HealthCare Roundtable e-News – March 31, 2017

Republicans Renew Effort to Repeal ACA

Republicans are resurrecting the effort to repeal and replace the Patient Protection and Affordable Care Act (ACA).

On March 24, GOP leaders of the House of Representatives withdrew the “American Health Care Act” (H.R. 1628) from consideration just before a scheduled vote when it became clear that, despite have a significant majority of the chamber’s members, they lacked the votes needed for passage. This thwarted the fulfillment of one of the Republican Party’s top goals for the past seven years after it seemed since November, when Donald Trump was elected president and Republicans held on to their majorities in both the House and Senate, to be a sure thing.

Although Speaker of the House Paul Ryan, R-Wisc., said after the cancelled vote that, “We’re going to be living with Obamacare for the foreseeable future,” Republicans rallied for a renewed legislative effort against the law within a few days, and Vice President Mike Pence went to Capitol Hill on March 28 to discuss the issue. Democrats, who passed the ACA in 2010 without a single Republican vote, cheered the failure of the GOP plan, but House Majority Whip Steve Scalise, R-La., said that Democrats’ “celebration is premature.”

“I think we’re closer today to repealing Obamacare than we’ve ever been before, and surely even closer than we were Friday,” Scalise said on March 28.

The challenge for Republicans is that their proposal was opposed by both moderates, who were concerned about Congressional Budget Office (CBO) and Joint Committee on Taxation (JCT) projections that the proposal would increase the number of people without insurance by 24 million within a decade, and conservatives, who disparaged the bill as “Obamacare Lite.” Any revisions to please one faction are likely to increase opposition in the other one.

Trump has given conflicting signals on the issue. At first, he said that the withdrawal of the bill was “the best thing that could happen,” explaining that the ACA is about to “explode” amid big premium increases, which will lead to a bipartisan health care reform bill. Later, though, he indicated that he was so frustrated by holdout Republicans that he might work with Democrats on the issue. Then he urged members of the two parties to work together, saying, “we are all going to make a deal on health care.”

“That’s such an easy one,” Trump told senators at a White House reception, The New York Timesreported. “I have no doubt that that’s going to happen very quickly.”

Even if a modified proposal were to get through the House, support for the GOP plan is even shakier in the Senate, where Republicans hold only a two-vote majority. The Times reported that, “the renewed push did not meet with much enthusiasm from Senate Republicans, who said they had other priorities at the moment.”

The American Health Care Act would, among other things:

  • Drop the ACA’s subsidies for consumers in the state-level insurance exchanges in favor of less generous tax credits to be used in the individual market
  • Repeal the ACA’s expansion of Medicaid and cap federal Medicaid spending
  • Exchange the ACA’s individual mandate and employer mandate for a 30 percent penalty on the premiums of people who fail to maintain coverage
  • Repeal most of the ACA’s taxes, but not the “Cadillac tax” on high-value employer-provided health insurance plans
  • Allow insurers to charge older beneficiaries five times the amount they charge younger people; the ACA limits the ratio to 3:1

The legislation would not repeal all of the ACA because it was structured so that it could be passed using the budget reconciliation process, which is limited to tax and spending-related measures. This procedure does not allow for filibusters and, thus, would require only a simple majority of votes to get through the Senate, rather than a 60-vote supermajority that would otherwise be needed.

The CBO and JCT forecast that the proposal would result in 14 million more people not having insurance in 2018 and 24 million more people being uninsured in 2026. The bill, according to their report, would reduce budget deficits by a combined $150 billion between 2017 and 2026.

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CMS Decides Against Eliminating EGWP Bids

The Centers for Medicare and Medicaid Services (CMS) will continue to use bids by employer group waiver plans (EGWP) in its payment calculations.

EGWPs are a type of Medicare Advantage plan used by state and local governments, unions and others to provide health care coverage to 3.2 million retirees. CMS has considered eliminating bidding by EGWPs, arguing that the plans have no incentive to be competitive and, as a result, regularly submit high bids.

This year, the agency is basing payments to EGWPs on a combination of EGWP bids and individual market bids, rather than just EGWP bids, as was done in previous years. It had proposed using only individual market bids starting in 2018, but, “after reviewing comments” submitted regarding the proposal, it decided to continue to use the combination. CMS revealed the decision in its 2018 Medicare Advantage rate announcement

Public Sector HealthCare Roundtable members have previously expressed concern about the move away from EGWP bids, since this would prevent CMS from taking account of the unique characteristics of plans provided by the public sector and unions.

CMS also stated that it “would like to develop a better understanding of the impact that these changes are having on beneficiaries” and will be gathering information from EGWP sponsors and others.

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Feds Join 2nd Lawsuit Alleging Medicare Advantage Fraud by UnitedHealth

The federal government has joined plaintiffs in a second lawsuit charging that an insurance company fraudulently overbilled Medicare Advantage.

The lawsuit accuses UnitedHealth Group, the largest Medicare Advantage insurer in the country, of reporting to the Centers for Medicare & Medicaid Services (CMS) that patients were sicker than they really were. Sicker patients have higher “risk scores,” which means higher reimbursements for the insurance company.

The lawsuit was filed in 2009 by a whistleblower. The Justice Department is seeking to combine the case with a similar lawsuit that it joined against UnitedHealth in March. That case, which was filed by a whistleblower in 2011, accuses 15 companies of submitting false Medicare Advantage claims.

The Justice Department said in a March 14 court filing that it is also investigating Health Net, Aetna, Cigna’s Bravo Health and Humana for possibly committing similar violations.

UnitedHealth has denied any wrongdoing, and a spokesman said that company officials are “confident we complied with program rules.”

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Medicare Advantage Payments to Increase by 0.45%

The Centers for Medicare & Medicaid Services (CMS) will increase payments to Medicare Advantage providers by an average of 0.45 percent in 2018.

Medicare Advantage (MA) offers managed care plans through private companies, which receive a fixed amount of money from the federal government per beneficiary each month. Around 18 million people – about one-third of all Medicare beneficiaries – are in Medicare Advantage.

The final rate announcement reflects a slight increase from CMS’ preliminary announcement in February, which would have increased rates by an average of 0.25 percent. (Summary)

Coding changes – adjustments to payments that reflect differences in diagnosis coding between Medicare Advantage organizations and fee-for-service (FFS) providers – are expected to boost payments by about 2.5 percent, making the effective 2018 growth rate 2.95 percent.

“Plans that improve the quality of care they deliver to enrollees will see higher updates and can grow and enhance the benefits they offer to enrollees,” CMS stated.

In 2017, payments increased by 0.85 percent, while the overall growth rate, including coding adjustments, was 3.05 percent.

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