Health Policy Update April 1, 2010

CHRISTIANA CARE HEALTH POLICY UPDATE On Deck In Dover 

Recovery Act Money will Help to Offset Added Expenses to Medicare Part D

White House Watch 

President's Budget Proposal Assumes Comprehensive Health Care Reform

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President Calls for Regulation of Insurer-Rate Increases

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Officials Announce New Health Information Technology Grants

Washington Watch 

Consumer Reports Releases Hospital Rankings Based on Hospital-acquired Infections

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Recovery Act to Help Fund Health IT

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Analysts Expect Hospital Mergers to Increase

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Senate approves Reid amendment to health reform bill

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House Passes Bill that Delays Cuts in the Physician Fee Schedule

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Senate passes Health and Human Services Appropriations Bill

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House approves jobs bill with health coverage, workforce provision

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Senate may expand Medicare/Medicaid instead of a new 'public-option'

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Reid set to unveil new public option

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Health & Human Services will provide $235M to establish health IT "beacons"

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MedPAC Releases Report on Regional Variation

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NIH Revises the Definition of Principal Investigator

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HHS revises how it calculates improper Medicare payments

On Deck In Dover Recovery Act Money will Help to Offset Added Expenses to Medicare Part D February 18, 2010: Health and Human Services Secretary Kathleen Sebelius announced that states will receive more than $4 billion in financial relief due to the American Recovery and Reinvestment Act of 2009 (ARRA). The amount that states will have to pay the federal government will be reduced by $4.3 billion to offset the cost of Medicare coverage for prescription drugs for state residents eligible for both Medicare and Medicaid. The relief is intended to offset some of the added expense to Medicare Part D. Delaware is expected to save a total of $7,712,637.  "We believe today's action will help states as they struggle to maintain Medicaid and other budget priorities in these difficult economic times," said Sebelius. "This relief will help states continue to provide critical health care services to the nearly 60 million beneficiaries who depend upon it."

White House Watch Patient Protection and Affordable Care Act (H.R. 3950) Signed into Law March 23, 2010: Congress approved H.R. 3950 on March 21. The $940 billion legislation passed in the House by a vote of rd 219-212 and in the Senate by a vote of 60-39. President Obama signed the bill into law on March 23 . The President held a

CHRISTIANA CARE HEALTH POLICY UPDATE press conference after the signing. (Video of the press conference can be found here.) The President said, “Our presence here today is remarkable and improbable. With all the punditry, all of the lobbying, all of the game-playing that passes for governing in Washington, it’s been easy at times to doubt our ability to do such a big thing, such a complicated thing; to wonder if there are limits to what we, as a people, can still achieve. It’s easy to succumb to the sense of cynicism about what’s possible in this country.”

Some of the most immediate changes that will occur include: Within 90 days of enactment, the law will provide immediate access to high-risk insurance plans for people who can’t get insurance because of a pre-existing medical conditions.

Within six months it would bar insurers from: a. denying people coverage when they get sick b. From denying coverage to children with pre-existing conditions c. From imposing lifetime caps on health-care coverage A thorough timeline for the reform as well as the legislations history can be found here.

The White House’s overview of the legislation, including some frequently asked questions, can be found here.

President's Budget Proposal Assumes Comprehensive Health Care Reform February 1, 2010: President Obama released a budget proposal for the federal fiscal year 2011. The proposed budget assumes the passage of comprehensive health care reform legislation but does not include any new proposals directly affecting Medicare or Medicaid payments to healthcare providers. The proposed budget was accompanied with a statement from the President. "Because even the best-trained workers in the world can't compete if our businesses are saddled with rapidly increasing health care costs, we're fighting to reform our nation's broken health-insurance system and relieve this unsustainable burden", wrote the President.

President Calls for Regulation of Insurer-Rate Increases February 22, 2010: President Obama has called for government regulation of insurance rate increases as part of his comprehensive healthcare overhaul. Obama's pronouncement comes after Health and Human Services Secretary Kathleen Sebelius drew attention to a California health-insurance company, Anthem Blue Cross, which sought to increase rates up to 39 percent. The President is calling for legislation creating a board that would determine whether or not increases are reasonable and justifiable. It also would give Sebelius the authority to block rate increases that were deemed unfair by the board. The legislation would be based on legislation first proposed by Sen. Dianne Feinstein (D-Calif.).

Officials Announce New Health Information Technology Grants The Obama administration announced a wave of funds to advance its health information technology goals. The money comes from the stimulus package approved earlier this year by Congress. At a forum in Chicago, Health and Human Services Secretary Kathleen Sebelius and Vice President Joe Biden announced the release of $1.2 billion to facilitate the adoption of electronic medical records by health professionals. Of these newly released funds, $598 million will be used to create regional extension centers to provide technical assistance to doctors and hospitals. In addition, $564 million in grants will go to states to help set up information exchanges.

Washington Watch HHS Secretary Calls for More Transparency from Insurers March 5, 2010: Health and Human Services Secretary Kathleen Sebelius recently met with five major insurance company executives and requested an explanation for the recent rate increases. The insurers claimed that hospitals, drug makers and other health-care are responsible for the rate increases. "The rate is really reflective of our other parts of the health-care delivery system," said Ron Williams, chief executive of Aetna Inc. Williams went on to state that Sebelius should have included executives from these other sectors in the meeting. The secretary asked the company executives to begin providing more transparency to consumers. She requested, among other things, that the companies begin to provide online access to information on rate increases including information about how much of their revenue goes toward administrative costs, marketing and actual care.

See also: President Calls for Regulation of Insurer-Rate Increases A New Survey Indicates that EMR Incentives Are Making a Difference March 6, 2010: A recent survey by Accenture and Harris Interactive claims that 58% of the physicians in small private practices anticipate adopting electronic medical records (EMRs, also called “electronic health records” or “EHRs”) within the

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CHRISTIANA CARE HEALTH POLICY UPDATE next two years. Many of those who said they will adopt EMRs cited new government incentives for those who implement the regulations (and punishments for those who ignore them), as their reason. Of those surveyed, only 15% said they were currently using EMRs. "Our research indicates that, as intended, federal legislation is an important driver of EMR adoption among U.S. physicians," said Dr. Kip Webb, who leads Accenture's clinical transformation practice, "If U.S. health care providers properly implement and use EMRs more broadly, there is no doubt that EMRs can make an important contribution to improving quality of care and controlling costs." In December, the CMS released its proposed requirements and incentives for the adoption of EMRs. An overview of the requirements can be found here.

See also: Officials Announce New Health Information Technology Grants A New Survey Shows Radical Growth in Uncompensated Care March 24, 2010: According to a recent survey of its members, the National Association of Public Hospitals and Health Systems found that the number of uninsured patients who received uncompensated medical care at public hospitals has increased by 10 percent since the start of the recession in 2007. The number of uninsured patients receiving medical care at safety net health systems has increased by 23 percent. Some hospitals have reported up to $16 million in uncompensatedcare costs. With the passage of H.R. 3950, experts expect these figures to decrease significantly. According to the Urban Institute, had the legislation not passed, the number of uninsured would have increased by between 23 and 28 million in the next ten years. The full findings of the Urban Institute’s report can be found here.

AMA Supports Healthcare Reform Bill March 25, 2010: AMA President J. James Rohack said that the American Medical Association supports the $940 billion rd healthcare reform bill signed by President Obama on March 23 . “By extending health coverage to the vast majority of the uninsured, improving competition and choice in the insurance marketplace, promoting prevention and wellness, reducing administrative burdens, and promoting clinical comparative effectiveness research, this bill will help patients and their physicians,” Rohack said. Rohack did voice some concerns about the bill. Most notably Rohack stated that the AMA would continue to lobby congress permanently repeal Medicare's sustainable growth rate or SGR formula. SGR threatens to cut Medicare payments by 21.2% next month. Though the bill is not perfect, Rohack said, “we cannot let the perfect be the enemy of the good when it comes to something as important as the health of Americans.”

Health Care Reform Amendments (H.R. 4872) Approved in House and Senate March 25, 2010: The House and Senate have approved H.R. 4872 which amends H.R. 3950. The amendments, known as the “Health Care and Education Affordability Reconciliation Act of 2010”, passed In the House by a vote of 220-207. It passed in the Senate by a vote of 56-43. The legislation will provide subsidies for low-income earners to buy health insurance. It will also provide them with additional drug benefits. It also increased taxes on individuals earning more than $200,000 per year and seeks to reduce federal deficits by $143 billion over the next yen years. After the House approved the bill, Speaker of the House Nancy Pelosi said, “Tonight, the House of Representatives voted to strengthen health insurance reform, invest in our nation’s students, and secure a better future for all Americans.” Her full press release is available here. The president is expected to sign the bill into law.

Consumer Reports Releases Hospital Rankings Based on Hospital-acquired Infections February 3, 2010: Consumer Reports has released a ranking of the "top and bottom performers in 10 states where hospitals are publicly reporting the numbers of central-line-related bloodstream infections in their intensive-care units". The March issue of Consumer Reports also includes an investigative article which claims that several hospitals are ignoring a readily available checklist proven to help prevent hospital-acquired infections and continue to expose patients to deadly central-line bloodstream infections. "All hospitals should be aiming for zero infections," said John Santa, M.D., M.P.H., director of the Consumer Reports Health Ratings Center. "The procedures needed to eliminate ICU infections are simple, low-tech, and inexpensive, requiring a change of mindset and culture. All ICUs should be able to dramatically reduce if not eliminate these infections".

Recovery Act to Help Fund Health IT February 12, 2010: Health and Human Services Secretary Kathleen Sebelius and Labor Secretary Hilda Solis have announced awards that total nearly $1 billion for furthering health information technology. The awards, which were a result of the Recovery Act, are expected to make health IT available to more than 100,000 hospitals and primary care physicians by 2014. It also is expected to create thousands of jobs in health care and information technology. Sebelius noted that one of the goals of the awards was to facilitate efforts of healthcare providers to adopt and use electronic health-records in a significant manner. Â "Health information technology can make our health care system more efficient and improve the quality of care we all receive," said Sebelius. "These grant awards, the first of their kind, will help develop our electronic infrastructure and give doctors and other health care providers the support they need as they adopt this powerful technology."

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CHRISTIANA CARE HEALTH POLICY UPDATE Analysts Expect Hospital Mergers to Increase February 20, 2010: According to Kaiser Health News, analysts expect the number of hospital mergers to increase, if health care reform legislation remains in limbo. Several hospitals supported Obama's proposed health care reform because the promise of increased insurance coverage was expected to offset future cuts in reimbursements. Without passage of Healthcare Reform Legislation, many nonprofit hospitals that anticipate financial difficulties in the face of cuts to reimbursements are expected to seek alliances with larger hospital chains with more capital. Â Several hospitals in the Nashville area already have started considering possible mergers and acquisitions.

House Passes Bill that Delays Cuts in the Physician Fee Schedule The House of Representatives voted overwhelmingly to approve the FY2010 Defense Appropriations bill that includes a provision delaying Medicare physician payment cuts until March of 2010. Without Congressional action, physicians faced a 21 percent payment cut on January 1st under the current physician fee schedule. The bill will now move to the Senate, which failed last month to advance a separate bill to permanently fix the physician pay formula after opponents argued it would have added to the federal deficit.

Senate passes Health and Human Services Appropriations Bill The Senate approved and sent to the President a spending bill funding the Department of Health and Human Services and several other federal agencies through fiscal year 2010. The HHS funding includes $2.29 billion for the Ryan White AIDS program; $498 million for health professions workforce programs; $420 million for bioterrorism hospital preparedness grants; $317 million for the Children's Hospitals Graduate Medical Education program; $244 million for nurse training; and $11.8 million for telehealth programs.

House approves jobs bill with health coverage, workforce provision The U.S. House of Representatives voted to approve the Jobs for Main Street Act, which includes $23.5 billion to increase federal funding for state Medicaid programs through June 2011. The funding extends an American Recovery and Reinvestment Act provision that increased the federal medical assistance percentage through 2010 for states that maintain their Medicaid eligibility standards. In addition, the Jobs Act includes $12.3 billion to extend the 65% COBRA health insurance subsidy to 15 months for individuals who lose their jobs through June 30, 2010, and $750 million for competitive grants to train 150,000 people in the high-growth health care and environmental sectors.

Senate may expand Medicare/Medicaid instead of a new 'public-option' Senate Democrats are considering a significant expansion of Medicare and Medicaid as part of a package of potential changes to health-overhaul legislation that would also sharply scale back a proposed new government-run insurance plan.

The proposal under consideration would open Medicare to people ages 55 to 64 if they couldn't find coverage elsewhere. The proposal would allow them to buy insurance coverage at subsidized rates under Medicare, though the subsidies wouldn't be as great as those for people 65 and over. A companion proposal would expand Medicaid beyond what is already called for in the bill. Under one scenario, people with incomes up to 150% of the federal poverty level would qualify for the program.

Reid set to unveil new public option, breaking Senate impasse on healthcare.

Sen. Tom Carper (D-Del.), who has been tapped by Majority Leader Harry Reid (D-Nev.) to come up with a Plan B approach to the public option controversy that has divided Democrats, has been working closely with liberal and conservative Democrats, as well as Sen. Olympia Snowe (R-Maine). A new measure on the so-called "public option" will be unveiled soon, which Senate Democratic leaders hope will break the logjam on healthcare reform. If it attracts widespread support, the Carper measure could be added to Reid's bill, which is expected to be debated on the Senate floor over the next several weeks. Read more details at The Hill.

Health & Human Services will provide $235M to establish health IT "beacons" Organizations that are leaders in health IT will receive additional federal funds under a new Department of Health and Human Services initiative—called the “Beacon Community Program�—intended to support community-based models for electronic health record (EHR) adoption. The program will draw on $235 million in federal stimulus funds and help organizations with fully developed health IT programs accelerate and enhance their IT infrastructure and compile and disseminate lessons learned to apply nationwide.

MedPAC Releases Report on Regional Variation The Medicare Payment Advisory Commission (MedPAC) Dec. 1 released a report to Congress titled "Measuring Regional Variation in Service Use."Â The report analyzes the differences between regional variation in Medicare spending and regional variation in the use of services.

The MedPAC findings include:

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CHRISTIANA CARE HEALTH POLICY UPDATE    

Policy-makers must recognize that regional variation in service is not equivalent to regional variation in Medicare spending; Policy-makers also must recognize the spending differences that are related to the wage index and other Medicare adjustments. The appropriate levels of those adjustments "are separate issues that deserve consideration in their own right"; Regions with high levels of service use are not always the regions with high growth rates; and Service use varies within individual states and markets.

NIH Revises the Definition of Principal Investigator The National Institutes of Health (NIH) released the final rule on "Grants for Research Projects." Effective Dec. 10, the rule amends the current regulations governing grants for research projects by revising the definition of Principal Investigator (PI) to permit more than one individual with appropriate level of authority and responsibility to be listed in the grant application.

HHS revises how it calculates improper Medicare payments The Department of Health and Human Services announced a 7.8% improper payment rate for Medicare fee-for-service payments in 2009, up from 3.6% in 2008. Improper payments include those that may have been paid incorrectly and do not necessarily reflect fraud.

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