By Erin Mershon, CQ Roll Call

September 7, 2016 -- The uninsured rate in the U.S. dropped to a historic low of 8.6 percent in the first quarter of the year, according to new government data.

The Obama administration cheered the achievement Wednesday, calling it "undeniable" proof of the law's success in improving access to care. The data, from the Centers for Disease Control's (CDC) annual National Health Interview Survey, show 1.3 million more people gained insurance between the first quarter of 2015 and the same period in 2016. That difference, however, was not statistically significant, according to the CDC.

Overall, the survey shows 21.3 million people have gained insurance since 2010, when Congress passed the Affordable Care Act.

"Our country's march toward improving access, quality, and affordability in health care goes on, and today's numbers show that the Affordable Care Act is continuing to drive historic progress," said Health and Human Services Secretary (HHS) Sylvia Mathews Burwell in a statement.

The CDC survey also notes that gains in private coverage for adults 18 to 64 that came through HealthCare.gov or state-based marketplaces between 2015 and 2016 were not statistically significant.

Trying to Improve the Risk Pool
 
The improvement in access to health care comes as the Obama administration is still struggling to improve both affordability and competition on the health insurance marketplaces created by the law. This year, several major insurers, including UnitedHealth Group and Aetna Inc., have announced plans to withdraw from many of the counties in which they were selling plans, citing the financial instability of the new insurance markets.

Republicans have pounced on the instability, highlighting the dropouts as well as double-digit premium increases as signs the law is failing. On Wednesday, six Republican senators led by John McCain of Arizona introduced legislation that would make anyone living in a county with one or fewer insurance companies on its exchange exempt from the law's individual mandate penalties. Recent analyses have suggested as many as one-third of U.S. counties will be in such a situation in 2017.

As part of a series of efforts to improve that financial stability, the Obama administration on Tuesday announced plans to test a new way of screening people who sign up for HealthCare.gov plans during some of the law's special enrollment periods.

Insurance companies have pressured the administration and Congress to consider tightening the applicability of special enrollment periods for years, arguing that they allow people to wait to sign up for insurance coverage until they get sick. The administration has already eliminated several of the options for special enrollment coverage and added a documentation requirement to others.

Now, beginning in 2017, the administration will test the effects of asking people to verify their eligibility before they sign up for coverage.

They want to "valuate the impact of pre-enrollment verification of special enrollment period eligibility on compliance, enrollment, continuity of coverage, the risk pool, and other outcomes," according to guidance from the administration.

The scope of the pilot has not yet been determined, but insurers are already pressing for it to be expanded nationwide.

"CMS is taking steps to move forward on a major problem facing consumers and health plans in the Exchange," said Clare Krusing, spokeswoman for America's Health Insurance Plans. "There needs to be broader application and use of a pre-enrollment verification across the board."

The administration said in the document that since it added the verification requirements for special enrollment periods earlier this year, it saw a 15 percent drop in those enrollments.

By Erin Mershon, CQ Roll Call

September 9, 2016 -- Health and Human Services Secretary Sylvia Mathews Burwell called in an op-ed Friday for Congress to consider a public option as a way to lower premiums on the exchanges.

Burwell joins Democratic presidential candidate Hillary Clinton and other progressives who have increasingly promoted the policy during this year's campaign. President Barack Obama also renewed his call for the option this summer, as Burwell noted. In her op-ed, which was first published by CNN, the secretary also criticized conservatives for their efforts to derail the health care law.

"Unfortunately, opponents of the law have spent years chipping away at funding for everything from CO-OPs to programs that help stabilize premiums to outreach efforts that help uninsured Americans find coverage," she wrote. "These actions make coverage less available and less affordable for consumers."

Burwell's focus on affordability comes as the health care law faces serious challenges. Insurance premiums in many states are rising by double digits in some states, and several major insurers, including UnitedHealth Group Inc. and Aetna Inc., have dramatically scaled back their participation in the marketplaces.

The secretary outlined several other changes Congress could make, including increasing the premium subsidies available under the law or working to decrease prescription drug costs. She said states and insurers could also help improve affordability.

Burwell acknowledged that 2017 will be a "transition year" for the exchanges, but pointed out that the health care law has successfully improved access and reduced the uninsured rate in the United States to an historic low. She also said the country was seeing large premium increases because insurers priced their products too low at the outset.

Burwell also pointed out that subsidies will protect many Americans from bearing the brunt of the premium increases, and said that the agency is "using all the tools at our disposal" to try to improve affordability and access.

By Marissa Evans, CQ Roll Call

September 8, 2016 -- Kentucky Gov. Matt Bevin's long-awaited proposal to overhaul his state's Medicaid expansion program has been certified as complete by federal officials but it's unclear if they will approve the plan.

On Thursday afternoon, the Centers for Medicare and Medicaid Services certified in a letter that the Bluegrass State has successfully submitted its plan and a 30-day federal comment period now begins.

Marjorie Connolly, press secretary for the Department of Health and Human Services (HHS), said in an email that the agency will "look forward to the people of Kentucky sharing their views and questions with HHS."

Connolly also said that Kentucky's Medicaid expansion as originally structured is working and waiver negotiations can take as long as seven months.

"We are prepared to continue working for as long as it takes to find a solution that builds on the historic progress Kentucky has made under Medicaid expansion and avoids moving backwards," Connolly said.

The state turned in its federal waiver proposal for the so-called Helping to Engage and Achieve Long Term Health, or HEALTH program, on Aug. 24. Kentucky used the summer to hear public comments about the plan to give a major makeover to the Medicaid expansion proposal, which had been touted nationwide for its enrollment growth.

Bevin's plan calls for conservative wish list items such as work requirements, lock-out periods, health savings accounts, and nominal premium payments. Advocates and lawmakers are now waiting to see if Bevin will follow through on scrapping the program altogether if HHS does not approve his plan.

Under an executive order in 2014, Kentucky expanded eligibility for the joint federal-state health insurance program for the poor and disabled. The federal health law allows states to expand Medicaid to individuals with incomes up to 138 percent of the poverty level. Starting in 2017, states will have to start chipping in 5 percent of the costs and by 2020, 10 percent of costs. Thirty-one states and the District of Columbia have taken up expansion.

Bevin vowed on the campaign trail last year to make changes to the Medicaid program. While he was steadfast in dismantling Kynect, the state's health exchange website, he has pivoted in recent months when it comes to Medicaid expansion. While he initially called for dropping the 400,000 low-income Kentuckians who qualified, he has since walked back the idea and said his administration would craft a more efficient plan to potentially continue the program while saving costs.

By Jad Chamseddine, CQ Roll Call

September 9, 2016 -- Sen. Elizabeth Warren of Massachusetts and other Democrats, in a letter to Aetna Inc. CEO Mark Bertolini, accuse the health insurer of deciding to pull out of 11 health care exchanges in retaliation for a Justice Department (DOJ) lawsuit to block Aetna's acquisition of Humana Inc.

Warren was joined by fellow Senate Democrats Edward J. Markey of Massachusetts, Sherrod Brown of Ohio and Bill Nelson of Florida, as well as independent Sen. Bernie Sanders of Vermont in her letter to Bertolini. Warren said Aetna's departure from the health law's exchanges appears "to have been motivated" by the government's lawsuit against the proposed $37 billion merger.

The letter writers back the Justice Department in its suit to block the health care insurance merger, arguing many experts predict the transaction would "harm competition in the health insurance market and negatively impact the cost and quality of health care."

Aetna announced last month it was withdrawing from 11 state-based exchanges citing financial losses. The company at the time said it had lost about $430 million since 2014.

Aetna's announcement came about a month after the Justice Department said it was filing suit in federal court to prevent Aetna and Humana from combining their companies. The decision to enjoin the companies from merging their assets was part of a larger plan to keep the health care insurance market competitive as the Justice Department announced it was also blocking Anthem Inc. from buying Cigna Corp. on the same day.

Warren was one of the first lawmakers to publicly air her anger at Aetna for leaving the exchanges. She made the comments in a Facebook post on Aug. 11, accusing the insurer of retaliating against the government's suit. Now in the letter, she expounds on that theory and said antitrust concerns raised by the merger between Aetna and Humana were "widely anticipated" and should not have come as a surprise to Aetna.

"Despite the risk that the merger would not be approved, Aetna agreed to pay Humana a break-up fee of $1 billion in the event that the acquisition was not completed" by Dec. 31, Warren and the other senators said in the letter. They argue it proves Aetna's lawyers knew the deal would raise issues with regulators and on Capitol Hill.

But, the senators continue, paying $1 billion to Humana, in addition to the merger-related expenses, could become a significant burden on Aetna, which until the spring of 2016 remained committed to its presence in all 15 exchanges.

It was not until meetings with the Justice Department in April and May led Aetna to believe the government would probably block the transaction. The letter cites different instances in which Aetna told investors during earnings calls in 2015 and early 2016 its role in the exchanges was a "good investment" and that it was looking to expand to other states while also working with the Obama administration and lawmakers to keep the program functioning properly.

This all changed, the letter says, when the Justice Department "began to raise questions about the merger," leading Aetna to "change its tune."

The health insurer told the Justice Department in a letter in early July it "expressly conditions its continued participation in the public exchanges" on the DOJ's approval of the deal with Humana, arguing that without adding Humana's assets it would hurt Aetna's financials and it would be forced to "immediately take action to reduce" its footprint.

"Aetna's decision regarding its participation in the ACA exchanges appears to be an effort to pressure the Justice Department into approving a merger that the Department alleged violates antitrust law and has the potential to significantly harm consumers all across the country," the letter says.

The letter from Bertolini explaining the insurer would have to leave the exchanges if the transaction is blocked was compelled from the company during a civil investigative demand for documents and information by the Justice Department asking Aetna to explain the consequences if the deal is blocked.

But this narrative was immediately rejected by Aetna. In a statement to CQ Roll Call, T.J. Crawford, an Aetna spokesman, points to the fact many insurers, "large and small," were forced to reduce their public exchange participation, with more than 40 companies leaving certain geographic areas.

"Singling Aetna out may be politically convenient during election season, but this letter ignores realities and takes the focus away from needed reforms," Crawford said. "The ACA is not sustainable without bipartisan action that improves access, affordability and quality of care for consumers."

Aetna has offered to settle with the government out of court by agreeing to sell $117 million worth of Medicare Advantage assets to Molina Healthcare Inc. in early August. But the Justice Department had already rejected similar proposals by the health care insurer, saying in its complaint with the district court that "divesting bits and pieces to smaller insurers" wouldn't be enough to maintain competitive vigor in the health insurance industry.

The case is set to go to trial in the U.S. District Court for the District of Columbia on Dec. 5 with District Court Judge John Bates presiding over the case. Aetna asked the court in late July to hear the case sometime in the fall, but did not specify a date. Aetna was pushing for an aggressive pretrial schedule because Humana can walk away from the transaction by the end of December, a possibility Humana executives have alluded to.

By Kerry Young, CQ Roll Call

September 7, 2016 -- House Republicans will encounter a hurdle if they put forward a serious plan to end the Obama administration's Center for Medicare and Medicaid Innovation (CMMI), which is at the heart of one of Washington's big fights over health policy. A federal budget expert on Wednesday said the center is likely to save $34 billion over a decade.

The House Budget Committee held a hearing Wednesday about the center, which was created in the 2010 health care law to test ways to improve care and save money. 

"Unfortunately, under its current analysis, the Congressional Budget Office (CBO) tells us that any altering of CMMI's demonstration activities would result in a substantial loss in savings," said House Budget Chairman Tom Price, R-Ga. Republicans say the center's work represents an overreach of executive authority.

One of the biggest disputes is over the center's proposed tests of payments for drugs, such as chemotherapy, that doctors provide in their offices. Drugmakers, many doctors and lawmakers oppose the center's proposed alternative Medicare payments for drugs, known as the Part B drug model. Groups including AARP and the nonprofit Medicare Rights Center back it as an initial step toward addressing the nation's rising drug costs.

In June, House Republicans proposed in a policy paper to end the center in 2020, when the center's initial $10 billion funding will lapse. House GOP appropriators also want to rescind $7 billion from the center through the fiscal 2017 Labor-HHS bill (HR 5926). Committee Democrats opposed this. The Senate version (S 3040) wouldn't make this cut.

Mark Hadley, deputy director of the CBO, told the budget panel Wednesday that the center's initiatives may save about $30 billion between fiscal 2021 and 2026. CBO projects another $4 billion in earlier savings between fiscal 2017 and 2020, for a total of $34 billion over a decade.

Republicans' efforts to block the drug pricing proposal also would likely result in the loss of federal savings. CBO's Hadley told reporters Wednesday that the budget office may complete its cost estimate of the proposed Part B drug model in the next several weeks. This could complicate efforts to move a bill (HR 5122) to block the center's Part B drug model. The Centers for Medicare and Medicaid Services (CMS) has not set a date for releasing a final version of the administration's proposal, first unveiled in March.

The projected savings from the center and its drug proposal present a challenge for Republicans, who in recent years have called for offsets when CBO estimates that legislation would result in costs to the federal government. The federal debt held by the public rose to $14.1 trillion from $5 trillion in the past decade.

The first test of the GOP's strategy in blocking the center's project could happen this fall.

Kentucky Democrat John Yarmuth predicted at the hearing that Republicans will seek a workaround to the hurdle of the CBO estimate if they seek to limit the center's work.

"If Republican leadership doesn't like the CBO score, it can waive its own cut-as-you-go rule or redefine the baseline and pass the bill regardless of the cost," Yarmuth said. "I am guessing that the majority will ultimately end up doing that here, and that's too bad because the demonstration projects being pursued by the innovation center are incredibly important."

Differing Views

A former CBO official told House Budget that the agency is making a mistake in counting heavily on savings from the center, which is in the early stages of its work.

"If you look back at past behavior by CBO, it would never have assumed savings from demonstrations," said Joseph Antos, who served as the budget office's assistant director for health and human resources from 1995 to 2001.

Antos, now an American Enterprise Institute researcher, raised concerns about reported financial results of the center's early work. He referred to an analysis in which Ashish K. Jha, director of the Harvard Global Health Institute, says one of the center's key efforts lost $216 million last year.

In a recent blog post, Jha drilled into the costs of accountable care organization programs, which are meant to give hospitals and doctors financial incentives to improve care. ACOs are part of the groundwork for larger efforts to move away from the traditional fee-for-service approach to Medicare reimbursement, which bases pay on volume rather than the quality of medical care.

There are difficulties inherent in estimating future savings from the center's work, whether done by CMS itself or CBO, because of the limited data available and guesswork about the future, Antos said.

"What is sometimes overlooked is that any assessment of the spending impact of a CMMI demonstration project is not a simple accounting exercise," Antos said. "The estimate is, ideally, the best one can forecast at the moment, but the savings are far from certain."

The House Budget hearing made clear partisan splits about the center. Price views the program as an example of presidential overreach that may disrupt the care of people enrolled in Medicare, which covers about 55 million people. By changing payment in tests, the center may cause doctors to stop providing certain treatments because of expected financial losses, critics of the Part B drug model argue.

"When we talk about new payment models, we are not just talking about a computer simulation or a science project in a lab somewhere," Price said at the hearing. "We are talking about whether or not seniors on Medicare are able to receive the medications or treatment options that their physicians believe are in the best interest of the patient."

But the center has its staunch backers as well. It was designed to take the approach that venture capitalists do, funding many projects in the hope that a few will pay off. Rep. Tim Ryan, D-Ohio, argued for more federal funding for the center, with the knowledge that some efforts will fail. He said the winners among its projects may restrain spending growth for Medicare, which already costs about $600 billion a year. The center's aim is to save money while also improving the care that elderly and disabled people get from doctors and hospitals.

"We've got to spend a little bit of money from the government side to figure out how to do all of this better," Ryan said. "The private market is not going to do it. They keep getting paid to do the same thing."

By Kerry Young, CQ Roll Call

September 6, 2016 -- Senators will face pressure this fall to confront a difficult question as Medicare officials increasingly tie hospitals' payments to the quality of care that medical professionals deliver: Should hospitals that treat a large number of poor people face different criteria than hospitals whose patients are more affluent?

Medicare, the nation's largest single purchaser of medical services, is pegging a growing share of its payments to judgments about how well senior citizens and people with disabilities are served by medical professionals. Hospitals that fail to meet quality standards are penalized.

The link between income and health is driving a debate about whether the Centers for Medicare and Medicaid Services (CMS) should make any allowances for the challenges of treating people living in poverty.

Many of the measurements that CMS intends to use to judge the quality of hospitals' care track how patients fare for 30 days after being discharged from hospitals or nursing and rehabilitation centers. People who receive low wages or suffer from homelessness may fall ill during this time for reasons unrelated to the quality of medical services provided to them. Hurdles include being unable to buy food or medicines or to travel to a doctor's office for follow-up visits.

Failing to account for these obstacles can lead to unfair financial hits on hospitals that serve the poor, some industry groups and their congressional allies argue. GOP Rep. James B. Renacci of Ohio, who supports this view, enlisted 44 fellow Republicans and 41 Democrats to back a bill that proposed a socioeconomic adjustment for the Medicare payment penalties. His measure was folded into a larger Ways and Means Medicare package that sailed through the House on a voice vote in June.

Renacci and several Ways and Means colleagues, including Democrat Danny K. Davis of Illinois, will press for the Senate to take this measure up in the fall as a step toward providing relief for so-called safety-net hospitals.

"These institutions ought to be given a little bit of latitude," Davis said in an August interview. "We are trying to the extent possible to even the playing field. Some institutions are taking on more of a burden than others."

The Ways and Means bill proposes a path to grouping hospitals according to a measure of how many of their patients qualify for both Medicare and the Medicaid program for people with low incomes.

Lawmakers and the next presidential administration will likely continue to wrestle with the question of socioeconomic status and Medicare's quality measures as the agency seeks to base payment rates for other medical professionals, such as doctors, on patients' experiences.

Some of the nation's leading research groups are in the midst of analyses expected to yield critical information. The nonprofit National Quality Forum is conducting a two-year study on socioeconomic factors and performance measures.

So far, CMS has revealed some reluctance about adjusting the quality measures, while allowing that poverty could influence medical results. The agency says it doesn't "want to mask potential disparities or minimize incentives to improve the outcomes of disadvantaged populations."

Agency officials included this phrase in three recent Medicare payment rules. It serves as the agency's stock reply to requests for socioeconomic adjustments for quality measures that are currently used for hospitals and eventually intended for skilled nursing centers and rehabilitation centers, which are places where people are sent to recover after strokes, surgeries and illnesses.

Still, CMS officials clearly continue to struggle with the issue. The Department of Health and Human Services (HHS) asked the National Academy of Medicine to analyze socioeconomic adjustments and Medicare measures. The academy was tasked with considering how to define such an adjustment, and is weighing factors such as a patient's ability to follow medical instructions.

The average penalty for a safety-net hospital, which is one that serves a disproportionate share of poor people, runs about $191,000 if too many patients are readmitted. Those penalties are higher than the $158,000 average penalty for all hospitals, said Arnold Epstein, deputy assistant secretary for planning and evaluation at HHS, in a presentation to the National Academy of Medicine panel. Safety-net hospitals tend to be larger, which may account for some of the difference. HHS officials declined to be interviewed, citing work underway on a report for Congress on this topic.

It's unclear how much of the problem for patients in safety-net hospitals can be attributed to poverty.

However, a leading researcher in the field of quality metrics says his review of the issue persuaded him to support some allowances for poverty.

"We don't actually want to create two standards of care," says Ashish K. Jha, the director of the Harvard Global Health Institute, in an interview.

"We want organizations like hospitals to be responsible for delivering good care for poor patients as well as for wealthy ones," Jha says. "However, what we don't want to do is punish organizations just because they have more poor patients."

The financial hit from readmission penalties is expected to rise as CMS officials continue implementing the program, which was created by the 2010 health care overhaul to measure the quality of care for seniors.

CMS estimated that the readmissions program will save Medicare $528 million in fiscal 2017, an increase of approximately $108 million from the current year. That's due in part to the addition of coronary bypass patients to the group whose readmissions can drive down a hospital's payments. CMS already applies penalties if patients are readmitted after heart attacks or heart failure, pneumonia, certain knee or hip surgeries, or a lung condition sometimes linked to smoking known as chronic obstructive pulmonary disease.

The hospital penalties represent just part of the emerging debate over the issue of socioeconomic adjustments to Medicare payments.

The question also affects ongoing work at CMS to devise a framework for assessing the quality of what's called post-acute care, the roughly $60 billion that Medicare spends on home health care and specialty centers where people recover after initial hospitalizations for serious illnesses and surgeries.

And, perhaps even more significantly, CMS officials will need to decide whether to make allowances for the poverty of patients as the agency implements last year's congressional overhaul of Medicare payments for doctors.

CMS is creating a complex set of measures, known as the merit-based incentive payment system, for doctors' reimbursements.

Doctors participating in the new payment system could see their reimbursement cut or raised by as much as 4 percent in 2019 based on assessments of the quality of their care. By 2022, the potential penalties and gains would rise to 9 percent. These payment adjustments will reflect how well or poorly physicians scored on CMS' quality measurements in previous years.

Groups including the California Medical Association asked CMS to revise the current draft proposal to make allowances for doctors with many poor patients.

Steven Larson, president of the California group, told CMS that failing to aid physicians who treat a large share of low-income people "could force them to avoid caring for patients who have the greatest needs."

The stakes are even higher for people on Medicare whose doctors may be impacted by penalties, says David Nerenz, the director of the Center for Health Policy and Health Services Research at Detroit's Henry Ford Health System.

"It's hard to pick up and move a hospital that's been for a hundred years in an inner-city area, but doctors are more mobile," Nerenz says. "You may find a real problem in finding physicians willing to go to or stay in underserved areas."

Still, researchers and lawmakers say that the push for quality measures could improve the quality of care provided for people on Medicare. HHS estimates that 565,000 hospital readmissions were prevented over a five-year period due to efforts to avoid the penalty.

And hospital officials are thinking more deeply about what happens to patients when they head back to their communities, says Elna Nagasako, a physician and researcher at the Washington University School of Medicine in St. Louis who has published work in the journal Health Affairs on socioeconomic factors and readmission rates.

Hospitals are finding new ways to collect information about the challenges that can erode a poor person's health after a hospital stay and communicate those findings to other medical professionals.

Nagasako says there may need to be a more standardized approach, for example, to understanding where a patient will live after discharge. Patients staying temporarily with relatives may be considered to have a home by some doctors, yet they may face some of the same challenges as someone living in a shelter. In other cases, even people living in their own homes may lack basic necessities, she says.

"Technically they may have a roof over their head, but they may not have running water or the landlord may not have taken care of mold," Nagasako says.

Doctors and other health professionals need to be sensitive while seeking this kind of information.

Patients may wonder why questions about their environments are being asked along with more routine medical queries, such as a blood pressure check, Nagasako says.

"It's something that may not have been covered in medical school," she says.