SAMHSA222s Weekly Financing News Pulse: National Edition June 25, 2010 6/25/10 1 SAMHSA222s Weekly Financing News Pulse: National Edition National News Administration Releases Regulations for Health Reform Law; Health Plan Website to Launch; Governors and State Attorneys General Seek Permission to File Briefs in Multi- State Lawsuit Poll Finds Fewer Americans Support Repealing Health Care Reform DOJ Awards RSAT Grants DOD Awards SAIC Contract to Continue Substance Abuse Program for Youth Obama Administration Begins New Measures to Combat Health Care Fraud Update: Congress Approves Six- Month Medi care Physician Reimbursement Rate Adjustment, Fails to Approve ARRA FMAP Funding Extension Studies Released Health Affairs Releases Issue Examining National Health Care Reform Law222s Impact Commonwealth Fund Report Finds U.S. Residents Spend More on Health Care than other Developed Nations, Not Correlated to Better Care Commonwealth Fund Examines Ways to Control Medicare and Medicaid Costs IFEBP Survey Finds Employers Will Retain Annual and Lifetime Benefit Limits as Long As Permitted KFF Releases Individual Insurance Market Survey Finding Large Rate Increase Requests KFF Releases MA Data Report, Updated Medicaid Primer, and Brief on Long- Term Medicaid Services Archives of Internal Medicine Study Examines Free Clinics, Suggests Public Financing 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 Kevin Hennessy ( kevin.hennessy@samhsa.hhs.gov ). SAMHSA222s Weekly Financing News Pulse: National Edition June 25, 2010 6/25/10 2 National News Administration Releases Regulations for Health Reform Law; Health Plan Website to Launch; Governors and State Attorneys General Seek Permission to File Briefs in Multi - State Lawsuit: On June 22, the U.S. Dep artments of the Treasury , Labor , and Health and Human Services (HHS) released proposed regulations for components of the national health care reform law. The Obama Administration is referring to the regulations collectively as the 223Patients222 Bill of Rights224. The regulations guarantee health care coverage for nearly all children under age 19 and bar insurers from rescinding coverage except in cases of fraud. The regulations also eliminate lifetime limits on health care coverage and limit annual benefit caps to $750,000; however, the annual cap limit will rise to $2 million in 2014. Additionally, the regulations ensure that patients can choose their physician within their insurer222s network and bar insurers from requiring prior approval for out -of -network emergency care. The proposed regulations are set to take effect September 23 and HHS Secretary Kathleen Sebelius projects that they will increase health insurance pr emiums by no more than 1 percent ( Kaiser Health News, 6/23 ; Kaiser Health News, 6/22 ; Los Angeles Times, 6/23 ). On July 1, HHS will launch a new website, healthcare.gov, to provide basic information on health plans for individuals and small businesses in their area. Beginning in October, the site will also provide consumers with more detailed information on costs and benefits ( Kaiser Health News, 6/23 ). In other health reform news, House Minority Leader John Boehner (R -OH) released a report on June 23, criticizing the national health care reform law. The report challenges provisions in the law, including assertions that it will lower health costs and reduce the deficit, and compares them to a GOP proposal to replace the law ( Kaiser Health News, 6/23 ). Finally, on June 23, Governor C hris Gregoire (D) of Washington, Governor Ed Rendell (D) of Pennsylvania, Governor Bill Ritter (D) of Colorado, and Governor Jennifer Granholm (D) of Michigan sought permission to file amicus briefs in the multi -state lawsuit over the national health care reform law222s individual insurance mandate. All four governors are Democrats from states whose Republican attorneys general joined the multi-state lawsuit. The same day, Democratic state attorneys general from Iowa, Vermont, and Oregon also sought to file briefs in the case. The judge presiding over the case recently said that he would not accept amicus briefs; however, the governors contend that they are in a unique position to challenge the plaintiffs222 argument that the law violates state sovereignty ( Kaiser Health News, 6/24 ; T he Seattle Times, 6/23 ; The Hill, 6/23 ). Poll Finds Fewer Americans Support Repealing Health Ca re Reform: A June Rasmussen Reports poll found that 55 percent of likely voters support repealing the national health care reform law, down from a high of 63 percent in mid -May. Most respondents with insurance reported being satisfied with their current coverage, with 80 percent responding that they consider their coverage to be 223good224 or 223excellent224. However, 44 percent of those with coverage believe that the law will force them to change their coverage. Overall, 52 percent of respondents believe the law will be 223bad for the country,224 39 percent believe it will be 223good for the country,224 and 2 percent believe it will have no impact ( Rasmussen Reports, 6/21 ). D OJ Awards RSAT Grants: The U.S. Department of Justice222s (DOJ) Bureau of Justice Assistance (BJA) awarded a total of $28.4 million in grants to states and U.S. territories under the Residential Substance Abuse Treatment (RSAT) for State Prisoners Program. In 2009, DOJ a llocated $9.7 million for the program. The grants fund the development and implementation of RSAT programs in state and local correctional and detention facilities. Under the RSAT program, DOJ awards funding to programs that last six to 12 months, house participating prisoners separately from the general population, focus on the inmates222 substance abuse, and develop inmates222 skills to overcome their substance abuse and related SAMHSA222s Weekly Financing News Pulse: National Edition June 25, 2010 6/25/10 3 problems. DOJ awarded grant funds using a formula based on the proportion of the U.S. prisoners held in the state ( DOJ ). D OD Awards SAIC Contract to Continue Substance Abuse Program for Youth: The U.S. Department of Defense (DOD) awarded Science Applications International Corp. (SAIC) a contract to continue substance abuse counseling for adolescent family members of active duty U.S. military personnel. SAIC has managed the program since it began in 1987. The contract is worth up to $80 million and could last up to 4.5 years ( Washington Business Journal, 6/24 ). Oba ma Administration Begins New Measures to Combat Health Care Fraud: On June 18, President Barack Obama222s Administration released a memo announcing the creation of a 223Do Not Pay List224 designed to prevent fraudulent acquisition of federal funding. The memo requires all federal agencies to consult a series of federal databases to verify the validity of federal funding requests before awarding or paying any funds. Additionally, the administration announced that Centers for Medicare & Medicaid Services (CMS) will be the first agency to utilize fraud mapping software, originally developed by the Recovery Accountability and Tran sparency Board to monitor the distribution of funding under the American Recovery and Reinvestment Act (ARRA). Federal officials say that Medicare and Medicaid made approximately $65 billion in improper payments in FY 2009 and President Obama aims to redu ce Medicare fraud by 50 percent by 2012 ( Kaiser Health News, 6/24 ; Government Information Sec urity, 6/23 ; WhiteHouse.gov, 6/18 ). Update: Congress Approves Six - Month Medicare Physician Reimbursement Rate Adjustment, Fails to Approve ARRA FMAP Funding Extension: On June 24, the U.S. House approved the six- month adjustment of the Medicare physician reimbursement rate that the U.S. Senate approved on June 18. The measure will increase physician reimbursement rates 2.2 percent through November; however, without further Congressional action, lawmakers project that physicians will face a 23 percent cut in Medicare reimbursement rates in December. Legislators estimate that the rate increase will cost $6.5 billio n but note that the cost is fully offset by reductions in other spending. In addition, the current reimbursement adjustment is retroactive to June 1. The measure now goes before President Barack Obama . Also on June 24, Senate Democrats failed to overcom e a GOP filibuster of the American Jobs and Closing Tax Loopholes Act , which originally contained the Medicare physician reimbursement rate increase. Legislators removed the rate adjustment from the bill to expedite its approval and reduced the scope of t he legislation in an attempt to secure passage. The original version contained $24 billion in additional American Recovery and Reinvestment Act (ARRA) Federal Medical Assistance Percentage (FMAP) funding through June 30, 2011; however, the version that fa iled to overcome the filibuster on June 24 would have reduced the ARRA FMAP funding extension to $16 billion. Senior Democrats say it is unlikely they will attempt to pass the measure again before the July 4th Congressional recess ( The New York Times, 6/24 ; NPR, 6/24 ; Politico, 6/24 ; The Hill, 6/24 ; The Wall Street Journ al, 6/25 ; Los Angeles Times, 6/25 ; The W ashington Post, 6/25 ). Studies Released Health Affairs Releases Issue Examining National Health Care Reform Law222s Impact: The June issue of Health Affairs examines implementation issues for the national health care reform law. Articles within the issue examine the impact of the law on insurance, federal and state governments, and employers. Health Affairs offers insight into the states222 role in reform, especially states222 role in expanding Medicaid, as well as the law222s impact on payment and delivery reform. The issue also SAMHSA222s Weekly Financing News Pulse: National Edition June 25, 2010 6/25/10 4 highlights the aspects of the law that may slow health care cost growth and identifies steps that government and the private sector can take to facilitate the law222s success ( Kaiser Health News, 6/18 ). C ommonwealth Fund Report Finds U.S. Residents Spend More on Health Care than other Developed Nations, Not Correlated to Better Care : On June 23, the Commonwealth Fund released a report comparing the health care systems of the U.S. and six other developed nations. The report found that U.S. health care spending in 2007 was $7,290 per -person, more than double that of the other six nations surveyed. New Zealand spent $2,454 per - person, Britain spent $2,992, the Netherlands spent $3,837 p er-person, Germany spent $3,588 per -person, Canada spent $3,895 per -person, and Australia spent $3,357 per -person. The study examined health care quality, efficiency, access, and equity, and the ability of residents to lead long, healthy, productive lives . The Netherland222s health care system ranked the best overall, while the U.S. system ranked the worst ( Reuters, 6/23 ; Kaiser Health News, 6/23 ). Commonwealth Fund Examines Ways to Control Medicare and Medicaid Costs: On June 8, the Commonwealth Fund released a brief examining the issues facing the new Center for Medicare and Medicaid Innovation (CMI). The national health care reform law created CMI to develop new payment models and improve health care delivery under Medicare and Medicaid. The brief outlines the challenges CMI will face in improving quality while slowing cost growth and offers suggestions for improving the process of developing new payment models ( Kaiser Health News, 6/18 ; Commonwealt h Fund, 6/8 ). IFEBP Survey Finds Employers Will Retain Annual and Lifetime Benefit Limits as Long As Permitted: A survey by the International Foundation of Employee Benefit Plans (IFEBP) found that most employers do not plan to eliminate annual or lifetime caps on health benefits until required to do so by the national health care reform law. The reform law bans lifetime benefit caps and restricts the use of annual caps beginning in 2011. The law also further restricts annual limits on health benefits beginning in 2014. The survey found that only 4 percent of employers plan to remove benefit caps before they are required to do so. The survey also found that 48 percent of employers intend to redesign their benefit plans to avoid the reform law222s tax on 223Cadillac224 health plans. Finally, the survey found that 87 percent of employers plan to continue offering employee health benefits ( Life and Health Insurance News, 6/21 ). KFF Releases Individual Insurance Market Survey Finding Large Rate Increase Requests: On June 21, The Kaiser Family Foundation (KFF) released an individual health care coverage survey , finding that insurers in the individual market requested rate increases averaging 20 percent. The survey examined premiums and deductibles nationwide as well as individuals222 attitudes toward their coverage. Over 50 percent of respondents reported difficulty paying their premiums and out -of -pocket costs. In addition, those with preexisting conditions were more likely to report problems with their coverage and uncertainty about its stabil ity than were those without preexisting conditions. Forty -nine percent of individuals that had someone with a preexisting condition covered on their policy reported difficulty getting their insurer to pay their claims, compared to 28 percent of those whos e policies did not cover anyone with a preexisting condition ( KFF, 6/21 ). KFF Releases MA Data Report, Updated Medicaid Primer, and Brief on Long- Term Medicaid Services: On June 22, KFF released a report examining 2010 data on Medicare Advantage (MA) plan SAMHSA222s Weekly Financing News Pulse: National Edition June 25, 2010 6/25/10 5 enrollment patterns and trends. As of March 2010, the report found that 11.1 million individuals, or one-quarter of all Medicare beneficiaries, were enrolled in MA plans. In March 2009, 10.5 million beneficiaries were enrolled in MA plans. The report notes that, although most Medicare beneficiaries have numerous MA plans available to them, enrollment is concentrated among a small number of insurers in almost every state. KFF also released an updated version of its Medicaid primer , outlining the structure of Medicaid, who the program covers, the services it provides, and its costs. Additionally, the primer explains the effects of the national health care reform law on Medicaid. Finally, KFF released a brief examining a proposal to shift Medicaid long-term care from insti tutional settings to home and community - based (HCBS) programs. The brief examines the provisions of the national health care reform law that expand HCBS benefit options and eligibility criteria as well as the financial incentives the law creates for state s that shift such care to HCBS programs ( KFF, 6/22 ; KFF, 6/22 ; KFF, 6/4 ). Archives of Internal Medicine Study Examines Free Clinics, Suggests Public Financing: On June 14, the Archives of Internal Medicine released a study examining free health clinics caring for the uninsured. The study found that 1,007 such clinics operate in 49 states and the District of Columbia, serving 1.8 million uninsured individuals annually. The study examined the clinics222 structures, revenue sources, patient profiles, operations, services, and staff. The researchers determined that the average operating budget for a free clinic was $287,810. The authors suggest that policymakers integrate the clinics with other safety -net providers or provide them with direct public funding support ( Kaiser Health News, 6/18 ; Archives of Internal Medicine, 6/14 ). Around the Hill: Hearings on Health Fin ancing Senate Armed Services Committee : Preventing Military Suicides June 22, 9:30 a.m., G-50 Dirksen House Oversight and Government Reform Subcommittee on Domestic Policy : Medical Treatment for Drug Addiction June 23, 10:00 a.m., 2154 Rayburn House Nature Resources Committee : Health Benefits for Retired Coal Miners June 23, 10:00 a.m., 1324 Longworth House Energy and Commerce Subcommittee on Health : MedPAC222s June 2010 Report To Congress: Aligning Incentives In Medicare June 23, 2:00 p.m., 2123 Rayburn House Veterans222 Affairs Subcommittee on Health : VA Rural Health Issues and Technology June 24, 10:00 a.m., 334 Cannon Senate Veterans222 Affairs Committee : Veterans222 Claims Processing July 1, 9:30 a.m., 418 Russell House Veterans222 Affairs Subcommittee on Oversight and Investigations : Veterans222 Suicide Prevention Outreach Efforts July 14, 10:00 a.m., 334 Cannon SAMHSA222s Weekly Financing News Pulse: National Edition June 25, 2010 6/25/10 6 House Veterans222 Affairs Subcommittee on Oversight and Investigations : Gulf War Illness July 27, 10:00 a.m., 334 Cannon