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September 26, 2011

Washington Health Policy Week in Review Archive 733a0929-152e-4b80-9cc5-cf5814ed2490

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Senators Press Bella for Faster Action on Streamlining Care of "Duals"

By John Reichard, CQ HealthBeat Editor

September 21, 2011 -- Dual eligibles. Seamless care. Fragmented programs. Perhaps never has so much jargon been uttered at a single hearing about a single health policy issue.

But as vague as the language might be, what seemed crystal clear at a recent Senate Finance Committee hearing is that senators have a firm understanding that health care services for many of the nation's sickest people—those enrolled in both Medicare and Medicaid—are so poorly organized that tens of billions of dollars are wasted each year.

There are services that are duplicated, treatments given in needlessly expensive facilities and hospitalizations that need never occur because of poor oversight of the patients. It's a matter of urgency, lawmakers said, to move more aggressively to improve the situation.

"We have been treading water on this question literally for decades," complained Sen. Ron Wyden, D-Ore. "I look back [to] when I was co-director of the Oregon Gray Panthers and we were doing exactly what we're doing now. We were talking about demonstration projects, small-scale kinds of studies.

"We knew that this was the group that was . . . fitted for essentially the house-call arrangement kind of approach," he added. "A team approach, docs, nurse practitioners, a multidisciplinary approach. And here we are today in pretty much the same place" with very little of that occurring.
"He's absolutely correct," said Sen. Benjamin L. Cardin, D-Md. "We need bolder approaches."

Republican senators, including Sens. Orrin G. Hatch of Utah and Charles E. Grassley, joined Democrats in calling for faster action and speculating about a fundamental restructuring of how services are delivered to the duals.

Listening sympathetically was the hearing's lone witness, Melanie Bella, director of the Medicare-Medicaid Coordination Office. Created under the health law (PL 111-148, PL 111-152), the office is supposed to find ways to harmonize the way Medicare and Medicaid work in providing services for the population of 9 million duals.

"I'm either hopeful or naive that by creating this office there is a force that might be able to push for a broader and faster expansion [of coordinated care] than we've been able to do in the past," she said.

In general, duals have enormous care needs. No one entity or person is in charge of making sure that those needs are met; that medications are appropriate and don't cause harmful interactions; that people with diseases like diabetes and chronic heart failure get proper preventive care and follow treatment regimens that keep them out of the hospital; or that patients follow discharge instructions on leaving the hospital and get the drugs and tests they need to keep them from having to be readmitted.

Compounding the problem is that half of the duals have mental impairments such as dementia and Alzheimer's. Many are in nursing homes. And Medicare and Medicaid are structured in a way that discourages efforts to find savings.

For example, if Medicaid assigns a case manager to oversee the treatment needs of a dual and prevent unnecessary hospitalizations, the savings don't go to the state Medicaid program but to the federal Medicare program, which pays for the hospital care of the duals. As a result, few duals have such care managers.

Finance Chairman Max Baucus, D-Mont., pressed Bella on her goals for improving care of the duals and for specifics on how to measure progress.

"Our ultimate metric is how many people can serve in integrated and coordinated systems," she said. "Of the 9 million duals that exist today, we believe about 100,000 of them are in such a system," Bella said.

"For 2012, our goal is to have a million of the nine million duals in a coordinated, integrated system of care, and then to keep building year after year, particularly through our demonstrations and our work with states," she added.

Demonstration programs and data are part of the strategy Bella is following, including demonstration programs set up under the health law.

Up to one-quarter of hospitalizations of the duals are thought to be preventable.

"What our office is doing is trying to put together care models and other programs that focus on care coordination for folks—on medication management, on care transitions when people are going between settings, because we believe that those provide the foundation of keeping people out of the hospital when they don't need to be in the hospitals.

"Where this is even more compelling is for people who are in nursing homes," she said. "We actually believe there is a 40 percent preventable hospitalization rate for beneficiaries in nursing homes."

Bella said her office is doing a demonstration program "to stop this churn that is bad for patients and shouldn't be happening."

Bella's office has awarded contracts of up to $1 million to 15 states to design better coordinated approaches to care. Part of these efforts will test two new ways of paying for care.

In one model, the state, the Centers for Medicare and Medicaid Services (CMS) and a health plan would enter into a three-way contract under which a per-capita fixed payment will be made to the health plan to meet the care needs of the dual involved. The payment will be set at a level that recognizes savings to the state and the federal government compared with the expected level of payment if services were not coordinated. A second form of payment to be tested involves using the traditional fee-for-service payment rather than a capitated one. A state will establish a program to manage the care involved. The state and CMS will establish a target for what the services involved would cost if the care were unmanaged. To the extent there are savings, CMS and the state would share them.

Wyden implored Bella to pursue a model tested by the Veterans Administration that involves delivering services to people in their homes rather than in nursing homes.

Wyden touted a "blockbuster" VA study of patients treated in their homes that reduced hospital stays by 62 percent and days in the nursing home by 88 percent. "Those folks are almost exactly in the same spot as folks who are eligible for Medicare and Medicaid except for the fact that they are even sicker," he said.

Wyden also pressed Bella to name a goal for how many duals could be treated at home in this way.

"We like to have targets as well," she replied. "What I'd like to do is get back to you. I'd like to go back and make sure that that type of program—everyone would not fall into that criteria—look at how many of the 9 million we think would be appropriate and come back to you with a quantifiable target that matches our 1 million to have in broad systems by 2012."

Hatch asked Bella whether it would make sense to mandate enrollment of the duals in managed systems. She sidestepped the question but noted that states now can request a system of "passive" enrollment with an "opt out." In other words, if CMS approves a state request for such a system, a state could assign duals to a managed-care program, but they would have the right to opt out.

Grassley wondered whether it made sense to have Medicare and Medicaid jointly caring for duals. "That is the million-dollar question," she said. The demos will help determine what states do best and what the feds do best, she said, in order to come up with a better system. Grassley also wondered whether there is "light at the end of the tunnel" for moving out of the currently disorganized system.

"I think there is definitely light at the end of the tunnel," she said. "The question is how quickly we can get there."

Bella also defended the demos by saying they would help produce findings that could serve as the basis of recommendations to lawmakers to make needed legislative changes. She noted that about 2 million of the 9 million duals would benefit from coordinated care tested by the demonstration programs.

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Mom and Dad's Health Insurance Increasingly Lures Young Adult Kids, HHS Says

By Jane Norman, CQ HealthBeat Associate Editor

September 21, 2011 -- Young adults appear to be flocking to their parents' health insurance policies, based on the release of yet another set of federal statistics showing an uptick in the number of Americans ages 19 to 25 with coverage.

The Department of Health and Human Services (HHS) announced that new data from the National Center for Health Statistics shows the share of young adults with health insurance rose from 66.1 percent in the first quarter of 2010 to 69.6 percent in the first quarter of this year. HHS officials said that amounts to about one million young people.

At the same time, the rates of health insurance among all other age groups rose only slightly, from 85.9 percent in 2010 to 86.3 percent in 2011, HHS officials said.

They said that the increase in health insurance coverage clearly is the result of a provision in the health care law (PL 111-148, PL 111-152) that allows young adults to remain on family policies until they are 26. It went into effect for plan renewals beginning on Sept. 23, 2010.

The assistance for young adults did not attract much notice when the law was moving through Congress but has since become a major selling point. When the provision was added, experts were uncertain how much of an impact it would have.

The release of the new statistics from the center, which is part of the Centers for Disease Control and Prevention, followed two other sets of numbers that also indicated young adults are increasingly gaining coverage.

Census estimates released earlier this month found that the percentage of young adults ages 18 to 24 with insurance increased from 70.7 percent in 2009 to 72.8 percent in 2010.

A new Gallup Poll also found fewer young adults lacking health insurance. Among those 18 to 25 who were surveyed, 24.2 percent said they were uninsured in the second quarter of 2011, compared to 28 percent in the third quarter of 2010, Gallup said.

However, the poll also found that the percentage of uninsured people ages 26 to 64 continued to increase, to a high of 19.9 percent in the second quarter of 2011. Pollsters noted they began to include more cell phone respondents beginning April 1, and thus some of the increase in the percentage of uninsured people could reflect greater representation of people who only use cell phones—and they tend to be younger.

"The provision of the Affordable Care Act that allows children up to the age of 26 to remain on their parents' plans appears to be having an immediate effect on the number of Americans who report they have health insurance," said Gallup.

The Gallup–Healthways Well-Being Index results were gathered April 1 through June 30 with a random sample of 89,857 adults age 18 and older. In the total sample, the margin of error was plus or minus one percentage point.

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Howdy, Pardner: HHS and the States Discuss Exchange Collaboration

By Jane Norman, CQ HealthBeat Associate Editor

September 20, 2011 -- The Department of Health and Human Services (HHS) has fleshed out the details on how states can cooperate with the federal government in setting up health insurance exchanges, a middle ground between states going it alone or leaving it to the federal government to completely take over their exchange operations, something neither side likely wants to happen.

Last week, HHS officials met in Washington with representatives from 46 states, the District of Columbia and two territories. Federal officials laid out options for how state officials can set up their exchanges in partnership with the federal government in ways that work best for each state.

The meeting followed on proposed rules HHS issued in July in which officials touted the flexibility that would be available for states.

The proposed rules—comments for which are due by Sept. 28—were another benchmark on the road to full implementation of the exchanges in 2014. Most states have not yet completed setting up their exchanges, though Rhode Island Gov. Lincoln D. Chafee recently issued an executive order creating an exchange in his state. He also appointed the public members of an exchange board that was created in the executive order, who will serve alongside four government officials on the board. A former U.S. attorney, Margaret "Meg" Curran, will serve as chairwoman.

"The exchange will give more Rhode Islanders access to affordable health coverage," said Chafee in a written statement. "There are still many decisions to be made about the specific details of how the exchange will work. I am confident that Attorney Curran and the board will ably guide the best design for a Rhode Island exchange."

In Washington, HHS officials posted on the website a news release outlining the "partnership model" that states may adopt. The five core functions of the state exchange are consumer assistance, plan management, eligibility determination, enrollment and financial management. In partnerships, both states and HHS would operate parts of the exchange, though HHS remains responsible for ensuring the state exchange meets standards in the health overhaul law (PL 111-148, PL 111-152), according to documents prepared for the meeting.

In the partnership model, states could decide on the plan management option, which means they would collect and analyze insurance plan information, monitor plans and collect and analyze data. HHS would coordinate with the state when it comes to consumer complaints and enrollment issues. "Where appropriate, HHS will help to ensure that exchanges meet all of the required standards so consumers have access to a range of high quality plan options," says an HHS statement.

A second option is for the state to conduct the consumer assistance functions such as in-person consumer help, manage the navigator program that helps people find insurance choices and educate consumers about the exchange. HHS would handle more centralized operations, such as managing call centers, the consumer website and written correspondence with consumers.

States could also decide to do both consumer assistance and plan management in partnership with HHS. In that case the federal government would manage all of the other exchange functions.

"States entering into partnership will agree under the terms of their grants to ensure insurance department, Medicaid, and CHIP cooperation to coordinate business processes, systems, data/information, and enforcement," say the HHS documents.

A timeline published on the HHS website indicates that in the fall of 2011 through the summer of 2012, states will identify the kinds of technical assistance they need, as soon as possible. Exchanges will begin to be approved in summer 2012, with June 29 the last date to apply for exchange establishment grants.

The deadline for conditional or full approval of an exchange is Jan. 1, 2013. States may move from conditional to full approval after that date, though, HHS says. Enrollment of consumers is to begin in 2013 and full use of the exchanges is set to launch in 2014.

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HHS Announces New Grants to Spur States to Scrutinize Premium Increases

By Rebecca Adams, CQ HealthBeat Associate Editor

September 20, 2011 -- Insurers and administration health officials sparred over a federal push to convince state officials to more closely scrutinize insurance premium increases. The two sides traded charges as the Department of Health and Human Services (HHS) announced $109 million in grants to help 29 states push back against proposed premium increases.

States that have enacted laws that give officials the right to disapprove premiums they consider excessive received the most money.

Earlier this month, a provision in the health care law (PL 111-148, PL 111-152) affecting rate review went into effect. The provision requires health insurers who want to increase their rates by 10 percent or more in the individual and small group market to justify the increases in writing.

This round of grants is the second cycle of awards to encourage states to more closely monitor insurance rate increases. It builds on $48 million that was provided in August 2010 to 43 states and five territories. The health care law will provide a total of $250 million in such grants.

All of the states in the new round received at least $3 million. Twenty got at least an additional $600,000 for having in place systems that give state officials the power to reject premium increases, said HHS officials. Steven Larsen, director of the Center for Consumer Information and Insurance Oversight, said that those states need the money because they have a heavier workload than others.

"We continue to encourage states to seek full prior approval" of proposed premium increases, said Larsen.

All of the states that got awards said they would improve their websites and beef up rate filing requirements, such as insisting that insurers disclose more information on their administrative costs. Twenty of them said they would increase scrutiny by taking on reviews of premiums in new markets or for new products. And in seven states, legislation will be introduced to strengthen regulators' authority to review and/or publicize proposed rate increases.

Health insurers fought back by arguing that simply refusing to allow insurers to raise premiums above certain thresholds is not the right way to hold down prices for consumers. They said that premiums are based on underlying costs for medical services.

"Highly publicized provisions such as premium rate review may make for good sound bites, but literally do nothing to address the soaring cost of medical care," said a blog post on the website of the trade association America's Health Insurance Plans (AHIP). The group said that federal data show that between 2000 and 2009, the growth in health care premiums tracked directly with the growth in benefits.

HHS officials plan to announce further funding for states in 2012.

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New Answers May Be Coming to Health Cost Puzzle

By John Reichard, CQ HealthBeat Editor

September 20, 2011 -- To what degree do prices, not the volume of health care services, account for rising health costs? To what extent do Medicare cuts cause hospitals and doctors to charge more to private insurers, leading them to increase premiums?

Those are two of the questions analysts hope to be able to answer with the launch of a first-ever huge research database of private insurance claims.

The new Health Care Cost Institute will house data from plans operated by Aetna, Humana, Kaiser Permanente and United Healthcare, as well as some Medicare data, including data about Medicare Advantage, the private health plans in Medicare.

At first the database will include about five billion medical-claim records representing more than $1 trillion in health spending. The claims relate to services provided by some 5,000 hospitals and 1 million other providers. The institute, which is led by a board consisting largely of academic researchers and says it is nonprofit and nonpartisan, will try to bring in data from other private insurers as well.

"Researchers and experts are clamoring for better data and deeper analysis to better understand the factors driving costs and to inform effective policy decisions," Martin Gaynor, a professor at Carnegie Mellon University and the institute's chairman of the board, said in a statement announcing the initiative.

"Unfortunately, the existing public data derived from Medicare and Medicaid activity aren't enough to form a complete, up-to-date picture of national cost drivers and trends," he said. "HCCI will provide, for the first time, researchers access to data that covers all ages and health issues and is national in scope," Perhaps more importantly, for the first time there will be comprehensive data on the privately insured who make up the majority of health consumers in the United States."

The institute will limit access to the data, which includes claims from 2000 to the present, to researchers. The claims will be stripped of patient identifiers. Plans call for issuing research findings in the form of "score cards," twice yearly starting in 2012. According to the institute's mission statement, the score cards "will contain timely information on aggregate trends for health care costs for commercial payers, the most recent data available for fee for service government payers, and will break out trends in inpatient hospital spending by unit prices for services, number of admissions, and intensity of admission."

In addition, "these reports will include cost trend data at a national aggregate level, with additional geographic information available over four or five regions. Data provided in the score cards will be freely available online to the public, with access provided to more detailed background data tables that will be available for download."

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Insurance Commissioners Frown on Medigap Proposals

By Jane Norman, CQ HealthBeat Associate Editor

September 20, 2011 -- Members of the National Association of Insurance Commissioners are developing a letter to members of Congress in which they will oppose attempts to extract more money from Medicare enrollees who buy Medigap insurance—an option the president has now backed for new enrollees.

The letter has not yet been publicly released, but members of an NAIC committee working on health care law issues voted during a conference call to approve a version of it.

Aides said that the Health Insurance and Managed Care (B) Committee approved a letter to congressional leadership and members of the Select Committee on Deficit Reduction "expressing opposition to proposals that would prohibit Medigap first-dollar coverage." The letter will next be considered by another NAIC panel, the Government Relations Leadership Council.

Critics of changes in Medigap say President Obama's proposal could harm seniors who can't afford to pay more out of pocket. According to a recent brief in the journal Health Affairs, Medigap plans are currently offered in 10 standard benefit packages that were developed by NAIC, which is made up of state insurance regulators. The Health Affairs article also said the two most popular plans cover all deductibles and coinsurance under Medicare Part A and Part B, including hospice and skilled nursing facility care.

In his recent deficit reduction proposal, Obama said he supports a Part B premium surcharge for new Medicare beneficiaries who purchase first-dollar coverage. Medigap policies sold by private companies cover most or all of the cost sharing required by Medicare, his proposal noted. But this "gives individuals less incentive to consider the costs of health care services and thus raises Medicare costs and Part B premiums," say administration documents on the plan.

It adds that "of particular concern" are Medigap plans that cover nearly all Medicare co-payments, even those for routine care that beneficiaries could afford to pay out-of-pocket. So the administration is proposing a Part B premium surcharge equal to about 15 percent of the average Medigap premium for new enrollees who buy Medigap policies with very low-cost sharing requirements, beginning in 2017.

Other Medigap plans would be exempt, and the surcharge would not apply to current beneficiaries or near-retirees. The administration says this move would save $2.5 billion over 10 years.

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