Posts Tagged ‘President Barack Obama’

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Supreme Court to Decide Healthcare Reform

Wednesday, November 23rd, 2011

The Supreme Court has agreed to rule on the fate of President Barack Obama’s Patient Protection and Affordable Care Act (ACA) healthcare law, with an election-year ruling due by July on the most comprehensive overhaul in nearly a half century.  The decision had been widely expected because the Obama administration asked the nation’s highest court to uphold the landmark legislation and 26 states asked that the law be ruled unconstitutional.

President Obama expressed confidence that the court would uphold the law when the decision is handed down, just four months prior to the 2012 election.  “Thanks to the Affordable Care Act, one million more young Americans have health insurance, women are getting mammograms and preventive services without paying an extra penny out of their own pocket and insurance companies have to spend more of your premiums on healthcare instead of advertising and bonuses,” said Dan Pfeiffer, the White House communications director.  “We know the Affordable Care Act is constitutional and are confident the Supreme Court will agree,” Pfeiffer said.  The administration pointed out that other landmark legislation, such as the Social Security Act, the Civil Rights Act and the Voting Rights Act, all faced similar legal challenges that failed.

Republicans have vowed to repeal “Obamacare,” but that promise will have to be modified if the high court undercuts the law as written.  A Supreme Court victory would make President Obama even more confident that the law is the major accomplishment of his first term.

Senate Minority Leader Mitch McConnell, (R-KY) said “this misguided law represents an unprecedented and unconstitutional expansion of the federal government into the daily lives of every American.”  The majority of Americans agree,” McConnell said.  “In both public surveys and at the ballot box, Americans have rejected the law’s mandate that they must buy government-approved health insurance, and I hope the Supreme Court will do the same.”

Despite Republicans’ insistence that the ACA is unconstitutional, only one of the four federal appeals courts that have heard cases on healthcare reform has struck down even a part of the law.

One of the ACA’s most vocal opponents is Karen Harned of the National Federation of Independent Business, who said: “We are confident in the strength of our case and hopeful that we will ultimately prevail.  Our nation’s job-creators depend on a decision being reached before the harmful effects of this new law become irreversible.”

Legal experts believe that the healthcare vote will be close on the nine-member court, which is comprised of five conservatives and four liberals.  Moderate conservative Justice Anthony Kennedy, who often is the swing vote, and could well cast the decisive vote.  Paul Heldman, senior analyst at Potomac Research Group, which provides Washington policy research for the investment community, said he still leaned toward the view that the law’s requirement that individuals buy insurance will be upheld.  “We continue to have a high level of conviction that the Supreme Court will leave much of the health reform law standing, even if finds unconstitutional the requirement that individuals buy coverage,” he wrote.

An impressive 5 ½ hours of oral arguments will be held in late February or March. The primary issue is whether the “individual mandate” section – which requires virtually all Americans to buy health insurance by 2014 or face fines — is an improper exercise of federal authority.  According to the states, if that linchpin provision is unconstitutional, the entire law must be also be overturned.  Joining Florida in the challenge are Alabama, Alaska, Arizona, Colorado, Georgia, Idaho, Indiana, Iowa, Kansas, Louisiana, Maine, Michigan, Mississippi, Nebraska, Nevada, North Dakota, Ohio, Pennsylvania, South Carolina, South Dakota, Texas, Utah, Washington, Wisconsin and Wyoming.  Virginia and Oklahoma have filed their own challenges, along with other groups and individuals opposed to the law.

According to USA Today’s Joan Biskupic, “The leading question before the justices is whether in requiring most Americans to buy insurance, Congress exceeded its power to regulate interstate commerce.  The case is on track to be heard by March, and a ruling would come by the end of June, just before the Republican and Democratic conventions for the 2012 presidential election. The law known as the Affordable Care Act, intended to extend medical care nationwide, is the centerpiece of the Obama domestic agenda, and all major GOP presidential candidates oppose it.  The legal challengers, including a group of 26 states, say the law went beyond federal power and, if allowed to stand, would hurt small businesses and compromise individual choices on medical care.”

Writing in The Hill, Sam Baker says that “As they weigh the mandate, the justices will have to consider how it affects other parts of the law.  If they find the coverage requirement unconstitutional, they will have to decide whether to strike it down on its own or instead strike down the entire law.  The justices also will determine whether a separate federal law bars them from reaching a decision on the mandate before it takes effect.  People can’t challenge a tax before they have to pay it, and the Obama administration has defended the mandate by invoking Congress’s taxing power.  But it has also said the court should bypass procedural issues and rule directly on the mandate.”

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Obama to Sign Executive Order Releasing $1 Billion to Cut Medical Fraud

Wednesday, November 23rd, 2011

President Barack Obama will once again sidestep a fractious Congress and sign an executive order designed to cut fraud from Medicare and Medicaid.  The Department of Health and Human Services (HHS) will administer the changes, such as testing changes to obsolete hospital billing systems to prevent overbilling, administration officials said.

The billion-dollar initiative will reward the “most compelling new ideas” for cutting costs and improving care of Medicare and Medicaid patients with rewarding federal grants.  Called the Health Care Innovation Challenge, the initiative will provide between $1 million and $30 million over three years to individual organizations or coalitions that develop sustainable, new approaches to improving healthcare quality and efficiency.  “We’ve taken incredible steps to reduce healthcare costs and improve care, but we can’t wait to do more,” said HHS Secretary Kathleen Sebelius.  “Both public and private community organizations around the country are finding innovative solutions to improve our healthcare system, and the Health Care Innovation Challenge will help jump-start these efforts.”

Centers for Medicare and Medicaid Services (CMS) administrator Dr. Donald M. Berwick, M.D. said, “When I visit communities across the country, I continually see innovative solutions at the very ground.  By putting more programs like this in place and more ‘boots on the ground,’ these types of programs can truly transform our healthcare system.”

This program is part of the Obama Administration’s “We Can’t Wait” initiative, which is a series of legal Executive Branch steps designed to move America forward while Congressional Republicans block critical and necessary legislation.

To demonstrate that its campaign to cut government waste is working, the White House said the administration cut improper payments by nearly $18 billion in 2011, largely in such programs as Medicare, Medicaid, Pell Grants and food stamps.  Budget chief Jack Lew ordered federal agencies to tighten their oversight of contractors and grant recipients to reduce the potential for taxpayer waste.

Not surprisingly, there was some immediate opposition to the initiative, with Republican critics calling it a “$1 billion experiment.”  “On the day the Supreme Court decided to review the constitutionality of ‘Obamacare,’ the president is asking for another $1 billion in taxpayer dollars to pay for another healthcare experiment that will continue taking us in the wrong direction,” said RNC spokeswoman Kirsten Kukowski.  “We already spent $2.6 trillion on his job-killing health care bill.  Another $1 billion Executive Order is just more words for a president more interested in campaign talking points than creating jobs.”

With the Supreme Court preparing to hear arguments for and against the Patient Protection and Affordable Care Act (ACA) next March, it is important to note that even the 26 states suing to have the law overturned are hedging their bets.  Only four states have refused all federal money to plan for the changes that are scheduled to take place.

Several healthcare industry leaders expressed their support for the ACA. “The system is transforming itself,” said Charles N. Kahn III, president of the Federation of American Hospitals.  “But the success of these changes depends a lot on whether there is sufficient funding.”  Nationally, hospital systems are anticipating an influx of federal funds and patients as the law goes into full effect.  “If the law is struck down, healthcare reform will have to continue one way or another,” said Patricia Brown, president of Johns Hopkins HealthCare.

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ACO Rules Revised to Attract Providers

Thursday, October 27th, 2011

The Obama administration has issued revised regulations to encourage doctors, clinics and hospitals to take greater responsibility for improving patients’ care.  The rules will reward healthcare providers who enter into partnerships to cut the cost of caring for Americans while also boosting quality — two goals of the Patient Protection and Affordable Care Act (ACA).  Known as Accountable Care Organizations, or ACOs, these partnerships have been promoted by many experts as the most promising remedy for the high costs that typify the American healthcare system.

Supporters believe that ACOs could save taxpayers billions of dollars by better coordinating patient care and replacing the current fragmented system in which patients bounce between doctors and hospitals with minimal communication between providers.  “ACOs can represent a very big step forward in helping to transform Medicare, Medicaid and the Children’s Health Insurance Programs so they can help assure high quality, seamless and less costly healthcare,” said Dr. Donald Berwick, who runs the Medicare and Medicaid programs and helped to write the new rules.

“We have made changes in response to what we heard,” Berwick said. “I think they make the program more attractive.”  During the early days, between 50 and 270 ACOs may enroll in the program and save the Medicare program as much as $950 million over four years, according to independent estimates.

Among the changes are increased flexibility in eligibility to participate in the Shared Savings Program; a choice of start dates in 2012; a longer agreement period for those starting in 2012; more flexibility in the governance and legal structure; more streamlined quality performance standards; changes to the financial model to enhance financial incentives to participate; increased sharing caps; no downside risk and first-dollar sharing in Track 1; removal of the 25 percent withholding of shared savings; increased flexibility in timing for the evaluation of sharing savings (claims run-out reduced to three months); more flexibility in antitrust review; enhanced flexibility in timing for repayment of losses; and more options for participation of Federally Qualified Health Centers and Rural Health Clinics.

ACOs are a key provision in the ACA to decelerate rising health costs while delivering high-quality care to Medicare patients.  They are designed to change the incentives that influence how doctors and hospitals operate.  Today, most hospitals and doctors get paid more by delivering more, not necessarily better, care.  ACOs will reward healthcare providers for keeping costs down and meeting certain quality measures, including cutting hospital readmissions or emergency room visits.  ACO’s goal is to replicate the highly respected models of care at the Mayo Clinic in Rochester, MN, and the Geisinger Health System in Pennsylvania where hospitals and doctors coordinate their efforts within the same organization.

George Roman, senior director of health policy at the American Medical Group Association, which represents approximately 400 large provider organizations, described the changes as “music to my ears.  We asked for almost all of these things.”

“We are very pleased at the number of significant changes in rules.  They have made the program look more attractive,” said Linda Fishman, senior vice president of the American Hospital Association.  “But it remains to be seen how many hospitals will find these changes to be motivation enough to enter the program.”

The 696-page document includes more generous shared savings incentives, leaves out 32 of the 65 original quality measures, and gives potential ACO participants extra time to formulate their plans.  One vital change is that the rule no longer mandates that 50 percent of participating physicians be approved under meaningful use requirements for electronic health record use. The revisions provide more opportunities for new ACOs to participate without absorbing risk in the earlier years, as well as major changes in at least 10 other critical areas.  Thanks to the revisions, many in the healthcare industry think more providers will be encouraged to sign up.

Writing in the Washington Post, Sarah Kliff notes that “It’s a big moment in health policy wonk land right now: the Obama administration has just published the final Accountable Care Organization rule.  Sound dull?  Let’s rephrase: The Obama administration has just released a regulation that could decide whether the American healthcare system moves past the broken, expensive fee-for-service model.  The idea is to encourage groups of providers to band together into ‘accountable care organizations’ and accept a flat fee for all care related to a particular patient or condition.  If they could deliver high-quality care in a cost-effective way, they could keep the money they saved.  The hope is to do nothing less than change the basic business model of American medicine from making money by getting patients to spend more money to making money by saving patients money.  There.  That’s better.  This is not the administration’s first crack at encouraging ACOs.  A proposed rule in April, which detailed the requirements to become an ACO, was greeted with howls of protest by the provider community.  In hundreds of comment letters, hospital and doctor groups blasted the program as unattractive, with too much risk and not enough reward.  The American Medical Group Association warned CMS that virtually none of its members would participate.  The group called the rule ‘overly prescriptive, operationally burdensome, and the incentives are too difficult to achieve to make this voluntary program attractive.’

“There are two things that really irked healthcare systems here. First, if an ACO ended up spending more money than the target set by Center for Medicare and Medicaid Services (CMS), it would have to pay back some funds. Second, any ACO would have to show savings above two percent before they could reap any of the financial rewards.  The rule eliminates both of those barriers to entry.  It creates an ACO track with no ‘downside risk.’  The two percent gap gets cut, too: under the final rule, ACOs share in any savings from the very first penny.  CMS made a lot of other adjustments too that make the program easier to participate in, like lowering the quality reporting requirements and eliminating requirements that ACOs show significant use of electronic medical records.  As one CMS official put it this morning, the agency wanted to ‘smooth the on-ramp’ into the program.”

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HHS Website Monitors Health Insurance Premium Increases

Monday, October 17th, 2011

Consumers can now select their state on a federal web page to see if any health insurers have raised rates, as well as the company’s reasoning behind the action. This information was previously unavailable, according to Steve Larsen, the Department of Health and Human Services (HHS) deputy director for oversight (only a few states include rate increases on their own websites).  Now, all insurance companies must file this information with HHS as one directive of the Patient Protection and Affordable Care Act (ACA).  “We are taking a good, hard look at why insurance companies are seeking to raise your rates, why your premiums might be going up, and making sure these decisions are public and justified,” HHS Secretary Kathleen Sebelius said.  “This is just a start, and over time we will be reporting more of these requests.”

The announcement follows a recent survey by the Kaiser Family Foundation that showed premiums for an employer-sponsored plan for a family of four climbing nine percent in 2011.  A report by Barclays Capital Equity Research showed that in the first three months of 2011, 13 of the leading 14 health insurers exceeded their earnings per share estimates; average earnings were 46 percent over estimates.  Insurers who wanted to raise rates 10 percent or more for individual or small group plans are required to provide justification.

At the same time, an advisory group urged officials to create a list of essential health benefits under President Barack Obama’s healthcare overhaul that aligns with the cost of typical small-employer plans.  The Institute of Medicine (IOM) report recommended that HHS be specific in deciding what health benefits should be required in individual and small group plans as the ACA goes into full effect in 2014.  The IOM, one of the National Academies of Science that advises U.S. policymakers, did not address any specific benefits types, in keeping with its assigned task.  “We’re in a marathon.  What we’ve just gotten today is the first leg,” said Paul Keckley, executive director of the Deloitte Center for Health Solutions.

The IOM recommendation favors business groups and insurers who have sought a narrow package of required benefits because of concerns that the plans will cost too much, said Neil Trautwein, vice president for the National Retail Federation.  Government should limit premiums to levels no higher than what small businesses pay on average and choose benefits “within the context of financial constraints,” according to the report.  The recommendation “is the appropriate tack to take since the objective is to cover everyone with at least basic benefits,” Trautwein said.

The issue has seen businesses and patient advocacy groups — such as the American Cancer Society, which argues for robust coverage — at odds with each other.  The ACA requires insurance plans to cover 10 broad categories of care, including hospitalization, mental health and pediatrics starting in 2014 and left details to Obama’s HHS secretary, who has  asked the IOM to recommend the optimal way to select the benefits that should be included in the plans.  Employer lobby groups argue that a generous package of benefits would cause workers to desert company plans, which could have the effect of compelling employers to pay fines and raise premiums as the number of people covered by their health plans decreases.

According to the IOM, Sebelius should start with a package of benefits that mirrors what small businesses offer their employees.  She should set a “premium target” for the benefits that is approximately the same as what small businesses will pay, on average, in 2014.  Next, she should select benefits that meet the target, a process the IOM compared to shopping for groceries under a budget.  “If the package of essential health benefits gets too comprehensive, it quickly becomes unaffordable,” said John Ball, chairman of the institute committee that wrote the report.

Beginning in 2014, every health plan in the new marketplaces known as “exchanges” will have to provide a minimum package of “essential health benefits.”  The IOM report provides federal officials with a framework for devising that package, but doesn’t provide specifics.  “I’m sure a lot of people were expecting to get a list,” said Elizabeth McGlynn, a member of the IOM committee and head of the Kaiser Permanente Center for Effectiveness and Safety Research.  “That was outside of our charge.”

“With this thoughtful report, the IOM is urging policymakers to strike a balance between the affordability of coverage and the comprehensiveness of coverage,” said Karen Ignagni, president and CEO of the health insurance trade group America’s Health Insurance Plans.  “We agree that this balance is critical to ensuring that individuals, working families and small employers can afford health insurance.”  Amanda Austin of the National Federation of Independent Business termed the report “encouraging,” and “pretty thoughtful,” although she believes that HHS still has to do the heavy lifting to write the plans.

Sebelius issued her own statement on the report, saying she will hold “listening sessions” to help people choose what benefits they want included in the mandatory package.  “These conversations will help us ensure that every American can access quality, affordable health coverage they can rely on,” she said.  This seems to suggests to some that a proposal from the department won’t be coming anytime soon.

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U.S. Supreme Court Is Likely to Decide On the ACA This Term

Tuesday, October 11th, 2011

As of the first Monday of October, the United States Supreme Court is back in session and likely to make what could be a momentous decision on the Patient Protection and Affordable Care Act (ACA).  The nation’s highest court will consider President Barack Obama’s landmark healthcare overhaul, which impacts almost everyone in the country.  The Obama administration’s request last week that the justices resolve whether or not the healthcare law is constitutional makes it more likely than not that they will deliver their verdict by next June, shortly before the president and his Republican opponent move into the fall general election campaign.

Already, the GOP presidential candidates are taking advantage of virtually every debate and speech to attack Obama’s major domestic accomplishment, which extends health insurance to more than 30 million people who now lack coverage.  If, as expected, the justices agree to review the law’s constitutionality, those deliberations would define the court’s coming term.  Their decision could rank as the court’s most momentous since the December, 2000, ruling that sent George W. Bush to the White House.

According to the Med Page Today website, “The Obama administration petitioned the Supreme Court to decide on the constitutionality of the ACA, making it very likely that the high court will hear at least one of the cases challenging the landmark healthcare reform law before next year’s presidential election.  The U.S. Appeals Court for the 11th Circuit ruled in August that the individual mandate provision of the ACA is unconstitutional.  The Justice Department had until November to ask the Supreme Court to hear the case, but filing its petition sets the stage for oral arguments in the spring, and a final decision in June — at the height of Obama’s re-election campaign.  The 11th Circuit case was filed by 26 states that object to the ACA on a number of fronts, but opposition to the individual mandate is the main thrust of their argument.  The individual mandate, considered the linchpin of the law, requires everyone to have health insurance by 2014.  In its petition, lawyers for the Obama administration said the appeals court decision is ‘fundamentally flawed.’”

Supreme Court analysts say it is difficult to predict how the court would rule on the conservative challenge to the health care law.  Miguel Estrada argued several cases before the Supreme Court as an official with the Justice Department in the 1990s.  “The issues are really hard. Every time you ask the Supreme Court to overturn an act of Congress, it is a very difficult thing for the court to do. And Congress comes to the Supreme Court with a presumption of deference (to Congress) and constitutionality,” said Estrada.

Writing on the Big Think website, Robert de Neufville writes that “The administration’s decision strongly suggests that it will ask the Supreme Court to hear the case, since it doesn’t want the 11th Circuit’s decision to stand.  That puts the Supreme Court in the difficult position of having to rule on a politically charged piece of legislation during an election year.  Rick Hasen (of the Election Law Blog) that a Supreme Court decision is win-win for Obama: either the court affirms the constitutionality of the law or it seems to overreach by overturning it.  By the same token, ruling on the law may be a lose-lose proposition from the perspective of the court.  Whatever the court decides it will seem to be taking sides in a political struggle.  As Slate’s Dahlia Lithwick says,  there may not be five justices who want to want to make the court itself an election-year issue.  Lithwick says that “I don’t think Chief Justice John Roberts wants to borrow that kind of partisan trouble again so soon after Citizens United, the campaign-finance case that turned into an Obama talking point.  And I am not certain that the short-term gain of striking down some or part of the ACA (embarrassing President Obama even to the point of affecting the election) is the kind of judicial end-game this court really cares about.  Certainly there are one or two justices who might see striking down the ACA as a historic blow for freedom.  But the long game at the court is measured in decades of slow doctrinal progress — as witnessed in the fight over handguns and the Second Amendment — and not in reviving the stalled federalism revolution just to score a point.” 

The editors of Bloomberg Business Week fear the collateral damage that overturning the ACA might cause.  They note that “Should the Supreme Court take up healthcare reform this year?  So far, only one appeals court has ruled that the ‘individual mandate’ in ObamaCare — the requirement that virtually everybody must buy insurance, with government assistance if needed — overreaches the federal government’s powers under the commerce clause of the Constitution.  It’s not a trivial argument.  But an affirmative ruling would be a huge departure from our understanding of the commerce clause going back to the New Deal.  If the healthcare law’s individual mandate is unconstitutional, so is much of what the government has been doing for 80 years or so, and it will be the duty of the Supreme Court to sort through the ruins of the federal government as we know it and find a few shards to start building again.  We can’t help but suspect that the court will choose to avoid this opportunity, by not taking the case, by finding some other grounds for ruling, or by upholding ObamaCare.

“Ever since it passed in 2010, ObamaCare has been attacked as a costly and possibly unconstitutional intrusion of the federal government into people’s lives.  Almost the central issue in the campaign for the Republican presidential nomination has been the resemblance between ObamaCare and the state healthcare plan enacted in Massachusetts under then-Governor Mitt Romney.  Today, most Democrats feel the less said the better.  But if the new law loses in the Supreme Court, the political ramifications may look very different.  If the Supreme Court kills healthcare reform, it will stay dead a long time.  It took 17 years before anybody felt like scaling that mountain again after Hillary Clinton’s failure two administrations ago.”

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Medicare Bundling Payments to Save Money

Wednesday, September 21st, 2011

The Centers for Medicare and Medicaid Services (CMS) has a new program that would bundle insurance payments for multiple procedures with the goal of improving patient care while saving money.  CMS invited providers to help develop four models to bundle payments.  The program encourages hospitals, doctors and other specialists to coordinate in treating a patient’s specific condition during a single hospital stay and recovery.  “Today Medicare pays for care in the wrong way,” Health and Human Services Secretary Kathleen Sebelius said.  “Payments are based on the quantity of care, and not on the quality of that care.  There is little financial incentive for the kind of care coordination that can help patients from returning to the hospital.” 

The models give providers flexibility regarding how they get paid and for which services, and provides financial incentives to avoid needless or duplicate procedures.  “Hospitals and other providers recognize that they have to accommodate the current (fiscal) environment,” said Nancy Foster, vice president for quality at the American Hospital Association. 

“From a patient perspective…you want your doctors to collaborate more closely with your physical therapist, your pharmacist and your family caregivers,” CMS Administrator Donald Berwick said.  “But that sort of common sense practice is hard to achieve without a payment system that supports coordination over fragmentation.  We’re taking steps that will save Medicare, seniors and taxpayers $28 billion over 10 years. Medicare is paying much more than the private sector for equipment like wheelchairs and walkers.  By expanding our successful competitive bidding program, we can ensure that Medicare pays a fair rate for these goods.”

According to CMS, the initial round of competitive bidding has added up to savings of 35 percent compared to the fee schedule.  Questions in the 1st quarter of 2011 totaled less than 0.9 percent of calls to Medicare’s call center; Medicare received just 45 complaints during that time.  CMS will conduct the second phase of the program for a similar set of products in 91 major cities.  Competition begins this fall; the new prices go into effect on July 1, 2013.  “The success we’ve had in the first phase tells us that we can achieve these savings with no disruption for patients’ access and no negative effect on patients’ health,” said Jonathan Blum, deputy CMS administrator and director of the Center for Medicare. “We remain confident in our bidding methodologies that will produce tangible savings while ensuring adequate choice of qualified suppliers.”

The CMS Innovation Center, created under President Barack Obama’s Patient Protection and Affordable Care Act (ACA), has been investigating bundling payments as part of a larger effort to both improve patient care and reduce costs.

There is some disagreement over whether the CMS bidding program is successful.  Economists, consumer groups and some in Congress are on record opposing the program.  They cite reduced access to care, flaws in the program design and impact on local jobs.  “There’s a reason why more than 30 patient advocacy groups, 244 economists and auction experts and 145 members of Congress oppose this program: it undermines quality of care and it increases costs,” said Tyler J. Wilson, president of the American Association for Homecare.  “Because of this bidding program, beneficiaries will spend more time in expensive institutions, rather than in the far more cost-effective setting for care – their own homes.” 

Tim Size, executive director of the Rural Wisconsin Health Cooperative, is concerned about the impact on rural hospitals.  “Washington has created a new ‘super committee’ to find more cuts.  Some call it a super Congress to remind us this is a small group given powers usually kept by Congress.  Most economists say Washington needs a coherent policy for both additional cuts and additional revenue.  But politics seems to have taken new revenue off the table.  Most people believe the super committee will deadlock.  If Congress fails to act, cuts will be implemented across the board.  Most federal programs will be cut.  Across-the-board cuts harm efficient programs along with the inefficient.  Across-the-board cuts harm necessary along with the less necessary. The country deserves better than bulldozers driven by blindfolded drivers.  Most rural hospitals are financially just holding their heads above water.  Under-payment by government programs has left them vulnerable.  A sluggish economy and an increasingly competitive healthcare marketplace are taking their toll.  Medicare and Medicaid are rural hospitals’ largest payers. Additional cuts are likely to tip many rural hospitals into the red and eventual closure.”

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HHS Moves Forward to Create Healthcare Insurance Exchanges

Tuesday, August 30th, 2011

The Department of Health and Human Services (HHS)  has given $185 million to 13 states and Washington, D.C. to help them build Affordable Insurance Exchanges –one stop shopping that lets consumers choose a private health insurance plan that is virtually identical to insurance choices offered to members of Congress.  Since President Barack Obama signed the Affordable Care Act (ACA), more than half of the states have moved forward on building insurance exchanges.  The ACA creates Affordable Insurance Exchanges that will allow eligible individuals, families, and small businesses to shop for coverage beginning in 2014.  HHS plans to make more grant awards over the next several months.

According to HHS Secretary Kathleen Sebelius, “Too many American families have been priced out or locked out of the health insurance market.  Exchanges will give them control and could save them thousands of dollars a year.  I am encouraged by the progress states have made to date and am excited to give them more resources to continue their work.”

One state that is seeking guidance on how to set up its healthcare exchange is Nebraska,  which has questions about implementing this provision of the ACA.  According to state health insurance analyst Michael Sciullo, officials still haven’t learned the precise details of how the health insurance exchange could be established.  Sciullo is uncertain about whether a Nebraska-run program would carry over to other states, which option is the most cost-effective and how many participants would meet income requirements to join an exchange.  “There seems to be a lot of challenges with the concept,” Sciullo said.  “I think initially it was a concept that sounded great, particularly when we talk about the pooling aspect.  But with all the other challenges facing states as they prepare for the exchange process…it’s been one of those things that sounded a lot better in theory than has worked out practically.” 

Nebraska officials face the challenge of deciding whether the state will join the federal exchange, participate in a regional exchange with other states or create its own exchange.  A regional exchange In Nebraska is not likely because each state has different regulations governing healthcare insurance.  

HHS is encouraging states to set up their own exchanges because a peculiarity in the ACA is that while it gives HHS the authority to create a federal exchange for states that don’t set up their own, it doesn’t have the authority to provide any funding to achieve this goal.  The irony is that the law appropriates virtually unlimited dollars to help states create their own exchanges.  The federal exchange will have the same authority as the states to impose fees on insurance sold through the exchange once it is open for business.  No money is coming in until people start purchasing insurance, and there is significant work to be done in preparing to create federal exchanges.  “It’s very clear that (the HHS) secretary should ‘use such sums as may be necessary’” for supporting states in setting up exchanges, but it’s “sort of silent” on the federal fallback exchange, said Jon Kingsdale, founding director of the Massachusetts Connector, who advises HHS on setting up the federal exchange. 

The recent announcement that HHS, The Department of Labor, and the Treasury  proposed new rules that will help consumers easily understand their health coverage and determine the best options for themselves and their families.  Additionally, these proposed rules will help employers find the best coverage for their business and their employees.  Under the proposed rule alterations, health insurers and group health plans will give consumers clear, consistent and comparable information about their health plan benefits and coverage.  The new forms, scheduled to be available next year, will be a vital resource for more than 180 million health insurance consumers with private coverage.  “Today, many consumers don’t have easy access to information in plain English to help them understand the differences in the coverage and benefits provided by different health plans,” Sebelius said.  “Thanks to the Affordable Care Act, that will change.”  According to Sebelius, the simplified options have been sent to the nation’s governors for their input and approval. 

“Workers and their families need clear and understandable information regarding their health coverage,” said Secretary of Labor Hilda L. Solis.  “Today’s proposal is a common-sense step that will help workers quickly and easily compare different coverage options, in order to make more informed decisions.”  

Writing on the White House blog, Dr. Donald Berwick, administrator of the Centers for Medicare and Medicaid Services, says that “Having affordable, quality health insurance is incredibly important.  But how can you pick the plan that is best for you and your family if insurance plans are written in words you cannot understand or in type so small you can barely read it?  And how can you take advantage of the health benefits you have if you don’t know what your plan covers?  You’re not alone in your confusion.  Too many Americans don’t have access to information in plain language to help them understand the health coverage they have.  Now, thanks to the Affordable Care Act, every American consumer will receive an important new tool to understand their coverage.  Under proposed rules, health insurers and employers who offer coverage to their workers must provide you with clear and consistent information about your health plan.”

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What U2 Can Teach You About Building a Corporate Culture

Wednesday, August 17th, 2011

The Grammy Award-winning Irish rock band U2 is an excellent case history in how to create a powerful culture of connection.  This is the opinion of Michael Lee Stallard and Jason Pankau, partners in E Pluribus Partners, the world’s leading experts on how rational and emotional connections can boost productivity, innovation and organizational performance in the workplace.

In a recent interview for the Alter+Care Inspire Podcasts, Stallard and Pankau trace U2’s culture of connection back to the time when Bono’s mother died suddenly when he was just 14.  Because his father was so grief-stricken, he was unable to console his son, leaving Bono to grieve alone – a very difficult process for an adolescent.  When his friend and fellow band member Larry Mullen, Jr.’s mother died, Bono consoled his friend and created a lifetime bond with him.

That culture of connection has stayed with Bono throughout his adult life.  When Edge’s went through a divorce, the band members rallied around their friend to help him through a difficult time.  Later, Adam Clayton started abusing drugs and alcohol.  Instead of abandoning him, U2 decided that no one gets left behind, and the band supported his rehabilitation process.  A death threat was made against Bono because he planned to sing “Pride (In The Name Of Love)” – a song about Martin Luther King – in Arizona.  During the song, Clayton stood in front of his Bono to shield his friend.  Clayton literally was willing to take a bullet for Bono.

U2 is an extremely close band, powerfully crystallized in the fact that they and their long-time manager split all profits five equal ways, which is unusual and makes all members feel equally valued.

Stallard also talked about the connection culture that permeated the unit at Memorial Sloan Kettering Cancer Center where his wife underwent treatment several years ago.  Later – and at the Stallard’s recommendation – a friend went to Sloan Kettering but was treated in a different unit where the atmosphere was completely different.  The result was a far less pleasant experience and proof that culture emanates from the ground level.

To listen to Michael Lee Stallard’s and Jason Pankau’s full interview on how U2 represents a culture of connection, click here.

To sign up for Michael Lee Stallard’s and Jason Pankau’s newsletter and receive a free digital download of their book, click here.

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Skeptical Federal Appellate Court Hears Arguments on the ACA

Wednesday, August 3rd, 2011

Attorneys representing 26 states – with Florida taking the lead – locked horns with the Obama administration in the U.S. Court of Appeals for the 11th Circuit over the constitutionality of the Patient Protection and Affordable Care Act (ACA).Florida, 25 other states and the National Federation of Independent Business claim that the “individual mandate” violates the Constitution’s Commerce Clause by requiring that Americans buy healthcare insurance or pay a penalty.

Arguing for the Obama administration was acting Solicitor General, Neal Katyal, who said “People are seeking this good already in untold numbers.  The good of healthcare.  It’s purely financing.  It’s about failure to pay.  Not about failure to buy.”  Katyal pointed out that the 50 million Americans who currently lack healthcare insurance too often end up in emergency rooms for medical treatment, driving up costs.  Defending the law, Katyal emphasized the special nature of healthcare and the insurance market today.  He said billions of dollars incurred by people without insurance are passed on to people who carry insurance.  Arguing for the states, attorney Paul Clement conceded that the government can enact laws that people acquire healthcare insurance, but not until they need medical care.  Prior to that, “they’re not engaged in commerce.  They’re sitting in their living rooms,” Clement said.

The three-judge panel seemed to be skeptical about the government’s position. “I can’t find any case like this,” Chief Judge Joel Dubina said.  “If we uphold this, are there any limits” to the federal government’s power?  Judge Stanley Marcus said “I can’t find any case” in the past where the courts upheld “telling a private person they are compelled to purchase a product in the open market…Is there anything that suggests Congress can do this?”

So far, three federal district judges have upheld the ACA while two have ruled it is unconstitutional.  Three cases were heard by appeals courts, with a fourth appellate panel planning to hold a hearing in September.  The current case has attracted the most attention because it involves 26 state attorneys general who jointly challenged the law.  Additionally the Atlanta-based 11th Circuit is considered one of the nation’s most conservative federal appellate courts.

If any appeals courts declare the law unconstitutional, the case likely would be heard by the Supreme Court — perhaps during the election year.  Legal experts believe the 11th Circuit is more likely to rule against the administration.

The hearing was a government appeal of a decision by Florida-based U.S. District Judge Roger Vinson that ruled against the insurance mandate and voided the healthcare law.  According to Vinson, the mandate exceeded Congress’ power to regulate commerce because, instead of involving the usual “economic activity,” it targeted “inactivity,” in other words, someone’s decision not to purchase insurance.  This case is high profile because it was brought by more than half of the states; additionally, it tests an unprecedented lower-court ruling that invalidated the entire law.

One of the appellate judges asked Katyal if there are there any limits on Congress’s power to compel people to act. “Absolutely,” Katyal replied.  “We are not saying that Congress can force somebody to buy something and that failure to do so is economic activity.  People are seeking that good already,” he said.  Katyal said $43 billion is spent annually on care for the uninsured.  “That’s quintessentially economic,” he said.  Clement argued that the crux of the issue is whether the federal government can regulate individuals.  “For 220 years, Congress never saw fit to exercise that power,” he said.  “The whole reason we do this is to protect individual liberty.”  According to Clement, the Commerce Clause regulates people engaged in commercial activity and does not force them to engage.

Writing in The New Republic, Jonathan Cohn is reluctant to say how he thinks the court will rule.  “I didn’t hear the entire oral argument, which C-Span helpfully broadcast.  (Note to the federal judiciary: There’s this thing called the internet and it can transmit audio files.)  But I, too, came away genuinely uncertain how the court will rule.  The judges seemed a lot more ornery during the questioning of Katyal than they did during the questioning of Paul Clement, the former solicitor general arguing on behalf of the states filing the lawsuit.  But the actual substance of those questions – and some side comments that the judges made – suggested they were ready to reject essential pieces of the legal challenge.  Particularly striking were a series of comments from Frank Hull, in which she (yes, Frank is a ‘she’) stated repeatedly that she did not agree with the ‘activity-inactivity’ distinction opponents of the law have made.  As those of you following this case know, that’s really the heart of their argument:  They say the decision not to buy insurance is a form of ‘inactivity,’ which means the government may not regulate it.  Supporters of the law, including the government, disagree.  And Hull seemed to side with them, saying (roughly, given my sketchy notes):  ‘When I decide I would rather spend my money differently…that I would rather buy this product than pay for health insurance…that’s an economic decision…How can that be anything other than an economic decision?’”

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HHS Issues Guidance for State Healthcare Exchanges

Wednesday, July 27th, 2011

The Department of Health and Human Services (HHS) has proposed a structure for health insurance exchanges that gives states significant flexibility in how and when they set up open marketplaces designed to boost competition.  HHS announced a sliding deadline for states to create the exchanges, allowing them to receive conditional approval if they are in advanced preparation by 2013.

Additionally, states that are not ready by the final 2014 deadline can delay opening the exchanges until 2015 or later.  States that are still deciding whether to establish health insurance exchanges have sought clarity on how these insurance marketplaces will function.  The federal government previously had provided few details on this key part of the Patient Protection and Affordable Care Act (ACA).

The rationale for the exchanges is to create convenient access to an open marketplace of insurance plans that lets uninsured people and small businesses join together to negotiate affordable rates.  States had faced a January 1, 2013, deadline to decide if they would participate in the program.  Those opting to participate are expected to create governance and information technology structures virtually from scratch to have the exchanges in full operation by 2014.

“If we don’t have significant progress made by the end of the year, the IT experts tell us it’s going to be really hard to meet the deadline,” Kansas Insurance Commissioner Sandy Praeger said.  She is working to establish an exchange despite a lack of legislation in her state to move forward with it, not to mention a conservative governor who strongly opposes the health law.  “The health insurance market is often broken, especially for small businesses,” said HHS Secretary Kathleen Sebelius.  Sebelius said the exchanges would share three key features: They will serve as one-stop shops for comprehensive insurance needs; create competition between insurers based on price and quality; and provide basic coverage to all Americans.  “This is how members of Congress get their health insurance today,” she said.  “And once these reforms are fully in place, buying insurance will become much more like buying a home appliance or an airline ticket.”

Meanwhile, HHS announced three new initiatives to help states improve the quality and cut the cost of care for “dual eligible” – the approximately nine million Americans who qualify for both Medicare and Medicaid.  The programs include a demonstration program to try out two new financial models to better coordinate care for people who are eligible for both government programs; a demonstration program to help states upgrade the quality of care for people in nursing homes that focuses on cutting hospitalizations; and setting up a technical resource center to help states improve care for high-need high-cost beneficiaries.  “By improving care to the most vulnerable of our citizens, we can improve the quality of their lives and prevent wasteful spending,” Sebelius said.  “Governors and their staff have been looking for tools to help them accomplish these important goals.  I am pleased that we can continue our strong partnership with the states to do this.”

These moves couldn’t come at a better time.  It is estimated that the growth in the uninsured adult population continued in 2010 — particularly among the number of long-term uninsured and poorer uninsured.  Americans of all ages who were uninsured during the last year reached 60.3 million in 2010, an increase of nearly two million when compared with 2009, according to a report by the National Center for Health Statistics, a division of the Centers for Disease Control and Prevention.

Private health coverage continued to decline while public coverage increased, especially for children.  Among non-elderly adults, 61.1 percent had private coverage in 2010, a 1.7 percent decline.  The rate of privately insured children fell 1.9 percent to 53.8 percent.  While greater numbers of adults became uninsured, fewer children on the whole lost coverage.  That’s largely because the percentage of kids with public coverage — Medicaid and the Children’s Health Insurance Program (CHIP) — increased to 39.8 percent, up nearly two percent.  “Medicaid and CHIP have been a real success story,” said Tom Buchmueller, PhD, a University of Michigan health economist.  State expansion of children’s health programs began increasing the percentage of publicly covered children beginning in 2008.

Sebelius was joined by Washington State Governor Christine Gregoire,  who said the 135,000 dual eligible residents of her state cost $1 billion annually in healthcare costs.  Though they represent only 12 percent of the Medicaid caseload, they total more than one-third of the spending, she said.  “If we could just reduce the cost of two percent a year by investing in community-based solutions rather than nursing homes, which is what our patients want anyway, by helping them avoid psychiatric hospitalizations, we believe we could save at least $10 million a year just with that small segment – that high-risk segment of our dual eligible population.  This is our costliest population, with the greatest need, yet we’re not able to focus on what’s right for them,” Gregoire said.  “The opportunities you’ve provided us will make this possible now.”

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