Weekly recap of Federal and State Developments in Health Care Reform

Week of August 24 , 2009

With opposition to a government-plan option evident at many health care reform town hall meetings this summer, an alternative option based on private regional cooperatives is now getting a lot more serious attention.

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Senate Finance Committee member Senator Mike Enzi (R-WY), part of a six-member team that continues to try to achieve a bipartisan agreement throughout the Congressional recess, said last week that he could support a co-op provision. However, the co-op idea has its detractors and is still not well defined.

Federal 


With Congress in recess, there is no federal report this week. 



States 


CALIFORNIA: Legislation to initiate a health insurance tax to fund the state’s high-risk pool has been shelved for the year. The tax would have required all health insurers to be assessed up to $1 per member per month across each company’s entire book of business, including self-funded clients.

Insurance companies led the opposition to this tax, which has been proposed in the past by California-domiciled health insurers and HMOs. Insurance companies argued that funding a high-risk pool should be broad-based and not single out one industry, nor should it tax employers that do not purchase insurance but instead choose to fund health benefit arrangements in-house. The concept of funding high-risk pools by tapping employer’s self-funded arrangements was proposed but ultimately withdrawn or defeated in Oregon, Maine and Colorado this year as well. It is anticipated that these states will revisit the legislation in 2010.

NEW YORK: Governor Paterson's office is again outlining its priorities for federal health care reform for New York's congressional delegation and is signaling its intent to maintain or strengthen the state's role in regulating health care benefits. The Governor's office is emphasizing a need for any insurance exchange program to ensure a level playing field between the exchange and non-exchange insurers; the view that the federal law should be a floor and not a ceiling; and that there should be concurrent jurisdiction of the federal and state governments to regulate the insurance industry. In addition, Governor Paterson appointed James Wrynn as the new superintendent of insurance. The Senate is expected to act on this and other appointments in a one-house special session on Sept. 10. 
 


TEXAS: In a press conference held last week, Governor Rick Perry emphasized the importance of state-developed health care reform rather than the costly, expansive, one-size-fits-all mandates being considered by the federal government. The Governor expressed concern over the potential loss of a state’s ability to develop solutions tailored to the unique needs of its citizens. He further argued that current federal health care reform legislation would pose a serious threat to patients and providers, and would cost Texas taxpayers tens of billions of dollars over the next 10 years, without significantly improving care for Texans.

Other

August 14, 2009 – Study urges action to get patients to follow prescriptions - It is based on seven systematic reviews of medical literature, as well as interviews with 16 health care organizations, insurers, drug makers, and technology companies. The health care institute recommends some system wide changes, such as revamping how health care providers are paid. Other recommendations include using health information technology to monitor what happens after an electronic prescription is transmitted to a pharmacy and to help patients manage multiple medication regimens.

Weekly Recap of Health Care Reform - Red Flag Rules in New Jersey

Week of August 17

The highly charged health care reform debate continues to get extensive news coverage, and Members of Congress are clearly feeling the heat. Senate Finance Committee Ranking Member Senator Charles Grassley (R-IA) took the unusual step of issuing a statement last week to reassure voters that a Finance Committee bill will not have end-of-life provisions -- one of the more controversial topics at town hall meetings this summer.

A Finance Committee bill has yet to emerge, as Committee members search for an approach that can net bipartisan support. But Grassley provided a small glimpse of the Committee's thinking when he disclosed that the panel "dropped end-of-life provisions from consideration entirely because of the way they could be misinterpreted and implemented incorrectly." Distancing himself and the Finance Committee from the House bill, Grassley went on to say House legislation is "poorly cobbled together" and could invite unintended consequences.

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Federal

Congress is in recess, so there were no federal reports for the week of August 17th.

States

NEW JERSEY: New law means that New Jersey providers will be subject to Red Flag Rules.

• Newly enacted legislation requires installment payment for maternity services, and it mandates the Department of Banking & Insurance to promulgate a payment schedule for provider services rendered in advance of child delivery. Through the New Jersey Association of Health Plans, several carriers will meet with stakeholders to assist the department in implementing this statute.

• Effective August 1, 2009, every health care organization and practice must review its billing and payment procedures to determine if it’s covered by the Red Flags Rule. Whether the law applies to you isn’t based on your status as a health care provider, but rather on whether your activities fall within the law’s definition of two key terms: “creditor” and “covered account.”

• As many as nine million Americans have their identities stolen each year. The crime takes many forms. But when identity theft involves health care, the consequences can be particularly severe.

• Medical identity theft happens when a person seeks health care using someone else’s name or insurance information. A survey conducted by the Federal Trade Commission (FTC) found that close to 5% of identity theft victims have experienced some form of medical identity theft.

• Victims may find their benefits exhausted or face potentially life-threatening consequences due to inaccuracies in their medical records. The cost to health care providers — left with unpaid bills racked up by scam artists — can be staggering, too.

• The Red Flags Rule, a law the FTC began enforcement on August 1, 2009, requires certain businesses and organizations — including many doctors’ offices, hospitals, and other health care providers — to develop a written program to spot the warning signs — or “red flags”

• Also enacted into law was an autism coverage mandate. Under the new statute, insurance carriers must extend coverage for medically necessary treatment including speech, occupational, and behavioral therapy. The coverage benefit is capped at $36,000 annually. Also, the state Supreme Court has denied an appeal for stay of approved rider filings by the Small Employer Health Benefits board.

• A coalition of health care providers, primarily ambulatory surgery centers, sought to delay implementation of an approved rider filed by Horizon Blue Cross Blue Shield of NJ, which limits out-of-network ASC benefits at $2,000. The newly appointed Commissioner of Banking & Insurance denied the providers’ appeal for stay. The coalition's emergency request for delay was denied by the Appellate Division and finally the Supreme Court upheld the denial.NORTH

CAROLINA: The Governor has signed the proposed budget with no premium tax increase to insurers, thanks to the input industry leaders, business leaders and trade groups. Previous budget proposals included increases from 1.9 to 2.25 percent, effective January 2011.

PENNSYLVANIA: Governor Ed Rendell signed a budget bill after exercising his line item veto to strike most appropriations other than those necessary to pay state employees. The bill, introduced by Senate Appropriations Committee Chairman Jake Corman (R-Centre), was passed without amendment so that it could go to the Governor. The 2 percent managed care organization tax remains the big open issue for the budget. Moving the current MA MCO assessment under the sales and use tax is supported by some, but the administration is pushing the added 2 percent tax on all managed care premiums.