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Weekly Health Policy Update: CBO Released Updated Economic Outlook, HHS Announced Final Stage 2 Meaningful Use Rule, and More Grant Awards were Issued

Weekly Health Care Wrap-Up.

In light of the Republican and Democratic National Conventions, MLA’s Weekly Wrap-Up will take a brief hiatus for the next two weeks.  We look forward to returning on Friday, September 14.  Enjoy the conventions!

Oversight Committee Asks IRS to Justify FFE Subsidies

Republicans on the House Oversight and Government Reform Committee sent aletter on Wednesday to the Internal Revenue Service (IRS) asking the agency to explain the basis for its plans to offer tax credits through the federally facilitated exchange (FFE), arguing the ACA only authorizes tax credits through a state-based exchange.  Democrats have argued that a drafting error, not Congressional intent, led to the discrepancy in the statute.  With a vast majority of states expected to fall under the FFE in 2014, expect the debate surrounding this issue to continue.

House Leaders Write CMS for Details on Exchange Rules

On Monday, two House Energy and Commerce Committee Republicans sent aletter to CMS Acting Administrator Marilyn Tavenner to follow up on their previous requests for clarification surrounding the Medicaid expansion and exchange planning.  Representatives Fred Upton (MI) and Joe Pitts (PA) stress that “regulatory uncertainty” is hurting the states’ ability to make key decisions and with such a short time to implement the ACA changes, they “do not have the luxury of procrastination.”  The letter also asks for full answers to the questions posed in a July 10 letter from the Republican Governors Public Policy Committee.  Pressure on HHS to release additional guidance is likely to mount over the coming weeks as the November 16 deadline to submit state Blueprints and declaration letters approaches.

CBO Releases Updated Budget and Economic Outlook

The Congressional Budget Office (CBO) has published an updated reportfeaturing projections for federal deficits and the unemployment rate as well as the overall outlook for the budget and economy from 2012 to 2022.  The CBO concludes, “The federal budget deficit for fiscal year 2012 will total $1.1 trillion, marking the fourth year in a row with a deficit of more than $1 trillion. That projection is down slightly from the $1.2 trillion deficit that CBO projected in March.  At 7.3 percent of gross domestic product (GDP), this year’s deficit will be three-quarters as large as the deficit in 2009 when measured relative to the size of the economy. Federal debt held by the public will reach 73 percent of GDP by the end of this fiscal year—the highest level since 1950 and about twice the 36 percent of GDP that it measured at the end of 2007, before the financial crisis and recent recession.” This CBO report is the latest in a series of projections likely to underscore the need for serious fiscal reform, including tax and entitlement reform, in 2013.

CMS Announces 500 Primary Care Practices for CPC Program

CMS this week released the list of physician practices selected in seven markets across the country to participate in the Comprehensive Primary Care (CPC) multi-payer initiative.  Selected practices will work with state and commercial payers as well as Medicare to better coordinate primary care services for patients.  In exchange, participating providers will receive a monthly care management fee.  Practices were selected through a competitive application process based on their use of health information technology, ability to demonstrate recognition of advanced primary care delivery by accreditation bodies, service to patients covered by participating payers, participation in practice transformation and improvement activities, and diversity of geography, practice size and ownership structure.  Find more information and a list of participating practices here.

HHS Releases Final Rule for Stage 2 of EHR Incentive Program

On Thursday, the Department of Health and Human Services (HHS) released the final Stage 2 Meaningful Use rule, outlining the Stage 2 criteria that eligible professionals (EPs), eligible hospitals and critical access hospitals (CAHs) must meet in order to qualify for Medicare and/or Medicaid electronic health record (EHR) incentive payments.  The final rule accepted several comments to the proposed rule, particularly around the level of patient engagement and quality reporting required to meet Stage 2 standards. A second new rule establishes the technical capabilities and related standards and implementation specifications that Certified EHR Technology will need to include.

Cohen Returns to CMS as Head of CCIIO

Late last week, CMS Acting Administrator Marilyn Tavenner announced that Gary Cohen will be returning to the Centers for Medicare and Medicaid Services (CMS) to become deputy administrator and director of the Center for Consumer Information and Insurance Oversight (CCIIO).  He previously served as oversight director at CCIIO before taking the position of chief counsel at the California Health Benefit Exchange Board.  Michael Hash, the current interim director, is resuming his position as director of the Office of Health Reform at the Department of Health and Human Services (HHS).   Read more 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.

HHS announced the next round of Level One and Level Two establishment grant awards this week.  Awards were granted to eight states, adding Connecticut, Maryland, Nevada and Vermont to the list of states receiving Level Two grants. Previously, Rhode Island and Washington were the only states to reach Level Two status.  California, Hawaii, Iowa and New York were also awarded Level One grants.  Additional information can be found on HHS’s website.


A new issue brief from Health Affairs and the Robert Wood Johnson Foundation explores the debate over Graduate Medical Education (GME) funding and discusses various proposals to reform the program.

Our own MLA Employee Benefits team has a new Employer Services Advisory out this week discussing “The Pay or Play Mandate for Large Employers,” outlining the options available to employers under the ACA.  Read more here.

Georgetown University’s Center on Health Insurance Reforms has launched a new blog that will feature pieces on health insurance coverage, insurance markets and insurance reform with an emphasis on the effects of these reforms on those with chronic or pre-existing conditions.

Health Insurance Exchanges: State of the States update.

After weeks of suspense, the Department of Health and Human Services (HHS) announced $765 million in Level One and Level Two grant awards to eight states on Thursday. Also this week, there were numerous developments in the Midwest and we learned that a U.S. Territory is now examining whether to create a health insurance exchange. Let’s get started.

On Thursday morning, HHS announced that California, Hawaii, Iowa and New York were awarded additional Level One grants while, Connecticut, Maryland, Nevada and Vermont were awarded Level Two grants. The grant awards ranged from California’s sizeable $196 million award all the way down to Iowa’s $26.6 million award for additional IT work to coordinate the state’s various databases and integrate the state’s Medicaid eligibility solution. The four Level Two grant recipients join Rhode Island and Washington as the few states that have received Level Two grant funding. Additional details can be found on HHS’s website. The next round of Exchange Establishment grant applications is due on November 15, 2012, one day before state Blueprints and declaration letters are due to HHS.

Also during the fanfare, Lt. Governor Anthony G. Brown (D-MD) held a press conference to announce not only the state’s Level Two grant, but also the new name for Maryland’s Health Benefit Exchange. Renamed the “Maryland Health Connection” and sporting a new logo, the Connection already has a functionalwebsite. As many as 150,000 individuals are expected to use the Connection during its first year.

Moving west, California’s statehouse was busy last week examining legislation (SB 703) to create a Basic Health Plan to cover people with incomes between 133 and 200 percent of the federal poverty level. However, in the end, the Assembly Appropriations Committee did not advance the bill. If passed, the Basic Health Plan would have covered an estimated 900,000 Californians. But the Basic Health Plan issue could reemerge in the future. On August 16, Governor Jerry Brown (D) sent a letter to legislative leaders informing them that he intends to call a special legislative session in either December or January 2013 to focus on health reform implementation.

Focusing on a territory we rarely get to discuss (or visit), Governor John P. de Jongh Jr. (D) of the Virgin Islands announced this week that he hired two consulting firms to advise him on whether the Virgin Islands should create a Health Insurance Exchange. To perform an IT gap analysis, a $400,000 contract was awarded to NewWave Telecom and Technologies, while Value Advisory Group was awarded an $199,000 contract to analyze the impact of an exchange on the insurance market.

Meanwhile in the Midwest, there were signs that exchange implementation may be slowing in multiple states.

Governor Rick Synder’s (R-MI) administration announced that Michigan was no longer on track to create a state-based exchange by HHS’s deadline and will now pursue a Federal-State Partnership. According to spokeswoman Sara Wurfel, “the governor continues to believe that Michiganders would be much better served with our own state-controlled exchange rather than the feds making those decisions for us.”

In late July, Governor Daniels (R-IN) asked all of the state’s gubernatorial candidates for their views on whether to create a health insurance exchange or participate in the Medicaid expansion. This week, Republican gubernatorial candidate Mike Pence was the first candidate to respond. In his letter, Pence stated that he was against creating a health insurance exchange because there was “too much uncertainty” surrounding the issue.

Minnesota’s health insurance exchange planning is continuing to move forward, but Governor Mark Dayton (D) said in a letter to state legislative leaders that he will wait until after the November elections before making a final decision on the state’s health insurance exchange. This is an interesting move for the Governor since it was only in July 2012 when he submitted a letter to HHS stating that it was “Minnesota’s intention to continue the planning and development of a Minnesota Health Insurance Exchange.” The Governor also wrote at the time that “We are excited by this opportunity to design our own Exchange…” Despite the Governor’s intention to wait before deciding the final fate of Minnesota’s Health Insurance Exchange, the state continues its planning efforts. Last week it submitted a Level One grant application for an additional $42.5 million in funding.

Finally, according to the minutes of a meeting between the West Virginia Office of the Insurance Commissioner and the state’s health care providers, the state’s HIX IT system RFP is ready to be released. However, the state is now deciding if it will pursue a state-based exchange or a federal-state partnership. If the state moves toward a state-based exchange, a Financial Sustainability Plan produced in July suggests the state is leaning toward leasing the state’s HIX IT system as opposed to purchasing

Looking ahead, State of the States will be taking a brief hiatus over the next two weeks in light of the Republican and Democratic National Conventions.  We’ll keep tracking exchange news in the meantime and will look forward to resuming on Friday, September 14.  Have fun in Tampa and Charlotte!

Weekly Health Policy Update: CBO Released Updated Economic Outlook, HHS Announced Final Stage 2 Meaningful Use Rule, and More Grant Awards were Issued

Weekly Health Policy Update: ACA Implementation Forums, SAMHSA Grants, and HHS Funding

Weekly Health Care Wrap-Up.

HHS Holds Regional Implementation Forums

The Department of Health and Human Services (HHS) this week kicked off its Affordable Care Act (ACA) implementation forums with events in Washington, DC and Atlanta, GA. On Tuesday in Washington, the big news was the release of the final state Blueprint for exchange approval, which is due to HHS on November 16. The forums did not reveal answers to some key outstanding questions surrounding ACA implementation, including possible costs for states utilizing the federally facilitated exchange as well as the timing of essential health benefits and market reform guidance. Read more about the forum here and find the blueprint here.

CMS Announces New Consortia to Participate in Independence at Home Demonstration

The Center for Medicare and Medicaid Innovation (CMMI) announced three consortia joining the list of individual practices participating in the Independence at Home Demonstration. The program aims to test the effectiveness of delivering comprehensive primary care services at home for Medicare beneficiaries with multiple chronic conditions. A map of participating consortia and practices as well as additional information about the demonstration are available here.

SAMHSA Awards HIT Grants

The Substance Abuse and Mental Health Services Administration (SAMHSA) awarded $4 million in grants for health information technology (HIT) to expand the capacity of substance abuse treatment providers to serve people who traditionally have been underserved because of lack of access to treatment in their immediate community. In particular, the program will focus on how web-based services, smart phones, and behavioral health electronic applications (e-apps), can enhance the ability of providers to effectively communicate with persons in treatment and  track and manage their health to ensure services are available where and when needed.  A list of awardees and more information can be found here.

HHS Awards Grants for Epidemiology and Laboratory Capacity Program

On Thursday, HHS Secretary Kathleen Sebelius announced $48.8 million in funding for epidemiology, laboratory and health information systems in health departments across the country. These awards will help public health departments prevent, track and respond to infectious diseases. The Centers for Disease Control and Prevention’s (CDC) Epidemiology and Laboratory Capacity for Infectious Diseases program is funded as part of the ACA’s Prevention and Health Fund. Read the announcement here.

House Energy and Commerce Republicans Request Information from HHS Secretary

Five Republicans on the House Committee on Energy and Commerce sent aletter to HHS Secretary Kathleen Sebelius this week requesting information about possible misuse of funding  through the Centers for Disease Control and Prevention (CDC) Communities Putting Prevention to Work Program (CPPW). The HHS Office of Inspector General has also expressed concern “regarding potential ‘inappropriate lobbying activities using CPPW funds’” by grantees of the program. The letter asks for clarification surrounding Secretary Sebelius’ comments in a March 2012 hearing on the subject when she said that the “prohibition on using federal funds for lobbying ‘applied to the [HHS] but not our grantees.’” In addition, the letter asks for files on all CPPW grants and communications relating to the lobbying restrictions.

From the States

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

Kansas. The Kansas Insurance Department announced a hearing on September 5 to discuss essential health benefits options for the state. An actuarial analysis by Milliman will be distributed at the meeting to help attendees sort through the potential benchmark choices. Milliman has conducted similar analyses for several states. Additional information about Kansas’ process can be found here.

Nebraska. Governor Dave Heineman (R) announced that he will be holding a series of informal public meetings to discuss health insurance exchange options in the state. Last week, the Nebraska Department of Insurance updated the state’s providers and brokers on its exchange planning. More information on Nebraska exchange issues can be found in last week’s State of the States: Health Insurance Exchanges.


A new report prepared by consumer representatives of the National Association of Insurance Commissioners (NAIC) provides recommendations to state and federal policymakers for the implementation of new insurance reforms under the ACA.

A new survey by the Center for Health Care Strategies examines the challenges faced by physician practices when implementing quality improvement strategies for underserved patients.

The Robert Wood Johnson Foundation (RWJF) is out with a new brief that concludes tobacco cessation programs have strong returns on investment over time, saving about $50 for every $1 spent. RWJF also released two resources for states on ACA implementation — one report focuses on interagency collaboration and the other provides a model to compare outcomes of different policy selections.

Kaiser Health News this week previews the ACA Medicare readmission penalties for hospitals that go into effect this October.  Read the story here.

The Commonwealth Fund released the results of their 2011 National  Survey of Hospital Readiness to Participate in an Accountable Care Organization (ACO) in a new issue brief.  The results show that 13 percent of hospitals involved in the survey are participating in an ACO or will be within one year, while 75 percent are not planning to participate.

Health Insurance Exchanges: State of the States update.

All eyes turned to the federal government this week on the exchange front, along with some interesting new reports from public policy groups. Let’s get started.

On Tuesday, HHS kicked off its series of Affordable Care Act Implementation Forums. The big news from the forum was the release of the revised stateBlueprint that states must submit for exchange approval by November 16.  The new version of the Blueprint is very similar to the original draft, with a few exceptions. Several key questions regarding ACA implementation remain unanswered following the forum.  Answers to questions on how HHS plans to fund the FFE and whether states using the FFE will face additional costs were vague, with HHS officials indicating the administration is still examining potential options. On the regulatory end, state exchange watchers will have to wait a bit longer for further guidance on the basic health plan, essential health benefits and market reform rules. The forum now heads to Chicago and Denver next week.

Earlier this week, after more than an hour of debate, the Kentucky Legislature’s Interim Joint Committee on Health and Welfare chose to delay a vote on the Executive Order Governor Beshear (D-KY) issued earlier in July to establish the Kentucky Health Benefit Exchange. During the hearing, the Committee asked members of the Exchange questions about the ongoing costs of operating the exchange, but found few of the answers satisfactory. According to Carrie Banaham, executive director of Kentucky Health Benefit Exchange and Bill Nold of the Department of Insurance, the Exchange’s operational costs for 2015 are estimated to be $67 million and the exchange plans to fund its operations by charging insurance companies user fees.

In Tennessee, legislative leaders appear unsure whether the state should pursue a health insurance exchange. In interviews, both House Speaker Beth Harwell (R) and House Majority Leader Gerald McCormick (R) expressed mixed feelings about Tennessee creating a state-based exchange. McCormick said he was concerned that “sooner or later the federal government’s going to change the rules and that’s something that’s happened in the past and we want to avoid that.”

Meanwhile in Michigan, while House Speaker Jase Bolger (R) said that the House would not vote on exchange legislation on Wednesday, it now appears that the House will consider options that allow Michigan to begin using its federal grant money to analyze its exchange options. Even though Michigan has received a $9.8 million Level One grant, state agencies have not been authorized to use it for exchange analysis.

Rounding out the week, on Wednesday, DC submitted a Level Two application to HHS to meet the agency’s August 15 deadline for grant funding. In its application, DC seeks over $70 million to hire additional staff for the exchange and procure the insurance exchange’s IT system. According to an analysis by Mercer, DC’s exchange could have a high percentage of users. With roughly 610,000 DC residents, Mercer estimates that up to 187,000 could be enrolled in the exchange. As we reported last week, Colorado also submitted a $43 million Level One application to meet HHS’s deadline.

Finally, in the policy world, a number of interesting reports were released. On Monday, an analysis on California’s Basic Health Plan performed by the UC-Berkeley Labor Center and the UCLA Center for Health Policy Research was released. The report estimates that creating a Basic Health Plan would take between 720,000 to 950,000 participants out of the exchange, but the number of Californian’s with health insurance would rise. Legislation to create a Basic Health Plan in California, SB 703, was evaluated on Thursday by the Assembly Committee on Appropriations. On the other side of the nation, the Robert Wood Johnson Foundation (RWJF) released two site visit reports for New Mexico andVirginia. In particular the report noted that while New Mexico had taken several important steps toward implementing its exchange, the state still had many important policy decisions to make, particularly creating a governance structure and developing an outreach strategy to reach the “36 percent of New Mexicans estimated to be without internet access.” Virginia received praise from the RWJF for its “thoughtful planning and stakeholder involvement” throughout the exchange development process. And while Virginia is taking full advantage of federal funds to upgrade its Medicaid IT system, the foundation notes that the state does not have a lot of time to get it up and running. Should the state pursue a state-based exchange, an informant told RWJF, that Virginia plans to “let the vendor propose the idea and their model. We want them to bring the model to us, essentially.”

Weekly Health Policy Update: ACA Implementation Forums, SAMHSA Grants, and HHS Funding

The Role Natural Gas Can Play in Reducing U.S. and Global GHG Emissions

Earlier this month, the U.S. Energy Information Administration (“EIA”) released a report that found that energy-related carbon dioxide (“CO2”) emissions fell in the first quarter of 2012 to their lowest level since 1992. Moreover, U.S. CO2 emissions in the first quarter fell by almost 8% compared to the first quarter of 2011.

According to EIA, this significant decline is due to several factors, including abundant and affordable U.S. natural gas supplies. While there is continued debate about the amount of lifecycle emissions associated with shale gas development, the EIA report demonstrates that greater reliance on natural gas in the electricity sector is significantly contributing to decreased energy-related CO2 emissions.

EIA also released another report this month detailing U.S. energy-related CO2 emissions for 2011. The report found a 2.4% decrease in energy-related CO2 emissions in 2011.  This decline occurred in a year in which natural gas’ market share of electricity generation increased by 3% from the previous year, while coal generation’s market share declined by 6%.  EIA’s report suggests that increased natural gas production “could play a continuing role” in future decreases of CO2 emissions.

The impact of increased shale gas development is not just on U.S. CO2 emissions.  In a New York Times op-ed this week, Michael Levi, a Senior Fellow for Energy and the Environment at the Council on Foreign Relations, argued that liquefied natural gas (“LNG”) exports could contribute to reduced global CO2 emissions. Levi’s op-ed builds upon a recent report he published entitled a “A Strategy for U.S. Natural Gas Exports.” The report described some of the benefits of LNG exports, including increased reliance globally on natural gas. Specifically, Levi estimated that natural gas exports could result in “approximately 15 million tons of reduced global emissions for each billion cubic feet of daily natural gas exports.”

These reports underscore the opportunity presented by increased domestic natural gas production to not only enhance U.S. energy security but to also responsibly address climate change.

The Role Natural Gas Can Play in Reducing U.S. and Global GHG Emissions

Weekly Health Policy Update: New Rules for Electronic Funds, CCIIO Review Request, and Exchanging Planning Developments

Weekly Health Care Wrap-Up.

HHS Adopts Operating Rules for Electronic Funds Transfers

On Tuesday, Health and Human Services (HHS) Secretary Kathleen Sebelius announced the release of a new rule for making health care claim payments and adjustments electronically. The operating rules build upon industry-wide health care electronic fund transfer (EFT) standards that HHS adopted in January of this year. Together, the previously issued EFT standards and the electronic remittance advice (ERA) operating rules announced this week are projected to save between $2.7 billion and more than $9 billion in administrative costs. The compliance date for operating rules for health care electronic funds transfers and remittance advice transactions is January 1, 2014.

Third Way Enters Entitlement Reform Debate

Continuing the lead up to a likely tax and entitlement reform debate in 2013, Gabriel Horwitz and Dave Kendall of the Third Way argued this week in Politicothat Democrats need to exercise some “tough love” when it comes to entitlements and put the programs “on a diet”… and fast.  Previewing the potential link between tax and entitlement reform the authors write, “ Higher taxes provide part of the answer — but not nearly enough. In fact, the more taxes become the answer, the more likely those taxes will smack the working age middle class right between the eyes.” Read the op-ed and the recent Third Way study on entitlement spending here.

Ways and Means Republicans Request CCIIO Review

Republican leaders on the House Ways and Means Committee this week sent a letter to the Government Accountability Office (GAO) suggesting that the Center for Consumer Information and Insurance Oversight (CCIIO) office has been moved to the business unit of the Centers for Medicare and Medicaid Services (CMS) to utilize Medicare and Medicaid funding for operations. The letter requests a response from GAO by October 15. Read the letter here.

ICD-10 Delay Lands at OMB

The final rule delaying ICD-10 implementation arrived at the Office of Management and Budget (OMB) this week, suggesting its release could come any day. Earlier this year, HHS announced a proposed rule delaying ICD-10 implementation until October 1, 2014.  The proposed rule can be found here.


The National Business Group on Health released a new survey  profiling how businesses are preparing to deal with health care cost growth in the years ahead. Specifically, the surveys find employers are eyeing a variety of cost-control measures including asking workers to pay a greater portion of premiums, but also sharply boosting financial rewards to engage workers in healthy lifestyles.

A new study published in Health Affairs reports that 69 percent of doctors nationwide are accepting new Medicaid patients, but regionally, these numbers vary widely.  Read the story here.

In a perspective appearing in the New England Journal of Medicine authors Charles Roehrig, Ani Turner, Paul Hughes-Cromwick and George Miller  argue  against recent claims that health care spending has slowed as a result of the recession.  The article discusses structural changes in the health care system that have contributed to a slower spending growth rate.

The Robert Wood Johnson Foundation is out with a new study examining the potential to lower costs for diabetes patients by improving the quality of care.

From the States

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

New York.  New York submitted an 1115 waiver request to CMS this week, asking for flexibility to invest up to $10 billion in savings generated by the state’s Medicaid Redesign Team (MRT) in health system reform activities in the state.  Specifically, the waiver outlines strategies to expand access to primary care, establish health homes, prepare health care providers for integrated care and reduce readmissions.

Kansas. Kansas also submitted a formal proposal to overhaul to its Medicaid program known as KanCare to CMS.  The Medicaid 1115 waiver aims to move hundreds of thousands of Kansas Medicaid beneficiaries to Medicaid managed care plans.  Ahead of this week’s submission, Kansas submitted a concept paper on January 26 and an informal application on April 26.

Health Insurance Exchanges: State of the States update.

With the dog days of summer upon us, exchange policy developments were pretty slow this week. However, Nebraska released additional details on its exchange planning and Colorado received approval from an oversight committee to submit a Level One grant application. Let’s review what else happened:

In New Jersey, five Democratic Assemblymen and two Democratic Senators reintroduced health insurance exchange legislation (A3186/S2135) last week. The bills are very similar to legislation that passed the House and Senate earlier this year only to be vetoed by Governor Chris Christie (R) on May 10. In a prepared statement, Governor Christie explained that he was vetoing the bill because he wanted to wait for the Supreme Court’s ruling on the ACA before deciding on whether to move forward with exchange implementation. Since the Court’s ruling, Governor Christie has yet to indicate if he will move forward with an exchange. During the Q&A section of a July 13 event held by the Brookings Institution, Governor Christie said he was “mak(ing) an analysis on the exchange issue” and hopes to reach “some kind of decision by the beginning of (20)13.”‪

On Thursday, the Legislative Health Benefit Exchange Implementation Review Committee officially approved Colorado’s $43 million Level One grant application. The approval follows a Legislative Health Benefit Exchange Implementation Review Committee meeting that happened the previous week on July 31. At the meeting, Exchange staff updated legislators on the IT contract recently signed with CGI, the exchange’s financial tracking and internal controls as well as community outreach plans. Legislators raised questions surrounding the long-term financial viability of the exchange and funding sources. In response, COHBE Board Chair Gretchen Hammer said that the Exchange was examining those issues but was “not to the place where we have a full financial model created.”

Also this week, the Nebraska Department of Insurance updated the state’sproviders and brokers on its exchange planning. Though the state lacks exchange implementation legislation, the state has been planning for a state-based exchange. Under current plans, the Nebraska Exchange will operate as a division of the Nebraska Department of Insurance. The state will develop a single exchange that services the individual and small employer markets; however, the risk pools will remain separate. Also of note, the exchange will not limit the number of QHPs.  Finally, brokers will get the “red carpet” treatment from the exchange with their own web portal designed exclusively for broker use and a separate telephone number for contacting the call center. Currently, the department is preparing an RFP to procure the exchange’s IT system.

Finally, looking to next week, we could see an announcement from HHS on grant funding for the states.  The last HHS deadline for submitting grant funding applications was June 29 and next week puts us in the final stretch of HHS’s 45-day grant approval window. Stay tuned!

Weekly Health Policy Update: New Rules for Electronic Funds, CCIIO Review Request, and Exchanging Planning Developments

Weekly Health Policy Update: Agreement on Tax Provisions, 5 Hospitals to Participate in APRN Demonstration, and Federal Exchange Update

Weekly Health Care Wrap-Up.

Tax, Budget Deals Dominate Talk on Capitol Hill

Late last week, House and Senate leadership announced a tentative agreement to pass a 6-month continuing resolution (CR) to keep the government funded through the beginning of next year, avoiding a “government shutdown” debate in the midst of a presidential election.  The agreement does not take action to avert the cuts – also known as sequestration — set to take effect as part of the Budget Control Act.

Earlier this week, Senate Finance Committee Chairman Baucus (D-MT) and Ranking Member Hatch (R-UT) announced an agreement to extend a subset of certain individual and business tax provisions.  The $152 billion package addresses a host of individual, small business and energy-related tax provisions, including the alternative minimum tax (AMT) and the R&D tax credit.  A summary of provisions included in the package can be found here.  The deal does not address the 2001 and 2003 “Bush tax cuts” on wages, capital gains and dividends.  The $152 billion cost of the package is not currently offset.

While these deals help Congress sidestep several key issues on the eve of the 2012 election, they do not address the so-called “fiscal cliff,” which includes the expiring Bush-era tax cuts and sequestration. It remains uncertain if Congress will act to address these issues during the Lame Duck session or wait until 2013.

Both Sides Set Up for Health Care Cost Debate

As we approach a tax and entitlement reform debate in Washington, DC, the New England Journal of Medicine this week published dueling opinion pieces considering the best way to proceed with efforts to control health care costs.  For the Democrats, leading health policy experts, including Zeke Emanuel, Don Berwick, Peter Orszag and others, argue for state-based “global spending targets,” administrative simplification and active purchasing by exchanges, among other solutions, to reduce health care spending.  For Republicans, Joe Antos, Mark Pauly and Gail Wilensky suggest that market-based approaches such as defined contribution and Medicare premium support will engage the consumer and the market in driving more efficient health care.  Both papers can be found here and here.

CMS Announces Funding for Five Hospitals to Train Nurses

On Monday, the Centers for Medicare and Medicaid Services (CMS) announced the five hospitals that will participate in the Graduate Nurse Education Demonstration. The hospitals will be eligible for reimbursements for the clinical training of Advance Practice Registered Nurses (APRNs) during the four year term of the demonstration. Payments to the participating hospitals will be linked directly to the number of additional APRNs that the hospitals and their partnering entities are able to train as a result of their participation in the demonstration. The payment will be calculated on a per-student basis, comparing previous enrollment levels in APRN training programs with enrollment under the demonstration.


The Robert Wood Johnson Foundation is out with a new blog focused on Public Health issues.

The Congressional Budget Office (CBO) released a cost analysis of various alternatives to the Medicare Sustainable Growth Rate formula.

The Bipartisan Policy Center held an event this week on the future of health care after the Supreme Court’s decision.
An agenda and archived video 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.  This week, Governor Deval Patrick (D) signed a 340 page billinto law aimed at controlling health care spending in the state.  Among its provisions, the law sets health care spending targets, encourages a move away from fee-for-service payment and  requires a “cooling off” period before filing a medical malpractice lawsuit.

National. In a survey of state budget directors, the Government Accountability Office (GAO) finds that most states expect the Medicaid expansion to increase their costs, despite significant support from the federal government.  The survey looks at states’ expected costs related to necessary IT upgrades as well as managing increased enrollment, particularly of those previously eligible but not enrolled.  Additional information as well as a link to the study can be found here.


Health Insurance Exchanges: State of the States update.

This was another slow week in the states for exchange developments. But before we jump in, exchange planners received an update late last week on the progress of the federally facilitated exchange from Mike Hash, interim director of the Center for Consumer Information and Insurance Oversight.  According to Hash, “The federally facilitated exchange is on track, on time, to go live October 2013.” He also said that HHS is in the first round of testing the FFE. With that covered, let’s move to the states.

Connecticut moved toward formally selecting its Essential Health Benefits benchmark. Connecticut’s health insurance exchange board preliminarily voted to use the ConnectiCare HMO, the state’s largest commercial HMO, as Connecticut’s model health plan.  In all, the board selected and created a package of benefits that exceed minimum federal guidelines.  While the exchange added a few benefits that the ConnectiCare HMO does not currently cover, like prescription drug coverage, pediatric dental and vision services, the plan would also include benefits such as in-vitro fertilization treatments and special autism care. After a thirty day open comment period the board will vote on whether to formally use ConnectiCare HMO as the state’s benchmark plan. All states have until September 30 to select and submit their Essential Health Benefits to HHS.

In Michigan, hearings on health exchange legislation in the House stretched into their second week, despite repeated calls by Governor Richard Snyder (R) for swift action. At a long hearing on Tuesday, many of the groups offering testimony urged committee members to pass exchange legislation, but many committee members remained skeptical. Some legislators are concerned about the ultimate costs of running an exchange and express doubts as to whether an exchange would lead to lower health insurance costs. With the House still debating what to do with health insurance exchange, the state’s planning efforts remain limited. Last week, the head of the Department of Licensing and Regulatory Affairs asked the House for approval to use a $9.8 million exchange planning grant before it expires in November.

Yesterday was the first meeting for a working group appointed by Governor Butch Otter (R – ID) to examine Idaho’s health insurance exchange options. With a lot of ground to cover in a short time period, the working group reviewed Idaho’s current insurance market, the planning efforts of other states, ACA requirements for an exchange and the potential cost for creating an exchange. Before adjourning, the group divided up a list of fourteen questions to research for the next meeting. The group aims to meet again in late August.

On the IT end, Illinois released an RFP for its exchange IT system. In its seventy page RFP, Illinois is looking for a vendor who will design and host its IT system for both the individual and SHOP. The procurement includes a web portal, using design principles from the Enroll UX 2014 project, for individuals and SHOP users. Call center operations are not included in this procurement. Interestingly, Illinois would like the vendor to host the exchange in a datacenter located within the state. Responses are due by August 30.

Looking ahead, conservative health care experts, Joe Antos, Mark Pauly and Gail Wilensky, weigh in on the exchange front in their latest piece in the New England Journal of Medicine. In what is perhaps a signal of things to come during the 2013 tax and entitlement reform debate and potential ACA “replace” legislation, the authors emphasize both defined contribution and Medicare premium support and note a possible role for market-based health insurance exchanges saying, “Health insurance exchanges promote competition and informed consumer choice but need not have the heavy regulation imposed by the ACA that limits the types of health plans that are made available. Consumers should have the right to buy less and pay less, if they choose to do so.”

Weekly Health Policy Update: Agreement on Tax Provisions, 5 Hospitals to Participate in APRN Demonstration, and Federal Exchange Update

Department of Commerce Announces August 22 and 29 Data Privacy Meetings

The Department of Commerce’s National Telecommunications and Information Administration (NTIA) recently held its inaugural meeting to begin implementing the Obama Administration Consumer Privacy Bill of Rights.

A variety of stakeholders from industry, consumer groups, government, academia, and the technical community began work toward crafting an enforceable code of conduct around mobile applications.

While NTIA provided a facilitator, the agency has taken a hands off approach to the process and plans to convene two meetings on August 22 and August 29, 2012 to continue work toward developing a code of conduct.

The NTIA has posted the lists of discussion elements raised at the first meeting and assigned homework for the next meetings.

It’s not clear where this effort is headed but we will continue to monitor developments.

Department of Commerce Announces August 22 and 29 Data Privacy Meetings