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Implementing Health Reform: Tax Form Instructions


August 29th, 2014

On August 28, 2014, the Internal Revenue Service re-released the draft forms that will be used by employer, insurers, and exchanges for reporting Affordable Care Act tax information to individuals and to the IRS for 2014 and 2015, as well as the instructions for completing those forms.  The IRS also released in the Federal Register requests for public comments on three of those forms – the 1094-Bthe 1094-C, and the 1095-C – under the Paperwork Reduction Act.  This post reports on these forms and instructions and on a guidance released by the Centers for Medicare and Medicaid Services.

The tax forms had been published earlier and are described in an earlier post.  The instructions for the forms, however, had not been available and had been eagerly awaited by employers, insurers, exchanges, and tax professionals. Forms 1094-C and 1095-C will be used by large employers with more than 50 full-time or full-time-equivalent employees to determine whether the employer is responsible for penalties under the employer shared responsibility requirements of the ACA.  They will also be used to determine whether employees have received an affordable and adequate offer of coverage, rendering them ineligible for premium tax credits.  Employers are required to provide each full-time employee with a form 1095-C and to file each of these together with a transmittal form 1095-B form with the IRS.

The instructions for the 1094-C and 1095-C are by far the most complex of the instructions released on August 28, filling 13 pages with dense, two column, print.  Most of the complexity derives from the options for complying with the employer mandate and the transition exceptions to that mandate that the administration has created.  These alternatives and exceptions were explored in my posts on the employer mandate final rule when it was issued in February, 2014.  These forms are also complicated by the fact that the IRS decided to allow self-insured large employers to file only the large employer 1094-C and 1095-C, rather than requiring them to also fill out the 1094-B and 1095-B forms, which are filed by other entities that provide minimum essential coverage.  Because the employer mandate has been delayed, large employers are not required to file these forms for 2014, although they may do so voluntarily.

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The Winding Path To Effective Bundled Payment


August 28th, 2014

Tom Williams and Jill Yegian’s excellent blog post makes a great companion to our recent paper on the evaluation of the Integrated Healthcare Association (IHA) Bundled Payment Demonstration. Williams and Yegian offer lessons from their experience implementing a demonstration project that failed to meet its original objectives. This type of analysis is essential.

It’s not unusual for a demonstration to fall short of its original objectives. Learning from such cases is part of the innovation process. This is especially worthwhile for bundled payment, which has many potential benefits for patients, providers, and payers.

None of the barriers encountered in IHA’s demonstration signal a “death sentence” for bundled payment. However, the demonstration clearly shows that bundled payment is difficult to implement.

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State-Based Marketplaces: Leveraging Year-One Lessons To Boost Year-Two Enrollment


August 27th, 2014

In three months, consumers will log onto their state’s health insurance marketplace to investigate their options and enroll in a plan. Already, states are hard at work prepping for the second year of open enrollment, which begins November 15. State marketplaces are expected to increase the number of enrollees this year and adopting lessons from 2013-2014 can help.

A User-Friendly Marketplace

First and foremost, states need a user-friendly marketplace that functions properly and allows consumers, brokers, insurers and navigators to seek and provide information that is timely and credible. States know this, but recently, interviews with 100 staff from five successful state-based marketplaces (SBMs) unearthed several less obvious lessons.

To begin, states should move from last year’s ‘shotgun’ marketing that helped build awareness to a more targeted approach to outreach this year. In addition to some mass marketing to maintain awareness, states should target advertising dollars to high-priority segments and focus on less expensive tools, like direct mailing campaigns and walk-up enrollment centers, which proved to be most effective last year.

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Implementing Health Reform: New Accommodations For Employers On Contraceptive Coverage


August 22nd, 2014

On August 22, 2014, the Departments of Health and Human Services, Labor, and Treasury released an interim final  and a proposed  rule providing for the accommodation of religious objections on the part of an employer or institution of higher learning to providing their employees or students coverage for contraceptive services.  A fact sheet on the rules was also released,   as was a notice on the revision of the form used to collect information on religious objections to contraceptive coverage.

The proposed rule, which applies to for-profit entities, is being issued in response to the Supreme Court’s decision in Burwell v. Hobby Lobby, which ruled that closely-held for-profit corporations may refuse to cover contraceptives for religious reasons.  The interim final rule responds to the Court’s interim order in Wheaton College v. Burwell  (and to 31 lower court injunctions) that released religious non-profit organizations from accommodations earlier proposed by HHS.

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Key Success Factors For the Medicare Shared Savings Program


August 21st, 2014

In January 2012 the Centers for Medicare & Medicaid Services (CMS) officially launched the Medicare Shared Savings Program (MSSP) for the formation of national Accountable Care Organizations (ACOs). Early participants were charged with bringing the theory of accountable care into practice.

Premier, a national healthcare improvement alliance of hospitals and health systems, created a population health collaborative in 2010 designed to assist providers with developing and implementing successful ACOs both in the public and private sectors.

Thus far, the Premier collaborative has advised nearly 30 MSSP applicants, and is working with another 30 more, on how to structure and manage an effective ACO. Through benchmarking tools, financial models, the sharing of best (and worst) practices, etc., members of the Premier PACT Collaborative have outperformed the national MSSP cohort.

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Whither CHIP?


August 19th, 2014

In a day all but lost to Affordable Care Act prehistory, on November 7, 2009, the House of Representatives passed the Affordable Health Care for America Act. Among the bill’s many differences with its Senate counterpart, it would have allowed the Children’s Health Insurance Program (CHIP) to expire at the end of 2013, with children covered under that program enrolled in either Medicaid or commercial Exchange plans.

On December 24, the Senate passed the Patient Protection and Affordable Care Act (ACA). Their bill extended CHIP through fiscal year 2015 while, curiously, enhancing the Federal match rate for the program beyond that date and instituting a maintenance of effort (MOE) requirement for states to keep CHIP kids covered through 2019.

At the time, drafters of the respective chamber’s versions of health reform anticipated heading to conference to negotiate and resolve their differences, with the disposition of CHIP one of the top considerations.

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The Latest Health Wonk Review


August 15th, 2014

At Wright on Health, Brad Wright offers some health policy insight in his August recess edition of the health wonk review. Brad highlights the Health Affairs Blog post by Jon Kingsdale and Julia Lerche on the “one-two punch” threatening the ACA’s second open enrollment period, as well as a variety of other great posts. 

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Key Takeaways From The Medicare Trustees’ Report


August 14th, 2014

Note: In addition to Keith Fontenot, Kavita Patel also coauthored this post. 

Depending on which article you read, either the Medicare Trustees think the program is coming to an end, or the news is great and we don’t need to do anything.

The reality is that the recent Trustees’ report contains both positive and sobering news: while costs have been flat for the last two years and growth is expected to moderate for some years to come, Medicare’s financing is still not in good shape over the long run. Current law benefits exceed financing to pay for them, and the Hospital Insurance Trust Fund will be unable to pay full benefits in 2030.

We cannot assume the problem will resolve itself, and action is needed to ensure the program’s stability.  Moreover, health care remains a substantial portion of the national budget – a whopping 25 percent — and addressing federal fiscal imbalances must include health programs.

Below we provide our key takeaways from this year’s Trustees’ report.

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Implementing Health Reform: ACA-Related Litigation, Special Enrollment Periods, And Navigator Certification And Training (Updated)


August 13th, 2014

Two federal district courts have issued decisions in recent days in litigation relating to the Affordable Care Act. This post will analyze those cases as well as describe two new special enrollment periods recognized by the Centers for Medicare and Medicaid Services (CMS) in guidance issued on August 4, 2014.

A decision on motion to dismiss Indiana case regarding premium tax credits in the federally facilitated exchange.  First, on August 12, 2014, Judge William T. Lawrence of the United States District Court for the Southern District of Indiana issued an opinion in Indiana v. the IRS, one of the cases challenging the legality of the Internal Revenue Service rule recognizing the issuance of premium tax credits through the federal exchanges. There are currently four cases raising this issue pending in federal courts in Oklahoma, Indiana, Virginia, and the District of Columbia.

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Implementing Health Reform: Medicare And The ACA Marketplaces (Updated)


August 12th, 2014

On August 1, 2014, the Centers for Medicare and Medicaid Services released a set of frequently asked questions on the relationship between Medicare and the marketplaces. This is not the first guidance CMS has published on this topic, and much of the information in the FAQ was already available. The FAQ is also quite repetitive, as it answers the same questions under different headings, such as “general enrollment FAQs” and “consumer messaging,” but does contain useful information. This post briefly summarizes the FAQ.

The FAQ emphasizes the fact that Medicare and marketplaces operate independently, with little overlap. The marketplaces do not enroll individuals in Medicare or in Medicare Advantage plans and do not sell Medicare supplement plans. Indeed, exchanges cannot legally sell coverage to Medicare beneficiaries.

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Implementing Health Reform: Transferring Information Among The Exchanges, The IRS, And Taxpayers


August 8th, 2014

For better or worse, Congress decided to use our tax system and the Internal Revenue Service to operationalize two of the most important features of the Affordable Care Act (ACA): the premium tax credits that make coverage affordable to many lower and moderate-income Americans and the individual responsibility provision which ensures that healthy as well as unhealthy Americans obtain health coverage.

The tax credits are available to otherwise uninsured Americans with incomes between 100 and 400 percent of the federal poverty level. For 2014, tax credits are being received by 85 percent of marketplace enrollees and are reducing their premiums in the federally-facilitated exchanges by 76 percent.

The individual mandate is enforced through a tax that will be imposed on Americans who do have minimum essential coverage—such as employment-based coverage, individual coverage, or coverage through a government program—and who do not qualify for an exemption. For 2014, these individuals will owe a tax for each month that they lack minimum essential coverage of 1/12th of $95 per adult and $47.50 per child (up to $285 for a year) or 1 percent of their income above the tax filing limit up to the average annual cost of bronze plan ($2,448 per individual up to $12,240 for families of five or more).

In a recent post on Health Affairs Blog, Jon Kingsdale and Julia Lerche offered an excellent analysis of some of the difficulties that may be encountered during the 2014 tax filing season. In another post I described briefly recently released 2014 tax forms, as well as further guidance on tax matters. This post examines how tax reporting and filing will be handled in greater detail.

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An Evolutionary Approach To Advancing Quality Measurement


August 8th, 2014

Editor’s note: Mary Barton also coauthored this post. 

The Medicare Payment Advisory Commission’s June report, like many current discussions on measuring quality in health care, focuses on the need for measures of overuse and outcomes.  The National Committee for Quality Assurance (NCQA) agrees and is committed to developing better measures for these important priorities.

NCQA’s Healthcare Effectiveness Data and Information Set (HEDIS), a tool used by more than 90 percent of America’s health plans to measure performance, includes a readmissions outcome measure, intermediate outcome measures like blood pressure and blood sugar control for diabetics, and measures of relative resource use.

MedPAC suggests focusing on important resource use outcomes, including preventable admissions, emergency department visits, mortality, and readmissions, as well as healthy days at home. These are important for helping us understand the costs of care.

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Posts On ACA Legal Challenges Lead Health Affairs Blog July Top Ten


August 7th, 2014

Two posts regarding legal challenges to the Affordable Care Act were the most-read Health Affairs Blog posts in August. In the top spot: Tim Jost’s discussion of Supreme Court actions that were arguably at odds with the Court’s Hobby Lobby decision. Next on the list: another post by Jost analyzing two federal appellate court decisions taking conflicting positions on whether consumers may receive premium tax credits under the ACA in states using the federally facilitated exchange.

Number three on the July top-ten list is Suzanne Delbanco’s post on bundled payment, part of her ongoing series on payment reform; Jennifer DeCubellis and Leon Evans’ post on investing in care coordination is next.

The full list is below:

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Having A Baby: Media Confusion Over Charges, Costs, And The Benefits Of Insurance


August 6th, 2014

Note: In addition to Marc Berk, Claudia Schur also coauthored this post. 

Recent discussion about the Affordable Care Act has intensified the media’s interest in the cost of medical care. While as health services researchers we are perhaps in the best position to provide information on complex health care topics, we may need to improve our ability to distill information into one minute sound bites.

A particularly interesting example of the disconnect between media reporting and a more nuanced analysis occurred earlier this year, on March 4, when NBC ran a story about the cost of having a baby. The story confused the very different concepts of what health care providers charge, what they are actually paid, and what consumers owe, and in so doing obscured one of the key benefits for consumers of being insured.

We were startled to hear that, according to NBC, the cost of having a baby has increased more than 300 percent in the past 10 years. According to the report, the cost of a vaginal delivery went from $7,700 to $32,000, while the cost of a cesarean birth went from $11,000 to $51,000. A small heading in the table presented by NBC cited Truven Analytics as the source of these data.

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The Payment Reform Landscape: Accountable Care Organizations


August 5th, 2014

Note: In addition to Suzanne Delbanco, this post is also coauthored by David Lansky.

“The accountable care organization is like a unicorn, a fantastic creature that is vested with mythical powers. But no one has actually seen one,” said former California HealthCare Foundation CEO, Mark Smith, MD, in 2010. Over the last four years, we’ve certainly seen a proliferation of unicorns and we’re now reaching the point where fantasy—at least in a handful of cases—is becoming a reality.

A growing number of large employers are piloting accountable care organizations (ACOs), working through their health plan; in some cases they are doing so directly with provider systems, such as the new Boeing arrangement with Providence Health and Services, Swedish Health Services, and University of Washington Medicine and Intel’s contracting efforts in Albuquerque, New Mexico and Portland, Oregon. The large employers and other health care purchasers with whom we work — eager, if not desperate, for solutions to contain the costs of health care and improve its quality — are watching these first movers carefully to see if ACOs prove to be a viable strategy for improving population health and bending the cost trend.

These leading purchasers intend to set the bar high. They cannot make the investment to pursue these ACO relationships if they are not assured that their populations will see meaningful, measurable gains in their health care and its affordability, as well as their health. That often means contractual commitments to lowering total costs of care and showing improved patient outcomes for targeted populations — like high risk, medically complex patients. Our purchaser colleagues who have been among the early adopters of ACO arrangements have begun to identify the features critical to successful ACOs; these are the elements other purchasers will look for when deciding if it’s worth proceeding.

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Bundled Payment: Learning From Our Failures


August 5th, 2014

Note: In addition to Tom Williams, Jill Yegian also coauthored this post. 

Seeing “IHA” and “Fails” together in the title of an article in the nation’s premier health policy journal was not an outcome that we anticipated when the bundled payment initiative described by M. Susan Ridgely et. al in the August issue of Health Affairs was launched.

The key objective of the Integrated Healthcare Association (IHA)’s initiative was to implement over 20 payer-provider bundled payment contracts, resulting in completion of more than 500 bundled cases within the first two years of the project. During the third year of the project, researchers were to conduct both a clinical and an economic evaluation to test how bundled payments affect the quality and cost of care, in conjunction with an implementation evaluation to determine the scalability of this approach.

Looking back, these targets seem highly optimistic; but at the pilot’s launch, both IHA and its stakeholders had a number of reasons to be confident. The pilot was well funded by a three-year grant from the Agency for Health Research and Quality (AHRQ), building on two rounds of planning and feasibility work over four years funded by the Blue Shield of California Foundation and the California HealthCare Foundation. In addition, there was a high level of interest and enthusiasm among a core group of providers and health plans that had a prior history of collaboration in a California physician pay for performance program.

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Health Affairs August Issue: Variations In Health Care


August 4th, 2014

Health AffairsAugust variety issue includes a number of studies demonstrating variations in health and health care, such as differing obstetrical complication rates and disparities in care for diabetes. Other subjects in the issue include the impact of ACA coverage on young adults’ out-of-pocket costs; and how price transparency may help lower health care costs.

For mothers-to-be, huge differences in delivery complication rates among hospitals.

Four million women give birth each year in the United States. While the reported incidence of maternal pregnancy-related mortality is low (14.5 per 100,000 live births), the rate of obstetric complications is nearly 13 percent.

Laurent Glance of the University of Rochester and coauthors analyzed data for 750,000 obstetrical deliveries in 2010 from the Healthcare Cost and Utilization’s Nationwide Inpatient Sample. They found that women delivering vaginally at low-performing hospitals had twice the rate of any major complications (22.55 percent) compared to vaginal deliveries at high-performing hospitals (10.42 percent

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Decoding 2015 Health Insurance Rate Increase Requests


August 4th, 2014

Note: In addition to Christopher Koller, Sabrina Corlette coauthored this post.

The rates are coming, the rates are coming.

While there seem to be fewer “latest verdicts on the ACA,” breathlessly reported in the popular press, as we move through the second half of 2014, the filing of 2015 rate requests for individual and small group products on the health insurance exchanges offer one more piece of catnip for pundits.

Who is up? Who is down? How much? Is this the dreaded death spiral for the ACA? Or its vindication?

As discussions and analysis of these increases are disseminated, it is important to remember the following points

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An Ounce Of Prevention For The ACA’s Second Open Enrollment


August 4th, 2014

Note: In addition to Jon Kingsdale, this post is coauthored by Julia Lerche.

Since recovering from its flawed rollout, the ACA has enjoyed a string of successes. By April, some eight million Americans managed to enroll; for 2015, some reluctant insurers, including the nation’s second largest (United), are jumping into the new ACA Marketplaces; and the New England Journal of Medicine recently published an analysis confirming the ACA’s significant reduction of the uninsured.

Approximately 87 percent of Marketplace enrollees claimed premium tax credits, of which an estimated 85 percent, or six million, actually paid premiums. (We assume a disenrollment rate of 3 percent per month since April 2014, which is conservative compared with the Massachusetts Health Connector’s experience and in line with the assumptions of several State-based Marketplaces.) Many of the original six million, plus more recent enrollees, will experience their second enrollment between November 15, 2014 and February 15, 2015. They will also file with the IRS for a premium tax credit as early as January 2015.

The two events in combination represent a huge risk. We hope the responsible agencies will act soon to mitigate the risks.

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Implementing Health Reform: King Plaintiffs Ask For Supreme Court Review


August 1st, 2014

On July 31, 2014, Michael Carvin, attorney for the plaintiffs in King v. Burwell, one of two parallel cases challenging an IRS rule allowing premium tax credits to be issued by federally facilitated exchange, filed a petition for a writ of certioriari in the United States Supreme Court. The petition asks the Court to review the Fourth Circuit decision affirming Judge James Spencer’s ruling rejecting their claim.

As was described here in detail last week, ACA opponents lost in the Fourth Circuit in a unanimous decision in King v. Burwell but won a split decision in the District of Columbia Circuit Court of Appeals in Halbig v. Burwell. Carvin is thus seeking Supreme Court review based on a split of authority between the circuits that must be resolved by the Supreme Court.

It is not the intent of this post to review the arguments in Carvin’s brief. Carvin argues that judges Griffith and Randolph made the right decision in Halbig, and that judges Gregory, Thacker and Davis in the Fourth Circuit and Edwards in the D.C. Circuit are wrong. There is really only one new argument in the petition that was not made below, namely that Congress’ intent to deny premium tax credits in states that failed to establish exchanges has now been conclusively established by statements made by Jon Gruber two years after the statute was adopted. This disregards the fact that Gruber neither drafted nor voted on the ACA and had earlier stated that premium tax credits were available in federally facilitated exchange states.

Rather than rehashing the merits, this post will discuss the timing of the petition, the basis on which it can be accepted, and the consequences if it succeeds. Nothing will happen immediately with this petition. The government has 30 days to respond, and can request additional time. The appellants then have 14 days to reply. This puts us into mid-September. It is unlikely, therefore, that the Supreme Court will decide whether or not to accept the petition until it reconvenes in October

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