Transcript of HEALTHCARE REFORM – A LOOK INTO THE CRYSTAL BALL Steve Markesich, CPAM Yale-New Haven Health...
- Slide 1
- HEALTHCARE REFORM A LOOK INTO THE CRYSTAL BALL Steve Markesich,
CPAM Yale-New Haven Health System Philadelphia/Keystone Chapters
September 21, 2010
- Slide 2
- The Evolution of PPACA The uninsured and under insured Richard
Scruggs State battlegrounds Provena Healthcare 2008 The bruising
2009 legislative process Victory?
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- TODAYS OUTLINE The law itself and implementation schedule
Impact on individuals, employers, providers and states Reaction
from the states The looming constitutionality question 2010
elections Some anecdotal fun Informational Resources
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- Anecdote # 1: TRUE OR FALSE: Legislation can become law without
a vote being taken?
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- ANSWER: TRUE
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- The Deem Team Self-executing rules exist in Congress under
which something can be deemed into law. Speaker Pelosi indicated
last winter that she actually favored a deem and pass legislative
maneuver which would allow the House to pass the Senates bill
without actually having to vote on it.
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- Reform Implementation Schedule Insurance
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- 2010 Establish temporary high risk pool to provide health
coverage to individuals with pre-existing conditions (effective 90
days following enactment until 1/1/2014. Provide dependant coverage
for adult children up to age 26 for all individual and EGHPs
(9/23). Prohibit plans from placing lifetime limits on dollar value
of coverage prior to 2014. Plans may only impose limits on coverage
as determined by the HHS Secretary. Prohibits insurers from
rescinding coverage except in cases of fraud. Prohibits pre-
existing exclusions for children.
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- 2010 ins. reforms (cont) Requires qualified health plans to
provide minimum coverage without cost sharing for preventive
services rated A or B by the U.S Preventive Services Task Force
(essential outpatient, inpatient, emergency, maternity, neonatal,
mental health, lab), recommended immunizations, preventive care for
infants, children and adolescents, additional preventive care and
screenings for women, and some prescription drugs. Provide tax
credits to small employers (no more than 25 employees with average
annual wages of less than $50K) that provide EGHPs.
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- 2010 ins. reforms (cont.) Create a temporary reinsurance
program for employers providing EGHPs to retirees over age 55 who
are not eligible for Medicare (effective 90 days following
enactment until 1/1/2014) more on this later Require health plans
to report the proportion of premium dollars on clinical services,
quality and other costs. Provide rebates to consumers for the
amount spent that is less than 85% for plans in large group market
and 80% for individual and small group market.
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- 2010 ins. reforms (cont) Establish a process for reviewing
increases in health plan premiums - Require plans to justify
increases. Require states to report on trends in premium increases
and recommend whether certain plans should be excluded from the
Exchange based on unjustified premium increases.
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- 2013 Create a CO-OP program to foster the creation of
non-profit, member-run health insurance companies in all 50 states
and DC to offer qualified health plans. Appropriate $6B to finance
the program and award loans and grants to establish Co-Ops by
7/1/13
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- 2013 Ins. Reforms, (cont.) Simplify health insurance
administration by adopting a single set of operating rules for
eligibility verification and claim status (rules adopted 7/1/11;
effective 7/1/13), electronic funds transfers and health care
payment and remittance (rules adopted 7/1/12 effective 7/1/14), and
health care or equivalent encounter information, enrollment and
disenrollment in a health plan, health plan premium payments, and
referral certification and authorization (rules adopted 7/1/14
effective 7/1/16) Health plans must document compliance with these
standards or face penalties of no more than $1 per covered life
(effective 1/1/14)
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- 2014 Create state-based American Health Benefit Exchanges and
Small Business Health Options Program (SHOP) Exchanges,
administered by a governmental agency or non-profit organization,
through which individuals and small businesses with up to 100
employees can purchased qualified coverage. Reduce out-of-pocket
limits to those with incomes up to 400% FPL to the following
limits
- Slide 16
- 2014 Ins. Reforms, (cont.) Limit deductibles for health plans
in the small group market to $2,000 for individuals and $4,000 for
families unless contributions are offered that offset deductible
amounts above these limits. Limit any waiting period for coverage
to 90 days. Create an essential health benefits package that
provides a comprehensive set of services, covers at least 60% of
the covered benefit, limits annual cost-sharing to the current law
HSA limits ($5,950 per ind./$11,900 per family in 2010) and is not
more extensive than the typical employer plan.
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- 2014 Ins. Reforms (cont.) Require the Office of Personnel
Management to contract with insurers to offer at least 2
multi-state plans in each Exchange. At least 1 plan must be offered
by a non-profit entity and at least 1 plan must not provide
coverage for abortions beyond those permitted by federal law.
Permit states the option to create a Basic Health Plan for
uninsured individuals with incomes between 133-200% FPL who would
otherwise be eligible to receive premium subsidies in the
Exchange.
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- 2014 Ins. Reforms, (cont.) Allow states the option of merging
individual and small group markets. Create a temporary reinsurance
program to collect payments from health insurers in the individual
and group markets to provide payments to plans in the individual
market that cover high-risk individuals. Require qualified health
plans to meet new operating standards and reporting
requirements.
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- 2015 and beyond Permit states to form health care choice
compacts and allow insurers to sell policies in any state
participating in the compact. Compacts may not take effect before
1/1/16.
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- Reform Implementation Schedule Medicare
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- 2010 Provide a $250 rebate to beneficiaries who reach Part D
gap (doughnut hole) and gradually eliminate the Part D coverage gap
by 2020. Expand coverage to individuals who have been exposed to
environmental health hazards from living in an area subject to an
emergency declaration as of 6/17/09 and have developed certain
health conditions as a result. Improve care coordination for dual
eligibles by creating a new office within CMS the Federal
Coordinated Health Care Office
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- 2010 M/C reforms (cont.) Reduce annual market basket updates
for inpatient hospital, home health, SNF, hospice and other
Medicare providers, and adjust for productivity. Ban new
physician-owned hospitals, requiring hospitals to have a provider
agreement in effect by December 31. Limit the growth of certain
grandfathered physician-owned hospitals
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- 2011 Reforms - Medicare Require drug manufacturers to provide a
50% discount on brand-name prescriptions and begin phasing in
federal subsidies for generic prescriptions filled in the MCR Part
D coverage gap. Provide a 10% bonus payment to PCPs and to general
surgeons practicing in health professional shortage areas
(effective 2011-2015). Restructure payments to Medicare Advantage
plans by settling payments to different percentages of MCR
fee-for-service rates. Reduce annual market basket updates for
Medicare providers
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- 2011 Medicare Reforms, (cont.) Provide Medicare payments to
qualifying hospitals in counties with the lowest quartile Medicare
spending for 2011 and 2012. Freeze income thresholds for
income-related MCR Pt B premiums for 2011 through 2019 at 2010
levels and reduce the Part D premium subsidy for those with incomes
above $85K/individual and $170K/couple. Create an Innovation Center
within CMS
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- 2012 Reduce Medicare payments that would otherwise be made to
hospitals by specified percentages to account for excess
(preventable) hospital readmissions Create a Medicare Independence
at Home demonstration program Establish a hospital value-based
purchasing program in Medicare and develop plans to implement
value- based purchasing programs for SNFs, HHAs and ambulatory
surgical centers. Provide bonus payments to high-quality Medicare
Advantage plans Reduce rebates for Medicare Advantage Plans
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- 2013 Establishes a national pilot program in which doctors,
hospitals and other providers are paid a flat rate by Medicare for
each patient episode of care
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- 2014 Reduce out of pocket amount that qualifies an enrollee for
catastrophic coverage in Medicare Pt D (thru 2019). Establish an
Independent Payment Advisory Board (IPAB) comprised of 15 members
to submit legislative proposals containing recommendations to
reduce the per capita rate of growth in Medicare spending if
spending exceeds a target growth rate. Reduce DSH payments
initially by 75% and increase payments based on the % of the
population uninsured and the amount of uncompensated care provided.
Require Advantage plans to have medical loss ratios no lower than
85%.
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- More on the IPAB This is a somewhat radical idea. Over the past
decades, Congress has been gutless when it comes to reforming
Medicare. Even though the program might be bankrupting the country,
elected officials face re-election so theyve punted on the issue.
The hope is that the IPAB frees Congress to permit cuts by making
it easier for them to dodge the blame. It puts the knife in someone
elses hands.
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- IPAP Will consist of 15 presidential appointees from the health
care industry, academia, think-tanks and consumer groups each
confirmed by the Senate, who will serve staggered six-year terms.
Their reform proposals will have to pass through Congress, and if
Congress does not act the recommendations go into effect. If
Congress wants to change their recommendations it requires 3/5
majority, and no filibusters are allowed. If Congress wants to
change the IPABs recommendations then they must come up with
alternatives that would save a similar amount.
- Slide 30
- IPAB The boards first recommendations will be for 2015. If
Medicare spending exceeds targets set in the law they will
recommend changes in the way Medicare pays for services in order to
reduce spending. Its purview over hospitals doesnt occur until
2018. The IPAB can not change eligibility rules, or modify benefits
This is THE linchpin to assure cost controls because PPACAs savings
as deemed by the CBO arrive only the policies behind the savings do
their jobs. If the IPAP is stripped then the status quo on Medicare
is maintained. Republicans are taking aim at the IPAP, looking to
abolish it before it gets started.
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- 2015 and after Reduce Medicare payments to certain hospitals
for hospital acquired conditions by 1%
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- Reform Implementation Schedule Medicaid
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- 2010 Creates a state option to cover childless adults through a
Medicaid State Plan Amendment. Creates a state option to provide
Medicaid coverage for family planning services to certain
low-income individuals through a Medicaid State Plan Amendment up
to the highest level of eligibility for pregnant women, Creates a
new option for states to pick up CHIP coverage to children of state
employees eligible for health benefits if certain conditions are
met.
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- 2011 Prohibit federal payments to states for Medicaid services
related to health care acquired conditions. Create a new state plan
option to permit MCD enrollees with at least two chronic
conditions, one condition and the risk of developing another, or at
least one serious and persistent mental health condition to
designate a provider as a health home. Provide states taking up
this option with 90% FMAP for 2 years for health home related
services including care management, care coordination and health
promotion.
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- 2011 MDC reforms, (cont.) Create a State Balancing Incentive
Program in MCD to provide enhanced federal matching payments to
increase non-institutionally based long term care service.
Establish the Community First Choice Option in MCD to provide
community-based attendant support services to certain people with
disabilities.
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- 2012 Create new demonstration projects to pay bundled payments
for episodes of care that include hospitalizations (effective
1/1/12 through 12/31/16) Provide MCD payments to institutions of
mental disease for adult enrollees who require stabilization of an
emergency condition (effective 10/1/11 12/31/15).
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- 2013 Increase Medicaid payments provided by PCPs for 2013 and
2014 with 100% federal funding.
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- 2014 Reforms - Medicaid Expand Medicaid to all non-Medicare
eligible individuals under age 65 with incomes up to 133% FPL based
on modified adjusted gross income and provides enhanced federal
matching for new eligibles. Reduce states Medicaid DSH
allotments.
- Slide 39
- Reform Implementation Schedule Quality Improvement
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- 2010 Support comparative effectiveness research by establishing
a non-profit Patient-Centered Outcomes Research Institute.
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- 2011 Develop a national quality improvement strategy that
includes priorities to improve the delivery of health care
services, patient health outcomes and population health. Establish
the Community-based-Collaborative Care Network Program to support
consortiums of health care providers to coordinate and integrate
health care services for low-income and underinsured populations.
Establish a new trauma center program to strengthen emergency
department and trauma center capacity.
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- 2011 Q/I reforms, (cont.) Improve access to care by increasing
funding by $11B for community health centers and the National
Health Services Corps over five years. Establish new programs to
support school-based health centers and nurse-managed health
clinics
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- 2012 Require enhanced collection and reporting of data on race,
ethnicity, sex, primary language, disability status, and for
underserved rural and frontier populations.
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- 2013 Require disclosure of financial relationships between
health entities, including physicians, hospitals, pharmacists,
other providers, and manufacturers and distributors of covered
drugs, devices, biologicals, and medical supplies.
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- Reform Implementation Schedule Prevention and Wellness
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- 2011 Cover only proven preventive services and eliminate cost
sharing for preventative services in Medicare; Increase Medicare
payments for certain preventative services by 100% of actual
charges or fee schedule rates. For states that provide Medicaid
coverage for and remove cost-sharing for preventive services
recommended by the US Preventive Services Task Force, and
recommended immunizations, provide a 1% point increase in the FMAP
(federal matching funds) for these services
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- 2011 Prevention/wellness (cont.) Provide M/C beneficiaries
access to a comprehensive risk assessment and creation of a
personalized prevention plan and provide incentives to MCR/MCD
beneficiaries to complete behavior modification programs. Provides
grants for up to five years to small employers that establish
wellness programs. Establish the National Prevention, Health
Promotion and Public Health Council to develop a national strategy
to improve the nations health. Require chain restaurants and food
sold from vending machines to disclose nutritional content on each
item.
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- Reform Implementation Schedule Taxes
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- 2010 Impose additional requirements on non- profit hospitals.
Impose a tax of $50K for failure to meet these requirements. Limit
the deductibility of executive and employee compensation for health
insurance providers to $500K per applicable individual. Impose a
tax of 10% on the amount paid for indoor tanning services.
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- 2010 Tax reforms, cont. Tax credits available for small
businesses (through 2013). Must have fewer than 25 employees with
average annual wages
- 2014 Require U.S Citizens and legal residents to have
qualifying health coverage (phase-in tax penalty for those without
coverage). Assess employers with > 50 employees that do not
offer coverage and have at least one FTE who receives a premium tax
credit, a fee of $2K per FTE, excluding the first 30 employees from
the assessment. Employers with > 50 employees that offer
coverage but have at least 1 FTE receiving a premium tax credit
will pay the lesser of $3K for each employee receiving the credit
or $2K for each FTE.
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- 2014 Tax reform, cont. The tax credit established in 2010
increases to 50% of the employers contribution for for-profit
employers and 35% of the contribution for non- profit
organizations. This small business tax credit is only available for
two consecutive tax years. Lawmakers concluded that other
cost-containment provisions in the law would be in full force by
2016, and small businesses would no longer need this help. The
small business tax credit is therefore potentially available for a
total of six years.
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- 2014 Tax Reforms, cont. Provide refundable and advanceable
premium credits and cost sharing subsidies to eligible individuals
and families with incomes between 133- 400% FPL to purchase
insurance through the Exchanges.
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- 2014 Tax Reforms, (cont.) Require employers with more than 200
employees to automatically enroll employees into health insurance
plans offered by the employer. Employees may opt out of
coverage.
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- 2015 and beyond Impose an excise tax on insurers of
employer-sponsored health plans with an aggregate value that exceed
$10,200 for individual coverage and $27,500 for family coverage.
Effective 1/1/18.
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- Reform Implementation Schedule Other 2010
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- Workforce Establish Teaching Health Centers to provide Medicare
payments for primary care residency programs in federally qualified
health centers.
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- Prescription Drug Reforms Authorize the FDA to approve generic
versions of biological drugs and grant biologics manufacturers 12
years of exclusive use before generics can be developed (currently
20 years).
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- Reform Implementation Schedule Other 2011
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- Long Term Care Establish a national, voluntary insurance
program for purchasing community living assistance services and
supports (CLASS program).
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- Malpractice Award five year demonstration grants to states to
develop, implement and evaluate alternative to current tort
litigations.
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- Reform Implementation Schedule Other 2012
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- Accountable Care Organizations Provides incentives for doctors
to join together in Accountable Care Organizations that can
coordinate care, which ideally will prevent unnecessary
hospitalizations and treat patients more cost-effectively. These
groups will be allowed to keep part of the savings if they are
successful.
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- Reform Implementation Schedule Other 2014
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- Prevention and Wellness Permit employers to offer employees
rewards of up to 30%, increasing to 50% of the cost of coverage for
participating in a wellness program and meeting certain
health-related standards.
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- Mandatory Coverage 2014 is the year when everyone is required
to have health insurance, either on their own or through their
employer
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- Anecdote #2: TRUE OR FALSE: Politicians are not above
publically wishing ill will on their colleagues if it furthers
their or their partys agenda.
- Slide 71
- ANSWER TRUE
- Slide 72
- December 21, 2009 After trekking through a snowstorm and 12
hours of acrimonious debate, Senate Democrats win a milestone
victory approving a procedural motion to move reform legislation to
final passage later in the week by a 60-40 vote. Not a single
Republican voted to advance the measure.
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- How acrimonious was it? Sen. Tom Colburn (R-OK) said on the
Senate floor: What the American people ought to pray for is that
somebody cant make the vote tonight. It was difficult the escape
the conclusion that he was referring to 92 year old,
wheelchair-bound Sen. Robert Byrd (D-WV) who had been in and out of
hospitals and lay at home ailing. It would not be easy for him to
get out of bed in the wee hours with deep snow on the ground and
ice on the roads.
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- IMPACT ON INDIVIDUALS The Good No pre-existing condition
exclusions for Children under 19. No unjustified rescissions of
coverage. No lifetime limits on coverage. Restricting annual limits
on coverage. Remove insurance-company barriers to ED services.
Relief for the Part D doughnut hole. Free preventive care under
Medicare and new plans. Help for early retirees.
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- Individuals, cont. Extend coverage for young people up to 26 th
birthday though patents insurance. Immediate help for the uninsured
with pre-existing conditions (interim high-risk pool). Prohibition
of pre-existing clause Ban on higher premiums for women Cap on out
of pocket expenses for private health plans. New long-term care
insurance program (CLASS) Greater access to insurance.
- Slide 76
- IMPACT ON INDIVIDUALS The Bad Tax on indoor tanning services.
Higher taxes on wealthiest Americans. Higher deduction limit for
unreimbursed medical expenses. PCP shortage? Reduces HSA exemptions
potentially eliminates FSAs and HSAs? Shift from EGHPs to State
Exchange plans? Unfunded mandates? Healthy Americans who dont use
services or buy insurance now required to. More IRS Agents
- Slide 77
- Individuals, cont. Does access to care ultimately get rationed?
Does employer mandate lead to job cuts? More government involvement
in Health Care? Short-term increases for EGHP cost share? Expansion
of MCR/MCD = more cost shifting? Rebirth of HMOs Death of Medicare
Advantage? Does this ultimately lead to higher costs for individual
who engage in high-risk lifestyles? Smokers Diabetics
Overweight/obese
- Slide 78
- Sidebar on Care Rationing Dr. Donald Berwick was appointed to
be the administrator for CMS. As president of the Institute for
Health Care Improvement, he is renowned for his experience in
changing health care practices for the better, and is a champion of
health care improvement based on changes who have knowledge to make
it happen. He explained in an interview last year that the British
National Health Services has developed very good and very
disciplined, scientifically grounded, policy- connected models for
the evaluation of medical treatments from which we ought to
learn.
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- More on Berwick He added that The decision is not whether or
not we will ration care the decision is whether we will ration with
our eyes open. And right now, we are doing it blindly. Dr. Berwicks
job as the chief purchaser of healthcare appears to be to find ways
to offset higher insurance and medical costs that the legislations
subsidies and mandates will cause, which could inevitably mean the
political rationing of care.
- Slide 80
- Impact on employers - The Good Help covering cost for their
retirees Tax credits for small business Companies with < 100
employees can purchase insurance from Small Business Options
Program Exchange Subsidies for self-employed Small businesses no
longer at a competitive disadvantage Save money by paying the fine
for not offering EHPGs to employees? Wellness program
incentives
- Slide 81
- Impact on Employers The Bad Not providing coverage no longer an
option without financial penalties. Short term uncertainty in the
insurance market leads to significant short term premium increases.
Uncertainty about what this ultimately will do to the bottom line.
Nothing in legislation to promote HSAs. Penalties for larger
businesses Need to report HC benefits on W-2s in 2011 Significantly
more paperwork/bureaucracy Need to send 1099s to every independent
contractor/self employed individuals paid over $600
- Slide 82
- More specifics on taxes Individuals who do not obtain insurance
or a hardship waiver would be penalized. The penalty is based on a
complicated formula based on the greater of a flat $ amount or % of
household income per family members not covered. Individuals
eligible for but not enrolled on EGHPs may still be eligible for
credits if the employees contribution would have exceeded 9.5% or
if the plan covers 60% of allowed costs. Out of pocket premium
credits for individual plans purchased through an Exchange:
100-150% of FPL: 2 to 4.7% of monthly income 150-200% of FPL: 4.7
to 6.5% of monthly income 200-250% of FPL: 6.5 to 8.4% of monthly
income 250-400% of FPL: 8.4 to 9.5% of monthly income
- Slide 83
- Impact on Providers Less uninsured and more insured patients
but also more Medicaid higher co-pays and deductibles? ED
overcrowding becomes worse with PCP shortage? Significant
reductions in DSH/ changes in cost reporting? Bundled payments
across providers? Uniform transaction sets to become a reality?
Electronic medical records regional/national data warehouses ($19B
in budget) Rebirth of HMOs Death of Medicare Managed Care? More
integrated health systems? The bottom line is that a large part of
the cost of this program will come from hospitals getting paid
less.
- Slide 84
- Impact on Providers - Medicare Medicare cuts are going to be a
reality. The Independent Payment Advisory Board will charged with
monitoring the outcome of the Medicare changes in this legislation
and will fast-track recommendations to reduce Medicare spending if
spending exceeds targets.
- Slide 85
- Provider impact preventable readmissions Beginning in 2012, HHS
will publish each hospitals readmission track record. In 2012, MCR
will stop paying hospitals for preventable readmissions tied to
health conditions such as heart failure or pneumonia. Will expand
in 2014 to cover four additional health conditions.
- Slide 86
- EHR Incentive payments Topic is so voluminous it could be a
presentation of its own. The American Recovery and Reinvestment Act
(part of the 2009 stimulus package) includes a series of incentives
for providers to switch to electronic health records. In the first
few years they can get bonuses for doing so. But in 2014, the
government will slash reimbursement for those without sophisticated
systems. $2M base + per discharge amount (based on MCR/MCD share)
No maximum incentive amount.
- Slide 87
- More on Electronic Health Records (EHRs) Need to know
meaningful use, clinical quality measures. The theory: Data capture
and sharing lead to advanced clinical processes with leads to
improved and more cost-effective outcomes. RECOMMENDATION: Get
wired and plug in!
- Slide 88
- Provider impact Medical Harm Tied to HACs stemming from medical
errors or infections. In 2012 hospitals will no longer be paid for
just reporting their performance, but will be paid commensurate to
their scores. Higher scoring hospitals will be paid more. In 2015,
HHS will start reporting each hospitals record for medical errors
and infections pertaining to M/C pts. In 2015, MCR will reduce its
payments by 1% to hospitals with the highest rate of medical errors
and infections, and MCD will no longer pay for treatment when a
patient is harmed during a hospital stay.
- Slide 89
- Provider impact - penalties Not only will hospitals potentially
lose real $$$ at a time when they are struggling to keep up with
escalating costs, but be vulnerable to an even bigger risk a
tainted reputation. Will private insurers follow Medicares
lead?
- Slide 90
- Provider impact - physicians Current legislation reduces
physician rates an additional 21%. The house approved a 19 month
fix, raising rates paid to physicians by $1B over current rates and
$23B over the rates that would be imposed on the cuts went through.
Sets target levels for per Capita Medicare spending in 2015 these
targets may be hard to reach. PCP care emphasized. Legislation
doomed if more drs. opt out of program? More hospital owned
practices or physician partnerships? (discussions of partnerships
have dramatically escalated since Obama signed the bill)
- Slide 91
- More on Physicians The Medicaid program will raise
reimbursement for PCPs and largely leave specialists rates
unchanged.
- Slide 92
- Summary on provider impact A large portion of the cost this
program will come from hospitals getting paid less. The legislation
hopes to reduce wasteful spending eventually hospitals and doctors
will be paid based on quality and value. Privately owned physician
practices will become like dinosaurs. In order to thrive in this
environment physicians will have to merge into larger groups to
make it easier to adopt management practices to evaluate their
care, and conduct internal quality reviews. Either that or simply
become hospital employees. The law includes incentives for
hospitals to shift business away from traditional acute care inpa
tient facilities into more cost-effective settings.
- Slide 93
- Summary, cont. Hospitals are often the largest employer in
suburban and rural communities. That may change. There are going to
be major changes, but nobody is exactly sure what these are going
to look like. This kind of uncertainty is much harder for smaller
organizations to face than a large organization.
- Slide 94
- Impact on States Are central to the implementation of reform
legislation. States will oversee the expansion of Medicaid, enforce
new insurance reforms and run the new insurance Exchanges. Must
decide by 2013 if they want to run the exchanges or let the federal
government do it instead. Concern that funding received from Feds
is not enough and creates a bigger problem for those states already
struggling with budget deficits.
- Slide 95
- States (cont.) Some states will experience a financial
windfall. These are the States that are already paying for
something that the new legislation will mandate. The feds will pick
up much of the burden they are now bearing.
- Slide 96
- The battle shifts to the courts While the ink is still drying
on the bill that President Obama signed on March 23 rd, AGs from 14
states filed lawsuits against the Departments of HHS, Treasury and
Labor immediately after the ceremony. AGs from Florida, South
Carolina, Nebraska, Texas, Michigan, Utah, Pennsylvania, Alabama,
South Dakota, Louisiana, Idaho, Washington, and Colorado all signed
on to one complaint. The Virginia AG filed a separate
complaint.
- Slide 97
- Since then Arizona, Indiana, Mississippi, Nevada and North
Dakota have joined the Florida suit. Association of American
Physicians and Surgeons filed a separate lawsuit. So did the U.S
Medical Society. So did a host of other groups too numerous too
mention.
- Slide 98
- The states rebel 70% of Missouri voters passed Proposition C,
which declares that the government cannot tell Missourians they
must have health insurance. Virginia, Idaho, Arizona, Louisiana
have passed legislation similar to Proposition C. So did Oklahoma
and Florida, but these were vetoed by their governors. Colorado is
placing a similar initiative on this years ballot. Constitutional
law professions doubt these can withstand a Supreme Court
Challenge.
- Slide 99
- States Pushing Back Why? Even states with Democratic governors
have expressed pessimism about complying with the law. Reason #1 is
the legislation will leave public and private payers with huge new
costs at a time when most are struggling to recover from the
recession. Reason #2 is that the law will dramatically curtail
individual freedom and force people to comply with Washingtons
dictates on what constitutes acceptable health insurance.
- Slide 100
- More on states The bulk of the costs are hidden, which is what
most are worrying about. Insurers administrative costs will
increase as they rewrite policies in accordance with the law. State
officials will have to spend local tax dollars to set up new
institutions such as appeals tribunals for reviewing insurance
rates. Employers will force employees to pony up more cash for
their health insurance premiums in response to the higher premiums
they are receiving from their carriers, who are responding to the
uncertainty of the market and the presumed increase in their
administrative costs. States are responding to the feedback from
their constituents.
- Slide 101
- Its all about ME Even though Missouri overwhelmingly passed
Proposition C, the state will change its tune in a heartbeat if the
feds are willing to underwrite healthcare benefits for retirees. In
September, the feds released a list of 2,000 corporations, unions
and government entities that have asked to participate in the $5B
reinsurance program created under the law. Missouri was among those
bellying up to the bar. Arizona, Idaho, Indiana, Louisiana,
Michigan, Nebraska, and Nevada have also applied.
- Slide 102
- The conspiracy of the hypocrites? The states of lined up for
one simple reason: This program could protect the health care
benefits for thousands of people who retired too young to qualify
for Medicare. Under the program, the feds will pick up 80% of the
costs for retirees with medical claims between $15K - $90K Not many
people run up bills that high, but only a few claims like these
drive premiums through the roof for companies and governments that
provide healthcare benefits for retired workers. So the real lesson
behind Proposition C and other states who have squawked is that we
dont want the federal health reform only the parts that benefit us.
When you look at the details its pretty much all of the law.
- Slide 103
- The Legal Challenges The Individual Mandate: The Constitution
allows Congress to regulate commerce. Historically, insurance
contracts were not considered commerce, but the Supreme Court has
long allowed Congress to regulate and prohibit all sorts of
economic activity that are not, strictly speaking, commerce.
Opponents argue the individual mandate extends the commerce clauses
power beyond economic activity to economic inactivity, which is
unprecedented. They view the mandate as similar requiring everyone
to buy American cars to help the car industry
- Slide 104
- Legal Challenges, Cont. Others argue that Congress does have
the power to regulate activities that have a cumulative effect on
the economy. The Constitution allows for Congress to tax and spend
for the common defense and general welfare of the United
States.
- Slide 105
- Potential Legal Challenges, cont. Constitutional Amendments:
The Constitution gives states legislative powers to require
Congress to convene a convention to propose an amendment to the
Constitution. If two-thirds of state legislatures demand an
amendment barring the federal regulation of health insurance or an
individual mandate, Congress would be Constitutionally-bound to
hold a convention. The very threat of an amendment convention would
probably induce Congress to repeal the bill. However it would take
34 states to accomplish this.
- Slide 106
- More on lawsuits Not surprising, many of the officials behind
the suits are running for re-election or higher office. A recent
Supreme Court decision involving Sarbanes-Oxley (SO) supposedly
dealt a blow to reform opponents. The court ruled that although a
part of SO was unconstitutional, and therefore should be struck
down, the rest was OK and should remain in place. Why is this a big
deal?
- Slide 107
- Sarbanes-Oxley Decision Opponents of reform are hoping that if
just one part of PPACA, namely the individual mandate, was struck
down by the court, then the court would have to decide that the
entire act was unconstitutional. Why? Because PPACA does not have a
severability clause a sentence declaring that if one part of the
law is found invalid, the rest of the law could still be enforced.
S.O. doesnt have a severability clause either, but the court let
the rest of the act stand. Not the end of legal challenges, but
could close out one path for appeal.
- Slide 108
- Anecdote #3: TRUE OR FALSE: Once fully implemented the
uninsured will disappear?
- Slide 109
- ANSWER FALSE It is believed this legislation will cover around
30-35M of the 54M that are currently uninsured.
- Slide 110
- The 2010 Elections As soon as Congress passed the legislation,
money started pouring into political advertising. Pro-reformers put
out ads thanking Democrats who voted for the bill despite facing
tough re-election campaigns. Meanwhile the RNC produced ads
characterizing the legislation as a cost-raising, tax increasing
bill, and urged voters to stop the madness. These ads will most
likely keep appearing from now until November, given how divided
Americans are over healthcare reform.
- Slide 111
- Elections, cont. Roughly equal numbers of Americans say passing
the bills was a good thing or a bad thing. A larger majority said
they were still confused about the new law and how it would affect
them and their families. The impact on the November elections will
depend in large part on how effectively the administration and
Democratic leaders explain and sell the bill, and how effectively
critics label it a boondoggle. Republicans are more enthusiastic
about voting this fall. Negativity sells and obstructionism helps
Republicans in this regard. The democrats are VERY worried.
- Slide 112
- If Republicans take control of one or both houses of Congress?
DEFUND IT: They have vowed to choke off funding for implementation
of the legislation? DISMANTLE IT: They will look for provisions
that Democrats are on record as opposing and try to prevent them
from occurring. DELAY IT: Can vote to postpone cuts to popular
Medicare Advantage programs. DISAPPROVE REGULATIONS: The
Congressional Review Act of 1996 (CRA) gives Congress the authority
to overturn regulations issued by federal agencies if both houses
approve, with 2/3 majority needed to override a presidential veto
(difficult to pull off)
- Slide 113
- Republicans, Cont. OVERSIGHT/INVESTIGATION: Conduct numerous
public hearings and summon witnesses to testify in ways that would
support their agenda. They will also have Donald Berwick to testify
before Congress detailing his agenda for implementing the law.
DELEGATE TO THE STATES: Could encourage states to press forward
with their own programs. The more that states move forward with
reform that suits the needs and pocketbooks of their citizens, the
easier it would be for Congress to repeal PPACA and start
over.
- Slide 114
- Republicans, cont. Their main focus will be to slow down
implementation of the law and make a case to the county of the
damage the law will do to our economy. Remember 2010 is also about
the 2012 Presidential elections, where a Republican President and
Congress could potentially wipe the slate clean and start all over
before the 2014 mandates kick in. And dont forget about the
gubernatorial races. There are a lot of them up for grabs in
November and the states are ultimately decide whether to set up
insurance exchanges.
- Slide 115
- CONCLUSION The Feds Keys to success Its an ongoing campaign:
progress must be demonstrated and broadly communicated Adequate
resources must be made available. Coordination is key: Somebody has
to be on point to drive implementation across federal agencies and
other organizations needed to successfully execute the legislation
(IPAB?). Experiment, evaluate, be flexible and open to change: This
is new, and not everything will work as planned. Transparency:
Distrust of the federal government is widespread. Make decisions
publicly, communicate openly with everyone (insurers, unions,
clinicians, etc.) and listen as well as talk.
- Slide 116
- Success, cont. Beating up on industries (insurance, drug, etc)
may be good politics but it does not create a good trust or a
functional working relationship. Create interactive, long-term
relationships. Close the loopholes as they become apparent (IPAB?).
Control the message In a nutshell Educate the public Deliver the
deliverables Handle the insurers Maintain costs
- Slide 117
- Last key to success An Obama victory in 2012. If democrats lose
one or both Congressional houses this year AND the White House in
2012, Congress will begin the process of repealing the law before
most of the benefits impacting individuals kick in.
- Slide 118
- One thing is sure The actual version of the legislation that is
implemented will be different than the current version. It will
take until the 2020s to determine if this is a success or failure
Your institutions key to success is to be informed and adapted
quickly to emerging changes.
- Slide 119
- Informational Resources HHS.gov HealthCare.gov Kff.org (Kaiser
Family Foundation Web site click health reform then see
implementation timeline, law summary and a variety of other things)
Familiesusa.org (click health reform central link)
- Slide 120
- THANK YOU Stay informed. This is no longer theory. It is very
real and will have a significant impact on all of us personally and
professionally. The temptation is to be lulled to sleep since most
of the guts of this legislation wont go into effect for years to
come. It is best to be informed and prepared.