WeeklyFinancingNewsPulseNationalEditionfinal20091023.pdf (PDF | 319.14 kb)
SAMHSA222s Weekly Financing News Pulse: National Edition October 23, 2009 10/23/09 1 SAMHSA222s Weekly Financing News Pulse: National Edition National News House and Senate Move Towards Merged Health Care Reform Bills, Debate Centers on Public Plan Senate Blocks Action on Unfunded Medicare 223Doctor Fix224 President Obama Signs VA Health Care Bill Democrats to Add Provision Eliminating Health In sures222 Antitrust Exemption to Health Reform; House Judiciary Committee Approves Bill Senator Introduces Bill Authorizing More Funding for IHS Sen. Durbin Introduces Bill to Increase the Quantity of Crack Cocaine Triggering Mandatory Minimums Rep. Braley to Introduce Bill Emphasizing Patient Safety DOJ Issues Formal Medical Marijuana Guidelines Update: Administration Cites Humana for Non- Compliance, Relaxes Medicare Communications Rules Health Care Reform Polls Find Support for Public Plan and Continued Confusion HHS - DOJ Strike Force Yields More Charges on Medicare Fraud Pharmaceut ical Companies are NAMI222s Biggest Donors Studies Released CMS Office of the Actuary Report Says House Health Reform Bill Would Increase Health Care Costs CDC Report Finds Drug Deaths Outnumber Traffic Deaths in 16 States NCQA Report Finds Health Care Quality Stagnant; M/SU Treatment Quality Low Families USA Report Estimates 2009 Uninsurance Rate CBPP Report Highlights Recession222s Effect on State Budgets AAMC Data Shows Small Increase in Medical School Enrollment Committee Report Says Health Reform Bills have Too Few Cost Controls Goldman Sachs Says Health Reform222s Medicare Cuts Will Halve Insurer222s Earnings Growth Watson Wyatt Finds Large Employers Do Not Plan to Restore Health Benefits After Recession Study Finds Association Between Post - Retirement Work and Health, Includin g Mental Health Around the Hill: Hearings on Health Financing For quest ions or comments, please contact Kevin Hennessy ( kevin.hennessy@samhsa.hhs.gov ). SAMHSA222s Weekly Financing News Pulse: National Edition October 23, 2009 10/23/09 2 National News House and Senate Move Towards Merged Health Care Reform Bills, Debate Centers on Public Plan : After receiving preliminary Congressional Budget Office (CBO) estimates on differing versions of health care reform bills last week, House Speaker Nancy Pelosi (D - CA) and House Majority Whip James Clyburn (D - SC) began counting votes for the version containing a 223robust224 public plan, which would pay providers at rates tied to Medicare reimbursement rates. However, the latest vote count shows that Rep . Pelosi does not yet have the 218 votes required to pass legislation with a robust public option. She said that, while she will continu e to pursue the robust version , the House will pass a health care reform bill by Thanksgiving that will include some version of a public option ( The Hill, 10/22 ; Kaiser Health News, 10/21 ; Kaiser Health News 10/22 ). In the Senate, negotiators continue closed - door meetings to merge the Senate Finance Committee222s bill, for which legislative language was posted on the committee222s website this week, and the Senate Health, Education, Labor and Pensions (HELP) Committee222s bill ( Life and Health Insurance News, 10/20 ). Senate Finance Committee Chair Max Baucus (D - MT) said it is unlikely that a version of the public option will win the necessary 60 votes to pass in the Senate; however, Senate Majority Leader Harry Reid (D - NV) is considering numerous approaches to the public option, including one allowing individual states to opt out of the plan ( New York Times, 10/22 ; Wall Street Journal, 10/23 ; Kaiser Health News, 10/19 ). Senate Blocks Action on Unfunded Medicare 223Doctor Fix224: In a roll call vote on October 21, the Senate blocked progress on SB 1776 , which would authorize $247 billion in additional Medicare payments to physicians over a decade, permanently altering Medicare222s physician reimbursement rates without offsetting the expense and therefore adding to the federal deficit (Financing News Pulse 10/16 edition). The current reimbursement formula, passed in 1997, has required congressional 223fixes224 to avoid substantial physician reimbursement cuts and, if left unchanged, would require a 21 percent physician payment rate cut in 2010. Thirteen Democrats and independents joined all 40 Senate Republicans in opposing the measure, which required 60 votes to advance. Meanwhile, Senate Majority Leader Harry Reid (D - NV) signaled his intention to pursue a shorter - term fix while continuing to keep the issue separate from broader health care reform legislation ( Kaiser H ealth News, 10/22 ; Wall Street Journal, 10/22 ; New York Times, 10/21 ). Pr esident Obama Signs VA Health Care Bill : President Barack Obama signed the Veterans Health Care Budget Reform and Transparency Act ( HR 1016), approved by Congress October 14 (Financing News Pulse 10/16 edition), authorizing Congress to appropriate funds for the Department of Veterans Affairs222 (VA) medical programs one year in advance of each fiscal year. In 19 of the past 22 years Congress has approved the VA budget late, forcing the VA to operate on the previous year222s budget that often lacks funding for new programs slated for inclusion in the new budget (Financing News Pulse 6/29 edition) ( Kaiser Health News, 10/22 ). D emocrats to Add Provision Eliminating Healt h Insures222 Antitrust Exemption to Health Reform; House Judiciary Committee Approves Bill : The House Judiciary Committee approved legislation ( HR 3596 ) on October 21 that would curb health insurers222 exemption from federal antitrust laws. After securing passage in the House Rules Committee , House Speaker Nancy Pelosi (D - CA) said that she will merge the bill into the broader health care reform package fo r consideration on the House floor ( CQ Politics, 10/22 ). Similarly, Senate Majority Leader Harry Reid (D - NV) announced plans to include the Senate222s companion bill ( SB 1681 ), which completely repeals the 1945 McCarran- Ferguson Act exempting health insurers from antitrust laws, as part of the Senate222s health care reform bill SAMHSA222s Weekly Financing News Pulse: National Edition October 23, 2009 10/23/09 3 (Financing News Pulse 10/16, 9/18 editions) ( Kaiser Health News, 10/21 ; Kaiser Health News, 10/21 ; AP, 21 ; New York Times, 10/21 ). Senat or Introduces Bill Authorizing M ore Funding for IHS : On October 15, Senate Indian Affairs Committee Chair Byron Dorgan (D - ND) introduced SB 1790 to authorize additional funding for the Indian Health Service (IHS). The proposed bill, which was referred to the Senate Indian Affairs Committee , would p ermanently reauthorize all current IHS health care programs, create new programs to recruit additional health care professionals, establish additional M/SU programs, and require IHS funding mechanisms to account for medical inflation and population growth ( Argus Leader, 10/19 ; THOMAS). In related news, House Speaker Nancy Pelosi (D - CA) authored a letter to the National Congress of American Indians on October 13 in which she pledged that Native Americans would not be subject to health care reform222s insurance mandate or the penalties tied to that mandate and may continue to receive health care through IHS ( Indian Country Today, 10/19 ). Sen. Durbin Introduces Bill to Increase the Quantity of Crack Cocaine Triggering Mandatory Minimums : On October 15, Senate Majority Whip Dick Durbin (D - IL) introduced the Fair Sentencing Act ( SB 1789 ) to increase the amount of crack cocaine necessary to incur a mandatory minimum sentence under federal law. Under current law, individuals must possess 100 times more powder cocaine than crack cocaine to trigger the same mandatory minimum sentence. Sen. Durbin222s bill wou ld also increase the penalties for large - scale drug trafficking and violent crime ( Washington Post, 10/16 ). The U.S. Sentencing Commission (USSC) issued rep orts in 2007, 2002, 1997, and 1995 recommending that Congress reduce crack cocaine sentencing requirements to make them equal with powder cocaine. In 2007, Congress took no action to prevent the USCC from reducing the disparity in sentencing guidelines wh ile the U.S. Supreme Court ruled (Kimbrough v. U.S., 06 - 6330) that judges were within their rights to consider the disparity in making their sentencing recommendations. However, despite those changes, only Congress can alter the official legal mandatory minimums that remain law ( Washington Post, 12/11/2007 ; Christian Science Monitor, 11/2/2007 ) . Rep. Braley to Introduce Bill Emphasizing Patient Safety: Rep. Bruce Braley (D - IA) plans to introduce legislation to implement the Institute of Medicine222s (IOM) 1999 patient safety recommendations that many policy makers say have not been sufficient ly incorporated into the broader health care reform legislation. The bill would mandate that practitioners and health care institutions report medical errors and create a system for monitoring such mistakes ( Kaiser Health News, 10/21 ; Modern Healthcare, 10/22 ). DOJ Issues Formal Medical Marijuana Guidelines : U.S. Attorney Gener al Eric Holder released official U.S. Department of Justice (DOJ) guidelines for medical marijuana on October 19, formalizing a DOJ policy in place since January not to prioritize legal action against users and dispensers of medical marijuana in the 14 states permitting the activity. Holder stressed that the DOJ will continue to prosecute individuals who obtain or distribute marijuana in violation of states222 medical marijuana guidelines ( DOJ, 10/19 ; Los Angeles Times, 10/20 ). Update: Administration Cites Humana for Non -Compliance, Relaxes Medicare Communications Rules : On October 16, the Centers for Medicare & Medicaid Services (CMS) cited Humana Inc. for violating Medicare rules by misinforming Medicare Advantage (MA) beneficiaries about the possible effects of health care reform on MA plans. The citation comes after CMS initiated an SAMHSA222s Weekly Financing News Pulse: National Edition October 23, 2009 10/23/09 4 investigation into Humana 222s communications at the urging of Se nate Finance Committee Chair Max Baucus (D - MT) (Financing News Pulse 10/9, 9/25 editions). At the start of the investigation, CMS also sent letters to all MA insurers instructing them to cease any programs designed to communicate potential effects of health care reform to their beneficiaries; however, CMS has since overturned that directive. Under new CMS guidelines, insurers must obtain permission from beneficiaries to initiate such communication and may not use federal funding to pay for the communications ( New York Times, 10/16 ; Kaiser Health News, 10/19 ). Health Care Reform Polls Find Support for Public Plan and Continued Confusion : A Washington Post/ABC News poll , released October 19, found that Americans are nearly evenly divided in their opinions on health care reform. In addition, t he poll found that 57 percent of respondents support the inclusion of a public plan option while 56 percent support an individual health insurance mandate, though 71 percent support the mandate when coupled with subsidies for low - income residents ( Kaiser Health News, 10/20 ; ABC News, 10/19 ). A CNN/Opinion Research Corporation poll also found that the public was evenly divided on health care reform and increasingly favoring the public option. CNN found that 49 percent favor reform and 49 percent oppose it; however, 61 percent favor the public option, up 6 points since August ( CNN, 10/21 ; Kaiser Health News, 10/21 ). A Kaiser Family Foundation (KFF) poll found support for health care reform largely unchanged , with 55 percent of respondents reporting that , 223it is more important than ever to take on health care reform now224 while 41 percent saying that 223we cannot afford to take on health care reform right now.224 The KFF poll also found high support (57 percent ) for the public plan; however, only 32 of respondents support it when told that the plan could give the government an unfair advantage over private companies while 65 percent support it with a 223trigger,224 to be enacted only if the private market fails. Finally, the KFF poll found that many respondents incorrectly believed that most health care reform changes would occur within one year of the bill222s passage ( KFF, 23 ). Looking to the future of reform, a USA Today/Gallup poll found that 33 percent of respondents expect to oppose a final health care reform bill, 25 percent expect to support it, and 39 percent remain undecided. The Gallup poll also found increasing support for the public plan but also an increasing number of respondents (49 percent) who fear that reform will increase their health care costs ( Kaiser Health News, 10/21 ). Finally, asking related questions, a Robert Wood Johnson Foundation (RWJF) poll found that 67 percent of Americans believe that access to care will improve or remain constant under health care reform while roughly 33 percent were concerned about losing their personal coverage under reform, up from 29 percent in August ( AP, 10/20 ). H HS -DOJ Strike Force Yields More Charges on Medicare Fraud : On October 21, the Federal Bureau of Investigation (FBI), the U.S. Department of Health and Human Services (HHS), and the California Attorney General222s office jointly announced charges against 20 individuals for a total of $26 million in Medicare fraud. The arrests result from investigations conducted by the HHS- DOJ Medicare Strike Force (Financing News Pulse 8/3 edi tion) ( Kaiser Health News, 10/21 ). P harmaceutical Companies are NAMI222s Biggest Donors : As the result of a request for donor information from Senate Finance Committee Ranking Member Chuck Grassley (R- IA), the National Alliance on Mental Illness (NAMI) disclosed its health care sector contributors, revealing that pharmaceutical company contributions totaled $23 million from 2006 to 2008, about 75 percen t of NAMI222s donations. NAMI Executive Director Michael Fitzpatrick agreed that the percentage of donations coming from pharmaceutical companies was higher than NAMI wanted and that the industry222s share of future fund raising would drop significantly ( New York Times, 10/21 ). SAMHSA222s Weekly Financing News Pulse: National Edition October 23, 2009 10/23/09 5 Studies Released CMS Office of the Actuary Report Says House Health Reform Bill Would Increase Health Care Costs : A report released October 21 by the Office of the Actuary , an independent entity within CMS , found the version of HR 3200 approved by the House Ways and Means Committee in July would increase overall health care costs by 2.1 percent over a decade. The report predicts that, under the bill, h ealth care222s share of the gross domestic product (GDP) would grow to 21.3 percent by 2019 but only 20.8 percent under current law, largely due to newly insured residents seeking health care. The report, which contains a disclaimer that it does not represe nt an official HHS position, differs from CBO cost estimates insofar as it considers both private and public payers rather than limiting analysis to the legislation222s effect on federal spending. Obama Administration officials note that analysis was conduc ted on an out - of - date bill and that the House 221s final health care reform legislation will differ substantially from the committee version ( Kais er Health News, 10/22 ; AP, 10/22 ; Dow Jones Newswire via Wall Street Journal, 10/22 ; The Hill, 10/21 ). CDC Report Finds Drug Deaths Outnumber Traffic Deaths in 16 States : A Centers for Disease Control and Prevention (CDC) report found that drug - related deaths outnumber traffic fatalities in 16 states, highlighting the increasing safety of car travel and the increasing abuse of prescription medications. Nationally, the CDC recorded approximately 45,000 traffic - related deaths and 3 9,000 drug- related deaths. The 16 states are CO, CT, IL, MD, MA, MI, NV, NH, NJ, NY, OH, OR, PA, RI, UT, and WA ( AP, 9/30 ). N CQA Report Finds Health C are Quality Stagnant; M/SU Treatment Quality Low : The National Committee for Quality Assurance (NCQA) released its annual state of health care quality report on October 22, finding tha t overall health care quality in America227 including private and public coverage 227 has been virtually stagnant since 2008. Previous NCQA reports had found health care quality had improved significantly every year for the past 12 years and NCQA attributes the reversal to the economy and the fee - for- service (FFS) payment model. In addition to the overall trends, the NCQA report notes that the percentage of patients receiving quality care for many conditions, including for M/SU conditions, remained under 50 percent while some M/SU conditions displayed quality reductions ( NCQA, 10/22 ; Kaiser Health News , 10/22 ). F amilies USA Report Estimates 2009 Uninsurance Rate : Using 2008 data from the U.S. Census Bureau and the Urban Institute (Financing News Pulse 10/16, 9/14 editions), a Families USA report estimates the 2009 national and state- level uninsurance rates based on the continued rise in unemployment since 2008. The report estimates that the number of uninsured working Americans has increased by 4 million since the 2008, totaling over 50 million uninsured American residents. The report notes that states with higher unemployment rates have suffered greater percentage losses in health coverage, with the highest percentage lo sses coming in Oregon, Michigan, South Carolina, Nevada, and North Carolina. However, the report also notes that insurance rates among children have remained high throughout the recession largely due to the success of Medicaid and the Children222s Health In surance Program (CHIP) ( Families USA, 10/20 ; Philade lphia Inquirer, 10/21 ; Kaiser Health News, 10/21 ). State - level estimates are available on the Families USA website . CBPP Report Highlights Recession222s Effect on State Budgets : On October 22, the Center on Budget and Policy Priorities (CBPP) released an updated report documenting the effects of the current SAMHSA222s Weekly Financing News Pulse: National Edition October 23, 2009 10/23/09 6 recession on state budgets, noting that 48 states faced FY2010 budget shortfalls and 26 states face mid - year shortfalls totaling $16 billion. In addition, the report notes that most states anticipate large funding gaps for 2011 and that American Recovery and Reinvestment Act (ARRA) funding is slated to run out before states have rebounded from the recession. The report provides state-level budget data and considers the role of the federal government and other state budgetary options including tax increases and expenditure reductions in resolving the shortfalls ( Bloomberg, 10/20 ). A AMC Data Shows Small Increase in Medical School Enrollment : New data from the Association of American Medical Colleges (AAMC) shows that first - year enrollment in American medical schools increased 2 percent since 2008 to approximately 18,400 students. The AAMC data showed that medical school applications increased only slightly since 2008, from 42,231 to 42,269; however, so far this year, 3 percent more people have taken the Medical College Admission Test (MCAT) than took the test in 2008 ( Physician News, 10/20 ; Kaiser Health News, 10/21 ). A related study , published in the Journal of the American Medical Association (JAMA), compared U.S. Census data with AMA Physician Masterfile information, concluding that census data shows more young physicians entering the workforce and fewer older physicians remaining active, yielding smaller estimates for the current and future physician workforce ( U.S. News & World Report, 10/20 ). C ommittee Report Says Health Reform Bills have Too Few Cost Controls : A report released by the Committee for a Responsible Federal Budget presents analyses of federal health care reform legislation using data from the CBO, Office of Management and Budget (OMB), Joint Commission on Taxation, and the Library of Congress, to conclude that none of the bills does enough to control health care costs ( Kaiser Health News, 10/21 ; Christian Science Monitor, 10/20 ). G oldman Sachs Says Health Reform222s Medicare Cuts Will Halve Insurer222s Earnings Growth : A Goldman Sachs Group Inc. analysis found that, if the Senate Finance Committee222s health care reform legislation is enacted, Medicare cuts will reduce the five major health insurance companies222 earnings by 50 percent. Of the five major companies 227 UnitedHealth Group Inc. , Humana Inc. , Cigna Inc. , WellPoint Inc. , and Aetna Inc. 227 Humana will be the most affected while Cigna will be the least affected because of its low number of Medicare enrollees. Goldman Sachs also estimates that the legislation would halve profit margins on individual and small- group policies to 3 percent over 10 years but double the number of enrollees to 20 million ( Bloomberg, 10/19 ). W atson Wyatt Finds Large Employers Do Not Plan to Restore Health Benefits After Recession : A Watson Wyatt survey found that two - thirds of large employers that cut employee health benefits during the recession do not plan to restore those benefits to pre - recession levels. The same survey found that fewer than half of firms that cut retirement be nefits plan to restore them within a year and 8 percent reported that they never plan to restore them ( Wall Street Journal, 10/20 ; Kaiser Health News, 10/20 ). S tudy Finds Association Between Post - Retirement Work and Health, Including Mental Health : A study published in th e Journal of Occupational Health Psychology analyzed data from the national Health and Retirement Study, finding that engaging in 223bridge employment224 during retirement was associated fewer major diseases and functional impairments that work - free retirement. In addition, the study found that engaging in bridge employment in one222s career field was associated with better mental health than non - employment or unrelated bridge employment ( New York Times, 10/19 ). SAMHSA222s Weekly Financing News Pulse: National Edition October 23, 2009 10/23/09 7 Around the Hill: Hearings on Health Financing Senate Judiciary Subcommittee on Administrative Oversight and the Courts : Bankruptcy and Medical Debt October 20, 10:00 a.m., 226 Dirksen Senate Small Business and Entrepreneurship Committee : Health Care Overhaul and Small Business October 20, 10:30 a.m., 253 Russell House Energy and Commerce Subcommittee on Oversight and Investigations : High Cost of Small Business Health Insurance October 20, 1:00 p.m., 2123 Rayburn House Energy and Commerce Subcommittee on Health: Indian Health Care October 20, 2:00 p.m., 2226 Rayburn Senate Homeland Security and Governmental Affairs Committee : Monitoring Response to H1N1 Flu October 21 , 9:30 a.m., 342 Dirksen Senate HELP Committee : HELP Nominations October 21, 10:00 a.m., 430 Dirksen Senate Veterans Affairs Committee : VA - Indian Health Service Cooperation November 5, 10:00 a.m., 418 Russell Senate Judiciary Committee: Health Care Fraud TBA, 226 Dirksen
