WeeklyFinancingNewsPulseNationalEditionfinal20090925.pdf (PDF | 312.43 kb)
SAMHSA222s Weekly Financing News Pulse: National Edition September 25, 2009 9/25/09 1 SAMHSA222s Weekly Financing New Pulse: National Edition National News Senate Finance Committee Marks Up Health Care Reform Bill; House Moves Towards Health Reform Compromise House Approves Legislation to Prevent Medicare Premium Increases Massachusetts Governor Announces Interim U.S. Senator Wh ite House Announces $25 Million in State Grants for Pilot Programs to Reduce Malpractice Suits SAMHSA Awards $46 Million in Prevention Grants CMS Investigates Humana for Marketing Violations, GOP Lawmakers Re quest Hearing, Threaten to Block Appointments CMS Says WellPoint May Resume Selling Part D, MA Plans Court Ordered Drug Price Reduction Takes Effect U.S. Orders Additional H1N1 Vaccine, NIH Announces Vaccine Efficacy in Children Franklin and Marshall College Poll Finds Americans Less Concerned with Health Care American Airlines to Drop Retiree Health Plan Subsidies Studies Released Obama Administration Releases Report Documenting Health Care Premium Trends and Recent Actions to Curb Costs Survey Finds Most Employers Oppose Health Insurer Tax Urban Institute Report Es timates the Cost of Racial and Ethnic Disparities RWJF Report Finds Most Preventative Care Does Not Result in Cost Savings But Many Preventative Measures are Cost - Effective KFF Releases Updated Briefs Examining P roposed Medicaid, CHIP, and Medicare Changes Under Health Reform KFF Releases Brief Analyzing Immigrant Coverage Under Health Reform Health Affairs Study Analyzes Medicaid and CHIP Spending on Children, Issues Reform Recommendations Study Finds Insurance Status Associated With Mortality Around the Hill: Hearings on Health Financing For quest ions or comments, please contact Kevin Hennessey ( kevin.hennessy@samhsa.hhs.gov ). SAMHSA222s Weekly Financing News Pulse: National Edition September 25, 2009 9/25/09 2 National News Senate Finance Committee Marks Up Health Care Refo rm Bill; House Moves Towards Health Reform Compromise : On September 22, the Senate Finance Committee began the mark up of the America222s Health Future Act of 2009 , the health care reform bill that the bipartisan 223gang of six224 have been negotiating for months. However, prior to beginning the mark up, Senate Finance Committee Chair Max Baucus (D - MT) made several changes to the bill , and released updated cost estimates from the Joint Committee on Taxation ( Kaiser Health News, 9/22 ) . Sen. Baucus 222 changes included: Reducing the burden of insurance premiums on individuals earning between 133 percent and 400 pe rcent of the federal poverty level (FPL) I ncreas ing the tax on insurers D ecreas ing the penalty for individuals failing to obtain insurance E nsuring that the federal government would assume the cost of Medicaid expansions in states with large Medicaid populations ( Kaiser Health News, 9/23 ; Kaiser Health News, 9/23 ). As of September 22, Finance Committee members had proposed 564 amendments . ( Kaiser Health News, 9/21 ). Though Senate Majority Leader Harry Reid (D - NV) had hoped to begin Senate floor debate o n the measure by September 28, the volume of amendments has forced the Finance Committee to extend the markup through September 29 , when committee members will debate amendments addressing the inclusion of a public plan option ( AP, 9/25 ). Thus far , the committee has rejected several amendments including those : E liminat ing the deal struck between the White House and the Pharmaceutical Research and Manufacturers of America (PhRMA) and replac ing it with a plan to extract twice the agreed upon $80 billion in savings from the industry ( New York Times, 9/24 ) . E liminat ing planned reductions for Medicare Advantage (MA) plans ( Kaiser Health News, 9/23 ) Eliminating an independent expert panel slated to make Medicare spending decisions ( Kaiser Health News, 9/24 ). The committee did adopt a measure delaying a final vote until committee members have a plain - English description of the measures and a preliminary Congressional Budget Office (CBO) cost estimate ( CQ Politics, 9/23 ). Additionally, o n September 24, the committee released internal scoring estimates for the September 22 revisions and updated state - level data on the impact of Medica id changes under the bill. The committee222s documents suggest that the bill would cost $900 billion over 10 years but actually reduce the deficit by $23 billion because of cost offsets. The committee also estimates that the Medicaid changes would increase state expenses by 1.3 percent over the decade ( Ka iser Health News, 9/24 ). Meanwhile, House Rules Committee Chairwoman Louise Slaughter (D - NY) and House Ways and Means Committee Chair Charles Rangel (D - NY) expect that the House will have a completed bill ( HR 3200) to send to the CBO for a cost estimate by September 28, tentatively setting the House for a floor vote in mid - October . H owever , inclusion of a public plan option 227 supported by, among others, House Speaker Nancy Pelosi (D - CA) 227 remains an issue of contention ( CQ Today, 9/25 ; AP, 9/25 ; The Hill, 9/24 ). Finally, t he Kaiser Family Foundation (KFF) updated their online health reform tracker and a subsidy calculator on September 23 , allowing easy comparisons of the current health care reform proposals. Ho use Approves Legislation to Prevent Medicare Premium Increases : On September 24, the U.S. House overwhelmingly approved legislation to prevent Medicare Part B premium increases for 11 million seniors . The legislation would use $2.8 billion from the Medicare Improvement Fund, which the SAMHSA222s Weekly Financing News Pulse: National Edition September 25, 2009 9/25/09 3 U.S. Department of Health and Human Services (HHS) usually uses to improve Medicare Parts A and B, to prevent rate increases for 25 percent of Medicare beneficiaries. The possible increase s stem from a federal law tying social security payments to Medicare Part B premiums . T hough 75 percent of Medicare enrollees would be unaffected because of a 223hold harmless224 clause in the law , new Medicare enrollees, Medicare enrollees with incomes over $85,000 ($170,000 for couples), and dually eligible Medicaid and Medicare enrollees whose Medicare premiums are paid by Medicaid would be affected (Financing News Pulse 5/11 edition). If no adjustment is passed, affected premiums will likely rise from an average of $96.40 per month this year to $119 per month in 2010, and $123 per month in 2011 ( CQ, 9/24 ; AP, 9/24 ; Kaiser Health News, 9/24 ). Massachusetts Governor Announces Interim U.S. Senator : On September 24, Massachusetts Governor Deval Patrick (D) named Paul G. K irk Jr. as interim replacement for the late former Senator Edward 223Ted224 Kennedy (D - MA). The move came after the Massachusetts Legislature voted September 23 to change state law to allow the governor to appoint an interim U.S. Senator to fill vacant seats prior to special elections (Financing News Pulse 9/22 edition) . Kirk, a former chairman of the Democratic National Committee and close political and personal ally of Senator Kennedy, is set to be confirmed at 3:15 September 25; however, state GOP leaders have scheduled a hearing to question the governor222s ability to make the appointment so soon after obtaining the legal authority to do so. After his official appointment , Kirk will restore the Democrats filibuster- proof majority in the U.S. Senate, including the two independent Senators who caucus with the Democrats . Kirk does not plan to run for the Senate seat in the January special election ( CQ Politics, 9/24 ; Los Angeles Times, 9/24 ; The Hill, 9/24 ; CQ Politics, 9/23 ). White House Announces $25 Million in State Grants for Pilot Programs to Reduce Malpractice Suits : On September 17, the White House announced $25 million in state grants to fund pilot programs to reduce medical malpractice suits. The grants, which will be administered by HHS and provide up to $3 million over three years, must reduce frivolous lawsuits while prioritizing patient safety, reducing preventable injuries, fostering better doctor - patient communication, reduc ing liability premiums and ensur ing that patients are compensated in a fair and timely manner ( ABC, 9/17 ; Kaiser Health News, 9/18 ). S AMHSA Awards $46 Million in Prevention Grants : On September 14, the Substance Abuse and Mental Health Services Administration222s (SAMHSA) Center for Substance Abuse Prevention (CSAP) awarded four five - year Partnerships for Success: State and Community Prevention Performance grants. The grants aim to reduce statewide substance abuse rates by addressing gaps in states 222 current prevention serv ices and increasing their ability to reach out to specific populations or geographic areas with serious, emerging substance abuse problems. Building on the strategic prevention framework (SPF), these grants offer approximately $2.3 million annually to the Colorado Prevention Partnership for Success , the Connecticut Department of Mental Health, the Illinois Partnership for Success, and the Tennessee Department of Mental Health and Developmental Disabilities222 Division of Alcohol and Drug Abuse Services ( SAMHSA, 9/14 ). C MS Investigates Humana for Marketing Violations , GOP Lawmakers Request Hearing, Threaten to Block Appointments : At the request of Senate Finance Committee Chair Max Baucus (D - MT), the Centers for Medicare & Medicaid Services (CMS) launched an investigation into Humana Inc.222s effort to induce their Medicare Advantage ( MA ) beneficiaries to send letters to their congressmen SAMHSA222s Weekly Financing News Pulse: National Edition September 25, 2009 9/25/09 4 opposing proposed cuts to MA plans under Democr atic health care reform legislation . CMS is investigating whether letters sent by Humana to beneficiaries in several states constitute a violation of agency marketing rules. The agency has also initiated an investigation of Humana222s online partner program, which automatically generates letters that beneficiaries can send lawmakers to oppose MA cuts . CMS has sent letters to all insurers offering MA plans, instructing them to immediately cease any similar programs ( Wall Street Journal, 9/21 ; Kaiser Health News, 9/22 ; Wall Street Journal, 9/22 ; FOX, 9/24 ). GOP lawmakers, including Senate Minority Leader Mitch McConnell (R- KY), contend that the companies are entitled to free speech and numerous lawmakers have suggested that CMS is using its regulatory powers for partisan purposes ( Kaiser Health News, 9/23 ). Senate GOP leaders sent a letter to HHS Secretary Kathleen Sebelius threatening to block Obama Administration health nominees unless CMS revokes the 223gag order224 while Republicans on the House Ways and Means Committee wrote a let ter to Committee Chair Charles Rangel (D - NY) requesting a hearing to investigate the action ( AP, 9/24 ; FOX, 9/24 ). CMS Says WellPoint May Resume Selling Part D, MA Plans : After suspending WellPoint Inc.222s ability to enroll new members in its Medicare Advantage ( MA ) and Medicare Prescription Drug Benefit (Part D) plans in January, CMS sent a letter to WellPoint on September 9 allowing the company to resume marketing its products on October 1 and resume enrolling new beneficiaries on November 15. CMS halted WellPoint222s enrollment because the company failed to comply with requirements for 223proper administration224 ( AMA News, 9/21 ). C ourt Ordered Drug Price Reduction Takes Effect : Beginning September 26, the average wholesale drug prices , which pharmacy benefit managers use to set reimbursement rates for pharmacies and health insurers , will decrease by 4 percent as the result of a court order. The order stems from a 2005 class - action lawsuit alleging that First Databank and McKesson Crop. wrongfully inflated the average wholesale prices to increase profits . Though private companies have prepared for the cut, pharmacies worry that the change will result in Medicaid reimbursement reductions ( Kaiser Health News, 9/18 ). U.S. Orders Additional H1N1 Vaccine , NIH Announces Vaccine Efficacy in Children : T he U.S. government ordered an additional 56 millio n doses of H1N1 (swine flu) vaccine, raising the total order to 251 million doses. The move comes after a spokes person for the Centers for Disease Control and Prevention (CDC) announced September 18 that the CDC expects 3.4 million doses of the inhalable H1N1 vaccine, FluMist, to be available the first week of October. Of the new order, 29 million doses are MedImmune LLC222s FluMist and 27.3 million are Sanofi Pasteur222s injectable vaccine. The National Institute of Allergy and Infectious Diseases (NIAID) at the National Institutes of Health (NIH) also announced that preliminary clinical trials found that a single dose of injectable vaccine provides sufficient immunity for individuals age 10 and up but that a 21 - day follow - up shot is required for younger children ( Kaiser Health News, 9/21 ; Kaiser Health News, 9/22 ; NIAID, 9/21 ). F ranklin and Marshall College Poll Finds A mericans Less Concerned with Health Care : A Franklin and Marshall College poll found that only 20 percent of respondents considered health care the most important problem facing their family. Pollsters believe that the results are due to an 88 percent insurance rate among respondents and note that 75 percent of respondents rated their coverage as 223good224 or 223very good.224 However, in the same poll, 56 percent of respondents reported that SAMHSA222s Weekly Financing News Pulse: National Edition September 25, 2009 9/25/09 5 the country222s health care system was not meeting their needs ( Kaiser Health News, 9/24 ; Philadelphia Inquirer, 9/2 4 ). A merican Airlines to Drop Retiree Health Plan Subsidies : Beginning January 1, American Airlines (AA) will no longer offer subsidized retiree health plans to non - union retirees over 65. The 5,500 affected retirees may choose to retain their AA coverage to supplement their Medicare coverage; however, they must pay the full cost of the premiums. AA has made similar proposals in contract negotiations with the airline 222s three unions but ha s yet to finalize any deals ( AP, 9/23 ). Studies Released Obama Administration Releases Report Documenting Health Care Premium Trends and Recent Actions to Curb Costs : On September 22, the Executive Office of th e President released a report compiled by the National Economic Council , which documents the rising cost of health insurance premiums at both the national and state levels. The report notes that from 1999 to 2009, premium increases ranged from 88 percent in Michigan to 145 percent in Alaska; however, wages and inflation increased by 38 and 28 percent respectively over the same time. The report also examines recent actions by State Insurance Commissioners to reduce premium increases ( Wall Street Journal, 9/22 ). Survey Finds Most Employers Oppose Health Insurer Tax : A Watson Wyatt Wordlwide survey of 160 employers found that only 19 percent favor a tax on health insurers as a revenue source for health care reform and only 11 percent favor counting employer - paid health care premiums as individual222s income. The survey also found that 73 percent of employers believe that health care reform will increase health care costs ( Business Insurance, 9/24 ; PR Newswire, 9/24 ). U rban Institute Report Estimates the Cost of Racial and Ethnic Disparities: On September 22, the Urban Institute released a report which estimates that racial and ethnic disparities in a set of preventable illnesses including diabetes, hypertension, and stroke will cost $23.9 billion in 2009. The report concludes that , in 2009, Medicare222s share will total $15.6 billion while private insurance will spend an additional $5.1 billion. In a ddition, the report estimates that the total cost of the disparities will reach $337 billion by 2019 and increase by more than 50 percent by 2050 as the American minority population increases ( Kaiser Health News, 9/24 ; Urban Institute, 9/22 ). RWJF Report Finds Most Preventative Care D oes Not Result in Cost Savings But Many Preventative Measures are Cost -Effective : A report by the Robert Wood Johnson Foundation (RWJF) found that, though man y preventative services are cost- effective 227 offering good value for their cost227 and help people lead longer and healthier lives, most do not result in cost savings ( Kaiser Health News, 9/24 ). K FF Releases Updated Briefs Examining Proposed Medicaid, CHIP, and Medicare Changes Under Health Reform : KFF has a released a brief, 223 Medicaid and Children222s Health Insurance Program Provisions: America222s Affordable Health Choices Act & America222s Healthy Future Act ,224 comparing Medicaid and Children222s Health Insurance Program ( CHIP ) coverage under the Senate Finance Committee health reform bill and th e House Tri- Committee bill. In addition, KFF released, 223 Side - by - Side Comparison of Key Medicare Provisions in 2009 Health Reform Legislation ,224 and 223 Medicare Savings in Perspective: A Comparison of 2009 Health Reform Legislation and Other Laws in the Last 15 Years 224 examining proposed Medicare changes in the current bills, including provisions affecting MA plans, prescription drug coverage, and other payment reform. KFF also released a brief, entitled 223 Setting SAMHSA222s Weekly Financing News Pulse: National Edition September 25, 2009 9/25/09 6 Medicare Payment Policy: Is There a Role for an Independent Entity? 224 that examin es the way Medicare payments are cu rrently se t and consider s the potential role of an independent Medicare rate - setting entity. KFF Releases Brief Analyzing Immigrant Coverage Under Health Reform : On September 21, KFF released a brief providing an overview of key issues surrounding current immigrant health care and proposed changes under the numerous health care reform proposals ( KFF, 9/21 ). Health Affairs Study Analyzes Medicaid and CHIP Spending on Children, Issues Reform Recommendations : A study published in Health Affairs found that spending on children under Medicaid and CHIP is highly concentrated, highlighting the importance of cost containment strategies designed to reduce the burden of chronic illnesses. Using d ata from the Medical Expenditure Panel Survey (MEPS), th e study found that 10 percent of child enrollees 227 67 percent of whom have chronic conditions 227 account for 72 percent of spending on children while 30 percent of enrolled children receive little or no care ( Kaiser Health News, 9/24 ). S tudy Finds Insurance Status Associated With Mortality : A study , released by Physicians for a National Health Program and published in the American Journal of Public Health, found that lack of health insurance is associated with a 40 percent higher risk of death. Following up on a 1993 Institute of Medicine (IOM) study that found a 25 percent increased risk of death among uninsured adults, this study found that the risk has increased even after controlling for age, sex, race/ethnicity, income, education, self - and physician - rated health status, body mass index, leisure exercise, smoking, and regular alcohol use ( Kaiser Health News, 9/18 ). Around the Hill: Hearings on Health Financing Senate Homeland Security and Governmental Affairs Committee : Protecting Against the H1N1 Flu September 21, 10:00 a.m., Hartford, CT Senate Finance Committee: Health Care Revision September 22, 9:00 a.m., 216 Hart September 23, 216 Hart September 24, 216 Hart September 25, 216 Hart House Veterans Affairs Subcommittee on He alth: Pharmaceutical Needs of Veterans September 22, 3:00 p.m., 334 Cannon House Energy and Commerce Committee: Health Care Overhaul September 23, TBA, 2123 Rayburn House Science and Technology Subcommittee on Technology and Innovation: Research and De velopment of Biologic Drugs September 24, 10:00 a.m., 2 318 Rayburn SAMHSA222s Weekly Financing News Pulse: National Edition September 25, 2009 9/25/09 7 Senate Veterans Affairs Committee : VA Health Services Contracts September 30, 9:30 a.m., 418 Russell Senate Homeland Security and Government al Affairs Subcommittee on Federal Financial Ma nagement, Government Information, Federal Services, and International Security : Medicaid Substance Abuse TBA, TBA, 342 Dirksen
