State Health Insurance Exchange Updates

Things are moving forward in Washington, Rhode Island and surprisingly Indiana:

http://www.commonwealthfund.org/Content/Newsletters/Washington-Health-Policy-in-Review/2011/May/May-31-2011/Indiana-Washington-Rhode-Island-Lead-on-Exchanges.aspx

Trade Groups React to Proposed ACO Regs

The accountable care organizations (ACO) rule published March 31 has drawn comments from key industry groups:

• The Academy Advisors: Tuesday, its 17 health system CEOs sent a letter to the Centers for Medicare & Medicaid Services (CMS) Administrator Don Berwick recommending five changes to the rule to simplify and lower the costs of participation in the ACA Section 3022 Shared Savings Program.
• College of Healthcare Information Management Executives (CHIME): in its May 10 letter, CHIME urged CMS to disallow Medicare enrollee opt-out for sharing of their data because it would undermine efforts to coordinate care for seniors. In the current rule, an ACO is required to provide a form to enrollees allowing them to opt out.
• American Medical Association (AMA): in its letter to CMS May 26, the primary concerns are the methodology for determining the Primary Service Area (PSA) and enforcement of the anti-trust oversight provisions. It encouraged increasing the safety zone threshold from 30 to 40 percent. It also seeks clarification of financial integration issues involving physicians and hospitals, and assurance that physicians are not at a disadvantage in forming ACOs in communities where hospitals are consolidating physicians: “Physicians should not have to become employed by a hospital or sell their practice to a hospital in order to participate in ACOs or other innovative delivery models.”
• America’s Health Insurance Plans (AHIP): in its letter, AHIP requested the safety zone be decreased from 30 to 20 percent so as to preclude provider consolidation and anti-competitive behaviors. And in its letter, it requested that regulations be created that preclude an ACO from cost shifting operating costs for the ACO to commercial plans.

But reactions to the Pioneer ACO are more positive to date: announced May 16, Pioneer ACOs allow prospective assignment of Medicare enrollees to the ACO, partial capitation and bigger shared savings bonuses than the two-sided ACO model, and do not carry a downside risk associated with cost benchmarks. Provider organizations with more experience in risk-based contracting might be attracted to the Pioneer ACO model which has a minimum savings rate of one percent (vs. 2 to 3.9 percent for ACOs) and upside of between 50 and 75 percent of savings (vs. 50 to 60 percent for ACOs).

Selling Insurance Across State Lines: Excerpts from a Congressional Hearing

Wednesday, the House Energy and Commerce Subcommittee on Health held a hearing on the Health Care Choice Act of 2011 (H.R. 371), which would allow the purchase of health insurance across state lines. The hearing featured testimony from Steve Larsen, Director of the Center for Consumer Information and Insurance Oversight (CCIIO) at CMS and from health financing experts, the American Cancer Society and the American Legislative Exchange Council (ALEC). A summary of the arguments is below.

Proponents
“States have imposed over 2,100 benefit mandates on health coverage. Estimates show that these requirements increase premiums anywhere from 10 to 50 percent.” – Representative Fred Upton (R-MI)

“The best scenario to reduce the uninsured, numerically, is competition among all 50 states where one or more states emerge as dominant players. This scenario would yield a reduction in the uninsured by 8.1 million people.” – Steve Parente, Ph.D., health financing expert, University of Minnesota, who recently completed a peer-reviewed study on purchasing insurance across state lines that will be published in the Journal of Risk and Insurance

Opponents
“Selling insurance across State lines has long been proposed as an option to increase competition and choices in health insurance, but there are serious pitfalls with this approach when it is not coupled with adequate consumer protections. The Affordable Care Act allows health care to be sold across State lines when both States agree and consumer protections are maintained. Without the consumer protections included in the Affordable Care Act, we run the risk of creating an environment where there is a `race to the bottom’ in which insurers have an incentive to sell plans from the State with fewest consumer protections.” – Steve Larsen, Director of CCIIO

“It allows them [insurers] to choose to operate under the laws of states with weaker consumer protection and risk-pooling standards. By doing so, plans will be allowed to cherry-pick the best risk, leaving older, sicker individuals isolated in pools without healthier individuals to offset their medical costs. The result will be insurance markets in disarray, without any real pooling of risk.” – Representative Frank Pallone, (D-NJ)

High Deductible Plans Gain in Popularity But:

http://www.usatoday.com/news/washington/2011-05-30-health-care-deductibles-hospital-bills-doctors_n.htm

Early Implementor States Running Behind

The Early Innovator grants, awarded in February, total $241 million, and are meant to support states for the next two years as they develop "exchange IT models that can be adopted and tailored by other states." Many of the seven states awarded Early Innovator grants, while still meeting HHS benchmarks, are struggling to move forward on other key aspects of implementation, especially passing legislation to set up the new online marketplaces for insurance .

Pat Boone to the Rescue of the Ryan Medicare Plan

This is unbelievable:
http://www.kaiserhealthnews.org/Stories/2011/May/27/pat-boone-medicare-factcheck.aspx

Will Providers Be Able to Say No to Patients?

Many of the impending reforms in health care will involve docs and hospitals steering members towards more effective and efficient treatment. How will this be received by patients? It depends on ell it is communicated:

http://www.healthleadersmedia.com/page-1/MAG-266122/Telling-the-Patient-No