Another Day In Omerica

Over the past year the House and the Senate have been working on an effort to provide health insurance reform that lowers costs. Obama has now put forth a proposal that incorporates the work of the House and Senate. This proposal adds additional ideas from Republican members of Congress. It makes insurance more affordable by providing the largest middle class tax cut for health care. It sets up a new competitive health insurance market giving tens of millions of Americans the exact same insurance choices that members of Congress will have. It will end discrimination against Americans with pre-existing conditions.

One key improvement is eliminating the Nebraska FMAP provision and providing significant additional Federal financing to all States for the expansion of Medicaid. The proposal completely closes the Medicare prescription drug “donut hole” coverage gap. It strengthens the Senate bill’s provisions that make insurance affordable for individuals and families. The threshold for the excise tax on the most expensive health plans will be raised from $23,000 for a family plan to $27,500 and will start in 2018 for all such plans. And another important idea included is improving insurance protections for consumers and creating a new Health Insurance Rate Authority to review and rein in unreasonable rate increases and other unfair practices of insurance plans.

Download the full PDF of the President’s key improvements.

• It makes insurance more affordable by providing the largest middle class tax cut for health care in history, reducing premium costs for tens of millions of families and small business owners who are priced out of coverage today. This helps over 31 million Americans afford health care who do not get it today – and makes coverage more affordable for many more.
• It sets up a new competitive health insurance market giving tens of millions of Americans the exact same insurance choices that members of Congress will have.
• It brings greater accountability to health care by laying out commonsense rules of the road to keep premiums down and prevent insurance industry abuses and denial of care.
• It will end discrimination against Americans with pre-existing conditions.
• It puts our budget and economy on a more stable path by reducing the deficit by $100 billion over the next ten years – and about $1 trillion over the second decade – by cutting government overspending and reining in waste, fraud and abuse.
• Eliminating the Nebraska FMAP provision and providing significant additional Federal financing to all States for the expansion of Medicaid;
• Closing the Medicare prescription drug “donut hole” coverage gap;
• Strengthening the Senate bill’s provisions that make insurance affordable for individuals and families;
• Strengthening the provisions to fight fraud, waste, and abuse in Medicare and Medicaid;
• Increasing the threshold for the excise tax on the most expensive health plans from $23,000 for a family plan to $27,500 and starting it in 2018 for all plans;
• Improving insurance protections for consumers and creating a new Health Insurance Rate Authority to provide Federal assistance and oversight to States in conducting reviews of unreasonable rate increases and other unfair practices of insurance plans.
•
Increase Tax Credits for Health Insurance Premiums
The House and Senate health insurance bills lower premiums through increased competition, oversight, and new accountability standards set by insurance exchanges. The bills also provide tax credits and reduced cost sharing for families with modest income. Relative to the Senate bill, the President’s Proposal lowers premiums for families with income below $44,000 and above $66,000. Relative to the House bill, the proposal makes premiums less expensive for families with income between roughly $55,000 and $88,000. The President’s Proposal also improves the cost sharing assistance for individuals and families relative to the Senate bill. Families with income below $55,000 will get extra assistance; the additional funding to insurers will cover between 73 and 94% of their health care costs.

Close the Medicare Prescription Drug “Donut Hole”.
The Medicare drug benefit provides vital help to seniors who take prescription drugs, but under current law, it leaves many beneficiaries without assistance when they need it most. Medicare stops paying for prescriptions after the plan and beneficiary have spent $2,830 on prescription drugs, and only starts paying again after out-of-pocket spending hits $4,550. This “donut hole” leaves seniors paying the full cost of expensive medicines, causing many to skip doses or not fill prescriptions at all. The Senate bill provides a 50% discount for certain drugs in the donut hole. The House bill fully phases out the donut hole over 10 years. Both bills raise the dollar amount before the donut hole begins by $500 in 2010.

Invest in Community Health Centers.
About 1,250 centers provide care to 20 million people, with an emphasis on preventive and primary care. The Senate bill increases funding to these centers for services by $7 billion and for construction by $1.5 billion over 5 years. The House bill provides $12 billion over the same 5 years. Bridging the difference, the President’s Proposal invests $11 billion in these centers.

Strengthen Oversight of Insurance Premium Increases.
Both the House and Senate bills include significant reforms to make insurance fair, accessible, and affordable to all people, regardless of pre-existing conditions. One essential policy is “rate review” meaning that health insurers must submit their proposed premium increases to the State authority or Secretary for review.

Extend Consumer Protections against Health Insurer Practices.
The Senate bill includes a “grandfather” policy that allows people who like their current coverage, to keep it. The President’s Proposal adds certain important consumer protections to these “grandfathered” plans. Within months of legislation being enacted, it requires plans to cover adult dependents up to age 26, prohibits rescissions, mandates that plans have a stronger appeals process, and requires State insurance authorities to conduct annual rate review, backed up by the oversight of the HHS Secretary. When the exchanges begin in 2014, the President’s Proposal adds new protections that prohibit all annual and lifetime limits, ban pre-existing condition exclusions, and prohibit discrimination in favor of highly compensated individuals. Beginning in 2018, the President’s Proposal requires “grandfathered” plans to cover proven preventive services with no cost sharing.

Improve Individual Responsibility.
The House and Senate bills require individuals who have affordable options but who choose to remain uninsured to make a payment to offset the cost of care they will inevitably need. The House bill’s payment is a percentage of income. The Senate sets the payment as a flat dollar amount or percentage of income, whichever is higher (although not higher than the lowest premium in the area). Both the House and Senate bill provide a low-income exemption, for those individuals with incomes below the tax filing threshold (House) or below the poverty threshold (Senate). The President’s Proposal raises the percent of income that is an alternative payment amount from 0.5 to 1.0% in 2014, 1.0 to 2.0% in 2015, and 2.0 to 2.5% for 2016 and subsequent years – the same percent of income as in the House bill, which makes the assessment more progressive.

Strengthen Employer Responsibility.
Under the Senate bill, there is no mandate for employers to provide health insurance. But as a matter of fairness, the Senate bill requires large employers (i.e., those with more than 50 workers) to make payments only if taxpayers are supporting the health insurance for their workers. The assessment on the employer is $3,000 per full-time worker obtaining tax credits in the exchange if that employer’s coverage is unaffordable, or $750 per full-time worker if the employer has a worker obtaining tax credits in the exchange but doesn’t offer coverage in the first place. The House bill requires a payroll tax for insurers that do not offer health insurance that meets minimum standards. The tax is 8% generally and phases in for employers with annual payrolls from $500,000 to $750,000; according to the Congressional Budget Office (CBO), the assessment for a firm with average wages of $40,000 would be $3,200 per worker. The President’s Proposal, small businesses will receive $40 billion in tax credits to support coverage for their workers beginning this year. Consistent with the Senate bill, small businesses with fewer than 50 workers would be exempt from any employer responsibility policies.

Comprehensive Sanctions Database.
The President’s Proposal establishes a comprehensive Medicare and Medicaid sanctions database, overseen by the HHS Inspector General. This database will provide a central storage location, allowing for law enforcement access to information related to past sanctions on health care providers, suppliers and related entities. (Source: H.R. 3400, “Empowering Patients First Act” (Republican Study Committee bill))

Registration and Background Checks of Billing Agencies and Individuals.
In an effort to decrease dishonest billing practices in the Medicare program, the President’s Proposal will assist in reducing the number of individuals and agencies with a history of fraudulent activities participating in Federal health care programs (Source: H.R. 3970, “Medical Rights & Reform Act” ( Kirk bill))

Expanded Access to the Healthcare Integrity and Protection Data Bank.
Increasing access to the health care integrity data bank will improve coordination and information sharing in anti-fraud efforts. The President’s Proposal broadens access to the data bank to quality control and peer review organizations and private plans that are involved in furnishing items or services reimbursed by Federal health care program. It includes criminal penalties for misuse. (Source: H.R. 3970, “Medical Rights & Reform Act” (Kirk bill))

Liability of Medicare Administrative Contractors for Claims Submitted by Excluded Providers.
In attacking fraud, it is critical to ensure the contractors that are paying claims are doing their utmost to ensure excluded providers do not receive Medicare payments. Therefore, the President’s Proposal provision holds Medicare Administrative Contractors accountable for Federal payment for individuals or entities excluded from the Federal programs or items or services for which payment is denied. (Source: H.R. 3970, “Medical Rights & Reform Act” (Kirk bill))

Community Mental Health Centers.
The President’s Proposal ensures that individuals have access to comprehensive mental health services in the community setting, but strengthens standards for facilities that seek reimbursement as community mental health centers by ensuring these facilities are not taking advantage of Medicare patients or the taxpayers. (Source: H.R. 3970, “Medical Rights & Reform Act” (Kirk bill))

Limiting Debt Discharge in Bankruptcies of Fraudulent Health Care Providers or Suppliers.
The President’s Proposal will assist in recovering overpayments made to providers and suppliers and return such funds to the Medicare Trust Fund. It prevents fraudulent health care providers from discharging through bankruptcy amounts due to the Secretary from overpayments. (Source: H.R. 3970, “Medical Rights & Reform Act” (Kirk bill))

Use of Technology for Real-Time Data Review.
The President’s Proposal speeds access to claims data to identify potentially fraudulent payments more quickly. It establishes a system for using technology to provide real-time data analysis of claim and payments under public programs to identify and stop waste, fraud and abuse. (Source: Roskam Amendment offered in House Ways & Means Committee markup)

Illegal Distribution of a Medicare or Medicaid Beneficiary Identification or Billing Privileges.
Fraudulent billing to Medicare and Medicaid programs costs taxpayers millions of dollars each year. Individuals looking to gain access to a beneficiary’s personal information approach Medicare and Medicaid beneficiaries with false incentives. Many beneficiaries unwittingly give over this personal information without ever receiving promised services. The President’s Proposal adds strong sanctions, including jail time, for individuals who purchase, sell or distribute Medicare beneficiary identification numbers or billing privileges under Medicare or Medicaid – if done knowingly, intentionally, and with intent to defraud. (Source: H.R. 3970, “Medical Rights & Reform Act” (Kirk bill))

Study of Universal Product Numbers Claims Forms for Selected Items and Services under the Medicare Program.
The President’s Proposal requires HHS to study and issue a report to Congress that examines the costs and benefits of assigning universal product numbers (UPNs) to selected items and services reimbursed under Medicare. The report must examine whether UPNs could help improve the efficient operation of Medicare and its ability to detect fraud and abuse. (Source: H.R. 3970, “Medical Rights & Reform Act” (Kirk bill), Roskam Amendment offered in House Ways & Means Committee markup)

Medicaid Prescription Drug Profiling.
The President’s Proposal requires States to monitor and remediate high-risk billing activity, not limited to prescription drug classes involving a high volume of claims, to improve Medicaid integrity and beneficiary quality of care. States may choose one or more drug classes and must develop or review and update their care plan to reduce utilization and remediate any preventable episodes of care where possible. (Source: President’s FY 2011 Budget)

Medicare Advantage Risk Adjustment Errors.
The President’s Proposal requires in statute that the HHS Secretary extrapolate the error rate found in the risk adjustment data validation (RADV) audits to the entire Medicare Advantage contract payment for a given year when recouping overpayments. Extrapolating risk score errors in MA plans is consistent with the methodology used in the Medicare fee-for-service program and enables Medicare to recover risk adjustment overpayments (Source: President’s FY 2011 Budget)

Modify Certain Medicare Medical Review Limitations.
The Medicare Modernization Act of 2003 placed certain limitations on the type of review that could be conducted by Medicare Administrative Contractors prior to the payment of Medicare Part A and B claims. The President’s Proposal modifies these statutory provisions that currently limit random medical review and place statutory limitations on the application of Medicare prepayment review. (Source: President’s FY 2011 Budget)

Establish a CMS-IRS Data Match to Identify Fraudulent Providers.
The President’s Proposal authorizes the Centers for Medicare & Medicaid Services (CMS) to work collaboratively with the Internal Revenue Service (IRS) to determine which providers have seriously delinquent tax debt to help identify potentially fraudulent providers sooner. The data match will primarily target certain high-risk provider types in high-vulnerability areas. (Source: President’s FY 2011 Budget)

Preventing Delays in Access to Generic Drugs.
Brand-name pharmaceutical companies can delay generic competition through agreements whereby they pay the generic company to keep its drug off the market for a period of time, called “pay-for-delay.” The President’s proposal adopts a provision from the bipartisan legislation that gives the FTC enforcement authority to address this problem. Specifically, it makes anti-competitive and unlawful any agreement in which a generic drug manufacturer receives anything of value from a brand-name drug manufacturer that contains a provision in which the generic drug manufacturer agrees to limit or forego research, development, marketing, manufacturing or sales of the generic drug.

Republican Ideas Included in the President’s Proposal

• Includes personal responsibility incentives: Allows health insurance premium to vary based on participation in proven employer wellness programs
o (Sources: H.R. 3468, “Promoting Health and Preventing Chronic Disease through Prevention and Wellness Programs for Employees, Communities, and Individuals Act” (Castle bill); H.R. 4038, “Common Sense Health Care Reform & Accountability Act” (Republican Substitute bill); H.R. 3400, “Empowering Patients First Act” (Republican Study Committee bill); H.R. 3970, “Medical Rights & Reform Act” (Kirk bill), “Coverage, Prevention and Reform Act”)
• Advances medical liability reform through grants to States: Provides grants to States to jump-start and evaluate promising medical liability reform ideas to put patient safety first, prevent medical errors, and reduce liability premiums.
o (Sources: S. 1783, “Ten Steps to Transform Health Care in America Act” (Enzi bill); H.R. 3400, “Empowering Patients First Act” (Republican Study Committee bill); H.R. 4529, “Roadmap for America’s Future Act” (Ryan bill); S. 1099, “Patients’ Choice Act” (Burr-Coburn, Ryan-Nunes bill))
• Extends dependent coverage to age 26: Gives young adults new options.
o (Sources: H.R. 4038, “Common Sense Health Care Reform & Accountability Act” (Republican Substitute bill); H.R. 3970, “Medical Rights & Reform Act” (Kirk bill))
• Allows automatic enrollment by employers in health insurance: Allows employee to opt-out.
o (Sources: House Republican Substitute; H.R. 3400, “Empowering Patients First Act” (Republican Study Committee bill); “Coverage, Prevention, and Reform Act” )
• Mechanisms to improve quality.
o (Sources: H.R. 4529, “Roadmap for America’s Future Act;” S. 1099, “Patients’ Choice Act;” H.R. 3400, Republican Study Group bill; S. 1783, “Ten Steps to Transform Health Care in America Act” (Enzi bill))
• Comprehensive Sanctions Database. The President’s Proposal establishes a comprehensive Medicare and Medicaid sanctions database, overseen by the HHS Inspector General. This database will provide a central storage location, allowing for law enforcement access to information related to past sanctions on health care providers, suppliers and related entities.
o (Source: H.R. 3400, “Empowering Patients First Act” (Republican Study Committee bill))
• Registration and Background Checks of Billing Agencies and Individuals. In an effort to decrease dishonest billing practices in the Medicare program, the President’s Proposal will assist in reducing the number of individuals and agencies with a history of fraudulent activities participating in Federal health care programs. It ensures that entities that bill for Medicare on behalf of providers are in good standing. It also strengthens the Secretary’s ability to exclude from Medicare individuals who knowingly submit false or fraudulent claims.
o (Source: H.R. 3970, “Medical Rights & Reform Act”)
• Expanded Access to the Healthcare Integrity and Protection Data Bank. Increasing access to the health care integrity data bank will improve coordination and information sharing in anti-fraud efforts. The President’s Proposal broadens access to the data bank to quality control and peer review organizations and private plans that are involved in furnishing items or services reimbursed by Federal health care program. It includes criminal penalties for misuse.
o (Source: H.R. 3970, “Medical Rights & Reform Act”)
• Liability of Medicare Administrative Contractors for Claims Submitted by Excluded Providers. In attacking fraud, it is critical to ensure the contractors that are paying claims are doing their utmost to ensure excluded providers do not receive Medicare payments. Therefore, the President’s Proposal provision holds Medicare Administrative Contractors accountable for Federal payment for individuals or entities excluded from the Federal programs or items or services for which payment is denied.
o (Source: H.R. 3970, “Medical Rights & Reform Act”)
• Community Mental Health Centers. The President’s Proposal ensures that individuals have access to comprehensive mental health services in the community setting, but strengthens standards for facilities that seek reimbursement as community mental health centers by ensuring these facilities are not taking advantage of Medicare patients or the taxpayers.
o (Source: H.R. 3970, “Medical Rights & Reform Act”)
• Limiting Debt Discharge in Bankruptcies of Fraudulent Health Care Providers or Suppliers. The President’s Proposal will assist in recovering overpayments made to providers and suppliers and return such funds to the Medicare Trust Fund. It prevents fraudulent health care providers from discharging through bankruptcy amounts due to the Secretary from overpayments.
o (Source: H.R. 3970, “Medical Rights & Reform Act”)
• Use of Technology for Real-Time Data Review. The President’s Proposal speeds access to claims data to identify potentially fraudulent payments more quickly. It establishes a system for using technology to provide real-time data analysis of claim and payments under public programs to identify and stop waste, fraud and abuse.
o (Source: Roskam Amendment offered in House Ways & Means Committee markup)
• Illegal Distribution of a Medicare or Medicaid Beneficiary Identification or Billing Privileges. Fraudulent billing to Medicare and Medicaid programs costs taxpayers millions of dollars each year. Individuals looking to gain access to a beneficiary’s personal information approach Medicare and Medicaid beneficiaries with false incentives. Many beneficiaries unwittingly give over this personal information without ever receiving promised services. The President’s Proposal adds strong sanctions, including jail time, for individuals who purchase, sell or distribute Medicare beneficiary identification numbers or billing privileges under Medicare or Medicaid – if done knowingly, intentionally, and with intent to defraud.
o (Source: H.R. 3970, “Medical Rights & Reform Act”)
• Study of Universal Product Numbers Claims Forms for Selected Items and Services Under the Medicare Program. The President’s Proposal requires HHS to study and issue a report to Congress that examines the costs and benefits of assigning universal product numbers (UPNs) to selected items and services reimbursed under Medicare. The report must examine whether UPNs could help improve the efficient operation of Medicare and its ability to detect fraud and abuse.
o (Source: H.R. 3970, “Medical Rights & Reform Act”, Roskam Amendment offered in House Ways & Means Committee markup)

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