Tick, Tock: Administration Misses Some Health Law Deadlines

By Phil Galewitz

KHN Staff Writer

JAN 31, 2013


Updated at 1:48 p.m. to reflect the administration’s announcement that 500 groups will participate in a pilot program to change how doctors and hospitals are paid.

The Obama administration is late in implementing several provisions of the federal health overhaul intended to improve access to care and lower costs.

The programs, slated to take effect Jan. 1, were supposed to increase fees to primary care doctors who treat Medicaid patients, give states more federal funding if they eliminate Medicaid co-pays for preventive services and experiment with changes to how doctors and hospitals are paid by Medicare.

The administration also has delayed giving states guidance on a new coverage option known as the “basic health program,” designed to help low and moderate-income people who don’t qualify for Medicaid.  At least one state –Washington — has already decided to not implement the program in 2014 because it won’t have enough time. Washington, along with Minnesota and New York, are keenly affected by the federal inaction because they already have government subsidized programs to help cover such residents which expire at the end of this year. As a result, tens of thousands of people who now have coverage but who won’t qualify for expanded Medicaid could see their coverage become unaffordable next year.

Some of these deadlines appear to have slipped as the administration focuses on carrying out two of the biggest provisions in the health law designed to expand coverage to as many as 30 million people:  On Oct. 1, the federal government must have in place new online marketplaces that will offer government-subsidized individual and small group coverage in every state. Coverage in these marketplaces starts Jan. 1, 2014, when many states are also expected to expand their Medicaid programs for the poor.

Dr. Kavita Patel, a former health policy aide to President Barack Obama, said some delays are inevitable given staff turnover after the November election and the focus on emergencies such as Hurricane Sandy. “I am still impressed with the rate that they are going given all that is going on,” said Patel, now a fellow at the Brookings Institution.

But the delays are already affecting some of the programs that states and their neediest residents had banked on.

Most states, including Texas, Florida and California, have not started offering the higher pay rates to primary care doctors who see Medicaid patients because the administration did not issue the rules until November and state officials said they didn’t have time to carry out the change. While Medicaid fees vary by state, they are generally far below those paid by Medicare and private plans. The change means an average 73 percent average pay increase nationally, according to a 2012 study by the Kaiser Family Foundation (Kaiser Health News is an editorially independent program of the foundation.)

The two-year pay hike is intended to entice more doctors to treat the millions of residents expected to enroll in Medicaid in 2014.  “The delay doesn’t help” states’ efforts to recruit new doctors, said Anthony Wright, executive director of Health Access, a California patient advocacy group.

The Centers for Medicare and Medicaid Services (CMS) said doctors will be able to get the higher fees retroactively to Jan. 1, when states do implement the provision.

The administration has also lagged on paying states a 1 percentage point higher Medicaid matching rate if they eliminate requirements for co-pays for immunizations and other preventive services. About half the states charge people on Medicaid nominal co-payments for such services, which could be a barrier to care.

The federal government splits the cost of Medicaid with states, with the percent of funding varying by the wealth of each state. Every state receives at least a 50 percent match. The 1 percentage point increase would mean an extra $74 million in federal funding in Washington, said MaryAnne Lindeblad, director of the Washington State Health Care Authority, which runs the Medicaid program.

“In the great scheme of things, every little bit helps,” she said.

It is unclear when the payments will begin to states that qualify because the administration has not issued the regulations.

The health law was also supposed to give states the option to set up a basic health program  that would offer lower cost-sharing for people who make too much to qualify for Medicaid, but who would be hard pressed — even with new federal subsidies — to afford the premiums and cost-sharing of plans offered in the new markets.  The law allows states to use federal dollars that would have gone to subsidies to pay instead for coverage for residents who earn up to twice the federal poverty level, or about $47,000 for a family of four.

Washington, Minnesota and New York are scheduled to end their programs later this year because it was assumed beneficiaries would get coverage through the health law. Massachusetts’ program will expire in June.

Another advantage of the basic health program is that people won’t have to worry about paying the government back if their incomes increase during the year in which they are enrolled, while people getting subsidies could face that prospect, Lindeblad said.

Washington hopes to offer the program in 2015, she said. 

An HHS spokesman said rules for the basic health program should be coming soon and offered no reason for the delay.

Lucinda Jesson, commissioner of the Minnesota Department of Human Services, said the basic health program is vital for states like Minnesota that were ahead of the federal government in expanding coverage.  More than 90,000 people might have to go from MinnesotaCare into the more high cost coverage in exchanges if the state can’t establish a basic health program in time for 2014, Jesson said.

“We don’t want to have people worse off because of the Affordable Care Act — that is not what Congress intended.”

Early Thursday afternoon, meanwhile, administration officials announced the start of the pilot program to change how doctors and hospitals are paid. Under the “bundled payments” initiative, participants in more than 500 provider organizations will be paid for “episodes of care,” instead of separately for individual services. Such payments are seen as a way to encourage hospitals and doctors to work together to hold down costs and improve care.

“The objective of this initiative is to improve the quality of health care delivery for Medicare beneficiaries, while reducing program expenditures, by aligning the financial incentives of all providers,” said Acting CMS Administrator Marilyn Tavenner.

Smokers To Face Big Costs from Affordable Care Act

By: Alexandra Sutter, WMBD/WYZZ

Updated: January 30, 2013


PEORIA — If you’re a smoker, prepare to pay more.

Next year, President Obama’s Affordable Care Act will put big penalties on smokers, with insurers charging nearly double for those who can’t kick the habit.

Lorraine Harvey has been smoking since she was just a teenager and for her, smoking is also a part of her job at Discount Tobacco in Peoria.

She said, “It’ll affect my income, you know. It’s going to affect can I smoke or not, my health care insurance. It affects everything about me.”

Harvey said she’s fed up with the increasing cost of her habit. She said last summer’s tax increase was bad enough, but a rise in insurance premiums may be the final straw. “The government wants it both ways. We want your tax money but now you get to pay even higher premiums to have healthcare insurance. That’s not fair to the people.”

The Obama Administration said health insurers will be allowed to charge smokers thousands of dollars.

According to the Associated Press, that means a 50 year old smoker could be paying more than four thousand dollars a year and a 60 year old could wind up paying more than five thousand dollars, on top of premiums.

Now, Harvey said she’s trying to quit. She said, “I mean, you get to the point where you have to. Especially when your insurance rates are going to go up 50 percent. It’s crazy.”

Young smokers may be off the hook. According to the Affordable Care Act, it is mainly the older smokers that will pay the higher fines. 


Article Link: http://centralillinoisproud.com/fulltext?nxd_id=302682 


For success, hospitals should strategize for health exchanges

February 01, 2013 | Kelsey Brimmer, Associate Editor

Healthcare Finance News 

NEW GLOUCESTER, ME – The earlier hospitals begin to plan and strategize for how they will handle the healthcare environment once health insurance exchanges are operational, the better, said Purva Rawal, senior manager of health reform at Avalere Health, during a webinar Thursday.

The webinar, hosted by market anaylst firm Avalere, focused on the impact of the new health exchanges on hospitals and their relationships with payers and patients.

As hospitals face more payment pressures, they will also see increased patient volume, Rawal said, noting that there will be an estimated 24 million new health insurance enrollees through exchanges and 12 million new Medicaid enrollees, along with $158 billion in ACA provider payment cuts and $7.1 billion in readmission penalties for hospitals.

“The 2014 coverage expansion through exchanges and Medicaid are intended to partially offset the payment reductions in the ACA,” she said, “making them critical focus areas for hospital to recoup losses.”

Rawal explained some ways for hospitals to position themselves for success with health insurance exchanges including capitalizing on exchange coverage by identifying and influencing state implementation decisions and leveraging value-based payment efforts by creating a value-based payment strategy across payers.

Preston Gee, senior vice president of strategic planning and marketing at Trinity Health in Novi, Mich., also explained how Trinity launched an extensive planning initiative for accountable care, clinical integration and other core facets of healthcare reform.

But what is essential for hospitals to successfully compete in the new market is early strategic, operational and market readiness said Preston Gee, senior vice president of strategic planning and marketing at Trinity Health in Novi, Mich.

Gee said that because the number of individuals that could eventually utilize exchanges may hit 30 percent. “Exchanges and marketplaces represent a potential sea change in the way care is purchased and the medium by which healthcare decisions are made,” he said.

According to Gee, some of the preparations that have been made at Trinity include researching the health insurance exchange experience in Massachusetts, creating an organizational structure to assess and implement the changes, assigning accountability at each Trinity organization, developing a predictive model for volume and financial impact and developing detailed work plans and accountability milestones.

“We’re using the disruptive nature of health exchanges as a way to grow,” he said. “We anticipate this to be an opportunity to really grow significantly in this space.”


Article Link: http://www.healthcarefinancenews.com/news/for-success-hospitals-should-strategize-health-exchanges

Reader Letter | State must fix Medicaid managed care

Just over a year ago, Kentucky began a statewide Medicaid managed care program under which three private organizations provide health coverage for approximately 560,000 Medicaid patients. Because of a significant budget shortfall in the Medicaid program, the state moved quickly to implement the program through the managed care organizations, known as MCOs.

The program was intended to help the state save money while ensuring patients receive the quality care they need. Kentucky’s hospitals, as essential care providers for Kentuckians in every region, have been on the front lines as this new system has been implemented. Our primary interest, of course, is patient care, and we also contribute to the economic well-being of communities throughout the state.

Our concern, however, is that patient health, hospitals and the communities they serve are threatened by a number of serious problems that have emerged in the months since the statewide Medicaid managed care system took effect.

Hospitals’ close monitoring of the new system has documented the following significant issues:

• Medicaid patients are being inappropriately denied coverage for emergency care, inpatient psychiatric care and other critical behavioral health services.

• Patients are being referred to outpatient services that do not exist in their areas by out-of-state MCO reviewers who know little about available resources in Kentucky.

• Hospitals are being denied payment for emergency room services as MCOs second-guess physicians and their treatment choices for patients.

• Provider networks are inadequate. Contract cancellations by MCOs with multiple hospitals have left patients in large parts of the state, particularly in Eastern Kentucky, without ready access to such critical services as maternity care, radiation therapy and adult and child psychiatric care. Patients and their families are forced to travel hours from home to receive care.

• MCOs frequently are not paying hospitals on time as required by state law — with payments taking more than a year in some cases — placing a significant financial strain on hospitals and forcing some to lay off employees.

• The state Medicaid Department has taken no significant action to enforce its contracts with MCOs to address these issues, leaving Kentucky Medicaid patients and health providers to fend for themselves.

Kentucky hospitals are not the only source of documentation of these problems. A report by the nationally respected Urban Institute validated many of the same concerns. Among the issues cited in that November 2012 report:

• Changing provider networks.

• Patients having difficulty maintaining continuity of needed prescription medications.

• Administrative difficulties that include authorization delays and claim denials.

• The fact that the state’s oversight of Medicaid managed care is “still developing.”

Medicaid managed care has the potential to improve services and lower costs, but not if patients are struggling to gain access to needed care and providers are fighting to be paid for the care they have given patients.

Action is needed to address the problems that patients and hospitals are experiencing with Medicaid managed care and to make the system work properly. And with the possibility that Medicaid will be expanded in Kentucky to include an additional 350,000 people, it is critical that these issues be addressed right away to avoid greater problems in the future.

State laws must be strengthened to ensure the Medicaid managed care system works for the benefit of patients, providers and taxpayers.

In addition, although managed care organizations essentially operate like private insurance companies, they are not subject to the same consumer protections that state law applies to private insurers. Strengthening consumer protections for Medicaid patients will ensure the organizations play by the same rules as all insurance companies that serve the public.

Making the managed care system work in the best possible way for Kentucky should be the shared goal of providers, state government and the MCOs themselves. We can achieve this goal by taking the right steps — right away.


Prestonsburg, Ky. 41653


Princeton, Ky. 42445

Mr. Warman is chairman of the Kentucky Hospital Association and President/CEO of Highlands Regional Medical Center in Prestonsburg, Ky. Mr. Lovell is chairman-elect of the KHA and CEO of Caldwell Medical Center in Princeton, Ky.