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Implementing Health Reform: Wraparound Coverage Excepted Benefits And Draft 2016 Letter To Issuers (Updated)


December 20th, 2014

In December 19, 2014, in what one hopes were their last major regulatory actions before the holidays, the Departments of Labor, Health and Human Services, and Treasury released a proposed rule on a new excepted benefit for wraparound coverage, while the Centers for Medicare and Medicaid Services released a Draft 2016 Letter to Issuers in the Federally Facilitated Marketplace.

This post will describe the wraparound coverage proposed rule.   It will be updated in the next day or two to analyze the letter to issuers (issuers being the Affordable Care Act word for insurers.)  I will note briefly, however, that the letter to issuers is very similar to the 2015 letter to issuers, with two major exceptions.  First, because open enrollment for 2016 begins on October 1, rather than November 15, as in 2015, the time frame for completing regulatory review begins earlier and is quite compressed.  Second, the 2016 letter picks up on a few new regulatory initiatives for 2016, such as attempts to provide more accurate provider directories and formulary information.  These changes will be explored more thoroughly in the update to this post.

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New Findings About The ACA’s Impact On Employer-Sponsored Health Insurance


December 19th, 2014

Since the Affordable Care Act (ACA) was signed into law, some of its critics have predicted that businesses would discontinue offering employer-sponsored health insurance, moving employees into the individual Marketplaces. If widespread dropping of employer-sponsored health insurance were to occur, government costs could increase since many low-wage workers would qualify for federal subsidies in the Marketplaces.

A new study, released today as a Web First by Health Affairs, examined data from the Health Reform Monitoring Survey for June 2013 through September 2014, assessing any early changes of employer-sponsored insurance under the ACA. Authors Fredric Blavin, Adele Shartzer, Sharon Long, and John Holahan report that the percentage of workers with employer offers for health insurance was basically unchanged between June 2013 and September 2014: 82.7 percent versus 82.2 percent. The authors are all affiliated with the Health Policy Center at the Urban Institute, in Washington, D.C. 

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The Medicare Shared Savings Program: CMS Turns To Stakeholders On Incentivizing ACO Risk


December 19th, 2014

On December 1, 2014, the Centers for Medicare & Medicaid Services (“CMS”) released its long awaited Proposed Rule to update regulation and operation of the Medicare Shared Savings Program (“MSSP”). In response to concerns raised by participating accountable care organizations, CMS proposes to revise the MSSP program in several ways to provide greater flexibility for ACOs.

However, in important areas CMS may not have gone far enough. This post describes the framework CMS has set forth and then suggests several ways in which the proposal could, in our view, be improved to achieve the CMS objective of encouraging ACOs to bear more risk. In particular, CMS should consider using its waiver authority more robustly; allowing Medicare beneficiaries to designate their primary care providers, and by extension their ACO; and revising the MSSP risk-adjustment methodology to better reflect the changing risk profiles of ACOs.

CMS is actively seeking stakeholder input, which may indicate agency recognition that further changes beyond those in the propose rule are needed. By all indications, stakeholder input will be seriously considered; more than any time in recent memory, stakeholder comments will make a difference in the shape of the Final Rule. This presents a unique opportunity for stakeholders and we urge concerned parties to share their perspectives through comments – the deadline for submitting comments is February 6, 2015.

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The Dane Difference: Why Are Dane County’s Exchange Premiums Lower?


December 18th, 2014

During the next few years, states and the federal government will likely seek solutions to control costs and improve quality in the Affordable Care Act (ACA) health insurance marketplaces. State and federal policymakers should look carefully at the decades-long success of the Wisconsin State Employee Health Plan (WSEHP) in controlling the rapid rise of health insurance costs in Dane County—where Madison, Wisconsin’s state capital, and the University of Wisconsin, are located—as they seek to improve the effectiveness of the ACA’s marketplaces and health insurance costs in general.

The WSEHP consistently obtains substantially lower health insurance premiums in Dane County than in Wisconsin’s 71 other counties. In 2013, an individual plan in the WSEHP was about $1,400 cheaper annually in Dane County, or 16 percent less than the average in the rest of the state; and a family plan was about $3,500 cheaper, also a 16 percent difference. This Dane difference has existed for at least a decade, with the gap slowly widening over that time.

Why does WSEHP get much lower premiums in Dane County than in the state’s 71 other counties, and what lessons can policymakers learn from this difference?

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How To Succeed At Payment Reform (By Really Trying)


December 18th, 2014

Editor’s note: This is part 2 of a blog post adapted by the author from his recent keynote address at the New York State Health Foundation Conference, “Payment Reform: Expanding the Playing Field.” You can watch his half-hour speech, beginning around the eight-minute mark.

In my previous post, I explained “Why I Oppose Payment Reform.” Despite the reservations I laid out in that post, I do not actually oppose payment reform.

To summarize the case for payment reform, fee-for-service payment has supported a fragmented delivery system with little accountability for cost or quality.  As there is growing consensus that we want to move from our current system toward one that maximizes the health outcomes we achieve relative to the resources we expend, alternative payment models may provide us with a path. We should remember, however, that payment reform is a tool, not an end in itself; and we should be clear about our goals and then deploy the tool where it can help us achieve those goals.

Achieving payment reform is a process.  Here are five elements that are necessary for a successful process.

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ACO Quality Results: Good But Not Great


December 18th, 2014

On September 23, 2014, the Centers for Medicare and Medicaid Services (CMS) released Year 1 Quality Performance results for Accountable Care Organizations (ACOs) that began participating in the Medicare Shared Savings Program (MSSP) in 2012 or 2013. Another report, released shortly before, outlined financial performance of the ACOs and showed that only 49 ACOs, or 22 percent of those ACOs, qualified for shared savings payments by successfully reducing total spending.

Opportunity for continued quality improvement aside, a troublesome snag for the program could be a very low correlation between improved quality and earned savings: our analysis shows that, in performance year one, improved quality and earned savings only correlate at 8.6 percent, so low that it is statistically insignificant (Figure 1).

In practice, this means that better quality is not associated with better financial results. Twenty-one of the 49 ACOs that did earn shared savings actually scored below the average quality of the group. For the first year, quality outcomes did not affect the size of shared savings payments, but in future years ACOs that perform poorly on quality measures will lose a portion of any shared savings.

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Health Affairs Web First: The Bottom Line On Different Management Models In State Health Exchanges


December 17th, 2014

The Affordable Care Act gives states discretion as to how they design their health insurance Marketplaces. Some states run their own Marketplace; others are part of the federally facilitated exchange; and a few chose a state-federal partnership. All states have plan management responsibilities, and if a state runs its own Marketplace, it has management choices. A “clearinghouse” model of management is when all health plans meeting published criteria are accepted into the exchange.

This model is used by some state-run exchanges and all the state-federal partnerships and federally facilitated exchanges. The alternative is the “active purchasing” model, allowing a state to directly negotiate premiums, provider networks, and other details. This model has been adopted by ten of the seventeen state-run exchanges.

A new study, released today as a Web First by Health Affairs, found that in the 2013–14 open enrollment period, state-based Marketplaces using a clearinghouse model had significantly lower adjusted average premiums for all plans within each metal tier (bronze, silver, and gold) compared to state-based Marketplaces having active purchasing models. This study offers the first attempt to assess the premium differences across Marketplace models.

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Shared Decision Making And The Use Of Patient Decision Aids


December 17th, 2014

More than 30 years ago, a Reagan-era Presidential Commission urged the national adoption of “shared decision making” (SDM) as a way to improve communication and informed consent in health care. Since then, many patient decision aids (PDAs) have been developed — tools that present information about common medical choices in standardized, user-friendly formats. More than 100 published, randomized trials using PDAs have shown many benefits.

Summarizing these benefits, a recent Cochrane review concluded that using PDAs can lead to patients gaining knowledge, having a more accurate understanding of risks, harms and benefits, feeling less conflicted about decisions and rating themselves as less passive and less often undecided. But there remains a lack of evidence that these tools actually change the way clinicians and patients communicate, and it is unclear to what extent more medical decisions are actually being shared.

A discussion paper recently published by the Institute of Medicine (IOM) reviewed the literature on the implementation of PDAs in clinical practice and concluded that, despite some areas of progress, “the promise of SDM remains elusive.” In this blog post, we expand on some ideas raised in the recent Discussion Paper and provide specific recommendations in three areas: technological support for shared decision making, recognition that failure of shared decision making comprises a medical error, and a transformation in how we conceptualize “informed consent.”

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Implementing Health Reform: Enrollment And Reenrollment For 2015 (Updated)


December 16th, 2014

The December 15, 2014 deadline for reenrolling in qualified health plan (QHP) coverage to assure continuous coverage as of January 1, 2015 has come and gone.  Individuals who were enrolled through the federally facilitated marketplace (FFM) for 2014 but did not return to the marketplace to shop for 2015 plans will be passively reenrolled in their 2014 plan or in a plan similar to it.  The 2015 open enrollment period lasts through February 2015, and individuals can return to the FFM at any time before then to change plans.  But the change will not be effective for January 1.

A number of state-operated exchanges—including New York, Massachusetts, Idaho, Rhode Island, Washington, Minnesota, and California—have reportedly either extended the date by which individuals can enroll or reenroll and still have coverage effective January 1 or given individuals who had begun the enrollment process as of December 15 extra time to complete the process for January 1 coverage.  The FFM has not extended the deadline.

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Investing In The Health And Well-Being Of Young Adults


December 15th, 2014

Young adulthood — ages approximately 18 to 26 — is a critical time in life. What happens during these years has profound and long-lasting implications for young adults, and — because many are parents — for the next generation.  Healthy, productive, and skilled young adults are critical for the nation’s workforce, global competitiveness, public safety, and national security.

Although young adults are resilient and adaptable, they are surprisingly unhealthy, showing a worse health profile than both adolescents and adults in their late 20s and 30s. Recent national attention on young adults has focused primarily on enrolling them in health care insurance to offset the higher costs associated with care for older adults under the Affordable Care Act 2010 provisions — mistakenly implying that it is not in their own interest to have health insurance. Unfortunately, too little attention has been paid to young adults’ specific health needs and the transitions they face once they are in the health care delivery system.

The Institute of Medicine and National Research Council recently released a new report titled Investing in the Health and Well-Being of Young Adults, which reviews what is known about the health, safety, and well-being of young adults and offers recommendations for policy and research. It was prepared by a committee with expertise in multiple disciplines, including public health, health care, behavioral health, sociology, social services, human development, neuroscience, economics, business, occupational health, media, and communications. We served as chair and a member of the committee, respectively.

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Implementing Health Reform: Beneath The Hood Of The ‘Cromnibus’


December 12th, 2014

The “Consolidated and Further Continuing Appropriations Act, 2015” or “Cromnibus” legislation moving through Congress contains a number of provisions that relate to the implementation of the Affordable Care Act (ACA).

Risk Corridors

The provision that has been most widely noted so far requires the risk corridor program to be budget neutral for 2014. The risk corridor program moves funds from qualified health plans (QHPs) that have lower than anticipated allowable costs to those with higher than anticipated allowable costs. Section 1342 of the ACA, which creates the risk corridor program, contains no explicit appropriation.

A report issued earlier this year by the Government Accountability Office (GAO), which is the final authority on the legitimacy of government expenditures, determined that the continuing resolution for 2014 permitted the Centers for Medicare and Medicaid Services (CMS) to fund the risk corridor program for 2014 both from payments collected from plans with lower than anticipated costs, which were properly characterized as user fees, and from funds transferred from other CMS accounts. No risk corridor payments were in fact payable in 2014, however, as risk corridor payments will first be made in 2015 for 2014.

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Why I Oppose Payment Reform


December 12th, 2014

I recently gave the keynote address at the New York State Health Foundation Conference “Payment Reform: Expanding the Playing Field.” This blog post is adapted from those remarks (you can watch the half-hour speech beginning around the eight-minute mark).

I had my epiphany shortly after I announced my departure from the National Academy for State Health Policy (NASHP) about nine months ago. In an effort to help find my successor, I contacted some executive search firms. One firm quoted what they referred to as the “market price.” When I pressed them to tell me how much effort this price represented, they declined to do so. Ultimately, I recommended that NASHP contract with a search firm that charged by the hour.

It was then that I realized that, given the choice between capitation (a fixed fee for the outcome I desired) and fee-for-service (an hourly rate with no accountability for the outcome), I, as a purchaser, chose fee-for-service. Only a hypocrite would go around talking about the importance of payment reform, while secretly conducting business the old way!

Having given the matter some further thought, I present my five reasons for opposing payment reform:

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What To Watch For During This Year’s Open Enrollment Period: Lessons From The Health Reform Monitoring Survey


December 10th, 2014

The Obama Administration recently lowered its expectations on the number of individuals that are likely to enroll in health insurance plans through the Marketplace by the end of 2015—suggesting that it might be more difficult than expected to find and enroll remaining uninsured residents while retaining people who signed up during the first open enrollment period (New York Times; Wall Street Journal; Washington Post’s “Wonkblog”).

One potential barrier to enrollment is low levels of Marketplace awareness among the uninsured: September 2014 estimates from the Urban Institute’s Health Reform Monitoring Survey (HRMS) indicate that only 52 percent of uninsured adults reported hearing some or a lot about the health insurance Marketplace created by the Affordable Care Act (ACA). Despite this large knowledge gap, awareness of the Marketplace has improved since last September, when only 30 percent of the uninsured reported hearing some or a lot about the Marketplace prior to the first open enrollment period.

While increasing awareness of the Marketplace will continue to be important as the second open enrollment period unfolds, there are two additional issues that may determine how many more uninsured people actually gain coverage this year. First, will the remaining uninsured be reluctant to seek coverage and enroll during the current open enrollment period, and if so, why? Second, for people seeking information on health plans, what sources of information are they likely to turn to, and will those sources be adequate to meet the demand?

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From The National Coordinator For Health IT: The Federal Strategy For Collecting, Sharing, And Using Electronic Health Information


December 8th, 2014

Making our nation’s health and wellness infrastructure interoperable is a top priority for the Administration, and government plays a vital role in advancing this effort. Federal agencies are purchasers, regulators, and users of health information technology (health IT), as they set policy and insure, pay for care, or provide direct patient care for millions of Americans. They also contribute toward protecting and promoting community health, fund health and human services, invest in infrastructure, as well as develop and implement policies and regulations to advance science and support research.

The Office of the National Coordinator for Health IT (ONC) has a responsibility to coordinate across the federal partners to achieve a shared set of priorities and approach to health IT.  To that end, today we released the draft Federal Health IT Strategic Plan 2015-2020, and we are seeking feedback on the federal health IT strategy.  This Strategic Plan represents the collective priorities of federal agencies for modernizing our health ecosystem; however, we need your input. We will accept public comment through February 6, 2015. Please offer your insights on how we can improve our strategy and ensure that it reflects our nation’s most important needs.

A collection of 35-plus federal departments and agencies collaborated to develop the draft Federal Health IT Strategic Plan: 2015-2020, identifying key federal health IT priorities for the next six years (Exhibit 1). The landscape has dramatically changed since the last federal health IT strategyWhen we released that Plan, the HITECH Act implementation was in its infancy. Since then, there has been remarkable growth in health IT adoption. Additionally, the Affordable Care Act implementation has begun to shift care delivery and reimbursement from fee-for-service to value-based care.

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Section 1332 Waivers And The Future Of State Health Reform


December 5th, 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.

The Affordable Care Act (ACA) turbocharges state innovation through a number of provisions, such as the creation of the Center for Medicare & Medicaid Innovation, funding for states to establish customized insurance exchanges, and Medicaid reforms such as health homes and projects geared toward the dual eligible population. Yet another component of the law holds even more potential for broad reform. Buried in Section 1332 of the law is a sparkplug for innovation called the State Innovation Waivers program.

Also known as 2017 waivers or Wyden waivers, 1332s offer wide latitude to states for transforming their health insurance and health care delivery systems. According to the statute, states can request that the federal government waive basically every major coverage component of the ACA, including exchanges, benefit packages, and the individual and employer mandates. But the cornerstone of 1332 waivers is the financing. To fund their reforms, states can receive the aggregate amount of subsidies—including premium tax credits, cost-sharing reductions, and small business tax credits—that would have otherwise gone to the state’s residents. Depending on the size of the state, the annual payment from the federal government for alternate coverage reform could reach into the hundreds of millions or even billions of dollars.

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The Family Glitch, Other Thorny Children’s Coverage Policy Issues, And The Future Of CHIP


December 3rd, 2014

Editor’s note: For more on the topic of children’s health, stay tuned for the December issue of Health Affairs, set to be released next week.

Health Affairs’ recent policy brief on the family glitch highlights one of the key issues affecting how well children will be served in the new post Affordable Care Act (ACA) coverage landscape. Many observers thought that with the creation of health insurance marketplaces and subsidies for low-income families, there would no longer be a need for the Children’s Health Insurance Program (CHIP), which was created in 1997 to provide health coverage for uninsured low-income children.

Together with its larger sister program, Medicaid, CHIP has been quite successful in achieving this legislative goal. From 1997 to 2012, the national rate of uninsured children was cut in half from 14 to 7 percent. Yet, 7 million children still remain uninsured. The ACA, meanwhile,  was aimed primarily at reducing numbers of uninsured adults. The question now is, what policies and systems are needed to sustain and further the progress that has been made to increase rates of children’s insurance?

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Implementing Health Reform: Federal Exchange Reenrollment And More (Updated)


December 2nd, 2014

On December 1, 2014, the Centers for Medicare and Medicaid Services (CMS) released a Guidance for Issuers on 2015 Reenrollment in the Federally facilitated Marketplace (FFM).  This guidance sets out in great detail—with clarifying examples—the process which the FFM and insurers will use to send and receive enrollments and reenrollments for 2015, including the process that the FFM will use to communicate to an insurer when a 2014 enrollee selects a different insurer for 2015 coverage.  The guidance is primarily directed at insurers but should also be of interest to consumers and those who are assisting them.  It demonstrates, I believe, a much higher degree of planning and intentionality than was evident in the 2014 open enrollment period, when enrollment rules often seemed to be developed on the fly.

This post describes the reenrollment guidance, as well as initial enrollment figures for the FFM and other ACA-related developments.

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How Do Alternative Payment Models Fit In With State And National Reform Efforts?


December 1st, 2014

Editor’s note: This post is part of a periodic Health Affairs Blog series, which will run over the next year, looking at payment and delivery reforms in Arkansas and Oregon. The posts will be based on evaluations of these reforms performed with the support of the Robert Wood Johnson Foundation. The authors of this post are part of the team evaluating the Oregon model.

The Affordable Care Act has affected health care at almost every level. Extensive experimentation within states continues to create changes. Given all these shifts, it is helpful to step back and consider how alternative payment models (APMs) fit in with these reforms, and why they are critically important.

Many describe the Affordable Care Act as a means to expand coverage, with relatively little emphasis on controlling costs. This is an oversimplification — accountable care organizations are designed to address costs. New “productivity adjustments” in the Medicare program are also intended to check spending growth. But these changes, while real, represent a patchwork approach to controlling costs that probably do not address the underlying problem.

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Implementing Health Reform: Minimum Essential Coverage And The Multi-State Plan


November 24th, 2014

Two earlier posts this past weekend analyzed the massive Department of Health and Human Services 2016 Benefit and Payment Parameter Proposed Rule, released on November 21.  Also on November 21, the Internal Revenue Service of the Department of the Treasury released a final rule on Minimum Essential Coverage and Other Rules Regarding the Shared Responsibility Payment for Individuals, while the Office of Personnel Management released proposed modifications to the multi-state plan (MSP) program rule.  This post explores these rules.

Minimum Essential Coverage

The ACA requires Americans to either maintain “minimum essential coverage” (MEC) or pay a tax.  There are a number of exceptions to the requirement, however, and the concept of MEC can become quite complicated.  The final rule published by the IRS provides guidance as to the meaning of MEC and the rules governing some of the exceptions.

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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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