Post-Acute Care Subject of New House Legislation

Payment and policy for post-acute care have long been topics of interest to policymakers on Capitol Hill.  Furthering this discussion, Representative David McKinley (R-WV) introduced H.R. 4673, the Bundling and Coordinating Post-Acute Care Act of 2014 (also known as BACPAC) on May 19, 2014.  H.R. 4673 was referred to the Committee on Ways and Means, and the Committee on Energy and Commerce.

Click here to view a summary of the Bill by District Policy Group President, Ilisa Halpern Paul.

Click here to visit the Library of Congress page for the legislation.

Senate Confirms Burwell

Earlier today the Senate voted 78-17 in Executive Session to confirm the nomination of Ms. Sylvia Mathews Burwell to be the new Secretary of The Department of Health and Human Services (HHS). Ms. Burwell was most recently the head of President Obama’s Office of Management and Budget before being nominated for her new role. Ms. Burwell takes the helm of HSS from the former Secretary Kathleen Sebelius. A native of Hinton, West Virginia—a town of roughly 3,000, Ms. Burwell held the position of Deputy Chief of Staff working with Erskine Bowles in President Bill Clinton’s second administration. Ms. Burwell becomes the 22nd Secretary of HHS, an agency of over 70,000 federal employees across a number of important departments: the Food and Drug Administration (FDA); the National Institutes of Health (NIH); the Health Resources and Services Administration (HRSA); the Centers for Disease Control and Prevention (CDC); and the Administration on Aging among others. The largest portion of the agency’s near trillion dollar annual budget is dedicated to funding the Centers for Medicare and Medicaid Services (CMS) charged with running the Medicare and Medicaid programs nationwide.

Sebelius Resigns and Burwell Nominated for Secretary of HHS

The Administration made a major announcement at the end of last week: Secretary of the Department of Health and Human Services (HHS), Kathleen Sebelius, will be stepping down. Sebelius’ legacy will certainly be tied to the rocky implementation of the Affordable Care Act. After months of issues with the website, Sebelius’ announcement comes soon after a positive milestone with the enrollment period coming to an end and 7.5 million people signed up.

The President is nominating Office of Management and Budget (OMB) Director Sylvia Mathews Burwell to replace Sebelius. Burwell has significant experience, having held several positions in the Clinton administration. Burwell was unanimously confirmed by the Senate to head the OMB a year ago but it can only be assumed that the confirmation hearings this time around will be more contentious and may be more about the Affordable Care Act than Burwell herself.

According to Politico, “Burwell will undergo hearings in both the Finance Committee and the Health, Education, Labor and Pensions committee, though the confirmation vote will be held in Finance. A committee aide said the panel’s chairman, Sen. Ron Wyden (D-OR), plans to schedule a hearing soon after it receives Burwell’s nomination materials. A committee vote seems likely in early May.  Her nomination will probably face a full floor confirmation vote in late May or early June, since the Senate isn’t likely to shuffle its immediate schedule for her confirmation. White House press secretary Jay Carney said Friday he is anticipating a “May transition” for Burwell to HHS.”  http://www.politico.com/story/2014/04/sylvia-mathews-burwell-democrats-obamacare-affordable-care-act-105641.html#ixzz2yrbqCwv1

For more on Sebelius’ retirement from HHS and Burwell’s nomination see below:

Burwell Bio: http://www.whitehouse.gov/omb/organization_office

http://www.nytimes.com/2014/04/12/us/politics/obama-burwell-health-nomination.html?hpw&rref=us&_r=1&gwh=C7B635C56815C18258AC766106F0D155&gwt=regi&assetType=nyt_now

http://www.politico.com/story/2014/04/kathleen-sebelius-department-of-health-and-human-services-obamacare-affordable-care-act-105647.html

http://www.bloomberg.com/news/2014-04-13/burwell-hhs-hearings-give-republicans-obamacare-opening.html

Health Care on the Hill: March 2014

Senate Committee on Health, Education, Labor, and Pensions – Subcommittee on Primary Health and Aging

“Access and Cost: What the US Health Care System Can Learn from Other Countries”

March 11, 2014 – 10:00am

430 Dirksen Senate Office Building

House Committee on Ways and Means – Full Committee

“Hearing on the President’s Fiscal Year 2015 Budget Proposal with U.S. Department of Health and Human Services Secretary Kathleen Sebelius”

March 12, 2014 – 10:00am

1100 Longworth House Office Building

Senate Committee on Health, Education, Labor, and Pensions – Full Committee Hearing

“Protecting the Public Health: Examining FDA’s Initiatives and Priorities”

March 13, 2014 – 10:00am

430 Dirksen Senate Office Building

House Committee on Appropriations, Subcommittee on Labor, Health and Human Services, Education, and Related Agencies

“Hearing on the Department of Health and Human Services”

March 13, 2014 – 10:00am

2358-C Rayburn House Office Building

House Committee on Energy and Commerce – Subcommittee on Commerce, Manufacturing, and Trade

“Improving Sports Safety: A Multifaceted Approach”

March 13, 2014 – 10:15am

2322 Rayburn House Office Building

Dewonkify – Risk Corridors

The Patient Protection and Affordable Care Act –commonly referred to as “the ACA”—is a law that reformed nearly twenty-percent of the economy through modifications to regulations and changes to existing law. Its primary goals were to expand health care coverage and control rising costs. Among a number of reforms, the ACA mandated that all citizens have health insurance for a minimum of nine months of the year (or face a penalty); allowed children to remain on their parents plan until the age of 26; created health insurance market places where anyone can shop for health insurance; and banned insurance companies from denying coverage on the basis of pre-existing conditions.

Word: Risk Corridors

Used in a sentence:Risk corridors, a provision of the ACA, limits both the amount of money that a health-insurance plan can make and lose during the first three years it is sold on the new health-care exchanges. Related programs that mitigate risk for insurance companies are also being targeted by conservative Republicans.” –Rep. Tom Cole quoted in The Washington Post.

Definition: Risk corridors are a component of the ACA that limit the risk borne by qualified health plans on the insurance marketplaces. Risk Corridors are a mechanism to minimize the year-end losses of insurers who covered a disproportionate share of sicker, often older, insured customers. The federal government, through the Department of Health and Human Services, agrees to cover 50% of the excess costs borne by insurers if those costs exceeded premiums by 3-8%. In the event those losses amount to greater than 8%, the government will defray 80% of those losses. However, if insurance companies see similar gains then the situation is reversed and the federal government is the beneficiary of those excess funds. This is the risk adjustment portion of the ACA where “healthier” insurance companies help ones shouldering more expensive populations.

History: Ideally, insurance is a system whereby a company manages risk by distributing moneys from a sizeable portion of healthy participants—needing minimal to moderate medical services—to a much smaller portion of sicker participants that need a lot more medical services. This results in a margin or profit where premiums exceed the medical costs of the consumers participating in a given plan. This is a simplified way of explaining what actuaries do every year. They take consumers in a given plan and compare their likelihood to use medical services with the expected revenues from monthly insurance premiums and other out-of-pocket costs like yearly deductibles. However, the advent of the ACA brought on this new frontier of health insurance marketplaces where no one could be denied care due to pre-existing conditions: previous surgery, diabetes, HIV, cancers, benign tumors, hypertension, etc.

Although, risk was managed by mandating that everyone be covered, this did not completely allay the fears of private insurers. Actuaries remained nervous. Anyone from the individual market—usually those not eligible for Medicaid/Medicare or employer sponsored coverage—could enter the exchanges and purchase insurance coverage. This uncertainty could have resulted in excessive premiums to consumers. To mitigate that risk and help with the possibility that consumers would be sicker and older—and thus more likely to use many costly medical procedures—the authors of the law created risk corridors. This would be a temporary program to help insurers on the insurance market places for three years.

 

Health Care on the Hill – Upcoming Events

December 4, 2013; 3:00pm
“Adjudicating VA’s Most Complex Disability Claims: Ensuring Quality, Accuracy, and Consistency on Complicated Issues”
House Committee on Veterans’ Affairs, Subcommittee on Disability Assistance and Memorial Affairs (DAMA)
334 Cannon House Office Building

December 11, 2013; 2:15pm
“Protecting Seniors from Medication Labeling Mistakes”
Senate Special Committee on Aging
562 Dirksen Senate Office Building

December 12, 2013; 10:00am
“Open Executive Session to Consider an Original Bill to Repeal the Sustainable Growth Rate System and to Consider Health Care Extenders”
Senate Committee on Finance
215 Dirksen Senate Office Building

December 18, 2013; 2:15pm
“The Future of Long-Term Care Policy: Continuing the Conversation”
Senate Special Committee on Aging
562 Dirksen Senate Office Building

Dewonkify – Medicare Part D

Medicare is a federal program that provides health insurance coverage for people who are age 65 or older.  Individuals younger than 65 may qualify if they have certain disabilities or have End-Stage Renal Disease (ESRD).  Medicare is comprised of four parts—Parts A, B, C, and D.  Over the past few weeks, Capitol Health Record has dewonkified each of the four parts.

Definition:  Medicare Part D is a voluntary benefit that provides outpatient prescription drug coverage to beneficiaries.  The Part D benefit is operated through private plans; beneficiaries have the option of choosing either prescription drug coverage as part of their Medicare Advantage plan (more information is available here) or as a stand-alone prescription drug plan (PDP) which can be purchased in addition to traditional Medicare (Part A and Part B).

Used in a Sentence: “The Medicare Part D benefit provides seniors a way to afford their medications when they do not have other affordable drug coverage options.”

History:  The Medicare prescription drug benefit was added to Medicare as part of the Medicare Modernization Act of 2003 (MMA).  Prior to the passage of the MMA, many Medicare beneficiaries lacked access to prescription drug coverage.

When it was enacted, the standard benefit structure was as follows:  the beneficiary paid a deductible.  Once the deductible was met, the beneficiary paid 25 percent of the costs of his/her drugs and the plan paid the other 75 percent of the costs, up to the initial coverage limit (which, in 2010, was $2830 in total drug costs).  At this point, the plan stopped covering the costs of the beneficiary’s drugs (otherwise known as the “doughnut hole” or “coverage gap”) until the beneficiary’s drug costs exceeded the catastrophic coverage limit (which was $6440 in total drug costs in 2010).  At this point, the beneficiary would pay 5 percent, the plan would pay 15 percent, and Medicare would pay 80 percent of the costs for medications.  This unusual benefit design was meant to provide some drug coverage for all beneficiaries.

Many beneficiaries were very frustrated with the gap in coverage (doughnut hole).  The Affordable Care Act (“ACA”) contained provisions to incrementally address the gap in coverage, and by the year 2020, beneficiaries will no longer experience such a gap.  More information about the doughnut hole and the ACA provisions is available here.

More information about the 2014 Medicare Part D program is available here.  An overview of the Medicare Part D payment system is available here.

When the benefit first launched in 2005, the then-Bush Administration encountered some initial issues related to the launch of the website and enrollment.  While much different in scope, some politicians have compared problems with the launch of the Part D program to the problems currently being experienced with the ACA rollout (more information is available here).

Premiums:  Medicare Part D premiums vary depending on the beneficiary’s plan choice and geography.  Some plans, called “enhanced plans” provide greater coverage for prescription drugs, but usually have a higher premium.  In 2014, the standard average Medicare Part D monthly premium is estimated to be $31.

Like Medicare Part B, individuals who lack prescription drug coverage either through a former employer, Medicaid, or some other source, will face a late enrollment penalty if they delay signing up for Part D.  (More information on the Part D late enrollment penalty is available here.)

November 6th Webinar: Top Ten Ways Hospitals and Health Systems Can Survive in the Current Federal Health Care Policy Environment

Health care providers are facing the most dynamic and uncertain regulatory, legislative and fiscal environment in more than a generation. Increasingly, hospitals and health systems need to develop and maintain comprehensive government relations programs that address their site-specific or system-specific concerns. Federal government relations efforts are an integral component to health care providers’ business planning and strategic operations.

Join Ilisa Halpern Paul, Managing Government Realtions Director, Drinker Biddle’s Lobbying and Advocacy Team, and Meghan Woltman, Vice President, Government & Community Relations at Advocate Health Care, on November 6, 2013 for a complimentary webinar that will review the ten best practices with respect to federal health policy and government relations. The webinar will help guide providers in evaluating existing efforts and will provide recommendations for the most effective federal government relations program to navigate the ever-changing federal policy environment. For more information or to register, see here.

Health Care on the Hill – Week of October 7, 2013

With the ongoing government shutdown, the Congressional calendar has been up in the air. A number of hearings scheduled for last week were postponed, and we recommend that you reconfirm that the following hearings are still scheduled to happen the day prior.

Tuesday, October 8, 2013

10:00 a.m.
“Transforming Medicare Post-Acute Care: Issues and Options”
Senate Finance Committee Hearing
219 Dirksen Senate Office Building

Wednesday, October 9, 2013

1:00 p.m.
“The Effects of the Health Law’s Definitions of Full-Time Employee on Small Businesses”
House Small Business Subcommittee on Health and Technology Hearing
2360 Rayburn House Office Building

Thursday, October 10, 2013

10:00 a.m.
“Between Peril and Promise: Facing the Dangers of VA’s Skyrocketing Use of Prescription Painkillers to Treat Veterans”
House Veterans’ Affairs Subcommittee on Health Hearing
334 Cannon House Office Building