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New Health Policy Brief: Risk Corridors (Updated)


February 26th, 2015

The latest Health Policy Brief from Health Affairs and the Robert Wood Johnson Foundation (RWJF) provides an update to an earlier brief on the Affordable Care Act (ACA)’s risk corridor program, which allows the Department of Health and Human Services (HHS) to collect and make payments to qualified health plans. As the brief explains, a recent amendment to federal appropriations raises questions as to whether insurers will receive their full risk corridor payments for 2014.

While the Consolidated and Further Continuing Appropriations Act of 2015, which funded the government for the 2015 fiscal year, did give HHS the authority to collect user fees, an amendment was included that specifically prohibited HHS from transferring money from either trust fund.

The amendment did not eliminate the risk corridor program, nor did it prevent HHS from using payments received from insurers to pay out claims under the program (that is, user fees), but it effectively made the risk corridor program budget neutral unless HHS can find another source of funding. As a result, insurers expecting payments from HHS may not receive the full amount due.

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Implementing Health Reform: Beginning The Cadillac Tax Regulatory Conversation And Other ACA News (Updated)


February 24th, 2015

The Cadillac high-cost health plan excise tax, which goes into effect in 2018, is one of the last-to-be-implemented provisions of the Affordable Care Act (ACA). It was one of the most controversial provisions of the ACA, which contributed to its delayed effective date. But 2018 is now getting closer, and the Internal Revenue Services (IRS) is beginning a discussion about implementation of the Cadillac plan tax.

The Cadillac plan provision of the ACA will impose a 40 percent excise tax on the cost of employer-sponsored health plans when that cost exceeds certain thresholds. It is projected to be one of the biggest sources of revenue under the ACA; the Congressional Budget Office (CBO) in its 2015 Budget and Economic Outlook Report estimated that it would account for $149 billion in revenue between 2018 and 2225. Of this, however, only one quarter will come from the tax itself, while three quarters will come from increases in taxes on income as employers shift compensation from health benefits to taxable wages.

While the tax will affect few plans initially, it is likely to affect many more plans over time as the cost of health care continues to grow faster than inflation generally. The tax is expected to reduce health care expenditures by individuals, as it will drive employers to increase employee cost sharing as they cut the cost of coverage, and employees are likely to spend less on health care if they have to purchase it out-of-pocket rather than drawing on insurance coverage.

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An Era Of Precision Medicine And Rapid Learning


February 20th, 2015

At a recent White House event, President Obama presented his proposals for a Precision Medicine Initiative. The key elements include a national research system where 1 million or more volunteers can share their (privacy protected) electronic health records, genetics, and other data, and a national cancer initiative. The proposals will be developed in more detail based on meetings led by the National Institutes of Health (NIH) Director Francis Collins.

If national health policy adopts these proposals, much about today’s medical care system—including biomedical science, medical education, diagnostics, treatment options, comparative effectiveness research, quality metrics, payment systems, the role of patients, the personalization of medical care and prevention, and an understanding of the roles of environment, nutrition, culture, and many other factors—may greatly change.

The Obama administration proposes a highly collaborative, non-partisan public-private process. These proposals bring the era of “big data” to the center of the heath policy arena (see the July 2014 Health Affairs theme issue, “Using Big Data To Transform Care”). Many in the health system may want to take part in developing the proposals and being part of the implementation.

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How Open Data Can Reveal—And Correct—The Faults In Our Health System


February 18th, 2015

In April 2014, the Centers for Medicare and Medicaid (CMS) released millions of lines of Medicare Part B physician payment data, that led many researchers, analysts, journalists, and the general public to use the data to answer a number of pressing health care questions. And while the dataset does not include patient-level information, it does offer provider identifiers, which can facilitate data aggregation, highlight practice patterns, and cost trends (i.e. specialties with disproportionately higher payments and individual providers as “outliers”).

Our goal here, like many before us, is to highlight striking disparities in this dataset (despite its limitations); attempt to understand why they occur; and provide opportunities to address them.We examine three major issues: geographic variation; individual provider variation; and variation across care settings. Finally, we outline recommendations for future data releases to encourage more practical analyses.

Geographic Variation in Practice Patterns

A popular example highlighted by the CMS data was the rate of use of Lucentis — a drug prescribed for patients with age-related macular degeneration (AMD). Although a clinical study demonstrated similar outcomes for Lucentis ($2,000 per dose) versus Avastin ($50 per dose), the CMS data revealed total Lucentis spending of $1 billion.

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Implementing Health Reform: Enrollment Figures, Tax Forms, And More


February 13th, 2015

We are rapidly reaching the end of the 2015 open enrollment period, and the pace of enrollment seems to be picking up a bit. On February 11, 2015, the Centers for Medicare and Medicaid Services (CMS) released their enrollment snapshot for week twelve, covering the federally facilitated marketplace from January 31 to February 6.

During that time period, 275,676 individuals selected plans, bringing of enrollees in the federal exchange up to 7,749,375. The Department of Health and Human Services (HHS) reportedly announced on a press call on February 11, however, that 200,000 individuals will be dropped from enrollment in February for failure to satisfactorily document compliance with citizenship or residency requirements.

Enrollment is expected to continue to pick up during the final ten days of open enrollment, as it did last year. CMS has said that if an individual cannot get through at the call center or online on February 15, CMS will make sure that he or she can apply for coverage, but the agency has not announced any further relief nor any new special enrollment periods for 2015. I continue to urge CMS to provide a special enrollment period for people who were subject to the individual responsibility penalty for 2014 to allow them to avoid the penalty for 2015.

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Oregon Bridges The Gap Between Health Care And Community-Based Health


February 12th, 2015

It is now commonly accepted that to achieve health, the U.S. health system must address the social determinants of health. While the integration of health care with social services and public health is happening relatively infrequently across the country, one bright spot can be found in Oregon, where an innovative Medicaid health system model, referred to as the coordinated care model, is showing early signs of success in bridging the gap between the community and the health care system.

Under Oregon Governor John Kitzhaber’s leadership, newly created coordinated care organizations (CCOs)—partnerships between physical, behavioral, and oral health providers—have over the past two years adopted Oregon’s coordinated care model, which was created as the foundation for Oregon’s health system reform efforts to ensure care is coordinated, performance is measured, positive outcomes are rewarded, and that there is a shared responsibility for health, sustainable rate of growth, and transparency in price and quality—all with the goal of promoting positive health outcomes.

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New Narrative Matters: How Access, Knowledge, And Attitudes Shaped My Sister’s Care


February 6th, 2015

Health Affairs‘ February Narrative Matters essay features a woman who helps her sister get the care she needs when a tooth infection turns into a health emergency. Elizabeth Piatt’s article is freely available to all readers, or you can listen to the podcast.

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Is Bias A Source Of Unmet Needs For Medically Complex Kids?


February 2nd, 2015

A study on the “Inequities In Health Care Needs For Children With Medical Complexity,” published in the December 2014 issue of Health Affairs on children’s health, supports a suspicion I have had for some time. Children with medical complexity face the possibility of unmet health care needs simply because of who they are.

Dennis Kuo and colleagues found that children with medical complexity had higher unmet needs than children without medical complexity. The authors describe medical complexity as “children who require medical services beyond what is typically required by children with special health care needs.”

This inequity holds regardless of race, ethnicity, insurance coverage, and household income in relation to poverty level. In other words, unmet needs remain high even among those who have favorable social determinants of health care. The authors conclude that medical complexity itself may be an independent determinant of health care inequity for children.

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Health Affairs Web First: Do Low-Income Consumers In Medicaid Opt-Out States Pay More Out Of Pocket?


January 28th, 2015

In the twenty-three states currently not expanding Medicaid under the Affordable Care Act (ACA), uninsured adults who would have been eligible for that program and have incomes at or above poverty are now generally eligible for subsidies to purchase health coverage in their state’s Marketplace exchange. How would out-of-pocket costs in the Marketplace compare with Medicaid coverage for this group of low-income Americans living in states not expanding Medicaid?

This study, being released by Health Affairs as a Web First, estimated these costs under two simulation scenarios: calculating out-of-pocket costs for families covered by a subsidized silver Marketplace plan and comparing that with coverage under Medicaid. Author Steven Hill found that Medicaid would more than halve these adults’ average annual family out-of-pocket spending ($938 versus $1,948).

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New Health Policy Brief: The Two-Midnight Rule


January 23rd, 2015

A new policy brief from Health Affairs and the Robert Wood Johnson Foundation (RWJF) examines the so-called “two-midnight rule,” which takes effect on April 1 of this year for new Medicare hospital claims. The rule, announced in 2013, is an effort by the Centers for Medicare and Medicaid Services (CMS) to clarify when a patient will be considered by Medicare as an inpatient for hospital billing purposes. Under this rule, only patients that a doctor expects to need two nights in the hospital would be considered inpatients for the purpose of Medicare claims.

In the past, CMS provided little guidance to hospitals on this matter. This is important because the Medicare payment structures are very different for inpatients versus outpatients: Hospitals are reimbursed with a single comprehensive payment for all care provided to an inpatient during his or her time at the hospital, but they are paid standard fees for each unique service they provide to outpatients. This brief describes the perceived need by CMS for the two-midnight rule, how it would work, the implications for Medicare payment, and the heated response to the rule by the hospital industry.

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Graduate Medical Education: The Need For New Leadership In Governance And Financing


January 14th, 2015

With the creation of the Medicare program in 1965, a funding stream was established to support the training of medical residents who provided care for Medicare beneficiaries. In subsequent years, Medicare has maintained these payments to teaching hospitals and remains the largest payer for Graduate Medical Education (GME), with expenditures totaling about $10 billion annually. This represents two-thirds of Federal GME support, with another $4 billion per year provided to hospitals through State Medicaid GME support.

This expenditure was a major motivation for the Senate Finance Committee to request the Institute of Medicine (IOM) to issue a report entitled “Graduate Medical Education That Meets the Nation’s Health Needs.”  The Report proposed major reforms to create a GME system with greater transparency, accountability and strategic direction, in order to increase its contribution to achieving the nation’s health goals. Prior to publication of this long awaited report on July 29, 2014, GME financing policies received substantial attention in the last two sessions of Congress, with a particular focus on increasing the number of federally funded GME positions. The House and Senate committees with GME jurisdiction produced multiple legislative initiatives.

However, there was considerable opposition from primary care stakeholders to some of the proposed changes because of inadequate emphasis on ambulatory training. Possible redistribution of Medicare GME funding was also of concern to many. This seemed to dissuade Congress from passing reform of GME policies. Nevertheless, 1,500 new GME positions were authorized in the recent Veterans Health Administration legislation.

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Medicaid Expansion Post Leads Health Affairs Blog 2014 Top-Fifteen List


January 8th, 2015

As we begin 2015, we present the fifteen most-read Health Affairs Blog posts from 2014. Topping the list is “Opting Out Of Medicaid Expansion: The Health And Financial Impacts,” by Sam Dickman, David Himmelstein, Danny McCormick, and Steffie Woolhander. “Low-income adults in states that have opted out of Medicaid expansion will forego gains in access to care, financial well-being, physical and mental health, and longevity that would be expected with expanded Medicaid coverage,” the authors write, and they offer a state-by-state projection of these consequences.

Next on the list is Susan DeVore‘s overview of health care trends to watch in 2014, followed by David Muhlestein‘s look at the likely growth of accountable care and an examination of declining inpatient hospital utilization by Robert York, Kenneth Kaufman, and Mark Grube. The list also includes two posts from Tim Jost’s comprehensive series on implementing the Affordable Care Act, on waiting periods for employer-sponsored health insurance and Medicaid asset rules.

Stay tuned for the 2014 most-read lists for Health Affairs journal and GrantWatch Blog.

The full top-fifteen list is below:

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Health Affairs’ January Issue: Aging And Health


January 5th, 2015

The January issue of Health Affairs includes a number of studies examining issues pertaining to aging and health or health care. Other subjects covered include: the effect of Medicare’s Hospital Compare quality reports on hospital prices; how the Affordable Care Act’s provisions impact Americans shouldering high medical cost burdens; and whether California’s Hospital Fair Pricing Act has benefited uninsured patients.

Content on aging and health was supported by the John A. Hartford Foundation.

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Implementing Health Reform: Open Enrollment Progress For 2015 (Updated)


December 31st, 2014

On December 30, 2014, the Centers for Medicare and Medicaid Services released several reports on enrollment numbers covering the second marketplace enrollment period to date.  It released its first monthly ASPE (Assistant Secretary for Planning and Evaluation) report covering October 15 to November 15, 2014.   (press release here  )  The ASPE report for the first time includes some — very incomplete — information on enrollment in the state-operated exchanges.

CMS simultaneously released a snapshot report covering enrollment in the Federally Facilitated Marketplace (FFM) for the sixth week of open enrollment.

The bottom line is that the reports confirm what we all knew already: The first month of open enrollment is going much better than the early months of open enrollment last year.  As of December 26, 6,490,492 individuals had selected a plan through the FFM.  Only 96,446 selected a plan in Week 6, compared to 3.9 million in week 5, emphasizing again the importance of the December 15 deadline for January 1 coverage in driving enrollment.

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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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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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The Accidental Administrative Law Of Policymaking In The Medicare Program


December 11th, 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.

When Congress establishes a new regulatory program, it lodges the program in a regulatory agency or executive department. A regulatory agency generally has presidentially appointed commissioners with staggered terms and expert staff. This design provides insulation from politics and facilitates applying technical expertise to regulatory problems. Also, administrative agencies make rules and policy and have the powers of investigation, adjudication, and sanction to enforce compliance. Administrative law, an essential instrument of democracy, regulates the operation and procedures of government agencies.

The Social Security Amendments of 1965 established Medicare in the Social Security Administration (SSA). Medicare initially contained two parts, hospital insurance for hospital and related services and supplementary medical insurance for physician and other outpatient services. Pursuant to contract, Medicare contractors handle claims and pay providers as well as adjudicate appeals and make program policy.

This post chronicles the development administrative law, policymaking, and regulation in the Medicare program. It describes how the program evolved a revolutionary collaborative model of regulation that could provide a useful guide for other programs.

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CMS Proposes Coverage For Lung Cancer Screening With Low Dose CT


December 9th, 2014

On November 11, the Centers for Medicare and Medicaid Services (CMS) released its Proposed Decision Memo for Screening Lung Cancer with Low Dose Computed Tomography (LDCT), which is expected to be finalized in mid-December. Despite a negative assessment by its own advisory committee, CMS has proposed coverage with evidence development (CED) for an annual “lung cancer screening counseling and shared-decision-making visit” and, for appropriate beneficiaries, additional screening with LDCT.

Under CED, Medicare provides conditional coverage for a new treatment or technology while additional data is collected to confirm its effectiveness and make a final determination. Through this proposed decision, CMS has followed the lead of numerous other expert and advisory groups, which have concluded that the overall benefits of such screening for at-risk individuals outweigh concerns regarding gaps in evidence, generalizability and potential harms.

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Evolving Medicaid To Better Serve Children With Medically Complex Conditions


December 8th, 2014

The fragmented Medicaid system must evolve to better meet the needs of children with medically complex conditions, a growing population responsible for a high proportion of health care spending. Regional care networks and national data support are two viable tools for containing costs while improving care for our nation’s most vulnerable children.

The Case for Change

Medicaid has evolved into an essential health care payor for the nation’s children, supporting health care coverage for more than 30 million children.

The program has become particularly vital to families of children with complex medical conditions. Care for this population was not widespread when Medicaid was created nearly 50 years ago. In the early 1960s very few infants born with extreme prematurity and/or congenital conditions survived. Thanks to advances in pediatric subspecialty training and technology, the life prospects for these children have greatly improved, and Medicaid now supports an estimated 2 million children with medical complexity. This population is projected to double over the coming decade.

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Children’s Health: Health Affairs’ December Issue


December 8th, 2014

The December issue of Health Affairs includes a number of studies examining current threats to the health and health care of America’s children, and what can be done to meet their needs within an ever-evolving health care system. Some of the subjects covered: the role of Medicaid in reducing early-term elective deliveries; how pediatric services are covered in the state insurance Marketplaces; Medicaid spending on children with complex medical conditions; and the effect of abuse and neglect on children’s health and school engagement.

This issue of Health Affairs is supported by The W.K. Kellogg Foundation as well as by the Children’s Hospital Association, The David and Lucile Packard Foundation, Nemours, the Annie E. Casey Foundation, and The Child and Adolescent Health Measurement Initiative.

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