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Thursday, May 21, 2015

Health Care Reform Articles - May 21, 2015

How Medicare Advantage Investors Profited From Loose Government Lips 

By EDITOR • 22 HOURS AGO

On Wall Street, Feb. 3, 2011, was mostly a ho-hum day. But not for companies that sell Medicare Advantage plans. 
Several of those that offer the privately run Medicare coverage option hit the jackpot, tacking on billions of dollars in new value after federal officials signaled they might go easy on health plans suspected of overcharging the government. 
The stocks took off after the federal Centers for Medicare and Medicaid Services advised the plans in a memo that it was rethinking a move to ratchet up audits. Some of these plans are run by publicly traded insurance companies whose fortunes can rise and fall on a whiff of change in Medicare policy. 
At the time, health insurers were bracing for tougher audits, fearing they could wind up owing the government millions of dollars as a result. 
The memo was sent to Medicare Advantage plans, but wasn't available to the general public. 
A CMS spokesman said the two-paragraph memo was routine and that officials did nothing wrong in sending it out. But the advisory appears to contradict CMS regulations that urge officials to wait until after markets close to disclose information that could move stocks. The episode also raises fresh questions about the security and timing of so-called market-sensitive disclosures — and just who gains access to the information. 
"When the memo was released by people at the agency, they had to be brain dead if they thought it would not quickly make its way into the hands of those who influence stock prices," said Lynn E. Turner, a former Securities and Exchange Commission official and expert on financial reporting requirements. 
Big Jump
CMS said it began sending out the memo on an internal message system at 9:30 a.m. on Feb. 3 and it took "several hours" to reach all of the 6,500 health plan recipients. 
By mid-afternoon, a CMS official in Washington noted that shares in three major Medicare Advantage insurers had "shot up" as a result. 
"There's also an incredible volume — an atypical number of buyers and sellers," CMS official Misha Segal wrote in an email to several agency higher-ups at 2:37 p.m. (See the email traffic below.) 
UnitedHealth Group, the nation's biggest Medicare Advantage company, rose 4 percent, which "is nearly $2 billion in 'newly created equity' for the company," according to Segal. "This is a big jump." 
The huge stock rally — and the role CMS played in sparking it — is disclosed in agency emails and other records obtained by the Center for Public Integrity through a Freedom of Information Act lawsuit.
CMS officials, in a statement, said nothing was amiss.

Congress plots to pay for a trade deal by raiding Medicare

By Michael Hiltzik
Los Angeles Times, May 18, 2015
Medicare means many things to many people. To seniors, it's a program providing good, low-cost healthcare at a stage in life when it's most needed.
To Congress, it's beginning to look more like a piggy bank to be raided.
That's the only conclusion one can draw from a provision slipped into a measure to extend and increase the government's Trade Adjustment Assistance program, which provides assistance to workers who lose their jobs because of trade deals. The measure, introduced by Rep. David Reichert (R-Wash.), proposes covering some of the $2.7-billion cost of the extension by slicing $700 million out of doctor and hospital reimbursements for Medicare.
The plan on Capitol Hill is to move the Trade Assistance Program expansion in tandem with fast-track approval of the Trans-Pacific Partnership trade deal, possibly as early as this week. We explained earlier the dangers of the fast-track approval of this immense and largely secret trade deal. But the linkage with the assistance program adds a new layer of political connivance: Congressional Democrats demanded the expansion of the Trade Assistance Program, Congressional Republicans apparently found the money in Medicare, and the Obama White House, which should be howling in protest, has remained silent.
Medicare advocates have taken up the slack by raising the alarm. "To take this cut and apply it to something completely unrelated sets a terrible precedent," Max Richtman, head of theNational Committee to Preserve Social Security and Medicare, told me.
The Medicare raid was so stealthy that critics in Congress, including members of the Congressional Progressive Caucus, are just now gearing up to oppose it. "It was sort of buried" in the bill, Rep. Keith Ellison (D-Minn.), the caucus co-chair, told me Monday. The caucus expects to circulate a letter opposing the arrangement as soon as later this week. Ellison, an opponent of granting fast-track authority on the TPP, says the Medicare cut amounts to piling the costs of trade liberalization onto its victims.
"There will be fabulous wealth generated by the Trans-Pacific Partnership," he says. "The people who are hurt shouldn't have to pay for it with their jobs and then have inadequate Medicare when they get older."
Ellison labeled the extension of the assistance program a "consolation prize" for those injured by trade deals. But there are grounds to question how much good the Trade Adjustment Assistance actually does. 
Some of its benefits are direct. The program extends unemployment benefits for workers laid off because of competition from international trade and subsidizes their healthcare insurance. It funds job retraining programs and subsidizes job searches. Older workers can get limited "wage insurance" covering a portion of any wage reductions they suffer in moving to new jobs. Some of this assistance is skimpier in the new bill than they were in the last major reauthorization of the program in 2011, following trade deals with Colombia, South Korea and Panama. 
But in a 2008 study, Kara M. Reynolds of American University and her associate John S. Palatucci found that workers receiving trade assistance did scarcely better than other laid-off workers at finding new employment -- and that they earned on average 30% less at their new jobs, compared with the roughly 10% pay cut faced by unassisted workers. 
One reason, they posited, is that the workers in the trade program were in worse-hit industries and were trying to replace relatively high wages. But taking advantage of job training also kept them out of the workforce longer, which may have made them less desirable to employers.
What makes the Medicare cut especially stealthy is that it's slipped into the federal budget for 2024 -- it won't even show up on the books until the assistance program itself has expired. Moreover, it's pitched as an extension to the 2011 sequester, possibly to make it seem all the more painless.
The sequester, an economically damaging bit of fiscal hugger-mugger Congress devised as a route out of an impasse over the debt limit, left Medicare relatively but not entirely unscathed: much of the program was exempted from cuts, though provider reimbursements were pared by 2% each year through 2023. Last year, the Medicare sequester was extended into 2024 to cover a reversal of cost-of-living cuts to veterans' pension benefits -- another case of raiding Medicare for an unrelated program. The new proposal cuts Medicare provider benefits by another quarter of a percentage point from October 2024 through March 2025.
This is different from the $700-billion cost reduction in Medicare enacted via the Affordable Care Act. That includes efforts to make the program more efficient by improving the incentives governing how doctors and hospitals deliver care to their patients, along with reductions in payments to Medicare Advantage plans. Richtman points out that much of this amounts to a reallocation within Medicare -- "it's piled back into the program by paying for improvements in preventive care, closing the 'doughnut' hole in Medicare Part D (the prescription drug benefit)" and other measures. In the broadest sense, the cost reductions in Medicare are netted against other healthcare costs within the Affordable Care Act.
By contrast, the new proposal would take $700 million out of Medicare, period. Nothing in the TAA will help Medicare function better, augment its services to members, or cover healthcare costs. Slicing into physician and hospital reimbursements may have the opposite effect, by reducing members' access to care. "I'd characterize this as money stolen from Medicare," Richtman says.
The greater danger is that Congress gets addicted to looking to Medicare for spare cash. Richtman and other social insurance advocates have grown accustomed to keeping their eyes on efforts in Medicare legislation to tamper with the program's benefits and finances; now they have to watch out for raids from all directions. 


Learning A New Health Insurance System The Hard Way

By Jenny Gold 
The insurance program was called “Believe Me”  — but Kairis Chiaji had her doubts.
She and her husband Arthur were skeptical that the new health plan they purchased for 2015 would actually work out. That’s because their experience in 2014 had been a disaster, she said.
The Sacramento, Calif., couple had been thrilled to learn last year about the prospect of subsidized coverage under the nation’s health law, she recalled. Each of them had been uninsured for years when they signed up for coverage through the state exchange, Covered California.
“I just thought about how many people who are like me,” explained Kairis, 43, a self-employed natural hairstylist and doula. “If you have a lot of money, you’re covered. If you don’t have any money, you’re covered. When you’re in the middle, working hard every day, that’s when it’s really tough.”
When her children were little she worried about paying for their care if they were injured.
“I just simply told my children, listen, all I’ve got is a ruler and duct tape, so you’re not allowed to break any bones. Literally you can’t get hurt,” she said.
Arthur, an immigrant from Kenya who worked in food preparation, hadn’t had coverage since he left his home country,  which has a national health insurance program. “Everybody can afford insurance,” said Arthur, 39, who married Kairis in 2013. “And so that’s how I thought it was gonna be [in America]. That was not the case.”
At a health fair in February 2014, the Chiajis signed up for a plan with Anthem Blue Cross at a cost of $138 a month for the two of them. Her two oldest children, who are 18 and 22, were able to get insurance through Medicaid, the state and federal program for the poor, and her younger son has private insurance through his father, Kairis’ ex-husband.
Kairis and Arthur went home and waited to receive their insurance cards and first bill. Nothing arrived.
At the end of June, they finally received their cards and a bill for May, June and July, Kairis said.
They sent in one month’s payment, which they assumed would be for July since they hadn’t even known they were eligible for coverage in May and June. But Anthem told them  their payment only covered May, Kairis said.
When Kairis called Anthem to ask whether there had been a mistake, “they said you’re not covered [now] because you have to pay the months before now,” she said.
As she tried to resolve the problem, Anthem told her to hold off paying another bill until the insurer was able to process a change in their  income, which would lead to a slightly lower premium. So she waited, but didn’t get another bill.
Around that time, the couple brought two more children into their home, whom they are in the process of adopting from the foster system.  Arthur tried to go to the doctor for a physical exam to complete the adoption but was told by the medical office he wasn’t covered.
Kairis tried to clear things up on the phone with Anthem. “You wait on line for an hour, you get disconnected, they say no one can talk to you and hang up on you,” she said. “It was really frustrating.” When she called Covered California, she said, she got a message explaining operators were busy and she was disconnected.

The Problem of Underinsurance and How Rising Deductibles Will Make It Worse

Findings from the Commonwealth Fund Biennial Health Insurance Survey, 2014

Abstract
New estimates from the Commonwealth Fund Biennial Health Insurance Survey, 2014, indicate that 23 percent of 19-to-64-year-old adults who were insured all year—or 31 million people—had such high out-of-pocket costs or deductibles relative to their incomes that they were underinsured. These estimates are statistically unchanged from 2010 and 2012, but nearly double those found in 2003 when the measure was first introduced in the survey. The share of continuously insured adults with high deductibles has tripled, rising from 3 percent in 2003 to 11 percent in 2014. Half (51%) of underinsured adults reported problems with medical bills or debt and more than two of five (44%) reported not getting needed care because of cost. Among adults who were paying off medical bills, half of underinsured adults and 41 percent of privately insured adults with high deductibles had debt loads of $4,000 or more.

Ignoring the Penalty for Not Buying Health Insurance

Obamacare’s big stick doesn’t seem to be scaring many people into buying health insurance.
The health law includes many inducements for people to obtain health insurance — including free Medicaidcoverage for many low-income Americans and subsidies for those with moderate incomes. But it also includes the notorious “individual mandate,” a fine for those who can afford insurance but don’t buy it.
Because the law, and the fine, are new, many policy experts expected that some people would decline to sign up for insurance until they were hit with a penalty at tax time. Forecasters have estimated a big bump in marketplace enrollment next year, the first sign-up period after people have been fined. The Congressional Budget Office, for example, estimates 10 million more people will have Obamacare plans next year. The law’s structure relies on even healthy and otherwise disinclined consumers to enter insurance markets to help stabilize prices.
Certainly, some people who might otherwise go uninsured have been persuaded by the penalty. Polls have shown that it is a well-known provision of the law. And studies of the uninsured have shown that mentioning the penalty changes some people’s thinking about health insurance. At the end of the normal enrollment period in February, about 11.7 million peoplehad selected marketplace health plans or renewed their plans from 2014, according to the federal government.
http://www.nytimes.com/2015/05/21/upshot/penalty-for-not-buying-health-insurance-might-be-too-light.html?hpw&rref=upshot&action=click&pgtype=Homepage&module=well-region&region=bottom-well&WT.nav=bottom-well&abt=0002&abg=0


Why Insurance Doesn’t Always Prevent Giant Medical Bills

Health insurance is supposed to help you pay for your health care, but it’s also supposed to protect you from financial ruin. A large new survey finds that, for nearly a quarter of insured adults, insurance has provided flimsy protection against huge medical bills.
The survey, from the health research group the Commonwealth Fund, looked at around 3,000 adults who had been insured all year, and found that in 2014, 23 percent of them were “underinsured,” according to a definition of financial exposure developed by the researchers. The group in the study included people with Medicaid, Medicare and their own health insurance, but also the large percentage of Americans with insurance through their jobs.
Many recent changes in the health care system — good and bad — tend to get pinned on the Affordable Care Act. But the Commonwealth study shows that the proportion of insured people with substantial medical costs has been essentially unchanged since 2010, the year the health law passed. In 2010, 22 percent of insured people met the definition of underinsured. In 2014, when many of the law’s major provisions went into effect, that proportion was 23 percent.
The big change in the country’s experience of health insurance appears to have happened between 2005 and 2010; five years before Obamacare passed, only 13 percent of insured Americans met the fund’s definition of underinsured. Since then, the study shows, the number of adults expected to pay a certain amount (a deductible) for their medical care before insurance kicks in has increased. So has the size of those deductibles.
Health plans that ask patients to reach a deductible before insurance foots the bill have become increasingly popular among employers that offer coverage to their workers. The plans are cheaper because they pay out a smaller share of bills. There is also evidence that having people pay for more of their health care out of pocket limits how much care they seek, and thus reins in insurance costs.

Sick man whose Obamacare story went viral could be thwarted by Supreme Court

by Greg Sargent - Washington Post

By now you may have learned of the plight of one Luis Lang, a South Carolina man whose story went viral after it was reported that he couldn’t afford to treat an illness that was threatening to make him blind — and blamed Obamacare for it. He has since come around to the view that Democrats may not be entirely to blame for his state of affairs — and says he is going to try to gain coverage through the law.
But there’s another potential twist to the tale: Just as he is now seeking to get on Obamacare, he could very well find himself unable to sign up for coverage, if the Supreme Court rules for the challengers in King v. Burwell next month.
Lang’s story has gone wild on the internet, turning him into a symbol of a number of intertwined narratives about the law: How Republican opposition to the Medicaid expansion has created a coverage gap claiming many low income people; how justifiable confusion about the complicated law is fueling anger at it; and so on.
It all started when the Charlotte Observer reported that Lang, 49, a self-employed Republican handyman who has never bought insurance, developed “bleeding in his eyes and a partly detached retina caused by diabetes.” The paper reported that subsequent medical bills quickly ate up his savings, whereupon he turned to the Obamacare exchange. He discovered his earnings fall below the window to qualify for a subsidy, yet he might not be able to get on Medicaid because South Carolina has not opted into the Medicaid expansion. He risks falling into the “Medicaid gap.”
The paper reported that his family blamed this on Obamacare, prompting criticism from bloggers and others, combined with a crowd-funding drive for his surgery. In a subsequent interview with Think Progress, Lang said he now thinks opposition to the Medicaid expansion is the culprit, is rethinking his GOP affiliation, and is going to try to get coverage from the law, though he still says he has issues with its implementation and blames both parties:
“Now that I’m looking at what each party represents, my wife and I are both saying — hey, we’re not Republicans!” Lang said….
“I put the blame on everyone — Republican and Democrat. But I do mainly blame Republicans for their pigheadedness,” Lang said. “They’re blocking policies that could help everyone. I’m in the situation I’m in because they chose not to expand Medicaid for political reasons. And I know I’m not the only one.”…
“I know we didn’t do it the right way,” Lang told ThinkProgress, explaining that he’s hoping to figure out the situation with his fluctuating income so he can be the first in line to sign up for a plan during the next open enrollment period.
Lang also told Think Progress that he now supports universal health care. As Steve Benen notes, he is only the latest example of people “who thought they hated ‘Obamacare,’ right up until they needed it.”


By Jackie Farwell - BDN Staff
If you’re a Medicare enrollee who has been hit by an unexpected medical bill, you might be familiar with the term “observation status.”
Hospitals increasingly are placing seniors under “observation” instead of admitting them as inpatients, and a Senate panel led by U.S. Sen. Susan Collins wants them to hit the brakes.
Many seniors are surprised to learn they were never admitted, even after staying overnight at a hospital and receiving treatment, testing and medications. Most learn about it when a bill arrives in the mail for out-of-pocket costs they never anticipated.
Why are hospitals doing this, why is it costing seniors money and how is Maine responding? Here’s a breakdown:
Observation status is for patients not healthy enough to go home but not sick enough to be admitted. Doctors use observation time to decide whether to admit a patient, such as by running tests or performing lab work. As Kaiser Health News explains, “this care requires a doctor’s order and is considered an outpatient service, even though patients may stay as long as several days.” Under Medicare guidelines, hospitals should decide whether to admit patients within 24 to 48 hours.
Patients “under observation” wind up in administrative limbo. Studies found hospitals began using observation stays as a substitute for inpatient status.
The number of Medicare beneficiaries under observation has jumped dramatically — 88 percent over the past six years, to 1.8 million in 2012, according to the Medicare Payment Advisory Commission.
Observation visits lasting longer than 24 hours more than doubled to 854,454 between 2006 and 2012, according to KHN.
Numbers on how many Maine people are affected by this issue are hard to come by, but about 275,000 residentsare covered by Medicare — that’s one in five Mainers.
Hospitals want to get paid for the care they provide. Medicare won’t reimburse hospitals for treating patients who were admitted but should only have been observed. That’s because the program wants to stamp out fraud and abuse. Inpatient care is more expensive than outpatient care and, therefore, is costlier for Medicare to cover.
So hospitals increased their shares of observation patients, wary of auditors who sniff around their books and decide some patients never should have been admitted, then deny reimbursement.
Seniors often need care that’s covered only after a hospital admission. If a senior spends time in the hospital under observation status, Medicare won’t pay for follow-up nursing home care that individual may need after discharge. “Skilled nursing care” includes treatments such as intravenous insulin injections for diabetics and physical therapy after an injury or surgery. Patients who never were formally admitted — whether they know it or not — don’t quality for skilled nursing care. They get two choices: forego it or pay for the care themselves.
“They just know that they are in the hospital,” Collins, chair of the Special Committee on Aging, said. “If they are admitted later to a skilled nursing facility for follow-up care, they may be shocked to learn that they will be liable for out-of-pocket costs totaling thousands of dollars.”
Seniors face other out-of-pocket costs. Outpatient care — which technically includes observation care — often comes with copayments for doctors’ fees, hospital services and medications patients must pay. Medicare won’t cover even routine drugs for patients in observation care. (Some seniors have a separate Medicare drug plan, but whether it covers such medication is up to the insurer, according to KHN.)
And, unlike with fees for inpatient care, Medicare sets no limit on the amount of outpatient expenses beneficiaries owe.
Many Medicare patients don’t know they’re being “observed.” Seniors often wrongly, but understandably, assume they’ve been admitted after spending a night or two in the hospital. Medicare does not require hospitals to inform patients they are in observation status or that they’ll be left holding the bag for the cost of any uncovered services — but hospitals must tell patients if they’re downgraded from inpatient to observation. While legislation has passed the U.S. House that would require such notification, Collins encouraged Medicare officials to make this change on their own even without a legislative fix.



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