SAMHSA222s Weekly Financing News Pulse: National Edition May 7, 2010 5/7/10 1 SAMHSA222s Weekly Financing News Pulse: National Edition National News Retiree Coverage Subsidies to Begin; States Opt Out of High- Risk Pool Administration; HHS Publishes Interim Rule on Web Portals; Representatives Introduce Bill to Extend Dependent Coverage through FEHB Representatives Introduce Medicare Fraud Legislation HHS Secretary Sends States Letter Urging Investigation of WellPoint Rate Filings, WellPoint to Conduct Third Party Review CBO Projects Doc Fix Will Cost $276 Billion through 2020 IBC Announces Program to Improve Cost and Quality of Care through Physician Pay Representative Introduces Bill for Mental Health and Suicide Prevention Services for IRR Veterans Poll Finds Improvement in Rating of U.S. Health Care System, Increased Confidence in Retaining Current Coverage Update: President Signs Veterans Legislation with Mental Health Components into Law Studies Released Health Affairs Study Finds Coordinating Care Reduces Costs Health Affairs Study Projects Savings through Simplification of Billing GHRI Study Finds Higher Cost of Care for Women who Experience Domestic Violence Input Inc. Releases Analysis Projecting over $5 Billion in Spending on IT for Reform Compliance KFF Releases Three Briefs on Medicar e NAPHS Releases Annual Survey for 2009 AHRQ Reports 10 Percent of Medicaid Patients Require Readmission within 30 Days of Initial Hospitalization 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.s amhsa.go v/enetwork/success.aspx For questions or comments, please contact Kevin Hennessy ( kevin.hennessy@samhsa.hhs.gov ). SAMHSA222s Weekly Financing News Pulse: National Edition May 7, 2010 5/7/10 2 National News Retiree Coverage Subsidies to Begin; States Opt Out of High- Risk Pool Administration; HHS Publishes Interim Rule on Web Portals; Representatives Introduce Bill to Extend Dependent Coverage through FEHB : On Ma y 4, the White House announced that a temporary program to subsidize employer -sponsored coverage of early retirees would begin on June 1 and run until January 1, 2014, when insurance exchanges are scheduled to be operational . The program is funded with $5 billion, and will cover 80 percent of the costs of claims between $15,000 and $90,000 for retirees age d 55 to 64. Employers that receive the federal funds must use the money to lower health care costs for the early retirees , and are required to continue their current contributions to retiree health benefits . U.S. Department of Health and Human Services (HHS) Secretary Kathleen Sebelius projects that 3,000 private employers and 1,500 state and local governments will participate in the program ( Kaiser Health News, 5/5 ; New York Times, 5/4 ). April 30 was the deadline for states to notify HHS whether they would administer their own high- risk pools or let HHS do it for them. Only Utah and Rhode Island have yet to decide. Eighteen states , including Alabama, Delaware, Florida, Georgia, Hawaii, Idaho, Indiana, Louisiana, Minnesota, Mississippi, Nebraska, Nevada, North Dakota, South Carolina, Tennessee, Texas, Virginia, and Wyoming, have announced that they will opt out and let HHS operate the high- risk pools. ( Kaiser Health News, 5/4 ; The Washington Post, 5/4 ; T he Salt Lake Tribune, 5/6 ) . On May 5, HHS published its interim final rule on web portals designed to work alongside health insurance exchanges. The portals will provide individuals and small businesses with information about affordable health coverage o ptions in their states, including information on private insurance, Medicaid, CHIP, high -risk pools, and coverage in the small-group market. Initially the portals will offer summary information but as they are fully implemented they will offer more detailed information. The portals must be available by July 1. The interim rule takes effect on May 10, and will be open for public comment for 30 days ( Kaiser Health News, 5/4 ; Government Health IT, 5/3 ; Federal Computer Week, 5/4 ). On May 4, U.S. Representative Chris Van Hollen (D - MD), U.S. Representative Gerald Connolly (D -VA) and U.S. Delegate Eleanor Holmes Norton (D -DC) introduced the Federal Employee Health Benefits (FEHB) Program Dependent Coverage Extension Act ( H.R. 5200), which would allow the U.S. Offic e of Personnel Management (OPM) to offer coverage to the adult children of federal employees covered through FEHB before the measure extending dependent coverage in the health care reform law takes effect on January 1, 2011. Under current law OPM cannot e xtend the benefit until January 1 ( Kaiser Health News, 5/5 ; The Washington Post, 5/5 ). Representatives Introduce Medicare Fraud Legislation: On April 15, U.S. Representative Ron Klein (D -FL) and U.S. Representative Ileana Ros - Lehtinen (R - FL) introduced the Medicare Fraud Enforcement and Prevention Act of 2010 ( H.R. 5044), a measure that increases the penalties for fraud, improves the ability of law enforcement to detect and prevent fraud, and increases scrutiny of those who wish to bill Medicare. The proposed bill: D oubles the penalties to 10 years of jail time and a minimum fine of $50,000 for making false statements about federal health care services or giving kickbacks to patients for their complicity in fraudulent billing. M akes it illegal to distribute Medicare and Medicaid beneficiary identification or billing privileges, with a punishment of up to three years in jail and a fine equal to the amount stolen ; individuals who sell patient numbers but do not actively participate in fraudulent billing would be eligible for jail sentence s. I ncreases the scope and number of background checks and site visits for those applying for Medicare billing numbers, and requires the U.S. Department of Health and Human Services SAMHSA222s Weekly Financing News Pulse: National Edition May 7, 2010 5/7/10 3 (HHS) to provide law enforcement with real-time access to Medicare data and alert law enforcement immediately if suspicious activity is detected . E stablishes a pilot program through HHS using biometric technology, such as fingerprint and retinal scans, to verify that patients receive services. R equires the Government Accou ntability Office (GAO) to review the performance of contractors that handle Medicare222s billing system to evaluate their training, expertise in fraud detection, and their use of data -mining software to manage large quantities of information, and then report their findings to Congress. The bill has been referred to the House Ways and Means Committee and the House Energy and Commerce Committee ( Kaiser Health News, 4 /30 ; THOMAS.gov, 5/6 ; American Medical News, 4/29 ; South Florida Business Journal, 4/14 ). HHS Secretary Sends States Letter Urging Investigation of WellPoint Rate Filings, WellPoint to Conduct Third Party Review: On May 4 , U.S. Department of Health and Human Services Secretary Kathleen Sebelius sent a letter to state governors and insurance commissioners urging them to re -examine rate filings by WellPoint Inc. , in light of the fact that WellPoint222s California subsidiary, Anthem Blue Cross, withdrew its proposed rate increases on April 29. Anthem withdrew its proposed rate increases after a firm hired by state regulators determined that Anthem222s proposed rates overstated future medical costs, and could be cut by an average of 10 percent. The secretary222s memo also suggests that states increase their review of rate increase proposals, and notes that the national health care reform law contains $250 million for that purpose. On May 5, WellPoint officials sent a memo to their employees stating that the comp any will conduct a third party review of all of its 2010 rate filings and investigate why its actuaries did not discover the miscalculations in its California filing ( The Wall Street Journal, 5/5 ; Kaiser Health News, 5/6 ; The Wall Street Journal, 5/5 ; Kaiser Health News, 5/5 ). C BO Projects Doc Fix Will Cost $276 Billion through 2020: On April 30, the nonpartis an Congressional Budget Office (CBO) released projections indicating that freezing Medicare reimbursement rates at their current level, as opposed to cutting them using the Sustainable Growth Rate formula, would cost $276 billion through 2020. That is an increase in cost of 30 percent over what identical legislation proposed last year was projected to cost. Officials attribute the increase in anticipated cost to assumptions of an improved economy leading to higher costs for health services, and demographi c changes. The reimbursement rates will be cut on June 1 if lawmakers do not pass legislation to prevent the cut ( Kaiser Health News, 5/4 ). I BC Announces Program to Improve Cost and Quality of Care through Physician Pay: On April 29, Independence Blue Cross (IBC) announced that starting July 1 it would begin a program that increases physician222s base pay and doubles current incentives to encourage physicians to offer higher quality care at a lower cost. The program will reward doctors who meet the standards to be a 223patient - centered medical home224, which include greater access to care for patients, following treatment guidelines, educating patients about managing their health, and prescribing drugs electronically. IBC will spend $47 million annually on the program ( The Philadelphia Inquirer, 4/30 ; Kaiser Health News, 4/30 ). Rep resentative Introduces Bill for Mental Health and Suicide Prevention Services for IRR Veterans: On April 28, U.S. Representative Rush Holt (D -NJ) introduced the Sergeant Coleman S. Bean Individual Ready Reserve Suicide P revention Act of 2010 ( H.R. 5170), a measure that requires the U.S. SAMHSA222s Weekly Financing News Pulse: National Edition May 7, 2010 5/7/10 4 Department of Defense (DOD) to arrange for a mental health professional to call Individual Ready Reserve (IRR) members and Individual Mobilization Augmentees within 90 days of the end of t heir deployment, and once every 90 days after that for as long as they remain in the IRR. The phone calls would check on the emotional, psychological, medical and financial status of the veterans and serve as a means to get the veterans help if they need it. The mental health professional making the call would be required to refer anyone considered a suicide risk to the nearest military treatment facility or TRICARE provider for an evaluation and, if necessary, treatment. Lawmakers intend to use the legislation to fill a gap in services, as IRR veterans do not currently have the same access to mental health and suicide prevention programs as other combat veterans. Lawmakers project that the bill would affect 11,000 veterans. A similar bill was defeated last year during conference with the Senate over costs. The bill now goes to the House Armed Services Committee ( Marine Corps Times, 5/6 ). Poll Finds Improvement in Rating of U.S. Health Care System, Increased Confidence in Retaining Current Coverage: A Rasmussen poll of 1,000 likely voters found that 55 percent of Americans rate the nation222s health care system as good or excellent, up from 44 percent in February and 35 percent when President Barack Obama first proposed his health care legislation. The poll also found that 45 percent of Americans believe they will be able to keep their insurance coverage, up from 39 percent in February. Forty percent of Americans believe they will have to change their insurance coverage ( USA Today, 5/3 ; Kaiser Health News, 5/4 ; Ra smussen Reports, 5/3 ). Update: President Signs Veterans Legislation with Mental Health Components into Law : On May 5 , President Barack Obama signed the Caregiver and Veterans Omnibus Health Services Act ( S. 1963) into law . The new law expands access to care for members of the military, including for mental health counseling. The law also creates a support program for caregivers of disabled veterans from the Afgha nistan and Iraq wars, which law makers project will cost $1.7 billion over the next five years ( Kaiser Health News, 5/6 ). Studies Released Health Affairs Study Finds Coordinating Care Reduces Costs: A study published in Health Affairs examined the care of 10,000 patients at a Seattle -area Group Health Cooperative 223medical home224, where primary care physicians are responsible for coordinating individual patients222 care. The study examined costs and patient outcomes, and found that patients in Group Health222s medical home had 29 percent fewer ER visits and six percent fewer hospitalizations than other patients. The startup cost required $16 per patient annually, but doctors involved in the medical home said that after a couple of years the y began to see savings, and that eventually they found that for each dollar they invested in the system, they saved $1.50. Group Health is expanding the system to all 26 of its Washington medical centers, to cover more than 400,000 patients ( Kaiser Health News, 5/4 ). Health Affairs Study Projects Savings through Simplification of Billing: A study published in Health Affairs suggests several changes to curren t medical billing practices to reduce costs. The authors suggest a single transparent set of payment rules for multiple payers, a single claim form and standard rules of submission, among other changes, to save a projected $7 billion annually, nationwide. The authors project the changes would save physicians four hours per week and support staff five hours per week in labor. The study reports that physicians currently spend 12 percent of their net patient service revenue to cover the costs of excessive c omplexity ( Kaiser Health News, 4/30 ; Health Affairs, 4/29 ). SAMHSA222s Weekly Financing News Pulse: National Edition May 7, 2010 5/7/10 5 GHRI Study Finds Higher Cost of Care for Women who Experience Domestic Violence: On April 23, The Journal of General Internal Medicine published a study by the Group Health Research Institute that examined the cost of health care for women who experience intimate par tner violence (IPV) over a 10 year period. The researchers found that women who experienced IPV had higher health care costs than women that did not, and that those higher costs lasted for three years after their exposure to IPV ended ( PubMed, 4/23 ). Input Inc. Releases Analysis Projecting over $5 Billion in Spending on IT for Reform Compliance : An analysis by Input Inc. projects that federal, state, and local governments will spend over $5 billion on health information technology and traditional IT to comply with the health care reform law. Input analysts say only $1 billion to $2 billion is funded through the reform law, and it is unclear where the rest of the funding will come from ( Government Health IT, 5/3 ). KFF Releases Three Briefs on Medicare: The Kaiser Family Foundation (KFF) released three briefs pertaining to changes to Medicare under the federal health care refo rm law. The first is an updated brief that examines the new board created to limit growth in Medicare spending, explaining its structure and processes, and outlin ing key dates in the board222s operations through 2019. The second brief examines changes to Medicare Advantage plans, including new benefit requirements and a shift in the open enrollment period. The third is an updated brief that examines changes to Medicare broadly under the reform law, including changes to benefits, provider payments and Medicare Advantage plans. The brief explains various demonstration p rojects established in the law, and offers a timeline of implementation dates for components of the health care reform law affecting Medicare ( KFF, 5/5 ; KFF, 5/6 ; KFF, 5/5 ). NAPHS Releases Annual Survey for 2009: On May 4, the National Association of Psychiatric Health Systems (NAPHS) released its annual survey for 2009. The survey contains trend analysis that examines year-to -year changes in hospitals and residential treatment centers over a two year period, and national averages with data arranged to allow for comparison by occupancy size. The survey found an increase for demand in 2009 over 2008, including a 3.5 percent increase in inpatient hospital admissions and 1.5 percent increase in residential treatment center admissions. The survey also examines the payment for care, and found Medicaid, Medicare, private insurance, state governments and other sources such as juvenile justice systems to be the payment sources for behavioral health care ( PR Newswire, 5/4 ). AHRQ Reports 10 Percent of Medicaid Patients Require Readmission within 30 Days of Initial Hospitalization: On April 14, the Agency for Healthcare Research and Quality (AHRQ) released data showing that in 2007, 10 percent of Medicaid recipients hospitalized for reasons other than childbirth had to be readmitted at least once within 30 days of their initial hospital stay. That readmission rate is 70 percent higher than that of the privately insured. AHRQ found that the readmission rate for those hospitalized for alcohol or substance abuse was 13 percent in 2007 ( AHRQ, 4/14 ). Around the Hill: Hearings on Health Financing Senate Appropriations Subcommittee on Labor, Health and Human Services, E ducation, and Related Agencies : Fiscal 2011 Appropriations: Labor, HHS, Education SAMHSA222s Weekly Financing News Pulse: National Edition May 7, 2010 5/7/10 6 May 5 , 9:3 0 a .m., 124 Dirksen House Veterans222 Affairs Committee : Vietnam Veterans Longitudinal Study May 5 , 10:0 0 a .m., 334 Cannon Senate Veterans222 Affairs Committee : Treating Traumatic Brain Injury May 5, 9:30 a.m., 418 Russell House Energy and Commerce Subcommittee on Health : Health Care Bills May 6, 10:00 a.m., 2123 Rayburn Senate Veterans222 Affairs Committee : Veterans222 Issues May 19, 9:30 a.m., 418 Russell House Veterans222 Affairs Subcommittee on Disability Assistance and Memorial Affairs: Military Sexual Trauma Issue May 20, 10:00 a.m., 334 Cannon