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Paying For The ‘Doc Fix’


March 26th, 2015

For years now it has become apparent that the Sustainable Growth Rate (SGR) system is not sustainable.  However, fixing the SGR will require increases in budgeted costs, and so one of the major barriers to replacing the SGR is figuring out how to pay for the fix. Towards this end, it is important to understand the appropriate cost-comparison.

Federal scorekeepers (appropriately) assess the cost of the SGR fix relative to current law, which assumes that fees will follow a trajectory defined by current policy. But as near as I can tell, few advocate for that path or believe it will occur; rather the current system will continue to require regular “patches”.  Therefore, the appropriate measure of the cost of the doc fix is spending with the fix relative to spending without it.  The latter includes the costs of future “patches” necessary to ensure continued operation (as well as any savings that can be achieved because of continued SGR related negotiations).  Substituting this realistic alternative into the cost calculus likely substantially lowers the incremental cost of any SGR fix.

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Health Affairs Web First: Without CHIP, Sharply Higher Insurance Costs For Many Low-Income Families


March 26th, 2015

Funding for the Children’s Health Insurance Program (CHIP) is now set to expire after September 2015. A new study, being released by Health Affairs as a Web First, and also appearing in its April issue, examines the availability and cost of dependent coverage for children through employer-sponsored plans. Such plans would be the primary pathway to affordable coverage for more than half of all children losing CHIP eligibility, insofar as access to employer-sponsored coverage through their parents can bar children from receiving Marketplace subsidies.

According to the study, 96.9 percent of enrollees in employer-sponsored plans had access to dependent coverage. The additional cost would vary — as much as $7,252 per year for workers with one dependent child and $11,829 for those with two or more dependent children. The study also found that adding dependent coverage could cost many families more than 8.05 percent of their income, qualifying them for hardship exemptions from buying coverage.

As a result, many children once covered by CHIP would no longer be insured. This study is thought to provide the first estimates documenting variations across employers in the marginal costs to families adding children to employer-sponsored plans.

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Executions, Doctors, The U.S. Supreme Court, And The Breath Of Kings


March 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 relationship between medicine and capital punishment has been a persistent feature of this past year in health law, both at the level of medical ethics and Supreme Court review.

Our story starts in Oklahoma, where the execution of Clayton Lockett was botched on April 28, 2014. NIH bioethicist Seema Shah described the events in question:

Oklahoma was administering a new execution protocol that used the drug midazolam, a sedative that is often used in combination with other anesthetic agents. Oklahoma had never used this drug in executions before; in fact, only a few states had experience with using the drug in lethal injection. Florida had previously used this drug in lethal injections, but with a dose five times higher than what was indicated in Oklahoma’s protocol. If the execution had gone as planned, Clayton Lockett would have first received midazolam; been declared unconscious, then received vecuronium bromide (a paralytic/neuromuscular blocking agent that would restrict his movements), and finally received potassium chloride (the drug likely to end his life). A few minutes after officially being declared unconscious, Lockett mumbled statements including the word, “Man.” He “began breathing heavily, writhing, clenching his teeth and straining to lift his head off the pillow.” Prison officials prevented the witnesses from seeing the rest of the proceedings by closing the curtains. The Department of Corrections then called off the execution and unsuccessfully tried to resuscitate Lockett, and Lockett eventually died of a heart attack more than 45 minutes after the execution began. Although a Department of Corrections official stated that Lockett’s veins “exploded,” an autopsy examination performed by a forensic pathologist hired by death row inmates appears to contradict official reports. This report concluded that even though prison officials decided to inject the drugs into Lockett’s femoral vein (which is a more difficult and risky procedure), Lockett’s surface and deep veins had “excellent integrity.” Another execution that was scheduled to occur that same night has now been stayed for six months, pending an investigation into Mr. Lockett’s execution.

On July 23, 2014, Arizona encountered a problem with the same drug in the execution of Joseph Wood, wherein the condemned inmate allegedly gasped for almost two hours before dying.

The executions have prompted two important but different kinds of responses. In this post I write about the role of medical ethics and the U.S. Supreme Court’s response.

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Unpacking The Burr-Hatch-Upton Plan


March 24th, 2015

Anticipating the upcoming Supreme Court decision on King v. Burwell, which could halt health insurance subsidies available through the federal exchange, Republican Senators Richard Burr and Orrin Hatch joined with Representative Fred Upton to propose a comprehensive replacement for the Affordable Care Act (ACA). The Patient Choice, Affordability, Responsibility, and Empowerment Act, or Patient CARE Act, is modeled on a proposal of the same name offered last year by Senators Burr, Hatch, and Tom Coburn, who has retired from the Senate. The Burr-Hatch-Upton plan, like its predecessor, adopts consumer-based reforms of the insurance market, modernizes the Medicaid program, and makes other changes intended to lower cost and increase choices.

In an earlier post, we described in detail the provisions of the Burr-Coburn-Hatch bill. In this post, we discuss how the Burr-Hatch-Upton plan differs from the earlier proposal. We also discuss the impact of the new proposal on health insurance coverage, premiums, and the federal budget based on a new analysis from the Center for Health and Economy (H&E), a non-partisan think tank focused on producing informative analyses of trends in U.S. health care policy and reform ideas. We conclude by commenting on the direction Republicans are likely to take in reforming the health system in the aftermath of a Supreme Court decision in the King v. Burwell case.

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When It Comes To The Value Of Wellness, Ask About Fairness Not Just About Effectiveness


March 18th, 2015

After a short truce, the wellness wars are raging again on this blog, with some voices hailing workplace wellness programs as cost effective means to better public health and others questioning their value.

Our own data show that both have a point. We have found that program participation is associated with statistically significant improvements in biometric markers, like BMI, and health-related behavior, like smoking and exercise. But we also find that those changes are not large enough, and the relationship between health risks and spending too weak, to result in reduction of health care cost, let alone in return of investment.

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Moving In Reverse? Potential Coverage Impacts For Children Of King v. Burwell, Medicaid And CHIP Eligibility Changes


March 17th, 2015

Over the last three decades, the US has taken important steps to reduce financial barriers to health insurance coverage for low and moderate-income children. These steps began with the Medicaid expansions for children in the 1980s and early 1990s, which were followed by the creation of the Children’s Health Insurance Program (CHIP) in 1997. Most recently, Congress reauthorized CHIP in 2009 and enacted the Affordable Care Act (ACA) in 2010.

This commitment to children has resulted in substantial increases in coverage. The uninsured rate among children decreased from 15.0 percent in 1989 to 6.6 percent in 2012 (Exhibit 1).

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Physician Aid In Dying: Whither Legalization After Brittany Maynard?


March 12th, 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.

Brittany Maynard’s highly publicized decision to end her life under Oregon’s Death With Dignity law has given a new face to the American right to die movement. It is that of a young, attractive, athletic newlywed, who would not have considered herself as having a stake in the movement until the day she learned a brain tumor was the cause of her severe headaches. She was terminally ill and faced a future of six months of increasing pain, debilitation, and severe seizures before dying.

A video of Maynard’s story produced by the non-profit advocacy organization Compassion and Choices has reached many millions of viewers. Extended coverage of her decision-making process by People Magazine resulted in record numbers of hits to the publication’s website. During her illness, Maynard moved from California to Oregon and on November 1, 2014 took barbiturates to end her life. In her memory, her husband and mother have become prominent activists in the effort to legalize physician aid-in-dying (PAD).

Is all of this likely to advance the PAD movement and, if so, through what legal processes?

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Health Affairs Web First: Assessing Efforts To ‘Solve The Sustainable Growth Rate Formula Conundrum’


March 11th, 2015

On April 1, unless Congress acts to prevent it, the current Sustainable Growth Rate (SGR) fee cut will take effect, dictating a 21.2 percent reduction in Medicare physician fees. A new commentary, released today by Health Affairs as a Web First, assesses last year’s bipartisan and bicameral legislative model for how to repeal the SGR, a model likely to be used in similar efforts this year.

The 2014 legislation contained many useful steps to replace the SGR but had a major omission, authors James Reschovsky, Larisa Converse, and Eugene Rich of Mathematica Policy Research argue: It did not adequately address overhauling the current Medicare fee schedule.

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New Health Policy Brief: Right-To-Try Laws


March 10th, 2015

A new policy brief from Health Affairs and the Robert Wood Johnson Foundation (RWJF) looks at so-called Right-to-Try laws. For patients with serious, potentially life-threatening diseases, current federal regulations offer two routes to gain access to experimental drugs not yet approved by the Federal Drug Administration (FDA): participation in a clinical research trial, or, if not possible, applying to the FDA for use of a drug under the expanded access (also known as compassionate use) program.

While the FDA has approved nearly all of these applications, the process is widely thought to be overly cumbersome. Since last year, five states have enacted their own Right-to-Try laws, with the aim of giving critically ill patients the treatments they seek. This health policy brief provides background on the federal regulations of expanded access and the recent involvement by many states.

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Who Authored Obamacare’s Exchanges? King v. Burwell And Justice Kagan’s Law Clerks


March 6th, 2015

Editor’s note: Watch Health Affairs Blog for more posts on King v. Burwell and the Supreme Court oral arguments in the case by Tim Jost, Grace-Marie Turner, Sara Rosenbaum, Bill Sage, and others.

Despite all the media hubbub and intense scrutiny, we didn’t learn all that much from the oral argument in King v. Burwell. The four liberal justices—Ginsburg, Breyer, Sotomayor, and Kagan—clearly believe that an exchange established “for” or “in” a state by the federal government is the same as an exchange “established by the state” (or at least that it’s ambiguous and the tie goes to the IRS). Justices Scalia and Alito—and presumably the silent Thomas—equally believe that words mean what they say.

So the case, as expected, turns on the views of Chief Justice Roberts and Justice Kennedy, who gave very little away. Indeed, I’ve never seen John Roberts so quiet at an oral argument—holding his cards so close that they risk being permanently imprinted on his vest—while Anthony Kennedy was characteristically inscrutable. In other words, 4-3 in the government’s favor with two wild cards.

That’s exactly what everyone knew going into the argument, and 85 minutes later if anyone tried to tell you that they knew what the outcome would be, they were engaging in spin or wishful thinking. To put an even finer point on it: whichever side you thought had the better chance of winning, downgrade your expectations to 50-50.

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Four Words Or 17 Syllables: Predicting King v. Burwell In Haiku


March 5th, 2015

Editor’s note: Watch Health Affairs Blog for more posts on King v. Burwell and the Supreme Court oral arguments in the case by Tim Jost, Grace-Marie Turner, Sara Rosenbaum, and others.

The resolution of King v. Burwell boils down to a simple point. A majority of the Supreme Court is willing to interpret the language of the Affordable Care Act. It is unwilling to rewrite that language.

It is all about four words: Whether “established by the state” in one section of the ponderously long, hastily passed health reform law renders low-income residents of states that have not created their own insurance exchanges but participate in federal exchanges ineligible for federal tax credits. If this is indeed the law, many middle-class families will be unable to afford coverage, residents of states that rely on federal exchanges will pay billions to the IRS for the benefit of those living elsewhere, premiums in those exchanges will rise as enrollment of healthy individuals drops, and the ACA will be unable to achieve its undisputed core purpose of health insurance for all Americans.

In contrast to the media cacophony leading up to yesterday’s hearing in the Supreme Court, the oral arguments themselves were clear and lawyerly. They were also undramatic. Most of the Justices knew where they stood, forcing plaintiff’s counsel Michael Carvin – who spoke first – to hear answers from the bench more often than he was asked actual questions. The Court’s willingness to listen had increased by the time Solicitor General Donald Verrilli took the podium on behalf of the government, and he proved himself an organized and articulate presenter. The only jurists not revealing their positions were Justice Kennedy, who challenged both lawyers on several points, and Chief Justice Roberts, who said little except to maintain order and decorum. (Justice Thomas famously refrains from participating in oral argument, but usually votes with Justice Scalia.)

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King v Burwell: The NFIB Medicaid Coercion Argument Returns


March 5th, 2015

Editor’s note: Watch Health Affairs Blog for more posts on King v. Burwell and the Supreme Court oral arguments in the case by Tim Jost, Grace-Marie Turner, and others.

The March 4, 2015 oral argument in King v Burwell, which will determine whether millions of low- and moderate-income Americans will continue to have access to affordable health insurance coverage, revealed a United States Supreme Court very much in play.  In this climate, observers inevitably are paying heightened attention to each of the many parries and thrusts that unfolded over more than an hour of rapid give-and-take between the Justices and the lawyers, as they battled over the meaning of 4 words in a 1000-page statute.

Perhaps no exchange will receive more attention than the one between Justice Anthony Kennedy and Michael Carvin (representing the challengers) that took place approximately 5 minutes into his argument.  It was Justice Sotomayor who actually kicked things off with the following observation:

The choice the state had was to establish [an] Exchange or let the Federal government establish it. . . .That was the choice.  If we read [the statute] the way you’re saying, then we’re going to read a statute as intruding on the Federal-State relationship, because then the States are going to be coerced into establishing their own Exchanges. . . Tell me how that is not coercive in an unconstitutional way?  And if it is coercive in an unconstitutional way [isn’t there] a primary statutory command that we read a statute in a way where we don’t impinge on the basic Federal-State relationship?

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King v. Burwell: Finding A Path Forward After An Executive Overreach


March 5th, 2015

Editor’s note: Watch Health Affairs Blog for more posts on King v. Burwell and the Supreme Court oral arguments in the case by Tim Jost and others.

The Supreme Court justices had a lively discussion today during arguments in King v. Burwell about who Congress intended to get health insurance subsidies and under what conditions.

The central question is whether the Internal Revenue Service had the authority to write a rule authorizing subsidies to go to millions of people in the 37 states now operating under federal exchanges.

The plaintiffs say the language of the law is clear:  Subsidies are allowed in “an Exchange established by the State under [section] 1311of the Patient Protection and Affordable Care Act.” It doesn’t just say this once, but nine times in various linguistic forms.

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King v. Burwell: Unpacking The Supreme Court Oral Arguments


March 5th, 2015

Editor’s note: Watch Health Affairs Blog for more posts by Grace-Marie Turner and others on King v. Burwell and the Supreme Court oral arguments in the case.

One March 4, 2015, the United States Supreme Court heard oral arguments in King v. Burwell.  As every reader of this Blog knows, the issue in the case is whether the Internal Revenue Service rule that allows the federally facilitated marketplaces to grant premium tax credits is valid.

If it is not, millions of individuals in the 34 states served by the FFMs will lose their tax credits.  Without the credits, they will no longer be able to afford health insurance.  The cost of insurance to those remaining in the nongroup market will rise precipitously, causing even more Americans to lose coverage.  As the number of uninsured increases, providers will bear an increased burden of uncompensated care.  A decision for the plaintiffs, that is, will be disaster for the American health care system.

The challengers argue that this is a result Congress intended.  They contend that the subsection of the Affordable Care Act dealing with the calculation of premium tax credits limits the credits to individuals enrolled in an “Exchange established by the State.”  The government argues that this is a term of art — that Congress intended this phrase to include the federally facilitated exchanges that the ACA requires the Department of Health and Human Services to create as a fallback where the states elect not to operate their own exchange.  Dozens of other provisions of the ACA support the government’s position.

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The Latest Health Wonk Review


March 4th, 2015

David Williams has the tenth anniversary edition of the Health Wonk Review up at Health Business Blog. David’s interesting review includes Tim Jost’s series of Health Affairs Blog posts unpacking the final 2016 Notice of Benefit and Payment Parameters rule and final 2016 Letter to Issuers in the federal exchange.

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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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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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King v. Burwell: Congressional Intent And The Statutory Language Are Aligned


February 5th, 2015

On March 4, 2015, the Supreme Court will hear oral arguments in King v. Burwell. That suit was filed by opponents of the Affordable Care Act (ACA) to stop tax-credit premium subsidies from being provided to moderate-income people in 34 states where the federal government is running health insurance exchanges in lieu of the states. According to the Urban Institute, it could result in the withdrawal of such subsidies for 9.3 million moderate-income people by 2016, and, according to the Rand Corporation, enrollment in coverage could drop by 9.6 million.

Some believe the King lawsuit is a contest between, on the one hand, congressional intent that premium subsidies should be provided in all states, versus, on the other hand, statutory language that says the opposite. Those who believe this formulation are half right: they are correct that Congress clearly intended subsidies to be provided to moderate-income families irrespective of whether their state of residence chose to run its marketplace directly instead of leaving it to the federal government; however, they are mistaken about the ACA’s language, which equally clearly indicates that subsidies should be provided in all states.

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