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June 1st Legislative Update

by Catherine Carver & Lynn Wickwire

Federal

Trustees Report (May 31, 2013) shows reduced cost growth, longer Medicare solvency

The Medicare Trustees projected that the trust fund that finances Medicare’s hospital insurance coverage will remain solvent until 2026, two years beyond what was projected in last year’s report. “The Medicare Hospital Insurance trust fund is projected to be solvent for longer, which is good news for beneficiaries,” said Marilyn Tavenner, Administrator of the Centers for Medicare & Medicaid Services (CMS). A number of factors have contributed to the improved outlook, including lower-than-expected Part A spending in 2012, and lower projected Medicare Advantage program costs. Recent data from the Medicare Advantage program indicate that certain provisions of the Affordable Care Act will help reduce the growth of spending in this program by more than was previously projected.

Final Rule Upholds Increased Rewards, Penalties For Wellness Participation

Employers will be able to increase rewards to workers who participate in wellness programs under final rules released May 29, 2013 by the Obama administration. The final rules have raised concerns among advocates who represent people with chronic or severe illnesses, as well as among some employers. They allow employers to increase workers’ financial stakes from 20 percent of the cost of their health premiums to 30 percent, starting next year. Participating in tobacco cessation programs carries a maximum reward or penalty of 50 percent of the cost of an employee’s health plan. Such programs can have a big effect on workers’ and employers’ pocketbooks. Workers who participate could qualify for hundreds, even thousands of dollars’ worth of premium or deductible discounts. Those who don’t participate would pay much more toward their own coverage, thus lowering employer’s costs. Proponents say wellness programs encourage people to make healthier choices and could slow health care costs related to obesity, high blood pressure and diabetes. But studies looking at whether such programs save money and change long-term behavior — or simply shift more of the cost of health insurance to workers — have produced mixed results.

House Republicans Seek Doctors' Feedback On Medicare Payment Draft

The draft proposal would include an “improved” fee-for-service model, Republicans said. In that model, doctors and medical specialty organizations would work with the Department of Health and Human Services to develop quality measures for specific provider groups. Physicians’ performance would be assessed based on those quality measures, and they would get incentive payments for good performance. Future payment updates would be based on physicians meeting those quality measures. The proposal does not outline how to pay for the cost of replacing the SGR.

Health Law Is Fostering Competition, U.S. Says

The new health care law is injecting more competition into health insurance markets nationwide, drawing additional insurance companies into states long dominated by a few carriers, Obama administration officials said May 30. Such competition offers the prospect of more choices for millions of consumers who will be shopping for insurance this fall. Companies entering the market could also put downward pressure on prices, partly offsetting factors that tend to increase premiums (Pear, 5/30).

Next Battles Over the Affordable Care Act are Predicted To Be Ugliest Yet

The White House and Republicans are preparing for an "epic battle" over the selling of Obamacare tied to the opening of online insurance marketplaces Oct. 1. News outlets describe how GOP lawmakers are increasingly calling for an independent probe of HHS Secretary Sebelius.

Analysts: Medicare Costs May Keep Declining

Innovations adopted and accelerated by the 2010 health care law will continue to force down overall Medicare costs, according to industry analysts and studies, even as the economy continues to improve. Those changes include new payment plans, improved efficiency and a move toward consumer-driven insurance plans that started before the law's passage. They influenced the $618 billion drop in projected Medicare and Medicaid spending over the next decade that was reported May 15 by the Congressional Budget Office. That report showed that costs for the two programs in 2012 were 5 percent less than projected in early 2010, and the CBO data are expected to foreshadow the spending projections in the annual Medicare trustees report scheduled to be released this week (Kennedy, 5/30).

'Workplace Wellness' Fails Bottom Line

According to a report by researchers at the RAND Corp, programs that try to get employees to become healthier and reduce medical costs have only a modest effect. Those findings run contrary to claims by the mostly small firms that sell workplace wellness to companies ranging from corporate titans to mom-and-pop operations. ... The report found, for instance, that people who participate in such programs lose an average of only one pound a year for three years.  See: http://aspe.hhs.gov/hsp/13/WorkplaceWellness/rpt_wellness.pdf

High-End Health Plans Scale Back to Avoid ‘Cadillac Tax’

While most of the attention on the Obama administration’s health care law has been on providing coverage to tens of millions of uninsured Americans by 2014, workers with employer-paid health insurance are also beginning to feel the effects. Companies hoping to avoid the tax are beginning to scale back the more generous health benefits they have traditionally offered and to look harder for ways to bring down the overall cost of care. In a way, the changes are right in line with the administration’s plan: To encourage employers to move away from plans that insulate workers from the cost of care and often lead to excessive procedures and tests, and galvanize employers to try to control ever-increasing medical costs. But the tax remains one of the law’s most controversial provisions. Bradley Herring, a health economist at Johns Hopkins Bloomberg School of Public Health, suggested the result would be more widely felt than many people realize. “The reality is it is going to hit more and more people over time, at least as currently written in law, ” he said. Mr. Herring estimated that as many as 75 percent of plans could be affected by the tax over the next decade — unless employers manage to significantly rein in their costs.

Commonwealth of Massachusetts

Health Policy Commission (HPC)

The primary issues HPC is currently focusing on are:

  • The definition of “total medical expenditures” for the state that will be used to measure how providers compare to the state’s annual domestic product of 3.6%.  This will not be completed anytime soon, and
  • Review of five to six “material change” applications recently submitted to the Commission for approval.  A material change “…is likely to result in a significant impact on the commonwealth’s ability to meet the health care cost growth benchmark, established in section 9 of chapter 224, or on the competitive market.” 

It is likely that the review process for the material change applications will begin right away and the definition of total medical expenditures will occur in a fall time frame.

Coalition seeks higher payments to safety-net hospitals

An unusual alliance led by the state’s fastest-growing health care company, Steward, and its largest health care union will press for higher payments to community and safety net hospitals, saying Massachusetts faces a widening gulf between the quality of care in affluent and low-income areas. The group, the Massachusetts Healthcare Equality and Affordability League,  launched May 30th by Steward Health Care System, a for-profit cluster of community hospitals, and Local 1199 of the Service Employees International Union, which represents about 47,000 workers in the state. Its organizers warn that Massachusetts could end up with a two-tier health care system, based on what Steward’s chief executive, Ralph de la Torre, called “socioeconomic bias and bigotry.”

Changes to Medicare Diabetes Supplies Mail Order Policy


Catherine Carver, MS, ANP, CDE
Vice President, Advocacy and Planning

Also available...

Page last updated: April 23, 2014