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Congress Passes Key Provisions on P3s

On Friday afternoon, the U.S. House of Representatives and Senate approved the final conference report on the Moving Ahead for Progress in the 21st Century Act (MAP-21), legislation to reform and reauthorize surface transportation programs through 2014. MAP-21 finally replaces the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) bill, which was enacted in 2005 and extended nine times since its expiration in 2009. President Obama is expected to sign MAP-21 into law, and could do so as early as this evening.

Prominent conservative groups urged Republicans to vote against the final agreement, while the U.S. Chamber of Commerce pushed strongly for its passage. The final vote in the House was 373-52, with all Democrats voting in favor. The Senate vote was 74-19 with one Senator voting present. The massive conference report is likely to be the last major piece of legislation passed by Congress until after the November elections.

While members were not happy with every provision in the bill, they largely praised it during floor debate this afternoon. The report does not include language requiring approval of the Keystone XL pipeline, which many House Republicans had pushed for. They dropped the demand after winning a concession from Democrats to streamline permitting of transportation projects. Many Democrats praised the extension of the highway provisions for more than two years, which they said would boost job creation.

Congress Passes Key Provisions on P3s

The Ambitious Agenda of U.S. Mayors

The U.S. Conference of Mayors gathered recently in Orlando, Florida for its 80th Annual Meeting, hosted by Orlando Mayor Buddy Dyer.

This bipartisan organization serves as a bellwether for rising issues that are of importance to cities of varying sizes across the country.

The programmatic theme for this year’s year’s annual meeting was “Mayors to Focus on Infrastructure Needs in Post-War Era / 2012 Presidential Campaign.”

Vice President Joe Biden addressed the bipartisan group and other speakers included Secretary Shaun Donovan,  Education Secretary Arne Duncan, Congressman Chaka Fattah (D-PA), and Former Treasury Secretary Henry Paulson.

Among the most pressing topics on their agenda are:

  • Job creation
  • Workforce training
  • Long-term unemployment
  • Transportation and infrastructure
  • Exports/imports
  • Crime and violence reduction
  • Mayors and social media
  • Expanding access to healthy food in urban areas
  • Employment help for veterans
  • The drawdown of military troops abroad
  • The impact of defense cuts on U.S. cities.

At the gathering, Philadelphia Mayor Michael Nutter was inaugurated as the new President of the USCM for the June 2012 – June 2013 term. Mayor Nutter gave his inaugural address entitled “Moving America’s Cities Forward.” Mayor Nutter said cities now have less money and fewer people to provide services and he called that “our new normal in America.” He cited innovative efforts by cities across the country to address the challenges, including Philadelphia rethinking how it uses water. And he cited the “Cities United” effort to combat urban violence that he said “is wiping out a generation of young, African-American men.” Despite this, Mayor Nutter said cities are the “future of America” as centers of new ideas, hubs of culture and art, and places “where people want to live and work.”

Led by Conference President Los Angeles Mayor Antonio Villaraigosa, the gathering adopted a plethora of resolutions in a wide variety of categories, including: Children, Health & Human Services; Community Development & Housing; Criminal & Social Justice; Energy; Environment; International Affairs; Jobs, Education & the Workforce; Metro Economies; Tourism, Arts, Parks & Entertainment; and Transportation & Communications.

The Children, Health & Human Services and Community Development categories brought a resolution in support of the Green And Healthy Homes Initiative and furthered efforts to expand the nation’s stock of affordable, green, healthy, and sustainable housing. In the Criminal & Social Justice category were resolutions regarding the Trafficking of Minors and in support of TSA’s Trusted Traveler Program, PreCheck™, and the Blue Ribbon Panel. In the Energy category, USCM adopted a resolution supporting a federal renewable energy portfolio standard and extending the Renewable Electricity Production and Investment Tax Credits. Among Metro Economies, resolutions were adopted to establish as a position of the USCM that corporations should not receive the same legal rights as natural persons and support for the change of Municipal Securities definition in the Volcker Rule.

Atlanta Mayor Kasim Reed chairs the Transportation & Communications Committee, which included among its resolutions support for High Speed Rail and for Electric Vehicles.

The scope and subject matter of these resolutions are as broad as the issues facing municipalities. All of the adopted resolution can be viewed by clicking here.

Keep watching this forum for additional current and upcoming information and updates relating to our nation’s cities.

The next USCM Leadership Meeting will be held in Philadelphia on July 18 -20, 2012.

The Ambitious Agenda of U.S. Mayors

The Supreme Court and the Affordable Care Act: Interpreting the Decision

Today, we held a discussion to help interpret the Supreme Court’s decision and to consider the implications for the U.S. health care industry, employers, government contractors, and financial markets.

Members of our Litigation, Public Policy and Government Affairs, Government Contracting, Health Care Regulatory, and Employee Benefits practices presented and fielded questions.

Click here to view the presentation.

The Supreme Court and the Affordable Care Act: Interpreting the Decision

Internet Regulatory Policy: My Report from Venice, Italy

Last week, Venice, Italy played host to IoT Week 2012 and the IoT International Forum.

Known in Europe as “IoT – The Internet of Things” and in the U.S. as “smart innovation,” “smart grids,” and “smart transportation,” this exciting field is increasingly demonstrating both market growth and the potential to bring about tangible societal benefits in a wide range of areas such as the electric grid, transport, logistics, health care, education, and sustainable development, to name but a few.

My presentation at the conference in Venice (hey, who passes up an opportunity to go to Venice??) focused on smart cities and smart innovation in the U.S. and Europe and the importance of public private partnerships, hinging on two priorities: 1) how to encourage an innovation/growth environment through the opportunities of new technology such as the cloud and IoT; and 2) how to simultaneously protect important public policy priorities, including privacy and security.

Policy makers increasingly recognize these goals can be both appropriately balanced and, where possible, optimized with a particular concern so as not to stifle potential innovation with preemptive regulatory restrictions that have yet to be proven necessary due to presumed market failure or hypothetical applications of technology.

For this to work in Europe, many observers hope that the proposed EU Data Protection Regulation will serve as an inter-operable framework for all privacy and data protection concerns in Europe such that unique new and burdensome requirements on the IoT won’t be counterproductive to promoting economic growth and innovation.

There is a growing sense that the most effective global policy approaches in this field will avoid technology specific silos where specific technology, such as the IoT, is regulated separately. Rather, support is coalescing around broader technology policy approaches that are horizontal in nature and which seek to include other related and intrinsic issues such as cloud computing and the IoT.

Internet Regulatory Policy: My Report from Venice, Italy

EIA’s Annual Energy Outlook 2012 Predicts Increased Domestic Energy Security

Today, the Energy Information Administration (EIA) released its Annual Energy Outlook 2012, which provides projections on U.S. energy consumption, production and use through 2035.  EIA’s report is another sign that the U.S., through a variety of factors, is moving toward greater energy security.

EIA’s report estimates that U.S. petroleum imports will continue to decline over the coming years. Under EIA’s reference case, petroleum imports will fall from 49% of total domestic consumption in 2010 to 36% in 2035. As the report notes, this decrease does not take into account the Obama Administration’s proposed fuel economy standards for model year 2017-2015 light duty vehicles, which would raise fuel efficiency standards to nearly 55 miles per gallon. The implementation of these fuel efficiency standards could further decrease domestic consumption of crude oil, which could in turn have positive impacts on U.S. petroleum imports.

There is much discussion these days regarding an “all of the above” energy strategy. The EIA report, however, emphasizes the importance of such a strategy. For example, the report concludes that reduced U.S. petroleum imports is due to a variety of factors, including: increased domestic crude oil production; decreased energy consumption stemming from stronger fuel efficiency standards; and increased production of biofuels.

EIA’s report also predicts increased production and usage of natural gas through 2035. Under the reference case, shale gas production will constitute 49% of total domestic natural gas production by 2035, up from 23% in 2010. In the power sector, natural gas’ market share is projected to increase from 24% in 2010 to 28% in 2035.

EIA will highlight its Annual Energy Outlook 2012 at an event on Wednesday sponsored by the Bipartisan Policy Center.

EIA’s Annual Energy Outlook 2012 Predicts Increased Domestic Energy Security

Weekly Health Policy Update: Community Health Center Funding, HHS Conversion Comments, and FDA User Fee Bill Approval

Weekly Health Care Wrap-Up.

Still No Word from the Supreme Court

Another week and still no ruling by the Supreme Court on the Affordable Care Act. The decision could come as soon as Monday, when the Court will issue its next round of rulings. Even still, the Court still needs to issue five opinions, plus the health care decision, before it heads out of town. While Monday is the last official opinion day on the Court’s calendar, additional days will likely be added. Stay tuned.

HHS Announces Community Health Center Funding

The Department of Health and Human Services (HHS) this week announced $128.6 million in funding for community health centers across the country. The grants will fund 219 health centers in 41 states as well as the District of Columbia, Puerto Rico and the Northern Mariana Islands. HHS estimates the awards will add 5,640 jobs and provide services to 1.25 million new patients.  Additional information can be found here.

HHS Asks for Comments on MAGI Conversion, Satisfaction Survey

HHS this week solicited comments on two potential methodologies for converting current state Medicaid and CHIP income eligibility standards to modified adjusted gross income (MAGI) standards. Respondents are also welcome to submit additional approaches. HHS is seeking responses by July 23, 2012. In addition, the agency also released a notice seeking ideas on how to establish a satisfaction survey system to be administered to members of each qualified health plan offered through an exchange. In particular, HHS is interested in ways to measure quality of care from the consumer’s perspective and track changes over time. Responses are sought by June 29, 2012.

House Passes User Fee Bill

Following negotiations between House and Senate lawmakers, the House this week approved FDA User Fee legislation by voice vote, sending the bill to the Senate for consideration. The Senate is expected to pass the bill easily sometime next week and send it to President Obama for his signature. Despite heightened political tensions in Congress, the five-year deal enjoyed bipartisan support throughout the legislative process. Additional information can be found here.

Around Town

The Pew Center on the States is out with a new issue brief looking at states’ efforts to cover the long-term costs of their employees’ pensions and retiree health care. The issue brief can be found here.

Larry Levitt and Gary Claxton from the Kaiser Family Foundation examine two factors that could prevent a “death spiral” in the individual insurance market if the Supreme Court strikes the individual mandate in the Affordable Care Act, while upholding the rest of the law. The analysis can be found here.

New data from HHS finds that more than 3 million young adults gained insurance under the Affordable Care Act. The information can be found here.

The Kaiser Family Foundation is also out with a new resource presenting data and analyzing issues related to coverage and access for oral health in the U.S. The new resources can be found here.

A new survey from JD Power and Associates finds that 47 percent of employers say they “definitely will” or “probably will” switch to a defined contribution model within a private exchange. The survey results can be found here.

From the States

For full coverage of state exchange activities, check out this week’s State of the States: Health Insurance Exchange Developments here.

Massachusetts. The state this week released a request for responses (RFR) for “integrated care organizations” to integrate care for dual eligibles between the ages of 21 and 64 statewide. The population includes more than 111,000 adults with disabilities, serious mental illness and substance abuse disorders, among other conditions. The RFR lists the target implementation date as April 1, 2013.

New Hampshire. On Tuesday, Governor John Lynch (D-NH) signed HB1297, a bill that prohibits New Hampshire and all state agencies, departments and subdivisions from participating in planning for or creating a state-based health insurance exchange. However, the bill allows New Hampshire’s agencies to plan with the federal government for the creation of a federally-facilitated exchange. The legislation also creates a twelve person health exchange advisory board to advise the Insurance Commissioner and the Commissioner of Health and Human Services on exchange issues.

Health Insurance Exchanges: State of the States update.

With another week passing by without a ruling from the Supreme Court, exchange watchers are eagerly looking forward to next week. The Supreme Court’s ruling on the ACA could come as early as Monday, but the Court could also make us wait a few more days.  As we’ve previously written, it’s been a slow few weeks for exchange policy makers in the states as they wait for the Supreme Court’s decision. But the uncertainty surrounding the ACA didn’t stop two states from making strong moves this week.

On Wednesday and Thursday respectively, Rhode Island and Connecticut made executive level hires to fill their top exchange posts. Christine Ferguson was tapped by Governor Lincoln Chafee (I) as Director of the Rhode Island Health Benefits Exchange. Ferguson’s experience includes serving as Rhode Island’s human services director from 1995 to 2001 and serving as the Massachusetts public health commissioner. In Connecticut, Governor Dannel P. Malloy (D) hired Kevin J. Counihan to be CEO of the Connecticut Health Insurance Exchange. Previously Counihan was president of Choice Administrators Exchange Solutions in Orange, California and from 2006 to 2011, he was the CMO for the Commonwealth of Massachusetts Health Insurance Connector Authority.

Meanwhile in New Hampshire, Governor John Lynch (D) signed legislation into law (HB1297) that severely restricts the state’s exchange planning capabilities. Under the enacted legislation, all of New Hampshire’s state agencies, departments and subdivisions are barred from planning or creating a state-based health insurance exchange. However, the bill allows New Hampshire to plan with the federal government for the creation of a federally-facilitated exchange. According to Colin Manning, a spokesman for the Governor, the reason Governor Lynch signed the bill because it did not “prevent the state from participating in a federal health exchange.”

Finally, as states and their consultants begin conceptualizing how exchange portals should guide users through selecting a health insurance plan, eHealthInsurance has released a report that shares their experience and offers some “best practices.” Of note, a consumer’s familiarity with an insurance company had little impact on their decision to purchase insurance from an insurer. Instead, it was more important for the insurer to have a simple application process and be easily contacted to answer questions. Also, eHealthInsurance found that potential customers who used the site’s decision support tools to select a plan were more likely to complete an application and purchase health insurance compared to other users who began the application process after getting a free quote.

Weekly Health Policy Update: Community Health Center Funding, HHS Conversion Comments, and FDA User Fee Bill Approval

FEC Approves Use of Text-Messaging in Campaign Fundraising

In a recent advisory opinion, the Federal Election Commission (FEC) unanimously voted to approve the use of text messaging to facilitate political donations by any American with a cell phone. The Commission held that a plan proposed by two political and media consulting firms and m-Qube, a corporate aggregator of business-to-consumer messaging and merchant billing for wireless service providers, passes muster under the Federal Election Campaign Act of 1971 and Commission regulations.

Under the approved plan, contributors have the option of making a contribution in two ways. The first method is akin to those methods utilized by charitable organizations such as the American Red Cross in recent years: A wireless user texts a pre-determined message to a short code identified with a political committee; the user receives a text requesting confirmation of the donation and a certification of eligibility to make the contribution.  The second method enables a user to enter his or her mobile number on a website in lieu of a credit card number after certifying eligibility to make the contribution; a PIN is sent directly to the cell phone, which the donor enters on the website to confirm the transaction.

Upon confirmation/certification, the user’s account is charged a predetermined amount (e.g., $10 per transaction) and individual phone numbers are capped at $50 per billing cycle per candidate/committee.

The Commission had issued a ruling rejecting the possibility of donation by text messaging in 2010, but distinguished m-Qube’s proposed model in its most recent decision, finding that adequate safeguards would prevent violation of four separate laws/rules regarding the recordkeeping and reporting requirements of 2 U.S.C. § 432(c); the prohibition on corporate contributions under § 441b; the forwarding requirements of § 432(b); and segregation requirements for commercial vendors that process political contributions. m-Qube’s proposed $50 cap per billing cycle, the ability of individual committees to securely access the electronic gateway tracking all contributions made to the committees’ accounts, and the fact that m-Qube’s advanced payments to the committees prior to m-Qube’s actual receipt of funds from the contributors qualify as “permissible extensions of credit” (and not as corporate contributions or forwarding of contributions) were sufficient to guard against violation of the above rules.

Politico reports that, overall, the reaction to the opinion has been positive, and commentators have noted that enabling contributors to donate by text will enhance the role of young and small-dollar donors during pending and future campaigns. Not surprisingly, both the Romney and Obama campaigns have expressed support for political donations by text.

The new contribution-by-text system is expected to make its debut in the coming weeks, just in time to further fuel the expected record-breaking fundraising season.

FEC Approves Use of Text-Messaging in Campaign Fundraising

Chairman Baucus on Tax Reform

A relatively early, and small, step was taken today on what is likely to be a long road ahead.

In a speech that amounted to a ringing endorsement of the need for tax reform, but that stopped well short of providing much more than themes, Chairman Max Baucus set forth his view that the federal tax system needs to raise more revenue, needs to concern itself with growing wealth disparity, and must adapt to changed global and technology conditions since the last tax reform as well as changes that are yet to come.  He did not promise to release his own vision of what a new tax code would be, at least not before the elections.  On the other hand, the speech signaled quite clearly that, of necessity, tax reform will soon begin moving forward and that 2013 will very likely be a watershed year in its consideration.

Another significant news item in the speech involving U.S. international tax law was his apparent approval of moving to a territorial tax system and away from this country’s world-wide system of business taxation.   While this might seem to dovetail with what his Republican Senate colleagues are saying, and amounts to something of a break from the White  House position, the Montana Democrat was quick to point out that revenues—taxes—will need to be part of the solution to this country’s fiscal problems.  This would appear to put him clearly at odds with those, like Mitt Romney, who are publicly renouncing any new taxes to help deal with our fiscal woes.

In this speech, Sen. Baucus was basically reminding us that in a post-election session and beyond, as Chairman of Senate Finance he will be a major player in the policy debate on what kind of tax code will be articulated in the next several years.  The real test for him, as he well knows, will come when Congress finally turns to the task.

Chairman Baucus on Tax Reform

HHS Makes Game Changing Exchange Provision for Agents and Brokers

Agents, brokers and private exchanges may have a new opportunity to access potential exchange customers as a result of a decision by HHS in its March 2012 health insurance exchange final rule.

Specifically, HHS opened the door for states to allow an agent or broker to enroll individuals, employers or employees in Qualified Health Plans (QHPs), in a manner that constitutes “enrollment through the exchange,” on their own website.  In other words, if the consumer would be eligible for a refundable tax credit for a QHP purchased on the exchange’s website, he or she is eligible to access the tax credit for purchases through the broker or agent’s private web portal.

For more information on the shift, and its impact on agents and brokers, consumers, states, technology vendors and carriers, check out Cindy Gillespie’s post on the Health Affairs Blog.

HHS Makes Game Changing Exchange Provision for Agents and Brokers

Weekly Health Policy Update: CCIIO Reinsurance Bulletin, Medical Device Legislation, and More Aging and Disability Funding

Weekly Health Care Wrap-Up.

CCIIO Releases Reinsurance Bulletin

The Center for Consumer Information and Insurance Oversight (CCIIO) on Thursday released a bulletin regarding the temporary reinsurance program included as part of the Affordable Care Act (ACA). The ACA directs States to establish or to enter into a contract with one or more non-profit reinsurance entities to carry out a transitional reinsurance program. The final exchange rule clarifies that states, regardless of whether they establish an exchange, may choose to establish a transitional reinsurance program or to have the Department of Health and Human Services (HHS) establish the program on their behalf. HHS will operate the reinsurance program in all non-electing states. The bulletin can be found here.

Ways and Means Passes Medical Device Repeal

The House Committee on Ways and Means this week approved legislation that would repeal the tax on medical devices included as part of the Affordable Care Act.  Republicans have yet to announce an offset for the bill, which is estimated to cost $29 billion.  To date, similar legislation has not been approved in the Senate. Additional information can be found here.

CMS Announces Antipsychotic Medication Initiative

The Centers for Medicare and Medicaid Services (CMS) this week announced an initiative aimed at reducing use of antipsychotic drugs among nursing home residents by 15 percent by the end of 2012. To take steps toward this goal, CMS and its industry and advocacy partners intend to implement enhanced training, increased transparency and alternatives to antipsychotic medication. Findings will be used to target and implement approaches to improve the overall management of residents with dementia, including reducing the use of antipsychotic drugs in this population.

HHS Announces Aging and Disability Resource Funding

The Department of Health and Human Services (HHS) this week announced $25 million in funding to support Aging and Disability Resource Centers (ADRCs) across the country. The ADRC program seeks to strengthen and expand states’ abilities to help seniors and people with disabilities access home and community-based long-term care services and supports. The initiative is a partnership of the Administration for Community Living (ACL), the Centers for Medicare and Medicaid Services (CMS), and the Department of Veterans Affairs’ Veterans Health Administration (VHA). Through the program, the VHA will make an additional $27 million available over 3 years in ADRC-funded states through VA Medical Centers. Additional information on the funding opportunity can be foundhere and here.

From the States

For a recap of this week’s exchange action, please see this week’s State of the States: Health Insurance Exchange here.

California.  Officials in the state have proposed a three-month delay for the launch of their dual eligible demonstration program, moving the expected start date from March to June of 2013. In addition, CMS has indicated that it does not support “lock in” for demonstration participants, instead favoring passive enrollment with an opt-out provision.  Additional information can be found here.

New Hampshire.  The Granite Healthcare Network, a network of hospitals, and Cigna have announced this week a new accountable care organization (ACO) structure.  The ACO will be made up of 900 health care professionals and  responsible for 23,000 Cigna customers. Additional information about the effort can be found here.


Health Insurance Exchanges: State of the States update.

After the Memorial Day weekend, it was a slow week in the states. With more and more states adjourning for the year and with the Supreme Court expected to rule on the ACA by the end of the month, few legislators are inclined to move forward before receiving additional clarification on the law from the Court. So let’s start off by focusing on some interesting developments in California.

Today, after waiting for nearly a month and a half, California announced that it plans to award a $359 million contract to develop the exchange’s IT system to Accenture. Of the total award amount, $183 million will be spent developing the exchange infrastructure, while the remaining $176 million in the contract will cover additional development and operational costs for 3.5 years. Assuming that the procurement continues on schedule, the California Health Benefit Exchange Board could hear a presentation from Accenture on the exchange IT system at the Board’s June 12 meeting.

Still focusing on California, at the May 22 California Health Benefit Exchange Board Meeting, staff made recommendations on the tricky issue of how to fairly compensate agents who enroll individuals in the exchange. The staff’s recommendation was to allow insurers to directly compensate agents to avoid burdening the exchange with agent payments or compliance disputes. However, as part of their report, the staff outlined various areas to examine to when making a final decision, primarily developing methods to ensure commission rate parity between sales of exchange and non-exchange plans.

The Board also heard recommendations on how to structure insurance options in the SHOP exchange. The exchange’s staff and consultants from PriceWaterhouseCoopers recommended adopting a “full employee choice” option. Under that option, the employer determines the maximum contribution that will be made on behalf of an employee and allows employees to select from any insurance product at any tier level within the exchange.

This approach is similar to some of the models being pursued by the private sector in private exchanges. As some states continue to ponder the best way to woo small businesses into their SHOP exchanges, a survey from Oliver Wyman this week finds strong interest private health exchanges among employers. Among their findings, 80 percent of employers were interested in private exchanges. When selecting who to partner with to offer a private exchange, employers opted to turn to a benefits consultant over a payer organization by a two-thirds margin.

On the procurement end, Wednesday was the final day to submit a letter of intent to bid on Rhode Island’s exchange IT system. Full responses are due on June 8. After submissions are collected, finalists will be asked to submit another round of proposals which will be due on July 9. The state aims to select its vendor by July 20 and have a signed contract by August 20.

Finally, the District of Columbia released a draft Statement of Work (SOW) as it continues to plan an RFP to hire a system integrator for its exchange. The draft SOW is an informational document since the Department is not seeking comments or responses from vendors. An RFP is expected to be released in June.

The District of Columbia has received a total of $9.2 million in federal funds to date and is in the early stages of preparing a Level Two grant application to submit to HHS later this year.

Weekly Health Policy Update: CCIIO Reinsurance Bulletin, Medical Device Legislation, and More Aging and Disability Funding