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Friday, January 27, 2012

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Spotlight: Overpaying for MA

A new Government Accountability Office report indicates that Medicare Advantage plans were overpaid by between $1.2 billion and $3.1 billion in 2010. The report found that MA plans tend to overstate their beneficiaries' sicknesses, which triggers higher payments. House Democrats said the federal government could save billions of dollars annually by adjusting the coding formula used to determine payments. (more)
Quote of the Day:

"If you don't want to buy insurance, you have to help pay for the cost of the state picking up your bill. We said no more free riders."
GOP presidential candidate Mitt Romney, at a debate on Thursday, defending the individual mandate in the 2006 health law he signed as governor of Massachusetts
Table of Contents:
Politics & Policy
MEDICARE ADVANTAGE: GAO Report Finds as Much as $3.1B in Overpayments in 2010 'DOC FIX': Lawmakers Divided Over Use of War Savings as Offsets PHYSICIANS: American College of Physicians Urge Lawmakers To Block Budget Cuts, Repeal SGR
Inside the Industry

INSURANCE CODES: AMA CEO Urges Boehner To Stop Mandated ICD-10 System
Statelines
CALIFORNIA: Federal Judge Likely To Strike Down Ban on Benefits for Same-Sex Partners CALIFORNIA: Universal Care Bill Stalls in Senate
Election Watch
GOP DEBATE: Santorum Compares Romney's Individual Mandate With Federal Overhaul
Trends & Timelines

RX DRUGS: Marketers Increasingly Using Symptoms Checklists, Study Finds WELLPOINT: Changes Approach To Paying Physicians; Hopes Plan Will Reduce ED, Hospital Costs NANOMATERIALS: Effect on Health Needs Further Study, Panel Says ON THIS DAY: Jan. 27, 1993 -- Hilary Clinton Stumps for Health Reform
Health Reform
ESSENTIAL BENEFITS: Most Drug Benefits Already Surpass HHS Minimums, Analysis Finds EXCHANGES: States Further Along Than Publicly Acknowledged, Official Says CMS: CMS: Tavenner Plugs Health Reform Accomplishments, Praises Berwick
Odds & Ends
http://www.americanhealthline.com/editionfull.aspx?date=2012-01-27 (1 of 11) [1/27/2012 3:36:41 PM]
CLASS ACT: Long-Term Care Advocates Urge House Members To Keep Program
BLOGGER VS. BLOGGER: Why Didn't Obama Spend More Time on Health Reform?
POLITICS &AMP; POLICY
MEDICARE ADVANTAGE: GAO Report Finds as Much as $3.1B in Overpayments in 2010

Story Highlights: * A new Government Accountability Office report shows that Medicare Advantage plans were overpaid by between $1.2 billion and $3.1 billion in 2010. * The report found that MA plans tend to classify their beneficiaries as being sicker than if they were enrolled in fee-for-service Medicare plans, which triggers higher payments. * House Democrats said the federal government could save billions of dollars annually if the coding formula used to determine payments is adjusted. A new Government Accountability Office report found that Medicare Advantage plans in 2010 were overpaid by between $1.2 billion and $3.1 billion, The Hill's "Healthwatch" reports (Pecquet, "Healthwatch," The Hill, 1/26). [Ed. Note: For background on Medicare Advantage payment rates, click here.]
According to the report, the overpayments resulted from a faulty risk adjustment process that overstated beneficiaries' sicknesses, which triggered that garner higher reimbursements (Sanger-Katz, National Journal, 1/26). The report, which House Democrats requested, calls on CMS to improve the accuracy of the risk score adjustment by readjusting the diagnostic coding system (Daly, Modern Healthcare, 1/26). The report did not identify plans that received the overpayments, Bloomberg reports (Bloomberg, 1/27). Reaction In a statement, House Energy and Committee ranking member Henry Waxman (D-Calif.) said, "We cannot afford to overpay health plans in Medicare any more than working families and businesses can," adding that although the federal health reform law "will eliminate many of the overpayments in Medicare Advantage plans over time ... there is more to be done" ("Healthwatch," The Hill, 1/26). Robert Zirkelbach, a spokesperson for America's Health Insurance Plans, noted that beneficiaries in MA plans usually receive better care compared with patients in traditional plans, so "conclusions about whether the MA payment system appropriately pays plans should therefore not be based on GAO's analysis" (Bloomberg, 1/27). -- compiled by Lindsey Underwood
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the higher payment rates (Wayne, Bloomberg, 1/27). The report suggests that private insurers are more attentive about noting disease diagnose
'DOC FIX': Lawmakers Divided Over Use of War Savings as Offsets
Lawmakers on the conference committee charged with negotiating a deal to extend the payroll tax cut and delay scheduled cuts to Medicare physician reimbursements are divided over whether to use savings from ending the wars in Iraq and Afghanistan to pay for the "doc fix," CQ Today reports. [Ed. Note: For background on the payroll tax and Medicare "doc fix" issues, click here and here.]
Certain committee members -- such as Rep. Phil Gingrey (R-Ga.) -- are worried about the budgetary implications of using war funding to offset a d fix, such as potential effects on service members.
President Obama this week already has said the savings from pulling out of the wars should be used to reduce the national debt and fund road an construction projects (Ethridge, CQ Today, 1/26). -- compiled by Matthew Wayt
PHYSICIANS: American College of Physicians Urge Lawmakers To Block Budget Cuts, Repeal SGR
The American College of Physicians released a report on Thursday urging lawmakers to block mandatory budget cuts established in 2011 and to permanently repeal the sustainable growth rate formula that sets Medicare physician payment rates, National Journal reports. The report argues that the cuts would undermine successful programs, including initiatives to increase the number of primary care physicians. The group offers several ways to save money without the cuts, including new takes on health insurance, changes to the medical liability system and Medicare reforms. The report also suggests Congress use funds allocated for the wars in Iraq and Afghanistan to offset the cost of a permanent "doc fix" and establish annual pay increases for physicians (Sanger-Katz, National Journal, 1/26). -- compiled by Lindsey Underwood
ELECTION WATCH
GOP DEBATE: Santorum Compares Romney's Individual Mandate With Federal Overha
Story Highlights: * At a debate in Florida yesterday, GOP presidential candidate Rick Santorum criticized fellow candidate Mitt Romney for supporting an individual mandate. * Romney tried to distance himself from the mandate in the federal health reform law by saying U.S. * However, Romney defended the aim of a mandate, saying, "If you don't want to buy insurance, you have to help pay for the cost of the state picking up your bill."
the mandate in the 2006 Massachusetts health reform law is best for the state but not the entire
During a Republican presidential debate in Florida on Thursday, GOP presidential candidate Rick Santorum (Pa.) criticized former Massachusetts Gov. Mitt Romney for supporting an individual mandate, the Los Angeles Times reports. Santorum said Romney's record would make him an ineffective opponent against President Obama because the former governor signed a statewide health overhaul in Massachusetts in 2006 that included an individual mandate. Santorum said both Romney and Obama support "government-run, top-down medicine" (Abcarian, Los Angeles Times, 1/26).
Romney tried to distance himself from the federal health reform law, saying that his health reform plan was intended only at the state level. He call the federal overhaul "bad medicine" and vowed to repeal it as president (Altman, "Hill Tube," The Hill, 1/26).
However, Romney defended the aim of an individual mandate. He said, "If you don't want to buy insurance, you have to help pay for the cost of the state picking up your bill." He added, "We said no more free riders" (Los Angeles Times, 1/26).
Santorum countered that Massachusetts residents must purchase insurance "as a condition of breathing" (Baker, "Healthwatch," The Hill, 1/26). in Massachusetts," Santorum said (Los Angeles Times, 1/26).
He also said that some Massachusetts residents are not paying the financial penalty for not having insurance. "Free ridership has gone up five-fold
Families USA Links Romney With Federal Overhaul Families USA on Thursday released a report outlining the similarities between the Massachusetts health reform law, signed by Romney in 2006, a the federal overhaul, National Journal reports. The report states, "A close look reveals two health laws drafted with almost identical key components" (Fox, National Journal, 1/26). Gingrich Group Links Romney to Medicare Fraud Winning Our Future -- a political action committee supporting GOP candidate Newt Gingrich (Ga.) -- on Friday will release a seven-minute online documentary that seeks to link Romney to Medicare fraud, the AP/Miami Herald reports. The documentary covers the acquisition of the medical testing company Damon Corporation by Romney's private equity firm, Bain Capital. Bain reportedly was fined more than $35 million for Medicare fraud before going bankrupt. The video features comments made by Romney at a debate on Monday, where he insisted he never did business with the government (AP/Miami Herald, 1/26). GOP Presidential Candidates Will Release Health Records Gingrich, Romney, Santorum and Ron Paul (Texas) at a debate on Monday said they would release their health records if they receive the GOP nomination, the AP/San Francisco Chronicle reports (AP/San Francisco Chronicle, 1/26). -- compiled by Matthew Wayt
HEALTH REFORM ESSENTIAL BENEFITS: Most Drug Benefits Already Surpass HHS Minimums, Analysis Finds
Insurance plans already provide drug benefits that far exceed minimums established by HHS under the federal health reform law, according to an analysis from Avalere Health, The Hill's "Healthwatch" reports.
[Ed. Note: For more background on the essential health benefits required under the federal health reform law, click here
Avalere analyzed the drug benefits in health plans that could be used to establish essential health benefits standards. It found that policies offered to small businesses often cover about 70% of the available medications for a specific condition, while larger plans offered to federal employees cover every FDA-approved medication. The standards set by HHS require benchmark plans to cover only one medication in a particular class. As a result, health plans will have flexibility to change their drug benefits without flouting federal law, the analysis states (Baker, "Healthwatch," The Hill, 1/26). -- compiled by Lindsey Underwood
EXCHANGES: States Further Along Than Publicly Acknowledged, Official Says
Joel Ario -- former director of the CMS Office of Insurance Exchanges -- on Thursday said that states are making more progress toward establishing health insurance exchanges under the federal health reform law than they publicly acknowledge, National Journal reports. During a National Academy of Social Insurance conference, Ario said there is a "big gulf" between what Republican governors are saying about the exchanges and "what's actually going on on the ground." He added, "Other than the tea party people, there really aren't strong bodies of opposition to the [overhaul] reforms" at the state level. Ario said that even if the law is overturned by the Supreme Court or repealed by a Republican president and Congress, having several states make progress on the exchanges will bring significant change to the insurance market (McCarthy, National Journal, 1/26). -- compiled by Hanna Dubansky
CMS: CMS: Tavenner Plugs Health Reform Accomplishments, Praises Berwick

made significant progress in implementing the federal health reform law, The Hill's "Healthwatch" reports.
In her first public appearance since being nominated, acting CMS Administrator Marilyn Tavenner on Thursday said the Obama administration has
Tavenner said the administration already has enacted important provisions in the law and pledged to continue working to improve the quality of ca and reduce costs.
She also praised the work of former CMS Administrator Donald Berwick, who stepped down at the end of 2011 (Baker, "Healthwatch," The Hill, 1 -- compiled by Matthew Wayt
CLASS ACT: Long-Term Care Advocates Urge House Members To Keep Program
The Alliance for Retired Americans and the AFL-CIO on Tuesday sent a letter to House lawmakers urging them to oppose a bill (HR 1173) that would repeal the Community Living Assistance Services and Supports program created by the federal health reform law, The Hill's "Healthwatch" reports. The long-term care advocates sent the letter on the same day that the bill was set up for a floor vote next week. [Ed. Note: For background on the CLASS Act, click here.] The two groups said that CLASS can be modified to work effectively and added that repealing the program "would do nothing to address the glaring need for adequate coverage of long-term services and supports" (Pecquet, "Healthwatch," The Hill, 1/25). -- compiled by Lindsey Underwood
INSIDE THE INDUSTRY INSURANCE CODES: AMA CEO Urges Boehner To Stop Mandated ICD-10 System
James Madara, executive vice president and CEO of the American Medical Association, recently sent a letter to House Speaker John Boehner (R-
Ohio) asking him to stop the federally mandated implementation of the ICD-10 insurance coding system for physicians, Modern Healthcare rep Madara's letter is similar to a resolution that AMA's House of Delegates passed in November 2011 (Conn, Modern Healthcare, 1/26). According to Madara, ICD-10 will require physicians' offices to manage about 68,000 codes, more than five times the current number. He said the
change will cost medical practices between $83,290 and more than $2.7 million, depending on their size (Pecquet, "Healthwatch," The Hill, 1/26) -- compiled by Paula Fortner and Matthew Wayt
STATELINES CALIFORNIA: Federal Judge Likely To Strike Down Ban on Benefits for SameSex Partners
Story Highlights: * A federal judge likely will strike down a federal law that prohibits same-sex partners in California from receiving long-term care benefits. * The judge allowed domestic partners to join the suit, which could add hundreds of plaintiffs. * The judge said that the law appears to be "motivated by antigay animus."
A federal judge on Thursday indicated that she likely will strike down a federal law that excludes same-sex partners from receiving long-term healt care benefits, saying that the law appears to be based on prejudice, the San Francisco Chronicle reports (Egelko, San Francisco Chronicle, 1/27).
In April 2010, three University of California-San Francisco employees and their partners filed a lawsuit in response to California Public Employees' because the Defense of Marriage Act denies federal tax benefits to states that provide coverage to same-sex couples through federally supported programs (American Health Line, 1/20). On Thursday, Wilken ruled that domestic partners could join the suit. According to Claudia Center, a lawyer for the California employees and their same-sex partners, the ruling adds hundreds of plaintiffs to the case.
Retirement System's refusal to enroll the partners in a federally approved long-term health care plan. CalPERS said it could not enroll the spouses
Wilken said same-sex couples in the state "are relegated to registered domestic partnerships because legal marriage is prohibited for them," addin that Congress "saw registered domestic partnership as a marriage-like status" and based its decision on sexual orientation.
Wilken also signaled that she likely will overturn the law because of failure by federal officials "to show a plausible, legitimate rationale for excludin exclusion of same-sex partners from tax benefits was "motivated by antigay animus," which she said is unconstitutional, according to Supreme Court precedent (San Francisco Chronicle, 1/27). -- compiled by Hanna Dubansky
domestic partners from (the law's) list of eligible family members (for the tax benefits), and the court can think of none." She noted evidence that th
CALIFORNIA: Universal Care Bill Stalls in Senate

A bill -- SB 810, by Sen. Mark Leno (D-San Francisco) -- to set up a universal health care system in California stalled in the Senate on Thursday, while the Assembly passed a handful of health-related measures, the Sacramento Bee reports. The Senate voted 19-15 on the single-payer bill. The measure needed 21 needed to pass. Four Democrats abstained from the vote, and one voted against it (Van Oot/Sanders, Sacramento Bee, 1/27). Leno said the legislation is needed in part because the federal health reform law is facing judicial review. He added that health care premiums have increased five times higher than the rate of inflation in the last 10 years and that 12 million California residents lacked health insurance at some point last year (McGreevy, "PolitiCal," Los Angeles Times, 1/26). Republicans argued that the legislation would increase costs and bureaucracy. The measure, which does not include funding mechanisms, has been projected to cost $250 billion annually. Lawmakers have until Tuesday to act on the legislation. However, Senate President Pro Tempore Darrell Steinberg (D-Sacramento) said he did not think the bill would pass this year (Sacramento Bee, 1/27). Calif. Assembly Passes Bills To Expand Health Care Services
Meanwhile, the Assembly on Thursday passed several bills designed to expand medical care and mental health services. Lawmakers approved a measure -- AB 154, by Assembly member Jim Beall (D-San Jose) -- that would expand mental health care by requiring insurers to cover conditions such as anxiety and depression.
Opponents of the measure argue that it is premature because the state's health insurance exchange guidelines still are being finalized and that the bill could end up costing the state more over the long term. The Assembly also voted:
To approve AB 137, by Assembly member Anthony Portantino (D-La Caada Flintridge), which would require insurers to cover mammogr medical needs regardless of a patient's age (Lin, AP/San Francisco Chronicle, 1/26);
To pass AB 171, by Beall, which would require health plans to cover developmental disorders such as autism;
To approve AB 369, by Assembly member Jared Huffman (D-San Rafael), which would prevent health plans from requiring a patient to try
priced prescription medication before allowing access to a physician-prescribed drug (Sanders, "Capitol Alert," Sacramento Bee, 1/26)
To pass AB 1000, by Assembly member Henry Perea (D-Fresno), which would require insurance companies to cover oral chemotherapy at the same level as intravenous chemotherapy (AP/San Francisco Chronicle, 1/26).
The Assembly-approved legislation now moves to the Senate (AP/San Francisco Chronicle, 1/26). -- compiled by Michael Pogachar
TRENDS &AMP; TIMELINES RX DRUGS: Marketers Increasingly Using Symptoms Checklists, Study Finds
Drugmakers increasingly are using checklists of symptoms to market their products, according to a study published recently in the journal Social Science and Medicine, New York Times' "Well" reports. Mary Ebeling, an assistant professor of sociology at Drexel University and the author of the study, said the checklists can influence patient in line with the branded drug" (Chen, "Well," New York Times, 1/26). -- compiled by Lindsey Underwood
preferences. She added, "The whole point of tools like this one is to confine people's experiences into these categories in order to make a diagnos
WELLPOINT: Changes Approach To Paying Physicians; Hopes Plan Will Reduce ED, Hospital Costs
the long run, the Wall Street Journal reports. Wellpoint, the second-largest insurer in the U.S. with 34 million customers, will increase its payments to PCPs by around 10%, while offering the possibility of additional payments that could increase fees by as much as 50%. Wellpoint could spend an additional $1 billion or more on the initiative, which it thinks could be more than offset by reducing members' emergency department visits and hospital stays (Weaver/Wilde Mathews, Wall Street Journal, 1/27). -- compiled by Anthony Wilson
Health insurer Wellpoint this summer plans to increase the fees it pays primary care physicians, aiming to increase care quality and save money in
NANOMATERIALS: Effect on Health Needs Further Study, Panel Says

The potential health and environmental impact of nanomaterials -- tiny forms of substances such as silver, zinc and aluminum -- should be studied further, according to a National Academy of Sciences panel, the New York Times reports. According to the panel, nanomaterials have moved into the marketplace over the last 10 years in various products, such as cosmetics, clothing and paint. They can be ingested, inhaled or absorbed through the skin, and they can affect the environment during manufacturing or disposal. The panel concluded that there are "critical gaps" in understanding the effects of the materials on human health and the environment (Dean, New York Times, 1/25). -- compiled by Matthew Wayt
ON THIS DAY: Jan. 27, 1993 -- Hilary Clinton Stumps for Health Reform
American Health Line is celebrating its 20th anniversary in 2012. Since 1992, AHL has brought its subscribers coverage of all the health polic decades. 1993 POLITICS & POLICY - CLINTON ADMINISTRATION: HILLARY HITS THE ROAD RUNNING USA TODAY: "President Clinton wasn't kidding when he saidhis national task force on health care reform would 'work constantly day and night'" (Mimi Hall, 1/27). WASH. POST: "Shortly after President Clinton announced Monday afternoon that his wife would lead [the task force], issue" (Dana Priest, 1/27). She called Sen. Donald Riegle (D-MI) at 10:30pm to talk health policy. Riegle: "It's clear to me that she is absolutely focused on this."
news they need to know. In honor of the anniversary, AHL on each day of 2012 will feature a story that was published on that date from the last tw
Hillary Rodham Clinton picked up the telephone and spent the next six hours introducing herself to the most powerful members of Congress on the
HILL REAX: USA TODAY: "Most members of Congress praised the appointment" (Hall, 1/27). House Ways and Means Chair Dan Rostenkowski ( IL): "This is big for health. This is a president who's laid it all out on the line." He added her presence may expedite reform: "If it's Hillary Clinton
calling for some statistics, I bet she's going to get them a lot faster than" other people. Sen. John Chafee (R-RI): "There is a natural tendency to tre rule in these matters" (Priest, 1/27).
the wife of any official with ... kid gloves. ... However, if she chooses to step into the fray, I'm sure everyone will still be polite, but candor has got to
EDITORIAL REAX: L.A. TIMES: "Yes, it shows he's serious, but if the plan falls short, both of the Clintons will have to be prepared, to put it mildly, expert, in charge of so crucial a project" (1/27). WASH. POST editorial calls the move "straightforward and audacious" but notes the "built-in risk": "Will members of Congress master the art of mixing respect for the First Lady with candor about the matter at hand? Will it be possible for other aides and subordinates of the president to stand up to his wife, or even to challenge her work to him, if they think they should (and as they would
to take the heat. And if it falls short, questions will be raised about the wisdom of putting the President's wife, an attorney not known as a health ca
with any other person in her job)?" (1/27). N.Y. TIMES: "Her new position and new offices in the active West Wing of the White House will allow he her and for the country" (1/27).
to do openly what she no doubt would otherwise have done covertly -- advise her husband the President. That has to be better than pretending, fo
OTHER REAX: Yale Univ.'s Theodore Marmor writes in the L.A. TIMES that her appointment "leaves no doubt that the universalization of coverag
and the control of costs are top priorities of the Clinton [Admin.] and that the President's concept of reform, not that of experts or interest groups, w of solving a managerial problem. [But] if the president thinks this is just a matter of getting all the papers shuffled, he's wrong. Painful political decisions will have to be made" (Priest, 1/27). Nat'l Academy of Public Admin. President R. Scott Fosler "said Hillary Clinton might have an the Reagan WH, "said Hillary Clinton's very prominence may inhibit the open debate on health care that Clinton wants": "How does a secretary of Health and Human Services or a budget director tell a president that his wife's idea is half-baked?" (AP/PHILA. INQUIRER, 1/27).
guide what he presents to Congress" (1/27). Heritage Fdn.'s Stuart Butler: "On the surface, her appointment is kind of a way to beat heads togethe
advantage in her new post by not being an expert on health matters -- she might be open to different views." Gary Bauer, domestic policy adviser i
FEDER: WASH. TIMES reports health transition team dir. Judith Feder "has signed on as the chief policy analyst for [HHS'] Donna Shalala ... officials said. She will head a team of top health policy analysts working with the President's Task Force on National Health Care Reform" (Paul Bedard, 1/27). ABC/WASH. POST surveyed 549 adults 1/26 on Hillary's appointment; margin of error +/- 5% ("Nightline," ABC, 1/26; W. POST, 1/27). HILLARY CLINTON'S APPOINTMENT TO HEAD TASK FORCE ON HEALTH CARE Approve 64% Disapprove 26% REGARDLESS OF APPROVAL, DO YOU THINK THERE WERE MORE QUALIFIED PEOPLE CLINTON COULD HAVE SELECTED Others more qualified 44% Hillary among best qualified 44% Don't know 12% WHICH WORRIES YOU MORE: THAT HILLARY WON'T HAVE A LARGE ENOUGH ROLE ON THE ADMIN. OR THAT SHE WILL HAVE TOO LARGE A ROLE Too large 36% Too small 3% Neither 58%
ODDS &AMP; ENDS BLOGGER VS. BLOGGER: Why Didn't Obama Spend More Time on Health Reform?
speech included just 44 words on health reform, far fewer than in his previous addresses.
President Obama in his State of the Union address on Tuesday spent little time discussing health care and the federal health reform law. Obama's
Sarah Kliff of the Washington Post's "Wonkblog"and Forbes' Robert Book had different conclusions on why Obama said so little about the ov MORE>>
Editors and Staff: Editor: Anthony Wilson Editor in Chief: Amanda Wolfe Contributing Editors: Kate Ackerman, Cassandra Blohowiak, Dan Diamond, Paula Fortner, Michael Pogachar, Santosh Rao, Justyn Ware Staff Writers: Daniela Feldman, Hanna Dubansky, Ashley Marchand, Juliette Mullin, Lindsey Underwood, Matthew Wayt
Top News:
A Panel Divided
The panel charged with negotiating a deal to extend a payroll tax cut and delay scheduled cuts to Medicare physician reimbursement rates is divided over whether to use savings from ending the wars in Afghanistan and Iraq to pay for the "doc fix."
The Mandate Candidate

During a debate in Florida yesterday, GOP presidential candidate Rick Santorum yesterday criticized fellow candidate Mitt Romney for supporting an individual mandate.
Benefits Ahead?
A federal judge yesterday indicated that she likely will strike down a federal law that excludes same-sex partners of California
employees from receiving long-term health care benefits, saying that the law appears to be based on prejudice.
Now & Later

Wellpoint this summer plans to increase the fees it pays primary care physicians, in the hopes of saving money in the long run by reducing customers' visits to emergency departments and hospitals.
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Friday, January 27, 2012

Spotlight: Overpaying for MA

Quote of the Day:

Inside the Industry

Trends & Timelines

Odds & Ends

http://www.americanhealthline.com/editionfull.aspx?date=2012-01-27 (1 of 11) [1/27/2012 3:36:41 PM]