MLA Weekly Health Care Wrap-Up: 09.02.11

September 2, 2011

Federal Health Care Update

IOM Releases Essential Health Benefit Forum Studies

The Institute of Medicine (IOM) this week released summaries of the recent public forums it organized to discuss how to define the "essential health benefit" package under the Affordable Care Act (ACA). The workshops brought together experts from federal and state governments, employers, insurers, providers, consumers and researchers. The IOM will release its recommendations regarding essential health benefits sometime early this fall. The summary can be found here.

Super Committee Announces Staff Director

Co-Chairs of the Super Committee, Jeb Hensarling (R-TX) and Patty Murray (D-WA), announced that Mark Prater will be the Committee's staff director. Prater is currently deputy staff director and chief tax counsel for Republicans on the Senate Finance Committee, where he has worked for two decades. Both Democrats and Republicans are praising the choice and see Prater as someone who can work with both parties. Also this week, Republican and Democrat members of the committee had their first organizational meetings. The Super Committee is required to meet officially by September 16.

FDA Publishes Tentative 5 Year Agreement To Renew Prescription Drug User Fee Act

The FDA has published a tentative agreement to renew and fund the Prescription Drug User Fee Act for the next five years. No significant new changes to the deal as published are expected, according to industry experts. The agreement, which was reached in May, raises fees by $100 million over the next five years in order to pay for new staff meetings, two more meetings with sponsors during the review process and a two-month extension of the review time for new drugs. The document is now open for comments. The FDA will send a draft to Congress in January. Congress is expected to move quickly to approve the agreement. The current user fee act expires at the end of September 2012. If the Act is not reauthorized by that date, the FDA will need to lay off about 2,000 regulators, bringing the drug approval process to a halt.

HHS Awards $40 Million To Boost Public Health Infrastructure

On Wednesday, U.S. Department of Health and Human Services Secretary Kathleen Sebelius announced $40 million in grant funding to state, tribal, local and territorial health departments and several schools of public to enhance the nation's public health infrastructure and workforce. Awarded in nearly every state, the grants will fund state and local programs supported through the Centers for Disease Control and Prevention (CDC) and the Health Resources and Services Administration (HRSA). Most of the grant funding comes from the Prevention and Public Health Fund created by the Affordable Care Act. This is the second year of CDC's five year program known as the National Public Health Improvement Initiative (NPHII) Strengthening Public Health Infrastructure for Improved Health Outcomes.

Rumors Swirl About MLR, Broker Bill

The National Association of Insurance Commissioners' meeting scheduled for earlier this week in Philadelphia was canceled because of Hurricane Irene. Yet, rumors swirled about how much attention the "broker bill" would have received had the event unfolded as planned. According to Politico, a spokeswoman for Florida Insurance Commissioner Kevin McCarty, chairman of the NAIC's Professional Health Insurance Advisors Task Force, said no major action was planned for the conference and that the group's executive committee had decided to put off a vote to endorse the Rogers (R-MI) / Barrow (D-GA) legislation to remove broker fees from the MLR calculation of administrative expenses. NAIC will be holding a series of conference calls in the coming weeks to conduct the business of the canceled meeting. Congress could choose to consider the Rogers/Barrow legislation, which currently has 113 cosponsors, at any time.

From The States

For full coverage of state exchange activities, check out this week's State of the States: Health Insurance Exchange Developments here.


Los Angeles Assemblyman Mike Feuer failed to garner enough votes in the California Senate to pass Assembly Bill 52, which would have allowed state officials to regulate health insurance rates for millions of consumers, a measure that health insurance companies, health care providers and others opposed. This was the final effort of a months-long campaign to increase state regulators' authority over health insurance premiums. Feuer has said that he will put the bill on hold until next year's legislative session.


Two years ago, Colorado expanded Medicaid to cover childless adults up to 100 percent of the federal poverty level (FPL). This week, however, the state has announced it will be scaling back the Medicaid program because the number of people eligible for coverage under the expansion is nearly three times as high as was projected and the cost of insuring those eligible is nine times higher than original estimates. A 2009 law allowed the state to impose a fee on hospitals while drawing down matching federal money to expand Medicaid coverage. Advocates for the uninsured said the state's decision to scale back coverage was the only realistic option until 2014.


Florida's Supreme Court will consider ruling on whether a $1 million cap on non-economic damages in medical malpractice cases violates the state's constitution. The cap was enacted in 2003 by the Florida legislature as part of a law overhauling the state's medical malpractice statute. In preparation for the case, the Supreme Court has received extensive amicus briefs both in support of and in opposition to the cap.


Governor Pat Quinn announced Wednesday that the state will spend $30.5 million to build and renovate 14 health centers across Illinois that provide care for low-income patients. The money comes from the state's multi-year construction fund, which is being financed by increases in driver's license and license plate fees, as well as higher taxes on alcohol, candy, soft drinks, and beauty products.

South Carolina

According to published reports, South Carolina Governor Nikki Haley has decided that the state will not apply for additional funding to support implementation of a state-run insurance exchange. Earlier this year, Haley set up the South Carolina Health Exchange Planning Committee by executive order, using a $1 million federal planning and establishment grant applied for under the previous administration to fund its work. State HHS Secretary Tony Keck indicated that the state could not move forward given the uncertainty around final rules for exchanges and how a federal version would operate.

Calendar: Looking Ahead

Tuesday, September 6.

Wednesday, September 7.

Thursday, September 8.

Around Town

The Health Care Task Force of the Republican Governors Public Policy Committee released a study on Tuesday, "A New Medicaid: A Flexible, Innovative and Accountable Future." Read the study here.

A new report from the Transactional Records Access Clearinghouse reveals new government statistics that federal health care fraud prosecutions in the first eight months of 2011 are on pace to rise over 85% over last year. Learn more here.

A new Kaiser Family Foundation poll this month finds, among other results, a decline in public awareness about provisions that advocates have touted as key benefits of health reform. The poll results can be accessed here.

The Alliance for Health Reform has issued a new policy brief on preventing chronic disease and the importance of community prevention programs. To read the brief click here.

The July/August issue of the American Health & Drug Benefits journal featured a study on how health information exchanges (HIEs) can potentially provide health plans with controlling costs arising from emergency department care.

Authors at the American Enterprise Institute released "Better Prices – Through Competitive Bidding – Can Help Solve Medicare's Fiscal Crisis." The view the article, click here.

Quotes of the Week

"Governors know what does and doesn't work with Medicaid in their states. They are in the best position to help Congress fix this broken entitlement program, and we will do it with their help."

- Senator Orrin Hatch, Ranking Member of the U.S. Senate Finance Committee upon the release of a new report by Governors on how to improve the efficiency and effectiveness of financially strained Medicaid.

"The increasing fiscal burden that will be associated with the aging of the population and the ongoing rise in the costs of healthcare make prompt and decisive action in this area all the more critical."

- Federal Reserve Chairman Ben Bernanke emphasizing that controlling health care costs will be key to the country's economic and financial stability.