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Building A Framework To Assess The Impact Of Change


February 27th, 2015

Editor’s note: This post is part of a series of several posts related to the 4th European Forum on Health Policy and Management: Innovation & Implementation, held in Berlin, Germany on January 29 and 30, 2015. For updates on the Forum’s results please check the Center for Healthcare Management’s website or follow on Twitter @HCMatColumbia.

Health care systems and organizations need to adapt to a rapidly changing societal and technical environment. In theory, this seems simple to do: policymakers and boards of organizations assess the nature of the developments, analyze the gap between the present and the desired situation, design a policy to reduce this gap, translate the policy in concrete measures, implement them, and reap the fruits of successful change — then start the cycle all over.

However, in the reality of daily practice, policies rarely have the intended effect and policy measures can lose effectiveness before they reach the intended point of impact. Sometimes, they may have the opposite impact than expected, raising costs for example, instead of reducing them.

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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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What Happens When A Retail Pharmacy Decides To Stop Selling Cigarettes?


February 26th, 2015

Editor’s note: This post is part of a series stemming from the Third Annual Health Law Year in P/Review event held at Harvard Law School on Friday, January 30, 2015. The conference brought together leading experts to review major developments in health law over the previous year, and preview what is to come. A full agenda and links to video recordings of the panels are here.

The sale of cigarettes and tobacco products at retailers with pharmacies has received considerable attention over the past year. The national debate reignited in February 2014, when CVS/pharmacy announced that we would quit the sale of cigarettes and tobacco products in our 7,800 pharmacies nationwide. In September 2014, we announced we were officially tobacco free — one month earlier than planned. This was met with kudos from the media, public health officials, and even the President of the United States.

But one question that did not receive anywhere near that level of attention was whether or not our actions would make a difference in the prevalence of smoking and, ultimately, in the public health.

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Top 5 Health Care Trends to Watch in 2015


February 25th, 2015

With a new Congress, health care is once again an issue of tremendous scrutiny and debate. Many of the federal policy debates in 2015 will be largely symbolic, resulting in little more than tweaks to existing law.

However, health care policy is not just a matter for Congress to consider. A range of issues will play out in the states and the private sector, effectively shaping the future. Below are the top trends we’re watching this year.

The Year of Living Interoperably

From electronic health records (EHRs) to clinical measures and decision support tools, providers are inundated with new technologies that automate processes and capture new types of data. However, these systems are limited in their potential because they don’t all “talk” to one another. They’re locked away within proprietary technologies that render them the equivalent of an email account that only sends messages to people in your company, or a phone that only makes calls in your house.

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State Expectations: Setting The Record Straight In King v. Burwell


February 25th, 2015

On Wednesday, March 4th, the Supreme Court will hear the latest attack on the Affordable Care Act (ACA): the case King v. Burwell. The King petitioners allege that the Internal Revenue Service overstepped its authority by issuing regulations authorizing residents of states with federally run exchanges to access premium tax credits. The petitioners claim that Congress intentionally limited access to premium tax credits to residents of state-based exchanges as a way to encourage states to run their own exchanges.

In support, some state officials claim that they interpreted the law in this manner and that it impacted their state’s decision not to operate a state-run exchange. These assertions, like their analysis of the statutory language, fall flat under any serious scrutiny, however.

Between October 2012 and March 2013, with the support of the Commonwealth Fund, the Center on Health Insurance Reforms (CHIR) conducted a comprehensive review of publicly available information in 50 states pertaining to their decisions to operate either a state or federally run exchange.

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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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How Menu Labeling Could Spark Change Beyond The Menu Board


February 24th, 2015

If there’s one thing we’ve learned about catalyzing changes that prevent illness in the first place, it’s that passage of a single policy can be like lighting a match — illuminating the way towards strategies with greater impact and igniting the energy of leaders. The success of a menu labeling might be the match needed to inspire further policy change to shift the trend of increased diet-related chronic disease in the United States.

In November, the Food and Drug Administration released the final rule guiding calorie labeling of menu items at chain food service establishments with 20 or more outlets nationally. The rule will apply to fast-food and sit-down restaurants, supermarkets, convenience stores and movie theaters, and will take effect on December 1, 2015.

Once implemented, calorie counts will be posted for all items (including alcoholic drinks) on menus and menu-boards, and on display tags for salad bars, bakery items, and soda dispensers. A companion rule requiring calorie labeling for vending machines will take effect one year later.

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Indirect Effects From Menu Labeling Can Improve The Public’s Health


February 24th, 2015

Just this past November, the U.S. Food and Drug Administration (FDA) released sweeping final rules requiring that calorie information be posted on menus, menu boards, and vending machines. The regulations expand the proposed rule to include a wide variety of food outlets with more than 20 locations: quick service and table service restaurants, grocery stores and superstores, movie theaters, amusement parks, ice cream shops, takeout and delivery, vending machines, and even alcoholic beverages.

In the press release for the final rule, FDA Commissioner Margaret Hamburg stated, “making calorie information available on chain restaurant menus and vending machines is an important step for public health that will help consumers make informed choices for themselves and their families.”

Although the scientific evidence linking menu labeling to consumers’ purchasing behavior is weak, indirect effects may contribute more to incremental gains in public health. We highlight a few in the following blog post.

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Putting Humpty Dumpty Together Again: Consolidating Regulatory Authority Over Food Safety


February 23rd, 2015

The fragmented nature of regulatory authority over food in the United States is well known. More than a dozen federal agencies are responsible for the safety of the nation’s food supply. The Food and Drug Administration (FDA) and the Department of Agriculture (USDA) have the lion’s share of responsibility, together overseeing over 80 percent of the nation’s food safety.

Generally, the USDA regulates meat, and the FDA regulates everything else, but overlaps, exceptions, gaps, and therefore examples of resulting absurdities abound: the FDA regulates frozen pizza, unless it has pepperoni. The FDA regulates seafood, unless it’s catfish. The USDA has jurisdiction over packaged open-face meat sandwiches, but if the sandwiches are closed, authority shifts to the FDA.

This division in regulatory authority is neither planned nor rational. It is instead a historical accident, originating in the early twentieth century. When the Pure Food and Drug Act and Meat Inspection Act were passed on the same day in 1906, both targeting the adulteration of the food supply, their oversight was assigned to different departments within the USDA. The fissure widened when the FDA was moved out of the USDA in 1940. This divided regulatory framework is not the only reason for the fragmentation of regulatory authority over food in the US, but it is a main driver.

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Implementing Health Reform: Final 2016 Letter To Federal Exchange Issuers


February 22nd, 2015

Each year the Centers for Medicare and Medicaid Services (CMS) releases a letter to issuers (insurers) in the federally facilitated marketplace (FFM) setting out the ground rules for coverage through the FFM for the coming year.  A draft letter is published for comments, followed by the final letter.  The letter addresses insurers that issue qualified health plans (QHPs) in the FFM, including stand-alone dental plans (SADPs), and covers the small business (FF-SHOP) marketplace as well as the individual marketplace.

On December 19, 2014, CMS  published the draft 2016 letter which I covered here.  On February 20, 2015, CMS published the final letter to issuers in the federally facilitated marketplace.  Not surprisingly, since it  covers the third year of operation of the marketplace, the 2016 letter is quite similar to those of preceding years.   The letter is based on previously published rules governing QHPs and the marketplaces, as well as on the final 2016 Benefit and Payment Parameters Rule, covered here (CITE) and here (CITE), from which it incorporates many provisions.

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


February 22nd, 2015

On November 21, 2014, the Centers on Medicare and Medicaid Services of the Department of Health and Human Services released its final 2016 Benefit and Payment Parameter (BPP) Rule.  (Fact sheet here.)  My first post examined the provisions of this rule that relate to consumers and providers.  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 new definition defines a “plan” as the pairing of a set of health insurance benefits under a “product” with a particular cost-sharing structure, provider network, and service area.  A “product” is a set of plans sharing a network type (HMO, PPO, etc.), package of benefits, and service area.  Under this new definition, 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.  Plan variations for different cost-sharing subsidy levels are not different plans under this definition.

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Implementing Health Reform: 2016 Benefit And Payment Final Rule, Consumer & Provider Provisions


February 22nd, 2015

On February 20, 2015, the Centers for Medicare and Medicaid Services (CMS) of the Department of Health and Human Services published its massive Notice of Benefit and Payment Parameters (BPP rule) for 2016 Final Rule, accompanied by a fact sheet.  This rule addresses a host of issues involving the continuing implementation of the Affordable Care Act for 2016.  A few provisions, however, affect the 2015 year as well and a number of provisions will not be implemented until 2017.

The BPP rule amends and updates existing rules; thus, it must be read in tandem with rules that have been promulgated earlier, which are catalogued in the preface to the rule.

CMS released also on February 20 its Final 2016 Letter to Issuers (Insurers) in the Federally-Facilitated Marketplace (FFM).   This letter sets the ground rules for insurer participation in the FFM for 2016 and covers many of the same topics covered by the BPP rule.

These documents are very lengthy and will be covered in three posts over the next few days.  This first post will focus on issues in the BPP rule that directly affect consumers.  The second post will focus more on issues that affect health plans.  The third post will examine the letter to issuers.

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Implementing Health Reform: Multi-State Plan Program; Benefits And Payment Rule, Letter To Issuers To Follow


February 20th, 2015

Late in the day on February 20, 2015, HHS issued its 476 page final 2016 Benefit and Payment Parameters Rule.   It also issued a lengthy final 2016 Letter to Issuers  and a fact sheet on the BPP rule.  These will govern health insurance coverage and the premium stabilization programs, as well as participation in the federally facilitated marketplace, for 2016.

More specifically, the BBP governs the premium stabilization programs; the cost-sharing reduction payment program; user fees for the Federally-facilitated Exchanges; the open enrollment period; the essential health benefits; qualified health plans; network adequacy; quality improvement strategies for qualified health plans; the SHOP program; guaranteed availability and renewability; minimum coverage; rate review; the medical loss ratio program; and other issues. The letter to issuers governs participation in the federally facilitated marketplace for 2016.

I will be reviewing the BPP rule and Letter to Issuers over the next few days and providing a series of posts on them; this post covers the amended Multi-State Plan Program (MSPP) rules issued earlier in the day.

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Implementing Health Reform: New Enrollment Opportunity For Those Subject To 2014 Penalty


February 20th, 2015

In our Health Affairs Blog post of November 7, 2014, Brian Haile and I recommended that the Department of Health and Human Services (HHS) create a special enrollment period to allow individuals who had to pay the individual responsibility penalty for being uninsured for 2014 to enroll in coverage for 2015 so that they would not have to pay a higher penalty for being uninsured for 2015. Other advocates subsequently joined in this call. On February 20, 2015, HHS announced that it is creating such a special enrollment period.

The special enrollment period will run from March 15 to April 30, 2015 and will allow individuals who live in states served by the federally facilitated marketplace website, Healthcare.gov, to enroll in coverage for 2015 if they:

  • Are not currently enrolled in coverage through the Federally Facilitated Marketplace (FFM) for 2015;
  • Attest that when they filed their 2014 tax return they paid the fee for not having coverage in 2014; and
  • Attest that “they first became aware of, or understood the implications of, the Shared Responsibility Payment after the end of open enrollment (February 15, 2014) in connection with preparing their 2014 taxes.”

Coverage will be effective on the first day of May for those who enroll by April 15 and the first day of June for those who enroll thereafter. Individuals who apply will have to pay the penalty for months they were uninsured in 2015 unless they otherwise qualify for an exemption. Centers for Medicare and Medicaid Services (CMS) has also launched a new online tool to help consumers determine who might otherwise be subject to the penalty to see if they are covered by another exemption.

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In Regulating E-Cigarettes, No Easy Fix For The FDA


February 20th, 2015

Sometime in the next few months, the Food and Drug Administration (FDA) is expected to issue the so-called deeming regulations, which will open the door to the federal regulation of e-cigarettes. In considering whether to issue the regulations, which were first published for notice and comment rulemaking last April, the FDA faces a formidable challenge: it must decide whether and how to regulate in the midst of scientific uncertainty and limited statutory flexibility.

By subjecting e-cigarettes to its regulatory regime, the FDA risks retarding the growth of what may prove to be a powerful new tool for harm reduction. But by failing to act, the agency risks undermining decades of progress in tobacco control. In either case, the public health impact is apt to be significant.

It is a victory that was made possible, in large measure, by a constellation of state and federal regulatory interventions: laws regulating the marketing and sale of cigarettes, barring sales to youth, banning indoor smoking, and taxing cigarette sales have all played a role in reducing rates of smoking.

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The Need For Publicly Funded Trials To Get Unbiased Comparative Effectiveness Data


February 20th, 2015

Comparative effectiveness research was one of the hotly debated components of the Affordable Care Act. The pharmaceutical industry is marketing driven, with pharmaceutical companies spending more on marketing than they do on research and development. The need for a marketing edge can also drive drug development.

As illustrated by the discussion below of Gazyva and Nexium, drugs can be developed at higher doses than the drugs they are intended to replace. When the newer, higher-dose drugs are tested against the older, lower-dose drugs, the trials are intended to show that the newer, higher dose drugs are superior to the older drugs that will soon be available as a biosimilar or generic.

It can be very difficult to tell whether the results of such trials reflect the differences between the active ingredients or simply the difference in doses, but such trials are almost certain to lead to increased use of the newer, higher-priced drugs. Because the money at stake creates such an incentive for companies to stack the deck, publicly funded trials are the only way to make sure that evidence-based medicine is based on the best possible evidence.

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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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HHS Proposed Policy On Non-Discrimination: Does It Adequately Protect Children?


February 19th, 2015

On November 26, 2014, the United States Department of Health and Human Services (HHS) published a proposed 2016 Notice of Benefits and Payment Parameters, an omnibus regulation published annually that sets “rules of the road” for the administration of federally regulated insurance plans. Among other matters, this year’s Notice contained a discussion of non-discrimination in coverage.

The concept of non-discrimination in coverage is a basic tenet health plans subject to the Affordable Care Act (ACA)’s “essential health benefit” requirements applicable to non-grandfathered health plans sold in the individual and small group markets (42 U.S.C. §18022, added by PPACA §1302). The non-discrimination standard is a watershed in U.S. law that extends the reach of prior federal civil rights laws and regulates the design, content, and administration of health insurance including Section 504 of the Rehabilitation Act of 1973, the Americans with Disabilities Act, Title VI and VII of the Civil Rights Act of 1964, and the Age Discrimination Act of 1975.

In accordance with its provisions, the HHS Secretary is barred from “mak[ing] coverage decisions, determin[ing] reimbursement rates, establish[ing] incentive programs, or design[ing] benefits that discriminate against individuals because of their age, disability, or expected length of life,” (42 U.S.C. §18022(b)(4)(B)). The provision further requires the Secretary to “take into account” the health needs of “diverse segments of the population including women, children, persons with disabilities, and other groups,” (42 U.S.C. §18022(b)(4)(C)).

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Implementing Health Reform: Preliminary 2015 Enrollment Numbers; Guidances


February 19th, 2015

As probably every reader of this blog knows by now, the Department of Health and Human Services released preliminary totals for plan selection for the 2015 open enrollment period on February 18, 2015. Over 1 million individuals enrolled through the federally facilitated marketplace in the final week, bringing the total enrolled in the FFM to 8.8 million, and the total enrolled through all marketplaces, federally facilitated and state-operated, to 11.4 million. Florida had by far the most enrollees in the FFM with 1.6 million, although Texas also had over a million enrollees.

The 11.4 million number includes up to 200,000 individuals who are being dropped from the rolls because they have not provided adequate documentation of immigration or citizenship status, but does not include up to 150,000 individuals who were “in line” when enrollment closed and who have up to February 22 to enroll. Although there will be some attrition over the next weeks of individuals who do not pay their premiums or find other coverage, HHS seems to have met its goal of 9.1 to 9.9 million effectuated enrollments.

Premium payment arrangements. The Internal Revenue Service continues to struggle with the question of how the Affordable Care Act affects various arrangements through which employers attempt to pay premiums for employees to purchase health insurance coverage in the individual market. The federal agencies have already issued four guidances on this issue over the past two years in January of 2013September of 2013November of 2014, and December of 2014.  On February 18, 2015, it released yet another guidance on this issue, this one focused on small employers.

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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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