Kaiser Daily Health Policy Report
Host of Medicare+Choice Plans to Raise Premiums in 2002, Withdraw From Markets
Workers Offered Flexible Spending Accounts
More Than 400 Pharmacies Sign On to West Virginia's Prescription Drug Discount Program
Florida Medicaid Agency Lax in Punishing and Deterring Fraud, Report Finds
Task Force Finds Massachusetts Medicaid Reimbursements Low
Colorado Lawmakers Debate Funding For Cancer Treatment
California Nursing Home Advocates Question Revamped Bill That Would Alter Medicaid Reimbursement for Long Term Care
HHS Names Regional Representative for Western States
Capitol Hill Watch
Despite New Focus on Anti-Terrorism, Disaster Relief Efforts, Congress May 'Tackle' Some Health Issues
[Sep 18, 2001]
Despite last week's terrorist attacks, several lawmakers have indicated that Congress intends to press on with domestic issues, including health care, the Binghamton Press & Sun-Bulletin reports (Heath, Binghamton Press & Sun-Bulletin, 9/18). Still, health aides and lobbyists believe that the only measures likely to prevail by the end of the year are those with "broad, bipartisan support," while debate on more contentious issues, such as a patients' bill of rights and Medicare reform, is "likely to be postponed," Bloomberg reports. Those measures with greater chances of passing include the allocating $28 billion over three years to reduce the number of the uninsured through tax credits and CHIP and Medicaid expansions; increasing Medicare reimbursement rates for rural hospitals; giving the Centers for Medicare and Medicaid Services greater discretion in choosing Medicare contractors; and allowing for the reimportation of U.S.-made prescription drugs (Hallam/Dixon, Bloomberg, 9/17). Congress last week set aside $40 billion for counter-terrorism programs and rebuilding lower Manhattan; with more spending in this area expected, other priorities will face increased budget pressures. Still, Rep. Maurice Hinchey (D-N.Y.) said, "You can't just sweep everything off the agenda. To say that we can just ignore the needs of our elderly or ignore the need for improved health care is, I think, irresponsible" (Binghamton Press & Sun-Bulletin, 9/18). 'Thanks for Playing'
Enacting patients' rights legislation and a Medicare prescription drug benefit will still prove difficult, however, given the controversial nature of the issues and both parties' desire to show unanimity in the wake of last week's attacks. Christin Tinsworth, a spokesperson for the House Ways and Means Committee, said that the panel has postponed introducing a Medicare drug benefit bill -- which is estimated to cost up to $300 billion over ten years -- "until next month at the earliest." Jeff Myers, a lobbyist for Pharmacia Corp., said, "I went to dinner with some health staffers last night, and the general consensus was that we're done, thank you for playing. [A drug benefit] was in trouble to begin with." Similarly, it is uncertain the House and Senate will have time to reach a compromise on the patients' rights bills that each passed earlier this summer. "Anything that's going to move with any speed has to be bipartisan," Tinsworth said (Bloomberg, 9/17).
Health Care Marketplace
Host of Medicare+Choice Plans to Raise Premiums in 2002, Withdraw From Markets
[Sep 18, 2001]
The Centers for Medicare and Medicaid Services had set a Sept. 17 deadline for HMOs that participate in Medicare+Choice to announce whether they will cover beneficiaries in certain markets next year and submit for approval rate modifications, benefit structures and marketing materials for 2002. While CMS will announce a comprehensive analysis of the changes in the future, a summary of announcements from Medicare HMOs in several states appears below. - Connecticut: ConnectiCare and MedSpan Health Options plan to drop Medicare+Choice plans in the state next year, which would affect about 39,000 seniors. ConnectiCare has about 24,734 Medicare+Choice members, including 14,410 in Hartford County, and MedSpan has about 14,000 members statewide. In New Haven County, Oxford Health Plans, which serves about 900 seniors, will offer a Medicare+Choice plan next year (Levick, Hartford Courant, 9/18).
- Florida: AvMed Health Plan will drop Medicare+Choice in six Florida counties, while Humana will continue to offer coverage in all its Florida markets, but will likely levy "significant" rate increases and benefit reductions. Blue Cross and Blue Shield of Florida, however, plans to exit seven state counties next year, leaving 39,000 seniors without coverage (Skidmore, Florida Times-Union, 9/18). United Healthcare plans to withdraw from Broward County, which would affect 3,442 seniors, and Palm Beach County, which would affect 3,317. Beacon Health Plan intends to drop Medicare+Choice plans in Palm Beach County, which would affect 3,576 seniors, and Broward County, which would affect 523 (LaMendola, South Florida Sun-Sentinel, 9/18).
- Massachusetts: Tufts Health Plan, which serves 105,000 seniors statewide, announced increased monthly premiums -- $25 to $67 more per month -- for members in its Medicare+Choice plan. Tufts also plans to increase co-payments for some generic drugs. Blue Cross and Blue Shield of Massachusetts, which serves 35,000 seniors, plans to boost monthly premiums $20 to $40 per month. In addition, the insurer plans to add a $50 per day charge up to $250 for hospital stays and a $25 per day charge for stays in skilled nursing facilities. In Essex, Middlesex, Norfolk and Suffolk counties, Harvard Pilgrim Health Care Inc. plans to increase monthly premiums from $35 to $60 for the insurer's 38,000 Medicare+Choice members (Heldt Powell, Boston Herald, 9/18).
Workers Offered Flexible Spending Accounts
[Sep 18, 2001]
This fall, many companies will allow their employees to enroll in flexible spending accounts to cover some of their health care costs next year, the AP/Detroit News reports. With the accounts, workers are permitted to direct part of their pre-tax salary to an account to cover "legitimate" health care expenses that are not covered by insurance or an employer, such as prescription drug copayments, eye glasses, orthodontic work and psychiatric care. Money in the accounts also can be used to pay for the care of a disabled spouse or aging parents if they are considered dependents for tax purposes, the AP/News reports. Typically, employees may "set aside" $1,000 to $2,000 each year, but some companies allow accounts of up to $5,000. However, funds that are not used by the end of the year are forfeited, Gary Kushner, head of Kushner & Co., an employee benefits consulting firm, said. "People need to be a bit conservative in deciding how much to set aside, because if they don't use it, the money reverts at the end of the year to the plan," Kushner added. More than 90% of Fortune 500 companies offer flexible spending accounts, and between 25% to 40% of smaller companies have the benefit (Powell, AP/Detroit News, 9/18).
Prescription Drugs
More Than 400 Pharmacies Sign On to West Virginia's Prescription Drug Discount Program
[Sep 18, 2001]
West Virginia Gov. Bob Wise (D) announced on Sept. 17 that 420 pharmacies have agreed to participate in the state's new prescription drug discount program for residents over age 60, the Associated Press reports. Seniors with the Golden Mountaineer Discount Card will receive varying discounts based on the type of drug purchased and pharmacy costs. "It may be a dollar on this drug, or two dollars on another drug. It just depends on the pharmacy," Wise spokesperson Amy Goodwin said of the potential savings. The discount card was first created in 1980 but has not been "generally accepted" for prescription drugs. The revamped program expands on the state's Senior Prescription Assistance Network II, a program designed to provide seniors with prescription drug discounts similar to those negotiated by the Public Employees Insurance Agency. Irving-Texas-based AdvancePCS will administer the program. About 400,000 cards will be mailed to residents this week, and the state Bureau of Senior Services will work to enroll additional pharmacies in the program. "For the first time, we have been able to negotiate a pharmacy discount for every senior citizen in the state," Wise said (Associated Press, 9/17).
Medicaid
Florida Medicaid Agency Lax in Punishing and Deterring Fraud, Report Finds
[Sep 18, 2001]
The agency that runs Florida's Medicaid program has not adequately recovered money lost to fraud and "rarely punishes violators," according to a legislative report released on Sept. 13. The Tallahassee Democrat reports that the Florida Legislature's Office of Program Policy Analysis and Government Accountability (OPPAGA) analyzed how the state Agency for Health Care Administration has handled Medicaid fraud and abuse over the past six years. The report -- the first of four that OPPAGA is conducting on AHCA's Medicaid practices -- concluded that the agency: - Recovered only $96.7 million of the estimated $2.1 billion to $4.3 billion "lost to fraud and abuse over the past six years."
- Imposed fines in less than 10% of cases where providers were determined to have overbilled the state. In most of these instances, the offenders simply had to repay the excessive funds and were not "dissuaded from repeating abusive behavior," according to the report. Also, in only 4.5% of roughly 7,600 cases of overpayments were companies fined.
- Has used "imprecise" methods to identify cases of fraud; in a three-year period, "the agency opened 6,420 cases of possible fraud or abuse and found problems in only 43% of them." The Democrat reports that while AHCA officials said this figure "showed an efficient use of staff, OPPAGA noted that investigators spent about the same amount of time on each case."
AHCA officials concurred that the agency needs to heighten its accountability of fraudulent providers and companies, but disagreed with the report's conclusion that they were "ignoring violators." AHCA spokesperson Bruce Congleston said, "We believe our focus has been more to prevention, to move the abusive and fraudulent providers out of the system." Florida's Medicaid program faces a $1.5 billion deficit this year, and analysts believe that the state "loses between 5% and 10% of its Medicaid budget" to improper reimbursements (Twiddy, Tallahassee Democrat, 9/14). The full OPPAGA report is available online.
Task Force Finds Massachusetts Medicaid Reimbursements Low
[Sep 18, 2001]
According to a report presented Sept. 17 to the Governor's Blue Ribbon Task Force, Massachusetts' Medicaid payments to hospitals should be increased "now," the Boston Herald reports. Currently, the state reimburses Medicaid services at a rate of 71 cents on the dollar. However, the report found that an inflation-based increase alone would raise reimbursements to 80 cents on the dollar. In addition to increasing reimbursements, the report recommended that the state investigate ways reduce the cost of health care. For example, the state could save money by shifting services from teaching hospitals to lower-cost community hospitals, health centers and nursing homes. Also, the report advocated the creation on an independent commission to "monitor" the finances of the health care industry. While the commission would not have "regulatory authority," it would remain separate from other regulatory agencies, the Herald reports. Hospital leaders "hailed" the study and said the findings support other reports that found the state's Medicaid reimbursements to be "low" (Powell, Boston Herald, 9/18).
Colorado Lawmakers Debate Funding For Cancer Treatment
[Sep 18, 2001]
To determine how to fund cancer treatments for uninsured women under the Breast and Cervical Cancer Act of 2000, Colorado's Legislature will hold a special session on Sept. 20, the Denver Post reports. While the federal government will pay about $67 for every $33 raised by the state for treatment, state lawmakers are "deeply divided" on how to appropriate funds for the program, which has "broad-based public support" (Martinez, Denver Post, 9/18). Under the law, the government will cover the costs of any surgery, radiation, chemotherapy, follow-up care and medication for patients whose disease is identified through a free screening program operated by the CDC. Uninsured patients with incomes up to 250% of the federal poverty level will be eligible for treatment for the two cancers through Medicaid (Kaiser Daily Health Policy Report, 1/5). Use Tobacco Settlement Funds...
Gov. Bill Owens (R) has proposed using funds from the tobacco settlement, but his plan has been criticized for "unfairly pitting treatment against prevention." The state's tobacco fund receives up to $15 million annually from a national settlement. Payments are tied to tobacco sales and could be reduced if sales decrease. Last year the state received $11.5 million in tobacco settlement funds. Owens spokesperson Dick Wadhams said "unspent" tobacco settlement funds would provide "steady and consistent funding" for cancer treatment. Antitobbaco activists, however, are opposed to the plan. Janet Fox Stephens, legislative liaison for the Colorado Tobacco Education and Prevention Alliance, said, "We feel the money should stay in the tobacco prevention, education and cessation fund." or General Revenue?
To fund the treatment programs, state Rep. Gayle Berry (R) and state Sen. Peggy Reeves (D) have proposed using "unspent taxpayer money," which normally is "recycled" into the budget for the following year. This year, there is about $10 million left over and the proposal would appropriate $610,000 of that in the first year. The amount would then be "slowly increase[d]" in the following years. In calling Owen's plan "fiscally irresponsible," Berry said, "I have concern with funding a Medicaid entitlement out of a limited cash fund, which is what the tobacco settlement fund is. We want to make the case that our approach is more fiscally responsible" (Denver Post, 9/18).
State Watch
California Nursing Home Advocates Question Revamped Bill That Would Alter Medicaid Reimbursement for Long Term Care
[Sep 18, 2001]
A nursing home bill (AB 1075) that would "radically change the way California pays for long-term care through Medi-Cal," the state's Medicaid program, and that passed the state Legislature last week, has received criticism from various senior groups and nursing home advocates, the Contra Costa Times reports. The original bill, sponsored by state Assembly Majority Leader Kevin Shelley (D), would have changed the way the state requires nursing homes to account for staff hours and called for a five-to-one patient-to-staff member ratio during the day. But late last week, legislators approved amendments that would require California by Aug. 1, 2004, to "revamp its reimbursement system" by determining an individual rate for each of the state's 1,200 nursing homes. Currently, Medi-Cal reimburses nursing homes an average of $125 per patient per day. The amendments also would put a yet-to-be-determined staff-patient ratio in place by Aug. 1, 2003. Lisa Hubbard, a spokesperson for the Service Employees International Union, the leading proponent of the revised bill, said that "even an unspecific ratio represents an improvement." She added, "We wanted ratios and we got them." But Eric Carlson, a National Senior Citizen Law Center staff attorney, said, "This is not the kind of thing you do with two days left in the Legislature." Pat McGinnes, executive director of California Advocates for Nursing Home Reform, added, "This isn't the bill that we supported. I am concerned very much about the lack of specifics" in the reimbursement provisions. Both McGinnes' group and the law center have withdrawn their support of the bill in letters to Gov. Gray Davis (D). The revised measure now awaits action from Davis, who "has no position on the bill" and has until Oct. 14 to act on it (Peele, Contra Costa Times, 9/18).
People
HHS Names Regional Representative for Western States
[Sep 18, 2001]
HHS Secretary Tommy Thompson on Sept. 17 announced the appointment of AltaMed Health Services Vice President Josh Valdez as the "direct representative" for Region IX, which covers Arizona, California, Hawaii and Nevada, as well as Guam, the Trust Territory of the Pacific Islands and the American Samoa. Valdez, who today will assume responsibility for "guidance and coordination of HHS policies in the region," previously served as a health services administrator in the United States Air Force (HHS release, 9/17).
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