MLA Weekly Health Care Wrap-Up: 9.30.11

September 30, 2011

Federal Health Care Update

Affordable Care Act (ACA) Looks Headed to US Supreme Court

The US Department of Justice has asked the Supreme Court to overturn an August decision by a panel of three judges in the 11th Circuit Court of Appeals that found the Affordable Care Act's (ACA) requirement that all individuals maintain health insurance coverage or face a financial penalty unconstitutional. The move sets up a decision on the case, brought by 26 states and the National Federation of Independent Businesses, prior to the 2012 presidential election. The plaintiffs made a similar request to the High Court earlier in the week. A copy of the DOJ's petition can be found here.

Senators Introduce Medicaid Flexibility For States Legislation

Last week, U.S. Senators Lindsey Graham (R-SC) and John Barrasso (R-WY) introduced the Medicaid Flexibility for States Act, a measure that would allow states to 'opt-out' of the Medicaid expansion called for in the ACA. The Senators cited their concern that states, already facing massive budget deficits, could not afford the burden of expanding the program to cover virtually all individuals making 133% or less of the Federal Poverty Level, as called for under the federal law.

House Appropriations Subcommittee Pulls Out Funding for ACA

The House Labor, Education and Health and Human Services Subcommittee released an FY 2012 spending plan on Thursday that took direct aim at funds that had previously been authorized for implementation of the Affordable Care Act. The Department of Health and Human Services receives a total of $70.2 billion in new discretionary budget authority under the draft, which is $200 million below last year's level and $2.8 billion (4%) percent below the President's budget request. It prohibits any funding for implementation of the ACA until legal challenges to its constitutionality have been settled and specifically bars operating dollars for the Center for Consumer Information and Insurance Oversight, the main ACA implementation arm at HHS. Observers say it is unlikely that the bill will make it out of committee.

Comment Period for First Round of Exchange Regulations Extended

With hours to go before the original deadline, HHS announced on Tuesday that they would extend the due date for public comments on the two Notices of Proposed Rulemaking that had been released on July 11. October 31 will now be the last day to submit input on both the July regs—which focused on the functions and responsibilities of exchanges and those issued on August 12. The latter dealt primarily with eligibility and enrollment provisions, and included a companion notice from the Department of the Treasury on how tax credits to lower-income individuals would be calculated and reconciled via the exchange. A compilation of the proposed regulations can be found on the Regulations and Guidance page of the Center for Consumer Information and Insurance Oversight.

IOM Report on Essential Health Benefit Criteria Due October 7

The Institute of Medicine (IOM) confirmed this week that it would be publishing its recommendations on criteria for determining the services defined as "essential health benefits" on October 7. Under the ACA, the Secretary of Health and Human Services is charged with developing the mandatory benefit package, in consultation with IOM. Beginning in 2014, all non-grandfathered plans in the individual and small group markets will have to meet this minimum standard. The Secretary is expected to release her proposal in late 2011 or early 2012.

House and Senate Agree on Short-Term Extension of Federal Funding

Pulling out all of the procedural stops to avoid another showdown over government spending, the federal lawmakers passed legislation this week that will extend existing funding levels through Tuesday, October 4. The House, which is technically in recess but approved the stop-gap measure by voice vote on Thursday, is expected to give approval to a larger bill to fund operations through November 18 when they return on Tuesday. The longer extension, which also passed the Senate this week, would reduce most agency and program funding by 1.5% over current levels to comply with limits on non-emergency discretionary spending included in the recently-enacted Budget Control Act, and provide a $2.65 billion down payment toward fiscal year 2012 disaster relief funding for the Federal Emergency Management Agency.

HHS Launches New Initiative Aimed To Strengthen Primary Care

On Wednesday, HHS's Center for Medicare and Medicaid Innovation (CMMI) launched the Comprehensive Primary Care initiative, which would offer financial incentives to encourage doctors and insurers to more closely coordinate care for their patients. The demonstration is designed to involve commercial and public payers in five to seven markets, with approximately 75 practices in each market, and serve up to 330,750 Medicare and Medicaid beneficiaries over the course of its four-year run. More information on how the program will work can be found here.

Review of CLASS Program to be Completed Shortly

Amid rumors that HHS was planning to shutter the office charged with implementing a controversial new long-term care initiative established in ACA, it was announced that the department's review of the fiscal viability of the program would be released for public review by mid-October. During debate on the federal health reform law, critics claimed that the Community Living Assistance Services and Supports (CLASS) Act's financing model was suspect. They won inclusion of a provision that requires the Secretary to certify that it will be solvent over a 75-year period before taking steps to implement it.

Oral Health Care Grants Announced by HRSA

On Tuesday, the Health Resources and Services Administration (HRSA) announced grants totaling close to $2.3 million to 12 organizations providing oral health education and services in underserved, high-risk populations—including children enrolled in Medicaid and CHIP. The School-Based Comprehensive Oral Health Services Program is funded by HRSA's Maternal and Child Health Bureau. 

From The States

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

Colorado.  The Legislative Health Benefit Exchange Implementation Review Committee in Colorado held up an application for $22 million in Level One funding. Republicans on the committee, which includes 5 members from each party and requires a majority vote to approve grant submissions by the exchange board, objected to language in the application that they feel will compel the state to implement Affordable Care Act provisions they oppose. There was also bipartisan concern over the level of compensation for some of the 27 staff positions that were proposed for funding. The exchange board will attempt to rework the application and secure final approval from the review committee before the end of the year.

Maine.  A report, prepared by Maine's nine-member exchange advisory panel, recommending ways to structure the state's exchange was presented to the Legislature on Monday and met with disappointment from state Democrats.

Michigan.  After months of deliberation on whether to establish an insurance exchange in the state, legislation was filed last week that would create the MiHealth Marketplace, a non-profit, "non-exclusive health insurance clearinghouse" that would be overseen by a 7-member board, with 5 of its directors appointed by the Governor and one each by the House Speaker and Senate Majority Leader.

Nevada. Three months after passage of a law creating the Silver State Health Insurance Exchange, Governor Brian Sandoval announced his selections for the board of directors. The board will consist of five voting members appointed by the governor, one each appointed by the Senate majority leader and speaker of the Assembly.

Oregon.  On Friday, the state Senate gave unanimous approval to Governor John Kitzhaber's nine-member slate of nominees for the board of the recently-established Oregon Health Insurance Exchange (see membership, below). The exchange board will hold its first meeting today with consideration of governing structure, bylaws, and the drafting of a business plan. Next up will be work to design the specific parameters of health plans available under the exchange. The Governor's statement on the Senate vote, as well as information on board members, can be found here.

Around Town

In the October edition of Modern Healthcare Executive, MLA's Cindy Gillespie and Elizabeth Carpenter explain the challenges and opportunities for those seeking to tap the $3.8 billion in federal assistance available for the establishment of healthcare CO-OPs under the ACA.

MLA's Michael Scheininger and Jim Schweiter will join host Ipsita Smolinski on expert panels at the Capitol Street – MLA Government Contracts event, "Debt Ceiling: What's Next for Healthcare?" on October 3 (see details in calendar section). Mike will address developments around Medicare fraud and abuse initiatives and the Medicare Advantage program, while Jim will provide insight on what the 2012 election could mean for federal and military healthcare policy.

Families USA released a state by state report this week on the number of individuals in each state with cancer, diabetes, chronic lung disease, or heart disease or stroke who rely on Medicaid for their health coverage.

According to a study published Monday, 42% of U.S. doctors believe that their patients are getting too much medical care suggesting that fears of malpractice suits may be to blame.

On Tuesday, the Kaiser Family Foundation and the American Hospital Association's Health Research and Educational Trust released their annual Employer Health Benefits survey. Authors calculated the average cost of a health insurance policy providing single coverage at $5,429 annually, with family coverage now averaging $15,073. The numbers represent a 9 percent increase over 2010—triple the size of the previous year's rise in premiums.

Retirees and those near retirement have different views of the health and financial challenges of retirement according to a poll from the National Public Radio, the Robert Wood Johnson Foundation and Harvard School of Public Health.

On Monday, the Center on Budget and Policy Priorities released a report that looks at the implications of replacing Medicare's guarantee of health coverage with a premium support payment that beneficiaries could use to help them purchase private insurance—along the lines of House Budget Committee Chairman Paul Ryan's reform proposal.

The Government Accountability Organization urged greater oversight of the 340B drug discount program, which gives safety-net providers discounts on outpatient drugs, in a report issued this week. 

Quotes of the Week

"At its core, the health care problem is one of inflation, driven by the overutilization of services, dramatic underpayments, and massive inefficiency. If you look closely, the reason is easy to see: The health care sector lacks most of the basic building blocks of a functioning market."

- House Budget Committee Chairman Paul Ryan (R-WI) in a speech to the Hoover Institution on September 27.

“Excessive and wasteful spending over the years has put many of the programs and agencies funded in this bill on an irresponsible and unsustainable fiscal path."

- House Appropriations Labor-HHS Subcommittee Chairman Hal Rogers (R-KY), introducing the panel's FY 2012 spending bill (see full story, above

Calendar: Looking Ahead

Both houses of Congress will be in session next week

Friday, September 30 - Saturday, October 1.

Monday, October 3.

Tuesday, October 4.

Wednesday, October 5.

Thursday, October 6.

Friday, October 7.