Here’s a convenient talking point for the Obama campaign as it begins to coalesce its message surrounding healthcare reform spending under the ACA: enrollment in Medicare Advantage is up since the beginning of the current decade, while premiums have been on the decline. HHS Sec’y Sebelius attributes this to the core provisions within the ACA allowing stipulations of bonus payments based upon quality, changes to enrollment periods, new medical loss ratio requirements and penalties, and the power for CMS to reject plan bids.

According to Humana’s last quarterly report, it bought two Medicare Advantage contractors in the third quarter of last year and enrollment increased over the past 12 months. Wellpoint also acquired an Advantage contractor in 2011 and saw increased enrollment.

While it may be a little premature to trumpet reform to this sector of Medicare spending by the government as being a permanent fixture of ACA implementation, it does highlight the need to revisit the drama surrounding payments to providers in FFS plans. Will the doc-fix ever be truly fixed? Bipartisan Senate and House members tasked with establishing a permanent end to reimbursement cuts to physicians will have their work cut out for them starting today — apparently considering everything from repeal of the SGR in its current form for Medicare spending to the use of war funds to finance such a permanent patch. Should be interesting.

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The cornerstone of the ACA is the provision for a coverage mandate — whether that coverage includes complete subsidized services (Medicaid or another fed subsidized program) or via private insurer. In order that individual states comply with this most essential of the reform law’s benefits, HHS has announced that states have the option to create “essential benefits packages” as a method of increasing compliance within the ACA.

“Flexebility” is the key, according to Secretary Kathleen Sebelius.

The national health law lists 10 categories of health care that all insurance policies must cover: hospitalization, emergency care, out-patient services, maternity and newborn care, mental health and substance abuse services, prescription drugs, laboratory testing, preventive and wellness care, pediatric services (including dental and vision examinations), rehabilitative care and habilitative care such as services for children with developmental disabilities. But within those categories, the federal government is allowing each state to determine its own basket of essential benefits by choosing a “benchmark” package offered by any of a variety of insurers.

Sebelius: This move protects consumers by respecting states’ role in healthcare delivery under the ACA. Obama administration: This is the only way in which the mandate can be upheld while making essential services affordable in all fifty states. Consumers? Increased standardization among offerings of basic services by states under the ACA raises the possiblity of mandated coverage rather than making things too onerous for the feds in getting the legislation off the ground in just a couple of years. | LINK

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From the Did You Know category today: the state of Indiana is challenging a key provision of the ACA having to do with the medical loss ratio for insurers. That’s the amount by which insurance premiums are set a certain degree of cost implementation for overhead. The ACA requires the insurer to spend 80 percent on healthcare delivery, or else pay a fine. Indiana is pursuing a federal waiver from this proviso. Healthcare consumer advocacy weighs in.

Indiana’s application is based on state politicians’ ideological opposition to health reform, not the realities of the state’s health care market … As the MLR regulations make clear, there must be a credible threat to the stability of the individual marketplace in order to grant a waiver. Indiana has demonstrated no such threat. We urge [HHS] to reject Indiana’s application.

Indiana is the only state in the country to request that consumer high deductible health plans be exempted from MLR provisions unconditionally. HHS will ultimately decide on the matter. | LINK

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The requirement that new insurance provisions and services under reform and HHS rules provide the gamut of preventive womens’ healthcare services will also cover the infamous morning-after pill. Other required free services under the new rules include all birth control methods approved in the U.S., domestic violence screening, and support for breastfeeding.

The HHS noted that not every health insurance plan must comply with the new directive, however. “The administration also released an amendment to the prevention regulation that allows religious institutions that offer insurance to their employees the choice of whether or not to cover contraception services,” the agency said.

Perhaps most significantly, the rules prohibit charging a co-payment, co-insurance or deductible for this type of healthcare delivery — raising questions as to the feasibility for the feds to include such a provision in the short term. Medicare will also foot the bill for both dual-eligibles and dedicated beneficiaries. | LINK

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HHS is scaling back its July 1 date it set to enforce new policies concerning insurance claims denials and reviews. According to the agency, states need more time to “adhere to requirements” — much to the frustration of patient advocacy groups and to the benefit of Insurance. Policyholders had 4 months in which to prepare appeals arguments previously under yet-to-be-instituted reform rules. Now it’s just 2 months.

Essentially, the Obama administration’s new rules give beneficiaries less time to prepare an appeal, less information about the reason for the denial and limitations on which denials can be appealed. Patients can still appeal if their coverage is canceled by an insurer, and decisions by external review panels are still in effect. External reviews will now start on January 1 of next year. The external review process is key to healthcare consumerism under the reform law, as patients have never before been required to complain to an independent review panel since individual states never entered into this regulatory aspect of reform until now.

Now that insurers have some breathing room until the initiation of this process and consumers have a narrower window of appeals action, the only question is who this move truly benefits in the long run. Expect to hear more concern from advocacy groups on matters of not only the delay of policy enaction, but also the apparent loss of protections as a result of a srinkwrapped appeals process. | PDF link to HHS document concerning new rules

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Getting the word out about all the preventive services available to Medicare beneficiaries is about as easy as wiping out fraud within CMS completely. But that’s not stopping HHS from pulling out all the stops in an effort to curtail future spending on preventable medical problems.

On Monday, HHS Secretary Kathleen Sebelius announced that the agency was launching a publicity campaign, known as “Share the News, Share the Health” to alert Medicare patients, their doctors and their relatives that the services are available at no charge. “Our job is to make sure every single Medicare beneficiary in the country knows,” Sebelius said.

Chalk it up to a (political) campaign by the federal government to get patients knowledgeable and accepting of the benefits afforded them under the reform law. Overall, this effort is a good thing. At its most superficial, it is a way to catch disease earlier, implement higher quality care delivery for less ill patients sooner, and it represents a time saver for the primary care physician, freeing him from informing the beneficiary in order to make the most of the covered physician service/visit. More profound, however, is the stark effect this initiative could have on patient empowerment — as only slightly more than 10 percent of beneficiaries takes advantage of at least one of the covered preventive medical screenings and services.

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President Obama has issued policy guidance on the extension of healthcare benefits under Medicaid for gay couples.

Under the new guidance, dated June 10, states have the option to allow healthy partners in a same-sex relationship to keep their homes while their partners are receiving support for long-term care under Medicaid, such as care in a nursing home.

This is significant, because, as the article states, states have the ability to seize property to pay for overdue medical charges once a beneficiary’s ability to pay is exhausted. The presence of a spouse in a married relationship living on that property would prevent liens and seizures from taking place, allowing Medicaid benefits to kick in. The same-sex partner living in the home would abort any power the state would have in realizing payments under those alternative conditions for beneficiaries receiving long term care services.

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Open season on ACOs? Not only are hospitals and healthcare organizations seizing upon the Obama admin’s goals for federal oversight of such programs, they are doing it in an unusually vociferous and uncharacteristically uncivil way. If you recall, the use of ACO oversight by CMS with respect to the care of Medicare patients seemed to be a solution to challenge rising Medicare costs of care delivery. Unfortunately, under the nascent reform law, it really never gained traction outside of the Obama admin’s ivory tower.

The five-year test enlisted 10 leading health systems around the country and offered financial bonuses if they could save enough by treating older patients more efficiently while providing high-quality care. … In 2010, the final year, just four of the 10 sites, all long-established groups run by doctors, slowed their Medicare spending enough to qualify for a bonus, according to an official evaluation not yet made public. Two sites saved enough to get bonuses in all five years, the evaluation shows, but three did not succeed even once.

The goals of the Obama administration may be laudable here, but many simply think the degree of ACO regulatory oversight by the federal government in this sense is downright lofty, if not impossible, as a Medicare cost-cutting measure.

The Cleveland Clinic’s chief executive, in a letter to the head of the CMS, called Medicare’s plans for accountable care organizations prescriptive, burdensome and discouraging. Dr. Delos Cosgrove, president and CEO of the 11-hospital system, said its officials finished a review “disappointed generally” with the proposals released two months ago to create Medicare ACOs.

Other orgs (Mayo Clinic [MN], Geisinger [PA]) have lobbed similar criticisms against CMS, HHS, and President Obama — citing startup costs for the future participation of theirs and other systems without guarantees of fiscal rewards for accountable care, all while being mired in massive regulatory oversight. Looks like the line has been drawn in the sand. Either further risk the alienation of hospitals and healthcare systems integral to making reform work by their future participation, or scale back and make major changes to the already controversial porposals CMS is mandating for ACOs with respect to Medicare reform and healthcare reform, overall. | LINK

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A group of states with a combined population of just under 50 percent of the U.S. population is trying to circumvent the process by which insurers publish premium rates before those published rates reach the marketplace. Ordinarily, individual states would have to receive the approval from their regulatory bodies (insurance commissioners) to review and approve or disapprove rates before they are published in the market. Doctor Pundit readers may recall that one of California’s major insurers, Wellpoint, lowered rate increases after intense media and political pressure forced smaller increases by approx. 7 percentage points.

That state’s IC action has led its lawmakers to consider applying the same statutes to group and individual plans on the open markets. The entire Wellpoint saga couldn’t have come at a worse time for the insurer. With an Arnold Schwarzenegger-approved massive budgetary deficit amid a national slumping economy and presidential push for reform going in high gear, the provider became the poster child for insurance reform in the overall drive of the Obama admin’s push for healthcare reform — garnering critical public support in advance of the law — in the process. States and the HHS would have the power to scrutinize insurance providers considering increases of 10 percent or more.

Insurers are quick to criticize this latest managed care regulatory act, accusing governments of focusing on perceptions of profits by insurers instead of what truly drives healthcare costs — healthcare delivery and utilization. Looks like they may have to get used to things playing out this way, as other states — such as Connecticut, Maine, Massachusetts and New Mexico — are either rejecting rates or adopting legislation to give state insurance commissioners additional rate review authority. | LINK

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Recent concerns of two members of congress have upped the ante in the war against a key provision of the ACA: the development of an independent payment advisory board^[1] for the purpose of overseeing payments made by Medicare in the event of rapid spending growth in the healthcare delivery sector. It’s just the latest argument in the ongoing saga to balance the major deficit facing the federal government in the wake of world crises, skyrocketing fuel prices, and the controversial Ryan plan.

[This board differs from the current Medicare Payment Advisory Commission (MedPAC), in which recommendations to Congress do not have to be acted upon. If fact they can be ignored.]

Essentially, the panel would have total control over the direction of Medicare spending once it hits the regulatory criterion in comparison to overall government spending. Championed by Kathleen Sebelius and Sen. Jay Rockefeller, the provision for board oversight would “ensure that health costs are reduced” at the discretion of “experts, using evidence, not by the undue influence of special interests”.

The GOP are fearing regulation under the guise of a presumptive non-partisan body (appointed by the president) and don’t like it one bit. Cries of the potential for “rationing boards” and interference in market forces by third parties that contract with Medicare to provide payments to healthcare providers at the hands of non-vetted “bureaucrats” are representative of that party’s concerns.

Perhaps what is a little surprising is the lukewarm reaction by many advocacy lobbies — from the AARP to the American Health Care Association — to Obama’s provisions. The focus on setting Medicare spending policy by unelected officials and the strong potential for policy decisions to be made by unaccountable and seemingly dispassionate arbiters of oversight and governance is of grave concern to these and other groups whose core constituencies (mainly those in long term care and chronic healthcare delivery to seniors) are directly affected by such decisions. The lobby groups allege the legislation of healthcare benefits to seniors by bypassing lawmakers’ authority would result in adverse consequences to coverage and access.

Appointees to the commission are chosen by President Obama and would require Senate confirmation. Currently, Democrats have slim control of the balance of power in that body.

1. Under the PPACA provision, the board cannot make recommendations to ration healthcare delivery, raise revenues or increase beneficiaries’ premiums, deductibles or co-payments. Recommendations of the board will become law unless the House and the Senate each adopt, by a 3/5 majority, a resolution to block them.

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