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October 13, 2015

Washington Health Policy Week in Review Archive be37ab79-f0c5-4dbe-8d6d-7c3ff814fb1f

Newsletter Article


Democrats Press Private Medicare Plans to Keep Networks Intact

By Rebecca Adams, CQ Roll Call

October 7, 2015 -- House and Senate Democrats want to require Medicare Advantage plans to keep intact their networks of medical providers for a full year once seniors enroll.

Beneficiaries "should have the peace of mind that their doctors will be covered all year long," said Sen. Sherrod Brown, D-Ohio, on a call with reporters. Brown plans to introduce next week a measure that would allow plans to drop providers only in what Brown called "extraordinary situations," such as when a physician is convicted of a crime or when a provider is unable to continue caring for patients.

Brown is soliciting the support of Sen. Rand Paul, R-Ky., who backed the idea in the past. Rep. Rosa DeLauro, D-Conn., is expected to introduce a House version soon.

Brown and cosponsor Richard Blumenthal, D-Conn., hope that even if the bill is not enacted, the Centers for Medicare and Medicaid Services (CMS) will change its Medicare Advantage policies through its annual call letter, which is expected to be proposed next February.

Brown's announcement comes a week before seniors begin making decisions about their Medicare coverage for next year. The Medicare open enrollment period runs from Oct. 15 through Dec. 7.

A Government Accountability Office report released last week found that "CMS does little to assess the accuracy of the network data" listing providers that plans submit to the agency and that CMS does not assess plan networks on an ongoing basis. "Because a plan’s providers may change at any time, CMS cannot be assured that networks continue to be adequate and provide sufficient access for enrollees," the watchdog group found.

Concerns about the inaccuracy of provider directories and health plans dropping providers without notice drew attention starting in 2013 when UnitedHealthcare unexpectedly ended contracts with tens of thousands of providers in states such as Connecticut and Georgia.

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Insurers Ask Lawmakers to Find Funds to Close Health Law Gap

By Kerry Young, CQ Roll Call

October 5, 2015 -- The Obama administration may need the help of congressional Republicans to shore up a risk management program established by the 2010 health care law. The program is already running a $2.5 billion shortfall that may otherwise land on insurers.

Sen. Marco Rubio and GOP colleagues, who last December narrowed the administration’s room to maneuver to close the gap in the insurer-funded program, are now seeking to build on that by forcing insurers to adjust prices to reflect costs.   

Their approach could not only determine whether insurance companies receive billions of dollars they would be entitled to under the program, but Rubio and his colleagues are also proposing legislation that could lay the groundwork to make the health care law become more market-oriented.

“Taxpayers should never have to bail out health insurance companies that lose money under ObamaCare, and now we need to take that option off the table for good by passing my legislation to repeal the risk corridor provision,” Rubio said in statement Friday.

At issue are payments in the risk-corridor program established by the 2010 law (PL 111-148, PL 111-152). The three-year program is designed to take money from health insurers with relatively low costs and distribute it to those with higher costs. The program is intended to level out insurers’ performance in the start-up phase of new health exchanges. The law bars the insurers from pegging costs to the expected health of customers.

In practice, however, the program didn’t receive enough from the low-cost insurers to meet the claims of the high-cost insurers.  The gap in 2014 was about $2.5 billion, according to the Centers for Medicare and Medicaid, which administers the program, said last week. Insurers were contributing $326 million to the program and claiming $2.87 billion.

Florida’s Rubio and Louisiana’s Bill Cassidy, who was then in the House and is now in the Senate, helped get language into the fiscal 2015 spending package (PL 113-235) that blocks money from major Medicare trust funds or appropriated accounts from covering a shortfall in the risk corridor program.

The provision appears to have forced the Department of Health and Human Services to pay insurers only a fraction—less than 13 cents of each $1–claimed through the risk corridor program this year.  CMS is expected to ask lawmakers to close the gap. The insurers’ trade group has already made the request.

Rubio this year is taking on the program through two bills. He introduced a measure (S 123) that would repeal the section of the 2010 law that created the risk corridor program. But he is also the chief co-sponsor of a bill (S 359) introduced by Cassidy would leave the program in place, but would amend the 2010 law to say funding can only come from payments by insurers.

“The administration has a vested interest in having the taxpayers bail out insurance companies because it keeps premiums lower,” Cassidy told CQ Roll Call in a Sept. 30 interview, adding that that approach masks the costs of the coverage.

Cassidy, a physician who helped found a community health clinic, says the risk-corridor program plays an important role in health care and wants the mechanism preserved. But he also said he doesn’t want some insurance companies drawing funds from the program because they didn’t properly assess risk.

“We should not allow a rogue insurance company to cherry-pick the well as the expense of an insurance company that does it right and takes all comers, so I am in favor of some sort of risk adjustment,” Cassidy said.

Cassidy’s bill would direct the HHS to proportionately decrease payments in a shortfall. The Centers for Medicare and Medicaid Services, constrained by the provision passed last December, have done that in its first set of payments.

A CMS official speaking on background on Thursday said that there could be “some isolated solvency and liquidity challenges for a small number of issuers,” and that the agency will work with state insurance regulators in case of disruptions.  

Health Republic Insurance of New York, one of the largest of the new non-profit insurance cooperatives established after the 2010 law with more than 100,000 customers, began winding down last week. An official said the reduced payments were a factor.

The insurance industry is unhappy with a payments decision that may leave companies and non-profit groups facing losses.

“Stable, affordable coverage for consumers depends on adequate funding of the risk corridor program,” said Marilyn Tavenner, president and chief executive of America’s Health Insurance Plans, a trade group that represents the insurers.  “It’s essential that Congress and CMS act to ensure the program works as designed and consumers are protected.”

Tavenner, who was the administrator of CMS until February and joined the group in July, has urged Congress to address the shortfall.

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In Republican Utah, a Second Try at Medicaid Expansion

By Marissa Evans, CQ Roll Call

October 7, 2015 --Lawmakers in Utah may try this month to expand Medicaid coverage with a plan hammered out by Republican governor Gary R. Herbert and key Republican legislators, who have come to be known in the state as the Gang of Six.

Their so-called Utah Access Plan will be formally presented to the public Tuesday, but a bigger test comes a week later, on Oct. 13, when Herbert and the six lawmakers decide if the proposal has enough support to justify calling a special session of the legislature to get it passed this year.

The proposal is meant to be a legislative middle ground after the Republican-controlled Utah House and Senate couldn’t agree on plans to expand the joint federal-state health insurance program for low-income and elderly beneficiaries.  

During the 2015 legislative session, the Senate approved Herbert’s proposed Healthy Utah plan, which would have covered 146,000 people at a cost of $78 million in state funds and $648 million in federal matching money in 2021, when federal funding for expanded Medicaid programs falls from 100 percent to 90 percent. But the House voted to implement the less ambitious Utah Cares plan, which had an estimated $56 million price tag and would have covered 93,000 people. The two plans couldn’t be reconciled before the legislative session ended in March.  

The new Utah Access Plus proposal would cover 95,000 people and includes provisions common in other red state Medicaid expansion plans, such as requiring beneficiaries to share in the cost of coverage. It also proposes a raft of new taxes and fees on health care providers.

It’s a draft of a proposal that’s likely to see some changes, says one of the Gang of Six, Republican State Senate President Wayne L. Niederhauser.

“We’re not absolutely settled,” Niederhauser said before the presentation of the plan at a public meeting late Tuesday afternoon in Utah. “Where there is unfairness we’ll hear about it on Tuesday and make adjustments.” 

The new proposal would provide coverage for families of four making up to $33,465 per year, with certain limitations, including:

  • Anyone who qualifies for Medicaid would be required to enroll in employer-sponsored health coverage if it’s available, with the state subsidizing the cost. 
  • Those who can’t get employer insurance but are above the federal poverty line will receive a subsidy to purchase private health insurance and contribute up to 2 percent of their income toward premium payments.
  • Beneficiaries making below the poverty line who are ineligible for workplace insurance would have their premiums and co-pays covered by Medicaid. 

The biggest challenge to the plan comes not from the requirements placed on beneficiaries, but from the taxes and fees proposed for health care providers, according to Niederhauser.

In all, the proposal would impose $50 million in taxes on doctors, pharmaceutical companies, hospitals and other providers in the state.

In addition, doctors, surgeons, physician assistants and other medical professionals who fall into the physician group of the federal Centers for Medicare and Medicaid Services’ provider class would be charged $797 in licensing fees starting July 2016 to help pay for the expansion. Hospitals would be assessed $1,600. 

Michelle S. McOmber, CEO of the Utah Medical Association, which represents 4,600 physicians in the state, said that the organization does not like the new plan and that “there’s no rhyme or reason” to the licensing fees. 

“It isn’t even the amount of the tax, it’s the way they’re going about it that we don’t agree with,” McOmber said. “We don’t think the way to fund government services is to tax individual providers or licensed professionals.” 

McOmber said that more daunting is that the $797 is only an estimate of how much providers would have to pay based on enrollment numbers. That number could swell under the plan to $1,100 by 2021. 

She said she’s hoping the legislature will consider increasing sales tax, the tobacco tax or the e-cigarette tax instead to help fund the proposal. 

Matt Slonaker, executive director of Utah Health Policy Project, said that while his organization has been advocating for Medicaid expansion for the last three years, the financing aspect of the plan will be a hurdle.

“Whenever you try to tax industry, the industry is probably not going to like it. But we worry groups are going to have strong lobbies, and that will have a big impact on how the vote turns out,” Slonaker said.

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Medicare Cost Spike Prompts Democratic Concern

By Adriel Bettelheim and Rebecca Adams, CQ Roll Call

October 7, 2015 -- House and Senate Democrats are rallying to block a sharp increase in 2016 Medicare premiums for doctor visits and outpatient services that would affect more than 15 million beneficiaries and is due to be announced soon.

The price spike, which had been anticipated since this summer, comes as the health program for the elderly and disabled grapples with rising costs of outpatient care and prescription drugs. The pressure point is Medicare Part B, which pays for doctor office visits, preventive services, drugs and other care delivered outside a hospital and requires beneficiaries to pay a portion of the cost.

“It’s very personal to the lives of America’s seniors and others who depend on Medicare,” said House Democratic Leader Nancy Pelosi of California on Wednesday.

Across the Capitol, Ron Wyden of Oregon, the top Democrat on the Senate Finance Committee, introduced legislation he said would block a projected 52 percent increase in monthly premiums for roughly 30 percent of Medicare beneficiaries. The increase would fall primarily on higher-income seniors, new Medicare enrollees and those who don’t collect Social Security benefits. Wyden said his measure would keep monthly premiums for this cohort at 2015 levels of $104.90 and deductibles for all beneficiaries at the current threshold of $147.

The Department of Health and Human Services is set to announce 2016 Part B premiums this month. In July, Secretary Sylvia Mathews Burwell said 70 percent of enrollees won’t see a change in their expenses, and that the size of increases for the remainder would be subject to cost projections, additional data and “the administration’s considerations.”

Most Medicare beneficiaries are insulated from sharp cost increases by a “hold harmless” provision that ensures the dollar increase in the Part B premium cannot exceed the increase in a beneficiary’s monthly Social Security benefit. Because of the low inflation rate, Social Security’s cost-of-living adjustment is expected to be zero next year, which has the effect of shifting all cost increases onto those Medicare beneficiaries not covered by the hold harmless language.

States have a stake in the outcome, because two-thirds of the excluded group are poorer seniors who qualify for both Medicare and Medicaid, the federal-state health program for the poor. State Medicaid programs are responsible for picking up any premium hikes for their beneficiaries and could be forced to scale back services as a result, Wyden said.

Championing a change could help Democrats curry favor with politically-active seniors.

“Every single American who receives Medicare earned it,” said Democratic Caucus Chairman Xavier Becerra of California.

But budget hawks said if Congress blocks the increases, lawmakers should find offsets so the costs do not add to the deficit.

“Congress certainly has a full plate these next few months, between the need to address highway funding, sequester caps, the debt ceiling, tax extenders, and now this premium spike,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget. “As we address these issues, we can’t keep charging the costs to our credit card, and we especially shouldn’t be increasing high and rapidly growing Medicare costs. Congress and the President need to pay for any premium relief, and preferably in a way that actually helps to slow future health care cost growth.”

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Top HHS Official Makes Case for Threatened Research Agency

By Kerry Young, CQ Roll Call

October 5, 2015 --A top federal official on Monday made a case for preserving the little-known Agency for Healthcare Research and Quality, which focuses on improving the practice of medicine, and rejecting efforts by House Republican appropriators to terminate the agency in order to gain flexibility in a tight budget year.

“Your work is not a nicety, “Mary Wakefield, acting deputy secretary of the Department of Health and Human Services (HHS), said at a Monday agency conference attended by many of its staff members. “Your work is a necessity.”

Dismantling AHRQ would free up about $364 million for other programs funded by the annual Labor-HHS-Education funding bill (HR 3020). That makes the agency an attractive target for Republicans under pressure to both curb domestic spending and still boost the National Institutes of Health’s budget. In explaining their decision, GOP appropriators have said that AHRQ duplicates work done by other federal health agencies.

AHRQ officials and congressional Democrats in contrast argue that no other agency shares AHRQ’s focus in helping doctors and nurses disseminate information for how to better treat their patients. Much of its work involves developing procedures and checklists. These efforts don’t garner the same kind of media coverage as cutting-edge initiatives such as the White House’s Precision Medicine campaign, which is intended to make the most of recent rapid gains in genetic research.

AHRQ, for example, had seen hospital readmissions reduced by as much as 30 percent with tools it helped developed, Wakefield said. Its IDEAL program directs hospital staff to consult with people about to leave the hospital and their families about home life, review the medications that former patients will need to take on their own and alert them to warning signs of a relapse.

This is another form of personalized medicine, Wakefield said, using the term that has helped stir interest in the White House’s plan to advance the field of genetic research.

The agency has survived past efforts to kill or curtail it, former Senate Majority Leader Bill Frist, R-Tenn., wrote recently in Forbes, arguing against termination. A former top official in the administration of President George H.W. Bush, Gail Wilensky advocated for keeping AHRQ in a Sept. 30 article published in a forum for the Journal of the American Medical Association.

“Given the cost and the shortcomings of U.S. health care, it shouldn’t be difficult to recognize the need for an agency that focuses on strategies designed to advance evidenced-based treatments, to improve patient safety, to foster the use of health information technology in facilitating these goals, and to aid the dissemination of improved clinical care strategies,” said Wilensky, who led the predecessor agency to the Centers for Medicare and Medicaid Services in the early 1990s. “But apparently it is, as I’ve observed during the 40 years I have been in the field.”

Republican House appropriators have indicated that AHRQ could be spared if a new budget deal is struck to lift the caps for fiscal 2016. In the Senate’s Labor-HHS-Education bill (S 1695), appropriators keep the agency intact but would slash funding to $236 million while also giving the agency orders in the accompanying report to expand on its work in preventing misuse of antibiotics and aid with adoption of health technology.

“It will be an exciting year for AHRQ, assuming that our budget uncertainties are resolved,” said Richard Kronick, AHRQ’s director, at the Monday conference.

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Drug Costs, Ads Concern Congress's Medicare Advisers

By Kerry Young, CQ Roll Call

October 9, 2015 -- Federal officials and lawmakers soon may face tough decisions on whether to peg payments for new medicines to the value they deliver for patients, with the aging of the population and ads directed at consumers set to increase Medicare's pharmaceutical costs, advisers to Congress said.

The Medicare Payment Advisory Commission (MedPAC) on Thursday engaged in a broad preliminary discussion of potential approaches to managing the future cost of buying drugs for the nation’s elderly and disabled. MedPAC is only in the early stages of considering what themes and specific advice it will provide to Congress next year in its influential reports. The panel is not close yet to settling on any formal recommendations regarding drugs.

Still, there appeared to be broad consensus about a need to make Medicare, the nation’s single biggest purchaser of health care, a much more demanding customer when it comes to drugs for the more than 50 million people for whom it provides health care.

“I think we all agree that there’s a problem with the reimbursement in Medicare” for the so-called Part B drugs, which are administered in doctors’ offices and clinics, said Kathy Buto, a MedPAC member who earlier served with the agency now known as the Centers for Medicare and Medicaid Services (CMS).

About $19 billion worth of Part B drugs were administered in doctors’ offices and clinics to people enrolled in Medicare in 2013, according to MedPAC. That included so-called biologics, products made by genetically altering living cells to produce mass quantities of therapeutic proteins, as opposed to the more traditional mixing of chemical agents in factories to make pills.

Drugmakers are trying to boost sales of biologics with commercials aimed at consumers, many of which feature older actors, said William J. Hall, a MedPAC members who is a geriatrician and a professor of medicine at the University of Rochester School of Medicine. That will draw the attention of people enrolled in Medicare and make them more likely to seek out these medicines, which can put people at risk for complications. There can be significant human capital costs in terms of monitoring the people who use these medicines for side effects, Hall said. Yet the ads race through the details of potential complications, Hall said.

“If you pay just a little bit of attention to these ads, I would defy you to really understand what is being said in these sound bites,” Hall said. “It’s sort of like the used car market in how the ads race though the warning.”

The MedPAC discussion touched on a major debate underway in the United States, the question of how much to pay for drugs that may offer little benefit for many patients. This is increasingly an issue with treatments for cancers. More targeted oncology treatments may help smaller populations of patients and sometimes may add only months to a person’s life, but new products sometimes cost more than $10,000 a month.

European nations are more active than the United States in looking for ways to peg reimbursement to results, Buto said. In the United Kingdom, many of the newer cancer drugs go through a special program that allows some patients access to expensive medicines that haven’t been proven to have significant benefit over existing treatments. But these products are not cleared for widespread use.

More research would need to be done on how Medicare might look to these kinds of models, but MedPAC should explore this topic, Buto said.

The commission “needs to look at this issue of how the government can be a more proactive participant in that area,” said Buto, who also served as a vice president of global health policy at the pharmaceutical giant Johnson & Johnson.

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