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Supreme Court Ruling Could Turn Health Care Topsy-Turvy

By John Reichard, CQ HealthBeat Editor

March 30, 2012 -- Questions by U.S. Supreme Court justices during this week's oral arguments over the fate of the health care law raised the distinct possibility that they will decide to wipe the whole thing away.

In doing so, the justices would be erasing not just the blueprints for ambitious changes to the health care system that have not yet happened, such as the coverage of 30 million uninsured Americans. They would also gray out many things that are now part of the landscape.

The justices were scheduled to meet late last week to take their first tentative votes in the case, with a ruling expected in late June. Some observers are already penciling in a 5-4 vote nullifying part or all of the law.

The stakes are huge when one considers the breadth of the law (PL 111-148, PL 111-1542). There is an enormous difference between getting rid of it the entire law and only eliminating the mandate.

A Loss of Existing Coverage

Millions of Americans owe their current coverage to the health care law, including those who have already gained coverage under the measure and those now enrolled in the Medicaid and Children's Health Insurance Program whose eligibility cannot be trimmed under the health law.

For example, 50,000 Americans are now covered by the Pre-existing Condition Insurance Plan, or PCIP. Before that program, they had been unable to qualify for health insurance because of costly pre-existing medical conditions. If the health law goes, they again would be uninsured and unable to get health coverage.

In addition, the Obama administration estimates that about 2 million Americans in their early to mid-twenties are covered by their parents' health plan thanks to the law. Many in this group would likely be uninsured without the provision.

The "maintenance of effort" requirement in the overhaul says states must maintain current Medicaid eligibility levels for adults until 2014, when state insurance exchanges start, and they must maintain eligibility for children through 2019. Republican governors have put pressure on lawmakers to get rid of the requirement as a way to cope with budget pressures.

O. Marion Burton, immediate past president of the American Academy of Pediatrics, says that if the law is overturned, 4 million children who have coverage will lose it because states will cut funding for Medicaid and CHIP.

The health care law already is increasing access to care in other ways that would no longer be funded if justices throw out the law. Specifically, the law has increased funding for community health centers that treat underserved populations in the inner city and in rural areas. Those added funds would dry up if the law is struck down.

Existing Consumer Protections Erode

Existing coverage also could go by the boards in other ways. For example, plans are prohibited under the health care law from placing lifetime limits on how much they will pay out for an enrollee's medical care. For cancer and other patients with very costly medical conditions, that provision has kept them from losing coverage.

Some small businesses have begun receiving tax credits to help them pay for coverage. Those credits would end.

The law also bars "rescissions," or the cancellation of coverage for other reasons. Consumer activists claimed that before the law such cancellations occurred in some cases in which women with breast cancer filed claims for care for the disease.

In addition, children with pre-existing medical conditions cannot be denied coverage. The law also has begun phasing out annual limits on medical care payouts over several years until they are completely eliminated.

The Center for Consumer Information and Insurance Oversight (CCIIO) at the Centers for Medicare and Medicaid Services (CMS) presumably would be eliminated, and with it programs that keep premiums from rising too much and ensure that minimum percentages of the premium dollar go to pay for medical care and quality improvement. The hundreds of CMS employees involved in implementing the law would presumably face layoffs.

CCIIO funds the review of yearly premium increases by insurers, requiring that they publicly justify proposed increases of more than 10 percent. Its "medical loss ratio" rules are now in effect and will require insurers to issue rebate checks to consumers this summer if they didn't pay at least 80 cents of the dollar for medical care and quality improvement in the case of small group and individual market plans and 85 cents in the case or larger group plans.

The website operated by CCIIO that helps consumers quickly compare insurers when they are shopping for plans would go dark. A rule that standardizes the way insurers describe their health benefits to make it easier to figure out what a plan covers and to compare it to other plans would be stopped.

A regulatory effort to ensure that health plan enrollees can appeal to independent outside boards when they are denied services by their plans would cease.

Efforts to establish a minimum set of "essential benefits" health plans provide would come to a halt, including rule-making to ensure plans provide women contraceptive coverage without charge.

States would stop getting money from CCIIO to build their own insurance exchanges to offer lower cost coverage to individuals and small businesses. Only a handful of states have those exchanges now or are close to getting them up and running.

Grants would stop for "Consumer Operated and Oriented Plans," the so-called COOP program designed to create competition against big for profit insurers by starting new consumer-run plans whose profits would go to lower premiums and improve benefits.

Other provisions to improve consumer and public health would end. For example, rule-making has already begun to require fast food chains to post calorie counts next to menu items. And the health care law funds a website that lets consumers check the extent to which their doctor is getting money from drug or device companies, creating a potential conflict of interest in prescribing.

The $15 billion Prevention and Public Health Trust Fund would be shuttered. So far, it has been used to increase the supply of primary care health professionals. It's also being used to counter obesity and fund smoking cessation programs and train public health workers. The Obama administration has proposed to take $80 million from it to pay for research into treatments to prevent Alzheimer's disease.

A Food and Drug Administration program to create a regulatory "pathway" for the approval of lower cost versions of high-cost biotech drugs is also part of the health law. The agency's progress toward getting those products on the market would be slowed.

New Medicare Benefits End

Medicare has paid out hundreds of millions of dollars in new Medicare benefits, notably to cover prescription drug costs in the "donut hole." This is the gap in the current Medicare drug benefit in which beneficiaries must pay full prescription costs. This gap would widen again rather than be eliminated.

A free annual wellness visit to the doctor to develop a personalized preventive care plan would no longer be reimbursed. Out-of-pocket charges would be restored for colorectal screening and mammographies among other preventive care benefits.

Hundreds of millions of dollars in funding to strengthen programs that fight fraud in Medicare and Medicaid would stop. That fraud costs the programs billions, analysts say.

Quality, Safety, Efficiency Affected

A number of programs already under way to improve the quality, safety and efficiency of health care would ostensibly be closed for lack of funding. The Center for Medicare and Medicaid Innovation and the CMS Medicare-Medicaid Coordination Office, which has launched programs to streamline care for the sickest Medicare patients, would be closed.

A CMS program to launch team-based care through new accountable-care organizations—a program that has touched off extensive planning and a wave of acquisitions in the health sector to more closely align providers—would stop.

The innovation center also has launched other ambitious programs to reduce medical mistakes and provide more comprehensive care for the chronically ill out of doctor's offices that would become "medical homes."

The $500 million "Partnership for Patients" program that has enlisted 3,200 hospitals in an effort to reduce hospital-acquired infections by 40 percent over three years would come to an end. CMS has estimated the program could save Medicare $50 billion over years.

Some $600 million in funding to incent primary care doctors to coordinate the overall care of patients and keep tabs on whether they are getting preventive tests and keeping up with their medications—steps proponents think would eventually save Medicare money—would dry up. The recently launched "Independence at Home" demo that aims to save Medicare money while improving care by sending teams of doctors and nurses into patients' homes to keep them stabilized and out of nursing homes would end.

A $500 million "community transitions" program to keep discharged hospital patients from having to go back to the hospital by making sure they follow their discharge instructions for post-hospital care would also end.

A billion-dollar-plus program for "comparative effectiveness research" to identify the best medical treatment would stop. Called the Patient-Centered Outcomes Research Institute, proponents hope its work will help bend down the upward curve in national health care spending.
The Medicaid and CHIP Payment and Assessment Commission, which aims to improve quality, efficiency and access to care in Medicaid, would be discontinued.

The current moratorium would end on the construction of doctor-owned specialty hospitals, which critics say make it harder for competing community hospitals to offer a wide spectrum of services.

Cuts Would Stop

Medicare and Medicaid Cuts have already begun that would total $500 billion over 10 years. Stopping those cuts could ease beneficiary access to Medicare Advantage plans and to hospital, home care and skilled nursing facility services. But GOP lawmakers have talked about preserving the cuts and using them for debt reduction or to pay for a permanent "doc fix."

Justice Antonin Scalia says it is time to take out the health law "in toto." If he gets his way, the current health policy landscape will be dramatically reshaped—and very soon.

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