By John Reichard CQ HealthBeat Editor

July 30, 2010 – Medicaid, the state-federal health care program for low-income and disabled Americans, covers some 61 million people, making it significantly bigger than Medicare, which covers 47 million.

Medicare, with around $500 billion a year in outlays, still dwarfs Medicaid’s $340 billion, of which about $200 billion is federal money and $140 billion from the states.

With coverage expansion provisions in the health care law, however, Medicaid enrollment is expected to jump to 70 million or more in a few years, as eligibility for the program opens up in 2014 to Americans with incomes up to 133 percent of the federal poverty level.

Official Washington, with its careful attention to middle- and upper-class concerns, will always be a Medicare kind of town. The program covers not just poor Americans but middle-class and rich ones too. But with Medicaid expected to pump $400 billion more into the coffers of hospitals, doctors, nursing homes and other providers under the overhaul, the program will join Medicare at center stage in policymaking in coming years.

Under the overhaul, a new, permanent panel called the Medicaid and CHIP Payment and Access Commission, or “MacPAC”, will scrutinize whether payment levels are adequate to ensure access to quality care in the Medicaid program.

MacPAC, which will hold its first meeting Sept. 23 and 24, owes its creation to the 2009 law that reauthorized the Children’s Health Insurance Program (CHIP) until 2014. But until the overhaul provided actual funding, the panel existed only on paper.

MacPAC’s original charge was to look at the adequacy of payment levels in Medicaid and CHIP. With the overhaul, Sen. John D. Rockefeller IV, D-W.Va, championed the broader scope. The commission is important now “because of the tremendous changes that will be occurring in the scope of the Medicaid program for coverage as a result of health reform,” said Diane Rowland, MacPAC’s new chairwoman.

Through MacPAC, Rockefeller wanted to bring to Medicaid the same impartial analysis that the Medicare Payment Advisory Commission, called MedPAC, brings to Medicare. “Each of them are incredibly necessary, so that you take the decision-making and put it in the hands of professionals and take it out of the hands of Congress and the lobbyists,” he said.

In ways both large and small, MacPAC will be patterned after MedPAC. They both have staffs of around 30 and a yearly budget of $11million to $12 million. Like MedPAC, MacPAC plans monthly meetings, recorded public votes on recommendations, and reports to Congress in March and June each year. Starting work Aug. 2 as MacPAC’s new executive director is Lu Zawistowich, who previously served as MedPAC deputy director.

High Hopes
Advocates for Medicaid patients, hospitals, and nursing homes hail the panel’s creation and hope it improves Medicaid payment rates, which are often so dismally low that doctors turn away enrollees. Kathleen Stoll, deputy director at Families USA, said there has been “a lack of data and analysis that really looks at some of the payment issues and understands where we need to make some tweaks.”

Stoll also lauds the appointment of Rowland, who “knows Medicaid as well as anyone.” Rowland has served since 1991 as executive director of the Kaiser Commission on Medicaid and the Uninsured, which publishes research on Medicaid. Other appointees of the 17-member commission, such as George Washington University professor Sara Rosenbaum, are also highly regarded by advocates for Medicaid patients.

“This is going to be a group oriented to finding ways to maximize access,” predicts Chip Kahn, president of the Federation of American Hospitals. Higher Medicaid payments will be a bigger priority for hospitals since new enrollees are expected to be heavier users of hospital services.

The commission is also a big deal for nursing homes, which have long sought better analysis of Medicaid. “We certainly hope that it will lead to more accurate reimbursement,” said Reed Franklin, a lobbyist with the American Health Care Association.

But there are two areas — worries about the deficit and concerns about data — that raise questions about MacPAC’s influence. Gail Wilensky, who has served as administrator of Medicare and Medicaid chairman of MedPAC, notes that payment data is scattered across 50 states and may not be computerized.
Meanwhile, many Republicans continue to oppose Medicaid’s expansion. Senate GOP staffer Rodney Whitlock said MacPAC will be valuable if it pinpoints how payments can improve access — but not if it focuses on primarily better outreach to increase enrollment in a broken system states can ill afford.

But analysts across the political spectrum are happy at the prospect that MacPAC will bring better data analysis, whatever the challenges. “If there are access problems, we’re better off knowing it and figuring out how to improve access without spending more money,” Wilensky said.

By John Reichard, CQ HealthBeat Editor

July 29, 2010 – Among the things most critical to the success of the health care overhaul law is the creation of state-based insurance exchanges. Failing that, Americans eligible for subsidies to fulfill the law’s mandate that they buy coverage won’t have a marketplace where they can find affordable coverage.

Designing and setting policy to create a successful exchange is no simple matter, however — and states are broke. But HHS announced Thursday that it’s offering $51 million in grants to help states get started, and that should help.

And in a second move, the department also issued a notice requesting public comment on standards needed to create a successful exchange.

HHS said in a news release that each state and the District of Columbia are eligible for up to $1 million in grant money to establish an exchange. Although state-based exchanges won’t open until 2014 under the law, states must begin working right way to develop policies and proposals to set up the exchanges, analysts say.

States can operate their own exchanges or partner with other states to operate a regional exchange, HHS said. ”If a state decides not to create an exchange for its residents, HHS will help establish one on their behalf,” the department added. It said that grant applications are available at their website and are due by Sept. 1, 2010.

HHS also issued a request for comment from states, consumer advocates, employers, insurers and others seeking their input on “rules and standards” exchanges should be required to meet. Those comments are due Oct. 4.

Rick Curtis, president of the Institute for Health Policy Solutions and an expert on exchanges, said the grant money is important.

The grants would give states “the ability to begin the planning and analysis of exchanges, which will play a pivotal role in assuring convenient and affordable access for consumers, coverage of the uninsured, as well as healthy competition among competing plans,” he said.

Curtis said states face a series of critical steps to create exchanges. They include designing and setting policy for the exchanges and figuring out how they will coordinate with other state agencies and function alongside the rest of the state’s insurance market. “In the context of severe budget challenges facing states, most would not otherwise have resources to take these critical initial steps,” he said.

These various planning activities “will also enable states to better identify and communicate to the federal government where related guidance and rules are needed in order for their exchanges to be viable and achieve federal and state goals,” Curtis said in a statement.

By John Reichard, CQ HealthBeat Editor

July 27, 2010 – The payment system announced Monday for treating Medicare patients in dialysis facilities marks the first time the traditional Medicare program is varying payment levels based on the quality of care. While hospitals, doctors, and other providers have been paid higher rates for years for reporting data on the quality of their care, dialysis facilities will be the first providers to see payments rise or fall based on what such data shows.

The government is switching to a payment system that not only bundles more services into a single payment but also tries to improve the value Medicare gets for its spending by tying payment to quality.

Dialysis is supposed to remove toxins from the blood of patients with end-stage renal disease (ESRD) — in other words, in patients whose kidneys no longer function. The quality of their life depends on how effectively the procedure cleans out the toxins and the extent to which they suffer from conditions such as anemia that rob them of energy for basic daily activities.

The Centers for Medicare and Medicaid Services (CMS) has chosen three measures it will use to collect the data that will be used to vary payment: One assesses how well the facilities perform dialysis; the other two asses how well they manage anemia.

The first measure examines the reduction of urea, a toxin that results from the digestion of protein. The two anemia management measures assess levels of hemoglobin in the blood — levels should be neither too high nor too low. One of the two measures looks at the percentage of patients at a facility whose hemoglobin is less than 10 grams per deciliter of blood while the other looks at the percentage whose hemoglobin is greater than 12 grams per deciliter.

The ESRD payment rule announced this week establishes these measures in final form. However, certain elements of the “Quality Incentive Program” (QIP) system are not yet final. The agency has invited the public to submit comments.

For example, CMS is proposing a system for assigning facilities a total performance score. Depending on those scores, payments would be reduced by as much as 2 percent. A total score between 0 and 10 would lead to a 2 percent reduction of payments starting Jan. 1, 2012. At the other end of the scale, a score of 26 to 30 points would mean no reduction of payment.

CMS is inviting public comment on the scoring system through Sept. 24 and plans to issue a final QIP rule by the end of the year.

It’s the kind of drill other providers can expect to see in coming years as quality incentives move to other health sectors in the Medicare program.

By Jane Norman, CQ HealthBeat Associate Editor

July 28, 2010 – You’d expect that residents of Massachusetts would lead the nation when it comes to health insurance coverage, given that a state law there requires that individuals be insured.

But county-by-county health insurance estimates released by the Census Bureau show that residents of the upper Midwest, along with their New England counterparts, enjoy some of the highest rates of health insurance coverage in the nation, while the South and Southwest lag behind.

The statistics indicate that the new health care law extending coverage to 31 million people when fully implemented in 2014 may have its most profound effect in those southern states. Texas alone has an estimated 5.7 million people without health insurance.

The Small Area Health Insurance Estimates provide 2007 data on the number of people in all 3,140 counties in the United States, and the percentages of those under age 65 who lack health insurance. The estimates are put together from census data such as population surveys and surveys of business patterns, as well as aggregated federal tax returns and Medicaid participation records.

Maps on the Census Bureau website show that while there are pockets in nearly every region of the country with rates of uninsured people higher than the national average of 17.1 percent, Texas, New Mexico and Florida are home to multiple counties with 29.2 percent to 49 percent uninsured people.

Census officials note that there can be wide variation in insurance rates within a state, and knowing which counties those are and the age range of those without insurance assists planners.

The estimates are broken down by age, sex, race, Hispanic origin and income categories at the state level and by age, sex and income categories at the county level.

The census says 26.8 percent of Texans don’t have health coverage, followed by 26.7 percent in New Mexico, 24.2 percent in Florida, 22.8 percent in Louisiana and 21.1 percent in Arizona.

On the other end, 7.8 percent of Massachusetts residents are uninsured, followed by 9 percent in Hawaii, 9.6 percent in Minnesota, 9.7 percent in Wisconsin, and 10.8 percent in Connecticut and Iowa.

New 2008 health insurance estimates for areas with populations of 65,000 or more will be released by the census in September.

The counties with the lowest rates of uninsured people are Henry County, Iowa, and Plymouth County, Massachusetts, each with 6.6 percent of residents without coverage; Waukesha County, Wisconsin, 6.9 percent; Worcester County, Massachusetts, 7 percent; Berkshire County, Massachusetts, 7.1 percent; Norfolk County, Massachusetts, 7.2 percent; Hampden County, Massachusetts, Anoka County, Minnesota, and Washington County, Wisconsin, 7.3 percent; and Carver County, Minnesota, 7.5 percent.

Counties with the highest rates of uninsured are in Texas. Leading the way is Kenedy County, a lightly populated county on the state’s southeastern border where 49.5 percent of the 341 residents under 65 are uninsured. It is followed by Hudspeth County, 48.5 percent; Jeff Davis County, 44.2 percent; Culberson County, 42.6 percent; Presidio County, 40.8 percent; Sherman County, 40.5 percent; Glasscock County, 40.4 percent; and Edwards County, 40 percent.

Echols County, Georgia, where 37.6 percent of residents don’t have insurance, is the non-Texas county with the nation’s highest percentage of uninsured. 

By John Reichard, CQ HealthBeat Editor

July 28, 2010 – The Department of Health and Human Services (HHS) issued a clarification Tuesday of its rules requiring insurers in the individual market to accept children with pre-existing medical conditions, saying they would not have to offer insurance at all times during the year.

The statement — inserted in the “questions and answers” section on an HHS website devoted to the rules — follows comments last week by some state insurance commissioners that insurers were dropping kids-only coverage because of worries about “adverse selection” (See related story, CQ HealthBeat, July 23, 2010).

Commissioners said parents could simply wait until children get sick to buy coverage and then stop paying for it after they got well, leaving insurers without premiums from good risks to balance out the costs of medical payouts for sick children.

“To address concerns over adverse selection, issuers in the individual market may restrict enrollment of children under 19, whether in family or individual coverage, to specific open enrollment periods if allowed under State law,” the website says. “This is not precluded by the new regulations.”

“For example, an insurance company could set the start of its policy year for January 1 and allow an annual open enrollment period from December 1 to December 31 each year. A different company could allow quarterly open enrollment periods. Both situations assume that there are no State laws that set the timing and duration of open enrollment periods.”

Scott Serota, chief executive of the Blue Cross and Blue Shield Association, hailed the clarification. He said in a news release that “we have been working closely with the administration to identify potential problems and seek solutions to ensure smooth implementation of the new healthcare reform law.
Today’s clarification is a good example of how we can successfully implement the new law by working together.”

By Jane Norman, CQ HealthBeat Associate Editor

July 29, 2010 – Employers are leaping at chances to put wellness programs in place but it’s unclear if many are making much difference in workers’ health, according to a new study by the Center for Studying Health System Change for the nonpartisan National Institute for Health Care Reform.

Programs that succeed have to be comprehensive, linked to business strategy, boosted by champions within the company and backed by senior leaders, the study said. If that commitment isn’t there, companies might as well stay on the sidelines.

The study by Ha T. Tu and Ralph C. Mayrell found some common themes emerged from interviews with industry experts and employers who run wellness programs. Wellness is a hot topic and the health care law expanded some workplace wellness regulations that allow employers to vary health insurance premiums based on employees’ ability to meet health standards. (See related story, CQ HealthBeat, June 11, 2010)

But the study’s assessment of the current state of worker wellness programs was decidedly skeptical. Tu and Mayrell said that programs have to be customized for particular businesses, and one-size-fits-all programs bought off the shelf likely won’t draw much interest or participation. Also unlikely to make much difference are online programs with no followup.

Successful programs are championed by senior leaders in companies with “reasonable expectations” who are able to communicate clearly the reasons why workers should participate, said Tu and Mayrell. Trying to sell programs in workplaces rife with turmoil or financial discord is “futile,” they said. “Mutual trust is key to effective wellness programs,” they wrote.

Employers can’t look at wellness programs for a quick fix because that’s unlikely to happen, and isolating the impact on health cost trends might not be possible, they added.

Wellness provisions in the new health care law have been viewed favorably by employers but many in the wellness industry and employers say the law didn’t go far enough and argue the federal government should authorize subsidies through employer tax credits.

Probably not a good idea, the authors said. “The evidence to date suggests that the gains from wellness programs are too uncertain to justify broad employer supported subsidies,” Tu and Mayrell wrote.