Arkansas is now the first state to use Medicaid expansion dollars to buy private coverage for many of its 250,000 newly eligible residents rather than enroll them in the existing Medicaid program. This week the Arkansas House of Representatives approved the plan, followed by the Senate, to confirm that the state will be implementing this “market-based approach” to expanding Medicaid.
The idea of buying private insurance for Medicaid recipients is emerging as a “conservative compromise” for some of the 24 states (home to more than 25 million uninsured residents) leaning toward rejecting federal funding the Affordable Care Act provides for the expansion. In the original legislation, the ACA required states to expand Medicaid to adults earning up to 138 percent of the federal poverty level, $15,870 for an individual or $32,499 for a family of four. The federal government would fully cover the costs of this expansion for two years, with states gradually having to contribute 10% by 2020. Last summer, the Supreme Court struck down the Medicaid expansion requirement, allowing states to refuse federal funding and opt out of the expansion.
But most of these states, including Florida, Texas and Indiana, are leaving a lot of money on the table—from hundreds of millions to $1 billion or more in federal funding. Under pressure from healthcare providers and other interested parties, some governors view premium assistance programs that move the poor, disabled and frail elderly to the state insurance exchanges to buy private insurance as a way to capture this windfall without appearing to embrace ObamaCare.
In Missouri, for example, Republican state legislator Jay Barnes calls the Obama administration’s plan for Medicaid expansion a “one-size-fits-all, far-left-wing ideological path.”
It’s called Blue Button+ and it works by giving physicians and patients the power to drive change.
The US deficit is driven primarily by healthcare pricing and unwarranted care. Social Security and Medicare cuts contemplated by the Obama administration will hurt the most vulnerable while doing little to address the fundamental issue of excessive institutional pricing and utilization leverage. Bending the cost curve requires both changing physicians incentives and providing them with the tools. This post is about technology that can actually bend the cost curve by letting the doctor refer, and the patient seek care, anywhere.
The bedrock of institutional pricing leverage is institutional control of information technology. Our lack of price and quality transparency and the frustrating lack of interoperability are not an accident. They are the carefully engineered result of a bargain between the highly consolidated electronic health records (EHR) industry and their powerful institutional customers that control regional pricing. Pricing leverage comes from vendor and institutional lock-in. Region by region, decades of institutional consolidation, tax-advantaged, employer-paid insurance and political sophistication have made the costliest providers the most powerful.
As the Obama administration continues its top secret effort to build federal insurance exchanges in about 34 states while 16 states are doing it on their own, that continues to be the big question.
HHS is using IT consulting firm CGI for much of the work on the exchanges and the federal data hub. CGI has their plate full since they are not only working on the federal exchange but also doing work for the state exchanges in at least Colorado, Vermont, and Hawaii.
Earlier this month, the Senate Finance Committee held an oversight hearing. The Obama guy in charge of exchange development testified before them. I thought it was notable that it was the Democrats who expressed the greatest concern, and frustration, over senators not getting a clear idea for just where the administration is toward the goal of launching the new health insurance exchanges on October 1.
It was one of the most notorious quotes that emerged from the battle over the Affordable Care Act.
We have to pass the bill so you can find out what is in it. – House Speaker Nancy Pelosi, March 9, 2010.
The line was taken out-of-context, as Pelosi’s office has continued to protest. But more than three years after her quote — and nearly three years after the ACA passed Congress — Pelosi’s accidental gaffe seems pretty apropos.
The law continues to delight supporters with what they see as positive surprises; for example, some backers say Obamacare deserves credit for the unexpected slowdown in national health spending. But critics warn that the law’s perverse effects on premiums are just beginning to be felt.
And there still are “vast parts of the bill you never hear about,” notes Timothy Jost, a law professor at Washington & Lee. “I wonder if they’re [even] being implemented.”
Jost and a half-dozen other health policy experts spoke with me, ahead of Obamacare’s third birthday on Saturday, to discuss how the law’s been implemented and what lawmakers could have done better.
The EHR vendor lock-in business model is under attack by frustrated physicians and patients and the reality that health care cost and quality are more opaque than ever. Doug Fridsma of ONC politely talks of the need to move from vertical integration of health care services to horizontal integration where patients can choose with their feet. Farzad Mostashari calls for moral behavior and price transparency. The Society for Participatory Medicine says “Gimme My DAM Data” and Patient Privacy Rights asks HHS to allow physicians to prescribe health IT without interference from the institution or the vendor.
The vendors’ response is a charm offensive called CommonWell Health Alliance with a pastel .org website. The website is presumably the official source of information about CommonWell and it lays out the members’ strategy to preserve the vendor lock-in business model for a few $Billion more. Ok, maybe more than a few.
The core of the CommonWell strategy is to avoid giving patients their data in a timely and convenient way.
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Last week I was in DC and I caught up with Bryan Sivak, a geek’s geek who has migrated from Silicon Valley (via London) to government service first in Maryland and now at HHS. He has a big job there to keep pounding out the open health data drumbeat Todd Park started. And he’ll have at least two big opportunities to do it this spring, first at Health 2.0’s developer conference Health:Refactored in Silicon Valley in May and then at the now 4th annual Health DataPalooza in DC in June.
New Hampshire: We’re in.
North Carolina: We’re not.
The two states on Tuesday were the latest to announce their intentions on the Affordable Care Act’s health insurance exchanges. States have until Feb. 15 to tell HHS whether they’ll retain even some control over the exchanges, or let the Obama administration run the exchanges for them.
And while New Hampshire made clear that it wants to partner with the federal government to launch an insurance exchange, North Carolina backed out of a previous plan to do exactly that.
By Friday, we’ll know where half a dozen other states stand, too.
Background on Partnership Model
The Affordable Care Act didn’t originally spell out the partnership model; under the law, states faced a binary choice of running their own insurance exchanges or punting the responsibility to the government.
But HHS officials realized they needed to tweak the ACA’s approach, as more than 30 states — increasingly led by Republicans, who took over 11 statehouses in the 2010 election — announced they planned to opt out of the exchanges altogether. This would leave HHS officials with “an awesome task in establishing and operating exchanges in [so many] different states and coordinating those operations with state Medicaid programs and insurance departments,” before open enrollment begins in October 2013, Paul Starr writes in The American Prospect.
As a result, the agency in 2011 introduced the partnership model in hopes of shifting some of the responsibility for running exchanges back to the states.
Under the hybrid approach, the federal government takes on setting up the exchange’s website and other back-end responsibilities, while states keep functions such as approving health plans and setting up consumer assistance programs. HHS also hopes that the partnership model will be a path for states that weren’t ready to run their own exchanges to take them over eventually.
If the devil is in the details, we got the motherlode this past week as to how the most incendiary part of President Obama’s health reform will actually work when it launches next January.
The Department of Health and Human Services issued lengthy rules on the controversial individual mandate requiring uninsured Americans to purchase a health plan. The IRS followed with nearly as lengthy a set of rules specifying who is eligible for subsidies for those purchases and who pays penalties when they refuse. In what critics will consider an Orwellian flourish, both federal agencies refer to these penalties as “shared responsibility payments” — even though the Supreme Court, in its upholding of the mandate, plainly referred to them as what they are: a tax.
The two sets of rulings represent a sort of good cop, bad cop routine from the Obama administration. The bulk of the HHS rules defines individual outs for the mandate, identifying 11 different types of uninsured Americans who will be exempt from the de facto tax, ranging from sudden financial impairment to genuine religious objection to medical care. The IRS rules are all bright hard lines about who has to pay, when, and how.
The major media, echoing criticism by Obamacare’s agitators from the Left, seized on the stinginess of the IRS rules regarding subsidies and penalties for family members of people covered by their employers, or what they call the “family glitch.” The glitch is technically real, but statistically remote, and will affect almost no one in the real world, but it does make for good inflammatory headlines.
Today the Office of the Inspector General (OIG) in the Department of Health and Human Services released a report, here, that is decidedly critical of CMS and ONC oversight of the Electronic Health Record (EHR) subsidy program.
Over the last couple of years there have been growing criticisms of the Meaningful Use program and its disbursement of potentially $30 billion in ARRA funds. I have detailed many of these concerns, such as the overall effectiveness of electronic records, my doubts as to the robustness of the first two Stages of Meaningful Use requirements, the safety record of the technologies, their ability to actually save money, their real-world interoperability, and their general usability in the healthcare workflow, here.
Recently, additional questions have been raised that go to the very heart of the subsidy program. First, the Center for Public Integrity, here, and the New York Times, here, set off a firestorm with allegations of EHR use leading to extensive upcoding. This led to a scolding letter to the healthcare industry from Secretary Sebelius and the Attorney-General, here, and combative words back from some of the addressees, here.
Healthcare reporters have been in a frenzy to report this week that the ACA is a done deal and states should get on with it. The election certainly changes the dynamic in the repeal effort, as Speaker John Boehner indicated in a recent interview with ABC News, yet the implementation battle is far from over.
The next interesting story line is developing out of an OK lawsuit pertaining to the legality of subsidies being made available in the federal exchange. To be more specific, it challenges an IRS rule that imposes an ACA employer mandate where the statute does not appear to authorize it. If this case were to prevail, it would undermine the “fallback” federal exchange that is going to be established for states that opt to forgo setting up their own state exchange.
Governors in SC, GA, FL, KS, VA, MO are on record that they will not set up a state exchange. Most believe, minus the Democratic Governor of MO since a ballot question prevents him from unilaterally setting up an exchange, that the subsidies will not be available in the federal exchange, and will put the federal government between a rock and a hard place.
The election results at the state level also play into this story.