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Fasten Your Seat Belts: Health Reform in Turbulent Times

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Fasten Your Seat Belts: Health Reform in Turbulent Times Bob Doherty SVP, Governmental Affairs and Public Policy, ACP Nevada Chapter, ACP January 9, 2013 – PowerPoint PPT presentation

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Title: Fasten Your Seat Belts: Health Reform in Turbulent Times


1
Fasten Your Seat Belts Health Reform in
Turbulent Times
  • Bob Doherty
  • SVP, Governmental Affairs and Public Policy, ACP
  • Nevada Chapter, ACP
  • January 9, 2013

2
Health reform getting from here to there
  • Here tens of millions uninsured, uneven quality,
    rising costs
  • There near universal coverage--with better
    quality at a price we can afford?
  • How smooth or rough will the journey be?

3
How we would like it to be . . .
4
What we expect it will be. . .
5
What we fear it will be . . .
6
Turbulence
  • Political environment/election
  • Affordable Care Act
  • Federal rules
  • State discretion
  • Entitlements
  • Fiscal cliff/sequestration
  • Payment/delivery system reform

7
Because of the election
  • No plausible scenario where the ACA will be
    repealed
  • State engagement/ resistance may determine the
    laws effectiveness in expanding coverage

8
2012 elections views on health care
  • Only 25 of voters favored full ACA repeal
  • Slightly more (47) favored keeping or expanding
    it over repealing all or some of the law (45)
  • It remains deeply unpopular in many
    GOP-controlled states http//www.dailykos.com/stor
    y/2012/11/06/1157266/-EXIT-POLLS-majority-do-not-r
    epeal-Obamacare
  • http//www.kaiserhealthnews.org/Daily-Reports/2012
    /November/07/exit-polls-and-the-health-law.aspx

9
The role of the states
  • Medicaid Accept/reject federal dollars
  • Exchanges Set up own exchange, partner with
    federal government, or turn it over to the feds
  • Benefits Establish benchmark for plans to be
    offered through state-exchanges or let feds
    determine
  • Enrollment help/encourage people to get coverage
    thru Medicaid or exchanges, or do nothing to help

10
Expanding Medicaid is a good deal for the states
11
Sarah Kliff, Wonkblog, Washington
Post, July 3, 2012 http//www.washingtonpost.com/
blogs/ezra-klein/wp/2012/07/03/why-hospitals-heart
-the-medicaid-expansion-in-one-chart
12
More on MedicaidFewer Deaths, Better Health
  • Medicaid expansions were associated with a
    significant reduction in adjusted all-cause
    mortality (by 19.6 deaths per 100,000 adults, for
    a relative reduction of 6.1). Mortality
    reductions were greatest among older adults,
    nonwhites, and residents of poorer counties.
  • Sommers and Baicker, Mortality and Access to Care
    after State Medicaid Expansions, NEJM, July 25,
    2012, http//www.nejm.org/doi/full/10.1056/NEJMsa1
    202099

13
ACPs Medicaid Patient Advocacy Campaign
  • Cover letter from College leadership, seeking
    100 U.S. chapter participation
  • Concise action plan with one-click links to all
    supporting materials, presentation slides,
    instructions and timetable
  • Customized state-specific reports (available
    now!) and press releases to be issued by all
    chapters
  • http//www.acponline.org/cln/medicaid_campaign.htm
  • Template and web interface to send the report to
    each states governor and legislators

14
States and health exchanges
  • State-run exchanges must meet federal standards
    by early 2013, ready to enroll by 10/1/2013
  • Deadline for submitting plan extended to 12/14
  • Some are ready to go, many are behind, some are
    opting out and letting feds run them

15
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16
Enrollment
  • States are rushing to decide whether to build
    their own health exchanges and the administration
    is readying final regulations, but a growing body
    of research suggests that most low-income
    Americans who will become eligible for subsidized
    insurance have no idea what is coming.
  • Supporters of the health-care law say the plan
    will not be a success without a massive public
    relations campaign to build awareness.
  • Many Americans Unaware of Health-care Law
    Changes, Sarah Kliff, Washington Post, November
    21, 2012, http//www.washingtonpost.com/business/e
    conomy/many-americans-unaware-of-health-care-law-c
    hanges/2012/11/20/ee02b0bc-3272-11e2-9cfa-e41bac90
    6cc9_story.html?hpidz2

17
New proposed rules
  • Defines benefits that all new individual and
    small groups must provide
  • States must select benchmark for plans offered
    through exchanges
  • About half the states have already selected the
    plan they will use as a model, meaning that
    insurers there can now start designing plans for
    sale
  • States that do not choose a benchmark plan will
    default to one selected by the federal government

18
New proposed rules
  • Instructions to insurers how to determine whether
    their plans can be sold as bronze, silver,
    gold, or platinum in state exchanges
  • The law spelled out ratios for how much money
    individuals could be asked to spend out of pocket
    in each of those categoriesbronze plans will
    have lower premiums and the highest deductibles
    and co-payments, while platinum plans will cover
    and cost more. The regulation includes a detailed
    calculator.

19
New proposed rules
  • Describes how much prices can vary according to
    patients ages and health histories
  • Hews closely to the requirements of the law.
    According to the rule, insurers can charge the
    oldest patients three times as much as the
    youngest, and no more.
  • More detailed analysis on ACP state advocacy web
    page http//www.acponline.org/advocacy/state_polic
    y/hottopics/side_by_side.pdf

20
2012 elections entitlement reform
  • Having campaigned against Medicare premium
    support and Medicaid block grants, no prospect
    that President Obama will agree to them, or that
    the Senate majority would enact them
  • But something has to be done Grand Bargain tied
    to tax reform/revenue deal? Incremental
    adjustments?

21
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22
A Beneficiary Lifetime Perspective Payroll
Contributions lt Expected Benefits 400,000
357,000
357,000
Medicare Expected Benefits, Lifetime Medicare
Payroll Taxes, Lifetime
350,000
300,000 250,000
188,000
Female
200,000
Male
170,000
150,000
119,000
100,000
60,000
60,000
50,000
0
Single, Average Wage Single, Average Wage
One-Earner Couple, One-Earner Wage Couple,
Average Wage
Two-Earner Couple, Two-Earner Couple, Average
Wage
Average
Average Wages
Source Steuerle CE and Rennane S. "Social
Security and Medicare Taxes and Benefits Over a
Lifetime. Washington, DC The Urban Institute.
June 2011.
23
Hospital Physician Sectors Accounted for
More than 70 Percent of Private Premium
Growth Over Past Five Years
2006 to 2010 Change ( Billions
120 100 80 60
3 of net change 3.1
4 of net change 4.0
9 of net change 9.5
14 of net change 15.4
26 of net change 28.0
45 of net change
108.5
97 percent of change in premiums
40
was due to growth in insurers spending for
health care services
48.3
20 0
Hospital Care
Physician Clinical Services
Prescription Drugs DME
Dental Other Professional
Home Health Other LTC
Net Cost of Health Insurance
Total Change in Premiums
Services
Facilities Services
2006-2010
20.3
13.2
14.5
14.3
20.5
3.1
14.7
Change
Source NIHCM Foundation analysis of data from
the National Health Expenditure Accounts.
24
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27
2011 Debt Limit Crisis Timeline of Events
28
2011 Debt Limit Crisis Led to Sequestration Threat
Updated 1/3/13
Budget Control Act of 2011
Because Super Committee failed to reduce the
deficit, U.S. faces threat of sequestration.
Congress postponed the sequester for two months
in legislation passed to address the fiscal
cliff. Absent further negotiation, automatic
spending cuts will take effect in March.
29
Senate Passed Fiscal Cliff Deal with Bipartisan
Support
Senate Votes For and Against American Taxpayer
Relief Act of 2012 by Party
51 votes needed for passage
47
40
Totals Yes 89 No 8 N/A 3
2
3
5
3
  • Quick Takes
  • 90 of voting Dems, 88 of voting Republicans,
    and all Independents voted in favor of the
    American Taxpayer Relief Act of 2012
  • Tea party had far less splintering effect among
    Senate than House Republicans, with only three
    tea party Senators voting against the bill Marco
    Rubio (R-FL), Mike Lee (R-UT), and Rand Paul
    (R-KY)

30
Most House Republicans Voted Against Fiscal Cliff
Deal
House Votes For and Against American Taxpayer
Relief Act of 2012 by Party
217 votes needed for passage
85
11
172
151
Totals Yes 257 No 167 N/A 11
16
  • Quick Takes
  • 64 of voting House Republicans voted against the
    American Taxpayer Relief Act of 2012
  • Divisions in party leadership on important votes
    are rare, but House Majority Leader Eric Cantor
    (R-VA) and House Majority Whip Kevin McCarthy
    (R-CA) voted against the bill, splitting from
    House Speaker John Boehner (R-OH) and signifying
    a possible ideological split within the
    Republican party
  • House Tea Party Caucus members accounted for 50
    of the GOPs 151 votes against the fiscal cliff
    deal (33)

31
Fiscal Cliff Deal At a Glance
Updated Jan. 2, 2013

Policy Area Negotiable Legislation Fiscal Cliff Deal
Taxes Income Taxes Raises tax rates on individuals/households earning 400k/450k or more Makes Bush-era tax cuts permanent for all other taxpayers
Taxes Capital Gains and Dividends Taxes Raises tax rates from 15 to 20 for individuals/households earning 400k/450k or more Keeps tax rates at 15 for all other taxpayers
Taxes Estate Taxes Raises estate tax from 35 to 40, with first 5M in assets exempted
Taxes Personal Exemptions Phases out personal exemptions for individuals making over 250k and limits itemized deductions for individuals/households earning 250k/300k
Taxes Alternative Minimum Tax (AMT) Permanently indexes AMT to inflation
Taxes Tax Breaks Extends American Opportunity Tax Credit, Child Tax Credit, and Earned Income Tax Credit for five years Preserves extenders, business tax breaks for research and development
Taxes Payroll Tax Holiday Allows temporary 2 payroll tax cut to expire
Spending Sequester Delays automatic spending cuts for two months
Spending Unemployment Benefits Extends unemployment insurance for one year
Other Pay Cuts for Physicians (a.k.a. Doc Fix) Puts off scheduled cuts in Medicare payments to physicians for one year
Other Farm Bill Extension Extends certain portions of the Farm Bill for 9 months
Other Congressional Pay Freeze Freezes congressional pay for the remainder of 2013
32
Fiscal cliff deal impact on physicians
  • No 27 Medicare pay cut (through 2013)
  • Does not advance permanent SGR reform
  • Paid for by cuts in disproportionate share
    payments to hospitals, Medicare Advantage,
    ambulance services, other non-physician providers
  • Reduces physician practice expense payments for
    advanced imaging

33
Fiscal cliff deal impact on physicians
  • Does NOT cancel Medicaid primary care increases
    to offset cost of blocking SGR cut
  • Directs HHS to improve advanced clinical data
    registries to clarify data tracking, reporting
    and transparency and implement quality
    improvements for services paid under SGR
  • Sequestration, postponed only until March, could
    result in cuts in critically important health
    programs

34
Non-Defense Cuts Focus Heavily on Medicare,
Medicaid
Non-Defense Cuts Health Care
Estimated Department of Health and Human Services
Cuts from Sequestration for FY2013
35
HHS Reductions Would Lead to Private Sector Strain
Non-Defense Health Care
Sequestrations Financial Impact on Public and
Private Sector Health Stakeholders
Less government spending means reduced spend on
health industry
HHS Reductions
Personnel reductions Reduced research on cancer and childhood diseases Reduction in services and nutrition assistance for women and children Reduced investment and grants dedicated to research projects Reduced funding for Affordable Care Act implementation
Private Sector Impacts
Hospitals Medical research institutions Nursing and residential care facilities Physicians and independent care contractors Outpatient care facilities Insurance carriers Pharmacies and health care equipment retailers
36
Another Debt-Ceiling Crisis Looms
Updated 1/3/13
  • Current Debt Ceiling Reached in December

(May 2012 Dec. 2012)
The U.S. hit the debt ceiling of 16.4T on
December 31, 2012. The Treasury has begun to
take extraordinary measures to keep the
government running until February or mid-March.
16.8
.
Debt in Trillions
16.0
.
15.2
37
2012 Debt Limit Crisis Could Lead to Default
Updated 1/3/13
February 2013
March 2013
Congress Negotiates Congress debates how to
reduce the national debt and whether to raise the
debt ceiling
Possible Default on U.S. Debt Obligations Failure
to reach a debt reduction deal or raise the debt
ceiling could cause the U.S. to default on debt
obligations, throwing financial markets into a
tailspin
38
Potential risks to ACP priorities
  • Result in budget offsets contrary to ACP policy
    and/or damaging to some members
  • Repeal rule to increase Medicaid primary care
    payments
  • GME/IME payments
  • Over-valued procedures
  • Lower non-primary care conversion factor
  • Restrictions on in-office ancillary services
  • Cuts in discretionary dollars (workforce, AHRQ),
    reductions in ACAs coverage subsidies

39
ACP advocacy
  • Opposes across-the-board sequestration
  • Identified ways to achieve hundreds of billions
    in savings in a responsible way (high value care,
    medical liability reform, payment/delivery system
    reforms, tax treatment of benefits)
  • Proposed plan to transition from SGR to better
    models aligned with value to patients

40
Future of SGR and FFS
  • Policymakers across the spectrum want to get rid
    of the SGR (but cant agree on how to pay for
    it)
  • And move away from volume to value
  • But FFS will be a component of value-based
    payments, even as FFS itself will change

41
New approaches
  • ACOs
  • Episode-of-care bundles (new rule expected soon)
  • Risk-adjusted global capitation
  • PCMH and PCMH-N practices

42
What is ACP doing to reform payment/delivery
systems?
  • Its not just about new payment modelsACP
    advocacy has resulted in big wins for internists
    on improving Medicare and Medicaid fee-for-service

43
New CMS rules big wins for IM!
  • New CPT codes 99495-99496 Medicare will pay
    physicians for transitional care management
    services, the non-face-to-face time they and
    their clinical staff spend on patient cases.
    Until now, only the face-to-face reimbursed
  • National pay of 164-231, depending on whether a
    patient is seen within 7 or 14 days of discharge,
    prior to geographic adjustment
  • Combined with other changes in the Medicare fee
    schedule, total 2013 gain for IM of 4-5 in total
    Medicare payments FPs average gain higher only
    because mix of services different)
  • These gains are on top of ACAs 10 Medicare
    primary care bonus (Average of 8000 more each
    year for qualified internists, 2011-15)

44
New CMS rules big wins for IM!
  • Medicaid pay parity rule, effective 2013-2014
    increases payments for evaluation and management
    and vaccine services to no less than Medicare
    rates, paid fully by federal government
  • CMS agreed with ACP that increases should apply
    to both primary care internists and IM
    subspecialists
  • Applies to EM codes 99201 through 99499 to the
    extent that those codes are covered by the
    approved Medicaid state plan or included in a
    managed care contract
  • Also, applies to services not covered by
    Medicare New and Established Patient Preventive
    Medicine Counseling Risk Factor Reduction and
    Behavior Change Intervention and Consultations

45
Medicare to Medicaid fee ratios, by state
lt.60 (8 states . 61 -.75 (14 states
.76-.85 (16 states and DC)
.86-1.00 (8 states) gt1.00(3 states)
How Much Will Medicaid Physician Fees for Primary
Care Rise in 2013? Evidence from a 2012 Survey of
Medicaid Physician Fees, Kaiser Family
Foundation, December 2012 ORG
46
ACP go to resource for members to prepare for
changes
  • Practical guides
  • Social media
  • Policy summaries
  • Advocate newsletter
  • Coming soon timeline of pending changes
    (regulation, payment, MOC) and promotion of
    resources from ACP

47
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52
Summary
  • 2012 election the ACA is here to stay, only a
    minority of voters favor full repeal, but
    electorate remains divided, and law remains
    deeply unpopular in some states
  • States are the new battleground decisions on
    Medicaid and exchanges may determine how
    effective the ACA is in covering uninsured

53
Summary
  • Fiscal cliff avertedfor now
  • Coming up new battles on spending and revenue
  • Entitlement reform will (must) happenbut how and
    when? Cuts in GME, other ACP priorities?

54
Summary
  • Payment and delivery system reforms will
    accelerate, standing still is not an option
  • Even as new models are developed, FFS continues
    to be part of the equation

55
Summary
  • ACP advocacy design new models that recognize
    value of internists services (PCMH) and improve
    FFS payments
  • ACP advocacy is paying off big wins for
    internists in Medicare and Medicaid pay

56
The destination
  • A nationwide program is needed to assure access
    to health care for all Americans, and we
    recommend that developing such a program be
    adopted as a policy goal for the nation. The
    College believes that health insurance coverage
    for all persons is needed to minimize financial
    barriers and assure access to appropriate health
    care services.
  • Ginsburg, et al, American College of Physicians,
    Position Paper, Annals of Internal Medicine, May
    1, 1990 www.annals.org/search?fulltextACPunivers
    alhealthinsurancesubmityesx15y9

57
Why does it matter? Because being uninsured is a
matter of life and death
Year Number of deaths due to uninsurance
2000 20,000
2001 21,000
2002 23,000
2003 24,000
2004 24,000
2005 25,000
2006 27,000
Total 165,000
Percent uninsured within age group
Age
U.S. population (millions)
Total deaths

Uninsured excess deaths
).
2001 2002 2003 2004 2005 2006 Total
2000
21,000 23,00
Dorn, Uninsured and Dying Because of It
Updating the Institute of Medicine Analysis on
the Impact of Uninsurance on Mortality, Urban
Institute, 2008
3
Dorn, Uninsured and Dying Because of It
Updating the Institute of Medicine Analysis on
the Impact of Uninsurance on Mortality, Urban
Institute, 2008
58
  • Elaine Dickinson (flight attendant) There's no
    reason to become alarmed, and we hope you'll
    enjoy the rest of your flight. By the way, is
    there anyone on board who knows how to fly a
    plane?
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