Source: http://medicareissimple.blogspot.com/2012/03/
Timestamp: 2017-07-23 20:50:11
Document Index: 356940353

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MedicareIsSimple: March 2012
Medicare Is Simple 800-442-4915 Friday, March 30, 2012
Consumer Groups File Class Action Over Copay Coupons, Allege Bribery and Fraud Reprinted from DRUG BENEFIT NEWS, biweekly news, proven cost management strategies and unique data for health plans, PBMs, pharma companies and employers.
March 23, 2012 Volume 13 Issue 6 Contributing to the ongoing debate over copay coupons offered by drug manufacturers, four proposed class-action lawsuits have been filed that characterize the brand-name drug promotions as illegal subsidies and “undisclosed kickbacks” — a claim one legal expert says is absurd, while another source doubts the suits will have much of an impact on the widely used industry practice.
The four union health plans that filed the lawsuits in New York, Chicago, Philadelphia and Newark, N.J., are members of Prescription Access Litigation (PAL), a coalition that is a project of Boston-based consumer advocacy group Community Catalyst. This is the first known lawsuit to challenge the legality and use of copay coupons.
“Copay coupons and other forms of direct-to-consumer advertising really misalign the efforts we’re taking to marshal our resources in a sensible way to continue a decent benefit,” contends Audrey Browne, acting counsel for the AFSCME District Council 37 (DC37) Health & Security Plan, one of the plaintiffs. Because the plan offers only supplemental benefits such as dental, vision and prescription drugs to 313,000 New York City employees, retirees and dependents, 75% of its budget goes to the generics-focused drug benefit, and the plan can’t afford to lose money to “aggressive marketing schemes,” she tells DBN.
The suits allege that copay coupons are a form of insurance fraud and violate the Racketeer Influenced and Corrupt Organization (RICO) Act in that they mask the true costs for reimbursement of the drugs being subsidized, representing inflated reimbursement amounts to the health plans. Moreover, they charge that copay coupons are a form of commercial bribery prohibited by the Robinson-Patman Act because they induce consumers to purchase the defendants’ brand-name drugs when less-expensive therapeutic alternatives are available and consumers are unaware that their plans end up paying much more for the promoted products.
“What’s interesting to me is this idea that there’s a surreptitious kickback paid through coupons that have been used so widely and so publicly for so many years; that seems to be an absurd premise for a lawsuit,” asserts William Sarraille, a partner and senior member of the Healthcare Practice group in the Washington, D.C., office of Sidley Austin LLP.
But Wilkinson says it was the rapid proliferation of copay coupons in recent years, combined with study findings that their use could lead to significant increases in drug costs, that led the organization and its members to take action.
Pointing to a Cleveland Research analysis that drug promotions had quadrupled between 2009 and 2011, he says, “It shows the industry’s eagerness to latch on to this promotional tactic and abuse it based on its successes.”
Meanwhile, the Pharmaceutical Care Management Association estimated in a November 2011 study that copay coupons could raise drug costs by $32 billion over a 10-year period (DBN 11/11/11, p. 8). “I think that raised the red flag for many health plans and also consumer advocates like us,” says Wilkinson. “We were already trying to understand the scope of the coupon problem and were also exploring potential solutions and ways to address them, but the coupon study kind of alerted the rest of the industry to the prevalence of their use and their impact.”
“The complaint is a direct assault on the verisimilitude of pharmaceutical manufacturers’ position that coupon programs are good for consumers,” observes Rob Noel, practice leader, managed care market at Pharmaceutical Strategies Group, LLC. “Short term, individual consumers using the coupons save some money at the cost of potentially billions of dollars to plan sponsors. Long term, many of the 300-plus brand medications currently being subsidized through the use of coupons risk being excluded from coverage by plan sponsors. Economics will force consumers to use preferred drugs or pay considerably more for the excluded medications as alignment between the payer and the consumer returns to the system.”
Lawsuits Could Settle With Little Impact
But whether those complaints will facilitate a change in coupon use may be hard to predict. “I am not at all surprised by the lawsuit and have thought these coupons raised serious legal issues for some time,” says Rodger Smith, senior vice president for audit and recovery services at SCIOinspire Corp., which offers technology-driven business solutions to health plans. “Typically, as part of a settlement, plaintiffs’ lawyers work to obtain some change in the allegedly inappropriate conduct of the defendant as part of a settlement — that is one of the benefits the court evaluated when determining if the settlement should be accepted (it needs to be judged fair to the class for the settlement to pass). Whether that will be a meaningful change is yet to be seen.”
Pointing to prior lawsuits that have challenged drug companies’ efforts to delay the release of generics, Smith says it’s more likely that these cases will be settled out of court for a small percentage of the profit that the drug companies made as a result of their copay coupon programs.
DC37 has a pass-through pricing arrangement with OptumRx, the UnitedHealth Group-owned PBM. “We want to know where our money’s going and we design our contracts based on certain assumptions that we’re going to have a certain flow of generics and a certain flow of brand. But when these aggressive coupon programs redirect people from the generic to the brand, it changes every assumption that we’ve made in dollars that we’re going to be spending on drugs based on the entire contract we’ve negotiated,” explains Browne.
While DC37 has not estimated the financial impact of the coupons, she says, “Obviously, all the plaintiffs will be put to the proof and we’ll have to show the damages when we get to that stage.”
While the lawsuits address the impact of coupons on health plan costs, Wilkinson says they also raise two fundamental concerns for consumers.
“One is that some of these are going to drive up consumer costs because they’re promoting very expensive drugs that all face stiff competition from generic alternatives that are equally effective and far less expensive,” he tells DBN. “The other concern is that by using and signing up for one of these copay coupons, an individual consumer is giving the drug manufacturer a key to open their prescription drug history, which could open them up to direct marketing and all kinds of promotions. So for some consumers this could really be seen as an invasion of privacy that they’re not necessarily acknowledging or consciously allowing.”
PAL is asking that the courts rule copay coupons unlawful and order drug companies to cease their use. The cases are also seeking an award of damages on a class-wide basis for insurers whose costs were driven up as a result of these promotions and triple damages as allowed by antitrust or RICO statutes. The three other plaintiffs are Sergeants Benevolent Association, New England Carpenters and Plumbers and Pipefitters Local 572 Health and Welfare Fund.
“Given how widespread and successful this marketing tactic is, I don’t think it’s going to be something that the industry gives up easily,” concedes Wilkinson.
The eight drug companies named in the lawsuit are Abbott Laboratories, Amgen Inc., AstraZeneca Pharmaceuticals, Bristol-Myers Squibb Company, GlaxoSmithKline, Merck & Co. Inc., Novartis Pharmaceuticals Corp. and Pfizer Inc.
The Pharmaceutical Research and Manufacturers of America, the trade association representing drug companies, declined to comment on the litigation and instead released the following statement from Senior Vice President Matthew Bennett: “Copay coupons address a serious problem of high cost sharing for medicines. They play a valuable role in increasing access to medicines and improving patient adherence to prescribed therapies, generating better health outcomes and reducing the use of avoidable and costly medical care.”
Nevertheless, Browne says she believes more plans will join the class action or initiate their own litigation. “Now that we’ve put some light of day on this, I think more people are going to be signing on,” she says. “It’s not a good business practice and it interferes with the PBM contract.”
55% of health plan members who purchase insurance on their own are say they are likely to use a state exchange, according to J.D. Power and Associates’s 2012 U.S. Member Health Plan Study.
New York Releases Proposal to Integrate Benefits and Financing for Dual Eligibles
State proposals to integrate coverage for dually eligible individuals, or people with both Medicare and Medicaid, under the Centers for Medicare and Medicaid Services’ (CMS’) new demonstrations and financing models continue to be made public for comments by stakeholders. Last week, the New York State Department of Health posted its demonstration proposal, under which, beginning in 2014, dual eligibles will be automatically enrolled into private insurance plans that provide both Medicare and Medicaid benefits, including pharmacy and long-term care benefits.
The proposal describes New York’s plan in general terms: the state will pursue an integrated financing pathway, under which it will enter into a three-way contract with CMS and private insurance companies that receive capped payments to administer both Medicare and Medicaid benefits. According to the proposal, although beneficiaries subject to the demonstration will be passively enrolled into plans, they will have the ability to disenroll or opt out of the model. The proposal also states that New York will engage independent enrollment brokers to help affected individuals navigate plan choices and enroll into plans. In addition, New York hopes to establish an integrated appeals process for both Medicare and Medicaid benefits, though the state did not provide specifics about the new appeals structure. Implementation of the demonstration will occur in eight designated counties throughout the state, including the five counties that comprise New York City.
Beginning July of this year, New York plans to enroll dual eligibles requiring long-term care under Medicaid into managed long-term care plans. The demonstration proposal released last week largely builds on this existing framework, which sees the conversion of the Medicaid long-term care benefit from a fee-for-service model into a private managed care model.
Many details about New York’s dual eligible integration demonstration remain unclear, requiring further clarification from the state. The public can comment on New York’s proposal until April 20, 2012.
New York was one of several states that released proposals last week. The National Senior Citizens Law Center (NSCLC) has developed a new website that provides information on state demonstration proposals as they become available. NSCLC’s website also features additional resources designed to help advocates engage in stakeholder processes and provide meaningful input on state plans.
$73 … in additional benefits and reduced cost sharing was received, on average, by Medicare beneficiaries enrolled in Medicare Advantage plans in 2010, according to an analysis by Avalere Health LLC.
“If poorly designed, workplace wellness programs can shift costs to those with the greatest health care needs; run afoul of federal anti-discrimination and privacy laws and the ACA’s prohibition on health status rating; and potentially affect which workers remain in employer plans and which end up in the new health insurance exchanges, possibly with a federal subsidy.”
— According to a new report from Georgetown University’s Health Policy Institute entitled Premium Incentives to Drive Wellness in the Workplace.
Statement by Secretary Sebelius on the Affordable Care Act
Today marks the two-year anniversary of the enactment of the Affordable Care Act, the law that gives hard working, middle-class families the security they deserve. It’s only been two years, but we’re already seeing that the law is making a difference in the lives of Americans. It’s helping seniors. New data shows that more than 5.1 million seniors and people with disabilities on Medicare saved over $3.2 billion on prescription drugs because of the health care law. That’s about $635 per person in average savings and money back in the pockets of America’s seniors.
It’s helping women. Because of the Affordable Care Act, 45.1 million women – including 20.4 million women with private health insurance and 24.7 million women with Medicare – can receive recommended preventive services without having to pay a co-pay or deductible. Important preventive services, like mammograms and Pap smears are free. And in 2014, insurance companies can no longer charge women higher premiums just because they’re women.
It’s helping young adults. Because of the law, 2.5 million more young people have health insurance coverage. It’s reducing premiums and lowering costs. Your insurance company can no longer raise your premiums by double digits without justification. And the law helps you get the most from their premium dollar: The health care law requires that premium dollars must be spent primarily on health care, not administrative costs like overhead or CEO salaries. So far, an estimated 74.8 million people have been protected by this new requirement.
And the law is protecting Americans with pre-existing conditions such as cancer or asthma. Already nearly 49,000 people have enrolled in the Pre-Existing Condition Insurance Plan, and it is now illegal for children under 19 to be denied coverage due to a pre-existing condition. The law also eliminated lifetime dollar limits on coverage for over 105 million Americans—they no longer have to live with the fear that if an illness strikes, they could max out their health coverage. There are many more benefits to come from the law, too. Until then, learn more about the benefits, protections and programs of the Affordable Care Act at www.healthcare.gov. You can also see the stories of how Americans from across the country are benefiting from the law at www.healthcare.gov/mycare.
The WH 2-Year Report and press release are also live here: http://www.whitehouse.gov/sites/default/files/uploads/careact.pdf
And here: http://www.whitehouse.gov/the-press-office/2012/03/23/new-report-affordable-care-act-gives-americans-more-security-better-bene
House Votes to Kill a Medicare Cost Panel
Published: March 22, 2012 WASHINGTON — In a rebuff to President Obama, the Republican-controlled House passed a bill on Thursday to abolish a Medicare cost control board created by the new health care law. The bill, approved by a vote of 223 to 181, provoked a full-throated debate on the merits of the law, the Affordable Care Act, on the second anniversary of its signing by Mr. Obama. In dozens of speeches, Congressional supporters and opponents of the law previewed arguments that will be made next week when the Supreme Court hears a challenge to its constitutionality filed by 26 states. The Obama administration, eager to showcase benefits of the law for consumers, said it had found that insurance rate increases affecting more than 42,000 people in nine states were unreasonable. Kathleen Sebelius, the secretary of health and human services, reviewed the rates using authority provided by the new law. She said Thursday that insurers should rescind the increases, issue refunds to consumers or publicly explain their refusal to do so. Insurers said the higher rates were justified by rising medical costs. The stated purpose of the new panel, the Independent Payment Advisory Board, is to “reduce the per capita rate of growth in Medicare spending.” Spending cuts recommended by the 15-member board would take effect automatically unless Congress voted to block or change them. “The Independent Payment Advisory Board encompasses all that is wrong with the Affordable Care Act,” said Representative Michael C. Burgess, Republican of Texas. “It is not accountable to any constituency, and it exists only to cut provider payments to fit a mathematically created target.” The House vote generally followed party lines. Seven Democrats voted for the bill, and 10 Republicans voted against it. A number of powerful House Democrats dislike the board because, they say, it could usurp the power of Congress to set Medicare policy. But most Democrats voted against the bill because it also included proposals that could limit patients’ ability to recover damages for injuries suffered as a result of medical malpractice. In the Senate, Republicans said they would push for similar legislation, perhaps by offering amendments to other bills. Senate Democrats vowed to block such efforts. Representative Allyson Y. Schwartz, Democrat of Pennsylvania, said she wanted to eliminate the board because lawmakers should “take responsibility for Medicare.” But Ms. Schwartz said Republicans had destroyed any hope of bipartisanship by “linking repeal of the board to tort reform, an unrelated, divisive and polarizing issue.” Representative Pete Stark of California, the senior Democrat on the Ways and Means Subcommittee on Health, said that he, too, opposed the board, but that it was “far less dangerous to Medicare than the voucher plan put forth in the House Republican budget this week.” The White House threatened to veto the House bill and defended the payment advisory board, saying it “will help reduce the rate of Medicare cost growth responsibly while protecting beneficiaries.” Under the law, the board cannot make recommendations to “ration health care,” raise revenues or increase beneficiaries’ premiums, deductibles or co-payments. Republicans said the board would inevitably try to save money by cutting Medicare payments to doctors, who would then be less willing to treat Medicare patients. “I have been a practicing physician for over 15 years, and I don’t think I have seen anything potentially more detrimental to seniors’ health care than the Independent Payment Advisory Board,” said Representative Larry Bucshon, Republican of Indiana and a heart surgeon. “No president should have the power to create a board with this much control over health care.” Representative Alcee L. Hastings, Democrat of Florida, said: “I am appalled by the hypocrisy of my Republican colleagues who keep stating that federal spending needs to be kept under control. But at the first opportunity, they wind up rejecting one of the most serious tools in place to actually tackle Medicare spending and make care more affordable.” The Congressional Budget Office estimated that repealing the board could increase Medicare spending by a total of $3 billion from 2018 through 2022.
82% … of the community pharmacists surveyed recently by the National Community Pharmacists Assn. said they have been handling drug shortages on a daily or weekly basis, with 81% observing higher prices as a result. From DRUG BENEFIT NEWS.
Cigna CEO Cordani Says Court Won’t Derail Health-Care Shift
By Alex Nussbaum and Alex Wayne - Mar 15, 2012 3:19 PM CT A Supreme Court (1000L) ruling on whether the U.S. health-care law is constitutional won’t stop market forces transforming how Americans get their medical care, said Cigna Corp. (CI)’s chief executive officer. Employers are increasingly pushing workers into plans where they share more of the cost and responsibility for managing care, the health insurer’s CEO, David Cordani, said in an interview yesterday at Bloomberg’s New York headquarters. The change, aimed at taming soaring health costs, has come to businesses including JPMorgan Chase & Co. (JPM), the biggest U.S. bank, which asked Cigna to revamp its benefits for this year, Cordani said. The bank switched workers into high-deductible policies that include fixed health-savings accounts that can be tapped by employees for out-of-pocket expenses. Even if the 2010 law is overturned, “the problem still exists, the problem of affordability, eroding health status, an aging population,” Cordani said. “The good news is, a lot of change is unfolding in the marketplace today.” In a 45-minute interview, Cordani said health plans may flee the market for individual and small-business coverage if the court kills only the mandate that all Americans get coverage while leaving the rest of the legislation in place. That would leave insurance pools dominated by patients who wait until they get sick to buy a policy, he said. Oral Arguments Three days of oral arguments on the health law are scheduled to begin March 26 before the nine-member court. Twenty-six states have challenged the law, championed by President Barack Obama, saying its insurance-buying mandate is unconstitutional. Cordani also said Bloomfield, Connecticut-based Cigna, the fourth-biggest U.S. insurer, would increase the number of patients covered by joint ventures with doctors -- so-called accountable-care organizations -- by 10-fold over two years. By 2014, the company plans to have 1 million patients in such arrangements, in which physicians and insurers work to better coordinate care and share in any cost savings, he said. “We philosophically believe it is a big part of the solution” to rising health-care costs, he said. Cigna rose less than 1 percent to $46.81 at the close of New York trading. The shares have gained 10 percent in the last 12 months. The company provides medical benefits to 11.5 million members in the U.S. and operates in about 30 countries. Sweeping Changes The so-called consumer-directed benefits Cigna put in place at JPMorgan this year are an example of the changes sweeping through much of U.S. health care, Cordani said. Such plans can include a health-reimbursement account, funded by employers, or a health savings account, where workers can steer their own pretax contributions, said Paul Fronstin, a research director at the Employee Benefit Research Institute in Washington. Companies are “hoping that it’s going to save them some money, that it’s going to control their costs, that people are going to think twice about the type of health-care services they use as a result,” Fronstin said. In addition to JPMorgan, Fairfield, Connecticut-based General Electric Co. (GE), Wells Fargo & Co. (WFC) of San Francisco, and American Express Co. (AXP), based in New York, have shifted their workers to consumer-directed plans, Fronstin said. So far, the evidence on whether they reduce costs is mixed, he said. These type of programs “are probably not really ready for prime time” in terms of saving money for customers, said Les Funtleyder, a health-care strategist and portfolio manager at Miller Tabak & Co. in New York. Consumers are at a disadvantage because prices charged by doctors and hospitals often aren’t transparent, he said. Unfulfilled Promise “Without information, these consumer-driven plans will not deliver as promised,” Funtleyder said in an interview. Cigna has tried to give members those tools, said a spokesman, Joseph Mondy. Earlier this month, the company debuted an online feature allowing customers to estimate the price of more than 200 procedures, from delivering babies to knee replacement surgery, he said in an e-mail. Cordani said Cigna has enrolled about 100,000 JPMorgan employees in the new policies. For the insurer, “it’s an example of change and it’s an example of being much more retail- oriented,” he said. The plans often include features such as 100 percent coverage of preventive care, personal health coaches and online tools to help workers choose doctors and hospitals, said Gloria Barone Rosanio, a Cigna spokeswoman. Joseph Evangelisti, a JPMorgan spokesman, declined to comment in an e-mail. Patient-Focused Like consumer-directed plans, Cigna’s accountable-care partnerships with doctors are an attempt to focus more on the needs of individual members than the employers who buy their policies, Cordani said. The company now has 17 such arrangements, covering 100,000 people. It’s goal is to expand to 1 million by the beginning of 2014, he said. Under the ACO model, Cigna “embeds” nurse-practitioners or health coaches in physicians’ practices, helping doctors to track which members are taking their medicines or need follow-up calls. Cigna uses its claims information to flag signs a patient may be relapsing. “There are a lot of products designed now around incenting health, incenting behavioral change and lifestyle changes and where physicians and hospitals engage in a much more comprehensive fashion,” Cordani said. “With or without the health-care law, the economic forces are driving change in any regard.”
30% to 78% … would be the premium increases in TRICARE under an Obama administration proposal to Congress, which some GOP congressional staffers charge is designed to discourage active duty service members and veterans from the military’s health plan and move them into state-operated insurance exchanges.
“Growth margins [for health plans] are being limited by medical loss ratio requirements, so all the plans are looking more aggressively at the need to expand [into new lines of business]. It’s definitely picking up with the Affordable Care Act and what’s transpiring there.”
— Henry Loubet, vice president and chief strategy officer at Keenan, a California-based consulting and insurance brokerage firm, told AIS’s Health Plan Week.
Since enactment of the health care law, Medicare beneficiaries received average savings of $635 on prescription drugs As the second anniversary of the Affordable Care Act approaches, new data shows that more than 5.1 million seniors and people with disabilities on Medicare saved over $3.2 billion on prescription drugs because of the new health care law, Kathleen Sebelius, Secretary of the U.S. Department of Health and Human Services (HHS), announced today while at the St. Louis Community College at Forest Park.
For St. Louis resident Fritzi Lainoff and her husband, the discounts meant $2,500 back in their pockets last year. “It was a blessing,” she said. “The law’s Medicare savings have made an enormous difference.”
Savings for seniors include a one-time $250 rebate check to seniors who hit the “donut hole” coverage gap in 2010 and a 50 percent discount on covered brand-name drugs in the donut hole in 2011.
In addition, data released today by the Centers for Medicare & Medicaid Services (CMS) show that through the first two months of 2012, about 103,000 seniors and people with disabilities saved $93 million in the donut hole.
“Without the health care law, more than 5.1 million seniors would have faced $3.2 billion in higher drug costs,” Secretary Sebelius said. “As we move forward, seniors will save even more as the new law completely eliminates the Medicare donut hole, delivering more relief to Americans like the Lainoff’s.”In 2012, Medicare beneficiaries will receive a 50 percent discount from manufacturers on covered brand name drugs and a 14 percent savings on generic drugs in the donut hole. The Affordable Care Act expands these discounts over time until the donut hole is closed in 2020.
Health and Human Services (HHS) Secretary Kathleen Sebelius announced today that health insurance premium increases in nine states have been deemed “unreasonable” under the rate review authority granted by the Affordable Care Act. "Thanks to the Affordable Care Act consumers are no longer in the dark about their health insurance premiums," said Secretary Sebelius. "Now, insurance companies are required to justify rate increases of 10 percent or higher. It’s time for these companies to immediately rescind these unreasonable rate hikes, issue refunds to consumers or publicly explain their refusal to do so."
Secretary Sebelius also released a new report today showing that, six months after HHS began reviewing proposed health insurance rate increases, consumers are already seeing results. Since the rate review program took effect in 2011, health insurers have proposed fewer double-digit rate increases. Furthermore, more states have taken an active role in reducing rate increases, and consumers in all states are getting straight answers from their insurance companies when their rates are raised by 10 percent or more. As of March 10, 2012, the justifications and analysis of 186 double-digit rate increases for plans covering 1.3 million people have been posted at HealthCare.gov, resulting in a decline in rate increases. According to the report, in the last quarter of 2011 alone, states reported that premium increases dropped by 4.5 percent, and in states like Nevada, premiums actually declined. In the decisions announced today, HHS determined, after independent expert review, that two insurance companies have proposed unreasonable health insurance premium increases in nine states—Arizona, Idaho, Louisiana, Missouri, Montana, Nebraska, Virginia, Wisconsin, and Wyoming. The excessive rate hikes would affect over 42,000 residents across these nine states.
In these nine states, the insurers have requested rate increases as high as 24 percent. These increases were reviewed by independent experts to determine whether they are reasonable. In this case, HHS determined that the rate increases were unreasonable, because the insurer would be spending a low percentage of premium dollars on actual medical care and quality improvements, and because the justifications were based on unreasonable assumptions.
Most rates are reviewed by states and many states have the authority to reject unreasonable premium increases. Since the passage of the health care law, the number of states with this authority increased from 30 to 37, with several states extending existing “prior authority” to new markets.
* The rate review program has made insurance companies explain their increases, and more than 180 have been posted publicly and are open for consumer comment on companyprofiles.healthcare.gov.
This initiative is one of many in the health care law to ensure that insurance companies play by the rules, prohibiting them from dropping coverage when a person gets sick, billing consumers into bankruptcy through annual or lifetime limits, and, soon, discriminating against anyone with a pre-existing condition.
The Centers for Medicare & Medicaid Services (CMS) today announced a call for applications for a new Affordable Care Act initiative designed to strengthen primary care in the United States. Under the Graduate Nurse Education Demonstration, CMS will provide hospitals working with nursing schools to train advanced practice registered nurses (APRNs) with payments of up to $200 million over four years to cover the costs of APRNs’ clinical training. “Thanks to the Affordable Care Act, we’re taking steps to put more advanced practice registered nurses at the forefront of our health care system,” said Marilyn Tavenner, Acting Administrator of CMS, and a nurse. “Better training and support for advanced practice registered nurses will mean higher quality care.”
APRNs—whether they are nurse practitioners, clinical nurse specialists, nurse anesthetists, or nurse midwives—play a pivotal role in primary care. This new initiative will provide funds to eligible hospitals to increase the availability of clinical training settings that will bolster the skills and supply of APRNs. Payments to the participating hospitals will be linked directly to the number of additional APRNs that the hospitals and their partnering entities are able to train as a result of their participation in the demonstration.
The demonstration requires that half of clinical training occur in non-hospital settings in the community. Most clinical training in large hospitals already includes some rotations in settings that treat minority and underserved populations; however, this demonstration sets a higher requirement for training in non-hospital community-based settings. Students receiving training funded by the demonstration will be encouraged to practice in non-hospital community-based settings, including in underserved areas.
CMS will select up to five eligible hospitals to participate in the demonstration. The demonstration is expected to run for four years. The demonstration was authorized by the Affordable Care Act, and will be operated by the Center for Medicare & Medicaid Innovation. It is part of the Administration’s overall effort to strengthen the health care workforce. For more information including how to apply, visit the Graduate Nurse Education Demonstration website at: innovation.cms.gov/initiatives/gne
The Supreme Court Cases and the Potential Impact on Health Insurers
By Jonathan Block - March 20, 2012
A big event takes place later this week when the Affordable Care Act marks its two year anniversary on March 23 since it was signed into law. Since then, many changes have taken place (with many more to come) that have impacted the health insurance industry dramatically. But don’t expect President Obama to be celebrating on Friday.
And why not? The law faces its biggest test next week when the Supreme Court will hear arguments on two cases regarding it. The one that has been getting the most attention is over the individual mandate. But the second one, over the constitutionality of the law’s large expansion of Medicaid, is what may end up having an even bigger impact on insurers.
Many insurers, particularly those focused on the Medicaid market such as Molina Healthcare and Centene, have been expecting a huge influx of Medicaid members as a result of both the law and many states’ desire to contract their Medicaid programs out to managed care companies. And just how much could insurers gain? The Congressional Budget Office has said the Medicaid expansion in 2014 will mean $627 billion in federal spending over 10 years. If the high court rules against the Obama administration in this case, a lot of future Medicaid business for those companies goes down with it.
In the mandate case, there are several possible outcomes. The court could uphold all of the law, find the mandate unconstitutional but find the rest of the law OK, or strike down the mandate and find some parts of the law valid and invalidate others. It’s hard to tell which result would be best for insurers, but to me, the second situation would be the worst for individuals and the third the best for insurers. In the second situation, not requiring everyone to purchase insurance could lead to an insurance pool with many more sick patients, thus driving up costs for insurers that would be passed on to consumers in the form of higher premiums. In the third possibility, say the court invalidates the mandate, allowing insurers to still deny coverage for people with pre-existing conditions, yet keeps other elements of the law intact. That would likely keep costs in check for insurers, but it would lead to the denial of coverage for many.
The decision, expected by late June, will be one of the most anticipated in recent memory. So, how do you think the Supreme Court will rule, and what will be the impact on the health insurance industry?
3 … of the 33 insurance rate decisions made by the states under health reform’s new mandatory rate review provisions found the proposed rate boosts to be “unreasonable,” with the other 30 deemed “not unreasonable,” according to CMS.
Government fraud-fighters are working on “False Claims Act Part II: This time it’s personal. The government is trying to get businesses to change the way they do business, and the push will be on to exclude middle managers, regional managers and top managers [from federal health programs]….Everyone realizes that clawing back America’s stolen billions is not enough. We have to make this pain personal.”
— Pat Burns, a spokesman for Taxpayers Against Fraud, in Washington, D.C., told AIS’s Report on Medicare Compliance.
40% … of oncologists surveyed by National Analysts Worldwide in January said they had seen patients die sooner over the past year because of drug shortages. From DRUG BENEFIT NEWS.
“The practicality of relying on only generics to meet the pharmaceutical needs of a patient population is questionable. While these formularies and benefit designs gained some momentum starting in 2006 when Medicare Part D plan sponsors attempted to provide some coverage for patients in the ‘doughnut hole’ of their Part D benefit by covering generics only, it is generally not realistic to believe that a formulary of only generics will meet all of the contemporary clinical needs of a patient.”
— Allan Zimmerman, a director in the PricewaterhouseCoopers Human Resources Services Practice, told AIS’s Drug Benefit News.
The Exchange Regulations Are Here
By Allison Bell MARCH 12, 2012
Here's the text of the Establishment of Exchanges and Qualified final rule, and also the text of a related interim final rule.
The U.S. Department of Health and Human Services (HHS) posted the final rule today to implement the provisions in the Patient Protection and Affordable Care Act of 2010 (PPACA) that are supposed to create a new set of state-based exchanges, or Web-based health insurance supermarkets, that individuals and small groups can use to buy health coverage.
Arthur D. Postal has posted an article about the final rule at http://www.lifehealthpro.com.
In case you would like to read an unedited version of some of the more interesting sections of the regulation, here are some of the provisions that relate to agents, brokers and Navigators.
One interesting section of the preamble to the regulations, in which HHS officials discuss the role of agents and brokers in selling exchange coverage:
Comment: With respect to proposed §155.220(a), many commenters urged us to set standards around the use of agents and brokers in order to ensure certain consumer protections.
These suggestions included having Exchanges to monitor and oversee all agents and brokers enrolling individuals and small groups in QHPs; establishing provisions to mitigate agents' and brokers' incentives to steer consumers to enroll in certain QHPs or to non-QHPs; setting uniform commissions for agents and brokers or establishing that issuers must compensate agents and brokers the same amount for Exchange and non-Exchange plans; prohibiting commissions for agents and brokers in the Exchange altogether; establishing certain disclosures by agents and brokers, including disclosure of their commission and whether or not the agent or broker has been the subject of any sanctions; applying privacy and confidentiality standards to agents and brokers; prohibiting Exchanges from directing individuals or small groups to enroll only through an agent or broker; prohibiting advertising by agents or brokers; or prohibiting agents and brokers from the Exchange altogether. A number of commenters also expressed concern regarding the role of third-party webbased entities enrolling individuals in QHPs.
Several commenters emphasized that such external entities should be held to the same standards as the Exchange; should not be permitted to perform eligibility determinations; or should be held to certain consumer protection standards to prevent steering.
Response: We recognize the importance of consumer protections with respect to agents and broker interactions. We also recognize the States’ role in licensing and overseeing agents and brokers and have allowed States to determine which standards would apply to agents and brokers acting in the Exchange, if the State chooses to permit agents and brokers to enroll individuals and small groups in QHPs through the Exchange.
In order to address commenters’ concerns while maintaining the State’s primary role in overseeing agents and brokers, we have added paragraph (d) to ensure that agents and brokers must comply with an agreement with the Exchange under which the agent or broker would comply with the Exchange’s privacy and security standards that are adopted consistent with §155.260 and §155.270.
We have also added paragraph (e) to ensure that agents and brokers comply with applicable State law. We also recognize that the role of web-brokers may evolve upon implementation of Exchanges, and that Exchanges may seek to involve Web-brokers in the enrollment process using a variety of technologies.
We have set forth standards in this rule to ensure that consumers enjoy a seamless experience with appropriate consumer protections if an Exchange chooses to allow Web-brokers to participate in Exchange enrollment activities.
In order to address commenters’ particular concerns around the role of Web-based entities, we note that eligibility determinations must be conducted by the Exchange and enrollment information must be transmitted to the QHP issuer by the Exchange.
We have added paragraph (c)(3) to §155.220 to ensure that Web sites used by agents or brokers to enroll individuals in a manner that constitutes enrollment through the Exchange provide consumers with access to the same information as they would if they used the Exchange Web site instead.
Based on several commenters’ suggestion that we address agents’ and brokers’ ability to steer or incentivize consumers to enroll in certain QHPs, and commenters’ general concern about the fact that the existence of such Web sites may confuse consumers, we have inserted standards under paragraph (c)(3) of this section to prevent such web-brokers from providing financial incentives and to establish that such Web sites must allow consumers to withdraw from the web-broker’s process and use the Exchange Web site instead at any time.
Furthermore, the web-brokers would also be subject to the standards inserted under paragraph (d) and (e) regarding compliance with an agreement with the Exchange and State law, respectively.
Here's a section of the preamble in which officials talk about how often exchange managers can consult with insurers, agents and brokers:
Comment: We received a number of comments stating that HHS should limit the number of consultations with health insurance issuers, agents, and brokers described in proposed §155.130(j) and (k) to minimize any potential conflicts of interest. One commenter recommended that consultation with a health insurance issuer be made fully transparent, while several other commenters recommended that the consultation only include agents and brokers that enroll qualified individuals, employers, or employees.
Response: We understand the concerns of commenters, but also acknowledge that health insurance issuers and agents and brokers are likely to play a significant role in the Exchange. We encourage Exchanges to be transparent in the consultation process. Furthermore, in States where the Exchange is not housed in the department of insurance, we expect there to be regular
consultation between the Exchange and the department of insurance, given the need for coordination between the two entities.
Here's an excerpt about the licenses that the agents, brokers and "Navigators" (ombudsmen) who deal with exchanges ought to hold:
Comment: A majority of commenters proposed that Navigators should not have to hold an agent or broker license or errors and omissions liability coverage in order to be certified or licensed as a Navigator. Conversely, a small number of commenters suggested that Navigators hold an agent or broker license as well as errors and omissions coverage and that Navigators should be subject to the same licensing and education standards established for agents and brokers.
Response: We accept the commenters’ suggestion that States and Exchanges should not be able to stipulate that Navigators hold an agent or broker license, and we clarify that States or Exchanges are prohibited from adopting such a standard, including errors and omissions coverage. “Agent or broker” is defined in §155.20 as “a person or entity licensed by the State as an agent, broker, or insurance producer.”
Thus, establishing licensure standards for Navigators would mean that all Navigators would be agents and brokers, and would violate the standard set forth §155.210(c)(2) of the final rule that at least two types of entities must serve as Navigators
Additionally, we do not think that holding an agent or broker license is necessary or sufficient to perform the duties of a Navigator as these licenses generally do not address training, among other things, about public coverage options.
Here is a section on conflicts of interest and Navigators, and how exchanges ought to let consumers know about the availability of the services of agents and brokers.
We are finalizing the provisions proposed in §155.210 of the proposed rule, with the following modifications. In new paragraph (b), we provide that an Exchange must develop and publicly disseminate conflict of interest and training standards for all entities that serve as Navigators. In paragraph (c)(1)(v), we apply the privacy and security standards adopted by the Exchange, as established in §155.260, to Navigators. In paragraph (c)(2), we provided that at least one entity serving as a Navigator must be a community and consumer-focused non-profit. We clarified in paragraphs (d)(2) and (d)(3) that subsidiaries of health insurance issuers and associations that include members of or lobby on behalf of the insurance industry are prohibited from serving as Navigators.
In paragraph (d)(4) we clarified that Navigators may not receive compensation from a health insurance issuer in connection with the enrollment of individuals or employees in any health plan, including both QHPs and non-QHPs. Finally, in paragraph (e)(3) we clarified that Navigators must assist consumers in selecting a QHP, thereby initiating the enrollment process. e. Ability of States to permit agents and brokers to assist qualified individuals, qualified employers, or qualified employees enrolling in QHPs (§155.220) Based on comments and feedback to the proposed rule, we are revising the rule to include paragraph (a)(3) of this section as an interim final provision, and we are seeking comments on it. In §155.220, we proposed to codify section 1312(e) of the Affordable Care Act that gives States the option to permit agents or brokers to enroll individuals and employers in QHPs.
To ensure that individuals and small groups have access to information about agents and brokers should they wish to use one, we proposed to permit an Exchange to display information about agents and brokers on its Web site or in other publicly available materials.
Additionally, recognizing that that an Exchange may wish to work with Web-based entities and other entities with experience in health plan enrollment, we sought comment on the functions that such entities could perform, the potential scope of how these entities would interact with the Exchange, and the standards that should apply to an entity performing functions in place of, or on behalf of, an Exchange while acknowledging and meeting the statutory limitation that premium tax credits and cost-sharing reductions be limited to enrollment through the Exchange.
We also sought comment on the practical implications, costs, and benefits to an Exchange that coordinates with such entities, as well as any implications for security or privacy of such an arrangement.
Comment: A number of commenters sought clarification on whether and how the involvement of agents and brokers described in proposed §155.220 may serve as Navigators under §155.210. Many commenters sought further clarification as to the distinction between the role of agents or brokers and the role of Navigators in the Exchange.
Response: In general, the responsibilities of a Navigator differ from the activities that an agent or broker. For example, the duties of a Navigator described under §155.210(e) of the final rule include providing information regarding various health programs, beyond private health insurance plans, and providing information in a manner that is culturally and linguistically appropriate to the needs of the population being served by the Exchange. Moreover, any individual or entity serving as a Navigator may not be compensated for enrolling individuals in QHPs or health plans outside of the Exchange; as such, an agent or broker serving as a Navigator would not be permitted to receive compensation from a health insurance issuer for enrolling individuals in particular health plans. That said, nothing precludes an Exchange’s Navigator program from including agents and brokers, subject to the conditions of §155.210.
Comment: Several commenters expressed support for the proposed §155.220(a) and the level of flexibility it affords State Exchanges to determine the role of agents and brokers and web-based entities in the Exchange marketplace. Several commenters specifically expressed support for the manner in which the accompanying preamble to the proposed rule described the Exchange as accountable for the actions of web-based entities. Response: We accept the recommendation that Exchanges have the flexibility to determine the role of agents and brokers, including web-based entities, in their marketplaces. We have retained the language in §155.220(a), which codifies the statutory flexibility that States may determine whether agents and brokers may enroll individuals, employers and employees in QHPs and provide assistance to qualified individuals applying for financial assistance. Comment: HHS received several comments urging us to prohibit agents and brokers, including web-based brokers, from performing eligibility determinations.
Response: The Exchange must perform eligibility determinations, subject to the standards and flexibility outlined in subpart D of this final rule. We note that an individual cannot enroll in a QHP through the Exchange, nor can a QHP issuer enroll a qualified individual in a QHP through the Exchange, unless such individual completes the single streamlined application to determine eligibility as described in §155.405 and is determined eligible.
We have clarified in §156.265(b)(1) that that enrollment by QHP issuer may be considered “enrollment through the Exchange” only after the Exchange notifies the QHP issuer that the individual has received an eligibility determination, the individual is qualified to enroll in a QHP through the Exchange, and the Exchange transmits enrollment information to the QHP issuer consistent with §155.400(a). In §155.220(c)(1), we also specify that an individual can be enrolled in a QHP through the Exchange with the assistance of an agent or broker only if the agent or broker ensures that the individual completes the application and eligibility verification process through the Exchange Web site.
We acknowledge and clarify that nothing in this final rule prohibits a QHP issuer from selling QHP coverage directly or through an agent or broker, so long as the standards of §156.255(b) are met; however, such sales and enrollment are not “enrollment through the Exchange” and such enrollees are not eligible for the benefits that are tied to enrollment through the Exchange.
Comment: With respect to proposed §155.220(a), several commenters sought clarification of the role agents and brokers in enrolling individuals in QHPs. Several commenters urged us to strengthen the role of agents and brokers in the Exchange by further clarifying their ability to participate in the Exchange marketplace. With respect to the preamble discussion of web-based entities, several commenters urged HHS to permit web-based entities in particular to enroll individuals eligible for advance payments of the premium tax credit and cost-sharing reductions in QHPs so that such individuals may have access to the same avenues for QHP enrollment as those individuals who do not receive financial assistance.
Response: We accept the recommendation that we provide Exchanges with discretion to leverage the market presence of agents and brokers, including web-based entities that are licensed by the State (web-brokers), to draw consumers to the Exchange and to QHPs. We have amended §155.220 to include minimum standards for the process by which an agent or broker may help enroll an individual in a QHP in a manner that constitutes enrollment through the Exchange.
This is intended to include traditional agents and brokers, as well as web-brokers. This process must include the completion by the individual of a single streamlined application to determine eligibility through the Exchange’s Web site, as described in §155.405; the transmission of enrollment information by the Exchange to the QHP issuer to allow the issuer to effectuate enrollment of qualified individuals in the QHP; and any standards set forth in an agreement between the agent or broker and the Exchange.
We note that there may be various means a State may choose to integrate agents, brokers and web-brokers consistent with the standards described in this section for enrollment through the Exchange. Agents and brokers may assist individuals enrolling directly through the Exchange Web site and may serve as Navigators consistent with standards described in §155.210. We also afford Exchanges discretion to allow agents and brokers to use their own Web sites to assist individuals in completing the QHP selection process, as long as such a Web site conforms to the standards identified in §155.220(c)(3). While Exchanges that pursue this option would be able to leverage the market presence of web-brokers in drawing consumers to the Exchange and QHPs, we note that the Exchanges will also have to share data and coordinate closely with such entities.
Health exchange regulations finalized by the Obama administration Monday envision allowing agents, brokers and private companies, to sell coverage on the exchange to individuals and employers through privately-run websites.
According to Beth Mantz-Steindecker John J. Leppard and Ira S. Loss of Washington Analysis, the rules provide great flexibility to the states to carve out a key role for agents and brokers.
Washington Analysis is a Washington think tank that provides research and analysis to buy-side securities analysts and brokers (i.e., those who serve the institutional market).
They said that the provisions related to the private market were stipulated on an interim final basis, meaning that the federal Department of Health and Human Services will review public comments and then determine whether to finalize them, alter them or remove them.
Given HHS statements concerning the ability of these entities to drive interest in an exchange, the analysts doubted the provisions would be removed.
However, they added it is unlikely that private companies will be permitted to assess consumer eligibility for premium subsidies, cost-sharing arrangements or other affordability programs.
“Compensation mechanisms for these entities will be determined by the state,” the analysts said.
The analysts also said that with Republicans currently in control of the majority of state governments, and with most Democratically controlled states placing an emphasis on initial insurer participation rather than restrictive control, “we think that this rule sets the framework for more market-driven exchanges than some have feared.”
The analysts’ comments were supported by officials of the National Association of Insurance and Investment Advisors.
Robert Miller, NAIFA president, said that while NAIFA staff is still analyzing the 644-page document, it found the recognition for the role of the agent and broker to be encouraging.
“We believe the interim final rule which permits agents, brokers and private companies, to sell coverage on the exchange to individuals and employers should be finalized," he said. "State flexibility may result in more market-driven exchanges."
Miller said that NAIFA will continue to work with HHS to ensure maximum state flexibility is retained, and with the states to ensure all consumers have access to knowledgeable licensed professionals.
Officials of the National Association of Health Underwriters, whose members will be most directly affected by the exchanges, said this morning it was still evaluating the rules for their impact on its members.
They did caution that the regulation merely provides a regulatory floor, and that states are free to enact conditions of participation above and beyond those outlined by HHS.
“This could include limitations on the number of insurers permitted to offer plans via the exchange or even an active exchange model whereby exchanges “negotiate” premiums,” the analysts said. “Still, the emphasis at this point remains on participation,” Mantz-Steindecker, Leppard and Loss said.
Other sources said among the functions which will be the responsibility of the states include which include certifying qualified health plans; operating a website for comparing plans; running a toll-free hotline for consumer support; providing grants to "navigators" to assist consumers; determining eligibility of consumers; and helping consumers enroll. Other sources noted that certain elements will disappoint insurers and consumers. PoliticoPro, for example, said, “Insurers, wanted less discretion for states - they wanted HHS to prevent exchanges from imposing requirements on plans in the exchanges beyond what is included in the health care reform law.”
Another concerns cited by PoliticoPro was that consumers wanted fewer insurers on the exchange board. “But under the new rules, up to half of a board can represent insurers,” Politico Pro said.
However, the final rule, which goes into effect in 60 days, mandates that representatives of insurance issuers, agents, brokers, or others licensed to sell insurance may not constitute the majority of an exchange board.
Furthermore, at least one voting member of the board must be a designated consumer advocate.
The analysts said that states will be given broad discretion in devising methods to ensure that their exchange is financially able to perform all of its required functions. “This will likely include some manner of user fees or assessments on participating issuers,” the analysts said.
“While HHS encourages states to study the impact of various funding arrangements on risk selection, insurer participation, and provider contracting, the ultimate determination will be left up to the state,” the analysts said.
“Any assessment collected by the exchange would be reflected in plan premiums and thus subject to rate review,” they said.
The regulation finalizes the original start date of October 1, 2013 for the initial open enrollment.
But the Washington Analysis analysts said that HHS has extended the effective close date by one month, to March 31, 2014, “a positive development for insurers.”
At the same time, exchanges must be either approved or “conditionally approved” by January 1, 2013. States failing to do so by that point will see the HHS establish an exchange for them.
In recognition of this short timeframe, HHS has not pursued calls for public comment periods for state exchange applications (“exchange blueprints”), the analysts said.
States seeking to establish an exchange after this time must have an approved or conditionally approved exchange in place at least 12 months prior to the first effective date of coverage, or January 1 of the prior year, they said.
New Partners Named in Efforts to Improve Transitions between the Hospital and Other Care Settings As part of the new health care law’s policies to improve the quality of care available to people with Medicare and all Americans, the Centers for Medicare & Medicaid Services (CMS) today announced 23 additional participants in the Community-based Care Transitions Program (CCTP). These participants will join seven other community-based organizations already working with local hospitals and other health care and social service providers to support Medicare patients who are at high-risk of being readmitted to the hospital while transitioning from hospital stays to their homes, a nursing home, or other care setting.
CCTP is designed specifically to provide support for high-risk Medicare beneficiaries following a hospital discharge. These 23 sites will work with CMS and local hospitals to provide support for patients as they move from hospitals to new settings, including skilled nursing facilities and home. Community organizations will help these patients stay in contact with their doctors to ensure their questions are answered and they are taking medications they need to help them stay healthy. Today’s announcement will support more than 126 local hospitals and help more than 223,000 Medicare beneficiaries in 19 states across the country. CCTP is part of the Partnership for Patients, a public-private partnership aiming to cut preventable errors in hospitals by 40 percent and reduce preventable hospital readmissions by 20 percent over a three-year period. Achieving these goals has the potential to save up to 60,000 lives, prevent millions of injuries and unnecessary complications in patient care, and save up to $50 billion for Medicare over ten years. To date, more than 8,000 partners have pledged their commitment to the aims of the Partnership for Patients, including more than 3,800 hospitals. As part of their two-year agreement with the CMS Innovation Center, each organization will be paid a flat fee for helping to coordinate patient care after a hospital stay for each Medicare beneficiary who is at high risk for readmission to the hospital. The 23 sites will join the seven organizations announced in November 2011, bringing the total number of sites to 30. This is the second round of CCTP participants announced since the program was launched in April 2011. Under the Affordable Care Act, the program may spend up to $500 million over five years. With this round of agreements, CMS has committed half of the $500 million allocated to CCTP. The Innovation Center continues to accept applications as long as funding is available. More information on the CCTP is available at: http://go.cms.gov/caretransitions. More information about the work the Department of Health and Human Services is doing to improve care for Medicare, Medicaid, and CHIP beneficiaries and by extension, all Americans, through the broader Partnership for Patients initiative, is available at http://www.healthcare.gov/partnershipforpatients.
“I guess once you top 25% enrollment in Medicare [as Medicare Advantage plans now have], the agency has got to show you some love.”
— John Gorman, chairman of Gorman Health Group, commenting to AIS’s Medicare Advantage News on CMS’s more positive tone of late toward MA health plans.
The policies released today will help States in designing their Exchanges to best meet the needs of their consumers. They offer States substantial flexibility as they design a marketplace that works for their residents. “These policies give States the flexibility they need to design an Exchange that works for them,” said HHS Secretary Kathleen Sebelius. “These new marketplaces will offer Americans one-stop shopping for health insurance, where insurers will compete for your business. More competition will drive down costs and Exchanges will give individuals and small businesses the same purchasing power big businesses have today.”
• • Setting standards for establishing Exchanges, setting up a Small Business Health Options Program (SHOP), performing the basic functions of an Exchange, and certifying health plans for participation in the Exchange;
The final rule builds on the flexibility and resources provided by HHS already to build State-based Exchanges. A majority of States have taken significant steps in building Exchanges. Previously, HHS awarded 49 States and the District of Columbia $50 million to begin planning their Exchanges, and as announced recently, 33 States and the District of Columbia have received over $667 million in Establishment Grants to begin building their Exchanges. Today’s announcement builds on over two years’ worth of work with States, small businesses, consumers, and health insurance plans. The administration examined models of Exchanges; convened numerous meetings and regional listening sessions across the country with stakeholders; and consulted closely with State leaders, consumer advocates, employers and insurers. To finalize the rules announced today, HHS accepted public comment over 75 days to learn from States, consumers, and other stakeholders on how the rules could be improved, and HHS modified the proposals based on feedback from the American people. For more information on today’s announcement, visit:
http://www.healthcare.gov/news/factsheets/2011/07/exchanges07112011a.html For more information on Exchanges, including fact sheets, visit http://www.healthcare.gov/exchanges.
A 40% … possibility exists that Express Scripts’s acquisition of Medco will go through, according to Morningstar Inc.
“All of this vilification of the insurance companies over premium increases doesn’t address the underlying fundamental problem that health costs are being driven by the spike in provider charges, and until we get at the underlying problem of the delivery system, we are not going to see control of costs.”
— Jack Rovner, an attorney and principal at The Health Law Consultancy in Chicago, told AIS’s Health Plan Week.
By Allison Bell MARCH 7, 2012 Prudential Financial Inc. says it is ending sales of individual long-term care insurance (LTCI) and focusing solely on the sale of voluntary group LTCI products.
Prudential, Newark, N.J. (NYSE:PRU), says it will honor existing individual LTCI policies.
The terms of the contracts, which are guaranteed renewable, will not change, the company says.
Other carriers have dropped individual LTCI product lines, group LTCI product lines, or both in recent years, and many have raised rates dramatically.
Prudential seems to indicate that individual LTCI increases are coming in the announcement of the suspension of individual LTCI sales.
"As long as premiums are paid on time, and benefits are not exhausted, coverage will remain in place, although premiums can be changed subject to regulatory approval," Prudential says in the announcement.
Prudential notes that it has been selling group LTCI coverage for 25 years, and that the product line complements other group insurance lines, such as group life and group disability.
"The decision to exit the individual long term care business reflects the challenging economics of the individual market and our desire to focus our resources and capital on the group market,” Malcolm Cheung, a vice president in Prudential's group insurance unit, says in a statement.
Prudential sent producers a memo saying it will continue to pay them according to the terms of their contracts.
The company says it hopes to be a leader in the employer and association LTCI markets.
In related news, Hartford, Conn.-based LIMRA notes that according to a recent sales survey it has conducted, 10 out of the top 20 individual writers of LTCI over the last five years have since exited the market.
The top five individual LTCI carriers in sales for 2011, LIMRA notes, were Genworth Financial, John Hancock Financial, Mutual of Omaha, Northwestern Long Term Care and Prudential Long Term Care.
Also according to LIMRA, in 2011, new annualized premium for individual LTC increased four percent for the year, to $546 million. Approximately 230,000 Americans purchased individual LTCI in 2011, two percent fewer buyers than in 2010. Having shown modest growth in recent years, LIMRA estimates that over 7 million Americans have stand-alone LTCI today. A majority of whom (roughly 2 out of 3) have individual coverage.
“In my view, health is a business in the United States in quite a different way than it is elsewhere. It’s very much something people make money out of. There isn’t much embarrassment about that compared to Europe and elsewhere.”
— Tom Sackville, who served in Margaret Thatcher’s government and now directs the International Federation of Health Plans, told Ezra Klein for a story in the March 4 issue of The Washington Post.
Four Star Plans May Get Higher Bonus; Low Plans Face New Woes
March 1, 2012 Volume 18 Issue 4 Four-star rated Medicare Advantage plans stand to get an extra percentage point of quality bonus in 2014, the last year of CMS’s bonus demonstration program, under a provision of the agency’s “45-day notice” and preliminary call letter released Feb. 17 (see story, p. 1). But CMS also in the document proposed a policy in which Medicare beneficiaries starting in 2013 no longer will be able to enroll directly via the agency’s Medicare Plan Finder online tool in MA and Part D plans that bear a low-performing plan icon because they had ratings of less than three stars. And CMS plans to issue notices to members in plans that have been low rated for three consecutive years offering the beneficiaries a special enrollment period (SEP) to move to a higher-rated plan.
In addition, CMS adopted most but not all of the 2013 star-rating changes it outlined as under consideration in an unprecedented memo to plans Dec. 20, 2011 (MAN 1/5/12, p. 1). Among the additions proposed in the call letter are a measure to reflect year-to-year quality improvement by an MA or Part D plan, and a measure of care coordination drawn from the Consumer Assessment of Healthcare Providers and Systems (CAHPS) survey administered in 2012 for MA plans only.
Abundance of Detail About Stars Is Unusual
The abundance of references to star ratings in the call letter is “not a huge surprise,” says consultant Stephen Wood, senior vice president of OptumInsight. What is a “little surprising,” though, Wood tells MAN, is the amount of detail about stars in the notice. He points out that CMS addresses in the notice industry concerns about the ratings and says it appears to be “trying to put a little more rigor” around the processes surrounding the star-rating measures.
The change in the bonus for four- and 4.5-star ratings in the CMS demonstration program is for 2014 only. It means those plans will get a 5% bonus that year compared with 4% in the former schedule.
“The goal is clearly to get plans to improve,” CMS officials said regarding the proposed changes for both high- and low-rated plans. But there is no indication in the call letter that the demonstration program with bonuses will be extended beyond 2014, as MA plans have hoped, Wood notes.
While CMS proposes to go ahead with its proposal to assign all new plan ratings a weight of 1 (the lowest possible) during the first year, it retreated from a contemplated change moving the classification of two “high risk medication” drug safety measures. The agency had considered covering prescribing patterns for patients with diabetes and hypertension as just “process” measures carrying the lowest rating, but opted instead in the call letter to keep them as “intermediate outcome” measures with the top weighting of 3.
“Recategorizing these two important patient safety measures as process measures would actually contradict CMS’ continuing efforts to recognize quality initiatives by prescription plans,” the agency explained in the call letter.
CMS is going ahead with changes it outlined last December to “retire” measures to the display page (i.e., still scored but not used in calculations of plans’ star ratings) that are related to access to primary care doctor visits and administration of pneumonia vaccine.
Also proposed for being added to the display page is a host of other measures, including a couple of major ones CMS indicated it is considering for actual rating measures for 2014.
One of them, according to CMS, is “measures from the Hospital Inpatient Quality Reporting program.” Specifically, the agency said, “we are exploring whether the individual-level hospital data can be associated with individual MA contracts.” CMS notes that the goals would be to create “an MA contract-level measure of the hospital care that enrollees in each contract receive.”
The other is a medication therapy management program measure for Part D plans based on the percentage of MTM-eligible beneficiaries who received a comprehensive medication review.
Potential 2014 Measures Include CCIP, QIP
Other measures under consideration for addition in 2014, according to CMS, include use of highly rated hospitals by MA plan members, evaluation of an MA contract’s Chronic Care Improvement Program (CCIP) and Quality Improvement Project (QIP), grievance rate per thousand enrollees in both MA and Part D, “appropriate implementation of Part D transition processes by plans to ensure continuity of care for beneficiaries,” “serious reportable adverse events” (including Hospital Acquired Conditions) and an MA Special Needs Plans care management measure.
None of those seems surprising to observers. Equally unsurprising is CMS’s note in the call letter that it intends to initiate action to terminate the contracts of MA or Part D plans that have had three consecutive years of summary ratings of less than three stars and that the agency has confirmed, via looking at the data underlying the ratings, are in “substantial noncompliance” with MA or Part D requirements.
View the call letter at www.cms.hhs.gov/MedicareAdvtgSpecRateStats.
House Eyes Medicare Fee Setter Insulation
By Allison Bell MARCH 6, 2012 A new Medicare cost-cutting entity, the Independent Payment Advisory Board (IPAB), is facing strong, bipartisan opposition in the House.
Members of the House Energy and Commerce voted Monday to approve an IPAB killer bill -- H.R. 452, the Medicare Decisions Accountability Act bill -- by a voice vote, without any recorded opposition.
Marilyn Moon, a senior vice president at the American Institutes for Research, Washington, argued that, if IPAB or some other entity fails to take charge of limiting the rates Medicare providers can charge, then the burden for negotiating for lower rates will fall mainly on elderly, sick patients who may have little ability to make bargains, or even to make active, informed decisions about their care.
"There is no strong evidence that markets work to discipline the costs of health care, so we have no reason to be optimistic that they will indeed be able to hold down cost growth over time," Moon said.
Congress included the IPAB provision in PPACA in an effort to create a body that would have the independence and freedom from lobbying to hold down the prices Medicare pays for care.
Because the IPAB provision includes exemptions for hospitals, hospices and other institutional providers, IPAB effectively has the authority only to change the rates Medicare pays to doctors and other individuals who provide care, Neas said.
Although IPAB has the direct ability to affect only the rates that Medicare pays, IPAB could have an indirect on private payers, because private insurers often base their provider reimbursement rates at least partly on Medicare rates.
The PPACA IPAB provisions calls for the rate cut recommendations made by the 15-member board to take effect unless Congress passes legislation that achieves the same amount of savings.
Once the IPAB recommendations take effect, they are supposed to be exempt from either administrative review or judicial review. IPAB does not have to solicit public comments or hold hearings before or after making rate recommendations.
Dr. David Penson, a Nashville, Tenn., urologist who testified on behalf of the American Urological Association (AUA), Linthicum, Md., noted that IPAB members cannot be directly involved in providing or managing the delivery of Medicare services, or engage in any other business, vocation or employment.
"The explicit exclusion of providers who treat the very patients IPAB's recommendations will impact is more than inappropriate," Penson said. "The AUA views this as negligent."
Dr. Scott Gottlieb, a resident fellow at the American Enterprise Institute, Washington, acknowledged that the PPACA IPAB provision prohibits IPAB from limiting access to benefits.
In spite of that provision, IPAB's "activities are going to inevitably affect patients’ access to care," Gottlieb said. "For practical purposes, IPAB has been given the authority to legislate."
In addition, the limits on who can serve on IPAB ensures that most members will be academics, Gottlieb said.
"It’s a flawed premise to believe that we will get a better result by sidestepping an open, vigorous policy debate about how we price and cover services under Medicare," Gottlieb said.
Medicare redesigns claims and benefits statement
Empowers seniors with clear information on health care services used
The redesign of the MSN includes several features not currently available to Medicare beneficiaries with the current MSN:
• A clear notice on how to check the form for important facts and potential fraud; • Clearer language, including consumer-friendly descriptions for medical procedures;
• Definitions of all terms used in the form; • Larger fonts throughout to make it easier to read; Starting later this week, the redesigned MSN will be available to beneficiaries on mymedicare.gov, Medicare’s secure online service for personalized information regarding Medicare benefits and services; and, in early 2013, paper copies of the redesigned MSN will start to replace the current version being mailed.
$25-$26 … is the average cost of a generic at retail, compared to the $211 average cost of brand drugs, according to Highmark’s director of pharmacy operations Gary Golibiewski.
“The Part D plans really have consumers who are very focused on cost, and the existence of a coverage gap really focuses the senior’s mind on trying to contain costs below that coverage gap, so it has created a generation of shoppers.”
— Adam Fein, president of Pembroke Consulting, Inc., told AIS’s Drug Benefit News.
March 4, 2012 — 2:35pm ET | By Dina Overland Blue Shield of California is seeking $10.5 million in damages from Monarch HealthCare, claiming its contract was violated after rival insurer UnitedHealth purchased the large doctor group.
Read more: Blue Shield seeks $10.5M from rival UnitedHealth doc group - FierceHealthPayer http://www.fiercehealthpayer.com/story/blue-shield-seeks-105m-rival-unitedhealth-owned-doc-group/2012-03-04?utm_medium=nl&utm_source=internal?utm_source=AISHealth#ixzz1oLkfKG9t
Only MLR Rebate Recipients Should Get Rebate Notices
MARCH 5, 2012 Keep it simple, CMS.
CMS recently published a Federal Register notice seeking comments on the guidelines the agency ought to set for insurers and health plans that are sending notices regarding the rebates required by the minimum medical loss ratio (MLR) provisions created by Section 2718 of the Patient Protection and Affordable Care Act of 2010 (PPACA).
Durham and Gallaher write on behalf of AHIP that CMS officials ought to avoid any rules that could make complying with the MLR rebate notice requirements any more expensive or complicated than the statute requires.
"Imposing an additional, unnecessary administrative cost is flatly inconsistent with the purpose of the MLR provision," Durham and Gallaher say.
The PPACA MLR provisions require insurers to spend at least 85% of large group plan revenue and 80% of individual and small group plan revenue on health care and quality improvement efforts. Insurers that find health care and quality expenses fall below the minimum must provide rebates.
One way to simplify the rebate notice process is to drop a CMS proposal that calls for requiring notices to go to individuals who will not be receiving rebates, the AHIP executives say. PPACA Section 2718 does not require health plans to distribute notices to enrollees in plans that have met the MLR threshold, the AHIP executives say.
Requiring plans to send notices to those enrollees would be duplicative, unnecessary, costly and confusing, and the costs would clearly outweigh any benefit, the AHIP executives say.
CMS officials have estimated that the burden of the regulation would be $71 million, but that estimation process is not a substitute for full analysis, the AHIP executives say.
In addition, CMS should avoid setting notice requirements that are too detailed, because PPACA Section 2718 does not actually require that any insurers send any MLR rebate notices, the AHIP executives say.
Instead of setting detailed requirements for the notices, CMS should provide sample notices and describe the performance objectives, rather than say how insurers must try to meet the objectives, the AHIP executives say.
CMS officials add that the proposed model notices CMS officials did provide are too hard for consumers to understand and do not meet the government's own Federal Plain Language Guidelines.
The AHIP executives also ask CMS to let an insurer send a rebate notice to the employer policyholder, then let the employer tell employees about the rebate.
Requiring health plans to issue rebates to the employer and then send notices to the employer plan enrollees would increase administrative costs for the employers and require the employers to take complicated steps to inform insurers about the whereabouts of employees, the AHIP executives say.
AHIP should issue rebate notice guidelines as quickly as possible, to give companies time to put the changes into effect, the AHIP executives say.
“The widening of differential copays to incent the usage of both therapeutic and chemical equivalents is an effective method in driving utilization to generics and lowering costs, particularly in light of recent or anticipated generic releases that have been forecasted to represent approximately $35 billion in overall brand drug spend over the next year.”
— Allan Zimmerman, a director in the PricewaterhouseCoopers Human Resource Services practice, told AIS’s Drug Benefit News.
$5 billion … was cut from health reform’s prevention fund on Feb. 17 to help pay for the costs of blocking a 27% cut in Medicare physician payments.
$375 MILLION HEALTH CARE FRAUD SCHEME
The arrests and charges were announced today by Deputy Attorney General James Cole and Health and Human Services (HHS) Deputy Secretary Bill Corr, along with Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Sarah R. Saldaña of the Northern District of Texas; HHS Inspector General Daniel R. Levinson; Special Agent in Charge Robert E. Casey Jr. of the FBI’s Dallas Field Office; Dr. Peter Budetti, Deputy Administrator for Program Integrity for the Centers for Medicare and Medicaid Services (CMS); and the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU). The indictment, filed in the Northern District of Texas and unsealed today, charges Jacques Roy, M.D., 54, of Rockwall, Texas; Cynthia Stiger, 49, of Dallas; Wilbert James Veasey Jr., 60, of Dallas; Cyprian Akamnonu, 63, of Cedar Hill, Texas; Patricia Akamnonu, RN, 48, of Cedar Hill; Teri Sivils, 44, of Midlothian, Texas; and Charity Eleda, RN, 51, of Rowlett, Texas, each with one count of conspiracy to commit health care fraud. Roy also is charged with nine counts of substantive health care fraud, and Veasey, Patricia Akamnonu and Eleda are each charged with three counts of health care fraud. Eleda also is charged with three counts of making false statements related to a Medicare claim. All the defendants are expected to make their initial appearances at 2:00 p.m. CST today in federal court in Dallas.
According to the indictment, Dr. Roy owned and operated Medistat Group Associates P.A. in the Dallas area. Medistat was an association of health care providers that primarily provided home health certifications and performed patient home visits. Dr. Roy allegedly certified or directed the certification of more than 11,000 individual patients from more than 500 HHAs for home health services during the past five years. Between January 2006 and November 2011, Medistat certified more Medicare beneficiaries for home health services and had more purported patients than any other medical practice in the United States. These certifications allegedly resulted in more than $350 million being fraudulently billed to Medicare and more than $24 million being fraudulently billed to Medicaid by Medistat and HHAs. “Today, the Medicare Fraud Strike Force is taking aim at the largest alleged home health fraud scheme ever committed,” said Assistant Attorney General Breuer. “According to the indictment, Dr. Roy and his co-conspirators, for years, ran a well-oiled fraudulent enterprise in the Dallas area, making millions by recruiting thousands of patients for unnecessary services, and billing Medicare for those services. In Dallas, and the eight other Medicare Fraud Strike Force cities, the Criminal Division and our partners in the U.S. Attorneys’ Offices will continue to crack down on Medicare fraud, and hold accountable those stealing from the public fisc.”
The indictment alleges that Dr. Roy used HHAs as recruiters so that Medistat could bill unnecessary home visits and medical services. Dr. Roy and other Medistat physicians certified and recertified plans of care so that HHAs also were able to bill Medicare for home health services that were not medically necessary and not provided. In addition, Dr. Roy allegedly performed unnecessary home visits and ordered unnecessary medical services. According to the indictment, Medistat maintained a “485 Department,” named for the number of the Medicare form on which the plan of care was documented. Dr. Roy allegedly instructed Medistat employees to complete the 485s by either signing his name by hand or by using his electronic signature on the document. Three of the HHAs Dr. Roy used as part of the scheme were Apple of Your Eye Healthcare Services Inc., owned and operated by Stiger and Veasey; Ultimate Care Home Health Services Inc., owned and operated by Cyprian and Patricia Akamnonu; and Charry Home Care Services Inc., owned and operated by Eleda. According to the indictment, Veasey, Akamnonu, Eleda and others recruited beneficiaries to be placed at their HHAs so that they could bill Medicare for the unnecessary and not provided services. As part of her role in the scheme, Eleda allegedly visited The Bridge Homeless Shelter in Dallas to recruit homeless beneficiaries staying at the facility, paying recruiters $50 per beneficiary they found at The Bridge and directed to Eleda’s vehicle parked outside the shelter’s gates.
Apple allegedly submitted claims to Medicare from Jan. 1, 2006, through July 31, 2011, totaling $9,157,646 for home health services to Medicare beneficiaries that were medically unnecessary and not provided. Dr. Roy or another Medistat physician certified the services. From Jan. 1, 2006, to Aug. 31, 2011, Ultimate submitted claims for medically unnecessary home health services totaling $43,184,628. Charry allegedly submitted fraudulent claims from Aug. 1, 2008, to June 30, 2011, totaling $468,858 in medically unnecessary and not provided home health services. The indictment alleges that Sivils, as Medistat’s office manager, helped facilitate the fraud scheme by, among other actions, supervising the processing of thousands of plans of care that contained Dr. Roy’s electronic signature and other Medistat physicians’ signatures, permitting HHAs to bill Medicare for unnecessary home health services and accepting cash payments from Cyprian Akamnonu in exchange for ensuring plans of care contained Dr. Roy or another Medistat physician’s signature. As outlined in the government’s request to the court to detain Dr. Roy, in June 2011, CMS suspended provider numbers for Dr. Roy and Medistat based on credible allegations of fraud, thus ensuring Dr. Roy did not receive payment from Medicare. Immediately after the suspension, nearly all of Medistat’s employees started billing Medicare under the provider number for Medcare HouseCalls. The court document alleges that Dr. Roy was in fact in charge of day-to-day operations at Medcare, and that Dr. Roy continued to certify patients for home health despite the suspension.
Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,190 defendants who collectively have falsely billed the Medicare program for more than $3.6 billion. To learn more about the HEAT Strike Force, please visit: www.stopmedicarefraud.gov.
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