HHS to Insurers: Double-Digit Rate Hikes Will Prompt Review

The Department of Health and Human Services (HHS) has released a final rule that will allow states to scrutinize insurance companies if they propose excessive increases in insurance premiums.

The final rule, published Thursday, would give states the authority beginning in September to issue a review of any insurer that raises premiums for small or individual health insurance plans by more than 10% in a given year. The law does not, however, give states or the federal government the power to tell an insurance company that it can't enact a high rate hike.

New Flexibility for States to Improve Medicaid and Implement Innovative Practices

The U.S. Department of Health and Human Services (HHS) today announced four initiatives to give states more flexibility to adopt innovative new practices and provide better, more coordinated care for people with Medicaid and Medicare while helping reduce costs for states and families. The initiatives support the Obama administration’s work to make Medicaid more flexible and efficient and to address long-term cost growth. Several of the announcements also help implement provisions of the Affordable Care Act. Today HHS announced:

•Fifteen states will receive federal funding to develop better ways to coordinate care for people with Medicare and Medicaid coverage, also known as dual eligibles, who often have complex and costly health care needs.

•All states will receive increased flexibility to provide home and community-based services for more people living with disabilities.

•All states are eligible to receive more money to develop simpler and more efficient information technology (IT) systems to modernize Medicaid enrollment.

•A proposal by the state of New Jersey for flexibility to expand health coverage for nearly 70,000 low-income residents has been approved.

“Medicaid programs provide health coverage for millions of low-income Americans who otherwise would lack access to health care,” said HHS Secretary Kathleen Sebelius. “With these new resources and flexibilities, states will have new options to make their Medicaid programs work better for the people they serve, while helping lower their costs.”

Coordinated Care for People with Medicare and Medicaid

Under a new initiative funded by the Affordable Care Act, 15 states will receive up to $1 million each to develop new ways to meet the often complex and costly medical needs of the approximately nine million Americans who are eligible for both the Medicare and Medicaid programs, known as “dual eligibles.” The goal of the program is to eliminate duplication of services for these patients, expand access to needed care and improve the lives of dual eligibles, while lowering costs. The new Federal Coordinated Health Care Office, or the Duels Office, at the Centers for Medicare & Medicaid Services (CMS), was created by the Affordable Care Act to improve care for dual eligibles and will work with the states to implement the top strategies to coordinate primary, acute, behavioral and long-term supports and services for dual eligibles, improving quality and lowering costs.

The 15 states that will receive these funds are California , Colorado , Connecticut , Massachusetts , Michigan , Minnesota , New York , North Carolina , Oklahoma , Oregon , South Carolina , Tennessee , Vermont , Washington and Wisconsin .

“Beneficiaries who are in both Medicare and Medicaid can face different benefit plans, different rules for how to get those benefits and potential conflicts in care plans among providers who do not coordinate with each other,” said Donald M. Berwick, M.D., administrator of CMS. “This can be disastrous for those beneficiaries who are most vulnerable and in need of help.”

Helping People with Disabilities Live in their Communities

CMS proposed new rules today giving states new flexibility for their programs to help people with disabilities choose to live in their communities rather than in institutions. The proposed rules reduce administrative barriers for states seeking to help multiple populations, which may include seniors and/or people with different types of disabilities. They will also allow individuals to participate in the design of their own array of services and supports, including such things as personal care and respite services for caregivers.

“These long awaited rules will help people living with disabilities realize the promise of the ADA to live in the least restrictive environments possible for them—like their own homes,” said Henry Claypool, director of the Office on Disability at HHS. “With these new tools as well as incentives included in the Affordable Care Act, states, working closely with advocacy groups, beneficiaries, and other stakeholders, can more easily develop effective plans to improve options for people with disabilities. We hope states will take advantage of this new flexibility.”

The proposed rule, CMS-2296-P, can be found at www.ofr.gov/inspection.aspx.

Developing and Upgrading Medicaid IT Enrollment Systems

New rules issued today will provide 90-percent of the cost for states to develop and upgrade their IT systems to help people enroll in Medicaid or the Children’s Health Insurance Program (CHIP) – and

75-percent of ongoing operational costs. This increase over the previous federal matching rate of

50-percent will help states prepare for the Medicaid improvements and expansion that will come in 2014 from the Affordable Care Act, when many more Americans will be eligible for these programs, and to coordinate enrollment with the Exchanges. The rules establish performance standards for the improved eligibility systems to promote greater efficiency and a more consumer-friendly enrollment process.

The final regulation, CMS-2346-F, can be found at www.ofr.gov/inspection.aspx.

Expanding Health Coverage in New Jersey

HHS Secretary Kathleen Sebelius today approved a Section 1115 demonstration for New Jersey that will expand health coverage to nearly 70,000 uninsured, low-income people through the Work First New Jersey program. In addition, the state will increase care coordination to improve health outcomes for participants in the program.

“This demonstration is yet another example of the many flexibilities states have to adapt their Medicaid programs to better serve their residents,” said Secretary Sebelius. “I want to commend New Jersey for expanding coverage to people in need.”

For more information about these announcements, visit www.cms.gov/apps/media/fact_sheets.asp.

Govs vs. Feds: Who Will Play The 'Power Card' In The Medicaid Struggle? - Kaiser Health News

  by Grace-Marie Turner, President of the Galen Institute

Medicaid is the rope in the current tug of war between the states and the federal government over health reform. So far, the feds think they are winning. But don't discount the strength and endurance of the states -- and especially the governors.

States are facing severe budget pressures. The 2009 stimulus package provided short-term cash to the states to shore up Medicaid -- the jointly funded federal-state health program for lower-income people. But in exchange, states had to agree to maintain their 2010 Medicaid eligibility levels or risk losing all federal matching funds.

In January, 33 governors and governors-elect wrote to President Barack Obama and congressional leaders requesting "flexibility and relief" from the "excessive constraints placed on us by healthcare-related federal mandates." States say they need to trim their Medicaid rolls now because they already are swimming in red ink and this circumstance will only get worse -- partly because stimulus funding that initially helped many of them pay for the added enrollment ends in June. And, while Health and Human Services Secretary Kathleen Sebelius has responded by sending her agency's Medicaid experts to the states to help them explore options to trim Medicaid spending, she is still urging states to do everything they can to keep Medicaid enrollment at current levels before the health law’s changes take effect in 2014.

These pleas for flexibility are bipartisan.

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Choose a State: State Resources for Employment of Persons with Disabilities

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Governors Want Reform Law Changed So They Can Reduce Medicaid Coverage | Hospital Financial and Business News

 Written by Leigh Page

Republican governors are demanding changes in the healthcare reform law so that states would be able to cut Medicaid enrollment and balance their budgets, according to a report by the Wall Street Journal.

Thirty-three Republican governors and governors-elect plan to send a letter to the White House and congressional leaders today requesting the change. Currently, the reform law would remove federal funding from states that drop Medicaid enrollees.
Full Article

H.R. 118: To amend the Patient Protection and Affordable Care Act to permit a State to elect not to... (GovTrack.us)

To amend the Patient Protection and Affordable Care Act to permit a State to elect not to establish an American Health Benefit Exchange.

Sponsor:	Rep. John Fleming [R-LA4](no cosponsors) Cosponsors:
Text:	The text of this legislation is not yet available on GovTrack. It may not have been made available by the Government Printing Office yet.
Status:	Introduced Jan 5, 2011 Referred to Committee View Committee Assignments Reported by Committee ... House Vote ... Senate Vote ... Signed by President ... This bill is in the first step in the legislative process. Introduced bills and resolutions first go to committees that deliberate, investigate, and revise them before they go to general debate. The majority of bills and resolutions never make it out of committee. [Last Updated: Jan 6, 2011 11:24AM]
Last Action:	Jan 5, 2011: Referred to the House Committee on Energy and Commerce.

Current Status

Relief for States Means More $ for Medicaid

Today, the Senate approved $26 billion in relief for states that are suffering budget shortfalls, including $16 billion in funding for state Medicaid programs. The economic downturn, and specifically higher unemployment rates, have increased the demand for Medicaid while also causing greater financial strain on states.

Additional federal money to states for Medicaid was first made available in 2009 through the American Recovery and Reinvestment Act, which included an increase in the Federal Medical Assistance Percentage (FMAP). The increased funding is due to expire, however, on December 31, 2010, and the legislation passed today by the Senate would extend the increased matching funds through June 2011. The House of Representatives, who are currently on August recess, will return to Washington, D.C., to vote on the financial aid package next week. 

Medicaid programs provide health coverage for low-income individuals, including Medicare consumers who qualify for Medicaid. People with both Medicare and Medicaid are known as dual-eligibles. Medicaid can help cover Medicare cost-sharing and fill in gaps in Medicare coverage, such as many long-term care supports and services. 

Read more about the FMAP legislation and today’s vote. 
Learn more about implications of proposed state budget cuts.

Can the States Nullify Health Care Reform? | Health Care Reform Center

by Timothy S. Jost, J.D.

On February 1, the Virginia Senate passed a bill stating that “No resident of this Commonwealth . . . shall be required to obtain or maintain a policy of individual insurance coverage.” In considering this legislation, Virginia joins numerous other states with pending legislation aimed at limiting, changing, or opposing national health care reforms (see map).1 What is going on here?

Whereas states generally adopt laws to achieve a legal effect, nullification laws are pure political theater. On its face, the Virginia bill exempts residents of the Commonwealth from having to comply with a law requiring the purchase of health insurance. Although the bill is phrased in the passive voice, its intent is clearly to block the implementation of a federal mandate requiring all individuals to carry health insurance.
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OBAMA ADMINISTRATION GRANTS RELIEF TO STATES ON PAYMENTS TO MEDICARE FOR PART D COSTS

HHS Secretary Kathleen Sebelius today announced $4.3 billion in financial relief to states by reducing the amount they will have to pay the federal government to offset the cost of Medicare coverage for prescription drugs for state residents eligible for both Medicare and Medicaid.

 

            “We believe today’s action will help states as they struggle to maintain Medicaid and other budget priorities in these difficult economic times,” said Secretary Sebelius.  “This relief will help states continue to provide critical health care services to the nearly 60 million beneficiaries who depend upon it.”

 

            This temporary financial boost to states is made possible by the American Recovery and Reinvestment Act of 2009 (ARRA).  That law granted a significant, yet temporary, increase in the amount states receive from the federal government to help pay for their Medicaid programs.    The increase was to the federal share of Medicaid costs, referred to as federal medical assistance percentage payments (FMAP). 

 

In a call with state governors today, Secretary Sebelius reported that HHS will apply the ARRA increased FMAP to so-called clawback payments.  The clawback payment is the amount states pay to the federal government as required by the Medicare Prescription Drug Improvement and Modernization Act of 2003 (MMA).  It is intended to offset some of the added expense to Medicare Part D of assuming drug costs for residents dually eligible for both programs.  Prior to MMA, state Medicaid programs covered prescription drug costs for these beneficiaries.  Because Medicaid is a state/federal matching program, the higher FMAP under ARRA results in a temporary reduction of the states’ share of spending and therefore in their clawback obligation.

 

This temporary adjustment in the clawback payments will be applied for the period October 1, 2008 through December 31, 2010.  In his 2011 budget, President Obama calls for the FMAP increase established in ARRA to be extended through June 30, 2011. 

  “In asking Congress to extend the increased FMAP in his 2011 budget proposal, the President recognizes both the critical role Medicaid plays in the health of our most vulnerable citizens and difficulties states are experiencing given the economic downturn,” Secretary Sebelius said.

 

States make clawback payments monthly and CMS is currently reprogramming its billing system to calculate the new, reduced payments owed by states.  The savings, which are retroactive to October 2008, will be deducted from what they otherwise would have owed going forward.

 

The table below shows each state’s estimated savings.  Column B shows the state’s obligation under the pre-ARRA formula with column C showing the newly calculated payment, column D the total estimated savings to the state. 

 

 

State (A)	Total Q1 FY 09 Thru Q1 FY 11 Clawback Based on Reg. FMAP (B)	Total Q1 FY 09 Thru Q1 FY 11 Clawback Based on ARRA FMAP (C)	Total State Savings/Fed. Cost Q1 FY 09 Thru Q1 FY 11 (D)
Alabama	$150,247,579	$106,425,199	$43,822,379
Alaska	$48,317,314	$38,286,755	$10,030,558
Arizona	$153,759,854	$108,954,983	$44,804,871
Arkansas	$87,089,886	$62,440,556	$24,649,330
California	$2,913,864,100	$2,238,430,401	$675,433,698
Colorado	$192,319,003	$150,066,687	$42,252,316
Connecticut	$296,665,054	$230,615,556	$66,049,498
Delaware	$34,099,374	$26,386,737	$7,712,637
District of Columbia	$25,602,876	$17,959,629	$7,643,248
Florida	$1,015,370,655	$732,819,868	$282,550,787
Georgia	$256,830,737	$186,189,524	$70,641,213
Hawaii	$60,409,856	$43,814,638	$16,595,218
Idaho	$46,562,615	$32,122,245	$14,440,370
Illinois	$875,508,052	$675,854,129	$199,653,923
Indiana	$209,694,287	$151,629,223	$58,065,064
Iowa	$162,359,071	$127,106,244	$35,252,826
Kansas	$113,478,227	$89,157,121	$24,321,107
Kentucky	$182,471,045	$127,408,848	$55,062,197
Louisiana	$203,392,153	$126,178,376	$77,213,777
Maine	$103,581,677	$75,744,571	$27,837,106
Maryland	$238,997,062	$187,197,783	$51,799,278
Massachusetts	$612,833,627	$480,102,616	$132,731,011
Michigan	$386,791,612	$285,445,457	$101,346,155
Minnesota	$360,083,533	$278,777,119	$81,306,414
Mississippi	$102,735,712	$65,989,013	$36,746,699
Missouri	$407,283,149	$299,443,677	$107,839,472
Montana	$28,771,325	$20,110,737	$8,660,588
Nebraska	$95,393,763	$76,664,267	$18,729,497
Nevada	$62,310,316	$45,031,768	$17,278,548
New Hampshire	$71,136,363	$56,982,733	$14,153,631
New Jersey	$696,147,055	$543,196,366	$152,950,689
New Mexico	$47,436,153	$33,768,936	$13,667,217
New York	$1,882,163,731	$1,474,399,935	$407,763,796
North Carolina	$552,941,188	$400,670,852	$152,270,335
North Dakota	$22,440,556	$18,259,530	$4,181,026
Ohio	$581,726,147	$430,246,974	$151,479,172
Oklahoma	$154,134,582	$106,156,483	$47,978,098
Oregon	$147,332,690	$108,155,974	$39,176,716
Pennsylvania	$1,000,611,930	$771,650,285	$228,961,645
Rhode Island	$97,366,309	$74,159,944	$23,206,365
South Carolina	$168,667,834	$117,154,008	$51,513,826
South Dakota	$31,593,895	$25,104,607	$6,489,288
Tennessee	$442,828,611	$321,494,820	$121,333,791
Texas	$777,317,414	$567,316,054	$210,001,360
Utah	$57,174,136	$39,826,114	$17,348,022
Vermont	$49,485,228	$36,881,632	$12,603,596
Virginia	$390,311,646	$304,575,535	$85,736,111
Washington	$359,451,673	$273,090,100	$86,361,573
West Virginia	$71,905,352	$48,544,797	$23,360,555
Wisconsin	$476,178,882	$358,970,479	$117,208,403
Wyoming	$23,393,068	$18,935,147	$4,457,921
TOTAL	$17,528,567,954	$13,215,895,031	$4,312,672,922