Washington Watch

Carter L. Alleman, J.D.

Preparing Health Policy Options

Congress will reconvene next week following a seven-week summer recess—and there is much work to be done. Though scheduled to be in session for four weeks before recessing again until after the election, there is speculation that even this abbreviated schedule could be cut short.

Before Oct. 1, Congress must pass several bills to fund federal agencies or, more likely, enact a temporary continuing resolution to extend government funding until after the election.  

Among the top appropriations-related priorities for medicine is the need to provide funds to address the opioid crisis and the Zika virus outbreak. While Congress has been quick to publicize passage of the Comprehensive Addiction and Recovery Act earlier in the summer, none of the newly authorized programs in the bill will receive funding until separate appropriations legislation is enacted.  Congress must also return to consideration of legislation to provide support for public health efforts to address the Zika threat, including support for prevention, mosquito control and vaccine research and development.

In addition to appropriations work, Congress is also likely to face renewed efforts to force action on legislation to address gun violence, such as closing loopholes in the current background check system. Additionally, while the House of Representatives acted to make important reforms to the mental health system, legislation remains pending in the Senate.

Fight Over Kentucky Medicaid Overhaul

Kentucky Gov. Matt Bevin submitted his plan to overhaul coverage for the 400,000 low-income residents who qualified under Medicaid expansion, but it’s unclear if the Obama administration will approve it or how strong the political blowback would be for ending the program.

On Aug. 24, Bevin, a Republican, turned in a long-awaited waiver application to the federal Department of Health and Human Services. The plan would provide stricter rules for beneficiaries who qualify but many of the proposed items are likely to be met with skepticism from the Obama administration. If the federal government does not budge on major conservative priorities such as work requirements and lock-out periods, Bevin has threatened to pull the plug on expansion altogether.

Bevin has been keen to overhaul the program with a more conservative edge. His proposed changes include requiring beneficiaries to work or volunteer, a request that the Obama administration has denied for multiple states with similar wishes. Advocates have been troubled by the Bevin administration’s call for six-month lockout periods for beneficiaries who fail to make on-time payments or fill out Medicaid paperwork correctly. The plan also would allow consumers to use health savings accounts and receive dental and vision care if they practice specific healthy habits.

Hospital Group Sees Kickback Risk in Medicare Payment Change

Medicare officials are implementing an order to stop paying higher rates for care provided at new satellite doctors’ offices affiliated with hospitals. Last year's budget deal (PL 114-74) directed Medicare to instead reimburse the new off-campus offices under the less-generous physician fee schedule or reimbursement rates for ambulatory surgical centers. Existing off-campus departments could continue to bill under the hospital outpatient rule.

Lawmakers had the backing of many policy analysts for a provision that addresses a longstanding concern about unequal Medicare pay. The federal health program for senior citizens and the disabled could pay $492 for an echocardiogram performed in a doctor’s office classified as a hospital outpatient facility, but only $228 for the same service in a physician-owned office, the Medicare Payment Advisory Commission said in a report to Congress. The Congressional Budget Office estimated $9.3 billion in savings over a decade from including the provision on hospital outpatient departments in the budget deal.

The newer satellite offices thus would face administrative limbo, with Centers for Medicare & Medicaid Services (CMS) signaling that it may develop a new pay system for them after 2017. The hospital outpatient departments (HOPDs) that opened, relocated or changed service lines after Nov. 2, 2015, also would assume substantial new legal risks, including the potential cost of defending against whistleblower suits.

Medicare Says $466 Million Saved in Alternative Pay Programs

Federal officials highlighted token Medicare savings as evidence of the success of alternative reimbursement tests, which are meant to lay the groundwork for a broader overhaul of how the nation’s single largest purchaser of health care pays for services.

Savings rose to $466 million last year from $411 million the previous year from certain programs meant to tie Medicare payments to judgments about the quality of care. These are the combined results of 392 accountable care organizations (ACOs) participating in Medicare's Shared Savings program and the dozen in what’s known as the Pioneer Accountable Care model.

The savings represent only a sliver of Medicare’s roughly $600 billion in annual spending. These programs are among the most advanced tests done of alternative payment models by Centers for Medicare & Medicaid Services (CMS). The results seen to date may yield clues about how doctors and other medical professionals and health organizations will fare as Medicare increasingly ties its payments to judgments about the quality of care provided.

The agency is in the midst of creating a new framework for assessing medical care that was mandated by last year’s overhaul of Medicare physician payment. CMS also is working on a new unified payment approach for what’s called post-acute care, a roughly $60 billion expense for Medicare to cover services provided to people recovering after strokes and serious illnesses and surgeries.

Aetna Withdraws Obamacare Exchanges in 11 States 

Health insurer Aetna Inc. announced late Monday it will largely withdraw from state exchanges set up under the 2010 health care overhaul, citing financial losses it attributes in part to a controversial premium stabilization program the law established.

Aetna's exodus from 11 state-based exchanges comes after a more dramatic 30-state withdrawal by UnitedHealth, the nation's largest health insurer. The departures will reduce the market competition that authors of the health law.
The decisions moreover underscore just how volatile the individual insurance market remains, three years after the exchanges were launched. Major health plans including Anthem Inc. and Humana Inc. have said that they, too, expect losses but have not said they plan to withdraw. Other insurers such as Cigna Corp. and Medicaid-focused plans like Molina Healthcare and Centene Corp. have said they are profiting from that part of their business. Earlier this year, even Aetna said it saw participation as a good investment.

Medicaid Expansion Didn't Alter Overall ER Use, Study Finds

The health care overhaul's Medicaid expansion didn't significantly alter the overall use of hospital emergency rooms, according to a new Health Affairs study that suggests newly insured individuals don't visit ERs more frequently.
The study found that from 2012 through 2014, overall emergency department use differed by less than 1 percent between states that expanded their Medicaid programs and those that opted out. Some 17 million people gaining coverage through private insurance and expanded Medicaid, the joint health insurance for the poor and disabled.

Researchers used monthly emergency department data from 478 hospitals. The authors noted some limitations, including that the number of hospitals assessed only represented about 10 percent of ERs nationwide. They also were not capable of distinguishing which patients had new insurance. And they were unable to track the long-term effects of expansion.

Emergency rooms in expansion states saw a 25.5 percent increase in Medicaid beneficiaries between 2012 and 2014 while non-expansion states saw a 1.7 percent increase. Among private insurance policy holders, researchers found a 1.3 decrease in emergency room use in expansion states while non-expansion states saw a 7.1 percent increase. Between expansion and non-expansion states there was a 6.7 percent overall decrease in visits paid by private insurance. Researchers said that may have been attributable to some policyholders becoming Medicaid-eligible under expansion and moving into the program.

CMS Releases Orthopedics Test Through Heart Model

The Centers for Medicare and Medicaid Services (CMS) included an expansion of an existing orthopedic payment test in the proposal for a new cardiac bundled payment. Medicare in April kicked off its five-year Comprehensive Care for Joint Replacement Model (CCJRM), which compels participation for most hospitals in 67 regions of the country. CCJRM pegs future reimbursement to judgments about how well people enrolled in Medicare fare after hip and knee replacements.

The new proposal would add other surgical treatments used for hip and femur fractures, known as arthroplasty and fixation, or "pinning."  With this change, CMS said the orthopedic payment project would cover "all surgical treatment options" for hip fractures.

Surgeon General Letter on Opioid Epidemic

The Office of the Surgeon General is sending a letter on the opioid epidemic to nearly 2.3 million physicians and other health professionals.  The letter is a call to action on safe prescribing education, access to treatment for opioid use disorder, and compassionate care without stigma. The letter is available here.