http://cepc.ucsf.edu.
Appeals court rejects constitutional challenge to Obamacare
A federal appeals court has rejected a conservative challenge to President Obama's healthcare law, ruling that the legislation did not violate the U.S. Constitution's "origination clause."
Opponents of the health law have brought a series of constitutional challenges to court, none of which have succeeded in derailing the law so far. One came close to doing so in the Supreme Court in 2012 and another seems headed to the high court. By contrast, this latest challenge, although a favored argument in some conservative circles, has gotten little legal traction.
The case was brought by Matt Sissel, a self-employed artist from Iowa who has also been a member of the National Guard. Sissel's lawyers told federal judges that he "could afford health insurance if he wanted," but "does not have, need or want health insurance."
The law requires that he either buy insurance or pay a tax. Although the Supreme Court upheld that so-called individual mandate in 2012, Sissel raised an issue not involved in that previous case: The law, he said, violated a constitutional clause requiring that "bills for raising revenue shall originate in the House of Representatives."
Opponents of the Affordable Care Act argue that the law violated that rule. It includes several tax measures, but passed the Senate first before being taken up in the House.
Supporters of the law have dismissed that claim, saying that the House followed a procedure used for many years by both parties in which the majority took a House bill that was already under consideration, amended it to include the text of the Senate-passed bill, then voted on the amended bill as a way to satisfy the "origination clause" rule.
The U.S. Circuit Court of Appeals for the District of Columbia, in a 3-0 ruling Tuesday in Sissel vs. HHS, said such procedural sleight of hand was beside the point. Supreme Court rulings going back to the earliest days of the nation have made clear that not every bill which includes a tax is a "bill for raising revenue" that triggers the requirement for the House to act first, the court noted.
EMHS in talks to add Ellsworth hospital to system
Posted Aug. 05, 2014, at 2:03 p.m.
ELLSWORTH, Maine — Maine Coast Memorial Hospital is considering joining Eastern Maine Healthcare Systems, a move that would mark the end of the Ellsworth hospital’s nearly 60 years as an independent organization.
Maine Coast Memorial and Brewer-based EMHS, the state’s second-largest health system, signed a letter of intent Monday, according to a joint news release the organizations issued Tuesday. The letter binds EMHS and Maine Coast to exclusive negotiations but remains the first step in reaching a final deal.
“It opens up the door to allow us to discuss what this next relationship will look like,” Suzanne Spruce, a spokeswoman for EMHS, said.
The 64-bed facility, opened in 1956, would become the ninth hospital in the EMHS system, which also includes nearby Blue Hill Memorial Hospital as a member.
Terms of the deal have not been disclosed. Discussions began about a year ago, Spruce said.
Finances were one factor in the hospital’s decision to explore joining EMHS, according to Patricia Patterson King, a spokeswoman for Maine Coast. Costly health care infrastructure, including electronic health records, has become increasingly difficult for small, independent hospitals to afford and maintain, she said.
Maine Coast expects to post an operating loss this fiscal year, which will total “substantially more” than the $375,470 in red ink it recorded last year, she said.
Beyond the potential financial benefits, Maine Coast also expects to adopt EMHS’ system for electronic health records and its remote-care services, such as telemedicine. EMHS has made clear it plans to expand access to high-quality care in Hancock and Washington counties, King said.
“While we are financially sound, this is an investment in our future,” she said.
If finalized, the deal is not expected to affect staffing at Maine Coast, King said.
“Change is occurring at every hospital in the nation,” Adin Tooker, chair of the Maine Coast Memorial Hospital Board of Trustees, said in the release. “Looking ahead, it will be harder than ever for Maine Coast Memorial Hospital to thrive without a partner. We made this strategic decision now while we are able to evaluate our choices from a position of strength and have the time to conduct a thoughtful and thorough review on our own terms.”
Maine Coast already has a relationship with EMHS, including shared oncology staff with Eastern Maine Medical Center, the system’s flagship hospital in Bangor. The Ellsworth hospital also participates in EMHS’ “accountable care organization,” a health care model outlined under the Affordable Care Act that rewards hospitals financially for keeping patients healthy at less cost.
Both organizations described a potential merger as a “natural next step.”
“The EMHS model is to provide access to high-quality services close to home for the
populations we serve, making Maine Coast a perfect fit,” M. Michelle Hood, president and CEO of EMHS, said in the release. “The two organizations have long enjoyed a great working relationship and I personally have high regard for Maine Coast, its leadership, and quality of care delivery.”
As an EMHS member, the Ellsworth hospital also would step up collaboration with Blue Hill Memorial, Spruce said. Already, mothers who see midwives and caregivers at Blue Hill deliver their babies at Maine Coast, she said.
“EMHS remains strongly committed to Blue Hill and to Blue Hill Memorial Hospital,” Spruce said.
Measuring Coding Intensity
in the Medicare Advantage Program
Richard Kronick1 and W. Pete Welch2
1Department of Health and Human Services—Agency for Healthcare Research and Quality 2Department of Health and Human Services—Office of the Assistant
Secretary for Planning and Evaluation
in the Medicare Advantage Program
Richard Kronick1 and W. Pete Welch2
1Department of Health and Human Services—Agency for Healthcare Research and Quality 2Department of Health and Human Services—Office of the Assistant
Secretary for Planning and Evaluation
Background: In 2004, Medicare implemented
a system of paying Medicare Advantage (MA)
plans that gave them greater incentive than fee-
for-service (FFS) providers to report diagnoses.
Data: Risk scores for all Medicare beneficiaries 2004–2013 and Medicare Current Beneficiary Survey (MCBS) data, 2006–2011.
Measures: Change in average risk score for all enrollees and for stayers (beneficiaries who were in either FFS or MA for two consecutive years). Prevalence rates by Hierarchical Condition Category (HCC).
Results: Each year the average MA risk score increased faster than the average FFS score. Using the risk adjustment model in place in 2004, the average MA score as a ratio of the average FFS score would have increased from 90% in 2004 to 109% in 2013. Using the model partially implemented in 2014, the ratio would have increased from 88% to 102%. The increase in relative MA scores appears to largely reflect changes in diagnostic coding, not
Data: Risk scores for all Medicare beneficiaries 2004–2013 and Medicare Current Beneficiary Survey (MCBS) data, 2006–2011.
Measures: Change in average risk score for all enrollees and for stayers (beneficiaries who were in either FFS or MA for two consecutive years). Prevalence rates by Hierarchical Condition Category (HCC).
Results: Each year the average MA risk score increased faster than the average FFS score. Using the risk adjustment model in place in 2004, the average MA score as a ratio of the average FFS score would have increased from 90% in 2004 to 109% in 2013. Using the model partially implemented in 2014, the ratio would have increased from 88% to 102%. The increase in relative MA scores appears to largely reflect changes in diagnostic coding, not
real increases in the morbidity of MA enrollees.
In survey-based data for 2006–2011, the MA-FFS
ratio of risk scores remained roughly constant at
96%. Intensity of coding varies widely by contract,
with some contracts coding very similarly to FFS
and others coding much more intensely than the
MA average. Underpinning this relative growth
in scores is particularly rapid relative growth in a
subset of HCCs.
Discussion: Medicare has taken significant steps to mitigate the effects of coding intensity in MA, including implementing a 3.4% coding intensity adjustment in 2010 and revising the risk adjustment model in 2013 and 2014. Given the continuous relative increase in the average MA risk score, further policy changes will likely be necessary.
http://www.cms.gov/mmrr/Downloads/MMRR2014_004_02_a06.pdf
Discussion: Medicare has taken significant steps to mitigate the effects of coding intensity in MA, including implementing a 3.4% coding intensity adjustment in 2010 and revising the risk adjustment model in 2013 and 2014. Given the continuous relative increase in the average MA risk score, further policy changes will likely be necessary.
http://www.cms.gov/mmrr/Downloads/MMRR2014_004_02_a06.pdf
Vermont Is 'Single-Payer' Trailblazer
By Michael Ollove
Stateline, The Pew Charitable Trusts, Aug. 7, 2014
Stateline, The Pew Charitable Trusts, Aug. 7, 2014
BERLIN, Vt. – Dr. Marvin Malek has been yearning and advocating for a publicly financed, single-payer health care system for at least two decades. Now, as Vermont stands on the threshold of being the first state to launch such a plan, he’s confessing to trepidation.
“I am pretty damn nervous,” he confided before bounding off for rounds at the Vermont Central Medical Center, still clutching the bicycle helmet he wore on his ride to work.
It’s not that Malek has reservations about the desirability of a single-payer system. He and other supporters in Vermont point out that it is already in place in many developed countries that produce better health outcomes at lower cost than the U.S.
It’s that getting there seems so fraught with complexity. “The problem is that the tentacles of our completely dysfunctional U.S. health system reach so deeply into every state,” he said. “How do you disentangle from that abysmal structure to create single-payer?”
That explains why Malek and many others here believe the Vermont legislature’s landmark vote in 2011 to move the state to a single-payer system by 2017 was the easy part of the process. Devising how to actually do it, a process the state is enmeshed in now, will be much more grueling.
The outcome couldn’t be more consequential, not only for Democratic Gov. Peter Shumlin, who put single-payer health care at the center of his first gubernatorial campaign in 2010, but for many others who have long cherished the idea of universal health care built on the foundation of a single-payer system.
Some believe that if the Vermont experiment is successful, other states could follow. In Canada, they note, single-payer started in one province and then spread across the country.
“We could be the Saskatchewan of America,” said Bram Kleppner, CEO of Danforth, a pewter manufacturer in Middlebury with roots tracing back to colonial America. He is among a group of business executives in Vermont Businesses for Social Responsibility, which actively promotes single-payer. He also sits on a board advising the governor on the financing of the plan.
Maverick State
A single-payer system is one in which the government, rather than private insurance companies, pays all health care costs. Some on the left have long harbored hopes for a national single-payer system, but the odds that Congress would ever extinguish the private insurance industry have never been anything but long.
Vermont is different. Vermonters proudly bring up the state’s maverick, progressive past: first state to mandate public financing for universal education in its constitution, first to partially outlaw slavery in its constitution, first to introduce civil unions for same-sex couples, and first to allow gay marriages by legislation, rather than through a court order. Many Vermonters hope a single-payer health system will be the latest addition to that list.
But it’s way too early to predict that other states will fall like dominoes for single-payer. Vermont’s unusual characteristics helped make that legislative vote possible. It is tiny and it has Democratic super-majorities in both legislative chambers. Its seven hospitals (eight if you count Dartmouth-Hitchcock Medical Center just across the border in New Hampshire), are spread out and tend not to think of themselves as competitors.
Nevertheless, other states will be watching closely to see if Vermont can successfully build the elements of its single-payer plan, including a unified data and claims system, a method for measuring the delivery of quality health care and a pay-for-performance scheme to replace the traditional “fee-for-service” model.
“Even for states that are keeping it ‘old school,’ watching a state create a unified health budget and seeing how it benefits them and the process they use, that will be enlightening to everybody,” said Hilary Heishman, a program analyst at the Robert Wood Johnson Foundation.
Medicare, Medicaid, and health benefit plans for both veterans and active duty military personnel will continue to operate in Vermont after 2017. Other plans would also continue, including those serving employees and retirees of out-of-state companies, and tourists and other visitors. Plus, there are major businesses in the state that could continue to self-insure if they are exempted from the new taxes. (Some countries with single-payer systems also have separate health plans for some constituencies, such as veterans.)
Despite those caveats, Act 48, as it is called, represents the first time a state has guaranteed all its citizens health care simply on the basis of their residency. Instead of premiums, Vermonters and businesses would pay for health care through yet-to-be determined taxes. Benefits and formularies (the prescription medicines that are covered in a plan) would be uniform, excluding Medicare and Medicaid, although both programs, through waivers, would be folded into a unified claims administration and payment system run under a new, independent agency called Green Mountain Care.
Billions in Savings?
The Vermont plan largely derives from Harvard economist William Hsiao, who described it in a 2011 Health Affairs paper. He estimated that single-payer would save 25.3 percent over current state health spending, cut employer and household health care spending by $200 million, create 3,800 jobs and raise the state’s economic output by $100 million.
The savings, according to Hsiao, would come from the consolidation of insurance functions, reduced administrative costs for providers, better mechanisms for detecting fraud and abuse and shifting to a no-fault medical malpractice model.
Hsiao said the savings, an estimated $4.3 billion over five years, could be used to pay for coverage of the uninsured and improved benefits, reducing the overall savings to a still healthy $2.3 billion.
Those numbers quickly proved overly optimistic. The legislature didn’t adopt the malpractice reforms Hsiao recommended, and the multiple payers still active in the state could reduce the expected administrative savings. Meanwhile, a University of Massachusetts study commissioned by the state estimated Vermont would have to raise $1.6 billion in new revenues each year to support the plan. A later report by Avalere Health, a consulting firm, estimated the annual cost to be $1.9 billion to $2.2 billion.
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