On March 12, 2012, HHS finally released the long-awaited Affordable Health Insurance Exchanges final rule that was published in the Federal Register on March 27. The Affordable Care Act (ACA) mandates that all states set up a state-run insurance exchange to be ready to go live in January 2014 or else the federal government, through HHS, will step in and implement an exchange pursuant to its discretion. The states have until January 1, 2013 to prove to HHS that they have taken the steps to create an operable exchange pursuant to the standards and that they will be ready to go live in January 2014. If HHS finds that the state is unprepared or not complying with the minimum standards, HHS will step in and create the exchange under its own direction.
The exchange is designed to allow consumers and small businesses the option to choose a private health insurance policy through a web-based platform. Kathleen Sebelius, the Secretary of HHS, states in a news release that the new exchange policies will “give states the flexibility they need to design an exchange that works for them,” and the exchanges will provide a marketplace for Americans for “one-stop shopping for health insurance,” which the federal government hopes will drive down costs for consumers by increasing competition among insurers and improving access to health care. Individuals that purchase a qualified health plan through an exchange may be eligible for a tax credit according to a recently released regulation by the IRS, known as the health insurance premium tax credit.
According to HHS’s news release, the final rules provides guidance to the states on how to structure the exchanges in two keys areas: (1) setting standards for establishing Exchanges, setting up a Small Business Health Options Program (SHOP), performing the basic functions of an Exchange, and certifying health plans for participation in the Exchange; and (2) establishing a streamlined, web-based system for consumers to apply for and enroll in qualified health plans and insurance affordability programs. The final rule also provides details on the roles of agents and brokers in the exchange and provides for privacy protections for enrollee data. The private insurance industry is pleased that the final rule also allows enrollees of the exchange to purchase insurance through private entities and still have access to the subsidies. Essentially, the final rule tasks the states with setting up an acceptable exchange and provides the standards and framework for doing so. Future rules by HHS will have to address how HHS will establish exchanges in states that do not implement one since this is not dealt with in this final rule.
To date, HHS has issued nearly $670 million to thirty three states and the District of Columbia to get them started on setting up an exchange. HHS announced, as of March 2012, that the “majority of the states have taken significant steps in building Exchanges.”
HHS’s new release fails to mention the backlash among a number of states (mainly Republican-led) and in general, from opponents of the ACA, that view the Act as unconstitutional and an abuse of federal power. Most recently, the Republican governor of Wisconsin, Scott Walker, has reportedly turned down $37 million in federal funding to set up the state’s exchange. Governor Walker stated that he will not begin implementing an exchange until the Supreme Court has issued a decision on the constitutionality of the ACA. Walker, like many Republicans, opposes the ACA and the creation of an exchange on the grounds that it is an “encroachment of Obamacare in our state, which has the potential to have a devastating impact on Wisconsin’s economy.” In defense of his position, Walker refers to Wisconsin’s reputation as a health care innovator and its success in achieving a high level of health insurance coverage, without the involvement of the federal government.
For Wisconsin and the several other states that have refused federal funding, including Kansas and Oklahoma, the regulations provide that HHS will step in and set up an exchange if the states refuse to take such action. Given the continued opposition across the country surrounding the ACA’s provisions, the backlash among the states is not surprising and will certainly continue until the Supreme Court makes its ruling on the constitutionality of the individual mandate and the Medicaid expansion provision in the upcoming months. If the Supreme Court rules that the individual mandate is unconstitutional and that the provision is not severable from the remainder of the Act, then the entire Act including the state exchange provisions will be struck down.
Whether you align yourself with the Republicans or Democrats, or another political party of choice, it is important to remember — politics aside — that 17.7 percent of Americans in December 2011 were uninsured. Even if the Supreme Court strikes down the whole Act or parts of the ACA, future action and legislation will be necessary to remedy the sad state of health care coverage in America and improve the quality and delivery of health care services.
HHS Seeks to End Healthcare Disparities, Announces Pipeline Program for Public Health and Biomedical Science
Case Western’s Disparities blog has a brief article/announcement well worth considering. They write:
The Department of Health and Human Services has devised a plan to end racial and ethnic disparities throughout the United States. The new plan will focus on recruiting undergraduates from underserved communities and steer them towards a careers in public health and biomedical science.
The Case Western blog links to an article from Medpage Today which adds that in addition to the pipeline program, HHS has come forward with a plan
for allocating more resources to community health centers, a call to train more people in medical interpretation to help serve patients with a limited command of English, and a push for reimbursement for interpretation services.
Medpage Today also notes that
The strategy tackles a long-acknowledged and persistent problem in the U.S. healthcare system: racial and ethnic minorities are more likely than whites to experience poorer quality care; more likely to suffer from serious illnesses, such as diabetes or heart disease; and less likely to get preventive care.
The report calls attention to racial and ethnic disparities in the healthcare workforce. According to a 2008 report from the Association of American Medical Colleges, although Hispanics account for about 16% of the total U.S. population, they make up less than 6% of all physicians. African-Americans account for a similar percentage of the U.S. population, but only a little more than 6% of all doctors are black.
I think Case Western gets it right when they say that
This approach is to attempt to diminish these disparities by creating grounds for all to become a part of the ever growing field of public health and biomedical sciences and be able to relate to the populations in which the racial and ethnic occur and provide better care while doing so.
Without diminishing the need for technical ability, to be able to understand and relate to a patient is no small thing. To be able to effectively communicate is key in a medical setting.
Last summer I wrote the following:
A recent study highlighted in the Wall St. Journal’s Health Blog points to both a discrepancy in perception between hospital doctors and their patients and a failure to communicate.
The study was conducted by Douglas P. Olson, MD and Donna M. Windish, MD, MPH. The authors noted as “Background” in the study abstract that:
Hospital surveys indicate lack of patient awareness of diagnoses and treatments, yet physicians report they effectively communicate with patients. Gaps in understanding and communication could result in decreased quality of care. We sought to assess patient knowledge and perspectives of inpatient care and determine differences from physician assessments.
The results of the study were derived from two validated questionnaires given to inpatients treated by “house doctors” over a course of roughly eight months at one hospital.The corresponding doctors were also queried. Eighty-nine patients and 43 doctors participated.
The survey – which the authors note is limited by its reach (one institution), patient characteristics (older, indigent and less-educated than average), and general responses, rather than one-to-one-patient-physician comparisons – is published in the Archives of Internal Medicine.
The results? From the abstract:
- Only 18% of patients knew their main doctor by name.
- Sixty-seven per cent of doctors believed their patients knew them by name.
- Fifty-seven per cent of patients knew their diagnosis.
- Seventy-seven per cent of doctors believed their patients knew their diagnosis.
- Fifty-eight per cent of patients thought that physicians always explained things in a comprehensible way.
- Twenty-one per cent of doctors stated they always provided explanations of some kind.
- Sixty-six per cent of patients reported receiving a new medication in the hospital, 90% noted never being told of any adverse effects of these medications.
- Ninety-eight per cent of doctors stated that they at least sometimes discussed their patients’ fears and anxieties.
- Fifty-four per cent of patients said their doctors never did this.
Interestingly enough,the WSJ article notes that the
responses didn’t significantly differ by sex, age, race, language or payment source, for the patients, or level and type of training, for the doctors.
Only 57% of patients knew their diagnosis? Which is to say that 43% did not? 90% not told of potential adverse reactions to new medication?
The study did not take into account the race or linguistic ability of the doctors– just level and type of training. Given the paucity of African American and Hispanic doctors, one wonders if one could have produced a significant number for doctor race and language. But we do know this– as stated above, the healthcare outcomes for racial and ethnic minorities is significantly worse than that of Whites. Is it far-fetched to think that cultural knowledge and linguistic ability– in a practice that requires communication– could lead to better outcomes? I have no belief that the HHS plan is the be all, cure all. But I think it’s a good step in the right direction.
Medpage Today offers the following quote: “Health disparities have burdened our country for too long,” said Assistant Secretary for Health Howard Koh, MD, MPH. “This plan reaffirms and revitalizes a national commitment to helping all persons reach their full health potential.”
Filed under: Cost Benefit Analysis, Cost Control, Drug Pricing, Drugs & Medical Devices, Economic Analysis of Health, Health Reform, HHS, Hospital Finances, Medicare, Medicare & Medicaid, Social Justice, Taxation
One rare point of elite consensus is that the US needs to reduce health care costs. Frightening graphs expose America as a spendthrift outlier. Before he decamped to Citigroup, the President’s OMB director warned about how important it was to “bend the cost curve.” The President’s opponents are even more passionate about austerity.
Journalists and academics support that political consensus. Andrew Sullivan calls health spending a “giant suck from the rest of the working economy.” Gregg Bloche estimates that “the 30% of health care spending that’s wasted on worthless care” is “about the price of the $700 billion mortgage bailout, squandered every year.” He calls rising health spending an “existential challenge,” menacing other “national priorities.” Perhaps inspired by Children of the Corn, George Mason economist Robin Hanson compares modern medicine to a voracious brat:
King Solomon famously threatened to cut a disputed baby in half, to expose the fake mother who would permit such a thing. The debate over medicine today is like that baby, but with disputants who won’t fall for Solomon’s trick. The left says markets won’t ensure everyone gets enough of the precious medical baby. The right says governments produce a much inferior baby. I say: cut the baby in half, dollar-wise, and throw half away! Our “precious” medical baby is in fact a vast monster filling our great temple, whose feeding starves our people and future. Half a monster is plenty.
But when you scratch the surface of these sentiments, you have to wonder: is the overall level of health care spending really the most important threat facing the country? Is it one of the most important threats? There are many ways to raise revenue to pay for rising health costs. Aspects of the Affordable Care Act, like ACOs and pilot projects, are designed to help root out unnecessary care.
I am happy to join the crusade against waste. But why focus on total health spending as particularly egregious or worrisome? Let’s explore some of the usual rationales.
Terrible Tax Expenditures and Suspect Subsidies?
Employment-based insurance gets favorable tax treatment, and much Medicare and Medicaid spending is drawn from general revenues. So, the story goes, medicine’s big spenders don’t have enough “skin in the game.” Once health and wealth are traded off at the personal level (as the Harvard Business School’s Clayton Christensen advocates), people will be much less likely to demand so much care. Government can attend to other national priorities, or individuals will enjoy higher incomes and will be free to spend more.
I respect these arguments to a point, but I worry they partake of the “nirvana fallacy.” If I could be certain that leviathan would repurpose all those wasted health care dollars on infrastructure, or green energy, or smart defense, or healthier agriculture, I’d be ready to end tax-advantaged health insurance in an instant. But I find it hard to imagine Washington going in any of these directions presently.
Giving tax dollars back to taxpayers also sounds great, until one processes exactly how unequal our income distribution is. In 2004, “the top 0.1% — that’s one-tenth of one percent — had more combined pre-tax income than the poorest 120 million people.” To the extent health-related taxes are cut, very wealthy households may see millions per year in income gains; the median household might enjoy thousands of dollars per year. Sure, middle income families will find important uses for those funds (other than bidding up the price of housing and education). But at what price? What if the insurance systems start collapsing without subsidies, and more physicians (who are already expressing a desire to work less) start seeking out pure cash practices? A few interactions with the the very wealthy may be far more lucrative than dozens of ordinary appointments.
Consider the math: billing a $20,000 retainer from each of 50 millionaires annually may be a lot more attractive to physicians than trying to wrangle up 500 patients paying $2000 each—or, worse, getting the money from their insurers. There are about 10 million millionaires in the US; that’s a lot of buying power. One $10,000 score by a cosmetic dentist from such a client could be worth 400 visits from Medicaid patients seeking diagnostic procedures. Providers are voting with their feet, and a Medicaid card is already on its way to becoming a “useless piece of plastic” for many patients. Given those trends, simply reducing health care “purchasing power” generally risks some very troubling outcomes for the very people the health care cost cutters claim to protect. No one should welcome a health care plutonomy, where the richest 5% consume 35% of services, regardless of how sick they are.
Is Anyone Underpaid in Health Care?
Health commentators rightly draw attention to big insurer CEO paydays. Top layers of management at hospitals and pharma firms are also getting scrutiny. Wonks are up in arms about specialist pay. Read more
As we head into a day which promises to bring us the politics of health reform writ large– in the form of a repeal vote staged in the House– I thought it might serve to listen for a moment or two to Health and Human Services Secretary Kathleen Sebelius give an HHS recap of 2010.
There are more than enough pundits engaged in the dynamics of tomorrow’s promised vote, so I’ll opt out for the moment. But I will say this: I’ve listened to a number of commentators refer to the vote in the House as “merely symbolic.” As it concerns present repeal of the health reform law, the vote will prove futile; but to think that that many career politicians were engaging in such an act for mere “symbolic” benefit is to miscalculate badly. These are smart people– smart enough to get, and in many cases stay for decades, elected.
Having said that, there’s a practical side to the HHS overview of 2010 that I rather appreciated. In case you missed it:
Filed under: Compliance, Drugs & Medical Devices, FDA, FDA Center for Devices and Radiological Health, Fraud & Abuse, HHS
On October 1, the Office of the Inspector General (“OIG”) of the U.S. Dept. of Health & Human Services (“HHS”) released its Work Plan for Fiscal Year 2011 (“Work Plan”). Each year, the OIG briefly outlines activities that OIG “plans to initiate or continue with respect to the programs and operations” of HHS. Various offices within OIG conduct audit, evaluation, investigation, enforcement, and compliance activities.
Continuing Work Within OIG
Many of the topics outlined in the Work Plan were included in last year’s plan. Although the repeated inclusion of these areas of focus makes compliance easier for facilities, audits should still be conducted in the following areas:
- Provider-based status
- Observation services (as part of an outpatient visit)
- Part A hospital capital payment
- Critical access hospitals
- Medicare disproportionate share payments
- Duplicate graduate medical education payments
- Hospital readmissions
- Hospital admissions with conditions coded present-on-admission
- Inpatient rehabilitation facility transmission of patient assessment instruments
- Medicare excessive payments
New Issues to be Targeted
“What we’re really looking at are four or five really brand new issues,” said Stephen Miller, JD, chief compliance and privacy officer for Trenton, NJ-based Capital Health System, Inc. for HealthLeadersMedia.com.
- Brachytherapy reimbursement
- Replacement of devices received at no cost or reduced cost
- According to Debbie Mackaman, RHIA, CHCO, regulatory specialist for HCPro, Inc., in Marblehead, MA, “Since the medical devices replacement issue can be a difficult billing procedure to comply with, facilities should certainly do an in-depth process audit in this area.”
- Safety and quality of intensity-modulated radiation therapy (IMRT) and image-guided radiation therapy (IGRT)
- Indicates a responsiveness on the part of OIG to headlines regarding quality concerns. In March, the Nuclear Regulatory Commission fined Philadelphia Veterans Affairs Medical Center $227,500, its second largest fine ever against a medical institution, after “unprecedented number” of radiation errors in treating prostate cancer patients.
- Hospitals’ application of the “three-day rule” and “one-day rule” under the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010
- Many hospitals have had difficulty in billing under the new rules, which redefined what services are related to the admission, and therefore not eligible for Medicare payment within the defined window. According to Mackaman, “IPPS facilities should be vigilant about reviewing the current three-day rule, and the non-IPPS hospitals should review the addition of the one-day rule.” CMS guidance on this topic can be found here.
OIG Review of FDA Administration
As HealthReformWatch previously reported, nine Food & Drug Administration (“FDA”) scientists from the Center for Devices and Radiological Health (“CDRH”) sent a letter to President Obama stating, in relevant part, that:
the scientific review process for medical devices at the FDA has been corrupted and distorted by current FDA managers, thereby placing the American people at risk. Managers with incompatible, discordant and irrelevant scientific and clinical expertise in devices…have ignored serious safety and effectiveness concerns of FDA experts. Managers have ordered, intimidated and coerced FDA experts to modify scientific evaluations, conclusions and recommendations in violation of the laws, rules and regulations, and to accept clinical and technical data that is not scientifically valid.
These scientists also wrote to Congress in 2008, accusing the top FDA officials of “serious misconduct” in ignoring scientist concerns and “approving for sale unsafe or ineffective medical devices,” according to the N.Y. Times.
According to Washington G-2 Reports, OIG also stated on September 29 that “it would re-examine the concerns of those FDA reviewers, and broaden the scope of its inquiry.”
This coming year, OIG intends to investigate CDRH “policies and procedures for resolving scientific disputes about approval of devices.” The Work Plan states that OIG will:
review a sample of administrative files for disputed device decisions and assess the extent to which regulations, policies, and procedures were followed during the dispute resolution process. We will also assess whether CDRH managers and staff are aware of and trained on policies and procedures for resolving scientific disputes.
Additionally, OIG will continue to review FDA oversight of investigational new drug applications, the process for device approval, and oversight of postmarketing surveillance studies of medical devices.