Senate hearing on individual market goes off-track fast, gets partisan

A Senate committee hearing on how to stabilize the individual health insurance market quickly devolved into a platform to make partisan comments and score political points regarding the proposed repeal and replacement of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). This occurred despite the efforts of the committee chairman to focus the committee on a transition plan for the individual market and the statements of the committee witnesses, which were non-partisan and conciliatory.

The Chairman’s remarks. In his introductory remarks, Sen. Lamar Alexander (R-TN), Chairman of the Senate Committee on Health, Education, Labor & Pensions, expressed his hope that the committee could put aside the partisan talking points and come together to find solutions to ensure the viability of the individual health insurance market during the transition from the ACA. The individual mandate to obtain health insurance was created by section 1510 of the ACA.

Alexander noted that the individual market makes up only 6 percent (18 million beneficiaries nationwide) of the total health insurance market, with only 4 percent covered through the ACA Exchanges. He further noted that some health care plans have pulled out of the Exchanges and many individuals may have only one plan to choose from. He asked the panel and the committee to focus on three questions: (1) Is there really instability in the individual markets? (2) If so, what needs to be done? (3) By what date must it be done?

The Ranking Member’s remarks. Ranking Member Patty Murray’s (D-WA) opening statement showed that she had no intention of following Alexander’s plea for a non-partisan hearing. Instead, she began by stating that while the individual market had always been a problem, the ACA helped to solve that problem, and now the Republican’s plan to repeal the ACA without a concrete plan for replacement is creating chaos in the health care system. She also went outside the individual market focus of the hearing and claimed that Republican policies would cut Medicare and Planned Parenthood. She termed the Trump Administration efforts as “TrumpCare by sabotage” and urged the Republicans to reverse their course and stop repeal of the ACA. She concluded by sarcastically suggesting that you “can’t repair the roof while Republican Party is burning the house down.”

Sen. Tim Scott (R-SC) responded to Sen. Murray’s comments with “the house may be on fire, but it was on fire before we got here.” He was also able to get one witness to concede that the individual market had already been destabilized by specific provisions of the ACA itself, including the essential health benefit requirement, special enrollment periods and extended grace periods that have allowed individuals to game the system, medical loss ratios, and having premiums for young people set higher than the penalties for not having coverage.

The witnesses. The committee witnesses included Julie Mix McPeak, Comissioner of the Tennessee Department of Commerce and Insurance; Marilyn Tavenner, former CMS Administrator and current President and Chief Executive Officer of America’s Health Insurance Plans; Janet Trautwein, Chief Executive Officer of the National Association of Health Underwriters; and Steve Beshear former Democrat Governor of Kentucky from 2007 to 2015.

All of the witnesses were in agreement that the individual health insurance market does not react well to the uncertainty that currently exists. And three of the four witness agreed that the number of plans available are dropping and the premiums are rising.

When asked by Alexander for a deadline for when Congress must act, the witness stated by the end of March at the latest. This, they stated, was because rates must be set by mid-July and plans approved by the various states by August.

McPeak. In her statement, McPeak testified that, “In short, Tennessee’s ACA individual market experience since 2014 has meant fewer marketplace carriers for Tennessee consumers, less competition across the state, and higher priced premiums for available products. In addition, we have seen existing FFM carriers move towards narrower networks, further limiting consumers’ access to providers of their choosing.”

She stated that there are only three ACA carriers in Tennessee, with only one choice in 73 of the 85 counties. In addition, she stated that premium rate increases have ranged from 42 to 62 percent in her state. She did not call for a delay in the repeal of the ACA, but, instead, asked Congress to allow states to tailor health care plans to fit their needs and urged an open and transparent repeal and replace process so that carriers can prepare adequately.

Tavenner. In her statement, Tavenner admitted that parts of the ACA have not worked well. She stressed that certainty in the individual market is essential. She recommended: (1) continuing to provide subsidies such as the advanced premium tax credits and cost-sharing reduction payments in their entirety; and (2) making full federal reinsurance payments for 2016, as this funding is important for plans to effectively cover the needs of high-need patients, including those with chronic conditions.

Tavenner also recommended several policies to help promote a more stable and workable transition for consumers and families, including:

  • Using premium tax credits to encourage younger people to get coverage.
  • Creating incentives for people to keep their coverage through the transition.
  • Beginning in 2017, establish a federally funded, transitional risk pool program would offset some of the costs of serving patients who have the most complex health conditions and need the most care.
  • Eliminating taxes and fees such as the health insurance tax, which will reduce premiums and promote affordability.
  • Effectively verifying the eligibility of those signing up for coverage during special enrollment periods, and shortening the 3-month grace period for non-payment of premiums so that it is better aligned with state laws and regulations (e.g. 30-day period).
  • Protecting people who are eligible for public programs from being inappropriately steered into the commercial insurance market.

Trautwein. Trautwein called for immediate stabilization of the individual market. She attributed the higher cost of individual plans to rules allowing healthy individuals to drop in and out of plans without consequences and allowing special enrollment periods without requiring upfront documentation and allowing inappropriate coaching by enrollers. She recommended:

  • Requiring guaranteed access to individual coverage and with state-level financial backstops for catastrophic risks.
  • Giving pre-existing condition credit for prior individual market coverage to ensure true heath insurance portability from one individual market policy to another.
  • Standardizing state requirements regarding the consideration of pre-existing conditions.
  • Improving federal group-to-individual coverage portability provisions so that people can transition directly from employer coverage to individual coverage without hurdles.
  • Stabilizing individual market rates by requiring more standardization as to how individual market carriers determine pricing.
  • Increasing consumer protections regarding individual market coverage rescissions.
  • Making it easier for employers to help people purchase individual health insurance.
  • Providing federal financial assistance to keep individual health insurance coverage affordable, including enhanced deductibility, subsidies for low-income individuals, and federal financial support for qualified state financial backstop programs.
  • Ensuring that all Americans have health insurance coverage.
  • Allowing state implementation of enhanced consumer protections with a federal fallback enforcement mechanism.

Beshear. In his statement, Beshear gushed about the ACA and what it did to increase the number of people with health coverage in Kentucky. He claimed that his creation of a state exchange and the expansion of Medicaid added 500,000 to the insured roles in Kentucky. He stated that he does not view the ACA as a partisan issue, but rather a tool to address health insurance problems. He believes that the ACA works and that Congress’ challenge is to make it work better.

House Republicans narrow aim to specific provisions in health reform battle

House Republicans introduced four bills as part of a new piecemeal strategy to repeal and redefine the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). The proposed legislation—which will be considered at a February 2, 2017, hearing before the House Energy and Commerce Committee—concerns: (1) special enrollment period (SEP) eligibility verifications; (2) premium rate ratios; (3) grace periods for missed premium payments; and (4) a political promise to continue the ban on preexisting condition exclusions.

SEP

The first bill would require HHS verification of an individual’s eligibility for a SEP before an insurer would be permitted to make coverage effective for that individual. Although HHS has already developed a pilot program for some SEP eligibility verifications, the bill would require HHS to create a verification process, through interim final rulemaking, for plan years beginning on or after January 1, 2018.

Premium variation

The second bill would give insurers more authority to vary the premium rates charged to older enrollees, as compared to younger enrollees, in the individual and small group markets. The bill would permit insurers to raise the current ratio of three-to-one to a ratio of five-to-one, or, to any other ratio established by a state. The greater variation addresses insurer complaints that the three-to-one ratio is not actuarially appropriate.

Grace period

The third bill would reduce the length of the current 90-day grace period afforded to premium tax credit recipients who miss their premium payments. The bill would shorten the grace period to one “provided by law” or one month. Although premium tax credit recipients are, by definition, experiencing financial difficulty, the bill is designed to assuage insurers’ contentions that premium tax credit recipients are using the grace period to skip the last three months of premium payments, catching up only when or if they develop a need for health care. However, HHS noted in the preface of its Notice of Benefit and Payment Parameters for 2018 (81 FR 94058) that such grace period “gaming” claims are unsubstantiated.

Preexisting conditions

The fourth bill, which does not promise a change in policy, is a statement of policy. In essence, the bill is a promise, in the event Congress decides to repeal the ACA, that the health reform replacement will include a provision with an absolute ban on preexisting conditions clauses. The bill establishes Congress’ position that it will not allow a return to a health insurance market where coverage decisions are based upon the status of an enrollee’s health. The bill makes a curious exception, however, for genetic conditions which have not already led to a diagnosis.

How will access to contraception coverage fare in light of the ACA repeal?

With the uncertainty about continued contraception coverage, a number of states have either enacted or introduced legislation to ensure that individuals continue to have access to contraception coverage and the number of women inquiring about birth control has increased. Since the November election and, in the wake of the imminent repeal of Obamacare, requests for intrauterine devices (IUDs) have been increasing significantly. Cecile Richards, President of Planned Parenthood, told CNN on January 9, 2017, that the demand for IUDs, a form of long-term birth control, has shot up 900 percent at Planned Parenthood branches because women “are desperately concerned that they will lose their access to health care,” SFGate news reported.

A December 7, 2016, Kaiser Family Foundation report that addressed private insurance coverage of contraception stated that many states have mandated minimum benefits for decades, including contraceptive coverage. Moreover, since the passage of the Affordable Care Act (ACA) (P.L. 111-148), states have strengthened and expanded the federal contraceptive coverage requirement. Among those states that have recently adopted contraceptive laws expanding ACA mandates for contraceptive coverage are New York, California, Oregon, Illinois, and Vermont.

New York

On January 11, 2017,  New York Attorney General Eric T. Schneiderman introduced “The Comprehensive Contraception Coverage Act of 2017” (CCCA), legislation that would provide access to cost-free contraception for women and expand coverage to men to ensure the continuation of contraception coverage under state law in light of Republicans’ goal of repealing the ACA.  The CCCA would (1) statutorily require state-governed health insurance policies to provide cost-free coverage for all FDA-approved methods of birth control, including emergency contraception, (2) prohibit insurance companies from “medical management” review restrictions that can limit or delay contraceptive coverage; (3) cover men’s contraceptive methods and bring their insurance coverage in line with the benefits enjoyed by women; and (4) allow for the provision of a year’s worth of a contraceptive at a time.

Crain’s New York Business addressed a number of items that are at stake in terms of women’s access to health care in New York under Donald Trump’s presidency. Although New York’s contraception legislation “has taken on new urgency for advocates since Trump’s victory,” the bill faces opposition from insurers because the provisions go beyond the ACA mandates, Crain’s predicted. In addition, Crain’s pointed out that Republicans in Congress will renew their efforts to defund Planned Parenthood, noting that access to services such as breast exams, Pap tests, STD screenings and family planning are most likely at risk of elimination for female Medicaid enrollees. Finally, abortion rights in New York might be curtailed if President-elect Trump’s Supreme Court judge appointee provides the Court with a majority of votes to overturn Roe v. Wade, the case that affirmed a woman’s constitutional right to an abortion under the 14th amendment. New York state law allows an abortion after 24 weeks only if it’s a matter of life and death for the woman, while constitutional law allows a woman to get a late-stage abortion if an anomaly poses a serious risk to her health or makes the fetus unviable, Crain’s explained.

Other States

In 2014, California passed the Contraceptive Coverage Equity Act of 2014 that requires plans to cover prescribed FDA-approved contraceptives for women without cost-sharing. In April of 2016, under the law, girls and women are able to drop by their neighborhood pharmacy and pick up birth control such as pills, patches, and injections without a doctor’s prescription but must speak with a pharmacist and fill out a questionnaire. Starting in January 2016, health plans were required to provide access to the full range of contraceptive methods approved by the FDA, including a variety of IUDs, for all insured individuals without cost-sharing, delays, or denial of coverage.

In 2015, Oregon passed two laws in 2015  expanding women’s access to birth control that became effective January 1, 2015.  HR2879 permits pharmacists to prescribe hormonal contraceptive patches and self-administered oral hormonal contraceptives, while HR3343 requires insurers to pay for a three-month supply of contraceptives when first prescribed, followed by a 12 month supply of contraceptives regardless of whether the woman was insured by the same plan at the time of the first dispensing. This law applies to oral contraceptive pills, the patch, and the vaginal ring.

The State Journal Register reported that Illinois adopted House Bill 5576, which will take effect January 1, 2017. Under the law, all ACA options must be covered without co-payments or deductibles, at least for women covered through health plans regulated by the state and plans that cover state employees, retirees, and their dependents. In addition, insurance companies must allow women to get a 12 month supply all at once.

The Burlington Free Press reported that Vermont legislation includes mandates from the ACA in the state law, but also expands upon the mandates to include additional birth-control methods, such as vasectomies. The bill specifies the 12 contraceptive products and services that must be included in health insurance plans as well as restrictions on cost-sharing for contraceptive services. It directs the Department of Vermont Health Access to establish 15 value-based payments for the insertion and removal of long-acting reversible contraceptives comparable to those for oral contraceptives.

Conclusion

Whether Congress repeals the ACA mandates requiring health insurance plans to provide contraceptive coverage and defunds Planned Parenthood is not certain. As of this writing, Congress has already taken initial steps to repeal the law. It remains to be seen if the actions the states have taken to ensure that both men and women have access to contraception under state law will hold up, and whether states that have introduced bills to ensure coverage will progress to enactment in the face of strong opposition.

 

‘Mid-build’ outpatient departments: submit paperwork soon to qualify for OPPS exemption

Off-campus provider-based hospital outpatient departments (HOPDs) that qualify for the mid-build exception must submit the required materials to their Medicare Administrative Contractor by February 13, 2017, to qualify for the exception for services provided in 2018. The hospital must (1) attest that department requirements are met; (2) include the department on the provider’s enrollment form; and (3) and submit a written certification that the department met the mid-build requirement that is signed by the CEO or COO of the main provider. All attestations must be audited by HHS for accuracy.

Outpatient prospective payment changes

Under the 2017 Outpatient Prospective Payment System (OPPS) Final rule (81 FR 79562), CMS implemented section 603 of the Bipartisan Budget Act (P.L. 114-74), which disallows payment made to off-campus HOPDs under the OPPS (see OPPS, ASC payment rates updated; off-campus PBD billing system established, Health Law Daily, November 2, 2016). This provision was created to ensure that services are billed at a uniform rate, regardless of the facility in which the services are provided.

21st Century Cures Act

Section 16001 of the 21st Century Cures Act (P.L. 114-255) provides an important “mid-build” exception for off-campus HOPDs that had a written contract with an outside party for construction of the facility before November 2, 2015. CMS’ preliminary guidance outlines the requirements for HOPDs that qualify for the 2018 exception. It also clarifies that attestations received from providers before December 2, 2015, qualifies that provider for the exception, and that these HOPDs should continue to use the ‘PO’ modifier when billing, rather than the ‘PN’ modifier. Those that did not submit timely attestations are to use ‘PN,’ which triggers the Medicare physician fee schedule (MPFS) payment.

The Cures Act also excepted HOPDs of cancer hospitals from the change to OPPS. Departments that met the requirements of 42 C.F.R. section 413.65 between November 1, 2015, and December 13, 2016, will qualify, as long as attestation is received February 13, 2017. HOPDs of cancer hospitals that meet regulatory requirements after December 13, 2016, will be exempt as long as an attestation is received within 60 days of meeting the requirements.