By Jane Norman, CQ HealthBeat Associate Editor

April 30, 2013 -- Federal officials all the way up to President Barack Obama sought to reassure Americans last week that they won't be befuddled by the application forms for the new health insurance exchanges, as the Centers for Medicare and Medicaid Services (CMS) unveiled revised, slimmed-down versions of the documents.

Responding to criticism of a proposed application form that ran for 21 pages in its paper version, CMS officials said the application has been "simplified and significantly shortened."

Now there are three versions. One is a "short form" for individuals who don't get their insurance through the workplace and don't have dependents. A second one that's somewhat longer is for families. A third is for people who won't be applying for federal subsidies to help pay for their health insurance policies.

All three versions will be used in the states with federal marketplaces or partnerships. States that run their own exchanges will be allowed to apply to modify some parts of the applications, a CMS official said, speaking on background. No more changes are expected prior to the launch of exchange enrollment on Oct. 1, the official said.

At his news conference last week, Obama said the first application didn't work. "We put together, initially, an application form for signing up for participation in the exchanges that was initially about 21 pages long, and immediately everybody sat around the table and said, 'well, this is too long,' " Obama said. "Especially in this age of the Internet, people aren't going to have the patience to sit there for hours on end. Let's streamline this thing."

One change that was made was in numbering pages. In the 21-page application's paper version, the cover page was counted as Page 1. In the short form, it's unnumbered.

Initial reviews of the revamped applications from health policy experts were warm. "There's not much they could cut but they did condense some things," said Tricia Brooks, a senior fellow at the Center for Children and Families at the Georgetown University Health Policy Institute. "Is it perfect? No, but it's getting there."

"It certainly is easier to read," said Karen Pollitz, a senior fellow at the Kaiser Family Foundation and a former CMS official, though she said she didn't see any huge differences in the way the overall application is structured.

Selling Job Still Needed

The question of complexity is an important one as CMS moves toward open enrollment and launches campaigns with private partners to educate people about how to sign up for insurance. Even some Democrats, such as Senate Finance Chairman Max Baucus, have expressed worries, and Republicans are keeping up a steady drumbeat of criticism about the rollout of the law (PL 111-148, PL 111-152).
Obama said the application and other issues related to full implementation of the law in 2014 do not apply to most Americans, who already are insured.

"And their only impact is that their insurance is stronger, better, more secure than it was before," he said. "That's it. They don't have to worry about anything else." Those who will feel the impact are Americans without insurance or those who are paying high prices in the individual market, Obama said.

CMS officials said that it's proof that implementation is moving along. "This is another step complete as we get ready for a consumer-friendly marketplace that will be open for business later this year," Marilyn Tavenner, CMS acting administrator, said in a statement.

Praise also came from Enroll America, the private organization helping sign up consumers, and from Families USA, another advocacy group active in enrollment.

Pollitz said the family application is particularly important because it may involve the enrollment of numerous individuals and also asks for detailed information about employer insurance coverage. She said CMS clearly tried to clarify, for example, who can or cannot be counted as a member of a family for purposes of qualifying for subsidies. The online version will be easier because it will let people skip over irrelevant questions, she said.

But an appendix that asks many questions about health insurance offered by an employer remains fairly complex and much of it probably will have to be filled out by the employer, Pollitz said. That includes questions such as whether the insurance plan that's offered "meets the minimum value standard," which means it has to pay for at least 60 percent of total allowed costs.

The application also asks consumers if they are on Medicaid, which is an insurance plan even though people often don't realize the program is considered insurance, Pollitz explained.

But both Pollitz and Brooks said that the way the law is written, consumers have to be asked these questions to determine their eligibility for tax credits or Medicaid, and there's not much that could be done to make it easier.

Applying Will Take Time

Brooks said the section on employer-offered coverage also means that consumers will not be able to fill out the application in one sitting, though they may be able to get through much of it if they are advised in advance to bring along relevant information. At some point, applicants will have to ask their employer's human resources department or the insurer for help.

The question then arises what happens if an employer is not cooperative, or gives out wrong information. Brooks said then it will be up to the exchange to verify the information that's provided. "If you can't answer these questions that should not prevent you from submitting the application," she said.

Brooks said she anticipates further changes once the first enrollment season is over. "This may be pens down for Oct. 1 but I don't think this is pens down forever," she said.

Obama said there will always be fixes to be made. "And the last point I'll make—even if we do everything perfectly, there will still be glitches and bumps, and there will be stories that can be written that say, oh, look, this thing is not working the way it's supposed to, and this happened and that happened," he said. "And that's pretty much true of every government program that's ever been set up."

By Jane Norman, CQ HealthBeat Associate Editor

May 3, 2013 -- The verdict is still out on whether a patient-centered medical home really can turn out to be a home, sweet home for patients and providers as well as achieve measurable cost savings and higher-quality health care.

But experts who are working on the concept and also researching the outcomes said at a recent Capitol Hill briefing that they're willing to keep plugging away despite the hurdles. "Change is hard," said Barbara Tobias, medical director of the Health Collaborative of Greater Cincinnati, which includes a medical home program.

Physicians in medical home models need to "not just lead teams but work effectively as members of teams," said Tobias, who's also a professor at the University of Cincinnati College of Medicine.

It is a culture change for doctors who often have an "oldest child" syndrome of wanting to direct everything, but "I think ultimately this is the kind of system we want to practice in," she said.

Patient-centered medical homes are a model of primary care considered an ingredient in the transformation of the U.S. health care system. They are made up of teams of health care providers who coordinate care and are proactive in reaching out to patients rather than waiting for patients to come to them, panelists said at the briefing sponsored by the Alliance for Health Reform. In demonstration programs, either the government or insurers often chip in money to physician practices to help make changes.

That means, for example, that doctors figure out ways to free up time in their schedules so patients can make same-day appointments and wait times are brief. Consultation is available over email or on the phone, and offices are open outside traditional work hours. Patients engage in decision-making with their doctors in active discussions.

Melinda Abrams, vice president at the Commonwealth Fund, said the idea is attractive because so many Americans have problems finding a primary care doctor and find inefficient and uncoordinated care when they enter the health care system. At the same time, primary care doctors are working on what one audience member described as a "hamster wheel" of longer hours for lower wages, and young residents are not attracted to such a regime.

A January report by the Commonwealth Fund proposed policy options for cost savings in the health care system totaling $2 trillion over 10 years, and a quarter of that was tied to changes in the primary care system, said Abrams. Commercial health plans in 49 states are testing medical home pilot programs.

Patient-centered medical homes are "the vehicle right now to strengthen primary care," Abrams said.

But will they really save money? Studies of some large health systems like Geisinger that have used the model found major savings. But in February 2012, another set of researchers found less evidence for savings in a study commissioned by the Agency for Healthcare Research and Quality.

Meredith Rosenthal, a professor of health economics and policy at the Harvard School of Public Health, said it's going to take more time to determine how much can be saved by medical homes. Getting broad participation from a variety of payers, including insurers and public programs, is important, as is getting them to contribute funds to physician practices in order to help make the changes work, she said. The most cost savings are found when there are fewer emergency department visits and fewer hospitalizations for chronic illnesses, she said.

Small primary care practices can make great strides with adequate financial and technical support, said Rosenthal. Success is more likely when there are strong ties with hospitals and specialists, she added, but ultimately may depend on larger payment reforms moving the system away from fee-for-service.

Sean Cavanaugh, acting deputy director of programs and policy at the Centers for Medicare and Medicaid Services (CMS), said it's important to have many different types of payers involved in a medical home model because a single payer can't pay practices enough in incentives to transform the office. CMS and its Innovation Center are in the midst of a comprehensive primary care initiative launched late last year in practices in seven markets across the country with about 313,000 Medicare beneficiaries served. In the program, Medicare offers bonus payments to doctors who do a better job of coordinating care.

Robert Graham, a research professor of health policy at George Washington University and a former federal health official, said the idea of medical homes has only very recently been put to large-scale tests and it's very difficult to make a "huge amount of change" in just a few years. Primary care doctors who felt the way they practiced was not sustainable were the ones who pushed the medical home concept, he said.

"This movement came from the provider community, and it will continue to be driven by the provider community," he said.

By John Reichard, CQ HealthBeat Editor

April 29, 2013 -- The Brookings Institution recently released a new plan for bending the health spending cost curve by ending fee-for-service payments in Medicare over the next decade, among other steps.

Signing on to the report were a number of figures with solid left-leaning credentials, along with a number of prominent GOP analysts who are more traditional Republicans not associated with the tea party movement.

On the Democratic side, the lineup includes former Senate Majority Leader Tom Daschle, former White House Office of Management and Budget Director Peter Orszag, former Health and Human Services (HHS) Secretary Donna Shalala, Harvard University economist David Cutler, and former Congressional Budget Office (CBO) Director Alice Rivlin.

On the right, the authors include former HHS Secretary Michael O. Leavitt, American Enterprise Institute scholar Joseph Antos, and former CBO Director Dan Crippen. Other signers have had ties to Republican administrations. They include Mark McClellan, former administrator of the Centers for Medicare and Medicaid Services, and Katherine Baicker of the Harvard School of Public Health, who served as an economist in the Bush White House.

"This really began to get momentum with us around the time that the sequester began to take effect," Leavitt said at an afternoon news briefing. There are moments, he said, and the sequester signals one is approaching, "when the pressure becomes big enough that something is compelled to happen. When it does, there needs to be a proposal that Republicans and Democrats can in fact agree upon."

What's in the Middle

The plan outlined reflects agreement among thought leaders in both parties who also have broad experience with the way Washington works, Leavitt asserted. He outlined four areas of common ground:

• Care must be integrated.
• Payment needs to move away from fee for service and toward a system in which providers take on risk, meaning they agree to be responsible for the care of patients for a "capitated," fixed sum of money that is agreed upon ahead of time.
• The principle of consumer choice needs to be an essential component of health care.
• The plan "needed to be scorable" by congressional budgeteers.

The authors said their proposal would save $300 billion in its first decade but more than $1 trillion after the second decade. Leavitt said that he personally thinks that estimate is "fairly conservative."

The authors said the plan also would set the health system on a path to overall health spending that grows at "GDP plus zero," in other words at the growth rate of the Gross Domestic Product.

McClellan said of the plan, "if there's an acronym to remember, it's probably 'MCC.' " The blueprint, like a recent proposal issued by the Bipartisan Policy Center, urges more aggressive steps to coordinate treatment in the Medicare fee-for-service program. But it's arguably more aggressive, urging that within five years there be an option for beneficiaries to enroll in "Medicare Comprehensive Care," or MCC.

"MCC organizations include collaborations of providers that receive a globally capitated, comprehensive payment for their attributed beneficiaries and must meet a set of care quality and outcome performance measures for full payment," the proposal says. The initial benchmark for MCC payment would be based on current beneficiary spending and quality of care. Over time the spending target would be based on GDP.

"Providers can continue to receive traditional fee-for-service payments, though those payments will likely continue to tighten over time and become less optimal for covering the costs of delivering effective care," the plan says. After 10 years, "we expect the vast majority of Medicare beneficiaries to be treated by providers who are paid using MCC methods."

Leavitt said the plan would draw on the experience of the Medicare Part D prescription drug program he helped to launch. Republicans laud that program as a model way to use competition to control costs and improve quality. But the authors of the plan sought to distinguish the proposal from the premium support approach proposed unsuccessfully by Republicans in last fall's elections. They said it would not shift costs to beneficiaries because it would cause overall health spending to be reined in by streamlining care.

The plan also would more closely track quality of care and per capita cost growth in Medicaid. "States that improve quality of care and reduce per capita beneficiary cost trends "would keep a disproportionate share of the savings," a summary says. The current demonstration program to streamline treatment of those dually eligible for Medicare and Medicaid would be converted into a permanent program for "Medicare-Medicaid Aligned Care."

Changes to private insurance "include limiting the tax exclusion of employer-provided health insurance benefits by imposing a cap on federal subsidies that would grow at the same per capita rate as those in Medicare or the exchanges," said a news release. That would generate savings of $120 billion over a decade. Other changes would "promote effective antitrust enforcement and developing more efficient medical liability systems."

• Report

By Rebecca Adams, CQ HealthBeat Associate Editor

April 30, 2013 -- States that operate and maintain upgraded Medicaid eligibility systems as the health law calls for can expect a 75 percent match from the federal government for more of those costs than local officials originally expected.

A "Frequently Asked Questions" document released by the Centers for Medicare and Medicaid Services (CMS) details the type of work that will garner the higher 75 percent matching rate for using and maintaining the updated systems. The usual matching rate for such costs is 50 percent.

Whether or not a state decides to expand Medicaid under the health law, states will be eligible for the 75 percent matching rate once they have redesigned their Medicaid eligibility determination systems as called for in the health care law (PL 111-148, PL 111-152), something which carries a 90 percent reimbursement. All states have to update their systems so that they have the ability to consider applicants' modified adjusted gross income when determining eligibility. States also have to change their systems so that they coordinate coverage with the new marketplaces that will start enrolling people in October.

States can get the 75 percent funding once they update their systems and the changes—which must meet Medicaid IT standards—take effect. The authority for this match does not expire.

The FAQs document explains what kinds of costs qualify for the rate.

States can get the rate for the operation and maintenance of system hardware and supplies, forms, software maintenance and documentation, and personnel costs related to eligibility determinations, including renewals. That includes customer service. The higher funding is also available for initial verification of eligibility, but not for audits or later verifications.

States can also get the higher rate for some costs to run call centers that help people apply for coverage. But not all of the call centers' activities are eligible for the higher rate, so administering that could be complicated. States can get the 75 percent match for call center work that helps with eligibility determinations. But answering questions about plan choices, benefits, and civil rights complaints will only get them the regular 50 percent match.

The FAQs include a chart spelling out which types of work will draw the 75 percent match and which activities (including outreach and marketing, policy development, staff development, appeals of eligibility determinations and audits) will only be eligible for the 50 percent match.

"This announcement is especially good news for state budgets," Tricia Brooks, senior fellow at the Georgetown University Health Policy Institute Center for Children and Families wrote in a blog post. She said that state officials should be especially happy that personnel costs are included.

"While this was greatly needed and hugely appreciated, it is interesting how creative they can get about the statute when they so desire," Matt Salo, executive director of the National Association of State Medicaid Directors, wrote in an email.

By Rebecca Adams, CQ HealthBeat Associate Editor

May 1, 2013 -- The Internal Revenue Service (IRS) is expected to publish a proposed rule on Friday that provides more information about the type of health coverage employers must offer in order to comply with the health care law.

The proposed rule, which the agency released before formally publishing it in the Federal Register, builds on previous regulations. It spells out several designs of health insurance plans that employers can use as a model to make sure that the coverage they are offering is sufficient to meet the requirements under the overhaul. The health care law (PL 111-148, PL 111-152) says that employers can be penalized if they don't offer insurance that covers at least 60 percent of costs and if one of their workers gets tax-subsidized coverage in the new exchanges.

The rule lays out several types of insurance plan designs that federal officials will consider "safe harbors" so that employers will know that the insurance they carry complies with the law if it mirrors those plans.

The safe harbor examples include a plan with a $3,500 combined medical and drug deductible and a $6,000 cap on workers' out-of-pocket costs. Plans would cover 80 percent of costs.

Another allowable plan would require workers to pay up to a $4,500 combined medical and drug deductible, with plans picking up 70 percent of costs. The limit on employees' out-of-pocket costs would be $6,400 and employers would make a $500 contribution to a health savings account.

A third safe harbor would require workers to pay a $3,500 medical deductible and plans would pay 60 percent of costs on medical expenses. Instead of paying a deductible for prescription drugs, workers would pay 25 percent of the costs for drugs through drug co-pays of $10 to $50 for three different tiers of drugs, and 75 percent co-insurance for specialty drugs.

The IRS requested comments on these plan designs that they proposed designating as safe harbors.

The agency also has released a calculator to help employers figure out whether their insurance covers enough costs to meet the law's requirements.

If an employer wants to use a plan design that has unusual features and the value of the plan cannot be determined with the calculator, then the company should hire an actuary to do an analysis.

The agency will collect public comments for 60 days.

By John Reichard, CQ HealthBeat Editor

May 1, 2013 -- A top federal official overseeing exchange implementation recently said that in many cases those applying for insurance coverage in the new exchanges will receive almost immediate eligibility determinations if they enroll online.

"If they are submitting online, in many instances they will receive their eligibility review almost immediately, including the amount of the premium tax credit they can expect to receive for a qualified health plan, or learn if they qualify for Medicaid and CHIP," said Chiquita Brooks LaSure. The new marketplaces are scheduled to start enrolling consumers on Oct. 1.

Brooks LaSure is deputy director for policy and operations at the Center for Consumer Information and Insurance Oversight at the Centers for Medicare and Medicaid Services (CMS). She spoke during an afternoon session at the first "Health Insurance Exchange Summit," held in Crystal City, Va.

Doubts about the how smoothly the enrollment process in exchanges, or marketplaces, have lately dogged CMS officials. In March, a CMS official emphasized that implementation experts are in a mode of trying to complete operations. Some of the niceties will have to be sacrificed for a while given tight implementation time frames, Henry Chao told a group of insurers. He also said the aim at this stage of the process is to avoid "a third world experience" for exchange shoppers.

Insurance applicants can apply online or use paper applications. CMS unveiled a streamlined three-page application for some individuals last week that can be filed either online or through the mail.

Brooks LaSure was asked how long the enrollment process might take if a determination is not made immediately. "There are certainly going to be times when individuals will need to provide more information," she said. "A lot of it is going to depend on whether the issue that needs to be resolved is something where there is some sort of paper transaction between us and the individual, or whether this is something that is going to be handled completely electronically," she said.

Asked if determinations aren't almost immediate whether the process would take days or weeks, she said that someone trying to apply online in the middle of the night but missing a piece of information might be able to submit it electronically the following morning, but other cases will involve an exchange of mail "and that might take longer."

Brooks LaSure also said that brokers will be able to assist consumers with enrolling in the federal exchange that will serve many states. CMS recently released a "frequently asked questions" document on how that process will work. That document in turn is raising questions.

"One of the options is to come in through the [insurer's web] portal and if that happens does the enrollee still get to see the whole menu of choices out there," asked Washington and Lee University Law Professor Tim Jost.

Brooks LaSure said it's important for people to know that there other options. She suggested that there would be a way for consumers to see those options. But Jost said afterward that he's nervous that consumers working through brokers won't necessarily see all the options, thereby undermining the principle of "managed competition" in exchanges that is supposed to control costs and improve quality.

Jost said he's more comfortable that web-based brokers will provide the full menu of choices. The CMS guidance document says that "Web brokers must display all Qualified Health Plans (QHP) available through a Marketplace, irrespective of compensation or appointment arrangements in Federally facilitated Marketplaces," the document says.

"CMS expects that the sort order of, or sorting algorithm for, Qualified Health Plans will not steer a consumer to a particular QHP based upon financial consideration to the web broker," the document states.

"CMS also expects that a web-broker will disclose to the consumer the specific source and nature of web broker compensation and that the compensation does not affect the display of QHP options or the premiums charged."

But in other cases, brokers might work individually with a consumer by going to the website of a specific insurer in order to assist that individual. The CMS document says that "as part of the discussion with the consumer, CMS expects that the agent or broker will inform the consumer that the agent or broker will provide information for certain QHPs with which he or she has a business relationship, but that the consumer could directly access the Federally-facilitated Marketplace website, where additional QHP information and choices are available."

That language suggests the possibility at least that the consumer won't actually see all the choices he or she has.

Brooks LaSure fielded questions on a variety of other topics – and one complaint.

She said, for example, that no guidance on federally facilitated exchanges is forthcoming and that CMS has addressed questions concerning that marketplace in regulations and other documents relating to other types of marketplaces. She said additional "frequently asked questions" documents could be issued, however.

A call center CMS plans to open in June will answer questions 24 hours a day relating to exchanges and insurance coverage options and be opened at the same time the agency relaunches its HealthCare.Gov site to handle many functions under the health law, she said.

The call center will have English and Spanish speakers available to field questions and a "language line" that can arrange to provide answers in more than 150 other languages, she said. She was unable to say, however, where the center will be located and how many employees it will have.

Brooks LaSure also was asked whether she expects any state-based exchanges to drop off the conditionally approved list. She didn't answer, saying only that "we continue to work with all the state-based marketplaces."

The head of the Connecticut exchange had a pointed request to make of Brooks LaSure. He said it was "kind of interesting" to get the news of the option of a three-page enrollment application. "Unfortunately, for states like Connecticut that are fairly far along in development this is a real problem for us because our system integrator is now saying" that it will be hard to go back and make that change.

"Anything that HHS or CMS could do to just sort of stop making changes right now would be very much appreciated," he said.