Many GOP Lawmakers Not Moving Forward on Health Plan Exchanges

May 14, 2012 – Topic: Health Plans

Many Republican governors and state lawmakers are refusing to move forward with implementing health insurance exchanges until after the Supreme Court rules on the constitutionality of the federal health reform law, the Washington Post reports.

For example, New Jersey Gov. Chris Christie (R) on Thursday vetoed a bill from the Democrat-controlled Legislature to set up the state’s exchange. Further, in six states where the GOP controls both the governorship and the state legislature, lawmakers have not even considered measures to establish the exchanges.

About 24 states have made little progress to set up the exchanges, but many analysts and state lawmakers say the approach is “more of a political statement than a strategy with potential to derail implementation” of the overhaul, according to the Post (Aizenman, Washington Post, 5/12).

However, there have been exceptions in at least six states. Last year, Nevada Gov. Brian Sandoval (R) did not veto an exchange measure approved by the Democratic assembly, while Mississippi Gov. Phil Bryant (R) promoted exchange legislation in his state (National Journal, 5/13).

Some States Will Have Little Time To Act

Should the Supreme Court find the overhaul constitutional, states that have not moved forward with implementation on an exchange could have little time to adapt, according to the Post. In states that cannot prove they have made significant progress in setting up an exchange by Jan. 1, 2013, the federal government could establish an exchange for them (Washington Post, 5/12).

States that begin implementing an exchange after the Supreme Court issues a decision — which is expected in late June — will have about six months to pass legislation to authorize the exchange, hire a board to oversee it, find vendors to develop the technical infrastructure and have the exchange nearly operational by Jan. 1, 2013, to begin accepting customers by fall 2014 (Kliff, “Wonkblog,” Washington Post, 5/11).

Several Republican governors — including Christie and the governors of Arizona, Nebraska, New Mexico, Tennessee and Virginia — have indicated they are reticent to hand over authority to the federal government to establish an exchange in their state.

Kevin Roberts, a spokesperson for Christie, said the governor has established enough technical groundwork to move forward if the high court upholds the overhaul. “Since the beginning we’ve taken steps to maintain control at the state level,” Roberts said, noting that the state assembly could adopt an exchange bill in its fall session or Christie could use an executive order to set up the exchange.

Some Democratic governors whose efforts to set up exchanges have been blocked by Republican legislatures also are considering executive orders. For instance, Kentucky Gov. Steve Beshear (D) earlier this month said he would use an executive order if the high court upholds the overhaul. New York Gov. Andrew Cuomo (D) last month issued an executive order establishing an exchange after Senate Republicans rejected legislation to create one (Washington Post, 5/12).

Medicare Officials Recommend Against the Word ‘Exchange’

In related news, CMS officials have said the word “exchange” could create confusion for consumers and say the term should not be used in enrollment materials, Kaiser Health News reports.

CMS Office of Communications Director Julie Bataille in a meeting of outreach advisers last week did not indicate a preferred substitute but said, “Words like ‘marketplace’ resonate much more with the consumer and also tend to be something that is all inclusive.”

Bataille said “exchange” has different meanings to consumers, including the idea that they could have to swap something. She said CMS would seek public comment on the enrollment materials before making a final decision on whether to use the term “exchange” (Jaffe, Kaiser Health News, 5/11).

Medicaid payments to primary care doctors will rise under new regulation

By N.C. Aizenman, Published: May 9 for The Washington Post

Primary care doctors could get a pay raise next year for treating Medicaid patients, under a rule announced by the Obama administration Wednesday.

The proposed regulation implements a two-year pay increase included in the 2010 health-care law. The increase, effective in 2013 and 2014, brings primary care fees for Medicaid, which covers indigent patients, in line with those for Medicare, which insures the elderly and some disabled patients.

Although Medicaid is jointly funded by states and the federal government, the pay boost would be covered entirely with federal dollars totaling more than $11 billion over the two years it would be in effect.

Congress automatically appropriated those funds when it adopted the health-care law, so it will not need to act now.

However, the provision is among hundreds that could be instantly nullified if the Supreme Court decides to overturn the law in its entirety when it rules on the constitutional challenge. The court heard arguments on the case in March, and a decision is expected late next month.

The pay raise is one of several attempts in the law to address a fundamental challenge in U.S. health-care: Because primary care doctors focus on preventive care, they offer the best hope of curbing the nation’s health spending. Yet they are paid far less than specialists, contributing to a shortage of primary care doctors that is projected to grow with the aging of baby boomers, the retirement of physicians and an expected influx of more than 30 million Americans who will gain insurance through the health-care law beginning in 2014.

The Association of American Medical Colleges (AAMC) has estimated that by 2020 the shortage of primary care doctors will reach 45,400.

The problem is most acute for patients covered by Medicaid, which pays substantially less than Medicare, let alone private insurers. And about 17 million of those newly insured by the law after 2014 will be covered by Medicaid.

In a statement Wednesday, Marilyn Tavenner, who heads the agency that administers Medicaid, described the pay raise as “an important tool for states to ensure their primary care networks are prepared for increased enrollment as the health care law is implemented.”

“Today’s action will help encourage primary care physicians to continue and expand their efforts to provide checkups, preventive screenings, vaccines, and other care to Medicaid beneficiaries,” she said.

Administration officials also noted that the law has already increased Medicare payments to primary care doctors — awarding more than 150,000 physicians almost $560 million in additional compensation in 2011.

Officials also pointed to a range of other initiatives in the law to bolster the primary care workforce, such as increasing primary care residency slots and offering scholarships and other incentives to medical professionals willing to work in under-served areas.

Atul Grover, chief advocacy officer for the AAMC, praised the Medicaid pay boost.

“I don’t think we’re going to solve the problem of access in this one short provision. But it’s a step in the right direction.”

Still, he said, “it’s just two years. So what do you do after those two years are up?”

Denton Has Concerns About More Private Medicaid Operators in Louisville

by Kenny Colston on May 10, 2012

The problems with privatized Medicaid in Eastern and Western Kentucky could be coming to Louisville.

Passport Health Plan has run Medicaid in Louisville and the surrounding area for more than a decade. The system was the model for last year’s Medicaid privatization, which brought three new Medicaid management companies into the state.

The federal government has ordered the state to open the Passport region to competition by next year. But Medicaid privatization isn’t working too well in the rest of the state. Hospital officials claim two of the private companies aren’t paying enough to reimburse Medicaid-covered care. The private operators say they are only adhering to their contracts with the state.

“Let’s make sure we have a plan,” says Senate Health and Welfare Committee Chairwoman Julie Denton. “If we are going to be bidding out with the Passport region for next year, starting January 1st, the Cabinet sure as heck better be working on an RFP and putting it together in a more thoughtful and steady fashion than they did the Medicaid managed care RFP for last year.”

The state has until July 1 to tell the federal government its plan to open Louisville to competition. But the Cabinet for Health and Family Services hasn’t yet begun work on the plan.

The current three statewide operators all have offices in Louisville, making them obviously competition partners for the region. But Denton says she’s not sure bringing those three in is a good idea.

“I don’t think they can just take three bids from the three MCOs and open those up and let those three MCOs in. And frankly with the way Coventry has been working thus far, I have no interest in letting them into the Passport region,” she says.

Currently, many healthcare systems are having contract issues with CoventryCares, one of the three new statewide MCOs. Coventry officials say they need more operating money and the company is looking to providers and patients to recoup profits.  That has led to lawsuits and threats from lawmakers that Coventry could be barred from operating in the commonwealth.

Coventry Cares wants to renegotiate Medicaid contract

By Tom Loftus | The Courier-Journal

FRANKFORT, Ky. — Coventry Cares, one of Kentucky’s three new Medicaid managed care organizations, has notified Baptist Healthcare System it must renegotiate its contract with the system or allow the contract to expire Nov. 1.

Coventry has sent a similar notification to King’s Daughters Medical Center in Ashland where its contract expires much sooner — May 26.

Matt Eyles, spokesman for Coventry, said the notices were sent in recent weeks because “after having a few months experience under the contracts … the kind of total costs we’re seeing are really much higher than we expected.”

In April Coventry said it would terminate its contract with Appalachian Regional Healthcare this month. But ARH, which runs eight Eastern Kentucky hospitals, sued Coventry in federal court to stop the move. Last week the two sides agreed to a continuation of the contract through June 30.

The moves by the Maryland-based Coventry to re-negotiate or terminate contracts with some of its hospitals are the latest bumps in the transition of Kentucky’s Medicaid program to three new managed care companies.

Audrey Tayse Haynes, secretary of the Kentucky Health and Family Services Cabinet, called Coventry’s actions “concerning.”

But Haynes said she sees no risk to Kentucky’s Medicaid recipients.

“There’s no risk for a couple of reasons. A Medicaid member is able to switch from one of the companies to the other two companies if they choose,” Haynes said. “Secondly, we as a cabinet are monitoring quite closely how these negotiations go.”

Eyles and spokespersons for Baptist Healthcare and King’s Daughters said they hope to resolve problems before current contracts expire.

Kit Fullenlove, the spokeswoman for Baptist Healthcare, said “we’re optimistic we can resolve this.”

Baptist Healthcare System owns five hospitals in Kentucky, including Baptist Hospital East in Louisville and Baptist Hospital Northeast in La Grange.

But Medicaid patients at those two hospitals would not be affected by Coventry Cares’ effort to renegotiate with Baptist because Passport Health Plan is the Medicaid managed care organization in Jefferson County and 15 surrounding counties.

Passport has been the exclusive managed care organization for the Jefferson County region for more than a decade.

But last year, in an effort to save hundreds of millions of dollars, the Beshear administration advertised for bids and eventually awarded contracts to three companies that now compete to manage the care of Kentucky’s Medicaid population outside Passort’s 16-county region. The two managed care companies other than Coventry Cares are Well Care and Kentucky Spirit.

Tom Dearing, of King’s Daughters, said he is “hopeful” that ongoing talks with Coventry and state Medicaid officials will result in no termination of the contract. “In our view, Coventry is putting profits ahead of lives in Eastern Kentucky by leaving potentially thousands of Medicaid patients without adequate health care options,” Dearing said.

Eyles disputed that comment. “We are committed to having a high quality effective provider network that is adequate and makes sure all of our members have access to the right care at the right time in the right setting,” Eyles said. “But we have to do it in a way that balances all of the challenges that we’re facing as well.”|newswell|text|Home|s

Kaiser Health News Digest – Dual Eligibles

States Push Feds To Include 3 Million ‘Dual Eligibles’ In Pilot Program

May 08, 2012

Though only designed for 2 million beneficiaries, states want the federal government to open a pilot program on dual eligibles — those who qualify for both Medicare and Medicaid — to 3 million. In the meantime, California is shifting its dual eligibles to managed care.

Modern Healthcare: Dual-Eligibles Pilot Program Faces Rush From States
States want to include more than 3 million dual-eligible beneficiaries in a CMS pilot program to overhaul their care and payments.  The number is 1 million more than the program was designed for and represents about a third of all that category’s beneficiaries, whose care is one of the biggest drivers of the growth in Medicaid costs (Daly, 5/7).

California Healthline: Risks, Rewards Higher for Managing Dual Eligibles 
The state is working to shift older, low-income Californians eligible to receive Medi-Cal and Medicare — known as dual eligibles — into managed care plans, hoping to coordinate and improve care, as well as save money. The state also is shifting Medi-Cal beneficiaries participating in the Multi-Purpose Senior Services Program into managed care. … About 60 percent of the 7.6 million people covered by Medi-Cal are in managed care plans. … The most-expensive Medi-Cal beneficiaries, many of them older with multiple chronic conditions, are still in fee-for-service plans (Lauer, 5/7).

Essential Health Benefit Packages Under Health Care Reform Have Employers Wary

Workforce Management

By Rebecca Vesely

Latest News

Monday, May 7,2012

Employers and consumer groups are tracking state efforts to craft insurance benefit packages for individuals and small businesses as required under the federal health care reform law.

The scope and cost of these benefit packages could have ramifications for years to come, and employers are seeking flexibility in their design.

Some states are starting to consider the scope and cost of health benefit packages to be sold in the health insurance exchanges, which are required to go online in January 2014.

The 2010 Patient Protection and Affordable Care Act requires that health plans sold to individuals and small businesses starting in 2014 offer minimum services in 10 categories of “essential health benefits.” The 10 categories are inpatient care; emergency services; maternity and newborn care; mental health; prescriptions; rehabilitation; laboratory services; prevention; and wellness and outpatient care.

Large and small employers have banded together to form the Essential Health Benefits Coalition to voice concerns in Washington and statehouses across the country on the issue. Members include the National Retail Federation, the U.S. Chamber of Commerce, National Federation of Independent Business, the Blue Cross and Blue Shield Association, America’s Health Insurance Plans and the Pharmaceutical Care Management Association.

“Employers want to make sure the benefits aren’t so expensive that they can’t cover the cost,” says Brendan Daly, spokesman for the Essential Health Benefits Coalition. 

The requirement doesn’t apply to large employers, self-insured health plans or grandfathered plans (those operating before the passage of the health care law). However, it does apply to individual and small-group plans sold both inside and outside the exchanges. And states can open their exchanges to large employers starting in 2017, where plans must offer these minimum benefit packages.

Last December, the U.S. Department of Health and Human Services announced that instead of a national definition for essential health benefits, each state could craft their own benchmarks within certain parameters.

Many consumer and provider groups preferred a national standard, but many employers said they liked the flexibility of a state-based approach.

Still, questions remain. For employers with workforces in multiple states, it’s unclear which benefit packages they must provide, Daly says.

“There’s apprehension about it,” he says.

Many state officials are waiting for a verdict from the U.S. Supreme Court on the constitutionality of the health reform law, which is expected in June, before starting to craft essential health benefit packages. But a few states, notably California and Oregon, are moving ahead. In Oregon, Gov. John Kitzhaber appointed a working group to make recommendations by September on the state’s benchmark plan for essential health benefits.

As defined by HHS, states can set a benchmark plan that “reflects the scope of services covered by a typical employer plan.” States can choose among the following options for their benchmark: one of the three largest small-group plans in the state by enrollment; one of the three largest state employee health plans by enrollment; one of the three largest federal employee health plans or the largest HMO plan offered in the state, according to HHS.

“It’s even more complicated than setting up the exchanges,” says Erin Reidy, associate policy director for the American Cancer Society’s Cancer Action Network.

That’s because states must look at the coverage options among the largest plans and their comparable costs. This can mean sifting though hundreds of pages of plan documents, Reidy says.

HHS is expected to help in this process by providing data it collects from health plans to determine the top three group plans in each state, sources say.

Employers are also concerned about how much leeway they will have to shift some of the costs of coverage to workers if they are too expensive. The benchmark plans will be subject to various state coverage mandates, which have made health benefits unaffordable for many businesses, according to the Essential Health Benefits Coalition.

HHS has not issued a final rule on the matter. Stakeholders were invited to submit comments to the agency earlier this year.

Rebecca Vesely is a freelance writer based in San Francisco. Please comment below.

Ky. hospital chain takes Medicaid dispute to court

from the Washington Examiner

May 02, 2012 — 11:05 AM
The Associated Press

FRANKFORT, Ky. (AP) — An eastern Kentucky hospital chain has asked a federal judge to intervene in a dispute with one of three companies the state picked to administer Medicaid when it changed the program last year.

Attorneys for Appalachian Regional Healthcare say patient care will be disrupted and workers will be laid off unless the judge issues an emergency order forcing Coventry Cares to allow its members to continue receiving care at its facilities. The Lexington Herald-Leader ( reports attorneys filed a request Tuesday seeking the injunction against Coventry.

If Coventry terminates its contract with Appalachian Regional Healthcare on Friday, it would affect about 25,000 people in the state’s poorest region. The healthcare system includes eight hospitals and several clinics and home-health agencies.

The state decided last year to switch Medicaid to a managed-care program as a way to save money, but problems have arisen during its implementation. Coventry was one of three companies the state chose to manage health care services for Medicaid patients in most of the state.

Coventry has said it needs to pull out of the contract because of decisions made by the state. The company said in court papers that another Medicaid contractor was allowed to not include ARH in its network, which meant it got more high-risk and high-cost patients. It also said that the state doesn’t effectively assess risks to assure managed care providers with more high-risk patients are adequately compensated.

Jill Midkiff, spokeswoman for the Cabinet for Health and Family Services, said the contractors agreed to the state’s risk-adjustment plan when it bid to become a provider.

Rick King, chief legal officer for the hospital chain, says patients are facing long travel times to get to other facilities approved by Coventry.

“We’re talking about 25,000 or more people who are going to be scrambling around trying to find health care in places where they’ve never been, trying to buy gas that they can’t afford,” King said Tuesday at a public meeting over the issue in Harlan.

ARH spokeswoman Hollie Harris said it would also mean job cuts of up to 400 workers.

“This is an issue that is going to have a devastating impact on southeastern Kentucky,” said Dan Stone, CEO of the ARH hospital in Harlan.

Coventry spokesman Matthew Eyles said the company would continue coverage for a few ARH patients, including some pregnant women, some cancer patients and follow-up appointments for people who have had recent surgeries.

Kerri Richardson, spokeswoman for Gov. Steve Beshear, said he is aware of the dispute, and that state officials have encouraged Coventry and ARH to continue talks.

Kentucky hospital chain in dispute with Medicaid contractor

From the C-J

 FRANKFORT, KY. — An eastern Kentucky

hospital chain has asked a federal judge to
intervene in a dispute with a Medicaid


Attorneys for Appalachian Regional
Healthcare say patient care will be
disrupted and workers will be laid off
unless the judge issues an emergency
order forcing Coventry Cares to allow its
members to continue receiving care at its

The Lexington Herald-Leader reports
attorneys filed a request Tuesday seeking
the injunction against Coventry.

If Coventry terminates its contract with
Appalachian Regional Healthcare, it would
affect about 25,000 people in the state’s
poorest region. The healthcare system
includes eight hospitals and several clinics
and home-health agencies.

The state decided last year to switch
Medicaid to a managed-care program as a
way to save money, but problems have
arisen during its implementation.