Week of September 28, 2009

The Senate Finance Committee wasted no time last week in wading through a seemingly endless number of amendments to its proposed health care reform legislation (see below). The committee turned aside a number of amendments, including attempts to avert cuts to the Medicare Advantage program to help pay for expanded coverage for the uninsured. But the sparring that occurred over the issue is a good indication that emotions are running high, and the dispute is bound to reappear when the bill makes it to the Senate floor. Democrats and the Obama administration last week sought to reassure seniors that health care reform would not cost them their current levels of Medicare benefits, but the head of the Congressional Budget Office, Douglas Elmendorf, recently told Senators that seniors in Medicare Advantage could very well see reduced benefits. The bill’s momentum continues, but some Democrats are now struggling to figure out how to vigorously support health care reform without alienating many elderly voters.

At the state level, California’s governor has opted to begin taxing medicaid.

Federal

The Senate Finance Committee began its long-awaited mark-up of a health care reform bill and by the end of last week had slogged its way through about two dozen amendments, both in open session and as part of after-hours talks dealing with Medicare, taxes, insurance and delivery items.

1. Of note are the proposed increase in the insurer tax and the defeat of several Republican amendments to soften the burden on seniors in Medicare Advantage. The individual coverage requirement is still intact, but the dollar penalty for noncompliance has been lowered. And the age rating limit of 5:1 has been reduced to 4:1, which would increase the eventual rate shock for younger insureds.

2. Additionally, the Committee approved an amendment to dramatically increase transparency by forcing PBMs, (aka Pharmacy Benefit Managers – The PBM market is dominated by 3 large players – Medco, Caremark, and Express Scripts) to disclose certain pricing information to government and plan sponsors. It seems likely that some member will offer an amendment to add an employer mandate to the bill as well as an amendment to replace the current co-op provision with a full-fledged government plan. This mark-up process is expected to continue through this week. It is likely that the Committee will finish by the end of the week but probably not in time to meld its product with the HELP Committee bill before the Columbus Day break.
The House Energy & Commerce Committee held a mark-up last week to take up a handful of amendments left over from its mark-up of reform legislation in July.

Two major items include:

1. Passage of a provision to provide grants to large employers (not covered in the original bill) for establishing wellness programs; and
2. The defeat of a provision that would have prohibited Insurers / payors from recovering insurance payments through subrogation.

Insurers / payors and employers worked together to help defeat this latter item. On a related House matter, it is becoming increasingly clear that the compromise between the House leadership and the Blue Dogs seems to be more tenuous than ever, which may well give the Speaker the political “room” to beef up the existing public plan provision in the House bill by adding back the government rate-setting provision she favors.
States

CALIFORNIA: Governor Arnold Schwarzenegger signed legislation that subjects Medicaid (Medi-Cal) managed care plans to a tax to fund Medi-Cal and the state’s Children’s Health Insurance Program (Healthy Families). The tax, which is assessed on the plan’s total operating revenue, is effective for Medi-Cal managed care plans through January 1, 2011.

Approval of the measure will prevent more than 600,000 children from losing access to Healthy Families coverage. In addition, this bill has allowed the state to reopen Healthy Families enrollment and begin processing the more than 80,000 applications that were placed on a wait list.

In other news, the California Privacy and Security Advisory Board (CalPSAB) approved a “hybrid approach” to patient consent guidelines for participation in a health insurance exchange. The approach, outlined by CalPSAB, appears to be inconsistent with federal privacy and security standards. CalPSAB is developing new privacy and security standards to enable the adoption and application of health information exchange in California.

CONNECTICUT: Gov. M. Jodi Rell is threatening to veto a bill being debated during a special legislative budget session because it represents a back-door maneuver around her veto of a controversial health care pooling bill. In a detailed letter to top legislators, Rell said flatly that she would veto the bill because it did not meet certain requirements.
One of the troubling provisions, Rell said, is that Section 15 of the general government bill would allow the state comptroller, Democrat Nancy Wyman, to merge various insurance plans into the state’s self-insured plan. Rell stated that this effectively would allow the comptroller to implement the pooling concept that she previously vetoed, which would likely result in a significant cost increase to the state at a time when the state is making cuts to virtually every program.

IOWA: The Iowa Health Care Coverage Commission has begun meeting to develop a plan to ensure that all Iowans have access to health care coverage that meets minimum standards of quality and affordability. The Commission, which has representation from a wide spectrum of stakeholders including the health insurance industry, has broken into three work groups addressing (1) coverage of uninsured and underinsured adults; (2) the use and creation of a group insurance plan to provide coverage to non-state public employees, employees of not-for-profit groups, and small employers; and (3) administration of health care reform. The Commission is required to issue its first quarterly progress report to the Iowa Legislative Council by January 1, 2010.

NEW YORK: The State Insurance Department (DOI) is conducting public hearings in Rochester, Newburgh and New York City to gather information about limited benefits health insurance plans. The goal is to ascertain how these policies are marketed by Insurers / payors and producers, assess what disclosures are made regarding the services they cover, evaluate what advantages these policies provide, and determine whether additional oversight and regulation are needed. The DOI investigations have revealed that some policies are sold through telemarketing firms using unlicensed agents, which runs afoul of the New York Insurance Law and that some Insurers / payors issue limited benefits health plan policies as group coverage through invalid associations. Consumers must join the association for an additional fee in order to be eligible to purchase the coverage. The NYS Health Plan Association will be submitting written testimony on behalf of its members who offer limited benefits plans, to distinguish these legitimate products from the fraudulent types of associations being investigated by the DOI.

OKLAHOMA: Senate President Pro Tem Republican Glenn Coffee recently announced the approval of 34 interim studies and the committees that will conduct them. With nearly one-third of the studies having implications for health insurance, the list yields insights into a number of issues, especially autism, that could be the subjects of key legislation in 2010. The following studies are the most relevant to the health insurance industry, and Insurers / payors will be watching them closely: Review of health insurance mandates; health insurance policy rescissions; high-risk pool coverage of autism spectrum disorder diagnosis and treatment; autism insurance mandates and the state’s economy; issues relating to interstate purchasing of health insurance policies; and possible funding for PPO coverage of persons in rural Oklahoma.

TENNESSEE: Preliminary meetings are being scheduled to discuss Silent PPO legislation related to workers’ compensation, which was defeated earlier this year. This is expected to be a significant issue for the 2010 legislative session. In addition, Insurers / payors are is participating in a workgroup at the Tennessee Department of Commerce and Insurance regarding implementation of claims data legislation passed earlier this year.

WISCONSIN: The Office of the Commissioner of Insurance (OCI) intends to publish emergency rules to comply with the federal American Recovery and Reinvestment Act (ARRA) and provisions related to continuation of employer-discounted group coverage. The draft rules contain a new COBRA eligibility category for group coverage discontinuation retroactive to May 2009. In addition, the Autism Workgroup, created under the auspices of the OCI, has developed an administrative rule to implement recently enacted legislation requiring health insurance coverage for autism spectrum disorders. The rule will be promulgated on an emergency basis and takes effect for insurance products that are issued or renewed on or after November 1, 2009.

No World Borders provides services to health care payors / insurers and providers as well as in other industries.

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Yesterday, an important message titled “Don’t Rush eHRs Without Addressing Medical ID Theft” was posted on ModernHealthcare.com by Martin Ethridgehill, formerly a provider training specialist with Blue Cross and Blue Shield of New Mexico.

Mr. Ethridgehill points out that if a patient’s electronic medical identity is stolen by someone for health insurance benefits, critical information about the patient can be imperceptibly altered, leading to accidental death in an emergency room for any number of reasons. Furthermore, he points out that even if the real patient is aware that his or her record is tainted by a false patient’s data, it is very difficult to get the comingled record cleared up.

I have also read elsewhere that HIPAA actually impedes resolution of the nightmare because the Rule also protects the privacy of the false patient – prohibiting the real patient from examining his or her own health record.

Reasons to Go Slow

Ethridgehill is particularly critical of the EHR industry which lately has downplayed the importance of patient privacy in order to sell dangerous products. He gives these reasons for the need to slow down in the rush for interoperability:

• “Adding safety and records mitigation protocols ensures patient safety as an ongoing concept and practice.”
• “No industry would be allowed to operate, where the officials in charge of it stated that the market or other bodies would be responsible for creating safety procedures. Can you imagine if the auto industry stated, “We make cars, let the market figure out how to regulate safety”? I doubt that Congress or any other body would consider these people as remotely credible, yet I hear time and time again these statements being made in public and private forums by executives, lobbyists, and even so-called healthcare leaders.”
• “For the public and providers to embrace a product that has no regulation, no built-in safeguards and obviously no importance to safety from the makers of these products, why would Congress expect the American public or healthcare providers to embrace a product or concept that involves the unregulated risk of injury, death, or staggering liability opportunities, let alone without any hope of remedy or proper relief?”

One of the keys to improving life for payors as well as providers and patients will be process innovation. This is accomplished by clearly documenting the existing or “as is” process as well as the “to be” of the desired process. That can only be accomplished with combined disciplines of technicians who know business process modeling (BPM), facilitators who are professionals that can interact with all levels of stakeholders in the health care service chain, and “content” experts who understand legal, medical, and workflow implications of making changes to major functions such as provider management or claims adjudication.

No World Borders has been consulting with several health care payors on process improvement, and preparation of the conversion of systems for electronic health records.

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