Tag: Affordable Care Act (ACA)
The specter of the U.S. Supreme Court striking down premium subsidies for millions of Americans will loom over the healthcare policy debate in Washington during the first half of 2015, and its fallout could dominate the second half of the year.
Republicans would face pressure to come together around a replacement plan if the subsidies are struck down and millions are left without affordable coverage. And President Barack Obama would have to make painful choices in negotiating such a deal about how much to give up of his landmark healthcare reform law.
In the meantime, Republicans, who are now in full control of Congress, will try to roll back pieces of the Patient Protection and Affordable Care Act and are likely to take symbolic votes to repeal the entire law. Beyond that, they may seek to restructure Medicare and Medicaid to reduce federal costs. But it’s unlikely Republicans will succeed in those efforts while Obama wields a presidential veto pen.
The likely impasse will mean the government’s role in healthcare will be a major issue in the 2015 campaigning for the next presidential election. Republican candidates may have to present their healthcare alternatives, while Democrats may need to detail what changes to the ACA they would support. Meanwhile, though, millions more Americans will have gained coverage this year either through Medicaid expansion or the insurance exchanges, making it increasingly difficult to roll back the law’s major features.
The political turmoil will heighten business uncertainty for providers, insurers and other healthcare stakeholders that have reorganized their operations to meet the requirements of the law, are benefiting from its provisions, and generally want to move ahead rather than start over.
“You need to envision a world where, whatever changes are being contemplated, you do not have fewer people with insurance coverage,” said Gail Wilensky, a senior fellow at Project HOPE who served as Medicare chief under President George H.W. Bush. “I don’t see going back to where we were.”
Providers also fret that Medicare could be targeted for further cuts under budget austerity by Republicans.
The most immediate threat to the ACA comes from King v. Burwell, the lawsuit that the Supreme Court will hear in March. The justices could eliminate premium tax credits for lower-income Americans in the 37 states using the federal insurance exchange. More than 7 million Americans could lose subsidies worth roughly $36 billion, according to the Urban Institute. That would have significant financial ramifications for providers and insurers that serve those subsidized insurance customers. The Supreme Court is expected to rule by June.
Conservative health policy experts are urging Republicans to come together around a package of changes to the ACA if the Supreme Court strikes down subsidies. Their argument is that Republicans would be in a powerful position to extract major changes in the law—including less regulation, greater state flexibility and reduced federal spending on subsidies—in return for restoring the premium tax credits in all states. “It would open up the opportunity to revisit some aspects of the law in a fairly substantial way if the Congress is ready to step forward,” said James Capretta, a senior fellow at the conservative Ethics & Public Policy Center who co-authored a widely discussed reform blueprint.
But coalescing around comprehensive reform legislation will be difficult for fractious Republicans. A significant segment of the GOP base sees any effort to “fix” Obamacare as an act of betrayal, and legislators who take on that task could invite primary challenges from the right. In addition, any GOP effort to craft a specific policy proposal is sure to attract criticism, including that it would insure far fewer Americans and offer skimpier coverage. If the Supreme Court wipes out subsidies, Wilensky foresees a standoff between Republicans who want to seize the opportunity to enact changes to the law and those who see any effort to improve it as verboten.
Meanwhile, Republicans want to repeal a number of ACA provisions this year. Those include the 2.3% medical-device tax, the employer and individual mandates, the 30-hour workweek standard for requiring employers to offer coverage, the Medicare Independent Payment Advisory Board, and the risk-corridor program designed to protect insurers from losses in the new individual-insurance markets. Obama’s veto pen might still protect all of these provisions. But Republicans could force Democrats to take politically uncomfortable votes that may be useful during their 2016 election campaigns.
Republicans also may seek big changes to Medicare and Medicaid, given that Rep. Paul Ryan (R-Wis.), the most vocal proponent of overhauling the two programs, is now chair of the influential House Ways and Means Committee. There is broad support among Republicans for adopting Ryan’s defined contribution proposal for future Medicare beneficiaries, which they hope will sharply reduce future Medicare spending.
Stephen Parente, a healthcare policy expert at the University of Minnesota who has advised Republican candidates, points to the growing popularity of Medicare Advantage as a sign that the public will accept the big shift to private Medicare plans that would result from the GOP’s so-called premium-support model. “We’re probably going to hit a 50% tipping point majority within two or three years,” he said.
But that doesn’t mean premium support will be enacted before the next presidential election. That’s because Democrats are almost universally opposed to any Medicare changes that could be seen as benefit cuts to seniors. And the pressure to take on the politically explosive Medicare issue has eased as spending growth has slowed in recent years, though it’s poised to accelerate as millions of baby boomers enter the program. “I don’t think President Obama is probably going to be interested in signing a sweeping reform of Medicare before leaving office,” Capretta said.
Substantial changes to Medicaid might prove more politically viable. Ryan has advocated transforming it into a capped block-grant program giving more authority to the states to set benefits, eligibility, and program structure. The Obama administration has shown a willingness to allow states to experiment with their Medicaid programs in return for implementing the ACA’s expansion provision.
But pushing for major changes to Medicare and Medicaid may be too politically risky with a presidential contest looming. That’s particularly true because Ryan and other key congressional Republicans are weighing presidential bids.
Douglas Holtz-Eakin, president of the conservative American Action Forum, expects the GOP emphasis instead to be on incremental changes that can attract Democratic votes and put legislation on the president’s desk. “Their loyalty to him as a lame duck is going to diminish,” he said.
One certainty is there will be another fight over fixing Medicare’s sustainable growth-rate payment formula for doctors. Last year, healthcare groups celebrated a bipartisan, bicameral deal to pass a permanent fix to the widely loathed payment scheme. The problem was that Republicans and Democrats couldn’t agree on a way to pay the package’s 10-year price tag of $140 billion. That led to a 17th consecutive patch, which will run out at the end of March.
A similar scenario is likely to play out again this year. Because the annual SGR bill has been one of the few pieces of healthcare legislation enacted in recent years, it probably will become a magnet again for numerous other proposals, perhaps including changes in the CMS’ controversial “two midnight” rule for short hospital stays.
There also will be jousting over the framework of health IT regulation.
Congressional Republicans have offered a vision of a largely deregulated sector. The administration introduced a draft framework last spring that loosened oversight of the sector, though with some scrutiny retained, including a new Health IT Safety Center. But House Republicans have challenged the administration’s authority to create the safety center. The federal health IT coordinator’s office, however, has convened multiple committees on the matter, with a framework expected early this year.
The fiscal year 2015 Omnibus Appropriations bill passed by Congress includes legislative language directing the Office of the National Coordinator for Health IT to decertify electronic health record products that are effectively blocking the sharing of health information.
“ONC should use its authority to certify only those products that clearly meet current meaningful use program standards and that do not block health information exchange,” states the bill. “ONC should take steps to decertify products that proactively block the sharing of information because those practices frustrate congressional intent, devalue taxpayer investments in [Certified EHR Technology], and make CEHRT less valuable and more burdensome for eligible hospitals and eligible providers to use.”
The legislation instructs ONC to submit a detailed report, not later than 90 days after enactment by Congress, regarding the extent of the information blocking problem. The report would include an estimate of the number of vendors or eligible hospitals or providers who block information, and a strategy on addressing the information blocking issue.
Congressional appropriators also instruct ONC’s Health IT Policy Committee to submit a report to the House and Senate Committees on Appropriations and the appropriate authorizing committees not later than 12 months after enactment regarding the challenges and barriers to interoperability. “The report should cover the technical, operational and financial barriers to interoperability, the role of certification in advancing or hindering interoperability across various providers, as well as any other barriers identified by the Policy Committee,” states the legislative language.
In March, industry stakeholders at a Federal Trade Commission workshop in Washington on healthcare competition warned that the proliferation of closed data networks are trapping providers and patients into proprietary networks that are barriers to interoperability and competition. Specifically, they charged that some health systems block patient information sharing in ways that have antitrust implications.
Business practices that inhibit or block the electronic sharing or transfer of health information are a serious concern, particularly developers or providers who restrict information exchange with users of other EHR products or HIE services, according to ONC. The agency has publicly pledged to work more closely with FTC to formulate policies that “improve transparency, promote interoperability, create incentives for quality, and reduce barriers to competition and innovation.”
2014 was an extraordinarily eventful year in the healthcare industry, punctuated by the latest ICD-10 delay, exemptions and extensions to meaningful use, and the VA’s scandalous summer of shame. As healthcare providers look ahead to 2015 and its similarly high potential for being a roller coaster year, EHRintelligence recaps some of the biggest stories of the past twelve months and how they impacted healthcare for good or for ill.
The ICD-10 delay shocks and disappoints
Hands-down, the biggest surprise of 2014 was the delay to ICD-10. A sneaky piece of legislation, signed by President Obama on April 1, changed the compliance date from October 1, 2014 to October 1, 2015 with barely any discussion, consultation, or warning. Leaving CMS speechless for weeks as healthcare providers scrambled to understand the impact of the change, many organizations expressed disappointment, frustration, anger, and resignation.
As another delay scare comes and goes with the finalization of the 2015 Congressional spending omnibus, providers are encouraged to view October 1, 2015 as the real and actual deadline. Whether or not the new year will include a new delay is impossible to say, but prepping for the code set switch is imperative for organizations that continue to lag far behind.
Meaningful use gets a little bit of a makeover
The EHR Incentive Programs have never been the most popular of healthcare reform attempts, but providers squared their shoulders and dove into Stage 2 of meaningful use with all the gusto they could muster – right as CMS extended the hospital reporting deadline. Hospitals now have an extra month, ending on December 31, 2014, to gather their attestation data and avoid the upcoming penalties starting in 2016, which provides a little breathing room for stressed out facilities.
The extension comes on the heels of several significant changes to the program over the past year, including a relaxed hardship exemption and changes to the use of 2014 Certified EHR Technology (CEHRT). At the very end of last year, CMS also announced that they would be pushing back the start of Stage 3 by one year until 2017, which gives healthcare providers more time to climb the meaningful use ladder.
VA is hit by electronic scheduling system scandal
As the will-they-won’t-they drama of interoperability upgrades continued to play out between the Department of Veterans Affairs and the Department of Defense, the VA was slammed with a public relations nightmare: a former physician whistleblower claimed that patients were routinely denied access to care, leading to numerous deaths, due to shady scheduling practices within the VA system.
The scandal felled top brass at the department, including VA Secretary Eric Shinseki, and prompted the passage of a massive spending bill to expand services, build new clinics, and overhaul the business practices of the hundreds of VA facilities across the nation. New Secretary Robert McDonald has promised to continue making reforms that will eliminate the “corrosive culture” that led to the shortfalls.
Massive data breaches continue to slam providers
Millions of patients were notified that their personal health information had been compromised during 2014 as healthcare providers continue to suffer from poor privacy and security practices. From the unencrypted data of two government websites providing AIDS resources to the 4.5 million patients whose information was exposed during a data breach at Community Health Systems, Inc. to the tens of thousands of compromised patient files in New Jersey and Los Angeles, it’s no wonder that patients remain nervous about giving their health data to their doctors.
Healthcare organizations are slated for some serious HIPAA audits by the Office of Civil Rights (OCR) in the coming months, and must prepare themselves to meet stringent privacy and security measures not only to pass the OCR’s scrutiny, but to avoid making some undesirable headlines in 2015 with an ugly and public patient data breach.
When Olivia Papa signed up for a new health plan last year, her insurance company assigned her to a primary care doctor. The relatively healthy 61-year-old didn’t try to see the doctor until last month, when she and her husband both needed authorization to see separate specialists.
She called the doctor’s office several times without luck.
“They told me that they were not on the plan, they were never on the plan and they’d been trying to get their name off the plan all year,” said Papa, who recently bought a plan from a different insurance company.
It was no better with the next doctor she was assigned. The Naples, Florida, resident said she left a message to make an appointment, “and they never called back.”
The Papas were among the 6.7 million people who gained insurance through the Affordable Care Act last year, flooding a primary care system that is struggling to keep up with demand.
A survey this year by The Physicians Foundation found that 81 percent of doctors describe themselves as either over-extended or at full capacity, and 44 percent said they planned to cut back on the number of patients they see, retire, work part-time or close their practice to new patients.
At the same time, insurance companies have routinely limited the number of doctors and providers on their plans as a way to cut costs. The result has further restricted some patients’ ability to get appointments quickly.
One purpose of the new health law was connecting patients, many of whom never had insurance before, with primary care doctors to prevent them from landing in the emergency room when they are sicker and their care is more expensive. Yet nearly 1 in 5 Americans lives in a region designated as having a shortage of primary care physicians, and the number of doctors entering the field isn’t expected to keep pace with demand.
The Association of American Medical Colleges projects the shortage will grow to about 66,000 in little more than a decade as fewer residency slots are available and as more medical students choose higher-paying specialty areas.
For now, experts say most patients are receiving the care they need, even if they have to drive farther, wait longer or see a nurse practitioner or physician assistant rather than a doctor.
More importantly, many are getting care for the first time. The surge also has forced many doctors to streamline their practice and rely more on mid-tier professionals instead of seeing every patient themselves.
“Family doctors are seeing a pretty significant increase in requests for appointments from new patients,” said Dr. Wanda Filer, a primary care doctor in York, Pennsylvania, and president of the American Academy of Family Physicians.
In response, the academy of more than 115,000 doctors say they’re adding new physicians to their practices, relying more on nurse practitioners and physician’s assistants, adding evening and weekend appointments. Despite the demand, Filer said most patients can get same-day appointments with someone on their team.
Dr. Laura Byerly has seen a surge of more than 2,000 new patients since January at her chain of health clinics in Hillsboro, Oregon, about 30 minutes west of Portland. Many had sporadic or no medical care for many years.
She hired new primary care doctors, receptionists and nurses whose sole role is to see new patients and prepare the chart for the first visit with the doctor. They even opened a new clinic so patients who used to drive 45 minutes for a visit could now see a doctor five minutes from home.
“The new patients required a significant amount of work to understand just what medications they should be on, what are their active diagnoses, what studies are needed now, and just who they are and what their life is like,” said Byerly, who is the medical director of the Virginia Garcia Memorial Foundation health clinics.
Dr. Jack Chou takes patients only during open enrollment. Otherwise, it’s a six to nine-month wait at his Los Angeles-area practice, where most of the new patients were covered through Medicaid expansion.
“The initial visit takes much longer because we’re trying to learn about patients who had fragmented care or no care at all,” said Chou. Despite the staffing struggles, “it’s actually a godsend for some of my patients.”
While most doctors are successfully juggling the influx, there have been cases like that of the Papas, in which consumers call multiple doctors only to find they are not in network or the doctors are not taking new patients.
Insurance agent Anthony Halby heard similar complaints from his clients in Grass Valley, California, a Sierra foothill community about an hour east of Sacramento. He said half a dozen consumers wanted him to switch their health plans as soon as the second round of open enrollment started earlier this month. They told him the plan they chose last year made it extremely difficult to find primary care doctors.
Only two insurance companies in the Gold Rush-era town offer coverage through the state exchange, and just four or five primary care doctors out of about 135 signed up with one insurer.
The other insurer has more doctors, but most are considered out of network. That means patients who use them will pay 60 percent of the bill, he said.
“Coverage does not equal access,” said Halby, who instead recommends his clients choose a plan outside the exchange that has a much broader provider network but also will not come with the government premium subsidies given to most of those who buy insurance through the exchange. “I tell people this up front: The premiums are going to be higher because there’s no subsidy. However, I’m going to guarantee you can keep your doctor.”
Health care spending grew at its lowest rate on record last year amid a relatively sluggish economy that has prompted consumers to spend more cautiously.A new report published in the journal Health Affairs Wednesday by the Centers for Medicare and Medicaid Services shows health spending grew by just 3.6 percent in 2013—the lowest year-to-year increase ever recorded. This is down from the already low average growth rate of 3.9 percent for the previous four years.
“Growth in national health spending has remained fairly stable since 2009, increasing between 3.6 percent and 4.1 percent annually,” Micah Hartman, a statistician for CMS’s Office of the Actuary, said during a call with reporters. He added that total health-care spending in the United States was about $2.9 trillion, or 17 percent of the U.S. economy.“The key question is whether health spending growth will accelerate once economic conditions improve significantly; historical evidence suggests that it will,” the report said. Health officials primarily attribute the record-slow growth to the still-sluggish economy, but also say new provisions under Obamacare aimed at curbing delivery costs have also played a role in the slowdown.
Unsurprisingly, spending growth slowed down in 2009 in the wake of the financial crisis and the Great Recession. Some experts suggest that a number of factors—like the shift to higher deductible health insurance policies—could keep spending down. Another factor that CMS officials said could maintain slow health spending are new Medicare cost controls implemented under the president’s health care law.
The U.S. spent about $2.9 trillion on health care last year, according to the report. The total annual spending works out to $9,255 per person, the highest in the world. Private health insurance and Medicare accounted for most of the spending, or about $962 billion and $586 billion, respectively.Both programs saw slower growth than the previous year. Meanwhile, Medicaid spending growth ticked up from 2012 to 2013, likely explained by the Affordable Care Act’s Medicaid expansion.Out-of-pocket spending by consumers rose 3.2 percent in 2013, but consumers may already be facing steeper increases in out-of-pocket costs, partly as a result of Affordable Care Act plans that feature lower premiums and higher deductibles. Though that shift may contribute to the lower growth in health care spending, it also comes with other consequences: Right now, more people than ever before say they have delayed treatment because of medical costs—and many of these people do have health insurance.CMS officials also said the Affordable Care Act’s Medicaid expansion could also drive an increase in health spending because payments to doctors will increase.Ultimately, while health care experts welcomed another year of slow growth in health care spending, they agree that it’s still too early to tell just how long the trend might last.
Republicans will be emboldened to aggressively challenge Obamacare after winning control of the Senate in midterm elections on Tuesday. For the first time since passage of the landmark healthcare law, Republicans will control both legislative chambers and the agenda in Washington.
Republican Kentucky Sen. Mitch McConnell, who won a surprisingly comfortable re-election victory and is poised to become Senate majority leader, has vowed to repeal Obamacare “root and branch.”
Media organizations also called key races for the GOP in Arkansas, Colorado, Montana, West Virginia, South Dakota, Iowa and North Carolina.
Still, undoing Obamacare will be extremely difficult considering Republicans won’t have the 60 votes needs to break Democratic filibusters, let alone the two-thirds majority required to override a presidential veto.
“I don’t expect the president to wake up tomorrow and view the world any differently than he did when he woke up this morning,” McConnell said in his victory speech. “He knows I won’t either.”
There’s also the politically dicey proposition of taking away benefits from the newly insured. Nearly 15 million individuals have signed up for coverage through the exchanges or enrolled in Medicaid under provisions of the Patient Protection and Affordable Care Act.
But Republicans will likely at least make a token effort to repeal the law in its entirety since so many candidates promised to do so on the campaign trail. If that fails, most political observers expect them to try and pick off unpopular provisions of the bill such as the individual and employer mandates and the medical device tax.
Republicans will also wield gavels, giving them the ability to lead investigations and hearings about implementation of the ACA. Sen. Orrin Hatch (R-Utah) is expected to chair the powerful Committee on Finance, and Sen. Lamar Alexander (R-Tenn.) is poised to chair the Committee on Health, Education, Labor and Pensions.
The exact partisan makeup of the Senate won’t be known for another month. That’s because neither candidate surpassed the 50% threshold in the Louisiana Senate race. There will be a runoff between Democratic incumbent Mary Landrieu and GOP challenger Bill Cassidy on Dec. 6.
Republicans were also expanding their majority in the House late Tuesday. Four years ago, Republicans seized control of the House by picking up 63 seats, in large part owing to a backlash over passage of Obamacare.
Demonization of the law was a crucial piece of the GOP election strategy in 2014. More than 800 different televisions ads aired during the election cycle referenced Obamacare or the ACA, and almost all of them were attack ads run by Republicans, according to an analysis by the Kaiser Family Foundation. In some competitive states, including North Carolina, anti-Obamacare ads ran for more than a year leading up to Election Day.
The ACA wasn’t the dominant issue of the campaign. In most polls, it ranked well behind jobs and the economy, and was clustered among a bunch of second-tier issues. But the unpopular healthcare law was emblematic of Obama’s broader struggles, with his approval rating hovering just north of 40%.
“You don’t necessarily have to mention Obamacare,” said Republicans Arkansas state Rep. David Meeks, at a political rally last month in Conway. “You can just say Obama’s policies and that’s just going to naturally pop into your head.”
Sen. Mark Pryor (D-Ark.) was one of the few candidates to try and utilize the ACA to boost his candidacy, cutting a commercial that cited his battle with cancer as evidence of the need for prohibiting discrimination against individuals with pre-existing conditions. But Pryor ended up receiving a double-digit drubbing from GOP challenger Tom Cotton.
Medicare was also the focus of attacks in some congressional contests, particularly those in states with a disproportionate share of elderly voters. But they don’t seem to have found much traction.
Democratic challenger Gwen Graham knocked off GOP Rep. Steve Southerland in a Florida district that includes Tallahassee and Panama City. Southerland had employed a common Republican attack line against Graham, suggesting that she supported cutting $700 billion from Medicare, a claim that’s been widely debunked.
In another Florida district, spanning from Key West to Miami, Democratic Rep. Joe Garcia pilloried GOP challenger Carlos Curbelo for wanting to end the “Medicare guarantee,” a claim that Politifact deemed false. That attack didn’t work either. Garcia lost by three percentage points.