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SAMHSA222s Weekly Financing News Pulse: National Edition November 23, 2009 11/23/09 1 SAMHSA222s Weekly Financing News Pulse: National Edition National News Senate Votes to Begin Debate on the Patients Protection and Affordable Care Act of 2009 Update: Senate Confirms Hyde as SAMHSA Administrator House Passes Medicare 223Doc Fix224 Legislation Senate Approves $134 Billion Veterans Budget, Increases Health Funding 9 Percent Sen. Grassley Introduced Legislation to Allow Longer Medicare Payment Delays in Dubious Cases Rep. Adler Sponsors Bill to Increase Oversight at VA Clinics OMB Reports $98 Billion in Improper Government Payments; Medicare and Medicaid Account for Over $50 Billion GINA to Take Effect, Prevent Employers and Insurers from Genetic Discrimination Pharmaceutical Companies Increased Drug Prices 9 Percent Since Last Year; Congressmen Seek Audits CCHIT Seeks Comment on Behavioral Health EHR Certification Criteria Polls Find Deep Divisions on Health Care Reform Army Suicides Rise; Study Finds Mental Health Staff Lacking in Afghanistan, Army to Send More Nabi, GlaxoSmithKline Sign Deal Over Nicotine Addiction Vaccine Studies Released CMS Report Finds House Health Care Reform Bill Would Increase Health Care Costs CMS Pays Out More for Quality Physician Reporting in 2009 Business Roundtable Report Praises Some Health Care Reforms, Criticizes Others Mercer Releases 2009 Employer Health Plan Survey Highlights RWJF Report Analyzes Massachusetts222s Health Care Reform, Outlines Lessons for the National Effort KFF Releases Health Care Reform Analyses of Racial/Ethnic Disparities and State Level Variations U.S News & World Report Releases Health Plan Rankings Study Finds Little Benefit to Hospital EHR Implementation Study Find Uninsurance Associated with Higher Mortality After Trauma Around the Hill: Hearings on Health Financing PLEASE NOTE: SAMHSA222s Weekly Financing News Pulse will not be produced over Thanksgiving; the next National Edition will be distributed on Monday, December 7th. 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_subscr ibe.html?code=USSAMHSA&origin=http://www.samhsa.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 November 23, 2009 11/23/09 2 National News Senate Votes to Begin Debate on the Patients Protection and Affordable Care Act of 2009: In an 6039 party line vote on the evening of November 21, the Senate voted to allow debate on the Democrat222s health care reform bill ( HR 3950 ), the Patients Protection and Affordable Care Act of 2009 . Although the Democrats succeeded in gathering the 60 votes needed to begin debate, currently expected to start November 30, numerous Democrats remain opposed to specific provisions of the bill while others have signaled that they will not vote for the bill in its current form. Senate Majority Leader Harry Reid (D NV) unveiled the bill on November 18 after numerous meetings with Senate Democratic leadership and Vice President Joe Biden and spent the remainder of the week courting Democratic votes ( New York Times, 11/21 ; CQ Today, 11/21 ; Kaiser Health News, 11/18 ). According to the Congressional Budget Office222s (CBO) analysis , the bill would cost $848 billion over 10 years, reduce the deficit by $130 billion, and insure an additional 31 million Americans to reach a 94 percent insurance rate by 2019 ( Kaiser Health News, 11/19 ). Among other provisions, the bill will: Require most Americans to purchase health coverage beginning in 2014 Expand Medicaid eligibility to non elderly Americans earning up to 133 percent of the federal poverty level (FPL) beginning in 2014 Create an insurance exchange in 2014 through which individuals earning up to 400 percent of the FPL could purchase subsidized coverage Include a public insurance option within the exchange which states could opt out of by passing legislation Impose fees on employers with 50 or more employees whose employees receive federal insurance subsidies Maintain the Children222s Health Insurance Program (CHIP) Prohibit insurers from denying coverage to individuals with pre existing conditions, cancelling coverage due to illness, or creating annual or lifetime coverage limits Remove cost sharing for preventative care under Medicare and reduce, but not eliminate, the Medicare prescription drug 223doughnut hole224 Create a 5 percent excise tax on elective cosmetic surgery Increase Medicare payroll taxes on individuals earning over $200,000 and couples earning over $500,000 annually Impose a 40 percent excise tax on 223Cadillac224 health plans with yearly premiums over $8,500 for individuals and $23,000 for families ( Kaiser Health News, 11/18 ; Kaiser Health News, 11/18 ; Los Angeles Times, 11/19 ; Kaiser Health News, 11/19 ; Bloomberg, 11/21 ) Senate Democrats also released a short summary and a detailed summary of the bill222s effects in addition to a guide to the bill222s immediate effects because the bill delays numerous larger provisions until 2014. Meanwhile, on November 20, the CBO released an updated score of the House222s health care reform legislation ( HR 3962 ), estimating the bill will reduce the deficit by $138 billion by 2019 rather than the previously estimated $109 billion because of additional savings from the Community Living Assistance Services and Supports (CLASS) Act ( CBO, 11/20 ). Finally, House Majority Leader Steny Hoyer (D MD) said that both he and Sen. Reid are targeting December 18 as the last day of the 2009 Congressional session ( Kaiser Health News, 11/17 ). Update: Senate Confirms Hyde as SAMHSA Administrator: On November 20, the Senate confirmed Pamela Hyde as the Substance Abuse and Mental Health Services Administration (SAMHSA) Administrator . Hyde has served as New Mexico Secretary of Human Services since 2003 and headed SAMHSA222s Weekly Financing News Pulse: National Edition November 23, 2009 11/23/09 3 the Ohio Department of Mental Health, the Ohio Department of Human Services , and the Seattle Department of Housing and Human Services . In addition, Hyde previously served as CEO of Comcare, a private non profit managed behavioral health care firm ( HELP Committee, 11/18 ; Iowa Politics, 11/19 ; Business Wire via Earth Times, 11/21 ; THOMAS ). House Passes Medicare 223Doc Fix224 Legislation: On November 19, the House passed a Medicare 223Doc Fix224 bill ( HR 3961 ) to permanently alter the sustainable growth rate (SGR) formula used to calculate Medicare physician reimbursements and prevent a scheduled 21 percent rate reduction in January 2010. A CBO analysis found that the bill would cost $210 billion over ten years, increasing the country222s deficit because the bill222s spending is not offset by revenue enhancements. The bill passed on a 243 183 vote; one Republican, Rep. Michael C. Burgess (R TX), broke ranks to vote with Democrats and 11 Democrats opposed the measure. The Senate failed to pass similar 223Doc Fix224 legislation earlier this year, however, Senate Democrats included a one year fix without permanent SGR adjustments in their health care reform legislation ( HR 3950 ) ( New York Times, 11/19 ; Kaiser Health News, 11/18 ). Senate Approves $134 Billion Veterans Budget, Increases Health Funding 9 Percent: In a unanimous vote on November 17, the Senate passed a bill ( HR 3082 ) to authorize spending $134 billion on veterans222 programs and military construction in FY2010. The measure would increase veterans222 health care spending by 9 percent and authorize a newly allowed $48.2 billion advanced appropriation for veterans222 medical care in 2011. A similar measure was passed in the House in July and the two now head to conference committee to be finalized before proceeding to President Obama ( AP, 11/17 ; Kaiser Health News, 11/18 ; THOMAS ). Sen. Grassley Introduced Legislation to Allow Longer Medicare Payment Delays in Dubious Cases: On November 16, Senate Finance Committee Ranking Member Chuck Grassley (R IA) introduced the Fighting Medicare Payment Fraud Act of 2009 ( SB 2774 ). The bill, which is designed to ease the requirements for prompt Medicare payments to allow the Centers for Medicare & Medicaid Services (CMS) additional time to investigate potential abuse, would give the U.S. Department of Health and Human Services (HHS) Secretary the authority to extend the time period in which Medicare must reimburse providers in cases where waste, fraud, or abuse are suspected. The bill was referred to the Senate Finance Committee ( IowaPolitics, 11/16 ; THOMAS ). In related news, data obtained by the Associated Press from Sen. Grassley show that CMS received roughly 30 fraud warnings from inspectors over the past three years but responded to only 50 percent of them. Sen. Grassley and HHS Secretary Kathleen Sebelius agree that the agency should respond to future warnings within two months ( AP, 11/13 ; Kaiser Health News, 11/13 ). Rep. Adler Sponsors Bill to Increase Oversight at VA Clinics: On November 7, Rep. John Adler (D NJ) proposed the Veterans222 Health and Radiation Safety Act ( HR 4062 ), which would focus on governmental oversight of the U.S Department of Veterans Affairs222 (VA) small programs, radiation treatment, and contracts with private doctors and hospitals. The bill would require the VA to submit an annual report to Congress on all programs that treat fewer than 100 patients per year. The bill was referred to the House Committee on Veterans Affairs ( Philadelphia Inquirer, 11/12 ; THOMAS ). OMB Reports $98 Billion in Improper Government Payments; Medicare and Medicaid Account for Over $50 Billion: On November 17, White House Office of Management and Budget (OMB) Director Peter Orszag announced that the federal government made $98 billion in improper SAMHSA222s Weekly Financing News Pulse: National Edition November 23, 2009 11/23/09 4 payments in FY2009, a 37.5 percent increase over the $72 billion the government improperly paid in FY2008. Orszag said that the increase was due in part to improved detection and accounting methods implemented this year. Orszag noted that Medicare and Medicaid jointly accounted for $54.2 billion in overpayments during FY2009, with roughly $36 billion coming from Medicare and $18 billion from Medicaid. Orszag also noted that the CMS report on which the OMB numbers were based found that the FY2009 Medicare fee forservice (FFS) error rate climbed to 7.8 percent from 3.6 percent in FY2008; however, those numbers only partially represent the procedural changes and do not represent a complete review of the applicable period.CMS officials speculate that the new accounting procedures will identify a 12.4 percent FFS error rate, yielding an estimated $47 billion in improper Medicare payments across FFS and Medicare Advantage (MA) and a combined Medicare Medicaid total of $65 billion in improper payments for FY2009. Meanwhile, Orszag also reported that CMS found that the MA error rate increased from 10.6 percent to 15.4 percent over the past fiscal year and that the change is not the result of the calculation adjustments. Orszag added that President Obama intends to issue an executive order strengthening agency oversight over improper payments ( CNN, 11/18 ; Kaiser Health News, 11/18 ; AP, 11/15 ; Modern Healthcare, 11/17 ; Kaiser Health News, 11/16 ). GIN A to Take Effect, Prevent Employers and Insurers from Genetic Discrimination: The Genetic Information Nondiscrimination Act (GINA) that passed in 2008 took effect the weekend of November 21. The new law prohibits insurers and employers from requiring genetic testing. The law also prohibits insurers from using genetic information to deny coverage or set premiums or deductibles while also preventing employers from using genetic information as the basis for hiring, firing, or promotion decisions. Finally, the law prohibits group health plans from awarding lower out of pocket costs to enrollees who agree to give family medical histories when completing health questionnaires ( New York Times, 11/15 ; Kaiser Health News, 11/16 ). Pha rmaceutical Companies Increased Drug Prices 9 Percent Since Last Year; Congressmen Seek Audits: According to the New York Times, pharmaceutical companies have increased wholesale prices for brand name drugs by an average of 9 percent since 2008. The price increases will raise the total drug expenditures by an additional $10 billion. Pharmaceutical companies say that they have legitimate business reasons for the increases while critics contend that the companies are attempting to raise prices before Congress passes national health care reform legislation ( New York Times, 11/15 ; Kaiser Health News, 11/16 ). On November 17, House Ways and Means Committee Chair Charles Rangel (D NY), House Energy and Commerce Committee Chair Henry Waxman (D CA), Rep. Pete Stark (D CA), and Rep. John Lewis (D GA), authored a letter to the Government Accountability Office (GAO) asking for an expedited review of prescription drug prices. The Congressmen asked the GAO to prepare a benchmark for current drug pricing passed on the CPI and a proposal for continually monitoring drug prices in the future. Separately, Senator Ben Nelson (D NE) asked the HHS Office of the Inspector General to investigate whether the increased prices were designed to avoid company losses under health care reform legislation ( New York Times, 11/18 ; Reuters, 11/18 ; Kaiser Health News, 11/19 ). CCHIT Seeks Comment on Behavioral Health EHR Certification Criteria: The Certification Commission for Health Information Technology (CCHIT) is accepting first round comments through December 12 on proposed criteria for certifying behavioral health, clinical research, and dermatology electronic health records (EHRs). The CCHIT will offer new certification options to vendors in July 2010 after additional rounds of comments ( Health Data Management, 11/17 ). SAMHSA222s Weekly Financing News Pulse: National Edition November 23, 2009 11/23/09 5 Polls Find Deep Divisions on Health Care Reform: A Washington Post/ABC News poll conducted November 12 15 found that 47 percent of respondents approve of President Obama222s handling of health care while 49 percent disapprove, with 56 percent reporting that they believe health care reform will increase overall U.S. health care costs. The poll found the neareven split on heath care in spite of the president222s 56 percent approval rating overall. However, individual aspects of Democratic health care reform continued to find support in the poll, with 53 percent of respondents supporting a public plan option and a majority supporting an employer mandate. The poll also found that only 19 percent of respondents believe that Democratic health care reform would improve their health care, while 37 percent believe their care would worsen and 42 percent believe it would remain the same ( CQ Politics, 11/17 ; UPI, 11/17 ). Meanwhile, asking related questions, a CNN/Opinion Research poll found that 46 percent of Americans favor the House health care reform bill ( HR 3962 ) while 49 percent oppose it and an Associated Press (AP) poll found that 41 percent support 223health care reforms being discussed in Congress224, while 43 percent oppose and 15 percent remain neutral or undecided ( CNN, 11/17 ; Kaiser Health News, 11/17 ; AP, 11/17 ) Army Suicides Rise; Study Finds Mental Health Staff Lacking in Afghanistan, Army to Send More: Data from the U.S. Army shows that 140 activeduty soldiers have committed suicide in 2009, the same number as in all of 2008. In addition, the number of non active duty suicides in 2009 already exceeds the number for 2008 by 14, leaving the Army on pace to set a new record high suicide count this year. In July, the Army partnered with the National Institute of Mental Health (NIMH) to conduct the largest ever study of suicide in the military, with the aim of reducing suicides and associated mental problems throughout the armed forces ( Bloomberg, 11/13 ; All Headline News, 11/18 ; NIMH, 7/16 ). In related news, the Army Mental Health Advisory Team found that mental health problems are on the rise among Army personnel deployed in Afghanistan and recommended deploying additional mental health professionals. The team found that soldier morale in Afghanistan is significantly lower than it was in 2005 or 2007 while the percentage of soldiers suffering from depression, anxiety, and PTSD rose from 10.4 percent in 2005 to 21.4 percent in 2009. In response, the army announced that it is more than doubling the number of mental health specialists in Afghanistan, sending 65 new specialists to join the 43 already there ( Houston Chronicle 11/14 ; AP via Miami Herald, 11/13 ). Nabi, GlaxoSmithKline Sign Deal Over Nicotine Addiction Vaccine: On November 16, Nabi Pharmaceuticals and GlaxoSmithKline Plc signed a licensing deal for Nabi222s experimental nicotine addiction vaccine, NicVAX, which is currently under development and partially funded through a $10 million National Institute of Drug Abuse (NIDA) grant. Under the deal, Nabi will receive $40 million upfront and is eligible for over $500 million in option fees while Glaxo will get an exclusive worldwide license for NicVAX and a license to develop follow up vaccines. Nabi would be responsible for the first two late stage vaccine trials after which Glaxo could take responsibility for further development. The companies expect to complete the deal in the first quarter of 2010 ( Reuters, 11/16 ). Studies Released CMS Report Finds House Health Care Reform Bill Would Increase Health Care Costs: A report conducted by the CMS Office of the Actuary at the request of House Republicans assessed the non tax financial implications of the House222s health care reform bill ( HR 3962 ), finding that it will increase health care costs by $289 billion over 10 years. The report, released November 13, is not directly comparable to the CBO cost estimates because it does not consider the tax offsets proposed in the bill. The CMS report determines that the $500 billion cut to Medicare could reduce benefits for some seniors and SAMHSA222s Weekly Financing News Pulse: National Edition November 23, 2009 11/23/09 6 possibly affect access to care. In addition, CMS concludes that, though the legislation would expand coverage to 32 million people, the subsequent demand for services would pose new challenges that may include price increases, cost shifting, changes in providers, or an increased reluctance by providers to accept Medicare patients.Democrats have highlighted that the findings show that HR 3962 would provide insurance coverage for 10 percent more people for a 1.3 percent increase in health care spending while Republicans have cited the report as evidence that the bill violates President Obama222s pledge to 223bend the cost curve224 ( AP, 11/15 ; Washington Post, 11/15 ; The Hill, 11/14 ; Kaiser Health News, 11/14 ; Kaiser Health News, 11/16 ). CMS Pays Out More for Quality Physician Reporting in 2009: A CMS report shows that, in 2008, the Medicare Physician Quality Reporting Initiative paid out over $92 million in incentive payments to 85,000 physicians who properly reported service quality data. The payout was significantly more than the $36 million in incentive payments that CMS distributed to 56,700 physicians in 2007 ( MedPage Today, 11/13 ). Business Roundtable Report Praises Some Health Care Reforms, Criticizes Others: A report released November 12 by the Business Roundtable , an organization representing CEOs of large companies, finds that aspects of Democratic health care reform have the potential to reduce large companies222 health care expenses, though other aspects may impede progress to lower heath care costs. The report finds that an effective combination of health care reforms could slow the health care cost growth rate and reduce employers222 health costs by $3,000 per employee by 2019. The report argues that numerous Democratic provisions, including changes to the Medicare reimbursement system, an independent Medicare rate setting commission, a strong individual mandate, increased use of accountable care organizations (ACOs), and elimination of regional medical practice disparities would reduce health care costs. Meanwhile, the report argues that cost shifting to the private sector, increases in individual health care costs, delayed or weakened cost saving efforts, and the failure to implement an individual mandate would increase overall health care spending ( Business Roundtable, 11/12 ; AP, 11/12 ; Kaiser Health News, 11/13 ). Mercer Releases 2009 Employer Health Plan Survey Highlights: On November 18, Mercer released highlights of 2009 U.S. National Survey of Employer Sponsored Health Plans prior to its scheduled release in spring 2010. Among other findings, Mercer222s highlights note that employers222 health care costs grew 5.5 percent in 2009 to reach $8,945 per employee; however, the increase was the lowest in 10 years. In addition, Mercer notes that larger employers implemented more health management and wellness programs while smaller businesses increasingly offered consumer directed health plans. Mercer found that the prevalence of employer sponsored insurance remained unchanged while over 40 percent of employers not currently offering health coverage reported that they would do so if health care reform legislation imposed an individual health care mandate. Local news outlets have reported on state level data from Mercer222s survey; however, such data is not yet publicly available from Mercer ( Mercer, 11/18 ; Philadelphia Business Journal, 11/19 ). RWJF Report Analyzes Massachusetts222s Health Care Reform, Outlines Lessons for the National Effort: A Robert Wood Johnson Foundation (RWJF) report analyzed the implementation of Massachusetts222 2006 health care reform law to isolate lessons applicable to national health care reform. The report highlights numerous strategies that allowed Massachusetts to obtain a 97.4 percent insurance rate including: automatically enrolling residents in subsidy programs based on state data, SAMHSA222s Weekly Financing News Pulse: National Edition November 23, 2009 11/23/09 7 creating a single application form and a single eligibility system for all subsidy programs, and enabling community based organizations and health care providers to complete subsidy application forms on behalf of their patients ( RWJF, 11/11 ; Kaiser Health News, 11/13 ). KFF Releases Health Care Reform Analyses of Racial/Ethnic Disparities and State Level Variations: The Kaiser Family Foundation (KFF) released a chartbook examining state variations in demographics, budget shortfalls, public program eligibility, uninsurance rates, and primary care availability to determine how those variables may interact with national health care reform. KKF also released a brief examining health care reforms potential effects on racial and ethnic disparities, especially under proposed Medicaid expansions, federal health care subsidies, workforce development programs, community health center expansions, and specific disparity provisions ( KFF, 11/18 ; KFF, 11/17 ; KFF, 11/11 ; Kaiser Health News, 11/13 ). U.S News & World Report Releases Health Plan Rankings: The U.S. News & World Report released its health plan rankings , America222s Best Health Plans. U.S. News provides overall rankings as well as rankings by region and by type of insurance, including commercial, Medicare, and Medicaid offerings ( Pacific Business News, 11/13 ). Study Finds Little Benefit to Hospital EHR Implementation: A study of 3,000 hospitals conducted by researchers at the Harvard School of Public Health and presented at a conference on November 16 found that EHR implementation had little effect on length of stay or best practice standards. The study examined hospitals with different types of EHRs and various levels of EHR implementation and found no significant differences; however, the researchers note that the findings likely indicate that the effects of large scale EHR implementation will depend on the details of hospital utilization. The researchers speculate that there will not be clear findings on the effects of EHRs for at least five years, after EHRs become more prevalent and the government sets standards for 223meaningful use224 and 223certified records224 ( New York Times, 11/15 ; Kaiser Health News, 11/16 ). Study Find Uninsurance Associated with Higher Mortality After Trauma: A study published in the Archives of Surgery found that uninsured Americans have a higher adjusted mortality rate after trauma than insured Americans. Uninsured Americans are nearly twice as likely as similar insured Americans to die in the hospital after trauma. The authors suggest treatment delay, decreased health literacy, and differences in care as possible reasons for the disparity ( Kaiser Health News, 11/17 ; AP, 11/16 ). Around the Hill: Hearings on Health FinancingHouse Education and Labor Committee : H1N1 and Sick Leave Policies November 17, 10:00 a.m., 2175 Rayburn Senate Homeland Security and Governmental Affairs Committee: H1N1 Flu Vaccine Availability November 17, 2:30 p.m., 342 Dirksen Senate HELP Committee : Food Safety Act; Labor HHS Nominations November 18, 10:00 a.m., 430 Dirksen SAMHSA222s Weekly Financing News Pulse: National Edition November 23, 2009 11/23/09 8 House Energy and Commerce Subcommittee on Health : H1N1 Preparedness November 18, 10:00 a.m., 2123 Rayburn Senate Veterans222 Affairs Subcommittee on Health: Project HERO November 19, 10:00 a.m., 334 Cannon Senate Indian Affairs Committee : Drug Smuggling and Gang Activity in Indian Country November 19, 2:15 p.m., 628 Dirksen House Veterans Affairs Committee : VA Health Care Funding December 2, 10:00 a.m., 334 Cannon
