SAMHSA222s Weekly Financing News Pulse: National Edition August 6, 2010 8/6/10 1 SAMHSA222s Weekly Financing News Pulse: National Edition National News HHS Announces $1 Million State Insurance Exchanges Grants; Reform Measure Allows More Health Care Facilities to Purchase Cheaper Medicaid Drugs; Federal Judge Rules Virginia AG222s Lawsuit May Proceed Rasmussen Reports Poll Finds More Americans Think Health Reform 223Bad224 for Ame rica Rep. Graves Introduces Bill to Defund Health Reform Bill to Repeal Health Reform222s New Business Reporting Procedures Fails Update: Senate Approves ARRA FMAP Funding Extensio n, House to Return From Recess to Vote DOL Withdraws Proposed Regulations Empowering State and Local Governments to Mandate Employer- Sponsored Coverage Studies Released Obama Administration Releases Annual Trustees Report on Medicare Trust Funds, Finds Medicare Will Improve Under Reform CMS Estimates Health Reform Will Save Medicare $575 Billion Over 10 Years GAO Finds Inconsistency in CMS Review of Medicaid Managed Care Rates KFF Examines State Medicaid Directors222 Concerns Over Medicaid Expansion KFF Examines Children222s Coverage Under Medicaid and CHIP, Public Coverage Increased During Recession Commonwealth Fund Health Care Opinion Leaders Survey Finds Broad Support for Payment Reform 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/enetwo rk/success.aspx For questions or comments, please contact Rasheda Parks ( Rasheda.Parks@samhsa.hhs.gov ). SAMHSA222s Weekly Financing News Pulse: National Edition August 6, 2010 8/6/10 2 National News HHS Announces $1 Million State Insurance Exchanges Grants ; Reform Measure Allows More Health Care Facilities to Purchase Cheaper Medicaid Drugs; Federal Judge Rules Virginia AG222s Lawsuit May Proceed : On July 29, U.S. Department of Health and Human Services (HHS) officials announced the availability of grants for states establishing health insurance exchanges. To promote marketplace competition and lower costs for consumers, the national health care reform law requires insurance exchanges in all states starting in 2014. Each state may establish its own exchange, create a multi-state exchange with other states, or allow HHS to establish one on its behalf. Under the grant program, each state may receiv e up to $1 millio n and s tates must file applications with HHS no later than September 1 . H HS is also seeking public comment on insurance exchange standards until October 4 ( Kaiser Health News, 8/2 ; HHS, 7/29 ). On August 2 , a health care reform provision allowing certain health care facilities to participate in Medicaid 222s 340 B program took effect. The 340 B program provides discounted brand- name drugs for outpatient s . Under the new provision, c hildren222s hospitals, freestanding cancer centers, critical access hospitals, rural referral hospitals, and sole community hospitals may now participate in the program . HHS officials estimate that 1,500 facilities are eligible to join the program under the expansion and that participating facilities will reduce their prescription drug costs by an average of 20 to 50 percent. Providers are eligible to join the program until September 30 ( The Hill, 8/2 ; Kaiser Health News, 8/3 ). Finally, on August 2 , U.S. District Court Judge Henry E. Hudson ruled t hat Virginia Attorney General Ken Cuccinelli222s (R) lawsuit over the national health care reform law222s individual insurance mandate may proceed , denying a motion by the U.S. Department of Justice (DOJ) to dismiss the suit. Judge Hudson ruled that the suit raises legitimate constitutional issues and that Virginia has standing to contest the law because the state is defending a law making it illegal to require state residents to purchase health insurance. Hearings on the case are scheduled for Oct ober 18 ( Kaiser Health News, 8/ 3 ; AP, 8/ 3 ; The Washington Post, 8/3 ). Rasmussen Reports Poll Finds More Americans Think Health Reform 223 Bad 224 for America : The latest Rasmussen Reports poll found that support for repealing national health care reform remains steady at 59 percent. Fifty - seven percent of likely voters believe that the law will be 223bad224 for America, the highest percentage since late March , while 32 percent believe that the law will be 223good224 for the country. In addition, t he number of insured voters that believe it is at least 223somewhat likely224 that they will have to change their insurance because of reform has increased from 40 percent in July to 51 percent in August ( Rasmussen Reports, 8/2 ). Re p. Graves Introduces Bill to Defund Health Reform: On July 27, Rep. Tom Graves (R- GA) introduced legislation ( H.R. 5882 ) to defund the national health care reform law. The bill would prohibit Congress from appropriating funds to implement any provisions of the Patient Protection and Affordable Care Act or the Health Care and Education Reconciliation Act of 2010 . The bill has been referred to the H ouse Energy and Commerce, Ways and Means , Education and Labor , The Judiciary , Natural Resources , and Administration Committees for consideration. A pproximately 155 candidates for Congressional seats in the upcoming November elections have signed a pledge to defund the law ( Politico, 8/2 ; Kaiser Health News, 8/2 ). Bill to Repeal Health Reform 222s New Business Reporting Procedures Fails: On July 30, the U.S. House rejected legislation ( H.R. 5982 ) that would have repealed a section of the national health care reform law requiring businesses and tax - exempt organizations to follow new procedures to report purchases of goods to the I nternal Revenue Service (IRS). Created to raise funds for health care reform SAMHSA222s Weekly Financing News Pulse: National Edition August 6, 2010 8/6/10 3 by reducing the underreporting of business income , federal officials project the measure will raise $13.7 billion over 10 years. The bill failed because the House could not reach a consensus on the mechanisms for offsetting the lost revenue ; Rep ublicans wanted to change other aspects of the health reform law and Democrats wanted to close tax loopholes for companies with foreign operations ( The Post- Star , 7/30 ; THOMAS ). Update: Senate Approves ARRA FMAP Funding Extension, House to Return From Recess to Vote: On August 5, the U.S. Senate approved a measure ( H.R. 1586 ) to provide states $26.1 billion in education and Medicaid funding. The bill includes a $16.1 billion extension of American Recovery and Reinvestment Act (ARRA) Federal Medical Assistance Percentage (FMAP) funding. Originally, the ARRA FMAP funding incr eased the base federal payment for Medicaid by 6.2 percent with further adjustments dependent on states 222 unemployment rate s. The extension lowers the base increase to 3.2 percent in the first quarter of 2011 and reduces it to 1.2 percent in the second qua rter. The U.S. House will return from its recess temporarily on August 10 to vote on the bill ( CQ Politics, 8/5 ; Kaiser Health News, 8/5 ; The Hill, 8/4 ; Politico, 8/4 ). DOL Withdraws Proposed Regulation s Empowering State and Local Governments to Mandate Employer -Sponsored Coverage: The U.S. Department of Labor (DOL) has withdrawn proposed regulations that would have empowered state and local governments to require businesses to offer employee health coverage or pay into a government health program. The regulations would have authorized programs such as Healthy San Francisco . Healthy San Francisco requires employers to pay a c ertain amount toward employees222 health care or pay into a city fund to cover services offered under the program. DOL officials were developing the regulations before the passage of the national health care reform law but plan to re assess the need for such regulations in light of health care reform ( The Hill, 8/3 ). Studies Released Obama Administration Releases Annual Trustees Report on Medicare Trust Funds, Finds Medicare Will Improve Under Reform: On August 5, the U.S. Social Security Administration (SSA) released the 2010 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds . The report found that health reform will improve Medicare 222s solvency , projecting that Medicare222s Hospital Insurance Tru st Fund will remain solvent until 2029. The 2010 report estimates that the fund will remain solvent 12 years longer than predicted before the passage of health care reform . The report also estimates that , in 2011 , Medicare trust fund revenue will exceed expenditures; however , that projection is predicated on the successful impl eme ntation of health reform and 223assumed e conomic recovery.224 The report states that Medicare still requires further reforms to attain long - term fiscal stability . Additionally, the report estimates that one - quarter of Medicare Part B beneficiaries will be subject to 223unusually large224 premium increases in 2011 while the remaining beneficiaries222 premium increases are capped because they are indexed to social security benefits ( Kaiser Health News, 8/5 ; Social Security Administration, 8/5 ; Kaiser Health News, 8/5 ; The Wall Street Journal, 8/5 ; The New York Times, 8/5 ). CMS Estimates Health Reform Will Save Medicare $575 Billion Over 10 Years : On August 2, the Centers for Medicare & Medicaid Services (CMS) released a report highlighting the national health care reform law 222s Medicare savings . The report estimates that health reform will save Medicare $8 billion through 2011 and $575 billion over 10 years. In addition, CMS project s that spending cuts under reform will reduce annual Medicare spending growth from 6.8 percent to 5.3 percent and reduce average SAMHSA222s Weekly Financing News Pulse: National Edition August 6, 2010 8/6/10 4 annual premium s by nearly $200 by 2018. T he report assumes that Congress will not avoid the scheduled 21 percent Medicare physician reimbursement rate reduction ( The Hill, 8/2 ; Kaiser Health News, 8/3 ). GAO Finds Inconsistency in CMS Review of Medicaid Managed Care Rates : On August 4, the U.S. Government Accountability Office (GAO) released a report finding regional gaps in the oversight and data collection tools used to ensure the actuarial soundness of Medicaid managed care organizations 222 rates . The report found that current CMS regulations lack standards governing the data used to set those rates and do not require states to report on the quality of the data they provide to CMS. In particular, the GAO found that Tennessee received $5 billion in annual federal funds for rates that were not certified by an actuary . In addition, the GAO found tha t Nebraska222s Medicaid program has not reviewed its managed care rates since the implementation of new regulations for actuarial rate review . The report notes that CMS has already taken ste ps to address these issues but suggests that further reforms are needed. The GAO recommends that CMS track states222 compliance with requirements for actuarial rate review and implement regulations to verify the quality of state data used to determine Medic aid managed care rates ( GAO, 8/4 ; The Hill, 8/4 ; Kaiser Health News, 8/5 ). KFF E xamines State Medicaid Directors222 Concerns Over Medicaid Expansion : On August 2, the Kaiser Family Foundation (KFF) released a report presenting interviews with state Medicaid directors concerning the implementation of the national health care reform law222s Medicaid expansion. The report found that Medicaid directors have con cerns regarding funding for the expansion, the administrative burden placed on states, and the availability of providers to treat newly eligible beneficiaries . Medicaid directors also expressed concern regarding the uncertainty of the extension of ARRA FM AP funds ( KFF, 8/2 ). KFF Examines Children222s Coverage Under Medicaid and CHIP , Public Coverage Increased During Recession : On July 26, KFF released a brief examining the most recent national data on children222s health coverage , focusing on children222s participation in Medicaid and the Children222s Health Insurance Program (CHIP). KFF found that , d uring the 2008 economic recession, the number of uninsured children declined because of an increase in public coverage. The brief notes that , although the two programs cover nearly one third of the nation222s children, 8.1 million children remain uninsured. KFF also notes that many uninsured children are currently eligible for public coverage and suggests enhancing efforts to identify and enroll them ( KFF, 7/26 ; Kaiser Health News, 7/30 ). Commonwealth Fund Health Care Opinion Leaders Survey Finds Broad Support for Payment Reform: On July 26, the Commonwealth Fund released a brief examining the results of its H ealth Care O pinion L eaders S urvey. The survey found that health car e financing plays an important role in implementing accountable care organizations (ACOs). When asked to identify 223significant barriers224 to ACO implementation, 93 percent chose current financial interests and incentives, 86 percent chose a lack of financial incentives for integration of services , and 75 percent chose the mis alignment of public and private payer policies and practices. The brief notes that the national health care reform law contains many provisions designed to coordinate and integrate care to improve service delivery ( Commonwealth Fund, 7/26 ; Kaiser Health News, 7/30 ) . Around the Hill: Hearings on Health Financing Congress is out of session for the August recess. The Senate will reconvene Monday, September 13 and the House will reconvene Monday , August 9 in a pro forma session. SAMHSA222s Weekly Financing News Pulse: National Edition August 6, 2010 8/6/10 5 Senate Veterans222 Affairs Committee : Veterans222 Health Legislation Markup August 5, 9:30 a.m., 418 Russell 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