Health Reform……One Year Later

Health Reform, now commonly known as the Affordable Care Act, is one year old this month. About a year ago, I wrote a blog post discussing my initial thoughts on the legislation from an unbiased perspective, and while there were many disagreements and differing opinions when it was passed (and since), the one thing everyone agreed on was that the law was going to continue to change as it was implemented.

Almost immediately its constitutionality became suspect, with 26 states appealing the law. A Virginia judge ruled the individual mandate is unconstitutional, and a Florida judge has ruled the entire legislation is unconstitutional. As a result, many of the 26 states are refusing to implement health reform in its current form. Despite this opposition, the Federal administration continues to hold its position that health reform will result in a large cost savings in Medicare that would be lost if provider reimbursement reform were sacrificed. The Federal administration has also appealed the Florida judge’s ruling, and this case is expected to reach the U.S. Supreme Court.

In addition to the argument over the constitutionality, two of the largest challenges posed are the feasibility of certain types of plans operating under the new guidelines and the Individual Mandate clause. By way of compromise, the administration has approved two types of waivers. One waiver exempts certain plans, including Mini-Med plans (plans that offer limited or reduced set of benefits at a low cost) from the 80% Medical Loss Ratio mandate portion of the law. This is important, as one of Merrill’s largest healthcare clients is a Mini-Med plan. The second waiver type allows states to “opt out” of the Individual Mandate if they can prove their state-run alternative meets or exceeds expectations as outlined in the law. Again, this is important, as another one of Merrill's large healthcare clients operates in the individual market.

As we continue to move through the implementation of health reform, we must be knowledgeable and agile, understanding our health plan partners’ day-to-day challenges in adjusting and adapting to frequent and ongoing alterations to the law. The more we understand the changing climate of healthcare, the better positioned we will be to strengthen our partner relationships and manage internal change to accommodate market conditions.

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Pam Argeris is a thought leader in the Healthcare Industry and possesses extensive, hands-on experience with CMS compliance, and multiple regulatory bodies such as NCQA, JACHO, and DOI. In her role at Merrill Corp., Pam focuses on developing solutions for compliance and quality assurance, delivered in a cost effective manner to improve beneficiary and prospect communications. You can contact Pam at Pamela.Argeris@merrillcorp.com.

Dr. Don Berwick’s Appointment to CMS in Danger

Last July, President Obama appointed Dr. Donald Berwick to serve as the Chief Administrator of the Centers for Medicare and Medicaid Services (CMS) through a recess appointment, meaning the president is putting Berwick in place while Congress is on recess.

However, Dr. Berwick still needs Senate approval eight months later and Republicans have gathered enough support to block his Senate confirmation. This shock came with a letter signed by 42 Republican Senators. This number is large enough to defeat his confirmation because 60 “yes” votes are required to confirm Dr Berwick. This majority in the Senate has called on the administration to withdraw Dr. Berwick’s nomination citing his past statements about healthcare rationing, and his lack of experience managing an organization of CMS’s size disqualify him.

Last Tuesday, Berwick said that the administration has sufficiently gone to bat for him as Republicans make him a central political target for their opposition to the healthcare reform law enacted last year.

“You may have seen a response from the White House a few days ago,” Berwick told reporters after a speech at an America’s Health Insurance Plans conference. “It was positive. I’m very grateful for that response.”

After the Senators sent the letter, White House spokesman Reid Cherlin said the administration would not withdraw Berwick’s nomination.

“The president nominated Don Berwick because he’s far and away the best person for the job, and he’s already doing stellar work at CMS: Saving taxpayer dollars by cracking down on fraud and implementing delivery-system reforms that will save billions in excess costs and save millions of lives,” Cherlin said in a statement to the New York Times.

Berwick’s past statements of support for Great Britain's National Health Service and his call for "rationing with our eyes open" created controversy when he took the lead at CMS, which manages about 100 million individuals. 

Nothing  further has been heard on a possible confirmation hearing with the Senate Finance Committee.  Dr. Berwick stated he is willing to talk with any senators who signed onto last week’s letter.

President Obama re-nominated Dr. Berwick at the end of January. His recess appointment allows him to serve through the end of this year.

Changes in the industry continue to be opportunities for Merrill.  As individuals come and go in the political arena, we know we must adapt quickly to these moves and look for methods of strengthening and improving communication to our clients and their membership. Working together to inform one another of changes will help us remain informed and progressive thought leaders.

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Pam Argeris is a thought leader in the Healthcare Industry and possesses extensive, hands-on experience with CMS compliance, and multiple regulatory bodies such as NCQA, JACHO, and DOI. In her role at Merrill Corp., Pam focuses on developing solutions for compliance and quality assurance, delivered in a cost effective manner to improve beneficiary and prospect communications. You can contact Pam at Pamela.Argeris@merrillcorp.com.

Health Reform Legislation Threatens Mini-Med Plans

If there has been one clear victim of the new health plan regulations, Mini-Med Plans are it. Last year when the new MLR percentages became reality, hundreds of Mini-Meds began seeking alternative measures to survive. HHS has provided a solution for 1,040 such plans. Out of all the Mini-Med Plans that applied, 94% have been granted a waiver, allowing the plans to be considered exempt from the new law. The exemption lasts only for one year, but is renewable until the full weight of the reform falls in 2014.

The waivers are required because the Mini-Med Plans, which provide care for over 2.6 million people, do not meet the minimum annual dollar limit on essential benefits as outlined in the reform legislation. This limit starts at $750,000 in 2011, increasing to $2 million in 2013. By 2014, the law states that there is to be no annual limit on essential benefits.

Mini-Med Plans cater to low-income or part-time workers, who often do not qualify for more expensive plans. Unless the reform legislation is re-written to account for these smaller providers, 2014 will see the end of Mini-Meds, and those employees will be forcefully folded into the government-created health exchange planned for 2014.

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Pam Argeris is a thought leader in the Healthcare Industry and possesses extensive, hands-on experience with CMS compliance, and multiple regulatory bodies such as NCQA, JACHO, and DOI. In her role at Merrill Corp., Pam focuses on developing solutions for compliance and quality assurance, delivered in a cost effective manner to improve beneficiary and prospect communications. You can contact Pam at Pamela.Argeris@merrillcorp.com.

Will the new Budget Leave CMS in Trouble?

The national deficit is spiraling out of control; this is common knowledge. However, with the President’s delivery of his new budget, much conversation has surrounded his potential cuts and investments. Because much, if not all, of the low hanging fruit has been picked, the choices surrounding reducing the deficit are enormously tough now.

In reviewing the high level line items from the House Appropriation Committee's 2011 CR Reductions, I quickly scrolled to CMS’s budget (page 14) to peruse how our friends made out in the budget decision making process. With a net budget change of $25.9 million, CMS did well compared to other agencies within the Federal Government's domain.  However, the change only comes in only two categories: Health Reform-Affordable Care Act (full on-boarding) and Research, Demonstration and Evaluation.  Other areas such as Medicare Contract Reform remain neutral.

One interesting side note is all Earmarks have been removed from CMS’s budget and overall throughout the budget in totality. Is this a means for the Executive branch to fully implement health reform legislation with little interference or is Congress self governing with disclosure of names and family ties with companies on earmarked monies? I suggest time will tell and it most likely is a combination of the two.

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Pam Argeris is a thought leader in the Healthcare Industry and possesses extensive, hands-on experience with CMS compliance, and multiple regulatory bodies such as NCQA, JACHO, and DOI. In her role at Merrill Corp., Pam focuses on developing solutions for compliance and quality assurance, delivered in a cost effective manner to improve beneficiary and prospect communications. You can contact Pam at Pamela.Argeris@merrillcorp.com.