Today's Datapoint

60% … of 548 employers surveyed recently by Aon Hewitt are reassessing their long-term retiree health strategies because of the ACA, with 40% of those already making changes directing post-65 retirees to the private individual market, with many of those plans containing a defined-contribution subsidy.

Quote of the Day

“I think it is going to be hard to find compromise [on the ACA’s so-called Cadillac tax, because it] has a long [2018] phase-in, which gives people time to adjust. It starts out quite high. The key is to develop regulations that distinguish plans that are costly because they are very generous from plans that are costly because a lot of sick or old people are covered….” — Henry Aaron, Ph.D., a senior fellow in economic studies at the Brookings Institution, told AIS’s Health Plan Week.

CMA to Congress on Medicare Reform Proposals, Post-Acute Care:

Protect Beneficiaries, Improve Access to Care Post-Acute Care Post-acute care refers to a range of services that support the individual’s continued recovery from illness or injury, or management of a chronic illness or disability. On June 19, 2013 the House Ways and Means Committee and Senate Finance Committee issued a letter to key communities requesting information and ideas on the types of long-term post-acute care reforms that would improve quality and improve program efficiency.[1] The letter requested comments and suggestions on a variety of options for reforming post-acute care, including quality measures, assessment tools, payment modifications, and beneficiary protections. Following a hospitalization or other care for injury or illness, many patients require continued medical care, at home, in the community, or in a specialized facility. Medicare spending on post-acute care in 2011, which included payments to skilled nursing facilities, home health agencies, long-term care hospitals and inpatient rehabilitation facilities, was $62 billion. The cost to the Medicare program of providing post-acute care has made it a target for policy-makers seeking to reduce program spending. The Center for Medicare Advocacy, joined by the National Senior Citizens Law Center, the National Committee to Preserve Social Security and Medicare and the National Consumer Voice for Quality Long-Term Care submitted broad comments with a focus on how to preserve and strengthen post-acute care services for beneficiaries.[2] In particular, the Center stressed that: • Legislative proposals to reform Medicare post-acute care should not be paid for by shifting costs to beneficiaries, including through the imposition of home health co-pays or other restrictions on Medicare home health coverage. • Congress should seek to improve access to post acute (and long-term) care, particularly through the elimination of outpatient therapy caps and the three day prior inpatient hospitalization requirement for coverage of skilled nursing facility care. • Financial incentives seeking to reduce utilization of post-acute care services should be focused on providers, rather than beneficiaries. Often, once beneficiaries seek care and are engaged in the health system, doctors and other medical providers, not patients, drive the number and types of services that are delivered. Beneficiaries should not be held solely or primarily responsible for reducing unnecessary, duplicative or ineffective care. Medicare Reform Proposals The House Ways and Means Subcommittee on Health also solicited input from stakeholders on various draft proposals that seek savings for the federal government in the Medicare program. These proposals include further means-testing Medicare premiums, increasing the Part B deductible, and adding a home health copayment. The Leadership Council of Aging Organizations, which includes the Center, submitted comments in strong opposition to these proposals [3] and any others which produce short-term savings by shifting costs to people who rely on Medicare, half of whom live with incomes under $22,000. Among other facts, LCAO’s comments highlight several key points, including: • More means-testing of Medicare premiums strikes at the heart of the middle class. • Increasing the Part B deductible harms the poorest and deters access to needed care. • Adding a home health copayment deters care for the sickest and increases the need for higher-cost levels of care. LCAO also emphasizes its support of cost-saving solutions that build on system-wide delivery reforms that reduce the rate of health spending by addressing the systemic causes of cost growth, while noting that in recent years, Medicare has led the way in reducing rates of cost growth. Conclusion Policymakers continue to propose cost-saving measures at the expense of Medicare beneficiaries. Once again, the Center for Medicare Advocacy urges Congress to adopt real, common-sense solutions that would reduce costs without harming Medicare and those who depend on it. ________________________________________ [1] Letter from House Ways and Means and Senate Finance Committee to stakeholders seeking input on Medicare post-acute care (June 19, 2013), available at http://waysandmeans.house.gov/uploadedfiles/pac_letter_final_w_signatures.pdf. [2] See http://www.medicareadvocacy.org/comments-on-post-acute-care-pac-reform-proposals/. [3] See http://www.medicareadvocacy.org/letter-to-ways-means-committee-re-cost-sharing-proposals/.

Amid Health Law Expansion, Some States Trim Medicaid Rolls

By PHIL GALEWITZ KHN Staff Writer AUG 18, 2013 While millions of adults nationwide will gain Medicaid coverage next year under the federal health law, more than 150,000 people could lose their coverage in the state-federal health insurance program for the poor as four states reduce eligibility. The states planning to make the cuts in January are Maine, Rhode Island, Wisconsin and Vermont. Most people losing access to Medicaid will be eligible for federal subsidies to help buy private coverage in the law’s online insurance marketplaces also starting in January, but advocates worry some will struggle to afford higher premiums and other cost-sharing expenses. "It is sad that as we look to expand coverage to more people, we are taking a step backward and taking away coverage to a significant amount of low income adults," said Linda Katz, policy director with the Economic Progress Institute, a Providence, R.I.-based advocacy group. Kaiser Health News collected enrollment data from the four states. The changes they plan still need federal approval, which is expected. Rhode Island is expanding Medicaid under the health law's provision to cover all childless adults making up to 138 percent of the poverty level. That will add about 45,000 people to the program. These expansion costs are fully covered by the federal government through 2016 and then the state will pay a small portion but no more than 10 percent. At the same time, though, Rhode Island is scaling back its Medicaid eligibility for parents of minor children from the current income threshold of 175 percent of the poverty level to 138 percent, affecting 6,700 people. They will be directed to shop for coverage on the state's insurance marketplace, also called an exchange. Rhode Island, like other states, expects this shift to reduce state spending. That's because states split the cost of Medicaid with the federal government, which picks up about 57 percent of Medicaid spending. But the subsidies in the marketplace are funded totally by the federal government. Meanwhile, in Maine, not everyone being cut from Medicaid will have access to the subsidies to buy private insurance. About 10,000 childless adults in the state, a little less than a third of those losing Medicaid coverage, won't qualify for those federal subsidies because they have incomes below the poverty level, $11,490 for an individual. The health law makes those subsidies available only to people with incomes between the poverty level and four times that amount. The law was written that way because it was assumed all states would expand Medicaid eligibility to cover everyone with incomes up to 138 percent of the poverty level, but the Supreme Court last year made that provision optional. Only about half the states are expanding Medicaid for 2014. Many states led by Republicans have balked at expanding Medicaid, citing how spending for the program has outpaced inflation and even a modest increase in spending over the next decade could be difficult. Stacey Jacobsohn, 52, of Augusta, Maine, is worried about losing her Medicaid coverage particularly since she had a stroke last year. With a $5,000 annual income, she said she will have to rely on her doctors to cut their prices so she can keep seeing them. "It's going to be very hard for me," she said. "It's a lot of fear right now." For the past four years, states have been limited in their ability to reduce the size of their Medicaid programs because of a requirement called "maintenance of effort," which first took effect in the 2009 federal stimulus law that provided billions of dollars to states during the recession as long as they didn't restrict standards for eligibility. That restriction was extended in the 2010 Affordable Care Act. But that provision ends for adults in 2014. That's why Maine next year will be able to reduce its Medicaid coverage for childless adults. In addition, Maine next year plans to reduce eligibility for parents and caretakers from 133 percent of the poverty level to 100 percent of the poverty level, which affects 15,000 adults. Medicaid Cuts Four states are reducing eligibility in their Medicaid program for some groups next year. State Number of people being cut Maine 35,000 Rhode Island 6,700 Wisconsin 92,000 Vermont 19,000 Of these, all will be eligible for federal subsidies in exchanges except for 10,000 childless adults in Maine with incomes below 100 percent of the federal poverty level. They won't be eligible. Maine Gov. Paul LePage, a Republican, says his state can't afford its current Medicaid program nor take on an expanded one, even if all the costs are paid for the first three years by the federal government. LePage this year vetoed a measure passed by the legislature to expand Medicaid under the health law's provision. Supporters of the measure could not get enough votes to override his veto. "Adding non-disabled individuals to our welfare program when we are failing to provide core services to thousands of disabled and elderly Mainers is unacceptable," LePage said in his veto message. In the other two states, the Medicaid cutbacks are the result of the expiration of federal waivers that allowed for demonstration programs designed to expand coverage. In Vermont, about 19,000 people will fall off the Medicaid rolls as the state ends two such initiatives geared toward helping people with incomes as high as 300 percent of the poverty level, or a little more than $34,000. Mark Larson, commissioner of the Vermont Department of Health Access, said the programs are ending to save the state dollars since those populations next year can qualify for federal assistance to buy coverage in the state exchange. Wisconsin would cut more people from Medicaid than any other state as part of a plan advanced by Republican Gov. Scott Walker and still awaiting federal approval. About 92,000 people -- 87,000 parents and caretaker relatives, and 5,000 childless adults with incomes above the federal poverty level -- would lose the Medicaid coverage they previously had as a result of a wavier and be sent to the online insurance marketplace. At the same time, the state is planning to add 100,000 Wisconsin childless adults with incomes below the poverty level to Medicaid. "The governor's reforms balance the need to maintain a strong and sustainable health care safety net with ensuring the greatest number of people possible can afford to remain in the private health insurance market and maintain their independence," according to a statement by the Wisconsin Department of Health. Many of the 92,000 Wisconsin adults losing Medicaid coverage already pay small monthly premiums. It's unclear how much those rates will increase in the online marketplace. "The products designed for the marketplace were never designed for people in these low-income categories," said Donna Friedsam, health policy program director at the University of Wisconsin. "Even with the federal subsidies, the cost sharing will still be quite onerous." http://www.kaiserhealthnews.org/Stories/2013/August/19/medicaid-cuts-in-four-states.aspx

National Average Part D Bid Drops 4.7% For 2014, Upping Risks for PDPs, MA-PDs

Reprinted from MEDICARE ADVANTAGE NEWS, biweekly news and business strategies about Medicare Advantage plans, product design, marketing, enrollment, market expansions, CMS audits, and countless federal initiatives in MA and Medicaid managed care. By James Gutman, Managing Editor August 8, 2013 Volume 19 Issue 15 For what seems to be a variety of reasons, 2014 bids by plans for Medicare Part D products were again aggressive, resulting in a 4.7% drop in the national average monthly bid amount released by CMS late last month to $75.88 from $79.64 for 2013. The results, which surprised several actuaries, especially coming on top of a 6% drop last year (MAN 8/23/12, p. 1), probably mean that the biggest operators of stand-alone Prescription Drug Plans will continue to take market share among auto-enrolled, subsidized PDP beneficiaries from smaller plans. This could threaten the long-term viability of some of those smaller PDPs. The figures also may mean some Medicare Advantage prescription drug (MA-PD) plans, including Special Needs Plans (SNPs), needed to use a short and now-ended reallocation period to reduce some aspects of their supplemental benefits. That’s because they are locked into minimum drug benefits, and their overall bids may have assumed they would get larger subsidies than they actually will in light of the drop in the Part D national benchmark. Separately, CMS also said July 30 that the average PDP premium will be about $31 for 2014, up just slightly from the $30 in 2012 and 2013 (see table, p. 7). This figure includes the expected effect of switches by beneficiaries to lower-priced products, notes Corey Ford, a senior manager at consulting firm Avalere Health LLC. Before such switches are taken into consideration, the base beneficiary premium for 2014 will be $32.42 next year, CMS said, up from $31.17 in 2013. The base premium results from multiplying the national average monthly bid amount by a fraction called the “beneficiary premium percentage.” Part D Average Bid Tumbles Again The difference in 2014 direction for the premium and bid must be primarily a result of what is happening with costs of the catastrophic portion of the Part D benefit, explains Pat Dunks, a principal and consulting actuary in the Milwaukee-area office of Milliman. The catastrophic portion is the 80% of costs paid by the federal government after the beneficiary gets through the “doughnut hole” coverage gap in the Part D benefit and is rising faster than are costs in the portion paid by PDPs, Dunks says. This may be partly because high specialty-drug prices, which often push beneficiaries beyond the doughnut hole, are rising faster than are overall pharmaceutical prices. “I think everybody was surprised” by the big drop in the 2014 average Part D bid amount, which is weighted by enrollment, Dunks tells MAN. He notes that the figure is especially important for auto-assigned PDP beneficiaries since plans bidding below the benchmark for basic coverage qualify for getting low-income subsidy (LIS) beneficiaries, with the amount of the subsidy varying by region. A plan falling within a de minimis amount, which will remain $2 per member per month for 2014, above the benchmark may retain LIS members if the plan agrees to pick up the additional cost itself. Humana, WellCare Bid Below Benchmarks Humana Inc. President and CEO Bruce Broussard, speaking in the company’s July 31 earnings call with investors (see story, p. 3), said the new CMS data mean that Humana was under the benchmark in all but one region, where it was in the de minimis range. Dunks calls the statement by Humana, which has among the lowest-cost PDPs in 2013, “no surprise.” WellCare Health Plans, Inc. CEO Alec Cunningham said in its earnings call Aug. 7 that the company was below the 2014 Part D benchmark in 30 of the 33 regions in which it bid on PDPs, compared with only 14 below-benchmark bids for 2013. The company lost more LIS members than it gained this year, but should reverse that situation in 2014, Cunningham noted. He attributed the turnaround partly to WellCare’s recent introduction of preferred pharmacy networks that lower its drug costs. Dunks says one possible reason for the big drop in the national average bid for PDPs may lie in risk-adjustment changes CMS is instituting on PDP beneficiaries. Those changes may make certain kinds of PDP beneficiaries more attractive to plan sponsors, thereby leading the sponsors to be “more aggressive” in their bids. But which plans did what, he points out, won’t be known — except in the case of self-disclosures such as Humana’s — until CMS releases the full “landscape” PDP files next month. Other factors that could have led to the drop in the average bid, according to Dunks, include more economies of scale achieved by the bigger plans, improved contracting with drug producers — “but inflation [in pharmaceutical costs] isn’t zero” — and formulary changes. He adds, however, that not as many major brand drugs will get new generics in 2014 as has been the case in 2013, so the opportunities for such formulary changes have declined. This leaves another possibility — that plans decided to accept lower profit margins for 2014 to keep members, Dunks says. The results the national average bid trend will have on smaller PDPs may be substantial, he suggests, and could lead them in the future to either negotiate better drug prices or exit the market. Brian Collender, specialist leader in the health actuarial practice at Deloitte, agrees that it will be “kind of tough” on smaller PDPs in the future and says that many of them “might go away” in light of the risk of continuing to compete in the low-premium environment. The Part D benchmark reduction is less of a problem for MA-PDs, he contends, since the inclusion of medical coverage in those products means there are far more dollars in the premiums and less dependence on auto-enrollees. However, even these plans may have had to cut medical benefits if they assumed the direct Part D subsidy would be higher than it turned out to be. MA-PDs had until Aug. 5 to make such benefit changes, which might just involve a “couple of dollars” less in supplementary benefits, such as for dental, vision or gym memberships, he says. Universal American Corp. Chairman and CEO Richard Barasch said in its Aug. 2 earnings call that the new benchmarks would cause the company “to adjust” its MA-PD bids by the deadline. He did not specify the form of the adjustments or where the company’s MA-PD bids stood in relation to benchmarks. Collender tells MAN he expected the national average to go down because of the continuing introduction of low-premium PDPs, “but not this much.” The trend may continue “a few more years,” but “it will have to stop at some point,” he says. He cites several reasons for the trend, including the moves to lower-priced generics and the potential that lower-priced PDPs have to attract younger, healthier seniors as new customers. Unhealthy seniors probably already are in the market and will tend to stick with their plans out of fear of problems if they switch, asserts Collender. But Ford, who says he was “not surprised” by the new average bid benchmark, tells MAN that perhaps the primary reason for the substantially lower figure for 2014 is preferred pharmacy networks and the continuing ability of them to make low-cost PDPs prevalent and feasible. It is the larger plans that have been “driving this trend,” he says, making it harder for smaller plans to compete, even if like Blues plans they have a strong local presence that makes them very competitive on the MA-PD side. View CMS’s July 30 memo on the 2014 national average bid amount by visiting the Aug. 8 From the Editor entry at www.aishealth.com/newsletters/medicareadvantagenews. Source: Avalere Health analysis of CMS’s annual release of the Part D national average bid and base beneficiary premium information. The average beneficiary premium and base beneficiary premium are from CMS’s press releases. Prepared by Avalere Aug. 2, 2013.

Ohio Medicaid costs would surge without expansion

State should also cut costs for current enrollees August 15, 2013 | By Ron Shinkman Ohio is the most populous state whose leadership has yet to decide whether to fully embrace the Affordable Care Act. It stands to lose money if it doesn't expand its Medicaid program, reported the Cincinnati Enquirer. Citing data from a study undertaken by the Health Policy Institute of Ohio and Ohio State University, Ohio would spend $17.4 billion a year on its Medicaid program. That takes into account an average annual spending increase of 7.2 percent and the current 40 percent the state pays to provide Medicaid coverage. Under the ACA, the state's share of payments would never rise above 10 percent, and spending would increase to $14.2 billion a year by 2025, the Enquirer reported. However, the cost increases are pegged to Ohio, reducing its annual Medicaid costs increases to 3.5 percent per year, a cut of more than half from the current cost trends. Expanding Medicaid would cover an additional 366,000 Ohioans, and would take significant financial pressure off of hospitals. However, more than half the states are unlikely to immediately expand their Medicaid programs under the ACA, leaving as many as 60 percent of Americans eligible without coverage. The Ohio study's findings were presented to a state legislative panel. Ohio's lawmakers have yet to vote on expanding the Medicaid program, and the window of being able to do so in time for early 2014 is quickly closing, according to the Enquirer. For more: - read the Enquirer article - here's the study (.pdf) Study: Ohio Medicaid costs would surge without expansion - FierceHealthFinance - Health Finance, Healthcare Finance http://www.fiercehealthfinance.com/story/study-ohio-medicaid-costs-would-surge-without-expansion/2013-08-15#ixzz2cZYovDhB

Home Care Helps Older Blacks with Depression

Published: Aug 19, 2013 By Cole Petrochko, Staff Writer, MedPage Today Reviewed by F. Perry Wilson, MD, MSCE; Instructor of Medicine, Perelman School of Medicine at the University of Pennsylvania and Dorothy Caputo, MA, BSN, RN, Nurse Planner Action Points • Note that this randomized trial demonstrated that an intensive, home-based, social worker intervention helped to alleviate symptoms of depression in older African Americans. • Be aware that the cost-efficacy of such interventions has yet to be evaluated. A home-based intervention for depressive symptoms in older African-American patients reduced depression severity, improved knowledge about depression, and raised patients' quality of life, researchers found. Compared with those wait-listed for the intervention, patients who received at-home care saw mean depression scores fall by 2.9 points (95% CI minus 4.6-minus 1.2) on one scale and by 3.7 points (95% CI minus 5.4-minus 2.1) on another scale, according to Laura Gitlin, PhD, of Johns Hopkins University School of Nursing, and colleagues. Those who received home-based care also had significantly improved quality of life, behavioral activation, and anxiety (P<0.001 for each) versus those who had not yet received the intervention, they wrote in the August 20 issue of Annals of Internal Medicine. The authors noted that depression is both common and has "debilitating consequences" in older patients, and that the condition is both under-recognized and under-treated in primary care settings among older African-American patients versus older white patients. White patients are more likely to receive standard depression care and to participate in psychotherapy and other guideline treatments, they wrote, adding that this disparity is due to systemic- and patient-level problems, such as lack of access to care and stigma associated with treatment. The researchers evaluated whether a home-based, social worker-delivered intervention -- which they titled "Beat the Blues" -- would manage depressive symptoms in a population of 208 African Americans ages 55 and older who were randomized to treatment or to a wait list for treatment. Participants in the intervention group received up to 10 1-hour sessions at home that were delivered weekly over the first 4 months and biweekly after that period. Social workers in the intervention offered care management through a "systematic assessment of unmet care needs," referrals to social and medical services, depression education in symptom recognition, education in stress reduction techniques, and education in behavioral activation through identification of personal activity goals and plans to accomplish them. Treatment goals included management of chronic conditions, socialization, exercise, and meeting unmet care needs. Those randomized to the wait list control received no study-based care over the baseline to 4-month study period, though they were offered the at-home intervention after 4 months. Study outcomes included improvement in depressive symptom severity as measured through the Patient Health Questionnaire-9 and the Epidemiologic Studies Depression Scale, as well as improvement of depression knowledge, well-being, quality of life, behavioral activation, anxiety, and functional difficulty. Participants had a mean age of 69.6; most were women (78.4%) and were unemployed (90.9%). Most were unmarried, lived alone, had some financial difficulty, and had no more than a high school education. Most participants also had high blood pressure, arthritis, and high cholesterol; diabetes was also common. Roughly one in five took antidepressants (19.3%) or anti-anxiety drugs (17%). After 4 months of treatment, depressive symptom scores -- as well as secondary outcomes improved for patients in the intervention group versus control participants. Improvements (P<0.001 for all) included: Depression knowledge and efficacy (an 0.3-point improvement) • Well being (0.7 points) • Behavior activation (0.8 points) • Quality of life (0.3 points) • Anxiety (-0.4 points) Functional difficulty scores dropped by 0.2 points, but this difference was not as strong (P=0.014). More patients who received treatment had remission of depressive symptoms compared with those who were wait-listed (43.8% versus 26.9%), and more had clinically meaningful reductions in depressive symptom severity (64% versus 40.9%). After 8 months, participants in the control group who had received at-home treatment "showed benefits ... that were similar to the adjusted benefits from the initial treatment group." Additionally, among those who received treatment in the first 4 months of the study, 68.6% were still in remission at 8 months' follow-up. The authors cautioned that the withdrawal rate was higher in the treatment group than in the wait-listed group. They also noted the study was limited by its use of a single-center, self-reported outcomes, a small study sample, a small number of male participants, and use of a single minority group. The study was supported by the National Institute of Mental Health. Primary source: Annals of Internal Medicine Source reference: Gitlin LN, et al "A home-based intervention to reduce depressive symptoms and improve quality of life in older African Americans" Ann Intern Med 2013: DOI: 10.7326/0003-4819-159-4-201308200-00005. http://www.medpagetoday.com/Geriatrics/Depression/41068?xid=nl_mpt_DHE_2013-08-20&utm_content=&utm_medium=email&utm_campaign=DailyHeadlines&utm_source=WC&eun=g350341d0r&userid=350341&email=john@thebrokerageinc.com&mu_id=5344066