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Implementing Health Reform: 2016 Benefit And Payment Parameters Proposed Rule, Insurance Provisions


November 23rd, 2014

On November 21, 2014, the Centers on Medicare and Medicaid Services of the Department of Health and Human Services released its proposed Benefits and Payment Parameters (BPP) RulePart I of this post examined the benefit provisions of this proposed rule. This post will analyze the parts of the rule that deal with the insurance market reforms; the reinsurance, risk adjustment, and risk corridor programs; health insurance rate review; and the individual and SHOP exchanges.

New Definitions Of ‘Plan’ And ‘State’

The regulation begins with a modified definition of the term “plan.”  The terms “plan” is important in the ACA regulations.  A plan has been defined, with respect to a health insurer, as the combination of a benefit package, metal tier, and service area.  The new definition adds to this combination cost-sharing structure and provider network, so that plans that differ in their cost-sharing structure (deductibles, copayments, or coinsurance) or provider networks are different plans, even if they are offered at the same metal tier.  This definition becomes important, for example, in determining whether a plan offered outside the exchange is the same as a qualified health plan (QHP) offered in the exchange and can thus participate in the risk corridor program.  The proposed regulations later propose that the unreasonable rate review regulation applies at the plan level.

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Implementing Health Reform: 2016 Benefit And Payment Parameters Proposed Rule, Consumer Provisions; Hardship Exemptions


November 22nd, 2014

On November 15, 2014, the marketplaces reopened for 2015.  Anecdotal reports indicate that in most places enrollment and reenrollment are running smoothly.  But the Centers of Medicare and Medicaid Services (CMS) of the Department of Health and Human Services (HHS) is looking forward to 2016.  On November 21 CMS published its massive 2016 Notice of Benefit and Payment Parameters (BPP) Proposed Rule  with accompanying fact sheet.  It also published the draft 2016 actuarial value calculator and draft actuarial value calculator methodology for 2016.  Finally, CMS published a guidance on hardship exemptions for certain individuals.

Not to be outdone, the Department of the Treasury, Internal Revenue Service released its final regulation on Minimum Essential Coverage and other Rules Regarding the Shared Responsibility Payment for Individuals, together with a Notice regarding Individual Shared Responsibility Payment Hardship Exemptions that May be Claimed on a Federal Income Tax Return Without Obtaining a Hardship Exemption Certificate from the Marketplace and a Revenue Procedure setting out indexed adjusted percentages of income that will be used for determining the level of contributions expected of individuals before premium tax credits become available, the affordability threshold for the shared responsibility payments unaffordability exemption, and the threshold for determining whether employer coverage is affordable for purposes of determining eligibility for tax credits.

Finally, the Office of Personnel Management released a lengthy proposed rule proposing modifications in the multi-state plan program.  These rules, proposed rules, and guidances will be addressed in a series of posts over the next several days.  This post will address primarily the consumer-facing provisions of the BPP proposed rule, focusing on changes in benefits.  A second post will follow, discussing the provisions of the rule more relevant to insurers, such as proposed changes in the reinsurance, risk adjustment, and risk corridor rules.  A final post will discuss the IRS rule, which is primarily a finalization of proposals and guidances already made public, and the OPM multi-state plan rule.

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Sovaldi, Harvoni, And Why It’s Different This Time


November 21st, 2014

With the Food and Drug Administration (FDA)’s approval of Harvoni, the successor to Gilead Science’s Sovaldi, the alarm bells have officially rung on breakthrough hepatitis C treatments. One can’t open a newspaper or scan a Twitter feed without stumbling on at least one reference to either of the these two drugs for hepatitis C — an often debilitating viral infection impacting the liver that affects somewhere between 3 to 5 million Americans and several hundred million people worldwide. Hepatitis C infection is often asymptomatic and can have long latency periods. In up to 20 percent of people, chronic infection can lead to liver failure, liver cancer, and potentially liver transplantation.

Gilead Sciences paid $11 billion to acquire the rights to Sovaldi — a drug that offers significant improvement in viral clearance over existing therapies — and launched the drug in the U.S. market at a price ($1,000 per pill, or $84,000 per course of treatment) that is usually reserved for drugs targeting “orphan conditions” for much smaller populations. Not surprisingly, Congress has taken an interest, patient advocacy groups are organizing, the health care community is holding conferences, coalitions are channeling a growing national outrage about the price, and public and private payers are stymied by the challenge of responsibly managing utilization of the drug.

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New On GrantWatch Blog


November 21st, 2014

Health Affairs GrantWatch Blog brings you news and views of what foundations are funding in health policy and health care.

Here are the most recent posts:

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The Latest Health Wonk Review


November 21st, 2014

In this week’s “turkey edition” of the Health Wonk Review, David Harlow of HealthBlawg provides a veritable smorgasbord of health policy posts, including a Health Affairs Blog essay by Jordan Paradise on biosimilars and patent disclosures.

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Adverse Events In Older Adults: The Need For Better Long-Term Care Financing And Delivery Innovation


November 20th, 2014

Evidence mounts that a major disconnect exists between the services most frail older adults need and what they get. The vast majority of frail older adults (around 75 percent) who face challenges in taking care of themselves live at home. According to new research from Vicki Freedman and Brenda Stillman, published in the most recent issue of The Milbank Quarterly, almost a third of these older adults report having an adverse consequence as a result of not getting the help they need. These consequences are pretty grim – the most frequently reported event being wet clothes associated with an unmet need around toileting.

But the most shocking statistic from this research is that hiring a paid helper appears to do little to protect against these consequences. Among those who hired help, nearly 60 percent reported adverse consequences. No doubt this reflects a higher level of need: paid helpers are brought in when the risk is quite high. But, it also reflects an inadequacy in support — an analogous group living in supportive housing (i.e., residential care or assisted living facilities) reported these events at a much lower rate (36 percent).

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Medicare, Medicaid, And Pharmaceuticals: The Price Of Innovation


November 20th, 2014

Editor’s note: This post is part of a series of several posts stemming from presentations given at “The Law of Medicare and Medicaid at Fifty,” a conference held at Yale Law School on November 6 and 7.

Through much of the last half century, Medicare and Medicaid (MM) have not for the most part supported research intended to lead to new drugs. For their role in drug development, we need to look to infrastructure and incentives. The record of the National Institutes of Health (NIH) illustrates the potential of both for pharmaceutical innovation. The current budget of NIH, the big elephant in the zoo of the federal biomedical enterprise, is $30 billion, but apart from a dozen small programs devoted to targeted drug development, most of these billions are not aimed directly at pharmaceutical innovation (See page 234).

Yet the NIH investment in biomedicine has indirectly fueled drug development in the private sector to a huge degree. It has paid for the training of biomedical scientists and clinicians, many of whom went on to staff the drug industry, especially its laboratories. NIH-sponsored research has also generated basic knowledge and technologies and it has encouraged universities to spin out their potentially useful findings into the industry by allowing for the patenting and licensing of the findings.

Like NIH, MM has helped fuel drug development indirectly by supporting selected experimental cancer treatments, medical education, and some clinical research and training. But investment in these activities has been small and their impact on drug development apparently very limited. In contrast to NIH, the MM stimulus to drug innovation has resided not in the production of new scientists or the patented uses of new knowledge, but principally in markets and pricing.

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Health Affairs Web First: In 11-Country Survey Of Older Adults, Americans Are Sickest But Have Quickest Access To Specialists


November 20th, 2014

A new survey of the health and care experiences of older adults in eleven different countries, released recently as a Web First by Health Affairs, found that Americans were sicker than their counterparts abroad, with 68 percent of respondents living with two or more chronic conditions and 53 percent taking four or more medications. Also, Americans were most likely to report cost-related expenses for care (19 percent of respondents) than residents in any of the other countries surveyed.

On the other hand, the United States compared favorably in some aspects: For example, 83 percent of US respondents had a treatment plan they could carry out in their daily life, one of the highest rates across the surveyed countries.

A few other key findings:

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Spreading Like A Wildfire: Interprofessional Education – The Vanderbilt Experience


November 20th, 2014

Well before the Affordable Care Act was passed in 2010, efforts to expand interprofessional education (IPE) were beginning to change the mindset that permeated much of health professional education in the US. One such example is the Vanderbilt Program in Interprofessional Learning (VPIL) that was established in 2010 with initial support from the Josiah Macy Jr. Foundation, and later from the Baptist Health Trust.

To learn about the challenges, successes, and surprises experienced by those who developed and lead IPE at Vanderbilt, I interviewed Linda Norman, Dean of Vanderbilt University School of Nursing, Bonnie Miller, Associate Vice Chancellor for Health Affairs and Senior Associate Dean for Health Sciences Education at Vanderbilt University Medical Center, and Heather Davidson, Director of Program Development for VPIL.

Peter Buerhaus: What were the key challenges faced when you started IPE at Vanderbilt?

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The Case For Advancing Access To Health Coverage And Care For Immigrant Women And Families


November 19th, 2014

Before the end of the year, the Obama administration is expected to announce that millions of undocumented immigrants will be able to lawfully stay in the United States. The new Congress may also take action on immigration reform legislation. Regardless of how it happens, any immigration policy change presents a good opportunity to revisit what has gone wrong with insurance coverage and health care for millions of immigrants, both undocumented and lawfully present, living and working in communities across the country.

A web of policy barriers to public and private insurance options effectively keeps millions of immigrant women and their families from affordable coverage and the basic health care—including sexual and reproductive health services—that coverage makes possible. Removing these barriers would advance the health and economic well-being of immigrant women, their families, and society as a whole. Most immediately, administrative steps advancing access for even some immigrants would be an important step forward. The case for doing so is compelling.

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Narrative Matters: Connecting With Community Health Workers


November 19th, 2014

The November issue of Health Affairs features two Narrative Matters essays.

A program connecting community health workers with patients in Boston shows benefits but is shuttered after funds dry up. Heidi L. Behforouz’s article is freely available to all readers, or you can listen to the podcast.

A community health worker and his patient share stories to create an empowering narrative of diabetes and treatment. Samuel Slavin’s article is freely available to all readers, or you can listen to the podcast.

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Shifting From Depression Screening Alone To Evidence-Based Depression Treatment In ACOs


November 19th, 2014

In their October 2014 Health Affairs article, “Few ACOs Pursue Innovative Models That Integrate Care for Mental Illness And Substance Abuse With Primary Care,” Valerie Lewis et al. identified that the quality measures in an Accountable Care Organization’s (ACO) contract affect how well that ACO integrates behavioral and physical health integration.

The authors note that depression screening is a common measure among the ACO contracts that include behavioral health measures and suggest that additional measures could lead to further improvement. In this blog, we propose some additional measures and consider whether effective measures alone will be sufficient or just necessary to promote integrated care models that reduce costs and improve health for the ACO’s defined population.

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Dear Governor-Elect: Some Health Policy Counsel


November 18th, 2014

Congratulations on your election on November 3. It is a mandate for your vision and leadership.  Now, like the proverbial dog who has caught the meat truck — where to begin with this business of governing?

As you contemplate the work in front of you, I would like to offer some (unsolicited) advice about a possible state health policy agenda, borne from my own work and observing states across the country. The recommendations are non-ideological and substance-neutral.  You will look hard to find a reference to the Affordable Care Act (ACA) here. The challenges states face in health care are so large they defy simple solutions and require collaboration across our widening ideological divide; energy spent attacking the ACA is energy diverted from these challenges.

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Challenges For People With Disabilities Within The Health Care Safety Net


November 18th, 2014

Medicare and Medicaid were passed to serve as safety nets for the country’s most vulnerable populations, a point that has been reemphasized by the expansion of the populations they serve, especially with regards to Medicaid. Yet, even after 50 years, the disabled population continues to be one whose health care needs are not being met. This community is all too frequently left to suffer health disparities due to cultural incompetency, stigma and misunderstanding, and an inability to create policy changes that cover the population as a whole and their acute and long-term needs.

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New Health Policy Brief: The 340B Drug Discount Program


November 18th, 2014

A new policy brief from Health Affairs and the Robert Wood Johnson Foundation (RWJF) examines the 340B Drug Discount Program. This federal program, established in 1992, was created to allow safety-net health care organizations serving vulnerable populations to buy outpatient prescription drugs at a discount. In the past few years, government reports have highlighted deficiencies in the oversight and management of the 340B program, whose sales in 2012 were reported by the Department of Health and Human Services (HHS) to total $6.9 billion.

The program has also received more attention as a result of two factors: the Affordable Care Act’s (ACA’s) addition of more program-eligible institutions and new guidelines from the Health Resources and Services Administration (HRSA) allowing program participants to contract with multiple pharmacies. Some critics have raised concerns about a philosophical difference between the original intent of the program (helping safety-net institutions to stretch limited resources) from the fact that many institutions see a profit when public and private payers reimburse them at a rate higher than what they paid for the drugs.

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Continuity Of Care For Chronic Conditions: Threats, Opportunities, And Policy


November 18th, 2014

Continuity of care is a bedrock principle of the patient-doctor relationship and is believed to be a fundamental attribute of high-quality medical care. Mounting evidence suggests that continuity of care for patients with chronic conditions prevents hospitalizations, reduces health care costs, and may prolong life in some populations.

Because patients are most likely to have longitudinal relationships with their pediatricians, family physicians, and internists, taken together, these primary care doctors are integral to translating continuity into meaningful care coordination. However, within the rapidly shifting landscape of health care delivery in the United States, continuity of care is simultaneously threatened and promoted by emerging care models.

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Analysis Of Medicare Spending Slowdown Leads Health Affairs Blog October Most-Read List


November 17th, 2014

Loren Adler and Adam Rosenberg’s examination of the causes of slower Medicare spending growth was the most-read Health Affairs Blog post in October. Their post was followed by Jeff Goldsmith’s interview with former Kaiser Permanente CEO George Halvorson.

Next on the top-ten list was J. Stephen Morrison’s look at the US response to Ebola and the role of Centers for Disease Control and Prevention Director Tom Frieden, followed by Tim Jost’s post on reference pricing and network adequacy.

The full list is below:

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How Consumers Might Game The 90-Day Grace Period And What Can Be Done About It


November 17th, 2014

Under the Patient Protection and Affordable Care Act (ACA), individuals receiving a federal subsidy are entitled to a three-month premium nonpayment grace period. As long as such an individual has paid at least the first month’s premium of the year, in any subsequent month the individual has three months to make the premium payment before coverage is terminated.

The grace period has obvious benefits for consumers, yet as a recent Health Affairs Health Policy Brief describes, this provision of the law has created significant apprehension among doctors and other health care providers who worry they will go unpaid when coverage is retroactively terminated for their patients. Unfortunately, as we explain here, this provision could have even broader adverse implications for the health care system.

The grace period law could encourage subsidized individuals to regularly pay only nine months of premiums and receive, in effect, twelve months of coverage. Should this gaming become widespread it could increase premiums (perhaps by as much as several percentage points) for everyone who purchases coverage in the individual (non-group) exchanges.

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Battle Lines Drawn Over Biosimilar Application And Patent Disclosure Process


November 17th, 2014

The Biosimilars Price Competition and Innovation Act of 2009 (BPCIA) introduced a long-awaited, and highly-supported, abbreviated route to market for “biosimilar” and “interchangeable” biologic products. The goal was to create incentives for development and reduce health care costs in the same way that previous legislation had accomplished in the generic arena over three decades ago.

However, widespread criticism of BPCIA provisions to facilitate interactions between biosimilar applicants and reference biologic sponsors regarding application submission and patent status was swift and unrelenting. Attorneys practicing in the realm of Hatch-Waxman litigation for generic drugs balked at the drastic differences between the familiar public process grounded in required patent disclosures, FDA Orange Book listings, and generic applicant certifications and the private, iterative process set forth in the BPCIA. Legal scholars, industry representatives, and practitioners alike projected that a courtroom battle regarding real-world operation of the provisions was imminent.

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Implementing Health Reform: Setting The Stage For 2015 Open Enrollment


November 16th, 2014

On November 15, 2014, the Affordable Care Act marketplaces reopened for 2015 enrollment, the second year of ACA coverage.  On November 14, the Centers for Medicare and Medicaid Services and the Office of Personnel Management released guidance and reports laying the groundwork for the second year.  This post covers these and notes briefly a couple of ACA court decisions that also came down on November 14.

Plan data release.  CMS released a number of data files containing information on plans available on the marketplaces for 2015 and their rates.  First, the release includes “landscape files” including plans available by county along with premium and cost-sharing data for selected scenarios and services for the 2015 plan year for the federally facilitated marketplace and federally facilitated SHOP.

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