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Tag Archives: Health Policy
Trump wants to bypass Congress on Medicaid plan
Block grants for states would achieve conservative dream on health program for poor.
The Trump administration is quietly devising a plan bypassing Congress to give block grants to states for Medicaid, achieving a longstanding conservative dream of reining in spending on the health care safety net for the poor.
Three administration sources say the Trump administration is drawing up guidelines on what could be a major overhaul of Medicaid in some states. Instead of the traditional open-ended entitlement, states would get spending limits, along with more flexibility to run the low-income health program that serves nearly 75 million Americans, from poor children, to disabled people, to impoverished seniors in nursing homes.
Capping spending could mean fewer low-income people getting covered, or state-designated cutbacks in health benefits — although proponents of block grants argue that states would be able to spend the money smarter with fewer federal strings attached.
Aware of the political sensitivity, the administration has been deliberating and refining the plan for weeks, hoping to advance an idea that Republicans since the Reagan era have unsuccessfully championed in Congress against stiff opposition from Democrats and patient advocates. During the Obamacare repeal debate in 2017, Republican proposals to cap and shrink federal Medicaid spending helped galvanize public opposition, with projections showing millions would be forced off coverage.
In addition to potential legal obstacles presented by moving forward without Congress, the administration effort could face strong opposition from newly empowered House Democrats who’ve vowed to investigate the administration’s health care moves.
“Hell no,” Sen. Bob Casey (D-Pa.) wrote on Twitter on Friday evening, vowing to oppose the administration’s block grant plan “through legislation, in the courts, holding up Administration nominees, literally every means that a U.S. Senator has.”
The administration’s plan remains a work in progress, and sources said the scope is still unclear. It’s not yet known whether CMS would encourage states to seek strict block grants or softer spending caps, or if new limits could apply to all Medicaid populations — including nursing home patients — or just a smaller subset like working-age adults.
A spokesperson for CMS did not comment on the administration’s plans but indicated support for the concept of block grants.
“We believe strongly in the important role that states play in fostering innovation in program design and financing,” the spokesperson said. “We also believe that only when states are held accountable to a defined budget — can the federal government finally end our practice of micromanaging every administrative process.”
Republicans have sought to rein in Medicaid spending, especially as enrollment swelled under Obamacare’s expansion of the program to millions of low-income adults in recent years. CMS Administrator Seema Verma has warned increased spending on the Medicaid expansion population could force cutbacks on sicker, lower-income patients who rely on the program.
The administration wants to let states use waivers to reshape their Medicaid programs, but the effort could face legal challenges in the courts. Waivers approved by the Trump administration to allow the first-ever Medicaid work requirements for some enrollees, for example, are already being challenged in two states.
Also complicating the administration’s push: the newfound popularity of Medicaid, which has grown to cover about one in five Americans. Voters in three GOP-led states in November approved ballot measures to expand Medicaid, which has been adopted by about two-thirds of states. Newly elected Democratic governors in Kansas and Wisconsin are pushing their Republican-led legislatures to expand Medicaid this year.
Verma has been trying to insert block grant language into federal guidance for months but has encountered heave scrutiny from agency lawyers, two CMS staffers said. She mentioned interest in using her agency’s authority to pursue block grants during a meeting with state Medicaid directors in the fall but did not provide details, said two individuals who attended.
There is some precedent for the federal government capping its spending on the entitlement program. Former President George W. Bush’s health department approved Medicaid spending caps in Rhode Island and Vermont that would have made the states responsible for all costs over defined limits. However, those spending caps were set so high there was never really any risk of the states blowing through them.
In recent years, governors have complained about the rising costs of Medicaid, which is eating up a bigger share of their budgets. States jointly finance the program with the federal government, which on average covers 60 percent of the cost – though the federal government typically shoulders more of the burden in poorer states. The federal government covers a much higher share of the cost for Medicaid enrollees covered by the Obamacare expansion.
An official from a conservative state, speaking on background to discuss an effort not yet public, said states would consider a block grant as long as the federal government’s guidance isn’t overly prescriptive.
CMS is hoping to make an announcement early this year, but it could be further delayed by legal review, which has already been slowed by the prolonged government shutdown.
Some conservative experts said the administration’s plans ultimately may be limited by Medicaid statute, which requires the federal government to match state costs. However, they say the federal government can still try to stem costs by approving program caps.
“There’s no direct provision of authority to waive the way that the federal government pays the states,” said Joe Antos of the American Enterprise Institute, a right-leaning think tank. “However, that doesn’t mean that you can’t try to have some of the effects that people that like block grants would like to see, in terms of encouraging states to be more prudent with the ways they spend the money.”
State Efforts to Protect Consumers from Balance Billing
Health insurance rates for working-age Americans have improved over the past decade. But not everyone with health insurance today has adequate financial protection. About one-fourth of insured Americans are underinsured because they have significant coverage gaps or high out-of-pocket costs. And all consumers are vulnerable to surprise medical bills, or balance bills for out-of-network care. These balance bills arise when insurance covers out-of-network care, but the provider bills the consumer for amounts beyond what the insurer pays and beyond cost-sharing, as well as in situations where out-of-network care is not normally covered but the selection of provider is outside the consumer’s control.
Consumers are most likely to receive surprise medical bills from health providers outside their insurance plan’s network after receiving emergency care or medical procedures at in-network facilities. In the latter cases, for example, consumers may select a surgeon and facility in network, but discover that other providers, such as an anesthesiologist or surgical assistant, are out of network. These unexpected medical bills are a major concern for Americans, with two-thirds saying they are “very worried” or “somewhat worried” that they or a family member will receive a surprise bill. In fact, these bills are the most-cited concern related to health care costs and other household expenses.
While employers and insurers may voluntarily protect employees or enrollees from some types of balance billing, no federal law regulates charges submitted by out-of-network providers. States can help protect enrollees from unexpected balance bills. However, state protections are limited by federal law (ERISA), which exempts self-insured employer-sponsored plans, covering 61 percent of privately insured employees, from state regulation.
Despite Recent State Activity, Consumers in Most States Are Not Protected from Balance Billing
We conducted a study, published in June 2017, that found that 21 states had laws offering consumers at least some protections in a balance billing situation. But only six of those states — California, Connecticut, Florida, Illinois, Maryland, and New York — had laws meeting our standard for “comprehensive” protections.
Critical elements of state laws that offer “comprehensive” protections against balance billing:
- Extend protections to both emergency department and in-network hospital settings
- Apply laws to all types of insurance, including both HMOs and PPOs
- Protect consumers both by holding them harmless from extra provider charges — meaning they are not responsible for the charges — and prohibiting providers from balance billing, and
- Adopt an adequate payment standard — a rule to determine how much the insurer pays the provider — or a dispute-resolution process to resolve payment disputes between providers and insurers.
In 2017 and 2018, states continued taking steps to protect consumers. Four states — Arizona, Maine, Minnesota, and Oregon — created balance-billing consumer protections for the first time, and two states — New Hampshire and New Jersey — substantially expanded existing protections. We now classify New Hampshire, New Jersey, and Oregon as states offering comprehensive protections against balance billing. As of December 2018, 25 states have laws offering some balance-billing protection to their residents, and nine of them offer comprehensive protections.
New Jersey has met our criteria for comprehensive protection by creating a strong dispute-resolution process to establish a payment amount for the out-of-network service. Other states have recently acted to protect consumers from balance billing in a more limited way that does not meet our criteria. For example, Missouri’s protections against balance billing apply only if the provider and insurer voluntarily agree to participate in the process.
Interest in a Federal Solution to Balance Billing
At the same time, interest has grown in federal measures, in part, because only federal legislation can protect those in self-funded insurance plans that are exempt from state regulation. During the 115th Congress, proposals were released by Senator Bill Cassidy (R–La.), Senator Maggie Hassan (D–N.H.), Representative Lloyd Doggett (D–Texas), and Representative Michelle Lujan Grisham (D–N.M.). The Cassidy proposal has bipartisan support, with three Democrats and two other Republicans as cosponsors.
Federal approaches vary along some of the same lines as state laws. For example, the Hassan bill relies most heavily on a dispute-resolution approach. By contrast, the Cassidy proposal relies on a payment standard that is the greater of a) the median in-network rate paid by the insurer or b) 125 percent of the average allowed amount across payers. Several federal proposals make protections contingent on failure of providers to notify the consumer that they could be billed by an out-of-network provider. States that have enacted protections have mostly viewed such contingent protections as an insufficient means of protecting consumers. Federal proposals also vary in the degree to which they allow a state role in implementing protections.
Some federal proposals, like some state laws, have potential gaps. For example, some address balance bills only from hospital-based physicians such as anesthesiologists and radiologists. Also, state laws and federal proposals mostly do not address ground or air emergency transport providers.
Looking Forward
The bipartisan interest in the surprise billing issue offers the potential for federal action in the new Congress. States are frustrated by their inability to address all insurance plans. And states without laws have often faced opposition from stakeholder groups, even when there is a consensus around protecting consumers. A federal solution could offer a more comprehensive approach, while giving states appropriate flexibility to seek an approach fitting their particular market environments.
CMS cuts ACA exchange fees, floats proposal to end silver-loading
Dive Brief:
- CMS proposed in its 2020 Payment Notice on Thursday a reduction to exchange user fees and is asking for feedback on a proposals to potentially eliminate auto-reenrollment and “silver-loading,” a strategy used by payers where they pack the ACA’s subsidy-rich silver tier plans in order to make up for losses incurred by the elimination of cost-sharing reduction (CSR) payments.
- The agency is proposing to drop the exchange fee to 3% from 3.5% of premiums for plans sold on the federal exchange and to 2.5% from 3% for plans sold on state exchanges. If finalized as-is, the rule would also increase the annual cost-sharing limit for self-only coverage to $8,200 from $7,900 and to $16,400 from $15,800 for family coverage.
- While rule’s intentions are to lower premiums, critics have argued it would trigger the opposite. Former CMS Administrator Andy Slavitt warned through a series of tweets that the rule is an “act of sabotage” that would cut coverage for 2 million Americans, “significantly increase premiums, and raise out of pocket costs.”
Dive Insight:
CMS has presented the rule as another step toward deregulating healthcare and lowering costs for consumers. Consumers, the agency argues, will ultimately save money on premiums, savings that will theoretically trickle down from insurers, who will pay less in exchange user fees once the proposal is finalized.
CMS Administrator Seema Verma said in a statement that the rule is aligned with the Trump administration’s healthcare goals, which include lowered premiums, reduced regulations, market stability, consumerism and protection for taxpayers.
While no regulations limiting or banning auto-enrollment and silver-loading are contained in the rule, CMS has requested public comment on the two issues for consideration in future rules before 2021.
“The Administration supports a legislative solution that would appropriate CSR payments and end silver loading,” the proposed rule states. “There is a concern that automatic re-enrollment eliminates an opportunity for consumers to update their coverage and premium tax credit eligibility as their personal circumstances change, potentially leading to eligibility errors, tax credit miscalculations, unrecoverable federal spending on the credits, and general consumer confusion.”
Critics called it the latest act of “sabotage” on the ACA.
Ending auto-enrollment, a key feature of the ACA, would result in lost coverage for a number of Americans.
The end of silver-loading, a tactic many health plans resorted to in 2018 after the elimination of the law’s cost sharing reductions, could wreak havoc for insurers in the exchanges.
Opponents of the rule believe cracking down on silver-loading would do little more than boost premiums for consumers, as insurers would have no other mechanism to mitigate subsidy losses.
The Trump administration is proposing a technical change to how premium subsidies are indexed, which will modestly decrease ACA marketplace subsidies and increase consumer premiums.
— Larry Levitt (@larry_levitt) January 17, 2019“
President Trump, Senator Patty Murray, D-Wash., said in a statement. is “hurting families left and right.” Murray is the top Democrat on the Senate Health, Education, Labor, and Pensions Committee.
“Even 27 days into the shutdown he caused, President Trump has somehow found time to further sabotage health care for patients, families, and women —this time by proposing what would amount to a health care tax on patients and families across the country,” Murray said.
America’s Health Insurance Plans praised the reduced user fee, adding the proposed rule focuses on “stability in the individual market.” But it is unclear where the insurance lobby stands on the proposals to potentially end auto-reenrollment and the practice of silver-loading.
Public comments on the rule are due February 19.
Health Care Costs 101: A Continuing Economic Threat
Click to access HealthCareCosts18.pdf
US health spending reached $3.3 trillion in 2016, or $10,348 per capita, and accounted for 17.9% of gross domestic product (GDP). Health spending slowed somewhat in 2016, following the coverage expansions of 2015 and 2014. National health spending increased 4.3% in 2016, down from 5.8% in 2015 and 5.1% in 2014. Despite this slowdown, 2016 health spending grew 1.5 percentage points faster than the economy (GDP grew at a rate of 2.8%).
Looking ahead, health spending is projected to grow at an average rate of 5.5% per year (1.0 points faster than the economy) between 2017 and 2026. At this rate, health care would consume a growing portion of the economy, totaling $5.7 trillion and accounting for one-fifth of GDP by 2026.
Health Care Costs 101: A Continuing Economic Threat (PDF), which relies on the most recent data available, details how much is spent on health care in the US, which services are purchased, and who pays.
Key findings include:
- Per capita health spending increased 3.5% in 2016 and crossed the $10,000 per capita threshold for the first time.
- Prescription drug spending declined dramatically from 8.9% in 2015 to 1.3% in 2016, driven in part by fewer new medications on the market, slower brand-name drug spending, and reduced spending on generic drugs.
- Households and the federal government each accounted for 28% of health spending in 2016.
- As ACA coverage expansion matured in 2016, the rate of increase in federal spending slowed to 3.9%, lower than private business (5.0%) or households (4.6%).
- Federal subsidies for ACA marketplace (individual coverage) premiums and cost sharing totaled $33 billion, accounting for 3.5% of federal health spending and 3.0% of private health insurance spending.
- Public health insurance, including Medicare and Medicaid, paid the largest share of spending (41%) in 2016. Private health insurance paid for a third of health spending and consumers’ out-of-pocket spending accounted for 11%.
The full report, a quick reference guide, and all of the charts found in the report are available under Related Materials. Also available are the datafiles and previous years’ reports. These materials are part of CHCF’s California Health Care Almanac, an online clearinghouse for key data and analyses describing the state’s health care landscape.
US Health Care Spending: Who Pays?
Over the past 56 years, there have been major shifts in how we pay for hospital care, physician services, long-term care, prescription drugs, and other health care services and products in the US. In 1960, Medicare and Medicaid did not yet exist. Only half of hospital care was covered by insurance, with the rest paid out of pocket and by a patchwork of sources, both private and public.
In 1960, almost all (96%) spending on prescription drugs came out of the consumer’s pocket, but a dramatic rise in private insurance, coupled with the implementation of Medicare drug coverage in 2006, dropped the out-of-pocket spending share to 14% in 2016.
This interactive graphic uses data from the Centers for Medicare & Medicaid Services (CMS) to show national spending trends from 1960 to 2016 for health care by payer. (Figures presented refer to personal health care, which, as defined by CMS, includes goods and services such as hospital care and eyeglasses but excludes administration, public health activity, and investment.)
The data visualization below is a companion to Health Care Costs 101, part of CHCF’s California Health Care Almanac.
3+ clicks needed to find online price lists of largest hospitals, Quartz says
The websites of 75 percent of the nation’s 115 biggest hospitals required three or more clicks to find their chargemaster, according to an analysis by Quartz.
Five things to know:
1. As of Jan. 1, hospitals are required to post their standard charges online under a CMS price transparency rule. They must present the information in a machine-readable format that can be easily imported into a computer system and update the information at least annually. On Jan. 10, CMS Administrator Seema Verma acknowledged that the information hospitals are posting “isn’t patient-specific,” but she said the federal government still believes the requirement “is an important first step.”
2. For its analysis, Quartz surveyed the websites of 115 of the largest U.S. hospitals, which receive 20 percent of all Medicare and Medicaid hospital funding. The reporters said “after spending an inordinate amount of time clicking through pages,” they found 105 hospitals’ lists online.
3. “Even among those hospitals that are technically compliant with the new rule, the vast majority don’t make it especially easy for the average person to find their pricing information. We found that most price lists are buried under many sub-menus or at the very bottom of a long page scroll,” the reporters said.
4. For six hospitals the reporters had trouble finding price lists for, they were able to track them down through a Google search pairing the name of each hospital with phrases like “price list” or “chargemaster.” Another four hospitals whose lists remained elusive to the reporters were contacted via email or phone, with three — Hackensack (N.J.) University Medical Center, Allentown, Pa.-based Lehigh Valley Hospital and Washington Hospital Center in the District of Columbia — not replying to Quartz at the time of writing.
5. Even for hospitals whose online lists were more accessible, some required hundreds of clicks to find a particular item, according to the publication. For example, Louisville, Ky.-based Norton Hospital’s 1,560-page price list had three separate pages for “treatment rooms.” At least five hospitals also requested a user’s email and name to access the data.
“In many instances, the price list is published on illogical pages. Most hospital sites have a ‘billing’ section, but, for example, the Methodist Hospital in San Antonio decided to put its standard rates on the legal page while [Indianapolis-based] Indiana University Health has placed it under the Frequently Asked Questions section of its website. Baptist Hospital in Miami published their chargemaster as fine print,” according to Quartz.
For the full Quartz report, click here.
Supreme Court hears case over disproportionate share hospital payments
Hundreds of millions of dollars in reimbursement are at stake; $3-4 billion from 2005 to 2013.
The Supreme Court was expected to hear oral arguments today over notice and rulemaking requirements for Medicare reimbursement.
The outcome of Azar vs. Allina Health Services could greatly affect reimbursement for hospitals that serve a disproportionate share of low-income patients. The DSH payment calculation is based on the percentage of low-income patients served.
The government wants to add Part C, or Medicare Advantage beneficiaries into the calculation, a move hospitals fear would decrease payments based on their belief that MA members are, on average, wealthier than Medicare Part A beneficiaries.
But the lawsuit is about how the Department of Health and Human Services went about attempting to implement its rule.
The hospitals in the lawsuit argue that HHS is required to conduct notice and comment rulemaking before providing the instructions to a Medicare administrative contractor that makes the initial determinations of payments due under Medicare. Medicare uses private contractors to administer its reimbursements to providers.
The case went to the District of Columbia Circuit Court, which vacated the rule. The hospitals argue that after the circuit court’s decision, CMS simply tried to make the same change without undertaking notice and comment.
The judge in the District of Columbia Circuit Court case was Brett Kavanaugh, who as Supreme Court Justice, is recusing himself in the HHS case Azar vs. Allina Health.
WHY THIS MATTERS
CMS’s proposed rule changes affect hundreds of millions of dollars in reimbursement for hospitals. The government estimates that the DSH payments from 2005 to 2013 totaled $3 to $4 billion, according to SCOTUSblog.
Hospitals suing HHS said the Centers for Medicare and Medicaid Services “botched” attempted rulemaking in 2004, when the department tried to change the standard governing Medicare payment to hospitals nationwide for services furnished to low-income patients.
The Medicare Act requires the agency to engage in notice-and-comment rulemaking, the hospitals argue.
HHS disagrees, saying the Medicare Act does not require HHS to issue formal notice-and-comment rulemaking prior to changing the DSH calculation formula. Doing so would cripple the Medicare program, requiring the agency to use rulemaking for any change in its lengthy and detailed operations manuals, it argues.
The hospitals involved in the lawsuit are Allina Health System and its affiliated hospitals, Abbott Northwestern, United, and Unity; Florida Health Sciences Center; Montefiore Medical Center; Mount Sinai Medical Center, New York-Presbyterian/Queens; New York Presbyterian Brooklyn Methodist Hospital; and New York and Presbyterian Hospital.
ON THE RECORD
“The agency botched that rulemaking: the final rule was not the ‘logical outgrowth’ of the proposed rule, and the D.C. Circuit vacated it,” Allina and other health systems said.
HHS Secretary Alex Azar said in court documents, “As the government has explained, respondents’ theory, if adopted, has the potential to substantially undermine effective administration of the Medicare program, not least because its rationale would encompass not just the Medicare fractions at issue here but nearly every instruction to the agency’s contractors, including those contained in the Provider Reimbursement Manual.”
In health care, it’s still about the prices
Health care executives gave no indication to bankers and investors at this year’s J.P. Morgan Healthcare Conference that their pricing practices would change any time soon.
Why it matters: That sentiment comes the same week when three of the original authors of an influential 2003 article — which studied why health care is so expensive in the U.S.— published an update. Their conclusion was the same: “It’s still the prices, stupid.”
Fifth Circuit Hits Pause on ACA Lawsuit Over Government Shutdown
At the urging of the Trump administration, an appellate judge put legal wrangling over the Obama-era law’s constitutionality on hold until the partial government shutdown ends.
The appeals process to review a ruling that declared the entire Affordable Care Act invalid will have to wait until attorneys for the federal government have funding to proceed.
Fifth Circuit Court Judge Leslie H. Southwick issued a stay in the case Friday, granting a request filed earlier in the week by the U.S. Department of Justice.
The pause comes three weeks into a partial government shutdown that’s poised to become this weekend the longest in U.S. history, as President Donald Trump insists that Congress authorize $5.7 billion for a wall along the U.S. border with Mexico and Democrats refuse to do so.
While most of the federal government was funded by earlier legislation, this shutdown affects about 800,000 federal workers and inhibits the work of several agencies that handle health-related tasks.
Both the plaintiffs and federal defendants agreed that a stay would be appropriate. But the California-led coalition of Democratic state attorneys general challenging the lower court’s decision and the U.S. House of Representatives—which, newly under Democratic control, is seeking to intervene in the case to defend the ACA—opposed the stay request.
HENRY KOTULA 