By Rebecca Adams, CQ HealthBeat Associate Editor

August 1, 2011 -- Starting Aug. 1, 2012, private health plans will have to offer free preventive services—including contraception, breast feeding supplies, and screening for sexually transmitted diseases.

The move was widely anticipated after the nonpartisan Institute of Medicine (IOM) issued a report July 19 recommending that preventive services for women be covered at no charge.

U.S. Department of Health and Human Services (HHS) officials issued an interim final rule on Monday that incorporates those recommendations. The public has 60 days to comment.

The rule would require insurers to offer free care for plan years that start on or after Aug. 1, 2012. Because many plans are based on calendar years, in practice a significant number of people will get the coverage beginning Jan. 1, 2013.

In a move that seemed designed to blunt some criticism from religious groups, faith institutions that offer insurance to their workers will be able to choose whether to cover contraception. HHS officials said they “welcome comment on this policy.” Advocates and lawmakers on both sides of that question were quick to offer their opinions on that provision.

HHS officials said Monday that the new regulation will have a “very small impact on premiums,” although they did not specify a dollar amount. They said that about 34 million women between the ages of 18 and 64 will be affected in 2013.

The free coverage will include: FDA-approved contraception and contraceptive counseling; human papillomavirus testing for women who are 30 years old and older; counseling regarding sexually transmitted diseases; human immunodeficiency virus (HIV) screening and counseling; breast feeding supplies and counseling, including rental costs for breast pumps soon after giving birth; domestic violence screening and counseling; gestational diabetes screening for pregnant women; and annual gynecological check-ups.

Insurers will still be able to charge copays for brand-name drugs if an FDA-approved generic alternative is available for free.

“These historic guidelines are based on science and existing literature and will help ensure women get the preventive health benefits they need,” said HHS Secretary Kathleen Sebelius.

The leader of America’s Health Insurance Plans, Karen Ignagni, didn’t specifically criticize Sebelius for largely adopting the IOM report. Instead she went after the Institute’s recommendations.

“Unfortunately, the preventive care coverage recommendations recently issued by the IOM would increase the number of unnecessary physician office visits and raise the cost of coverage,’’ Ignagni said in her statement. “The IOM’s recommendations would broaden the scope of mandated preventive services beyond existing evidence-based guidelines, suspend current cost-sharing arrangements for certain services, and encourage consumers to obtain a prescription for routine supplies that are currently purchased over-the-counter.

“Exceeding current evidence-based guidelines sets a troubling precedent for the IOM’s future coverage recommendations, including essential health benefits that will significantly impact the affordability of coverage and the cost to taxpayers,’’ Ignani said, referring to another rule that’s expected to be published this fall.

Controversy over Contraception
The conscience clause that allows religious groups to choose whether or not to cover contraception drew complaints from both the political left and the right.

Left-leaning advocacy groups for women praised the overall rule, but said that allowing religious institutions to refuse to cover birth control was unnecessary and potentially harmful. Some on the right said that HHS should have allowed a broader range of employers, not just those representing religious institutions, to opt out of contraceptive coverage.

The opt-out provision “was not recommended by the IOM committee,” said Debra L. Ness, president of the National Partnership for Women and Families. “Every employer should be required to provide coverage for this basic preventive care, which is essential to women’s health. Allowing some employers to refuse to do so would create barriers that, for some women, may prove insurmountable.”

Jeanne Monahan, director of the Family Research Council’s Center for Human Dignity, said that the rule “offered a fig leaf of conscience protection for certain churches that fulfill very specific criteria. However, religious groups that provide social services, engage in missions work to people of different religious faiths, religious health insurance companies, let alone religious health care providers and individuals in such health plans are not protected from any discrimination whatever.”

Janice Shaw Crouse, a senior fellow for the conservative group Concerned Women for America, said that she does not support the overall rule but offered what she called “guarded praise” for the conscience clause allowing religious groups to opt out of covering contraception.

“Why not have others opt in? It’s always people with deeply-held religious or philosophical beliefs who have to opt out,” said Crouse. “It’s an inconvenience and burden that should not be there.”
Of the overall rule, “It’s another invasion into people’s private lives and another expansion of government.”

Crouse also said that requiring insurers to offer free contraception is unnecessary.

“Poor people in this country spend their money on the latest version of cell phones, big screen TVs, cars, refrigerators. Their kids even have cell phones,” she said. “Poverty in the U.S. is not the issue that people tend to think it is. It’s a spending habits problem so I’d question whether there’s a need to pay for contraception. Today it costs practically nothing. To say that they need help with contraceptives when they have money to spend in other directions is hardly logical.”

The IOM had not recommended covering the abortion drug RU-486, and HHS officials did not include that in the list of benefits.

For emergency contraception, such as the Plan B or Ella morning-after pills, women would have to get a prescription from a doctor to be able to get it for free. The pills are also available over the counter.
Democrats on Capitol Hill largely applauded the agency’s action.

Senate Health, Education, Labor and Pensions Committee Chairman Tom Harkin, D-Iowa, said that “eliminating cost sharing for these crucial preventive services will make needed care more accessible and will improve the health of millions of women.”

Rep. Louise M. Slaughter, D-N.Y., said the rule “represents a historic milestone for women’s health and women’s rights in America. Access to contraception, counseling for victims of domestic abuse, and preventative screenings for HIV and other diseases will empower women to reduce unintended pregnancies and better protect themselves and their health. For years we’ve fought to get contraception covered for women by health insurance, just as they have covered Viagra for men.”

The regulation was issued by the departments of Treasury, Labor, and Health and Human Services.

Rebecca Adams can be reached at [email protected].

By Rebecca Adams, CQ HealthBeat Associate Editor

August 4, 2011 -- Doctors’ offices in Ontario, Canada, spend about $22,205 per physician per year to bill Canada’s single-payer agency—about 27 percent of the $82,975 that U.S. doctors spend annually to process claims, according to an article published in Health Affairs.

If doctors in the United States could lower their administrative costs to match those of Ontario physicians, the analysis said, the total savings would be about $27.6 billion per year. The article, supported by The Commonwealth Fund, found that medical assistants in the United States spend almost 21 hours per week interacting with health insurance plans and government health programs, which was almost 10 times more than in Ontario. American clerical staff spend 53.1 hours per physician per week on administrative tasks related to insurance, such as billing, compared with 15.9 hours in Ontario.

Ontario’s population is about one-third of the Canadian population and the researchers said the results would be similar if they had surveyed the entire nation.

Total medical spending per person in the United States is about $7,290 per year compared with $3,895 per year in Canada, which represents an 87 percent difference. Some of those additional costs come from meeting different requirements for billing, receiving prior authorization for medical services and sorting out coverage offered by various insurance plans.

About 216 Canadian physicians and administrators responded to the survey. The article was written by six researchers in Canada, New York and Colorado. The lead author was Dante Morra, an assistant professor in the Department of Medicine, University of Toronto, in Ontario.

The authors noted that their findings were similar to another study that found per capita administrative costs in Canada were about 29 percent of U.S. costs.

“There is broad agreement we can do better . . . Everyone would agree that there are efficiencies yet to be achieved,” said Susan Pisano, a spokeswoman for America’s Health Insurance Plans.

However, Pisano noted that there are several limits to the study beyond the fact that it is based on survey data rather than data from direct observations that can be verified. First, the survey was conducted in 2006. Since then, a number of changes have occurred in the marketplace. For instance, Pisano said, many insurers have changed the way they do prior authorization by requiring it for a smaller set of services and automating much of the process. Insurers have also simplified and automated other administrative tasks, she said.

Another issue is that the U.S. costs also included administrative costs related to Medicare, the federal program for the elderly and people with disabilities, as well as Medicaid, the federal-state program for the poor.

Rebecca Adams can be reached at [email protected].

By John Reichard, CQ HealthBeat Editor

August 5, 2011 -- The Centers for Medicare and Medicaid Services (CMS) announced a new Web site Friday designed to give consumers speedier access to information they can use to compare the quality of hospitals, nursing homes, home care agencies, health plans and doctors.

Agency officials said they have also updated data on an existing website devoted to hospitals in an effort to help consumers compare facilities. And they’ve added new information, including how well hospitals guard against infection during outpatient surgical procedures.

In a third step to prod providers to improve the quality of their treatment services, the agency outlined a fresh set of goals for the “QIOs”—the independent organizations that contract with Medicare to improve the quality and efficiency of care under the program.

The new Web site (www.Medicare.gov/QualityCareFinder) pulls together onto a single site information to compare hospitals, nursing homes, home care agencies, dialysis facilities, doctors and health plans. For example, consumers can compare hospitals based on death rates, readmissions, and whether facilities give recommended treatments for conditions like heart attack and pneumonia.

Patients and their families can compare nursing homes based on measures including how effectively they control pain; home care agencies on the various services they provide and how effectively they care for wounds; dialysis facilities on their control of anemia; and doctors on their clinical training, the languages they speak, and whether they accept Medicare rates as payment in full. And they can see how well Medicare health plans and prescription drug plans stack up against each other on their costs and benefits covered.

CMS is continuing to operate individual websites in each of these spheres. But the new site is a reminder of the breadth of quality information that can be obtained and also provides consumers with a one place to go for such information.

In addition to uploading fresh performance data on existing hospital quality measures, CMS is offering new data comparing how well outpatient departments protect patients from surgical infections and the extent to which they use proven lifesaving treatments for heart attacks.

Friday’s updated data provides death rates for people within 30 days of their leaving the hospital and of readmission rates within that period. The conditions involved are heart attack, heart failure, and pneumonia.

CMS Administrator Donald M. Berwick said that the new information also shows gains in the way hospital patients themselves rate their own care. Berwick cited “modest but meaningful improvements” in this area.

Under the new three-year-plan announced Friday, CMS will put QIOs to work to meet the goals of its Partnership for Patients program. That initiative aims to cut medical conditions acquired in the hospital by 40 percent by 2013. The partnership’s other goals are to reduce readmissions 20 percent by 2013, which would prevent the rehospitalization of 1.6 million hospital patients. Last but not least its goal is to save 60,000 lives over three years. CMS recently announced that 2,000 hospitals are now participating in the partnership. 

The three-year plan is known in the QIO world as the “10th Scope of Work.” CMS contracts with 53 independent QIO contractors in each of the states, the District of Columbia, Puerto Rico, and the Virgin Islands. They work closely with patients, nurses, and doctors in various health care settings to change treatment practices to improve quality and safety.

“The QIOs represent a kind of national force for change,’’ Berwick said, He called them a “tremendous resource for our country in terms of helping organizations improve. A fact sheet on the new objectives said that “through large-scale learning networks, QIOs will accelerate the pace of change and rapidly spread best practices.”

Other specific QIO goals include “improving care transitions,” said Jean Moody-Williams, director of the CMS Quality Improvement Group. This is designed to help assure that patients get the care they are supposed to as they move from hospital to home, or to another health care setting. In addition, “we are very interested in prevention, in care for populations in communities,” Williams said. “Thus we’ll be doing things such as improving the rate of influenza vaccination, and colorectal cancer screening.”

Separately, the Department of Veterans Affairs announced Friday that its facilities are included in CMS hospital quality ratings. “Veterans, stakeholders, and the general public will be able to directly compare the mortality rates and readmission rates at individual VA medical centers against non-VA hospitals” for heart attack, heart failure, and pneumonia, the department said in a news release.

John Reichard can be reached at [email protected].  

By John Reichard, CQ HealthBeat Editor

August 1, 2011 -- The impact of the debt ceiling legislation on Medicare, Medicaid, and the health care overhaul law may not be as great as some analysts initially feared—but all three could still take significant hits in the coming years.

Even House Democrats suspicious of the agreement expressed relief Monday that the White House negotiated provisions that would exempt Medicaid and limit Medicare cuts in the event a new trigger mechanism requires across-the-board spending cuts.

“I take issue with anyone that defines us as losers” in the agreement, Texas Democrat Sheila Jackson Lee declared after her party’s caucus met with Vice President Joseph R. Biden Jr. to discuss the agreement. “We have fire walls and the protection of Medicare, Medicaid, and Social Security because Democrats did not yield,” she said.

But the deal does not exempt government-funded health care programs from any cuts recommended by a new joint congressional committee and approved by the full Congress. The new panel must develop a package of at least $1.2 trillion in cuts over 10 years in addition to the almost $1 trillion in cuts that would occur immediately under the package. The deal requires the panel to issue recommendations by late November and Congress to approve them by the end of this year, otherwise reductions will occur through trigger provisions for automatic spending cuts that would begin in fiscal 2013.

The House passed the legislation Monday evening and the Senate is expected to act on it Tuesday.

“There’s no limit on what the committee can look at,” said Paul Van de Water, an analyst with the left-leaning Center on Budget and Policy Priorities (CBPP). “I don’t think this question of Medicare cuts is going to go away. I think there is also going to be particular pressure on Medicaid. The Republicans are going to be promoting their block grant, the administration will still be promoting its blended rate” in Medicaid. “And who knows what might be discussed with regard to the health reform legislation. I think that all of the health programs are going to be a major subject of discussion for the deficit reduction committee.”

Democrats claim that millions of Americans will lose coverage if Medicaid converts to a system of fixed allotments through block grants. And many on the left mistrust the blended rate idea. Sen. John D. Rockefeller IV, W. Va., for example, has predicted the blended rate revision would end the Children’s Health Insurance Program (CHIP).

But the agreement appears to fall short of having the impact that analysts estimated the nearly $3 trillion in cuts proposed by House Speaker John A. Boehner, R-Ohio, would. The CBPP said Boehner’s plan would have meant one of three things: immediate cuts to Medicare and Social Security, an end to health coverage expansion provisions of the health care overhaul law, or “evisceration” of the health care safety net program for low-income Americans.

In the final hours before the deal was struck, Republican leaders made it clear that entitlements were going to be on the joint committee’s plate.

Sunday morning on CBS’s “Face the Nation,” Senate Minority Leader Mitch McConnell, R-Ky., said the trustees of Medicare and Social Security have said the two programs are “simply not sustainable for the next generation. So that has to obviously be a part of what the joint committee comes back and recommends to the Congress.”

Van de Water said he doesn’t think health care programs dodged a bullet, saying they very much remain on the firing line. “The deficit reduction committee could still propose some very significant cuts,” he said. A new round of Medicaid cuts going into 2014, when the program is supposed to expand under the health care law (PL 111-148, PL 111-152) by some 16 million uninsured Americans “would be a real potential problem for health reform,” the analyst continued. “The concern is to try to assure that the deficit reduction committee doesn’t recommend any changes that would have significantly adverse effects on health reform, whether that would be big cuts in Medicaid or in any of the subsidies for participants” in the health insurance exchanges to cover the uninsured.

Liberal House Democrats, such as Peter A. DeFazio of Oregon and Eliot L. Engel of New York, said the deal would have a devastating impact on Medicare, expressing doubt that the joint committee would add tax revenues that would blunt the effects of cuts on entitlement programs. “It’s buying a pig in a poke and I don’t like it,” Engel said of the deal. “I have no guarantee that Medicare isn’t going to be decimated by this,” he said.

While critics of the agreement fear the impact of changes developed by a new joint committee, providers are focused on the automatic spending cuts that would occur if the committee process did not work. They say that 2 percent yearly reductions to providers in Medicare would harm beneficiaries and threaten their ability to get timely treatment.

John Reichard can be reached at [email protected].  

By Jane Norman, CQ HealthBeat Associate Editor

August 3, 2011 -- An actuarial analysis of a model insurance policy under the health care law found that even people who qualify for subsidies may have a tough time affording insurance if they have a chronic condition.

The analysis released Wednesday by Avalere Health and the National Health Council, which advocates for chronically sick people, estimated what premiums and out-of-pocket charges would be for a model plan similar to one offered to federal employees by Blue Cross Blue Shield. They assumed that such a plan’s benefits would come close to whatever federal officials set as the health benefits package under the law.

The estimated annual premium would be $5,000 for an individual and nearly $12,500 for a family. Its actuarial value would be near the “platinum” level established in the law—one of the most generous plans.

Out-of-pocket spending for people with chronic illnesses like AIDS, Alzheimer’s, or kidney disease often can run into the thousands annually. “For people with limited income and resources, even if they qualify for exchange subsidies, the cost of enrolling in a qualified health plan may be higher than they can afford,” said the report.

The study came as stakeholders are eagerly awaiting the next big step in implementation of the health care law—the Obama administration’s proposed definition of an essential health benefits package. That decision is expected sometime late this year or early in 2012, after the Institute of Medicine makes its recommendations, probably in September.

In the meantime, advocates of all types are offering input to the Department of Health and Human Services on how the benefits design should be structured and what it should—or should not—include. It’s not known how specific HHS will be in defining an “essential” benefit. Some experts, including National Health Council members, warn that being too specific may drive up the costs of insurance policies. It’s also unclear how much will be left up to states in defining benefits in their exchanges.

The overhaul law (PL 111-148, PL 111-152) creates 10 categories of essential benefits that must be covered by 2014, including ambulatory patient services, emergency services, hospital visits, prescription drugs and lab services. Out-of-pocket costs and deductibles are limited.

One scenario in the report outlined the costs for a family of four, with one person with kidney disease, and with an income at 250 percent of the federal poverty level, which would qualify them for subsidies. With an income of $55,875, after the costs of median necessities like taxes, child care and food are subtracted, as well as health insurance premiums and out-of-pocket costs, just $485 a month would be left in the family budget.

That scenario was projected for an area of the country with an average cost of living. “For people with limited income and high-cost health needs requiring significant out-of-pocket spending, health insurance coverage may still not be affordable, even with subsidies,” the analysis said.

The results of the analysis also showed that consumers may face a lot of differences among plans when it comes to cost sharing. They said people will have to study policies closely to figure out what works best for their own health care consumption patterns. For example, the analysis said, someone with a chronic illness might want to sign up for a plan with lower out-of-pocket limits, even if the deductible is higher than in other plans.

The council also offered a series of general recommendations on how the essential benefits package should be set up, including:

• Cost and quality should be balanced and patients protected. Plans should be required to disclose the deductible, co-payment and co-insurance amounts for in-network and out-of-network services. There should be oversight of states to ensure they are reviewing the design of plans. Patients should be able to expect cooperation and coordination when they switch plans or go in or out of Medicaid. 
• The regulations should require care coordination and management practices by companies to improve the quality of care and reduce costs. There should be specific requirements for state navigator programs to help consumers figure out their best options, how to enroll and how to obtain their benefits. 
• Clear standards should be set for “medical necessity” determinations by plans and it should be clear how people can appeal those decisions. Without adequate protection, people who are chronically ill will find it difficult to obtain coverage or challenge insurer decisions, the analysis said.

Marc Boutin, executive vice president and chief operating officer of the council, said the group is focusing on HHS and pushing the agency to ensure that the proposed benefits regulation offers people with chronic illnesses the protection that they need and at a price they can afford. Without that, “we could potentially create a whole new class that can’t afford care” and defeat the entire purpose of the law, he said.

National Health Council report

Jane Norman can be reached at [email protected].  

By Jane Norman, CQ HealthBeat Associate Editor

August 4, 2011 -- Pneumonia deaths among patients in hospitals plunged by 45 percent between 2000 and 2007, the Agency for Healthcare Research and Quality (AHRQ) reported Thursday.

By 2007, the average U.S. death rate attributed to pneumonia in hospitals fell from 74 deaths per 1,000 admissions to 41 deaths per 1,000 admissions, the agency said. The lowest death rate in 2007 was in Arizona, followed by Maryland.

However, eight states still reported 50 or more deaths per 1,000 admissions in 2007: Nebraska, Wyoming, Hawaii, West Virginia, Arkansas, Oklahoma, New York and Vermont. Nebraska topped the list with 57 deaths per 1,000 admissions.

The statistics included all people over 18 years of age, including Medicare enrollees. Older adults are at the highest risk for pneumonia, and they have the highest rates of hospitalization for the illness, says AHRQ.

Ernest Moy, a medical officer at AHRQ, said in an interview that the improvement is likely tied to the emphasis on quality of care that’s been a priority for federal officials. Pneumonia is one condition that’s been particularly stressed, he said. But beyond that, the agency can’t pinpoint reasons for the improvement, he said.

It’s important that states see the statistics and it might lead to more self-examination among those that aren’t doing as well, Moy said.

Quality improvement is key in battling pneumonia in hospitals, researchers say. The agency reported earlier this year on a study that found that rates of pneumonia in hospital intensive care units in Michigan among patients on ventilators decreased. The improvement was tied to tools to improve communication and teamwork among staff members, as well as the use of checklists and additional hand washing.

Measures recommended by Medicare to improve the quality of care for people with pneumonia include giving patients antibiotics within six hours of when they arrive at the hospital, getting the results of a blood culture before giving a patient antibiotics, and determining whether a patient has received a pneumonia vaccine.

The proportion of Americans 65 and older who were vaccinated against pneumonia increased from 53 percent to 58 percent between 2000 and 2007. But federal officials want to see that rate rise to 90 percent for that age group.

Pneumonia Deaths by State

Jane Norman can be reached at [email protected] .