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“Irrational Actors”: Republican State Legislators Shoot Selves In Foot, Help Citizens

One of the main features of the Affordable Care Act is the creation of 50 state-based health-insurance exchanges, online marketplaces where people and small businesses will be able to easily compare competing plans and select the one they prefer. If you’re buying insurance on the individual market after the beginning of 2014 (but not if you get your insurance through your employer like most people), your state’s exchange is where you’ll go. While the federal government establishes a baseline of requirements for what plans offered through the exchange must contain, each state will determine exactly how theirs will work.

But after the ACA was passed, and especially after the 2010 election where Republicans won huge gains at the state level, a lot of states run by Republicans refused to take any action to create their exchanges. Like a Catholic bishop looking at a package of birth-control pills, they retched and turned away, not wanting to sully their hands at all with involvement in President Obama’s freedom-destroying health-care plan. But the law also provides that if a state doesn’t get around to creating its exchange, then the federal government will just do it for them.

Which is why I’ve always found the actions of Republicans on this issue puzzling. They all say they hate the federal government, and states can do things better. But in this case, they’re letting the federal government take over. Which is probably a good thing.

Let’s say you live in Arkansas. Who would you trust to create an exchange that works well and empowers consumers: a state government run by Republicans who think any government involvement in health care is vile, or the Obama administration’s Department of Health and Human Services, which has a huge reputational stake in making the Affordable Care Act work as well as possible? Well, you’re in luck, because Arkansas has explicitly refused to create an exchange. Plenty of other states with Republican-controlled legislatures have simply dragged their feet in the hopes that either the Supreme Court will strike down the ACA when it hears the case later this year, or that a Republican will win the White House in November and successfully repeal the law (this is a list of where exchanges stand in each state, if you’re curious).

Conservative health-care wonks seem to be divided on the issue. Here’s one (h/t Sarah Kliff) making exactly the case that I made—if Republicans just ignore this, it’ll be turned over to an administration they hate (I just happen to think that’s a good thing, while he doesn’t). But here’s another testifying before the New Hampshire Legislature, telling them not to do anything and hope it just goes away.

This offers a reminder, in case you needed one, that elected officials are not always rational actors. They’ll even do things that undermine the principles they hold, for reasons of emotion or pique or false hope. In this case, that means a lot of people living in Republican-dominated states will probably have access to an exchange that works substantially better than whatever their state would have set up. So it’ll be a happy ending!


By: Paul Waldman, Contributing Editor, The American Prospect, March 14, 2012

March 15, 2012 Posted by | Affordable Care Act, Health Care, Ideology | , , , , , , | Leave a comment

Paul Ryan Supported Payment Advisory Boards Before He Was Against Them

During his series of 19 town halls in Wisconsin several weeks ago, Rep. Paul Ryan (R-WI) repeatedly criticized President Obama’s Independent Payment Advisory Board (IPAB) for “rationing” care to seniors, cutting Medicare, and denying care to current retirees. The IPAB is a 15-member  commissionthat would make recommendations for lowering Medicare spending to Congress if costs increase beyond a certain point. The reductions would go into effect unless Congress acts to stop them.

“[Obama’s] new health care law…puts a board in charge of cutting costs in Medicare,” Ryan told retirees at one town hall in Kenosha, Wisconsin in late April, arguing that the IPAB would “automatically put price controls in Medicare” and “diminish the quality of care for seniors.”

But as the Incidental Economist’s Don Taylor reports this morning, Ryan has previously introduced legislation that included a very similar board to control health care spending. In 2009, Ryan introduced the Patients’ Choice Act (PCA) which “proposed changing the tax treatment of private health insurance and providing everyone with a refundable tax credit with which to purchase insurance in exchanges” but also sought to establish “two governmental bodies to broadly apply cost effectiveness research in order to develop guidelines to govern the practice of, and payment for, medical care.” Taylor writes that “the bodies proposed in the PCA had more teeth, including provisions to allow for penalties for physicians who did not follow the guidelines, than does the Independent Payment Advisory Board (IPAB) that was passed as part of the Affordable Care Act.” Both the Health Services Commission and Forum for Quality and Effectiveness in Health Care was tasked with developing guidelines and standards for improving health quality and transparency and were afforded what the bill called “enforcement authority”:

(b) ENFORCEMENT AUTHORITY.—The Commissioners, in consultation with the Secretary of Health and Human Services, have the authority to make recommendations to the Secretary to enforce compliance of health care providers with the guidelines, standards, performance measures, and review criteria adopted under subsection(a). Such recommendations may include the following, with respect to a health care provider who is not in compliance with such guidelines, standards, measures, and criteria: (1) Exclusion from participation in Federal health care programs (as defined in section 1128B(f) of the Social Security Act (42 U.S.C.1320a–7b(f))).(2) Imposition of a civil money penalty on such provider

Like the IPAB, Ryan’s board is insulated from Congress and would have allowed true health care cost experts — the Forum for Quality and Effectiveness in Health Care even included 15 individuals, just like the IPAB although they do not appear to require Senate confirmation — to improve the cost effectiveness of the health care system. As Taylor observed back in 2009 when the board was first introduced, “any such effort will undoubtedly be called rationing by those wanting to kill it, and quality improvement and cost-effectiveness by those arguing for it. Whatever we call it, we must begin to look at inflation in the health care system generally and in Medicare in particular.” Little did we know that Ryan would be on both sides of that debate.


By: Igor Volsky, Think Progress, May 13, 2011

June 1, 2011 Posted by | Affordable Care Act, CMS, Congress, Conservatives, Consumers, GOP, Government, Health Care, Health Care Costs, Health Reform, Ideologues, Ideology, Medicaid, Medicare, Politics, President Obama, Rep Paul Ryan, Republicans, Wisconsin | , , , , , , , , , , , | Leave a comment

The Truth About Waivers: Protecting Coverage For Millions Of Americans

Today, you might have seen news stories about waivers from certain provisions of the Affordable Care Act. There has been no shortage of confusion and deliberate obfuscation on this issue and we want to ensure you have the facts.

Under the Affordable Care Act, we have implemented new rules that phase out, by 2014, health insurance companies’ ability to slap restrictive annual dollar limits on the amount they will pay for your care.  But between now and 2014, we also want to make sure workers are able to maintain their existing insurance, because on their own they would likely be shut out of the individual market or face unaffordable options. To do that, the Affordable Care Act allows the Department of Health and Human Services to issue temporary waivers from the annual limit provision of the law if it would disrupt access to existing insurance arrangements or adversely affect premiums, causing people to lose coverage. So far, we have granted 1,372 of these waivers to employers, health plans, and others in all 50 states, covering less than 2 percent of the insurance market and protecting coverage for more than 3.1 million Americans. We have been completely transparent about this process, announcing the waiver process in a regulation last summer, publishing clear guidance on the application process on our website, and posting a list of waivers we have granted on our website.

These temporary waivers will not be available beginning in 2014 when annual limits are banned and all Americans will have affordable coverage options. And millions of Americans – including many small business owners – will be able to shop for affordable coverage in new competitive marketplaces.

Some have raised questions about waivers that were recently granted to companies in California. So there’s no confusion, here are the facts:

  • A company called Flex Plan Services is a third-party administrator that provides benefit administration services for employers in a number of states, including: California, Washington, Alaska, and Georgia. One type of plan they administer is known as a health reimbursement arrangements (HRA or employer contributions to a tax free account).  Many of the company’s clients are hotels, restaurants and home health agencies, all of whom employ low-wage workers.
  • On March 23, Flex Plan Services submitted 92 waiver requests on behalf of 45 employer clients. On April 4, 2011, HHS approved the request.
  • HHS applied the same standard to the application from Flex Plan Services that it uses when reviewing any application for a temporary waiver. Waivers are only available if the plan certifies that a waiver is necessary to prevent either a large increase in premiums or a significant decrease in access to coverage.
  • In addition, enrollees must be informed that their plan offers coverage with a restricted annual limit.
  • No other provision of the Affordable Care Act is affected by these waivers: they only apply to the annual limit policy.

The Affordable Care Act puts an end to many of the worst insurance company practices including refusing to sell a policy to a family because someone had cancer or a child has asthma; cancelling coverage when a patient files claims because of an unintentional mistake in their paperwork; and slapping annual or lifetime limits on how much care you can receive. When these rules are fully in place in 2014, our country will be much better off and the cost of coverage will be within reach for the millions of Americans who now live day to day without coverage, worrying about an injury or an illness that could plunge them into bankruptcy. To get from today’s broken system to tomorrow’s patient-centered system takes time and patience through a reasonable transition period. But, together, we will get there.

By: Richard Sorian, Asst. Sec for Public Affairs, HHS, The White House Blog, May 17, 2011

May 19, 2011 Posted by | Affordable Care Act, Businesses, Consumers, Government, Health Care, Health Reform, Middle Class, Politics, Public, Public Health, Small Businesses, States, Under Insured, Uninsured | , , , , , , , , , | Leave a comment

Debunking The Right’s Health Waiver Conspiracy

Is House Minority Leader Nancy Pelosi helping companies in her district get around new health care rules? Conservatives seem to think so, but their evidence is spotty at best.

Last month, the Obama administration granted a reprieve to 204 businesses and policyholders from new health coverage rules under the Affordable Care Act, bringing the total number of waivers to more than 1370. Many of the waivers are for limited benefit or so called “mini-med” plans—controversial rock-bottom plans that provide a very limited amount of coverage (sometimes as little as $2,000 a year) to beneficiaries that are used heavily in low-wage industries like the restaurant business. New federal rules require such plans to offer a minimum of $750,000 of coverage annually, and the waivers exempt the mini-med plans from such rules on a case-by-case basis.

The Daily Caller reported on Tuesday that businesses in Pelosi’s district received nearly 20 percent of the waivers in April, pointing out that many of them went to high-end restaurants and hotels. Sarah Palin piled on in a subsequent interview with the Caller, calling the discovery “unflippingbelievable!” and “corrupt.”

Pelosi’s communications director, Nadeam Elshami, pushed back against the criticisms in an email to Mother Jones, denying that Pelosi’s district received any special treatment. Her office also denied that it was at all involved in the process of granting waivers for these businesses. “It is pathetic that there are those who would be cheering for Americans to lose their minimum health coverage or see their premiums increase for political purposes,” Elshami wrote Tuesday afternoon, emphasizing that health-care waivers “are reviewed and granted solely by the Administration in an open and transparent process.”

In fact, the recent waiver applications from businesses in Pelosi’s district were not even received by the minority leader’s office. Rather, they were submitted directly to the Obama administration through a third-party company, Flex Plan Services, which provides benefit administration to companies in the Bay Area, Washington state, and elsewhere in the country, according to a statement issued by Richard Solarian, an assistant HHS secretary. On March 23, Flex Plan Services submitted applications for annual limit waivers for their clients’ health plan, including 69 businesses in California, 20 in Washington state, two in Georgia, and one in Alaska, including restaurants, home health care providers, and other service-based companies. On April 4, the U.S. Department of Health and Human Services approved the waiver request for all of Flex Plan Services’ clients—not just the ones in Pelosi’s district.

Flex Plan Services never contacted Pelosi’s office about their waiver request, and her office did neither provided any information to the company about the waivers nor helped facilitate the request, according to her spokesperson.

In other words, the reason the waivers were clumped together was because Flex Plan Services—which is in charge of administrating all of these businesses’ health care benefits—had issued a waiver request for the entire group of businesses. Altogether, the Obama administration has granted 1372 waivers and has denied about 100 requests. The mini-med waivers are essentially a stop-gap measure designed to keep employers from dropping health care benefits all together. The White House explains that waivers are granted if conforming to the rules “would disrupt access to existing insurance arrangements or adversely affect premiums, causing people to lose coverage,” acknowledging that the low-benefits plans are sometimes the only option that some employers can offer. The Democrats’ rationale is that the other changes under federal health reform will eventually allow employers to receive better, more affordable coverage under the health insurance exchange, when it begins operating in 2014.

To be sure, it’s worth closely examining which businesses and policyholders have received waivers, as well as which ones have denied them, along with the Obama administration’s rationale for making such decisions. But, as the April waivers reveal, the very fact that reprieves have been granted to businesses residing in democratic districts doesn’t mean the process is unjust. And to assume that the rationale must be political or “corrupt” is to turn a real policy issue into a partisan bludgeon.

By: Suzy Khimm, Mother Jones, May 17, 2011

May 17, 2011 Posted by | Affordable Care Act, Businesses, Conservatives, Consumers, Democrats, GOP, Health Care, Health Care Costs, Health Reform, Ideology, Politics, President Obama, Public, Republicans, Right Wing | , , , , , , | Leave a comment

The Importance of Independence: Affordable Care Act’s Independent Payment Advisory Board Key to Quality Care at Lower Cost

A year ago this week, President Barack Obama signed into law our nation’s first comprehensive health reform law, the Affordable Care Act, which not only extends health insurance protection to tens of millions of Americans but also actually reduces the deficit—in large part because of measures the law takes to responsibly slow the growth in Medicare and overall health spending. Lowering the projected growth of health care costs is a key promise of the law because these ever-escalating costs drain businesses, government coffers, and individuals’ savings. Yet many who criticize the law as a budget buster are aiming to repeal some of its key cost-containment features.

The Independent Payment Advisory Board is a case in point. The Affordable Care Act establishes this board to serve as a guarantor that the law’s cost-containment goals will actually be achieved. If the government’s main health care program for the elderly and disabled Medicare exceeds its per capita cost-growth targets under the new law, then the Independent Payment Advisory Board is empowered to recommend ways to reduce program expenditures by changing the way Medicare pays health care providers.

The secretary of health and human services must implement these recommendations unless Congress passes an alternative proposal or discontinues the cost-containment review process by the Independent Payment Advisory Board. Some legislators propose to eliminate the board. This would be a mistake.

Understanding the purpose of the board—as part of the Affordable Care Act’s cost-containment strategy overall—makes it clear that keeping and strengthening the independent board makes sense. The new health law’s cost-containment strategy includes both reducing excessive payments to providers under Medicare’s current payment mechanisms and moving Medicare—and, by example, the private sector—away from a payment system that rewards volume of services, without regard to health benefits, to payment arrangements that reward effective care, efficiently provided.

The Independent Payment Advisory Board will reinforce this twin focus on quality care at lower cost.

The Affordable Care Act holds hospitals and other institutional health care providers to productivity gains—something every other sector of our economy has achieved over the past several decades. Between 1995 and 2008 average annual productivity growth across the vast majority of U.S. businesses was 2.4 percentage points—just more than 1 percentage point higher than the previous two decades. In contrast, the health care, education, and social services sectors combined have produced average annual productivity growth rates of negative 0.2 percentage points.

The Affordable Care Act’s push for providers to produce productivity gains on par with other sectors promotes the efficiencies needed to reduce health care costs. But to assure that growth rates actually slow, the Affordable Care Act sets a target for Medicare spending growth and requires the Independent Payment Advisory Board to develop and recommend payment changes to achieve it. Both the Congressional Budget Office and the executive branch’s Centers for Medicare and Medicaid Services predict that explicit payment changes will produce most but not all of the savings needed to realize the independent board’s spending-growth targets through 2019 under the new law.

Avoiding excessive increases in the rates Medicare pays historically slows spending growth across the entire health care industry and can do so in the future. But tightening fee-for-service does nothing to improve quality or efficiency in care delivery—a critical goal of health reform. That’s why the Affordable Care Act includes multiple strategies to promote payment and delivery reform.

First, the new law stops rewarding bad behavior. The law authorizes the secretary of health and human services, without seeking congressional action, to review and alter “misvalued” fees, such as paying more for services than they’re worth, and to reduce payments for clearly undesirable behavior, such as hospital-acquired infections or conditions, inappropriate hospital readmissions, and, even more egregious, outright fraud. These new steps will deliver market-based signals to Medicare health care providers—and by example to the entire industry—that the wrong kinds of services that drive up current costs will no longer be rewarded.

Alongside what might be considered these “sticks” to change behavior come a set of essential “carrots,” or rewards to deliver more effective and efficient care. At the most basic level, these rewards are extra payments to providers for doing “good” things—say, meeting a set of efficiency standards while maintaining quality care. But more importantly, these rewards reside in alternative payment mechanisms to replace today’s fee-for-service payment system.

Among the new payment systems the new health law encourages is “bundling” separate fees into a single payment for services associated with a specific condition, such as a hip fracture, which today would include separate fees for diagnosis, surgery, and postoperative care. Another provision of the law promotes the financial and health benefits of primary care and chronic care management through newly created “medical homes,” which coordinate health care for their patients. And yet another new approach to health care promoted by the new law are so-called “accountable care organizations,” which are collaboratives of inpatient and outpatient providers who are rewarded for delivering quality care to a defined set of patients at lower-than-projected costs.

The new law sets a clear timetable for implementing some of these measures and creates the Center for Medicare and Medicaid Payment Innovation to initiate, evaluate, and broadly extend the application of these methods as part of “rapid cycle change.”

The law also recognizes that these efficiencies and the savings they can deliver will not be realized if changes in payment systems are limited to the public sector, and therefore encourages public-private partnerships. Medicare is a large payer, accounting for 20 percent of our nation’s medical bill in 2009. Private payers have historically followed Medicare payment practices. But that outcome is neither automatic nor immediate.

What’s more, inconsistent payment mechanisms across payers discourage providers from changing behavior, impede efficiency improvements, and create opportunities for offsetting one payer’s spending reductions with increases for others. Indeed, a recent study by the Medicare Payment Advisory Commission, an independent congressional agency, finds that hospitals squeezed by both Medicare and private payers changed their operations to become more efficient, yet hospitals with generous private payments ignored Medicare constraints, took losses on Medicare patients, and continued business as usual. Better quality care at lower costs requires that the public and private sectors work in tandem.

The health reform law encourages common action in different ways. The law gives preference to innovations where providers engage with private payers alongside Medicare in adopting new payment incentives Other provisions in the law further support payment reform in the private sector by extending access to Medicare provider performance data to guide private payers’ payment-reform efforts, and requiring private health plans to regularly report on those efforts. These data will inform the Independent Payment Review Board when it uses its authority to make nonbinding recommendations for private-payer reforms alongside binding recommendations for public programs.

This is a key provision of the new law. From 1970 to 2000 the private sector was less effective than Medicare in promoting efficiency, with an average annual growth rate per enrollee of 11.1 percent compared to Medicare’s rate of 9.6 percent. An effort that addresses public-sector but not private-sector health care spending risks limited access for beneficiaries as well as missed opportunities to encourage health care providers to operate more effectively and efficiently. Therefore, the broader the new board’s authority is to influence not only public but also private spending, the more effective it will be.

A focus on policy tools alone, however, obscures the most important element of the Independent Payment Review Board’s potential impact. Payment improvements in the past were stymied by legislators responding to providers’ resistance to change. Provider payment is rarely a partisan issue but it is a political issue. The new law takes the politics out of the equation by giving the independent board the authority to make Medicare payment recommendations that become law unless explicitly overridden by legislative action. This gives a major boost to policy over politics in containing health care costs.

And it’s precisely this boost that special interest groups want to prevent. Opponents of the new board complain it undermines congressional authority and removes from their control an important budgetary lever at a time when the federal budget deficit is rising at an unsustainable rate. But the real concern of many of these critics, who often are the fiercest advocates of fiscal restraint, is that the board’s authority diminishes their influence and their ability to fashion a Medicare budget that benefits the pharmaceutical industry and other special interest groups that are in a position to lose the most from the board’s future recommendations.

Other critics of the Independent Payment Advisory Board fear the Affordable Care Act did not go far enough in granting it authority, leaving too many loopholes for special interest groups to avoid payment adjustments. In making adjustments the board is prohibited from addressing payments to hospitals, skilled nursing facilities, and other health care providers who are scheduled to receive “productivity adjustments” under the Affordable Care Act. Rather than repeal the board, the more sensible option would be to close these loopholes and extend accountability for unacceptable health care cost increases.

In fact, members of Congress and policymakers in the federal government should be thinking of ways to strengthen the Independent Payment Advisory Board given the fiscal reality facing the federal government today. The new board is one of the Affordable Care Act’s most important cost-containment tools. We can’t afford to lose it.

By: Judy Feder, Senior Fellow, Center For American Progress, March 21, 2011

March 22, 2011 Posted by | Affordable Care Act, Congress, Deficits, Federal Budget, Health Care Costs, Health Reform, Medicare, Politics, President Obama | , , , , , , , , | Leave a comment

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