Tuesday Tidbits

The Nation's leadership raised the debt ceiling in time to avoid the crisis that the Administration predicted. Congress recessed until last month without resolving the Federal Aviation Administration appropriations issue that has resulted in a furlough of 4,000 employees according to the Federal Times.

CBS News explains that the new debt ceiling law, among other things,

 Creates a 12-person House and Senate special committee to identify further spending cuts. The committee must complete its work by Thanksgiving - November 23 - and Congress must hold an up or down vote on the committee recommendations by December 23. The committee could overhaul the tax code or find savings in benefit programs like Medicaid, Medicare or Social Security. Congress could not modify the committee's recommendation.

Should the special committee deadlock or should Congress reject the committee's recommendations, then automatic across the board spending cuts of at least $1.2 trillion would go into effect.

A National Underwriter article explains how this process may affect health insurers.

The process may have a direct impact on the FEHB Program. The President's deficit reduction commission proposed last year that a premium support approach to the government contribution be tested in the FEHBP. Under premium support, the entire government contribution would be made available to pay the plan premium but the annual increases would be tied to a standard, such as the CPI-U. In other words, an employee or annuitant could have no employee contribution for a low cost plan. Currently, the law, 5 U.S.C. Sec. 8906, provides for a minimum 25% employee contribution.  This Kaiser Health News article reviews all of that commision's recommendations.

Health care providers are concerned about the new law. Modern Healthcare notes that

some physician advocates warned about the complicated timing of the work of the deficit reduction panel, which will have to offer $1.5 trillion in cuts by Nov. 23 and secure congressional passage by Dec. 23. That is the same time frame in which Congress will need to find billions of dollars to pay for another delay of the 29.5% cut in Medicare physician reimbursements scheduled for the beginning of 2012.

Speaking of Medicare, the Centers for Medicare and Medicaid Services announced today the Program's inpatient hospital care reimbursement policies for the federal fiscal year that begins October 1, 2012

CMS projects that total Medicare operating payments to acute care hospitals for inpatient services occurring in FY 2012 will increase by $1.13 billion, or 1.1 percent, in FY 2012 compared with FY 2011, due to a 1.0 percent increase in payment rates together with other policies adopted in the final rule. 

To provide hospitals with an incentive to reduce preventable hospital readmissions and improve care coordination, the Affordable Care Act requires CMS to implement a Hospital Readmissions Reduction Program that will reduce payments beginning in FY 2013 – for discharges on or after Oct. 1, 2012 ‑ to certain hospitals that have excess readmissions for certain selected conditions.   Today’s final rule finalizes readmissions measures for three conditions -- acute myocardial infarction (or heart attack), heart failure, and pneumonia – as well as the methodology that will be used to calculate excess readmission rates for these conditions.

The final rule also adopts a Medicare spending per beneficiary measure for both the Hospital IQR Program and the new Hospital Inpatient Value-Based Purchasing (VBP) program required by the Affordable Care Act.   The new measure will assess Part A and Part B beneficiary spending during a period of time that spans from three days prior to a hospital admission through 30 days after the patient is discharged.   The goal is to encourage hospitals to provide high quality care to Medicare beneficiaries at a lower cost and to promote greater efficiencies across care settings and throughout the entire U.S. health care system.

Yesterday, the Department of Health and Human Services adopted the U.S. Institute of Medicine's recommendations to expand the list of preventive care services required by women that non-grandfathered health plans must provide with no-enrollee cost sharing. The expanded list includes

• well-woman visits;
• screening for gestational diabetes;
• human papillomavirus (HPV) DNA testing for women 30 years and older;
• sexually-transmitted infection counseling;
• human immunodeficiency virus (HIV) screening and counseling;
• FDA-approved contraception methods and contraceptive counseling;
• breastfeeding support, supplies, and counseling; and
• domestic violence screening and counseling.

HHS adds that "Plans will retain the flexibility to control costs and promote efficient delivery of care by, for example, continuing to charge cost-sharing for branded drugs if a generic version is available and is just as effective and safe for the patient to use."  America's Health Insurance Plans President Karen Ignani remarked that 

"Health plans have long provided coverage for evidence-based preventive services, including the vast majority of services recommended by the Institute of Medicine (IOM). We appreciate that the administration’s guidance recognizes the value of health plans’ programs designed to ensure patients are receiving the safest, highest-quality care.

"Unfortunately, the preventive care coverage recommendations recently issued by the IOM would increase the number of unnecessary physician office visits and raise the cost of coverage. The IOM’s recommendations would broaden the scope of mandated preventive services beyond existing evidence-based guidelines, suspend current cost-sharing arrangements for certain services, and encourage consumers to obtain a prescription for routine supplies that are currently purchased over-the-counter.

"Exceeding current evidence-based guidelines sets a troubling precedent for the IOM’s future coverage recommendations, including essential health benefits that will significantly impact the affordability of coverage and the cost to taxpayers. Incentivizing and rewarding evidence-based health care are vital to making coverage more affordable and to putting our health care system on a sustainable and fiscally responsible path."

Aye, there's the rub. If HHS keeps going on this track, there will be no low cost health plans.