WeeklyFinancingNewsPulseNationalEditionfinal20100827.pdf (PDF | 216.83 kb)
SAMHSA222s Weekly Financing News Pulse: National Edition August 27, 2010 8/27/10 1 SAMHSA222s Weekly Financing News Pulse: National Edition National News CBO Estimates Health Reform Will Save $143 Billion Through 2019, Averting Medicare Physician Reimbursement Rate Reduction Will Cost $330 Billion Through 2020 NIH and VA Award $6 Million for Military Substance Abuse Research HHS Awards $32 Million to Se ven Rural Health Programs DOL Releases Guidance on External Claims Review for Self -Insured Health Plans Medicare to Cover Smoking Cessation Studies Released Urba n Institute Briefs Examine Health Reform222s Cross -State Insurance Purchasing and Cost - Containment Measures NEJM Study Finds Many Children Underinsured Avalere Health Estimates Three Million Seniors Must Switch Medicare Part D Plans Under Health Reform AARP Report Finds Retail Prescription Drug Prices Rising Faster Than Inflation AON Survey Finds Employers Plan to Shift Health Care Costs to Employees in 2011 UBA Survey Finds Employer Health Plan Costs Rising 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/service/multi_subscribe.html?code=USSAMHSA&origin=http://www.samhsa.go v/enetwork/success.aspx For questions or comments, please contact Rasheda Parks ( Rasheda.Parks@samhsa.hhs.gov ). SAMHSA222s Weekly Financing News Pulse: National Edition August 27, 2010 8/27/10 2 National News CBO Estimates Health Reform Will Save $143 Billion Throu gh 2019 , Averting Medicare Physician Reimbursement Rate Reduction Will Cost $330 Billion Through 2020: On August 24, Congressional Budget Office (CBO) Director Douglas Elmendorf responded to Sen. Mike Crapo222s (R -ID) request to provide information on federal savings from the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010. In his letter , Director Elmendorf said that the CBO estimates that both bills will result in net budgetary savings of $143 billion through 2019, including $124 from the health and revenue portions and $19 billion from the education components. In addition, Elmendorf re ported that preventing the scheduled 21 percent Medicare physician reimbursement rate reduction scheduled for December would cost $330 billion between 2011 and 2020. T he letter also notes that the CBO estimates the laws will reduce the projected 2020 deficit by $28 billion ( Health Leaders Media, 8/26 ). NIH and VA Award $6 Million for Military Substance Abuse Research: The U.S. Department of V eterans Affairs (VA) and the National Institute s of Health (NIH) awarded a total of $6 million to 11 research institutions to study substance abuse and related issues among U.S. military personnel, veterans, and their families. The National Institute on D rug Abuse (NIDA), the National Institute on Alcohol Abuse and Alcoholism (NIAAA), and the National Cancer Institute (NCI) will work collaboratively using $4 million from the NIH and $2 million from the VA. The projects will study the causes, screening, i dentification, prevention, and treatment of substance use , abuse, and related problems. As part of the program, researchers will examine treatment -seeking patterns among veterans and explore potential treatment strategies for individuals with co - occurring disorders. Researchers will also study the effectiveness of early intervention in the two months fo llo wing soldiers222 return from war. The recipient institutions are: Brandeis University ; Dartmouth College ; Medical University of South Carolina; the National Development and Research Institutes ; the University of California, San Francisco ; the University of Minnesota ; the University of Missouri; and the VA Medical Centers in West Haven, Connecticut ; Philadelphia, Pennsylvania; Little Rock, Arkansas; and Seattle, Washington ( NIH, 8/26 ) . HHS Awards $32 Million to Seven Rural Health Programs: On August 23, the U.S. Department of Health and Human Services (HHS) awarded $32 million to seven programs administered by the U.S. Health Resources and Services Administration222s (HRSA) Office of Rural Health. The funds include $22 million for the Medicare Rural Hospital Flexibility Program, which support s improvements in quality, financial stability, and service delivery in communities served by Critical Access Hospitals (CAHs). The award also includes $3 million for telemedicine and nearly $1 million to improve veterans222 access to mental health an d other health se rvices . The funds will also support programs that foster the development and expansion of the rural health workforce and improve rural health care delivery ( HHS, 8/23 ; Kaiser Health News, 8/24 ). DOL Releases Guidance on External Claims Review f or Self - Insured Health Plans : On August 23, the U.S. Department of Labor issued interim regulatory guidance on external claims review for non - grandfathered, self -insured, Employee Retirement Income Security Act (ERISA) -covered health plans. DOL222s guidance outlines the process that plan administrators must follow when a beneficiary challenges a denied claim. Under the process, after a claimant request s an external review, plan administrators must conduct a preliminary review, refer the case to an accredited indepen dent review organization, and comply with the external reviewer222s decision . The guidance takes effect for all plan years that begin SAMHSA222s Weekly Financing News Pulse: National Edition August 27, 2010 8/27/10 3 on or after September 23 and remains in effect until the DOL releases future guidance on the federal external review process ( Towers Watson, August 2010 ). Medicare to Cover Smoking Cessation : On August 25, President Barack Obama222s Administration anno unced that Medicare will expand coverage of smoking cessation efforts. Previously, Medicare only covered tobacco -related counseling for beneficiaries already suffering from a disease related to tobacco use. Under the new rules, Medicare will cover two sm oking cessation counseling attempts annually, with up to four individual sessions per attempt. The change affects Medicare Part s A and B, as Medicare Part D already covers smoking cessation medication ( The Hill, 8/25 ; Kaiser Health News, 8/26 ) . Studies Released Urban Institute Briefs Examine Health Reform 222s Cross - State Insurance Purchasing and Cost - Containment Measures: The Urban Institute released two briefs examining provisions of the national health care reform law affecting interstate health insurance purchases . The first brief explains the law222s interstate insurance purchasing provisions , compar ing the law222s provisions to previous proposals for cross -state purchasing . The authors note that the law requires all states to meet minimum insurance regulation standards and explain that states must form compacts with one another if they wish to allow residents to purchase insurance across state lines. The second brief examines the law222s cost containment measures and suggests that the law will result in a significant coverage expansion without accelerating the rate of health care cost increases. However, the author s caution that the law222s impact on cost containment cannot be accurately assessed for several years ( Kaiser Health News, 8/20 ; Urban Institute, 8/13 ; Urban Institute, 8/1 ). NEJM Study Finds Many Children Underinsured: Using 2007 data, the New England Journal of Medicine (NEJM) released a study examining underinsurance among children. The study found that 19.3 percent of all children, or 14.1 million individuals, were underinsured in 2007. Underinsurance was higher among children covered through private insurance than among those enrolled in public insurance programs at rates of 24.2 percent and 14.7 percent, respectively. In addition, the study found that t he most common reason for underinsurance was high out -of -pocket costs ( Business Week, 8/25 ; Kaiser Health News, 8/26 ). Avalere Health Estimates Three Million Seniors Must Switch Medicare Part D Plans U nder Health Reform : An analysis by Avalere Health projects that over three million seniors may be forced to switch their Medicare Prescription Drug Program (Part D) plans as a result of new rules under national health care reform. The Centers for Medicare & Medicaid Services (CMS) released regulations in April that require companies offering multiple Part D plans to ensure there are 223meaningful differences224 between the m . The rules also allow each company to offer only one basic Part D plan and two enhanced Part D plans in each region. Avalere estimates that 2.75 million seniors in basic Part D plans and 350,000 in enhanced Part D plans will have to changes plans. In total, Avalere estimates that up to 3.7 million seniors, or approximately 20 percent of the seniors enrolled in Part D, may be forced to change their plans under the new regulations. The authors also project that many insurers will change their plan offerings and cost-sharing arrangements to allow them to offer multiple plans u nder the requirements ( The Hill, 8/25 ; AP, 8/25 ; Kaiser Health News, 8/25 ). AARP Report Finds Retail Prescription Drug Prices Rising Faster Than Inflation : On August 25, AARP released a report examining retail prices for brand name prescription drugs between 2005 and SAMHSA222s Weekly Financing News Pulse: National Edition August 27, 2010 8/27/10 4 2009. The report found that the cost of the most popular drugs r ose 41.5 percent over that period, while the Consumer Price Index (CPI) increased by only 13.3 percent. For all 217 drugs studied, AARP found that average annual retail prices increased by 8.3 percent in 2009, 7.9 percent in 2008, 7 percent in 2007, and 6.1 percent in 2006. In addition, all but six of the 217 drugs studied had retail price increases higher than general inflation ( AARP, 8/25 ; N ew York Times, 8/25 ; Kaiser Health News, 8/25 ). A ON Survey Finds Employers Plan to Shift Health Care Costs to Employees in 2011: On August 25, Aon Consulting released a survey , which found that 65 percent of employers plan to change their health plans to shift costs to their employees in 2011 . Employers reported plans to use numer ous cost sharing techniques including, raising deductibles, copayments, coinsurance, and out -of -pocket limits. For 2010, 24 percent of respondents said that their health care costs rose less than 5 percent , 33 percent reported that costs rose 5 to 10 perc ent, and 18 percent said that costs increased 10 to 15 percent ( Business Insurance, 8/25 ; Kaiser Health News, 8/26 ). UBA Survey Finds Employer Health Plan Costs Rising: A survey by United Benefit Advisors (UBA) founds that employers222 health p lan costs rose 7.3 percent in 2009. For 2010, UBA found that employers increased employee contributions by 6 percent for family plans and 8 percent for individual plans. On average, employee contributions for family and individual plans totaled $5,300 and $1,350, respectively. The survey also found that the number of consumer- driven health plans (CDHPs) increased by 18 percent in 2010. The survey focused on small and mid -sized firms, examining 17,113 plans offered by 11,413 employers ( Indianapolis Business Journal, 8/25 ; UBA ). Around the Hill: Hearings on Health F inancing Congress is out of session for the August recess. The Senate will reconvene Monday, September 13 and the House will reconvene Tuesday , September 14 . House Veterans222 Affairs Committee : Personality Disorder Discharges: Impact on Veterans222 Benefits September 15, 10:00 a.m., 334 Cannon Senate Veterans222 Affairs Committee : VA Disability Compensation September 23, 9:30 a.m., 418 Russell House Veterans222 Affairs Subcommittee on Health: Veterans Health Administration Contracting and Procurement Practices September 23, 10:00 a.m., 334 Cannon House Veterans222 Affairs Subcommittee on Health: Veterans222 Health Bills September 29, 10:00 a.m., 334 Cannon
