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Implementing Health Reform: Excepted Benefits Final Rule


September 29th, 2014

Congress adopted Title I of the Affordable Care Act to increase access to health coverage for individuals by reforming employer group health coverage and health insurance offered to individuals and groups, requiring large employers to offer their employees affordable minimum health coverage or pay a penalty, imposing a penalty on individuals who can afford health coverage but fail to obtain it, and offering advance premium tax credits through the exchanges to individuals who cannot otherwise afford to purchase health coverage.

Coverage has long been available both through groups and for individuals that provides some health-related benefits but is neither a group health plan nor insured health coverage, as those terms are defined in the ACA.  These benefits were originally labeled by the Health Insurance Portability and Accountability Act (HIPAA) of 1996 as “excepted benefits,” because they are excepted from the forms of benefits regulated initially by HIPAA and now by the ACA.

On September 26, 2014 the Internal Revenue Service, Department of Labor, and the Centers for Medicare and Medicaid Services (“the agencies”) issued regulations expanding access to excepted benefits through insured and self-insured groups.

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Health Affairs Web First: CHIP Eligibility Finds Decrease In Uninsurance In Some States


September 24th, 2014

As part of the 2009 reauthorization of the Children’s Health Insurance Program (CHIP), states were provided with new resources and options to help reduce uninsurance rates among children. These included: expanded eligibility guidelines; simplified enrollment and renewal procedures; and funding for outreach campaigns. Fifteen states chose to raise their CHIP income eligibility thresholds.

In one of the first studies to analyze the impact of these recent CHIP expansions on the program’s enrollment, published today as a Web First by Health Affairs, authors Ian Goldstein, Deliana Kostova, Jennifer Foltz, and Genevieve Kenney found that “expansion states” saw a 1.1-percentage-point reduction in uninsurance among newly eligible children, cutting this group’s uninsurance rate by nearly 15 percent. The study also discovered that public coverage increased by 2.9 percentage points, revealing a shift among some of these families away from private insurance, and found variable effects across states.

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Bundled Payments: Do They Put Innovation At Risk?


September 22nd, 2014

While the United States health care system is quickly shifting focus from volume to value, bundled payments have emerged as a promising lever for containing costs and improving quality of care. This model, designed to offset some of the downfalls of traditional fee-for-service payments, reimburses providers based on a predetermined cost of an episode, or group of related services.

The model calls for providers to take on some financial risk while meeting quality standards, especially in areas of well-defined procedures like hip and knee replacements. Now, many are beginning to experiment in other high-cost medical areas, such as behavioral health and oncology.

But what is the impact of bundled payments on medical advancement and innovation? Bundled payments are here to stay, but there remains serious apprehension among innovators adjusting to this evolving landscape. NEHI (Network for Excellence in Health Innovation) brought stakeholders together this July to create a conversation in which experts discussed how bundled payments already have, and will, impact patients’ access to innovation.

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Implementing Health Reform: Complicated ACA Tax Forms Could Cause Problems


September 21st, 2014

In a few months, millions of Americans will be filing either form 8962 to reconcile the advance premium tax credit they received with the tax credit they were actually due, or form 8965 because they owe a tax under the shared responsibility (individual mandate) provision of the Affordable Care Act or claim an exemption from that requirement.

By the close of open enrollment in April, 6.7 million Americans had chosen a qualified health plan with premium tax credits,  and many more have since enrolled in a QHP through a special enrollment period and received tax credits.  Each of them will need to file a form 8962.  The Congressional Budget Office estimates that 30 million Americans are potentially subject to the shared responsibility requirement, and that 23 million of them may qualify for an exemption.  The 7 million individuals who owe the penalty will have to file a form 8965, as will most of the 23 million who claim an exemption.

On September 15, 2014 the Internal Revenue Service released draft instructions for form 8965.  On September 17, 2014, the IRS released draft instructions for form 8962.  It is difficult to overstate how complicated these instructions are.  The tax credit and individual responsibility provisions of the ACA were complicated to begin with, but have become ever more complex as new exceptions and special rules have been created as implementation of the legislation has proceeded.  Many of the mostly low income Americans who will be completing these forms are marginally literate, at least in English, and have been accustomed to filing very simple tax forms like the 1040-EZ (which cannot be used by an individual claiming a tax credit) or perhaps not to filing taxes at all.  They are likely to be confused, frustrated, even angry, and certainly bewildered, completing these forms.  It is to be hoped that most of them will be assisted by well-trained tax preparers.

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Pediatric Asthma: An Opportunity In Payment Reform And Public Health


September 18th, 2014

Editor’s note: The post is informed by a case study, the third in a series made possible through the Merkin Initiative on Physician Payment Reform and Clinical Leadership, a special project to develop clinician leadership in health care delivery and financing reform. The case study will be presented on Wednesday, September 24 using a “MEDTalk” format featuring live story-telling and knowledge-sharing from patients, providers, and policymakers. 

The Clinical Challenge: A Chronic, but Manageable Illness

Asthma affects 7 million children – more than 10 percent of kids in the U.S. – and is the most common chronic childhood disease. Yet even with high levels of insurance coverage, 46 percent of pediatric patients have uncontrolled asthma. There are substantial gaps in appropriate prescribing and adherence to effective medications. In addition, a multitude of non-medical issues influence a child’s ability to control their asthma: low parental health literacy, poor quality housing, and environmental triggers such as pests, mold, and cleaning chemicals. As a result 800,000 kids visit the emergency department (ED) for asthma each year.

In 2007 (the latest year which data are available) the U.S. spent over $56 billion on asthma care, of which nearly $27 billion was spent on pediatric asthma. Medicaid is the primary payer for pediatric asthma related hospitalizations with 55 percent of the market. Better control may also mean lower medical costs, due to reductions in ED visits, admissions, and other health care utilization – patients with poorly controlled severe asthma cost nearly $5,000 more per patient per year compared to average pediatric asthmatic costs.

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New Health Policy Brief: Employee Choice


September 18th, 2014

A new Health Policy Brief from Health Affairs and the Robert Wood Johnson Foundation (RWJF) looks at health coverage choice for employees of small businesses. Unlike large organizations, small businesses have been less likely to provide comprehensive health insurance or a choice of plans, and their employees are more likely to be uninsured or underinsured.

To address this insurance gap, the Affordable Care Act (ACA) created the Small Business Health Options Program (SHOP) Marketplaces in each state. (Note: The SHOP exchange was the subject of an earlier Health Policy Brief.) These Marketplaces (eighteen run by state exchanges, thirty-three by the federal government) will provide “one stop shopping,” for small businesses to compare health plans and enroll their employees.

To make SHOP Marketplaces more attractive to small businesses, the ACA required SHOP Marketplaces to offer a feature known as employee choice, in which employers can offer their employees a choice from multiple health insurance plans. While the majority of state-based SHOP Marketplaces have chosen to offer access to multiple plans, employee choice will not be mandatory until 2016. This Health Policy Brief examines the issue of employee choice, the status of its implementation, and whether the concept is successfully attracting more small businesses to offer coverage through SHOP Marketplaces.

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Reference Pricing And Network Adequacy Standards: Conflict Or Concord?


September 18th, 2014

With benefit designs and enrollee cost-sharing increasingly standardized across health plans under the Affordable Care Act (ACA), one of the remaining levers plans have to differentiate themselves—and to control premiums—is the size of their provider networks. Regulators have been caught in a crossfire between advocates of narrow networks who say they promote quality and keep prices down, and those who feel narrow networks could constrain access to necessary services.

Unfortunately, recent federal guidance – addressing, among other related items, the issue of “reference pricing” — blurs the distinction between in-network and out-of-network providers and may make it more difficult for regulators and consumers to understand the effective “size” of a particular network.

This confusion could undermine the goal of improving transparency in consumers’ health care choices and make it difficult for consumers to use prices in choosing providers. More troubling, expanded use of “reference pricing” under the guidance could leave patients paying unexpectedly large out-of-pocket amounts for services provided by ostensibly in-network providers.

Below, we characterize reference pricing as a “sub-network” contracting strategy, and we describe some of the implications of reference pricing and the guidance for consumers, regulators, plans, and providers.

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Implementing Health Reform: Resolving Income-Related Data Inconsistencies (Updated)


September 16th, 2014

On September 15, 2014, the Centers for Medicare and Medicaid Services (CMS) announced a second deadline in its efforts to resolve data inconsistencies remaining from the 2014 open enrollment period.  This second deadline is for the submission of documentation to resolve income inconsistencies for exchange enrollees.  The first deadline was announced in August, when CMS sent final letters to about 310,000 federal marketplace (exchange) enrollees whose enrollments raised citizenship or legal-immigrant status issues, informing them that they must provide verification documents by September 5 or be terminated from coverage as of September 30.

CMS received hundreds of thousands of documents in response to the August request, reducing the number of individuals with citizenship and immigration data-matching issues from 966,000 as of May 31 to 115,000 as of September 14.  These individuals will be terminated as of September 30, 2014, but under the revised bulletin 11, they will be reinstated retroactively if they subsequently produce the documents needed to verify their citizenship or legal alien status. They may also purchase insurance outside the exchange.  Insurers are legally required to offer coverage to individuals who reside in their service area, regardless of citizenship or alien status.

Under the procedure announced on September 15, CMS is sending final notices to individuals enrolled through the federally facilitated exchange who still have income-related data-matching issues, informing them that they must send required information to verify their income as of September 30, 2014 or their premium tax credits and cost-sharing reduction payments will be modified to reflect information reflected in data sources otherwise available to CMS.  For example, if an enrollee’s 2012 tax return reported income higher than that reported by the enrollee on his or her application for advance premium tax credits and cost-sharing assistance, and the enrollee failed to provide verification of the claimed income, the enrollee’s premium tax credits and cost-sharing reduction payments would be modified as of November 1 in accordance with the income reflected in the tax return.

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Reading Piketty In DC: Does Income Inequality Squeeze Health Spending?


September 16th, 2014

In the past year, an element of mystery and suspense has crept quietly into the long-running saga of health care spending growth, in most times a dreary tale of predictability and frustration.

The Congressional Budget Office (CBO)’s August forecast of significant reductions in Medicare spending growth in the next decade will help stoke a running debate about whether the spending slowdown that has outlasted the 2008-2010 recession is merely a delayed effect of the slump or a symptom of structural changes with a life of their own.

The mystery and suspense come from month-to-month uncertainties and inscrutable data about which way the trend lines are bending, and why.

Health Spending and Employment

A useful slant on the puzzle is offered in an August Health Affairs analysis by Dave Dranove and colleagues that examines small area variations in spending growth and correlates them with employment data. Dranove et al. found that relatively higher health spending occurred where employment levels were relatively high, and high unemployment translated into less spending on health. So whether it’s copays, deductibles, insurance contributions, or some other cost associated with obtaining care, personal income is a factor in spending levels, just as health costs are a factor in personal income.

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Early Observations Show Safety-Net ACOs Hold Promise To Achieve The Triple Aim And Promote Health Equity


September 15th, 2014

Safety-net accountable care organizations (ACOs) have the potential to deliver cost-effective, patient-centered care that engages patients and contributes to achieving the Triple Aim in Medicaid. Safety-net ACOs are playing increasingly important roles in delivering care for vulnerable populations. Active ACO formation is occurring in at least 18 state Medicaid programs with considerable variability across states, although they have been slower to develop than ACOs serving Medicare or commercial populations.

This post will outline five key observations regarding emerging safety-net ACOs and suggest broad policy implications. We are defining safety-net ACOs as collaborative entities of providers and sometimes payers that are 1) accountable for managing the health of their population, 2) assuming upside and/or downside financial risk, and 3) serving predominantly Medicaid (including dual eligibles) and uninsured patients.

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The Latest Health Wonk Review


September 12th, 2014

At Health Business Blog, David Williams is not ashamed to be a wonk in his September 11 edition of the Health Wonk Review. David highlights many great posts, including “The 125 Percent Solution,” suggested by Jonathan Skinner, Elliott Fisher, and James Weinstein on Health Affairs Blog, which would give consumers and insurers the option of paying 125 percent of the Medicare price for any health care service.

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ACOs, Bundled Payment Lead Health Affairs Blog August Most-Read List


September 12th, 2014

Posts on payment and delivery reform head the Health Affairs Blog top-fifteen list for August. Suzanne Delbanco and David Lansky’s post on accountable care organizations was the most-read post, followed by Tom Williams and Jill Yegian’s post on bundled payment, written in response to an article published in the August issue of Health Affairs.

Next is Health Affairs’ Editor-in-Chief Alan Weil’s post on the five engagements that will define the future of health, drawn from his keynote presentation at the 2014 Colorado Health Symposium. This is followed by Rosemarie Day and coauthors’ post on the private health insurance exchange system.

The full list is below.

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Birth Control Pills Should Be Available Over The Counter, But That’s No Substitute For Contraceptive Coverage


September 10th, 2014

In recent weeks, some opponents of the Affordable Care Act’s (ACA) contraceptive coverage guarantee have promoted the idea that oral contraceptive pills should be available to adult women without a prescription. Sens. Kelly Ayotte (R-NH) and Mitch McConnell (R-KY), for example, recently introduced the so-called Preserving Religious Freedom and a Woman’s Access to Contraception Act, a bill that would urge the Food and Drug Administration (FDA) to study whether to make contraceptives over the counter (OTC) — though for adults only.

Making birth control pills available over the counter, if done right, would meaningfully improve access for some groups of women. However, such a change is no substitute for public and private insurance coverage of contraceptives — let alone justification for rolling back coverage of all contraceptive methods and related services for the millions of women who currently have it.

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Employer-Sponsored Family Health Premiums Rise 3 Percent In 2014


September 10th, 2014

Average annual premiums for employer-sponsored family health coverage reached $16,834 this year, up 3 percent from last year, continuing a recent trend of modest increases, according to the Kaiser Family Foundation (KFF)/Health Research & Educational Trust (HRET) 2014 Employer Health Benefits Survey released today. Workers on average pay $4,823 annually toward the cost of family coverage this year. Health Affairs Web First article published today contains select findings from the KFF/HRET report.

This year’s increase continues a recent trend of moderate premium growth. Premiums increased more slowly over the past five years than the preceding five years (26 percent vs. 34 percent) and well below the annual double-digit increases recorded in the late 1990s and early 2000s. This year’s increase also is similar to the year-to-year rise in worker’s wages (2.3 percent) and general inflation (2 percent).

Annual premiums for worker-only coverage stand at $6,025 this year.  Workers on average contribute $1,081 toward the cost of worker-only coverage this year.

“The relatively slow growth in premiums this year is good news for employers and workers, though many workers now pay more when they get sick as deductibles continue to rise and skin-in-the-game insurance gradually becomes the norm,” Foundation President and CEO Drew Altman, said.

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A First Look At How The Affordable Care Act Is Affecting Coverage Among Parents And Children


September 9th, 2014

Following the implementation of the major coverage provisions of the Affordable Care Act (ACA) in 2014, the question arises: “How is the health law affecting uninsured children and their families?” Today, the Urban Institute released two new briefs using the Health Reform Monitoring Survey (HRMS) to begin to answer that question.

The bottom line is that between September 2013 and June of 2014, coverage increased for parents, particularly in states that have expanded Medicaid under the ACA, but no coverage changes were yet apparent for children. This early look suggests that the ACA is contributing to coverage gains for parents, which in turn should be beneficial to both them and their children.

Children’s Coverage

The report on children’s coverage from The Urban Institute and the Georgetown University Center for Children and Families found that the uninsured rate for children remained at historically low levels—close to 7 percent—but did not decline further for children under age 18 between September 2013 and June 2014. However, this national snapshot does not capture all of the fluctuations in children’s coverage that may be occurring across the country in particular states; we will have to wait for data from federal sources to have a definitive assessment of how coverage is changing at the state level.

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Rethinking Graduate Medical Education Funding: An Interview With Gail Wilensky


September 9th, 2014

A recent Institute of Medicine report has stirred controversy by proposing to significantly reshape the way Medicare graduate medical education funding is distributed. However, before the panel that wrote the report grappled with how the federal government should fund GME, it had to decide whether the federal government should be involved in the area at all.

“We struggled with the rationale [for a federal role] from the first meeting to the last time we convened,” Gail Wilenksy, who co-chaired the panel with Don Berwick, said in a recent interview with Health Affairs Blog.  After all, she said, the federal government “is not in the business of funding undergraduate medical education or other health care professions in any similar way, or funding other professions that are believed to be important to society and in shortage,” such as engineers, mathematicians, or scientists.

GME funding has been discussed at length in the pages of Health Affairs and will be the subject of a briefing sponsored by the journal tomorrow, Wednesday September 10. (Live and archived webcasts will be available for those who cannot attend in person.) Wilensky will offer opening remarks at the briefing. A summary of the GME report is provided in an earlier Health Affairs Blog post by Edward Salsberg, who will also participate in the briefing.

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Improving Access To High Quality Hospice Care: What Is The Optimal Path?


September 9th, 2014

Editor’s note: This post is part of a periodic Health Affairs Blog series on palliative care, health policy, and health reform. The series features essays adapted from and drawing on an upcoming volume, Meeting the Needs of Older Adults with Serious Illness: Challenges and Opportunities in the Age of Health Care Reform, in which clinicians, researchers and policy leaders address 16 key areas where real-world policy options to improve access to quality palliative care could have a substantial role in improving value.

High quality hospice care is consistent with the country’s stated health care reform goals: hospice is person-centered, improves clinical outcomes such as pain and satisfaction, is provided by a multidisciplinary care team, is coordinated across care settings, reduces unnecessary hospitalizations, and saves health care dollars. Studies have consistently shown that hospice improves quality for patients and families by reducing symptom distress, improving caregiver outcomes, and reducing hospitalizations near the end of life, including emergency department visits and intensive care unit stays and hospital death.

But what about access? Fortunately, hospice care in the United States is growing rapidly and there is much to celebrate in terms of the increase in the number of hospice agencies, the number of patients and families served by hospice, and the breadth of conditions and diagnoses of patients receiving hospice care. In 2011 there were more than 3,500 hospice providers — an increase of 53 percent from 2000 — caring for 1.2 million Medicare beneficiaries.

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Implementing Health Reform: Medicaid Eligibility, 2015 Navigator Grants, And FAQs (Updated)


September 8th, 2014

The decision of the full D.C. Circuit to review the panel decision in Halbig v. Burwell en banc was clearly the big Affordable Care Act (ACA) court decision of the first week in September, but a September 2 decision of the federal district court of the Middle District of Tennessee, Gordon v. Wilson, is also worthy of note.

The Medicaid law has long required state Medicaid programs to determine eligibility for Medicaid with “reasonable promptness,” defined by the regulations to mean within 90 days for applicants with disabilities and 45 days for everyone else. Applicants whose applications are not determined reasonably promptly are entitled by the Medicaid law and by the Due Process Clause of the Constitution to a fair hearing.

Medicaid Eligibility and Tennessee

Tennessee, like all states, was required by the ACA to begin calculating Medicaid eligibility for most recipients using modified adjusted gross income, or MAGI as of January 1, 2014. Tennessee attempted to establish a new computer system for doing this, but when it was not ready by January 1, Tennessee asked the federal exchange to determine Medicaid eligibility until it could get its system operational.

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Think and Act Globally: Health Affairs’ September Issue


September 8th, 2014

The September issue of Health Affairs emphasizes lessons learned from developing and industrialized nations collectively seeking the elusive goals of better care, with lower costs and higher quality. A number of studies analyze key global trends including patient engagement and integrated care, while others examine U.S.-based policy changes and their applicability overseas.

This issue was supported by the Qatar Foundation and World Innovation Summit for Health (WISH), Hamad Medical Corporation, Imperial College London, and The Commonwealth Fund.

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Implementing Health Reform: DC Circuit Vacates Halbig Judgement, Grants Rehearing


September 5th, 2014

On September 4, 2014, the United States Court of Appeals for the District of Columbia granted a request by the government for a rehearing en banc (by the full court) in Halbig v. Burwell.  A divided three judge panel in the Halbig case had held on July 22, 2014 that an Internal Revenue Service rule allowing federally facilitated exchanges to grant premium tax credits was invalid. The D.C. Circuit’s decision to hear the case en banc vacated the panel’s judgement.

On the same day the Halbig panel decision was released, a three-judge panel of the Fourth Circuit Court of Appeals in Richmond, Virginia, had unanimously upheld the rule.  The conflicting decisions resulted in dueling petitions for review.  The plaintiffs in the King case petitioned the Supreme Court for certiorari, asking the Court to reverse the Fourth Circuit decision and hold the IRS rule invalid.  The government, on the other hand, petitioned the D.C. Circuit for a rehearing en banc.

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