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Lessons from Vermont's Health Care Reform

Lessons from Vermont's Health Care Reform

By Laura K. Grubb, M.D.
The New England Journal of Medicine, April 4, 2013

In May 2011, Vermont Governor Peter Shumlin signed legislation to implement Green Mountain Care (GMC), a single-payer, publicly financed, universal health care system. Vermont’s reform law passed 15 months after the historic federal Affordable Care Act (ACA) became law. In passing reforms, Vermont took matters into its own hands and is well ahead of most other states in its efforts to implement federal and state health care reforms by 2014. The Supreme Court decision last June to uphold most of the ACA left many states scrambling, since they had postponed reforms pending the judgment. Although Vermont is a small state, its reform efforts provide valuable lessons for other states in implementing ACA reforms.

First, Vermont instigated change from within the state and engaged local stakeholders in the process. Vermont’s administration provided information to residents, promoted transparency, and actively engaged citizens on all levels. The administration established a health care reform website, hcr.vermont.gov, which provides regular reform updates, educational presentations, timelines, and links to legislation and other reform resources. Administrators host frequent public listening sessions throughout the state. In addition, Shumlin engaged health care providers in the reform process, in part through the GMC Health Care Professional Technical Advisory Group, which consists of 68 physicians, dentists, physical and occupational therapists, pharmacists, and naturopathic doctors, and the Mental Health and Substance Abuse Technical Advisory Group, consisting of 24 mental health professionals. The engagement of such stakeholders has helped to smooth the transition to large-scale reform.

Second, Vermont created the Green Mountain Care Board (GMCB), an independent board with responsibility for all the major factors influencing the cost of health care in the state. Whereas other states split responsibility for the oversight of different parts of the health system among different agencies, Vermont’s legislature created one board to consider all the variables. The GMCB has jurisdiction over payment reform, insurance exchanges, rate setting, hospital-budget authorization, resource and workforce allocation, state formulary establishment, regulation of insurance carriers, and maintenance of a statewide quality-assurance program. The board will establish and maintain a publicly financed health insurance program and a unified health budget. In addition, it is overseeing the development of two accountable care organizations: the Accountable Care Coalition of the Green Mountains, which includes 100 independent physicians statewide, and OneCare Vermont, whose network of 13 community hospitals, 2 federally qualified health clinics, 5 rural health centers, and 58 independent physician practices is responsible for the care of 42,000 Medicare recipients. The fact that many types of health care–related transactions must pass through the GMCB supports synchronization of reform efforts.

Third, Vermont is advanced in its development of a state insurance exchange that will offer essential benefits through at least three tiers of insurance packages while providing transparency and comparability.1 The ACA mandates that states establish their own exchanges or default to the federal exchange, and to date 23 states and the District of Columbia have declared their intent to establish their own exchange or a joint state–federal exchange (see tableStates That Have Declared Their Plans to Create State-Based or State–Federal Health Insurance Exchanges.).2 Although the development of a state exchange is a massive task, Vermont administrators believe that their exchange will serve as a foundation for a streamlined system for single-payer reform. “The infrastructure is useful because it would build the portal we would use for single payer, including eligibility screening, enrollment processing, premium collection, claims administration, and claims payment,” notes Robin Lunge, Vermont’s director of health care reform. “We have 65 small group plans in the state. With only two carriers in the state and on the exchange, the plans will be more uniform and there will be significantly less product. In terms of competition and cost control, Vermont has a rigorous rate-review process to look at insurance premiums to make sure they are reasonable given the factors established in state law.” Establishment of a state exchange will provide Vermont with several advantages, including federal funding, the development of an electronic portal for insurers, and the opportunity to align state reforms with federal ones as much as possible.

Finally, Vermont policymakers are maximizing federal financing and have projected cost savings. In January 2013, the state released a 156-page financing plan for its single-payer arrangement; the plan outlines federal financing sources and the anticipated generation of savings. Vermont has been awarded more than $250 million in federal funding for its state exchange — the fifth-highest amount among the states, although Vermont has the country’s second-smallest state population. “We feel strongly that the exchange is not the answer to all of Vermont’s health care problems,” Shumlin remarked, explaining that “the exchange is helpful to Vermont to bring us federal dollars to achieve our single-payer goal.”3 In fact, state exchange development will be 100% federally funded.4

Vermont will also gain substantial federal funding through its Medicaid expansion ($249 million) and attract federal financing through a 2017 innovation waiver ($267 million). While many states continue to debate expansion, Vermont has expanded its Medicaid program well beyond the ACA’s proposed income-eligibility threshold of 138% of the federal poverty level. With the expansion, Vermont will save 10.9% in state Medicaid funding. States that now have high eligibility levels will see decreases in spending, whereas those with low eligibility levels will have to increase their spending. Overall, experts predict that the national impact of Medicaid expansion will be a net increase of 0.3% in states’ total Medicaid expenditures but an overall decrease of 0.4% in spending, thanks to a 0.7% decrease in uncompensated care. Even though some states will see an eventual increase in spending on Medicaid if they expand their programs, they will still generate net savings in health care spending.5

Revenues from taxes (payroll, personal income, sales, cigarettes, tobacco, insurance, and more) will also finance GMC, but administrators believe that the eventual cost savings from the single-payer system will be greater than what will initially be needed from tax revenues. In 2017, claims costs are projected to be $87 million higher than they would have been without health care reform because additional health care services will be provided, but administrative costs will be $122 million lower, which will result in net savings of $35 million in the first year.

Policymakers and stakeholders in other states can learn some lessons from Vermont regarding ACA reform. First, engaging stakeholders while providing transparency at each stage of reform builds support for transition efforts. Second, the adage “work smarter, not harder” applies to the enormous task of implementing health care reforms: a central board can coordinate all implementation efforts, reduce redundancy and bureaucracy, and improve transparency. Third, the development of a health insurance exchange presents opportunities for state-specific health care innovation. And finally, instead of resisting the inevitable federal reforms in the name of federalism, states may capitalize on federal financing opportunities to build new state health programs and realize cost savings.

REFERENCES

1 Lunge R. The Vermont health benefit exchange (PowerPoint presentation). 2012 (http:/
/hcr.vermont.gov/sites/hcr/files/Exchange%20benefits%20report%20Feb%202012%20FINAL.pdf).

2 Henry J. Kaiser Family Foundation. Facts at-a-glance (http://www.statehealthfacts.org/healthreformsource.jsp).

3 Panebaker A. Shumlin bends on health benefits exchange. VTDigger.com. February 7, 2012 (http://vtdigger.org/2012/02/07/shumlin-bends-on-health-benefits-exchange/).

4 Lunge R, Larson M. Financing plans 2014-2017 (PowerPoint presentation). January 25, 2013 (http://hcr.vermont.gov/sites/hcr/files/2013/Financing%20Plans%20PPT%20w%202017%201-25%20Final.pdf).

5 Henry J. Kaiser Family Foundation. The cost and coverage implications of the ACA Medicaid expansion: national and state-by-state analysis. November 2012 (http://www.kff.org/medicaid/upload/8384.pdf).

Disclosure forms provided by the author are available with the full text of this article at NEJM.org.

This article was updated on April 4, 2013, at NEJM.org. Source Information:  From the Department of Pediatrics, University of Texas Health Science Center, Houston.

N Engl J Med 2013; 368:1276-1277April 4, 2013DOI: 10.1056/NEJMp1212974

Kudos for Vt. from New England Journal of Medicine

By Dave Gram, Associated Press
The Boston Globe, April 4, 2013

MONTPELIER, Vt. (AP) — An article in the prestigious New England Journal of Medicine is praising Vermont’s efforts to redesign its health care system, saying Vermont can serve as a model for other states.

‘‘Vermont is progressive,’’ said the article’s author, Dr. Laura Grubb, also a fellow in adolescent medicine at the University of Texas Medical School. ‘‘They didn’t wait until each step of the Affordable Care Act had to be implemented. They voted on their own state-based reform system.’’

Much of the energy behind Vermont’s efforts to implement the 2010 federal law actually has been directed at a more ambitious goal. Gov. Peter Shumlin and his fellow Democrats who control the Legislature have put Vermont on a path to move as close as it can to a Canadian-style, single-payer health care system by 2017.

The federal law calls for states to set up regulated health insurance marketplaces, called exchanges. Vermont has been eagerly setting up its exchange, in hopes of using it as a springboard for the single-payer system. State lawmakers passed legislation in 2011 to set itself on a two-stop journey to set up the exchange in 2014 and the single-payer system in 2017.

Shumlin, who has championed the changes to Vermont’s health care system, said the state should be ‘‘proud to be a leader’’ in implementing the federal law.

‘‘We are pleased to gain recognition of our path to single payer health care and our Vermont-style solutions in the New England Journal of Medicine,’’ he said.

Darcie Johnston, founder of the group Vermonters for Health Care Freedom, a group opposed to the state’s health care plans, said Grubb is a member of Physicians for a National Health Program, which supports single-payer health care nationwide.

In a phone interview, Grubb said she was an ‘‘inactive’’ member. ‘‘I haven’t paid dues in a couple of years.’’

Grubb, a medical doctor pursuing a master’s degree in public health policy, highlighted four areas in which states would do well to follow Vermont’s example. She noted:

—The creation of a centralized board — the Green Mountain Care Board — to coordinate efforts to retool the state’s health care system and set up what will be called the Green Mountain Care system by 2017.

—The inclusion of people, called stakeholders, who will be affected by health policy in its development.

—An aggressive approach to setting up the exchange, getting started even before last year’s Supreme Court decision upholding the law and before President Barack Obama’s re-election, which helped ensure the continuity of the federal effort.

—Attracting federal funds to help the state effort to implement the changes. The second-smallest state by population, Vermont ranks fifth in the country in attracting federal funds to support health care efforts.

The Green Mountain Care Board set up a 64-member advisory group of physicians, dentists, physical and occupational therapists and naturopathic doctors. It also set up a 24-member advisory group of mental health and substance abuse professionals to help guide its work.

‘‘The engagement of such stakeholders has facilitated a smoother transition to large-scale reform,’’ Grubb wrote.

http://www.boston.com/news/local/vermont/2013/04/04/kudos-for-from-new-england-journal-medicine/adqWIuOYe6A4WIaUxYT5WM/story.html

An adventure to make life worth living

By Andrew Coates, M.D.
WAMC Northeast Public Radio, April 5, 2013

Helen Keller famously wrote that “Life is either a daring adventure or nothing.”  She continued: “To keep our faces toward change and behave like free spirits in the presence of fate is strength undefeatable.”

No patient goes to a hospital in search of a daring adventure. Yet in the hospital, the presence of fate is inescapable. The Grim Reaper stalks the corridors. Tragedy strikes.

One day some years ago, soon after my residency in internal medicine, I visited a hospitalized patient early in the morning. I liked him and looked forward to hearing his views. In addition to his symptoms and the plans for his care, we discussed the headlines in The New York Times.

Later that morning he died a sudden, unexpected, death. After a tearful meeting with his family I arranged for an autopsy, as they requested. Later that day I attended his autopsy, in hopes of learning from the pathologist what had killed him. Later still, the pathologist, remarkably, met with this family himself, to explain what had happened, trying to help bring some peace of mind.

In this way, perhaps the hospital can be seen as a place for a daring adventure — for caregivers. But we need to prepare ourselves to meet the challenge.

My experiences as a hospital medicine physician led me to seek more training about the nature of suffering, about breaking bad news to patients and their loved ones, about helping with difficult decisions, resolving the goals of care and caring for dying patients. After all, a significant fraction of all deaths occur in a hospital. Of all patients with Medicare, about one quarter to one third will die in a hospital.

This week in the hospital I attended the deaths of three patients.

Each patient faced an inescapable diagnosis. Each patient refused life support measures they viewed as futile and even harmful. And each one had a triumphal death scene, with family embracing one another at the bedside, reminiscing, loving one another.

But the most compelling aspect of this work is how it reveals human courage. Our society and culture does so little to prepare us for death. And yet when death comes, the human solidarity that emerges is amazing. Family feuds melt away, people embrace religious faith — or sometimes reject it — they hold their convictions up to scrutiny in all kinds of ways. They confess and forgive and find laughter.

I suppose this is been true for any human crisis — for example how volunteers responded to help strangers after the storm Sandy. Yet the hospital death scene is particularly compelling as people face the loss of their loved ones, with eyes and ears and hearts wide open.

Sometimes in medicine when a terminal diagnosis or a grave prognosis is revealed, doctors will say “there’s nothing to do.” I have learned that although the patient may be dying — or even dead — in the hospital there is always something we can do. And that sometimes very small things can mean a great deal.

One of my patients who died this week told me that she knew she was dying. “It’s OK,” she said. I asked what I could do for her. “I want my family,” she said. For two days, as her entire extended family gathered, she rallied, at one point speaking via video call with grandchildren. Soon she lost consciousness and died.

It occurs to me that I had the great privilege to witness a woman behave like a free spirit in the presence of fate — as Helen Keller said, a portrait of strength undefeatable. An adventure to make life worth living.

Dr. Andrew Coates practices internal medicine in upstate New York. He is president of Physicians for a National Health Program.

You can listen to Dr. Coates’ radio broadcast here:
http://www.wamc.org/post/andrew-coates-adventure-make-life-worth-living

Advice for Stephen Colbert when interviewing President Clinton

By Arthur Yakov Krichevsky
Clayton-Richmond Heights Patch, April 5, 2013

I hope Stephen Colbert asks President Bill Clinton about health care on Saturday.

Colbert is a brilliantly satiric political comedian and host of Comedy Central’s “The Colbert Report.”

Last June, Clinton said that if we adopted a health system similar to Canada’s or those in Europe we’d have universal coverage and gain “a trillion dollars or more a year for pay raises, for investment in new technology, to create new jobs or whatever.”

Adopting a single-payer system — in the U.S., for example, improving Medicare and extending it to cover everyone — is how every other modern nation has done what we seem unable to do: provide high-quality health care to all citizens at roughly half what we pay. Plus, the residents of those nations live longer and healthier lives than we do.

Colbert will interview Clinton Saturday at Washington University in St. Louis during the closing session of the Clinton Global Initiative University being held here April 5-7. They really need to talk about health care.

President Clinton also stated that a single-payer system would dramatically reduce waste in administrative costs and overhead. The approximate annual savings are estimated at $570 billion, according to University of Massachusetts-Amherst professor of economics Gerald Friedman. These savings would come from reduced administrative costs and more favorable pricing of drugs and medical equipment.

Many of these price reductions would be possible due to one simple market reason: increased purchasing power. With Medicare as the single purchaser of health care services in the United States, its expanded market share would empower the kinds of stronger price negotiations done by all other modern countries.

Clinton also made the point that the United States spends over 17 percent of its GDP on health care costs, while Germany, France and Canada each spend just over 10 percent. This discrepancy is even more striking when we consider that our system leaves tens of millions of us without any insurance, while these more frugal countries provide affordable health care to every one of their citizens. That’s part of the reason why they live longer and healthier lives.

This is why I hope Colbert asks him about single-payer health care.

I hope he also asks Clinton about the hottest health care issue sweeping many states today: the transformation of Medicaid.

The Patient Protection and Affordable Care Act (ACA) encourages states to make Medicaid more available to 10 million working poor by paying 100 percent of the cost of their care for three years, gradually requiring states to pay no more than 10 percent by 2020. Unexpectedly, the Supreme Court decided last summer that states could chose to not do this.

Expanding Medicaid is the smart thing to do. In Missouri, for example, it will create 24,000 new jobs in our state in 2014, bring $8.2 billion into our state by 2020, and preserve millions of dollars every year for important services such as higher education.

Expanding Medicaid is also the right thing to do. It would start to provide health care access for around 260,000 poor Missourians today. Most of these folks work full-time at jobs that just don’t provide an affordable health care benefit. They are working, yet they risk bankruptcy with each illness or injury.

Medicaid isn’t the perfect solution, it needs some fundamental improvements, but it’s incredibly better than having no insurance at all. Many lives are at stake, not just in Missouri but across our nation.

For these reasons, I hope Colbert asks President Clinton about health care. The country is listening.

Arthur Yakov Krichevsky is a Pharm.D. candidate at the St. Louis College of Pharmacy and a board member of Physicians for a National Health Program – St. Louis.

http://clayton-richmondheights.patch.com/blog_posts/advice-for-stephen-colbert-when-interviewing-president-clinton-in-st-louis

TRICARE is coming up short for our military and their families

TRICARE Multiyear Surveys Indicate Problems with Access to Care for Nonenrolled Beneficiaries

Government Accountability Office (GAO), April 2013

In fiscal year 2012, the Department of Defense (DOD) offered health care services, including mental health care services, to about 9.7 million eligible beneficiaries in the United States and abroad through TRICARE, DOD’s regionally structured health care program.

The number and type of civilian providers available to serve TRICARE beneficiaries can vary depending on a beneficiary’s location and choice of coverage among TRICARE’s three basic plans—TRICARE Prime, TRICARE Standard, and TRICARE Extra. We use the term “nonenrolled beneficiaries” for beneficiaries who are not enrolled in TRICARE Prime and who use the TRICARE Standard or Extra options, or TRICARE Reserve Select (TRS).

Nearly one in three nonenrolled beneficiaries experienced problems accessing care, and they rated their satisfaction with care generally lower than Medicare fee-for-service beneficiaries.

Nearly one in three nonenrolled beneficiaries experienced problems finding civilian providers who would accept TRICARE. Those in PSAs (Prime Service Areas with TRICARE Provider networks) experience more problems finding primary and specialty care than those in non-PSAs.

Civilian providers’ acceptance of new TRICARE patients has decreased over time. Mental health providers report lower awareness and acceptance than other provider types.

http://www.gao.gov/assets/660/653487.pdf

Comment:

By Don McCanne, M.D.

TRICARE is a health care service program for active duty military, their dependents, and military retirees – a program that is particularly important for those who cannot use military health facilities nor the VA system. The results of this survey should make us ashamed of how we treat the military and their dependents.

Straight to the point, if we had a single, comprehensive health care system that served everyone and included all health care professionals and institutions, this report would not have been necessary. We really do need an improved Medicare that includes everyone.

Over 7,000 march to demand return of stolen UMWA health benefits

16 arrested sitting in for miners

By Kay Tillow
Firedoglake, April 4, 2013

CHARLESTON, W.Va. — They boarded buses and cars before dawn, some the night before, coming from the coalfields of Illinois, Pennsylvania, Kentucky, Virginia, Ohio, Indiana, and all across West Virginia. By Monday at 10 a.m. over 7,000 had packed into the giant Charleston Civic Center to voice their support for the 23,000 miners and their families who face the loss of their lifetime health benefits in a bankruptcy scam.

In a series of mergers and deals, Peabody Energy and Arch Coal transferred their contractual health benefit obligations to Patriot Coal. In St. Louis in March, Patriot Coal filed in bankruptcy court seeking to terminate the United Mine Workers (UMWA) contract and set up instead a Voluntary Employee Beneficiary Association (VEBA) for the retirees and families.

Patriot seeks to put only a pittance into the VEBA, vastly underfunding it. UMWA President Cecil E. Roberts has said this plan would “put thousands of retired coal miners, their dependents or their widows on the path to financial ruin, worsening health conditions or even death.”

The UMWA pioneered in health care benefits and pensions when they battled coal operators and the American Medical Association to establish the UMWA Health & Welfare Fund. John L. Lewis and the union defied accusations of socialized medicine to set up miners’ clinics and built the miners’ hospitals that serve today as the backbone of health care in Appalachia.

The UMWA won early retirement with family coverage for miners who retired before they were 65. These achievements of the miners’ struggles are under attack by Patriot, Peabody, and Arch. Most unions, following the lead of the UMWA, have negotiated early retirement with employers picking up the cost of health care until Medicare kicks in. The attack on UMWA retirees is a snapshot of what employers have in store for union negotiated early retirement plans.

The miners’ fight is winning political support. The West Virginia state Senate and House of Delegates have passed resolutions calling on Patriot Coal to meet its commitment to provide pension and health benefits to miners. Elected leaders are feeling some heat, judging by the number of the powerful who appeared at the Civic Center to express their support. West Virginia Governor Earl Ray Tomblin greeted the crowd. “I’m from Logan County the heart of coal mining. … I’m honored to stand shoulder to shoulder with you for the benefits of our retired miners.”

Dan Kane, UMWA secretary treasurer, spoke. “To cast aside those who earned benefits through decades of back breaking labor is like taking money – it’s theft.”

Kane called for a congressional investigation. “Who’s looking into this conspiracy? We will fight to protect our health care no matter what it takes. We will follow these robber barons and we will shine the light of truth on these evil deeds. We are on the right side of history.”

West Virginia Senator Jay Rockefeller appeared through a video. “We must hold Peabody, Arch and Patriot to the promises they have made.” He spoke of the introduction of the Coal Accountability and Retired Employee Act.

Representative Nick Rahall of West Virginia declared that “In 1912 Mother Jones said that the labor movement was a command from God Almighty.” He said that the promise to the miners must be kept. “No white flag … this is an uphill battle, but everyone here knows how to walk uphill.”

West Virginia Secretary of State Natalie Tennant described herself as a union member and said that this is an attack on all American workers. “It happened at Century Aluminum to steelworkers.” Tomorrow, she said it will happen to many more until we stop “these fraudulent transactions.”

“We can’t let this stand. This is an attempt to take away the health care that was won on your broken backs, on your black lungs and on the memories of your fellow miners who took their last breaths in the coal mines,” Tennant said. “What’s worrisome is that tomorrow it can be an attack on construction workers, nurses, secretaries, teachers; who knows where it stops?”

West Virginia’s junior senator, Joe Manchin, spoke against Patriot’s attempt to have retirement obligations dismissed in bankruptcy but also condemned Peabody and Arch for shifting their liabilities.

Manchin said he knows and talks to the owners of these companies. “I’ve told them, where I come from, you can’t make wrong right. You can’t, no matter how hard you try. You can’t shine crap, and by God, this is crap. You can’t make this stuff look good, you can’t make it smell good and you sure as hell can’t make it taste good.”

AFL-CIO President Richard Trumka brought support from 12.5 million members of the AFL-CIO. He said that when they dumped all the legacy costs onto one little company they knew it would fail. He said that we’ve been “living and working under the threat of vulture capitalism.” He addressed Patriot, Peabody, and Arch: “You can’t use the courts to steal because we won’t let you.”

UMWA President Cecil Roberts concluded the indoor rally. He said that 42 people have already been arrested in St. Louis where the bankruptcy court is convened. That includes all of the members of the International Executive Board of the UMWA. He spoke of the broadening of this movement with faith leaders from the United Church of Christ, the Episcopal Church, and the Catholic Church who would be joining today in nonviolent civil disobedience and arrest in protest against this moral outrage. He recognized the Teachers, CWA, USW, UAW, and the many unions that were in the hall.

Roberts said “We know who did this – they are wearing $10,000 suits and Gucci shoes. We know where they are. We are going to be like Jesus who threw the money changers out of the temple.”

At the conclusion of his speech people moved in orderly fashion to march to the headquarters of Patriot at Laidley Towers. When the front of the march arrived, the streets were still packed all the way back to the Civic Center. Many workers cheered from the steps of their office buildings.

Moms and dads sheltered the babies from the light rain and kept walking. The camouflage UMWA shirts read, “We are Everywhere” and “No Health Care, No Coal.”

A brief rally continued across from Patriot. Doris Crouse-Mays, president of the Virginia AFL-CIO, said that this will be the “first time that I’ve ever gone to jail in my life and I can’t think of a better reason.” She was joined in being arrested by Kentucky AFL-CIO President Bill Londrigan and West Virginia AFL-CIO President Ken Perdue.

Three religious leaders were among the 16 arrested, Father John Rausch, director of the Catholic Committee on Appalachia, Rev. James Lewis, Episcopal priest, and Rev. Donald Prange, St. James United Church of Christ, Lovettsville, Va.

Before leading the group to sit down on the steps of the Laidley Towers, Cecil Roberts paid tribute to Rev. Dr. Martin Luther King who taught nonviolent resistance to unjust laws. Roberts said we must build a movement that is more powerful than all of their money. “We are over 7,000 today and we will be back with 20,000 and then 30,000. If we can’t get justice in the court house, we will take it to the Statehouse. If we don’t get justice there, we must take it to the streets.”

The powerful march and rally made the news not only in West Virginia but also in the Wall Street Journal, the St. Louis Post Dispatch, and across the country.

Throughout hours of speeches about health care, neither politicians nor labors leaders mentioned the Affordable Care Act (ACA), known as Obamacare, the health care reform that was passed in 2010. Clearly the ACA provides no remedy for the health c
are crises that workers and retirees face.

Only a national single-payer plan, H.R. 676, Expanded and Improved Medicare for All, can provide the needed care. By removing the private for-profit health insurance companies and hospitals through H.R. 676, the nation can save $400 billion a year yet expand care to all.

H.R. 676 makes the wealthy pay a larger share and stops nonunion employers from being able to underbid unionized companies. With H.R. 676 there will be no more profiting from the denial of care.

Until we can build the movement that can pass H.R. 676, everyone should join the battle to preserve the health care won through union contracts. So do something to help the miners. Ask your senators and congressperson to support the UMWA demands.

Sign the petition for the UMWA here: http://www.fairnessatpatriot.org/

Check out the UMWA on facebook. Watch for more demonstrations to come.

Distributed by: All Unions Committee for Single Payer Health Care–HR 676 c/o Nurses Professional Organization (NPO) 1169 Eastern Parkway, Suite 2218 Louisville, KY 40217 (502) 636 1551; Email: nursenpo@aol.com, website: http://unionsforsinglepayer.org

http://my.firedoglake.com/kaytillow/2013/04/04/over-7000-march-to-demand-return-of-stolen-health-benefits/

The Intermountain scandal that isn't

Intermountain Healthcare pays $25.5M to settle violations of federal law

By David Wells
Fox 13 News, Salt Lake City, April 3, 2013

Utah’s largest health system self-disclosed violations of federal health care laws and agreed to pay the United States $25.5 million to settle its claims, according to a statement from the United States Department of Justice.

“These issues were primarily technical in nature and involved things such as lack of proper paperwork involving leases of physician offices and service agreements,” said a statement on Intermountain Healthcare’s website.

The DOJ statement said Intermountain Healthcare admitted to violating the Stark Statute by employment agreements under which the physicians received bonuses that improperly took into account the value of some of their patient referrals; and office leases and compensation arrangements between Intermountain and referring physicians that violated other requirements of the Stark Statute. These issues were disclosed to the government by Intermountain Healthcare.

“People should expect that hospitals and doctors care more for their patients than their bottom line profits,” said Gerald Roy, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services region including Utah. “So I applaud Intermountain for recognizing their liability and coming forward to self-disclose these violations.  We will vigilantly protect taxpayer-funded health programs against Stark violations through tight coordination with our partners at the Department of Justice.”

This link includes statements from Intermountain Healthcare and from the United States Department of Justice:
http://fox13now.com/2013/04/03/intermountain-health-care-pays-25-5-m-to-settle-self-disclosed-financial-violations/

The Settlement Agreement:
http://www.modernhealthcare.com/assets/pdf/CH8778043.PDF

Comment:

By Don McCanne, M.D.

Most of us have grown weary of the scandalous behavior of our corporate health care system, and so we are no longer surprised by the by headlines notifying us of multimillion dollar penalties assessed against these nefarious entities. In fact we say, “Good riddance.” However, in this instance involving Intermountain Healthcare, it is almost refreshing to see that the story behind the headlines can renew our faith in our health care system.

Intermountain Healthcare is a large, non-profit, highly ethical, integrated health care system in Utah. It has an excellent reputation for providing efficient, high quality care, and for being innovators in improving the delivery of health care. That is why it was surprising to see their name in the headlines reporting yet another scandal.

But a scandal it isn’t. Intermountain Healthcare violated provisions of the Stark statute designed to prevent referral arrangements that could provide perverse incentives for personal profit in health care. The Intermountain violations were technical, involving a flawed formula for physician compensation, and involving improperly documented rental arrangements for use of medical space.

Intermountain discovered these violations on their own. Instead of trying to cover them up, they reported them to the U.S. Attorney for Utah. Considering the total lack of criminal intent, the technical nature of the violations, the lack of harm done, and the self-disclosure of the errors, it can be argued that the $25.5 million penalty was excessive.

What does this have to do with single payer reform? Simply that there is a world of difference between a health care system structured on a business model with a primary mission to make money, and a health care system structured on a service model designed to take care of patients. Intermountain functions as the latter. It is a non-profit, integrated health care system that would be an ideal component of a single payer national health program.

Technical violations will always be with us, but they are understandable errors when the goal is to take care of patients, but not when the goal is to deliberately siphon off health care dollars for personal gain.

Insurers Trump in Washington

By Jon Kamp
The Wall Street Journal, April 3, 2013

Washington wants to get tough on spending — but in the latest round of payment rates for private Medicare plans, insurers emerged victorious.

Shares of health insurance companies soared Tuesday after federal officials scrapped proposed payment cuts to carriers that run Medicare plans amid pressure from senior citizens and lawmakers.

Insurers including Humana Inc., UnitedHealth Group Inc. and Cigna Corp. get paid by the federal government to run Medicare plans for more than 14 million Americans. Known as Medicare Advantage plans, the policies have been a growth spot for insurers as baby boomers turn 65 and appeal to seniors with perks like free gym memberships. Nearly one in three people on Medicare is on such a plan.

In February, the federal agency that runs Medicare proposed steep rate cuts to insurers for running these plans, on top of another layer of cuts called for in the federal health overhaul. One key payment metric was set to fall 2.2% under the initial proposal.

That set off the insurance industry’s most intense lobbying campaign in years, according to those involved, and it brought together an unusual coalition of Republican and Democratic lawmakers to push for stopping the cuts.

Lobbyists organized a grassroots effort that recruited 50,000 seniors to contact members of Congress through phone calls, emails or other methods. They warned that cuts would hurt benefits to seniors while driving plans from some parts of the country.

The effort found a receptive audience, with more than 160 lawmakers signing letters supporting industry-friendly changes. The rate changes were slated to take effect in 2014, just as all House lawmakers and several key senators stand for re-election. One key ally: Sen. Max Baucus (D., Mont.), the chairman of the committee that oversees Medicare, who could face a difficult campaign next year.

With this strong backing, insurers won the biggest item on their wish list: an unusual change in how the Centers for Medicare and Medicaid Services factors in rates it pays doctors, which has a big effect on how much the government pays companies running Medicare Advantage plans. Historically, the agency, known as CMS, has calculated the payment rates under the assumption that a cut in Medicare payments to doctors — estimated at roughly 25% next year — would take effect even though Congress typically delays it.

This time, Health and Human Services Secretary Kathleen Sebelius intervened to let the agency assume the doctor-payment cuts wouldn’t take place, according to CMS’s late Monday announcement. That allowed federal officials to significantly lessen the proposed cuts for insurers. Instead of a 2.2% cut to the key payment metric, Medicare on Monday announced a 3.3% increase.

The delay in the cuts underscores how difficult it is for lawmakers to pare federal spending on health care, which is a main driver of the deficit.

“It’s the old Potomac two-step on Medicare,” said John Gorman, executive chairman of Gorman Health Group, a Washington health consultancy. Lawmakers “slice and dice Medicare in their budgets, and then walk it back when they have to go home and face their constituents,” he said.

Among big insurers, the changes are most meaningful for Humana, which is more tethered to Medicare plans than its large peers. Humana shares rose 5.5% to $79.11 Tuesday, adding to an 8.6% rise Monday, when most of the jump came right at the end of trading, just ahead of the announcement from CMS on the increase in payments.

After Humana, UnitedHealth has the most Medicare Advantage exposure among big insurers, Jefferies analyst David Windley said, followed by Cigna and then Aetna Inc. UnitedHealth shares surged 4.7% Tuesday, while shares of Cigna and Aetna rose 2.9% and 3.7%, respectively. All of the insurers’ stocks added to gains Monday.

While rate estimates varied, analysts broadly said the savings were significant.

Mr. Windley estimated rates next year will now be down by just 1.75% to 2.75%, rather than the 7% to 8% implied by the mid-February proposal. Insurers still face cuts in Medicare Advantage payments under the 2010 Affordable Care Act, which the agency didn’t reverse.

Humana Chief Executive Bruce Broussard cited some “technical adjustments” within the complicated rate announcement that “may still present meaningful challenges in certain geographies.”

CMS’s office of the actuary indicated it disagreed with Ms. Sebelius’s decision to calculate the payment rate under the assumption lawmakers will stave off the doctor-payment cuts. “The assumption conflicts with the office’s professional judgment that, as in all past years, the determination should be based on current law, not an assumed alternative,” the rate announcement said.

Richard S. Foster, the recently retired chief actuary at CMS, said Ms. Sebelius’s intervention was highly unusual and “disturbing.”

“The solution to a problem caused by legislation that’s not working should be new legislation,” Mr. Foster said.

CMS declined further comment on why Ms. Sebelius intervened beyond Monday’s explanation that CMS shifted gears to better reflect likely congressional action on doctor payments.

Brody Mullins and Janet Adamy contributed to this article.

Will the ACA achieve universal, equitable coverage?

By Johnathon S. Ross, M.D.
Toledo Medicine, Winter 2013

In 2004, well ahead of the passage of the Affordable Care Act (ACA), the Institute of Medicine (IOM), in their report “Insuring America’s Health,” outlined a set of principles for health insurance reform: universal, continuous insurance coverage that is affordable and sustainable for individuals, families, and society, and should enhance well-being through care that is effective, efficient, safe, timely, patient-centered, and equitable.

Will the ACA meet the IOM’s principles?

The recent election guarantees that the ACA be implemented. This will be a complex and expensive effort.

States must create insurance exchanges or let the federal government do it for them and expand Medicaid to138 percent of poverty or face a significant loss of federal support. Systems must be created to educate employers and the uninsured about their opportunity and obligation to obtain health insurance or pay a tax.

Physicians get increased Medicaid and Medicare payments for primary care services, but new bundled payment methods and Accountable Care Organizations (ACOs) with their uncertainties and complexities enter the payment mix.

Hospitals face bundled payments, ACOs, and cutbacks in uncompensated care subsidies, but also increased payments through the expansion of private insurance and Medicaid to the uninsured. Added cuts could come from any federal budget deal.

Insurers must cover everyone without pre-existing condition exclusions or lifetime limits on care and cover all preventive services without co-pay. Premium hikes will be reviewed and 80-85 percent of premiums must be spent on care instead of administrative costs and profits. The insurers gain 10-20 million new customers through the exchanges and managed care Medicaid.

Patients will have no co-payments for preventive services, but will see new “wellness plans” that allow employers to increase the employee portion of premiums. The Medicare drug “donut hole” gets filled, but lower tax deductions for medical expenses and taxes on “Cadillac health plans” will come into play.

Sadly, the ACA covers only half of the uninsured and is unlikely to control costs. In Massachusetts, after six years, their ACA-like plan has not controlled costs and administrative complexity has increased. Those newly insured still find health care bills overwhelming and medical bankruptcy in Massachusetts has not decreased.

Can American healthcare meet the IOM principles through the ACA? If you had a house with a crumbling foundation, would you add a third floor? The ACA builds on the crumbling foundation of competing private insurers and decades of market competition in health care which failed to control costs, improve access or the quality of care.

Nonprofit health insurers were once effective in spreading costs across entire communities. Now, the complexity of the insurance market and the profit motive make insurers a bad bargain.

Private insurers make money by denying claims. Physicians and hospitals waste enormous amounts of time and money on excess paperwork and bureaucracy. More competition has only created an army of bureaucrats whose “generals” – the CEOs – get astronomical salaries.

Money-changers and paper-pushers thrive by chasing the money to pay for care – not by delivering it. In our complex, multi-payer system, chasing money is expensive work. The new Accountable Care Organizations look more like byzantine health care bureaucracies than paths to cost containment.

Individual market forces (medical savings accounts) will never effectively lower costs. The most expensive services are the least negotiable. Can a patient with a ruptured appendix on morphine haggle over fees? Look! Open heart surgery is on sale. Let’s have two!

Health care is not a bar of soap. It is a human need and should be a human right in the richest country in the world.

Physicians fearing change stampede into larger groups and employment in “integrated systems” with their own burgeoning bureaucracies. This consolidation of physicians, health systems and insurers will leave most communities with only a handful of provider organizations. In many, there will be only one. In this context, the rhetoric of market efficiency is nonsense.

We have a tested model. Medicare would work for all of us because it has worked for seniors for almost 50 years. In 1995, Taiwan replaced their private insurance system with one based on Medicare. They went from 60 percent to 100 percent coverage with hardly any growth in costs, and the patients and physicians are happy.

This is no surprise since studies show that the administrative simplicity of Medicare for all could save $400 billion yearly, cover all the uninsured, eliminate significant co-pays and deductibles, allow complete choice of doctor and hospital and improve coverage for all. Physicians could practice privately and independently with guaranteed payment for every patient.

Can the ACA meet the principles of the IOM? The IOM report discussed prototypes for reform, noting if they would satisfy their principles. They note that an individual and employer mandate with premium subsidies (i.e. the ACA) would fail to provide universality, continuity, affordability, and access to equitable care. They also note Medicare for all could satisfy all of the principles.

Perhaps the ACA was the best that could be achieved given the resistance of powerful vested interests to even a “public option.” Those who say “repeal and replace” the ACA will still face the same recommendations from our best health policy scientists when it comes time to choose a “replacement.”

Polls consistently show that Medicare for all is supported by the majority of Americans and a plurality of American physicians. Yet, some in Congress suggest privatizing and replacing Medicare with vouchers for private insurance. If we want Medicare to meet the IOM principles, this is exactly the wrong solution.

In our quest for health reform, we are not done yet. The ACA allows states to experiment with other types of reforms, including Medicare-for-all systems in 2017. Vermont, California, and Hawaii are considering Medicare-for-all reforms that will provide continuous lifetime coverage, save lives, and save money. When they prove it works then other states might follow. They could place our nation on the path toward a health care system that finally meets the principles of the IOM and can finally truly boast of being the best in the world.

http://www.toledoacademyofmedicine.org/%5CContent%5CPDFs%5CToledo-Medicine-Q4-2012.pdf

PNHP note: This article originally appeared under the title “Is the Affordable Healthcare Act the answer to America’s healthcare problems?” Toledo Medicine is the journal of the Academy of Medicine of Toledo and Lucas County (Ohio).

Insurers see way to dodge federal healthcare law next year

A little-known loophole in President Obama's landmark legislation enables health insurers to extend existing policies for nearly all of 2014.

By Chad Terhune
Los Angeles Times, April 2, 2013

A new fight is brewing over health insurance companies letting millions of Americans renew their current coverage for another year — and thereby avoid changes under the federal healthcare law.

That may offer a short-term benefit for certain consumers and shield some of those individual policyholders from potentially steep rate increases. But critics say this maneuver could undermine government efforts to remake the insurance market next year and keep premiums affordable overall.

At issue is a little-known loophole in President Obama’s landmark legislation that enables health insurers to extend existing policies for nearly all of 2014. This runs contrary to the widespread belief that all health insurance must immediately comply with new federal rules starting Jan. 1, when most provisions of the law take effect.

“Insurers are onto this, and the big question is how many will try to game the system,” said Timothy Stoltzfus Jost, a law professor and health policy expert at Washington and Lee University.

Some of the nation’s biggest health insurers are looking to take advantage of this delay, and Arkansas officials are encouraging companies to do this by resetting customers’ renewal dates for the end of December. There’s also concern that some insurers and agents could rush to sell more individual policies before year-end so they could be extended in 2014.

Some policy experts are expressing concern about this practice for fear that insurers will focus on renewing younger and healthier policyholders and hold them out of the broader insurance pool next year. Their absence could leave a sicker and older population in new government insurance exchanges, driving up medical costs and premiums there.

“This could undermine the Affordable Care Act, and it opens the door for exacerbating potential rate shock in the exchanges,” said Christine Monahan, a senior analyst at Georgetown University’s Health Policy Institute. “The health insurers can cherry-pick some healthy people and it raises prices for everyone else.”

This issue could affect some of the 15 million people nationwide who purchase their own coverage and millions more of the uninsured who are expected to join government exchanges next year. It would not pertain to the 150 million Americans who get health benefits through their employers.

Many health insurers are still mulling over their options on how to handle these individual renewals.

“Some carriers will require everyone to switch plans Jan. 1, and other carriers will allow customers to stay on their existing plan as long as possible,” said Bob Hurley, senior vice president of carrier relations at online site eHealthInsurance. “We are trying to nail this down with the carriers. I think it would be better for consumers to have that choice to carry their policy forward.”

The nation’s largest health insurer, UnitedHealth Group Inc. of Minnetonka, Minn., said, “We are currently looking at the best way to serve our customers’ best interests while continuing to comply with the Affordable Care Act going into 2014.”

WellPoint Inc., the Indianapolis insurance giant that runs Blue Cross plans in California and 13 other states, said its renewal practices will vary by state. In California, the company said its Anthem Blue Cross unit may allow individual policyholders to renew through March 31.

Kaiser Permanente, a major nonprofit health plan based in Oakland, said it doesn’t plan to renew policies beyond Jan. 1 in California and most of the other states where it sells coverage.

Richard Kern and his wife, a retired couple in Los Angeles, say they would welcome the flexibility to keep their individual policy from Aetna Inc. for another year amid so much uncertainty over next year’s rates.

“We don’t even know what the prices and alternatives are under Obamacare,” Kern said. “We are waiting for the other shoe to drop.”

If an insurer offers this option, it would then be up to consumers to decide whether they want to renew an existing policy into 2014. The length of any renewal may depend on what month their annual plan year begins.

Many lower-income people will qualify for federal premium subsidies, which will be available only when purchasing new coverage available in state- or federal-run insurance exchanges. It would make financial sense to take advantage of that government aid. Individuals earning less than $46,000 or families below $94,000 annually would be eligible for subsidies.

However, many people who are middle income or above could face significantly higher premiums next year with no subsidies. Those premium increases are tied to federal requirements that insurers accept all applicants regardless of their medical condition and the inclusion of more comprehensive benefits.

Renewing an older policy could mean forgoing some of those richer benefits and new limits on out-of-pocket medical expenses.

Last week, California officials estimated that premiums may rise 30% on average for about 1.3 million existing policyholders primarily because of those changes in the federal law. Insurers have warned that some customers could see their premiums double depending on their age and other factors.

Citing that threat of higher rates, Arkansas officials issued a bulletin to insurers last month describing how they could extend individual policies until Dec. 30, 2013, and then renew them for another year.

These health plans “would not be required to comply with the [Affordable Care Act] market reforms until 12/31/2014,” according to the Arkansas bulletin.

“For those folks who don’t qualify for subsidies, this is a consumer-friendly thing because the premium rates for 2014 will be substantially higher,” said Dan Honey, deputy commissioner of compliance for the Arkansas Insurance Department. “You will be exposed to rate shock.”

Other states may oppose that approach, further underscoring the uneven implementation of the federal healthcare law across the country. Oregon Insurance Commissioner Louis Savage said these renewals could be problematic and his office issued a rule barring any extension beyond March 31, 2014.

“We want to get as many people as possible into the exchange,” Savage said. “I think having renewals go deep into 2014 is counterproductive to the goals of the federal healthcare law.”

In California, state lawmakers are working on legislation that could address this renewal issue and other details about how individual policies comply with the federal overhaul.

These questions over renewals are separate from “grandfathered” health policies that existed before the federal law passed in March 2010. Those plans don’t have to meet all the requirements of the healthcare law as long as insurers or employers don’t make significant changes to them.

http://www.latimes.com/business/la-fi-health-renewal-loophole-20130402,0,7315979.story

Government insiders misappropriate funds to Medicare Advantage insurers

U.S. to boost rather than cut payments to health insurers

By Sandhya Somashekhar
The Washington Post, April 1, 2013

The Obama administration reversed itself Monday, scrapping plans to cut by 2.2 percent the rates paid to health insurers that take part in the Medicare Advantage program.

The insurance industry and more than 100 members of Congress had objected to the cut in the per capita growth rate, which was proposed in February. The insurers mounted a vigorous campaign, using television ads and phone banks, to persuade lawmakers to oppose the reduction.

On Monday, the Centers for Medicare and Medicaid Services (CMS) announced that it was changing its method of calculating reimbursement rates. Instead of cutting payments for Medicare Advantage plans, it will increase them by 3.3 percent.

“The policies announced today further the agency’s goal of improving payment accuracy in all our programs, while at the same time ensuring program stability and preserving beneficiary choice,” Jonathan Blum, the CMS’s acting principal deputy administrator, said in a statement.

http://www.washingtonpost.com/national/health-science/us-to-boost-rather-than-cut-payments-to-health-insurers/2013/04/01/7423c3a0-9b16-11e2-9a79-eb5280c81c63_story.html

And…

CMS Ensures Greater Value for People in Medicare Drug and Health Plans

Centers for Medicare and Medicaid Services (CMS), April 1, 2013

After careful consideration of public comments, key changes and updates finalized in the Rate Announcement and final Call Letter include:

The final estimate of the combined effect of the Medicare Advantage growth percentage and the fee-for-service growth percentage is 3.3 percent. These growth rates assume a zero percent change for the 2014 physician fee schedule (PFS) by taking into account the likely Congressional override of the schedule physician payment reduction.

http://www.cms.gov/apps/media/press/release.asp?Counter=4568&intNumPerPage=10&checkDate=&checkKey=&srchType=1&numDays=3500&sr

And…

Subject: Advance Notice of Methodological Changes for Calendar Year (CY) 2014 for Medicare Advantage (MA) Capitation Rates, Part C and Part D Payment Policies and 2014 Call Letter

CMS, February 15, 2013

Section A. MA Growth Percentage

The current estimate of the change in the national per capita MA growth percentage for aged and disabled enrollees combined in CY 2014 is -2.3 percent.

We appreciate that plans are facing several legislatively mandated changes affecting payment for 2014, and this may present challenges for plans. We solicit comment on suggestions to address these challenges within the parameters of current law.

http://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Downloads/Advance2014.pdf

And…

Subject: Announcement of Calendar Year (CY) 2014 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies and Final Call Letter

CMS, April 1, 2013

Attachment I shows the final estimates of the increases in the National Per Capita MA Growth Percentage for 2014 and the National Medicare Fee-for-Service (FFS) Growth Percentage for 2014. These growth rates will be used to calculate the 2014 capitation rates. As discussed in Attachment I, the final estimate of the increase in the National Per Capita MA Growth Percentage for combined aged and disabled beneficiaries is 2.96 percent, and the final estimate of the increase in the FFS Growth Percentage is 3.53 percent. Attachment II provides a set of tables that summarizes many of the key Medicare assumptions used in the calculation of the National Per Capita MA Growth Percentage.

The basis for the Growth Percentage for 2014 has been changed to incorporate an assumption that Congress will act to prevent the scheduled 25-percent reduction in Medicare physician payment rates from occurring. The Office of the Actuary has been directed by the Secretary to use this assumption, on the grounds that it is a more reasonable expectation than the reduction required under the statutory “sustainable growth rate” (SGR) formula. Although the Office of the Actuary agrees that Congress is very likely to override the physician fee reduction, the assumption conflicts with the Office’s professional judgment that, as in all past years, the determination should be based on current law, not an assumed alternative.

http://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Downloads/Announcement2014.pdf

And…

AHIP Statement on Final 2014 Medicare Advantage Payment Rates

America’s Health Insurance Plans (AHIP), April 1, 2013

America’s Health Insurance Plans (AHIP) President and CEO Karen Ignagni released the following statement in response to the final Medicare Advantage payment rates released by the Centers for Medicare & Medicaid Services (CMS) today:

“By being responsive to the more than 160 members of Congress from both parties who raised concerns about the impact of the proposed payment rate on seniors, CMS has taken an important step to help stabilize Medicare Advantage at a time when the program is facing significant challenges. We are currently reviewing the final rate announcement and will continue to work with policymakers in both parties to strengthen this critically important part of Medicare that provides high-quality, affordable coverage to more than 14 million seniors and people with disabilities.”

http://ahip.org/News/Press-Room/2013/AHIP-Statement-on-Final-2014-Medicare-Advantage-Payment-Rates.aspx

And…

Medicare Advantage Plan Star Ratings and Bonus Payments in 2012

Kaiser Family Foundation, November 2011

In 2012, Medicare Advantage plans will begin to receive bonus payments based on quality ratings. These payments were initially established in the 2010 health reform law that provides for bonus payments to plans that receive 4 or more stars and to unrated plans beginning in 2012. In addition to the bonus payments established by the health reform law, CMS will also be launching a 3-year demonstration to begin in 2012 that increases the size of bonuses for these plans, and also provides bonuses to plans rated as average (receiving 3 or 3.5 stars), using the same 1 to 5 star scale.

http://www.kff.org/medicare/upload/8257.pdf

And…

Payment Accuracy (Official U.S. government website)

The Department of Health and Human Services (HHS) reports an annual Medicare Advantage (Part C) program payment error rate, which presents the combined impact on payments from two kinds of error: errors in the payment system and errors in risk scores used to adjust benefit payment amounts to Medicare Advantage plans.

$96.4 billion  Total Medicare Advantage payments
$13.6 billion  Improper payments
14.1%          Improper payment rate

http://www.paymentaccuracy.gov/programs/medicare-part-c#learnmore

Comment:

By Don McCanne, M.D.

The private Medicare Advantage plans, offered as options to the traditional government-run Medicare program, were to have their egregious overpayments reduced by provisions of the Affordable Care Act. This year they were to have a 2.2 percent reduction in their rates, but instead received a 3.3 percent increase. That is a rate 5.5 percent higher than scheduled, which increases the payments to the Medicare Advantage plans by over $5 billion! What happened?

It is easier to understand why when you realize that the program was established as an effort to privatize Medicare. The previous effort – private Medicare + Choice plans – didn’
t work since the insurers were unable to provide profitable plans at a cost comparable to the traditional Medicare program.

Recognizing that, Congress established the Medicare Advantage program, authorizing payments averaging 14 percent over the costs of traditional Medicare. This would allow the private plans to offer a more attractive option with greater benefits and lower our-of-pocket costs. Once enough people were enrolled in the private plans then they could start to make the traditional Medicare program even less attractive through greater cost sharing, through means testing that chases away the more affluent beneficiaries, and through reducing payment rates causing a further decline in the number of willing providers.

Originally, the private Medicare + Choice plans were successful in enrolling healthier, lower cost patients. With time, many of those patients required more care, and the insurers started dropping out of markets in which they experienced losses. So the next phase – Medicare Advantage.

With Medicare Advantage, risk adjustment was used to transfer funds from insurers that cornered healthier patients to insurers that enrolled more patients with greater needs. Soon it was evident that the insurers became masters at enrolling patients who were not very ill but who could be coded as having expensive problems. Although efforts have been made to further refine the risk adjustments, our government’s payment accuracy website reveals that the insurers are still able to game the system, such that 14 percent of payments remain improper – over $13 billion.

Another one of the methods used to improve payments – but not reduce payments since the proposal was to be revenue neutral – was to retain some of the funds for the Medicare Advantage plans and then use them to reward plans with higher quality ratings, 4 or 5 star. Well, when they were ready to start reducing the overpayments, as required by the Affordable Care Act, the insurers protested that they couldn’t afford the reductions. So the administration revised the quality awards to include 3 star plans, thus assuring that 80 percent of Medicare Advantage plans would have their required reductions largely offset with the quality awards. But this was not revenue neutral. No problem. The administration declared these expanded awards to be a “demonstration,” and thus drew funds from their demonstration project kitty (our tax funds). That diversion of funds will continue through 2014.

So now we’re down to this year, and, of course, the insurance industry said that they would not be able to tolerate the scheduled reductions of 2.2 percent. They called out the forces. They even had more than 160 Representatives and Senators of both parties lobbying the administration to reverse these cuts. Yesterday, it became evident that they were successful – increasing payments 5.5 percent over the scheduled 2.2 percent cut – a $5 billion bonanza. How did they do it?

The sustainable growth rate (SGR) was a formula designed to slow the growth of spending on physician care down to sustainable levels. In response, physicians adjusted the frequency and intensity of their services to make up for what they perceived to be a reduction in their reimbursement rates. The formula would require a reduction in rates that would especially impact primary care physicians. Congress has deferred the reductions for fear of losing too many physicians from the program, but that has resulted in a 25 percent deficit for which Congress needs to enact a “doc fix.” Here’s where the shell game comes in.

In violation of the standards of the Office of the Actuary, CMS decided that Congress inevitably would enact a doc fix, which then they could say represents an increase in the cost of providing care to all Medicare beneficiaries. Thus the phantom increase has been applied to the new Medicare Advantage rates. Little does it matter that there was no increase since Congress has continued to authorize the suspension of the SGR reductions. It is specious for CMS to claim that payments went up this year  because of the not-yet-enacted doc fix when they have been up the whole time. Also it seems not to matter that the doc fix which they used in their calculations has not been fixed, and the money will have to come from somewhere… but certainly not from the $5 billion bonus they just gave the Medicare Advantage plans – money that never existed but will have to be drawn from Medicare payroll taxes, from general funds for Part B, and from increases in Part B Medicare premiums that will be paid by Medicare beneficiaries in the traditional plan who are not receiving any of the extra benefits that enrollees in the Medicare Advantage plans are receiving. Unfair.

But it’s worse than this. Not only is the administration bending over backwards to take good care of the private Medicare Advantage insurers, they are now engaged behind the scenes to further impair the traditional Medicare program – a strategy to further push privatization.

The Ryan/Wyden and Frist/Breaux/Thomas premium support voucherization of Medicare has proven to be too hot for the privatizers, considering the backlash that they have experienced. So premium support is off the table during the Obama administration’s negotiations with Congress over the next manufactured fiscal crisis. So what has replaced the vouchers?

It has been leaked, presumably deliberately, that Obama is proposing to combine the Part A (hospital) and Part B (physician) deductibles into one deductible for Parts A & B combined. The intent is twofold – to reduce the amount that the federal government is paying for Medicare, and to increase the sensitivity of Medicare beneficiaries to prices paid for Medicare benefits – making them empowered health care shoppers. This increase in out-of-pocket spending will especially impact the majority who do not require hospitalization and thus have lower total costs. This strategy will make those who have fewer health care needs wonder why they are paying so much more than they thought they would once they were on Medicare.

Bu that’s not all. About 90 percent of Medicare beneficiaries are protected from excessive cost sharing through Medigap plans or through employer-sponsored retirement health benefit programs. The consumer-directed camp has long wanted to bash the Medigap plans so patients would be exposed more directly to the costs. Obama’s team is proposing just that. They want to prohibit the Medigap plans from providing protection for the deductible – removing it, or at least reducing it, as a Medigap benefit. Another option that they are considering is to assess a 15 percent tax on Medigap premiums which would have a similar net financial impact as prohibiting coverage of the deductible.

So what is a person to do? You can accept the traditional Medicare program, but you will face higher deductibles, perhaps a Medigap tax, an even higher Part B Medicare premium, and perhaps means-tested premiums and benefits which will gradually shift down to middle-income individuals. This will not be pleasing to the majority who have only modest health care needs. The other option? You can enroll in a Medicare Advantage plan with greatly reduced cost sharing plus expanded benefits, and perhaps not even a plan premium, all thanks to Congress and the administration who are using our tax funds to provide very generous subsidies to the private Medicare Advantage plans.

A crummy traditional Medicare program with high out-of-pocket costs, or a slick private plan with most costs prepaid, by the government no less? It is presumed that the majority will rush over to the private plans, especially when they see what extra bennies they get.

What then? Congress can then continue to ratchet down government spending on the traditional program, causing an exodus of willing providers – stripping the program down to worse-than-Medicaid. After the private plans have become the standard and Medicare is in the tank, then what? Premium s
upport vouchers! The government gradually pares down the support for the premium you select, so you are now really an empowered shopper – empowered to buy whatever meager benefits you can afford with your measly premium subsidy.

Excuse the length of today’s message, but I hope you understand why. It’s not that I’m a soothsayer… but maybe I am.

Farewell to the NHS, 1948-2013

A dear and trusted friend finally murdered by Tory ideologues

This week’s ‘reforms’ of a treasured institution – by people who came to power promising not to mess with it – is yet another sickening assault on the poor by the rich

By Owen Jones
The Independent (U.K.), March 31, 2013

Nothing is more gut-wrenching than watching a close friend dying in front of you. And I mean beyond close: a friend who brought you into the world, helped raise you, and was there whenever you were most desperately in need. So, spare a moment for our National Health Service. Time of death: midnight, 1st April 2013. Cause of death: murder.

That this will strike many as hyperbole is because the assault on the NHS is one of the most scandalously under-reported issues in modern British history. Newsnight actually devoted a piece to scrutinising the privatisation of an institution once described by Tory Chancellor Nigel Lawson as “the nearest thing the English have to a religion”.

Only two years too late, then. Frequently, the attack is presented on the Government’s own terms: as the simple devolution of power to doctors and patients. Cuts of up to £20bn by 2015 are spun as “savings”. And who can disagree with “savings”?

A charitable explanation would be the sheer complexity of the Tory assault. The Health and Social Care Act is more than three times longer than the legislation that established the NHS in the first place. When I asked journalists adamantly opposed to the Tory plans why they had failed to adequately cover this travesty, they sheepishly responded it was too complicated: it went over their heads.

Cynical though it may be, that so many of those running our glorious “free” media are covered by private health insurance should not be ignored either.

From today, strategic health authorities and primary care trusts are formally abolished. Some £60bn of the NHS budget is now in the hands of clinical commissioning groups, supposedly run by GPs. This is a sham, though one which turns local doctors into human shields for the privatisers. In reality, the vast majority of GPs will keep on doing what they do already – looking after patients – while commissioning will be managed by private companies.

It’s worse than that. Under the Government’s Section 75 regulations – even after they were revised after huge political pressure – all NHS services must be put out to competitive tender unless the commissioning groups are satisfied a “single provider” can deliver that service. But as the British Medical Journal has asked, how can they “be sure there is only one possible provider except by undertaking an expensive tender?”

Indeed, were they to refrain from doing so, they would risk a costly legal battle. As over a thousand doctors and nurses warned last month, the regulations will “force virtually every part of the English NHS to be opened up to the private sector”. A free-for-all in the English NHS beckons.

As Dr Lucy Reynolds, a research fellow at the London School of Hygiene and Tropical Medicine, puts it, “the public sector will shrink away, and the private sector will grow”. All NHS hospitals will be forced to become foundation hospitals, laying the ground for them to be pushed into the private sector. That process is happening to my own local hospital, the Whittington Hospital, which is selling £17m worth of assets and faces 230 fewer beds and 570 job losses.

Let’s be clear what it at stake: services, people’s health and even lives. As Professor Terence Stephenson of the Academy of Medical Royal Colleges put it last week, doctors’ warnings had been ignored, and “unnecessary competition [would] destabilise complex, interconnected local health economies, in particular hospitals, potentially having adverse effects on patient services”.

And a warning from a leading member of a profession not known for overstating a case: patients could be “in danger from complications” from a fragmented NHS. Resources will no longer be distributed on the basis of need: the rules of the market now rule supreme. “It’s chaos, really,” says Brian James, until recently chief executive of the Rotherham Foundation Trust. Small and medium-sized hospitals will be “bankrupted by the market and more will be pulled into the big teaching hospitals”.

The great sell-off of our NHS is already well under way. Virgin Care now run more than 100 NHS services across the country, from radiology departments to GP clinics. Last year, they were given a £100m contract to run services in Surrey, and a £130m contract to run key NHS services for young people in Devon. Not that you’d know, of course: services run by the profiteering vultures circling ahead operate under the NHS logo, hiding privatisation from public view.

Just where is the opposition? Labour, the mother of the NHS, is hobbled by its own record. Although it injected desperately needed cash into our health services when last in power, New Labour helped to lay the foundations for this Tory offensive. Former Labour Health Secretary Frank Dobson once condemned government plans to contract out commissioning, “with private companies handing work to private hospitals… If that wouldn’t amount to privatisation, I don’t know what would.”

But that was 2006, and it was Tony Blair in office. The disaster of New Labour’s Private Finance Initiative – the equivalent of buying public services on a credit card – has left hospitals saddled with debts of £79bn. Hospital trusts face bankruptcy as a result.

Labour’s own health spokesperson, Andy Burnham, has commendably pledged to repeal the Tories’ NHS Act. But let’s not forget that the last time they were in opposition, Labour pledged to renationalise the railways: on assuming office, it was deemed politically impossible. That must not happen again, and pressure must be brought on the Labour leadership to reject their own past.

The Tories didn’t have the guts to put their proposals before the electorate. Despite its flaws, the NHS had record levels of public satisfaction before the Tories began systematically dismantling it. You need only look to the US – where their inefficient market-driven system consumes twice as much of GDP as our NHS – to see the superiority of publicly-run healthcare. New Labour’s own privatisation doubled the cost of administration in our NHS.

It was Nye Bevan who said “The NHS will last as long as there are folk left with the faith to fight for it”. It is with huge regret that I must say that – however much faith we have – we did not fight to save it. The NHS has been killed, murdered, assassinated by a Tory government. The question now is – do we have enough faith to bring it back to life?

http://www.independent.co.uk/voices/farewell-to-the-nhs-19482013-a-dear-and-trusted-friend-finally-murdered-by-tory-ideologues-8555503.html

The Salt Lake Tribune – If ACA fails, single payer is next

Last chance: If ACA fails, single payer is next

Editorial Board
The Salt Lake Tribune, March 30, 2012

The Patient Protection and Affordable Care Act should be seen as what it is: One last opportunity for the private health insurance market to prove that it can offer a service that covers the millions of Americans who were previously left out, at a cost that we — as individuals, employers and taxpayers — can afford.

If that is a goal beyond the grasp of the existing system, then it needs to be finally swept aside in favor of something that will meet those needs.

But this is, or should be, the private health insurance industry’s last chance. If Obamacare fails, a return to the cold-hearted free market is not a realistic or humane choice.

An entity with the chops to bargain down the actual cost of care is necessary. At the very least, a robust public option, an idea President Obama bargained away in the creation of the ACA, must be provided. Better still would be a single-payer plan — Medicare for all.

http://www.sltrib.com/sltrib/opinion/56079343-82/care-health-insurance-cost.html.csp

Comment:

By Don McCanne, M.D.

It is already clear that the structure of the private health insurance market that is perpetuated by the Affordable Care Act will continue to fail us – providing us only care that is too expensive and leaves too many out. Not even a competing “robust public option” can alter that. Now is the time to enact a single payer plan – an improved Medicare for all.

Let’s hope that the editorial board of The Salt Lake Tribune – and all other influential observers of the health care scene – will recognize sooner rather than later that the private insurance industry has failed us once again and has to go.