By Rebecca Adams, CQ Roll Call

January 14, 2016 -- President Barack Obama will ask Congress to give states more time to benefit from full federal financing of Medicaid expansion in the budget proposal he will release Feb. 9.

Under the Affordable Care Act, states were allowed to broaden Medicaid eligibility to people with income up to 138 percent of the federal poverty level. The overhaul required the federal government to pay all the costs for covering the people who became eligible through an expansion in 2014, 2015, and 2016. The federal funding phases down starting in 2017, when states must pick up 5 percent of the costs. In 2020 and beyond, states must bear 10 percent of the expenses for the expansion population.

However, Obama is arguing that all states that expand should get the same arrangement that states that expanded in 2014 did, including three years initially of complete federal financing. The proposal would "provide any state that takes up the Medicaid option the same three years of full Federal support and gradual phase down that those states that expanded in 2014 received, no matter when the state takes up the option," said an administration blog post issued early Thursday.

"This common-sense proposal makes the expansion as good a deal for states that expand now as it is for the states that have already done so," wrote Office of Management and Budget Director Shaun Donovan and Domestic Policy Council Director Cecilia Muñoz. "It is further evidence of the Administration’s willingness to work with states to build on recent progress in improving health coverage and making Medicaid affordable to states and taxpayers alike."

The flexibility would benefit states that have not expanded, many of them in the South and Midwest, if officials change their minds. 

If Congress approves, the proposal could provide additional money not just to states that expand in the future but also those that expanded after Jan. 1, 2014, and lost the opportunity to get full federal financing from the start. Those states include Alaska, Indiana, Michigan, Montana, New Hampshire, and Pennsylvania. Louisiana is slated to expand on July 1.

However, Republicans in Congress just cleared legislation (HR 3762) that would have repealed the Medicaid expansion, which Obama vetoed. GOP lawmakers running for re-election are unlikely to embrace additional federal funding for an expansion of Medicaid.

"I like the idea but I don't think it will pass Congress this year," said Georgetown University Center for Children and Families Executive Director Joan Alker. "The opposition continues to be ideologically based, but eventually some of the air will deflate from that balloon. Clearly the 2016 presidential election is very consequential here."

The president's proposal could put pressure on officials in holdout states. After Louisiana expands Medicaid as Democratic Gov. John Bel Edwards has promised to do this summer, only 19 states will not have broadened the program as the health law allows. Already, governors in South Dakota, Virginia and Wyoming are calling for expansion as part of their budgets. Advocates also are watching to see whether there could be action in Nebraska or in Southern states. Republican governors Gary Herbert of Utah and Bill Haslam of Tennessee also tried to convince GOP lawmakers in their states to accept expansion. 

The Medicaid issue has survived legal battles, with the Supreme Court ruling in 2012 that states could reject an expansion without losing all of their Medicaid money for their entire program, and numerous political fights. Obama is determined to cement as much of his legacy as possible this year by persuading states that have resisted broadening the program. However, conservative candidates also view opposition to the expansion as a winning political strategy in this election year.

The states that have not expanded are Alabama, Florida, Georgia, Idaho, Kansas, Maine, Mississippi, Missouri, Nebraska, North Carolina, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Wisconsin, and Wyoming.

By Melissa Attias, CQ Roll Call

January 13, 2016 -- The majority of people who leave the health law's insurance marketplaces in California and on a broader national level are picking up other coverage rather than going uninsured, according to officials on a conference call hosted by the organization Families USA, which supports the Affordable Care Act.

Peter Lee, executive director of Covered California, said California’s state-run exchange has surveyed a pool of people who left that marketplace over time and more than 85 percent left for other health coverage.

"We don't want to keep them. We shouldn’t keep them. We should help them transition to new employer-based coverage or to Medicare as they age out," Lee said on the call. "The fallacy that people are leaving to go bare and uninsured is not the case."
 
Mike Perry, partner at PerryUndem Research/Communication, said from a national perspective his group’s surveys have found that three-quarters of people who had coverage and dropped it have insurance. "The vast majority went on to other kinds of coverage," he said.
 
The third open enrollment period for the insurance exchanges set up under the health law began Nov. 1 and closes on Jan. 31.
 
Lee noted that Covered California often announces sign-up figures at the end of open enrollment, but about 15 percent of those people do not end paying their premiums because many enroll "just in case." He also said roughly one-third of those who are signed up at the beginning of the year will disenroll to get other coverage.
 
In addition, Lee noted that employer-based coverage faces similar challenges getting workers to enroll in offered coverage because of the cost. Continued education is critical so that people understand the value of insurance, he added.
 
"We are quite concerned that even a small number of people dropping coverage and going uninsured is because many people that have signed up did not previously have insurance—and the challenge of someone saying, 'Oh, I've gone six months or a year and I didn’t use my insurance, hence I didn't get a good deal,'" he said.

By Melissa Attias, CQ Roll Call

January 14, 2016 -- President Barack Obama’s pick to head the Medicare and Medicaid programs is slated to testify next week about health insurance CO-OP failures before the same Senate panel that has not acted on his nomination since it was put forward six months ago.

Andy Slavitt, acting administrator of the Centers for Medicare and Medicaid Services (CMS), is due before the Finance Committee at a Jan. 21 hearing examining CO-OPs established under the 2010 overhaul. A branch of the U.S. Department of Health and Human Services (HHS), CMS is the main federal agency implementing the health law, in addition to running the two big government health programs.

Obama nominated Slavitt to officially fill the post in July and a Finance aide said the panel received his paperwork from the administration in early September, which kicked off the vetting process. Little has been said by either party in the months since, however, with Republicans focused on using the budget reconciliation process to send legislation (HR 3762) dismantling the health law to Obama rather than moving forward with a nomination hearing to rehash its setbacks.

Slavitt previously worked for federal contractor Optum, which was involved with building the online system of insurance marketplaces established by the health law and fixing the federal exchange healthcare.gov after a rocky launch in October 2013.

Asked about the status of Slavitt’s nomination, Finance Chairman Orrin G. Hatch, R-Utah, told CQ Roll Call that his committee will probably hold a hearing but that he wasn’t aware of anything imminent.

"You know, I haven’t even looked at that recently," Hatch said.

Spokesman Aaron Fobes added in an email that Slavitt is "undergoing the Finance Committee's bipartisan vetting process" without offering a timeline. That process likely includes questions about conflicts of interest between CMS and Slavitt’s former employee—a subsidiary of UnitedHealth Group—that have been previously raised by Hatch and Senate Judiciary Chairman Charles E. Grassley of Iowa.

Ron Wyden of Oregon, the top Democrat on the Finance panel, said he talks to Slavitt regularly and that he’s been very accessible. Spokesman Taylor Harvey said by email that Wyden is "eager" to have Slavitt before the committee and confirmed as soon as possible.

Last month, Slavitt testified before the House Energy and Commerce oversight subcommittee about efforts to recoup misspent federal dollars invested in the state-run health insurance exchanges. House Republicans also held hearings to probe the collapse of a series of nonprofit insurance CO-OPs while GOP Sen. Ben Sasse of Nebraska had a hold on HHS nominees for nearly two months in an effort to get additional information.

The CO-OPs were included in the health care law as a compromise among Democrats after it became clear that supporters of a government-run health insurer would not prevail. At least a dozen CO-OPs funded under the law have failed.

Another Obama health care nominee has had better luck advancing, though he still lacks a clear path through the Senate. The Health, Education, Labor and Pensions Committee advanced the nomination of Robert Califf to lead the Food and Drug Administration by voice vote Tuesday, but Alaska Republican Lisa Murkowski plans to block full Senate consideration unless the agency responds to her concerns about genetically engineered salmon.

By Marissa Evans, CQ Roll Call

January 13, 2016 -- Kentucky Gov. Matt Bevin's plan to eliminate the state's health insurance marketplace will diminish the level of enrollment support for low-income residents, who used it to sign up by the thousands for coverage under the 2010 federal health care law, according to the system's advocates.

Bevin told federal officials in a Dec. 30 letter that the state intends to drop its exchange, Kynect, and have its residents use Healthcare.gov, the federal health exchange, to sign up for insurance. Bevin's office provided no details about the timing of the transition, but said there will be no impact on Kentuckians' ability to obtain or continue health care coverage for the 2016 plan year.

"We'll be taking a big step backward," said Emily Beauregard, executive director of Kentucky Voices for Health.

The announcement is the kind of change health law advocates in Kentucky feared after Bevin, as a Republican candidate for governor last year, pledged to undo the expansion of the state's Medicaid program ordered by his predecessor, Democrat Steve Beshear.

Kentucky has been lauded as a model for successfully implementing the so-called Obamacare law, reducing its portion of uninsured residents from 20.4 percent in 2013 to 9 percent last year, according to a Gallup Healthways Well-Being Index report in August. Rather than drop more than 400,000 newly covered residents by undoing Beshear's expansion, Bevin has said since the election that he would merely seek federal waivers to change the program, for which the federal government pays 100 percent of the cost through 2017, then fall gradually to 90 percent by 2020.

Cost to Taxpayers

But the exchange is financed by Kentucky taxpayers only, though the federal government provided $290 million in grants to support its launch. Bevin's office said the state now spends $27 million a year to run the exchange. Those costs are supposed to be offset by a 1 percent tax on premiums for private health plans, but Bevin's office said the tax generates just $2.5 million to $4 million a year.

"The vast majority of Kentuckians are paying for a website that only 2 percent of the population uses to purchase qualified health plans," said Jessica Ditto, communications director for the governor's office.

That figure does not include the 400,000 Medicaid beneficiaries, only the roughly 87,000 residents who signed up for private insurance through Kynect for the 2016 open enrollment period, according to the U.S. Department of Health and Human Services.

"The open enrollment period is not even closed yet...they're only counting the people who have enrolled right now," said Jason Bailey, executive director of the Kentucky Center for Economic Policy, "That's not all of the people they got in Kynect, it's not even close to the number of people who have enrolled in Medicaid or previously enrolled and cycled off."

Bailey also noted that the tax on premiums will rise to 3.5 percent from 1 percent when the transition is complete.

"They're not saving anyone any money by moving to the exchange," Bailey said.

Dismantling Kynect won't just affect how the state enrolls people but also how it helps consumers understand their coverage, said Beauregard. Medicaid-eligible residents especially, "won't have the assistance that they need to successfully enroll in coverage...we're going to have an access problem."

A Kaiser Family Foundation poll released in December found that while 49 percent of Kentucky residents have an unfavorable view of the federal health care law, they do like Kynect. In one poll question, 52 percent of Kentuckians said they wanted Bevin to keep Kynect, while 26 percent said they'd prefer to switch to the federal marketplace, according to the poll.

But the poll also found that that when Kynect supporters were told that Kentucky could save money by switching to Healthcare.gov, support for keeping the site dropped to 39 percent.

Still, Rich Seckel, director of the Kentucky Equal Justice Center, says he and other exchange advocates are "hoping as a transition plan is evaluated that Kynect will look like the better deal."

Seckel said Kynect was successful at enrolling people for coverage because of its community based approach that encouraged them not only to to sign-up, but also to use their insurance to improve their health. In addition, he said, consumers could easily report problems on the Kynect website and get the help they needed. He said that's not likely to happen with Healthcare.gov.

"It's difficult to imagine that going to the federal exchange will be quite as user-friendly as Kynect," Seckel says. "People might drop off because it's hard to use the system."

"A successful transition from Kynect to the federal marketplace will require strong cooperation and commitment from the state of Kentucky to its residents who have gained health insurance under the Affordable Care Act," said Ben Wakana, press secretary for the U.S. Department of Health and Human Services (HHS). "HHS is committed to work with the state on a seamless transition."

By Kerry Young, CQ Roll Call

January 15, 2016 -- Health groups see a looming revamp of Medicare rules on electronic health records as an opportunity to make the tools more relevant to patient care, while also reducing the administrative burden on doctors.

Doctors are pushing for a major reset of Medicare's approach to electronic health records, pressing the agency to develop new rules that would aid them in the practice of medicine.

By 2019, Medicare will tie payments for many doctors to new metrics that depend heavily on electronic health records to evaluate the past quality of care. The Centers for Medicare and Medicaid Services (CMS) is in the early stages of creating this merit-based incentive payment system, which was mandated by last year's sweeping overhaul of physician reimbursement (PL 114-10).

Medicare's direct payments to doctors are one of the largest single federal health expenses, with more than $69 billion reimbursed for so-called physician fee schedule services in 2014.

Looking at the results to date from a federal initiative to spur the use of electronic health records, many doctors say they are concerned about how CMS will develop the new payment system, known as MIPS. In addition to complaints about time lost on patient care due to data entry work, doctors frequently question the value of the information that they've been tasked by CMS to gather through electronic health records. In their view, stumbles with past efforts to decide what constitutes the so-called "meaningful use" of electronic records should serve as a caution to CMS as it develops the new MIPS system.

"If you are going to judge my quality by a system that is flawed and doesn't work very well, that just seems wrong," John Meigs, Jr., a doctor from Centreville, Alabama, who is president-elect of the American Academy of Family Physicians, told CQ HealthBeat in a recent interview. "Right now, providers are being held to a standard that our electronic health records can't meet and I am going to be the one who gets penalized." 

The American Medical Association (AMA) and other health groups have urged CMS to avoid repeating what they consider mistakes made with the meaningful-use rules as they develop the new MIPS framework for documenting quality of care with electronic health records. The AMA urged CMS to allow more flexibility in the new rules, making it easier to adopt emerging technology. It also asked that rules be more tailored to the concerns of specialty practices.

Acting CMS Administrator Andy Slavitt agreed with the need to move away from the current approach, and regain doctors' confidence and interest.

"We have to get the hearts and minds of physicians back," Slavitt said Monday at the J.P. Morgan health care conference in San Francisco.

Impact of Existing Health IT Program

There have been successes as well as setbacks so far in the roughly $30 billion federal push for greater use of electronic health records, which the 2009 stimulus law (PL 111-5) jump-started. More than 400,000 doctors and other providers of health care received federal money intended to help them adopt electronic health records. 

But about 209,000 medical providers will see their Medicare reimbursements shaved this year for failing to meet CMS' 2014 targets for demonstrating the meaningful use of electronic records.

The hit for more than half of these doctors and other health workers will be less than $5,000. The relatively light penalty made it easy for some doctors to abandon the program. With an interest in keeping doctors engaged, CMS last year modified some Stage 2 meaningful use demands for 2015 but only finalized these changes in mid-October. Congress last month raced to pass a law (PL 11-115) that expanded CMS' ability to offer exemptions from penalties to doctors who missed the 2015 target. Medical and health IT groups had been pressing for this relief due to CMS' tardy release on the revisions. 

"If the stage 2 rule is any indication, they need to beef up their efforts and work harder with stakeholders to implement" the 2014 overhaul of Medicare payments to doctors, Joel White, executive director of Health IT Now Coalition, told CQ HealthBeat.

CMS received many complaints about the kinds of questions doctors have been tasked with asking. Representatives of specialty practices bristled at being asked to check whether patients with eye and skin complaints received pneumonia shots. 

Sam Horton, an Indiana physician, urged the agency to focus on "maintaining humanity in the patient encounter.

"I want to practice medicine! Not try to sign 90-year-old demented patients up for email and help them remember their password, so that I can pass along a medication list electronically," Horton wrote in a comment last year to CMS.

The use of electronic health records in the United States is in the "training wheels" stage, said Robert Watcher, a professor at the University of California, San Francisco, School of Medicine (UCSF). An advocate for the use of electronic records, Watcher, the chief of the division of hospital medicine at UCSF, studied the bumps in the road with the implementation in researching his recent book The Digital Doctor: Hope, Hype, and Harm at the Dawn of Medicine's Computer Age. Early rules for electronic health records focused on what's simple to measure, not necessarily what's best for patients, he said. 

"It's easier to capture for a patient with heart failure that I performed an echocardiogram than did I have a good conversation with the patients about their disease. We are measuring the things that are accessible," he said. "The measures need to get better."

By Kerry Young, CQ Roll Call

January 15, 2016 -- The post-hospital care industry is gearing up for Medicare—under congressional instructions—to bring greater uniformity to a patchwork of payment policies after 2020. But the industry is worried that lawmakers might be tempted to move sooner to grab the expected billions of dollars in savings.

"Post-acute care is a focal point of policymakers, and it's obvious why," said William Altman, executive vice president for strategy, policy, and integrated care for Kindred Healthcare, a rehabilitation company, at a Jan. 13 briefing for congressional staff. "We all agree that the system must be reformed."

Medicare payments for post-acute care more than doubled, to $59 billion, between 2001 and 2013 despite concerns about fiscal waste. The absence of clear guidelines on the appropriate care for patients was part of the reason. Caring for a patient with a complicated case of pneumonia may cost $18,584 at an in-patient rehabilitation center, but only $10,360 in a skilled nursing home, according to the Medicare Payment Advisory Commission, or MedPAC. Long-term care hospitals and home health aides also provide care, adding additional variables to the reimbursement calculation.

"The decision as to what part of the post-acute care system is used is highly predicated upon getting people out of the hospital," said William J. Hall, a geriatrician and professor of medicine at the University of Rochester School of Medicine, in September. Hall serves on MedPAC.

"A lot of it has to do with who has the beds, who's willing to accept the patient and get them out pronto," Hall said. "That doesn't mean that there's malfeasance or bad practices. It's just kind of the way it is."

The current system often leaves the elderly and their families frustrated and confused about the right choice.

Researchers say there's not much data easily available to compare the options because hospitals until recently haven't had much incentive to closely compare them. Instead, hospitals have looked to post-acute care under the fee-for-service model to keep initial patient stays short, freeing up beds for new patients.

Medicare paid for 9.6 million cases of post-acute care in 2013. Post-acute care generally refers to what the health industry provides after a patient is hospitalized for a major medical event such as a stroke or coronary bypass or certain operations. There's broad bipartisan agreement about the need to overhaul post-acute care.

The White House's fiscal 2016 budget request proposed a move toward bundled post-acute care payments, estimating the change would save $9.3 billion over a decade.  

Rep. Kevin Brady, R-Texas, helped shepherd a law through Congress in 2014 that was meant to create a framework for a unified approach to post-acute care under a single payment system.

The measure (PL 113-185) breezed through the House on a voice vote and was cleared by the Senate by unanimous consent. Brady has since become chairman of the House Ways and Means Committee. In taking that gavel, Brady expressed a commitment to a post-acute care overhaul. His role in the chamber's fiscal decisions may put him on the hunt for savings to use as offsets in future budget deals.

The law mandated a robust collection of data to compare the different kinds of post-acute care services beginning in 2018. After two years' worth of data have been collected, the Department of Health and Human Services (HHS) has two years to report to Congress on how to create a post-acute care payment system. Congress could then act on any recommendations.

Altman of Kindred and others in the industry say they want to stick with that plan, but lawmakers have also signaled they want to act more quickly.

Industry Alert to Change

The post-acute care industry was on high alert last year as lawmakers overhauled (PL 114-10) Medicare payments to physicians.

The industry's worry was that Congress would change payment rules on post-acute care and claim savings as an offset for the popular "doc fix" bill, Jay F. Grinney, chief executive of HealthSouth Corp., a major provider of rehabilitation services, said Jan. 12 at J.P. Morgan's annual health care conference.

Lawmakers chose not to change the payment rules, but leaders of companies that do post-acute care are sensing they got only a temporary reprieve. Two bills introduced in the House underscore the reasons for their concern.

Brady introduced a bill (HR 3298) that would establish a shared incentive pool for the four kinds of providers of post-acute care. They would compete to earn bonus payments.

Rep. David B. McKinley, R-W.Va., has introduced a bill (HR 1458) that could create the role of a coordinator for post-acute care. The coordinators would help control spending through preventing hospital readmissions, giving them a stake in identifying the best options for care.

The industry is therefore taking a closer look at how test programs from the Centers for Medicare and Medicaid Services already are changing the field, Grinney said.

The 2010 health law gave the CMS $10 billion to test alternative approaches to Medicare's fee-for-service model. The model has long been criticized for rewarding doctors and hospitals for providing more services without establishing how much they help patients. CMS has been moving aggressively in recent years to tie payment to the quality of care provided.

"People are now starting to focus on what all of these changes to the delivery system mean," Grinney said.

Among the CMS test programs affecting the post-acute industry is the Comprehensive Joint Replacement model, which starts this year. It will make hospitals in 67 specified sections of the country accountable for the progress of patients enrolled in traditional Medicare after knee and hip replacements. HealthSouth described this as a good opportunity for the company as the program "should favor high-quality, low-cost providers."

"In an integrated or a fully coordinated system, Medicare is no longer going to be focusing on payment-specific rules and regulations," Grinney said at the J.P. Morgan conference. "They are going to be focused on outcomes, quality, and patient satisfaction."