• HHS invests $250 million to strengthen primary care workforce
• Physicians get 2.2 percent increase through November
• New health reform rules specify minimum annual limits, provide model language
• MedPAC recommends changes for Medicare delivery system
• COBRA subsidy helped two million households at a cost of $2 billion

• Massachusetts to gain from federal health care form, report confirms
• Georgia enacts “health care freedom” law

• Rush to electronic health records could cause more liability risk
• FSA participation grows from 16.7% in 2007 to 20.4% in 2009

HHS invests $250 million to strengthen primary care workforce

The HHS Secretary announced $250 million worth of investments that will be made under the Patient Protection and Affordable Care Act (PPACA) (PubLNo 111-148) to increase the number of health care providers and strengthen the primary care workforce. Over the next five years, the investments will support the training and development of over 16,000 new primary care providers by (1) creating 500 more primary care residency slots, (2) supporting physician assistant primary care training, (3) encouraging the pursuit of full-time nursing careers, (4) establishing nurse practitioner-led clinics, and (5) encouraging states to plan for health care workforce needs. Experts anticipate that the aging population and a decline in the number of medical students choosing to enter primary care will cause a shortage of nearly 21,000 primary care physicians by 2015. The funding is allocated from the new PPACA-created Prevention and Public Health Fund for fiscal year 2010.

The Prevention and Public Health Fund is a $500 million fund designed to assist in the creation of the necessary infrastructure for prevention of disease, early detection, and management of medical conditions before they reach a severe level. Half of this fund will be used to provide the necessary resources for strengthening the primary care workforce. Additionally, the funding will support the development of over 600 new physician assistants, who can be trained in a short period of time and are permitted to practice medicine as part of a physician-supervised team. An investment will be made in nursing education to encourage students to be trained full-time and go on to become nurse practitioners, who provide comprehensive primary care services. More funding will go to ten nurse-managed health clinics, which will be staffed by nurse practitioners who provide primary care services to medically underserved populations. Finally, resources will be provided to states to assist the implementation of innovative strategies to expand their primary care workforce by 10-25 percent over ten years.

In addition to investments made by the Prevention and Public Health Fund, the government is implementing additional strategies to increase the numbers of physicians, physician assistants, and nurse practitioners in the primary care field. PPACA will provide over $1.5 billion to the National Health Service Corps (NHSC) over five years, which will grant scholarships and assist with the repayment of educational loans for primary care providers who practice in underserved areas. PPACA will also provide tax breaks to certain student loans of primary care providers. The Department of Labor is promoting health care careers by making grants available and expanding career pathway programs. Medicare and Medicaid programs will offer financial incentives to build primary care capacity in underserved areas by providing higher payments and bonus payments.

HHS News Release, June 16, 2010.

Physicians get 2.2 percent increase through November

President Obama on June 25 signed into law legislation that will provide physicians participating in Medicare and TRICARE with a 2.2 percent increase in payments through the end of November 2010. The “Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010,” (H.R. 3962) also provides single and multiple employer pension plan sponsors with relief from pension funding requirements.

Since 1999, physician payments under Medicare have been determined by use of the Sustainable Growth Rate (SGR) formula. The practical effect of the SGR in recent years is that physicians have faced increasing cuts in reimbursement each year, with Congress stepping in to pass a series of temporary extensions that either delayed the payment decrease or, in some instances, increased physician payments temporarily. Physicians faced a 21 percent decrease in payments at the beginning of 2010, but the deadline for the decrease to start was extended twice, with the last deadline June 1.

CMS delayed processing claims reflecting the 21 percent decrease until June 18. The legislation, which passed the Senate on June 18 and the House on June 24, reverses that payment cut and provides a 2.2 percent update to payment rates retroactive to June 1, 2010. According to a blog post issued by Nancy DeParle, director of the White House Office of Health Reform, “the President also signed a directive to the Department of Health and Human Services instructing them to cut through the bureaucratic red tape and implement these changes immediately.”

New health reform rules specify minimum annual limits, provide model language

Minimum annual dollar limits for health plans in 2010 through 2013 were established in interim final regulations announced on June 23 by the Internal Revenue Service, the Employee Benefits Security Administration (EBSA), and the Office of Consumer Information and Insurance Oversight in the Department of Health and Human Services.

The interim final regulations, scheduled to be published in the June 28, 2010, Federal Register, provide detailed guidance on four separate health insurance provisions in the Patient Protection and Affordable Care Act (P.L. 111-148), as follows:

• Prohibition of preexisting condition exclusions (Public Health Service Act Sec. 2704);
• No lifetime or annual limits (PHSA Sec. 2711);
• Prohibition on rescissions (PHSA Sec. 2712);
• Patient protections (PHSA Sec. 2719A).

The interim final rules are effective 60 days after publication in the Federal Register, or Aug. 27, 2010. The rules are applicable to plan years beginning on or after Sept. 23, 2010.

Comments on the interim rules, which also must be received within 60 days after publication, may be submitted through the federal eRulemaking Portal at http://www.regulations.gov.

MedPAC recommends changes for Medicare delivery system

The June 2010 Medicare Payment Advisory Commission (MedPAC) report to Congress focuses on the implementation of reform in various areas of health care that will bring about a better quality of care while removing the current payment structure that rewards providers for providing a higher volume of care. To achieve these goals MedPAC discussed changes to cost-sharing policies, graduate medical education (GME), ancillary services offered in physicians’ offices, technical assistance, quality improvement, shared decision-making, coordination of care for dual-eligibles, inpatient psychiatric care, and the legal ability of CMS to institute policy innovations.

Since the current fee-for-service (FFS) benefit design contains no upper limit on a beneficiary’s cost-sharing expenses, over 90 percent of beneficiaries obtain supplemental coverage, which results in more utilization and cost to the Medicare program, according to MedPAC. When elderly beneficiaries are insured against Medicare cost-sharing requirements, they use more care and Medicare spends more on these beneficiaries. To reduce this utilization, MedPAC investigated adding a cap on out-of pocket costs while requiring fixed-dollar copayments on supplemental policies for specific services. Exceptions may be implemented that waive cost-sharing for services in particular circumstances, and cost-sharing protections could be provided to low-income beneficiaries to ensure they receive necessary care. Longer term changes may include the development of the evidence base in a carefully targeted attempt to recognize the value of various treatments. CMS would have to be willing to both lower the cost-sharing for highly valued treatments and increase the cost-sharing for more lowly valued services.

MedPAC Report, June 15, 2010.

COBRA subsidy helped two million households at a cost of $2 billion

At least two million households benefited from the COBRA premium assistance program in 2009 and the first few months of 2010, receiving approximately $2 billion in assistance at an administrative cost of about $8 million, based on the Internal Revenue Service’s (IRS) most recently available data reviewed in the U.S. Department of the Treasury’s Interim Report to The Congress on COBRA Premium Assistance.

The American Recovery and Reinvestment Act of 2009 (ARRA) and subsequent legislation provide a subsidy to employees who terminate employment involuntarily and qualify for COBRA continuation coverage as well as to their qualified family members. The subsidy is available for up to 15 months and applies to employees who are involuntarily terminated during the period beginning Sept. 1, 2008 and ending May 31, 2010. Individuals eligible for the subsidy are required to pay only 35% of what they would otherwise pay, and employers can recover the remaining 65% through a payroll tax credit. COBRA premium assistance also applies to temporary continuation coverage elected under FEHBP and to comparable state-required continuation plans even though these later plans are not part of the original COBRA legislation.

ARRA requires the Secretary of the Treasury to submit an interim report to the House Committees on Education and Labor, Ways and Means, and Energy and Commerce; and the Senate Committees on Health, Education, Labor, and Pensions, and on Finance regarding ARRA’s COBRA1 premium assistance program. The interim report must include information on: “(i) the number of individuals provided such assistance as of the date of the report; and (ii) the total amount of expenditures incurred (with administrative expenditures noted separately) in connection with such assistance as of the date of the report.” A final report is due as soon as practicable after the last period for which COBRA premium assistance is provided, which is currently the 15-month period ending Aug. 31, 2011, at the earliest.

Over 300,000 claims for over $2 billion in premium assistance against payroll tax withholding were filed by employer tax reporting units through early 2010. Since inception of the subsidy program through June 3, 2010, the Department of Labor (DOL) has received 20,199 requests. Of these, the DOL has closed 19,715, all but 49 of which were adjudicated within the statutorily required 15 business day time frame. Over 13,000 of these reviews resulted in the employer’s determination being overturned, while the employer’s determination was upheld in nearly 4,300 cases. In addition, approximately 1,200 were referred to the Department of Health and Human Services (HHS). The remaining requests (nearly 1,700) were either closed as incomplete applications, withdrawn by the requester, or denied because the requester had not applied for the premium assistance.

The report is available at http://www.treas.gov/offices/tax-policy/library/COBRAInterimReport.pdf.

Massachusetts to gain from federal health care form, report confirms

The federal Patient Protection and Affordable Care Act will direct billions of new federal dollars into the Massachusetts health care system and expand public coverage to reach more of the state's residents, according to a new report released by the Blue Cross Blue Shield of Massachusetts Foundation. The law also has the potential to help the state make progress toward its cost-containment and quality-of-care goals by providing funding opportunities for innovative pilot programs aimed at improving quality and affordability.

The report, Re-Forming Reform: What the Patient Protection and Affordable Care Act Means for Massachusetts, was written by Robert Seifert and Andrew Cohen of the Center for Health Law and Economics at the University of Massachusetts Medical School. It was the subject of a forum of health care leaders that convened on June 21, 2010, in Boston by the Foundation and the Massachusetts Health Policy Forum. Speakers included U.S. Senator John Kerry, Massachusetts Health and Human Services Secretary JudyAnn Bigby, and the new executive director of the state's Health Connector, Glen Shor.

“The Center's report is the most comprehensive assessment to date of how Massachusetts will be affected by national reform,” said Sarah Iselin, president of the Foundation. “It shows that with continued attention to the details of implementation at both the state and national levels, we can build on the extraordinary gains we've made in coverage and access, and accelerate progress toward a more effective, efficient and patient-centered health care system.”

Source: Blue Cross Blue Shield of Massachusetts Foundation, http://bluecrossfoundation.org.

Georgia enacts “health care freedom” law

Georgia has enacted a law intended to "preserve the freedom of citizens in [the] state to provide for their health care." Under the measure (Sec. 31-1-11, as added by Act 548 (S. 411), L. 2009, effective July 1, 2010):

• A law, rule or regulation may not directly or indirectly compel any person, employer or health care provider to participate in any health care system;
• Individuals and employers may pay for lawful health care services directly without a public or private third party (without penalty), and health care providers may accept such direct payment (without penalty);
• Subject to reasonable rules and regulations that do not substantially limit an individual’s options, the purchase or sale of health care in private health care systems may not be prohibited by law, rule or regulation.

Rush to electronic health records could cause more liability risk

Electronic health record (EHR) systems likely will soon become a fixture in medical settings. Advocates claim they will reduce health care costs and improve medical outcomes, which could be critical since the new health care reform law increases access for millions of Americans. Although benefits of bringing information technology to health records can be substantial, EHR systems also give rise to increased liability risks for health care providers due to possible software or hardware problems or user errors.

Two Case Western Reserve University professors, in a scholarly article published in the Berkeley Technology Law Journal, shed light on liability concerns and electronic health records systems. Sharona Hoffman, professor of law and bioethics and co-director of Case Western Reserve’s Law-Medicine Center, and her husband, Andy Podgurski, professor of computer science at the university’s School of Engineering, previously wrote “E-Health Hazards: Provider Liability and Electronic Health Record Systems,” which offers a comprehensive analysis of the liability risks associated with use of this complex and important technology.

At first glance, a quick transition to digital heath records seems a normal, even an overdue part of the wider flow of high-tech change, the authors write. It may seem surprising that many health care professionals continue to jot down notes and prescriptions on paper. Even so, many doctors might not be fully aware of the fresh liability risk, Podgurski said. Problems providing are can arise, for example, if an EHR system contains software bugs, if it is too complicated, or if training for users is insufficient. “Whether or not there is a software bug, in the sense of a clear error that causes a wrong output, the usability of the system may be lacking, and that may lead a user to make mistakes that have safety implications,” he said.

The authors make a strong case that, without thoughtful intervention and sound guidance from government and medical organizations, EHR technology may encumber rather than support clinicians and may hinder rather than promote health outcome improvements. Congress has made a $19 billion investment in promoting health information technology, provided through the American Recovery and Reinvestment Act of 2009. The US Department of Health and Human Services seeks to achieve nationwide usage of electronic health records by 2014. So now is the best time to consider pitfalls. The authors point out that EHR system purchasers may never know about product flaws, because no regulation requires such disclosure, and some vendor contracts even prohibit it. “If a computer problem causes an error in somebody’s drug prescription, medication dosage or surgical procedure, that can be catastrophic,” Hoffman said.

FSA participation grows from 16.7% in 2007 to 20.4% in 2009

In 2009, among individuals younger than age 65 with private health insurance, 20.4% had a flexible spending arrangement (FSA) for medical expenses, according to the Centers for Disease Control and Prevention (CDC). This is an increase from 2007, when 16.7% of individuals under age 65 with private insurance were in a family with a FSA.

The CDC’s National Center for Health Statistics (NCHS) reported information based on data from the 2009 National Health Interview Survey (NHIS). The report, Health Insurance Coverage: Early Release of Estimates From the National Health Interview Survey, 2009, includes selected estimates of health insurance coverage for the civilian noninstitutionalized U.S. population, along with comparable estimates from the 1997-2008 NHIS.

The CDC survey examined coverage under high deductible health plans (HDHP), which constitute a growing share of both employment-based and directly purchased health plans. Based on data from the 2009 NHIS, among individuals younger than age 65 years who had private health insurance, enrollment in HDHPs was 22.4%. This includes 6.3% who were enrolled in a consumer-driven health plan (CDHP, a plan with a health savings account (HSA)), and 16.1% who were enrolled in an HSA-qualified CDHP, but had not enrolled in an HSA. In the two years since 2007, HDHP enrollment increased by five percentage points from 17.5% in 2007.

Among the same population group with employment-based coverage, enrollment in an HDHP was 20.2%, up from 15.6% in 2007, compared with 46.9% of those with a private plan purchased or obtained outside of employment. The percentage of individuals with nongroup health plans that were HDHPs increased from 39.2% in 2007 to 46.9% in 2009. For individuals younger than age 65, approximately 8% of private health plans were individually-purchased, the CDC reported.

Uninsured rate hits high mark in 2009. The CDC survey also examined uninsured rates, and found that in 2009, 12.4% (32.6 million) of individuals younger than age 65 lacked health insurance for more than a year.

In 2009, the following numbers and proportions of people were or had been uninsured:

Uninsured	Younger than age 65	Ages 18 to 64
At the time of the interview	17.5%	21.1%
For at least part of the year	19.4%	25.6%
For more than a year	10.9%	15.4%

 

The rate of uninsurance in 2009 was highest among young adults, ages 18 through 24—29.6%. Among the 20 largest states, the rate of uninsurance ranged from a low of 3.7% in Massachusetts (the only state with a health insurance mandate) to a high of 24.6% in Texas. The percentage of adults with private coverage (as opposed to public health insurance) at the time of the interview was 62.9% nationally, with a high of 75.2% in Massachusetts and a low of 52.2% in Texas.

For more information, visit http://www.cdc.gov/nchs/data/nhis/earlyrelease/insur201006.htm.