SAMHSA222s Weekly Financing News Pulse: National Edition
April 1, 2011
4/1/11
1
SAMHSA222s Weekly Financing News Pulse: National Edition National News
Virginia AG222s Brief Requests Full Rejection of Health
Reform; DOL Delays Implementation of Health Claim
Appeals Rule; IRS Issues W
-
2 Health Coverage Reporting Guidance
Obama Administration Releases Proposed Rules Governing ACOs
Sen. Collins Introduces Bill to Establish HHS Medicare Home Health Rate Review
Update: Congress Debating Long-Term CR that May Affect Health Reform
Studies Released
Update: MACPAC Reports on Medicaid Spending
SAMHSA
Publishes Strategic Initiatives Paper
Urban Institute Estimates the Demographics of the Uninsured Population After Health Reform
Implementation
AEI Finds Use of Generic Drugs Could Have Saved Medicaid $329 Million in 2009
Update: GAO Presents Alternatives to the Individual Insurance Mandate
GOP House Committee Members Suggests EERP Could Deplete Cash Reserves in 2011
KFF Finds Raising
Medicare Eligibility Age Cuts Government Costs, Raises OOP Costs
KFF Raises Issues for Assessing Income under Health Reform
RWJF Finds Medicaid Expansion Will Disproportionately Affect Areas with PCP Shortages
Around the Hill: Hearings on Health Financing
To Subscribe to SAMHSA222s Weekly Financing News Pulse, please go to the following link and choose 223Health Care
Financing224: https://service.govdelivery.com/se
rvice/multi_subscribe.html?code=USSAMHSA&origin=http://www.samhsa.go v/enetwork/success.aspx
Note: The March 18 Financing News Pulse: National Edition incorrectly reported SAMHSA222s 2003 financing
data as 2010 MACPAC data.
The story is updated in this edition and we have corrected the previous version
posted to our website ( http://samhsa.gov/financing )
For questions or comments, please contact
Rasheda Parks ( Rasheda.Parks@samhsa.hhs.gov ).
SAMHSA222s Weekly Financing News Pulse: National Edition
April 1, 2011
4/1/11
2
National News
Virginia AG222s Brief Requests Full Rejection of Health Reform; DOL Delays Imple
mentation
of
Health Claim
Appeal
s
Rule; IRS Issues W
-
2 Health Coverage Reporting Guidance:
On
March 28,
Virginia Attorney General Ken Cuccinelli
(R) filed a brief
with the 4th
U.S. Circuit Court of Appeals
,
arguing that the
entire
national health care reform law is unconstitutional
and should be struck down
.
The Court of Appeals is hearing the case after t
he
Obama Administration
challenged
U.S. District Court
Judge Henry Hudso
n222s
original
ruling
, which found only the law222s individual
insurance mandate
unconstitutional
.
Oral arguments in the case begin in May
( The Washington Post, 3/28 ; Kaiser Health News, 3/29 ).
In other health care reform news, o
n March 18, t
he
U.S. Department of Labor
(DOL) announced
that it will delay implementation of health reform rules that protect
consumers appealing
denied or reduced
health benefits. The rules will
require
that insurers provide patients
with
detail
ed
information regarding what treatment/s
are
not covered and why, using the patients222 native language.
The rules
will
also
require
insurers
to
review
urgent coverage appeals within
24 hours
, rather than the
curre
nt 72
-hour requirement. DOL is revising the rules based on comments provided by insurers.
Originally slated to take effect in July, the rules will now take effect in January 20
12
( Kaiser Health News, 3/25 ). Finally, o
n March 29, the Internal Revenue Service
(IRS) released interim guidance explaining
how employers must
report employees222 health care costs on form W-2 tax documentation. IRS officials
are accepting comments
on the guidance, which they emphasize does not tax health benefits
,
but
rather
informs employees of the cost of their coverage
. For most employers, the reporting requirement does
not take effect until 2012, while
employers filing fewer than 250 W-2s
need not report
employee
health
costs
until 2013 ( Accounting Today, 3/
29 ).
Obama Administration Releases Proposed Rules Governing ACOs:
On March 31, the Centers for
Medicare & Medicaid Services
(CMS)
released
a proposed rule
outlining how accountable
care
organization
s
(ACO
s) will
operate under the national health care reform law. ACOs are networks of
physicians and hosp
itals that coordinate patient care with the
aim of achieving three core goals: (1)
better health for individuals; (2) better health
for populations with respect to educating Medicare
beneficiaries about the upstream causes of ill health, including substance abuse; and (3) lower growth in
health care costs by eliminating waste and inefficiencies while not withholding needed care that h
elps
beneficiaries.
Beginning in 2012, t
he law
will initiate
an
ACO system
within Medicare
.
Under the
proposed rules, CMS would develop performance benchmarks for each ACO, determining whether
the
ACO qualif
ies
to receive shared
savings payment
s.
ACOs
will receive shared savings payments if they
spend
less than CMS
222 pre-defined spending goals
while
also
meeting quality benchmarks. The proposed
rule would require ACOs to enter into
three
-year agreements
with participating providers
,
include
primary care professionals, establish a formal structure to receive and distribute shared savings
payments, and
serve
at least 5,000 beneficiaries
.
CMS will measure ACOs
222
performance
using five
metrics: patient and caregiver experience of care; care coordination; patient safety; preventive health;
and at
-risk population and frail elderly health.
U.S. Department of Health and Human Services (HHS)
officials project that the program could serve up to 5 million beneficiaries and save Medicare
$960
million in its first three years. CMS will accept comments on the
proposed
rules for 60 days ( AP via Yahoo!, 3/31 ; Modern Healthcare, 3/31 ; Kaiser Health News, 3/31 ).
Sen. Collins Introduces Bill
to Establish HHS Medicare Home Health Rate Review:
On
March
29,
Sen. Susan Collins
(R
-
ME) introduced legislation (
S. 659) that would establish a process for reviewing
proposed Medicare reimbursement rate cuts for home health care providers. The bill would require the
HHS
Secretary to review such proposals, and would bar their enactment until the Secretary determines
SAMHSA222s Weekly Financing News Pulse: National Edition
April 1, 2011
4/1/11
3
that
the cuts
are necessary. The bill is now before the Senate Finance Committee
( Modern Healthcare, 3/29 ; Kaiser Health News, 3/30 ).
Update:
Congress Debating Long-
Term CR that
May
Affect Health Reform:
Congressional
leaders are currently debating a potential long
-term continuing resolution (CR) th
at would fund the
government through September 30, cutting
spending by
$33 billion from FY2010 levels. Potential cuts
under discussion include eliminating
funding for the implementation of the national health care reform
law. If Congress does not approve a CR, current short
-term funding will expire on April 8 ( The Washington Post, 3/30 ; Kaiser Health News, 3/31 ; The Wall Street Journal, 3/30 ; Kaiser Health News, 3/30 ).
Studies Released
Update: MACPAC Reports on Medicaid Spending:
On March 15, the Medicaid and CHIP Payment
and Access Commission
(MACPAC) presented its first annual Report to the Congress on Medicaid and CHIP .
The report found that Medicaid covered 68 million individuals in FY2010, with state and federal
s
pending totaling $406 billion, or 8.1 percent of federal outlays.
In addition, MACPAC determined that
the Children222s Health Insurance Program (CHIP) covered 8 million children in FY2010 at a total cost of
$11 billion.
Finally, the report also notes that the
U.S. Substance Abuse and Mental Health Services
Administration
(SAMHSA) determined that Medicaid financed 25 percent of behavioral health
treatment in 2003 ( Modern Healthcare
, 3/15 ; MACPAC, 3/15 ).
SAMHSA Publishes Strategic Initiatives Paper:
On March 29, the
U.S. Substance Abuse and Mental
Health Services Administration
(SAMHSA) released Leading Change: A Plan for SAMHSA222s Roles and Actions 2011-
2014 .
Developed using stakeholder input, the report outlines SAMHSA222s goals, priorities,
and action steps for reducing the impact of substance abuse and ment
al illness.
The report explains
how SAMHSA will focus its resources going forward, particularly while implementing the national health
care reform law and the 2008 Mental Health Parity and Addiction Equity Act
(MHPAEA).
SAMHSA222s
report outlines eight strategic initiatives: prevention of substance abuse and mental illness; trauma and
justice; military families; recovery support; health reform; health information technology; data,
outcomes, and quality; and public awareness and support ( SAMHSA via Newswise, 3/29 ).
Urban Institute Estimates
the
Demographics of
the
Uninsured Population
After
Health
Reform
Implementation
:
On March 11, the Urban Institute released a brief
examining
the
demographics of those likely
to be
uninsured following the
full
implementatio
n of the national health
care reform law. The Urban Institute estimates
that the law will reduce the number of uninsured
individuals by
30 million, or 50 percent. The brief
project
s
that 37 percent of those remaining uninsured
will be Medicaid eligible b
ut not enrolled in the program, 25 percent will be undocumented immigrants
,
and 16 percent will be exempt from the law222s individual insurance mandate because they do not have an
affordable health coverage option
( Urban Institute, 3/11 ; Kaiser Health News, 3/25 ).
A
EI Finds Use of Generic Drugs Could Have Saved Medicaid $329 Million in 2009
:
On March
28, the American Enterprise Institute
(AEI) released a report
finding that increased use of generic drugs
in Medicaid could have saved states and the federal government a combined
$329 million in 2009. The
report found that
,
in 2009, Medicaid paid $1.5 billion for 20 popular brand
-name drugs that have
generic equivalents. The authors estimate that
opting for those
brand-name drugs increased costs by
approximately 20 percent. Noting that the national health care reform law222s Medicaid expansion could
SAMHSA222s Weekly Financing News Pulse: National Edition
April 1, 2011
4/1/11
4
add 16 million beneficiaries to the program, the report suggests that the potential for savings through
increased use of generics is substantial ( The Hill, 3/28 ; Kaiser Health News, 3/29 ).
U
pdate: GAO Presents Alternatives to
the
Individual Insurance Mandate:
Following a November
request by Sen. Ben Nelson (D
-
NE),
on February 25,
the
U.S. Government Accountability Office
(GAO)
released a
report
examining alternatives to the national health care reform law
222s individual insurance
mandate
. The report presents the alternatives as potential options for the federal
government in the
event that the insurance mandate is repealed or rejected; however, the GAO222s report does
not endorse
any of the measures or evaluate their effectiveness.
T
he report highlights auto
matic
enrollment in
employer-sponsored health plans, modifications to open enrollment periods
,
and
the imposition of late
enrollment penalties
. The report notes that other options for replacing the mandate include
a public
outreach campaign,
improving access to
health coverage purchasing
assistance, taxing uncompensated
care, and allowing greater variation in coverage rates to entice young individuals to enroll. Finally, the
report offers
additional
alternatives
,
including
barring
federal benefits to
uninsured individuals,
changing insurance broker compensation, and requiring or encouraging credit rating agencies to favor
the insured ( The Hill, 3/25 ).
GOP
House
Committee
Members
Suggests EERP Could Deplete Cash Reserves in 2011
:
On
March 2
3,
Republican
members of the
House Energy and Commerce Committee
released a report
projecting
the future of the national health care reform law222s Early Retiree Reinsurance Program (ERRP).
Under the program, health reform allocates $5 billion for businesses, unions, and state and local
governments to cover health care costs for early retirees between the ages of 55 and 65.
Running
through December 2014, the program
will cover 80 percent of the costs of
retirees222
claims between
$15,000 and $90,000
and offer coverage for early retirees222 spouses and dependents.
The
c
ommittee
found
that the program s
pent
$535 million
on health
care
costs for 253 organizations in 2010. Noting
that over 5,000 additional organizations are
approved to receive future payments from the program, the
authors caution
that the fund could be depleted in 2011
if all approved
org
anizations access funding at a
rate similar to the first 253 ( Bloomberg, 3/24 ; Kaiser Health News, 3/25 ).
KFF
Finds Raising
Medicare Eligibility
Age Cuts Government Costs, Raises OOP Costs
:
On
March 29, the Kaiser Family Foundation
(KFF) released a brief
finding that raising the Medicare
eligibility age from 65 to 67
would result in net federal savings of $7.6 billion
in 2014. However, KFF also
found that the change would cause a
$5.6 billion net increase in 65 and 66 year olds222 out-of
-
pocket
(OOP)
health spending. Additionally, the brief estimates that the change would raise employer retiree
health costs by $4.5 billion
and
cause
a 3 percent premium increase
for Medicare and coverage
purchased through
health reform
222s insurance exchanges ( KFF, 3/29 ; Kaiser Health News,
3/29 ).
KFF
Raises Issues
for
Assessing
Income
under
Health Reform
:
On March 18, KFF
released a brief ,
examining income verification for Medicaid
and
the national health reform law222s insurance exchange
subsidies. Because Medicaid eligibility and the size of an individual222s health subsidy are income-
dependent,
the brief suggests that the timing of an income
assessment
has significant implications for
individuals
222
coverage and costs. T
he
brief concludes that, because changes in income can significantly
affect coverage determinations
,
procedures
should
be put
in place to monitor changes in individuals222
income
over time, ensuring
that they
receive appropriate coverage or subsidie
s ( KFF, 3/18 ; Kaiser Health News, 3/25 ).
SAMHSA222s Weekly Financing News Pulse: National Edition
April 1, 2011
4/1/11
5
RWJF
Finds Medicaid Expansion Will Disproportionately Affect Areas with PCP Shortages
:
On
March 18, the Robert Wood Johnson Foundation
(RWJF) published a study
examining the impact of
the
current
supply of primary care physician
s
(PCP
s
)
on the national health care reform law222s Medicaid
expansion. The authors estimate
the law will result in 16 million new Medicaid beneficiaries by 2019,
with a disproportionate increase in the South and M
ountain
W
est regions. Because those regions
already
have the lowest concentration of PCPs, the authors caution that the expansion will
disproportionately impact demand for PCP services in those areas
. The brief suggests that states
implement delivery system reform and improve access to primary care servic
es
to ensure that the
Medicaid expansion provides adequate and accessible
health services to all
newly eligible residents
( RWJF, 3/17 ; Kaiser Health News, 3/25 ).
Around the Hill: Hearings on Health Financing
Senate Appropriations Subcommittee on Labor, Health and Human Services, Edu
cation, and Related Agencies:
Fiscal 2012 Appropriations: Labor, Health and Human Services, Education, and Related Agencies
March 30, 10:00 a.m. 124 Dirksen
House Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agenc
ies:
Health Care Overhaul Implementation
April 1, 10:00 a.m. 2358-C Rayburn
