How To Get A Health Insurance Plan In The United States

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1 IMPLEMENTATION Date effective Insurance market reforms 2013 (small group phased in beginning in 2013) 2011 (optional Medicaid expansion through state plan amendment) 2014 Medicaid expansion Exchange 2010 HEALTH INSURANCE EXCHANGE Where will it operate? State Regions if states agree and Secretary approves Finance Mark (September 16) Tri Committee Bill (July 14) HELP (July 15) Who will operate it? States with technical consultation of Secretary Who is eligible? Individuals without access to ESI Individuals for whom ESI contribution is more than 13 percent of income Small businesses up to 50 (or 100) depending on state law What will the rules be? Guaranteed issue, guarantee renewal, no pre-existing condition exclusions 2013 (Exchange, Medicaid expansion) National. States or group of states may opt to operate the exchange in lieu of the national Exchange provided they follow federal rules. Establishes the Health Choices Administration, an independent executive branch agency. The Health Choices Commissioner, appointed by the President. Individuals without access to ESI. After 2 yrs., individuals for whom ESI coverage is more than 11 percent of income Small businesses with 10 or fewer employees in year 1; 20 or fewer in year 2; larger employers over time (as decided by Commissioner) Guaranteed issue, guarantee renewal, no pre-existing condition exclusions Modified community rating (Exchange) State Regionally Sub-state (as long as serves distinct regional areas) Governmental agency or nonprofit organization Individuals Businesses who enroll all fulltime employees in exchange; Secretary decides employee limit, if not default is 10 Guaranteed issue, guarantee renewal, no pre-existing condition exclusions New America Foundation, Health Policy Program 1

2 Modified community rating (tobacco 1.5:1, Age 5:1, family size, geography) No MLR provision Benefits Preventive and primary care, emergency services, hospitalization, physician services, outpatient services, day surgery and related anesthesia, diagnostic imaging and screenings (including x-rays), maternity and newborn care, pediatric services (including dental and vision), medical/surgical care, prescription drugs, radiation and chemotherapy, and mental health and substance abuse services that at least meet minimum standards set by Federal and state laws. No cost sharing for prevention, except in value-based insurance design 4 levels (65, 70, 80, 90) plus young adult plan HSA out of pocket max ($5,950 for individuals and $11,900 for families in 2010) indexed to the per capita growth in premiums for the insured market as determined by the Secretary of HHS National plans (geography, age 2:1) Medical loss ratio defined by the Secretary Ultimately defined by Sec. of HHS working with new Benefits Advisory Commission chaired by Surgeon General. Benefits must include: inpatient, outpatient, physician services, equipment and supplies, preventive, maternity, Rx, rehabilitative and habilitative, well baby and well child visits, oral health, vision, and hearing for children, mental health and substance abuse. Limits out-of-pocket spending $5,000 for individual/$10,000 family Defines initial benefit package at 70% States can elect to cover more benefits, if they agree to reimburse Commissioner for differences in subsidy costs Modified community rating (geography, age 2:1. tobacco use) Insurers required to report % of premium spent on non-claims costs Insurers must offer dependent coverage to 26 Secretary establishes minimum benefits Develops one-time temporary commission to help Secretary make decision Must include: ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance abuse services, prescription drugs, rehabilitative and abilitative services and devices, laboratory services, preventive and wellness services, and pediatric services. No lifetime of annual limits States can cover more benefits, but must cover costs Basic plan, 76 Limits out-of-pocket spending $5,000 for individual/$10,000 family New America Foundation, Health Policy Program 2

3 Existing policies Individuals and groups who wish to renew coverage in an existing policy would be permitted to do so. Plans could continue to offer coverage in a grandfathered policy, but only to those who were currently enrolled, dependents, or in the case of an employer, to new employees and their dependents. No tax credits would be offered for grandfathered plans. Beginning January 1, 2013, Federal rating rules would be phased in for grandfathered policies in the small group market, over a period of up to five years, as determined by the state with approval from the Secretary. These plans could continue to exist after the transition period, but would be subject to the new rating rules. AFFORDABILITY Premium subsidies Sliding scale between 133 and 300 (and between 100 and 133 if individual chooses to enroll in exchange over Medicaid. Limit enrollee contribution to between 3 and 13 percent of income. People between 300 and 400 could get subsidy to make their policy 13 percent. Hold share of income paid on Policies purchased before 2013 would be grandfathered. Group policies must conform by 2017 Sliding scale tax credits between 133 and 400 percent of FPL tied to avg. premium of 3 lowest cost plans providing basic coverage in that area Limit enrollee contribution to between 1.5 and 11 percent of income. Caps not indexed over time. Administered by Exchange with local Social Security offices and Medicaid agencies. State individual and small group insurance markets reformed to meet Gateway specifications Existing policies grandfathered Sliding scale tax credits up to 400% Subsidies would cap premiums as a share of income on a sliding scale starting at 1 percent for those with income equal to 150 %, rising to 12.5% of income at 400%. For people with income between 150 and 200%, the subsidies would apply to that reference bid for the highest-tier plans; for New America Foundation, Health Policy Program 3

4 premium constant over time. Premium credit amount tied to second lowest-cost silver plan in area where the individual resides (by age according to standard age factors defined by Sect HHS) Cost sharing subsidies Cost sharing subsidies to bring plans to 90% between 100 and 150, 80% for No cost sharing over 200%. Reinsurance Insurers must contribute to a reinsurance fund to be used in years 2013, 2014, 2015 to stabilize the cost of individual coverage. Small business tax credit In 2011 and 2012, small employers with fewer than 25 workers with avg. wage less than $40,000 can claim credit of up to 35% of their contribution In 2013, eligible employers can receive tax credit of up to 50% of their contribution for 2 years if they purchase insurance through the exchange. Begins to phase out at Tax credits also subsidize cost sharing on a sliding scale basis Temporary reinsurance for employer-based plans for retiree health care (55-64) 80% of the cost of benefits provided per enrollee in excess for $15,000 and below $90,000 Act appropriates $10 billion, available until expended Tax credit equal to 50% of the amount paid by a small employer for employee coverage. Begins phasing out at 10 workers, fully phased out at 25. Also phases out average wage $20,000, fully phased out at $40,000 average wage. people with income between 200 and 300 %, the subsidies would apply to that reference bid for the middle-tier plans; and for people with income between 300 and 400%, the subsidies would apply to that reference bid for the lowest-tier plans. Administered by Exchange with local Social Security offices and Medicaid agencies. Temporary reinsurance for employer-based plans for retiree health care (55-64) 80% of the cost of benefits provided per enrollee in excess for $15,000 and below $90,000 Act appropriates $10 billion, available until expended In 2010, small businesses fewer than 50 who pay 60% of premium and have avg. wage less than $50,000 $1,000 individual; $2,000 family; $1,500 plus one Bonus payments for additional premium contributions Additional funds for offer history Available indefinitely, but not for New America Foundation, Health Policy Program 4

5 more than 10 employees and avg. wage over $20,000. Fully phased out at 25 workers/$40,000. MEDICAID/SCHIP Medicaid Starting in 2011 states can expand to childless adults through a state plan amendment January 2014, expand to everyone under , no mandate for individuals below 133. State MOE for all other populations until exchange is operational. In 2014, individuals between 100 and 133 can choose between Medicaid and exchange. States have to ensure EPSDT for kids. Feds help states by increasing FMAP. Bigger increases to states that have more newly eligible people. By 2019, everyone gets the same FMAP increase. Starting January 2013, states must offer ESI premium assistance and wrap around benefits if it is costeffective to do so. DSH DSH maintained until state s uninsured rate decreased by 50%. DSH is then decreased by 50%. Low DSH states decreased by 25%. If the state s rate of uninsurance decreases further, the state s DSH allotment would be further reduced Non-disabled, childless adults below 133% under Medicaid. Parents and individuals with disabilities below 133%. Newborns up to first 60 days of life. Fed government pays 100% State MOE Requires the Secretary of HHS to report to Congress by January 1, 2016 on the continuing role of Medicaid DSH as health reform is implemented. Directs Secretary to reduce DSH payments to States by a total of $10 more than 3 consecutive years ***ASSUMED*** All individuals up to 150% Federal government pays until 2015; phase down to current federal match by 2020 State MOE Increased FMAP for states who experience newly eligible Medicaid enrollees New America Foundation, Health Policy Program 5

6 by 35% of the % of decreased uninsurance. For low DSH states, the percentage point reduction would be multiplied by 17.5 percent. At no time in the future would a state s DSH allotment fall below 35 percent of the total allotment in 2012, adjusted for CPI-U growth. Any portion of the state s DSH allotment that is currently being used to expand eligibility through a section 1115 waiver is exempt from such reductions. CHIP State MOE applies until current authorization expires September September 2013 federal floor for CHIP requires states to offer to children between 134 and 250. CHIP package would include state exchange coverage and wrap around benefits. CHIP cost-sharing and out of pocket limits apply. States billion ($1.5 billion in FY 2017, $2.5 billion in FY 2018, and $6.0 billion in FY 2019) using a methodology that focuses on the uninsurance rate in each State and the amount of uncompensated care provided by hospitals. State MOE until exchange or Commissioner indicates and Secretary approves. State MOE ends. Requires stand-alone CHIP programs to provide 12-month continuous eligibility for all enrollees with incomes below 200% FPL. Effective January 1, continue to get enhanced match. PUBLIC HEALTH INSURANCE PLAN What type Co-op Public plan Public plan Who will govern? Co-op enrollees by majority vote Grant and loan awards made by advisory board chaired by Sect. HHS. If Co-op does not form in every CHIP enrollees have option to enroll in Gateway No other changes to program Department of HHS Department of HHS Secretary contracts with nonprofit to administer in same manner as Medicare program contracting New America Foundation, Health Policy Program 6

7 state Secretary to encourage formation. Public funding? $6 billion in loans and grants for start up costs and solvency requirements. Provider payment rates INDIVIDUAL RESPONSIBILITY Individual requirement to purchase coverage Prohibited from setting payment rates. Must be self financing. $2 billion in start-up pay back over 10 yrs. For first 3 years, Medicare plus 5 percent for physicians and practitioners (grown at Medicare economic index) who participate in Medicare (plus pediatricians, etc). Medicare rates for hospitals and other services and supplies on fee schedules; negotiated rates for drugs and other items and services not on fee schedule. After 3 years, Secretary granted greater flexibility in setting rates. Medicare providers NOT required to participate in public plan. Must be self financing. Initial loan must be paid back in 10 yrs. Secretary negotiates rates for provider reimbursement Yes. Yes. Yes. Exemption granted if premium more than 12.5% of income. Penalty : $750 per year per taxpayer unit. Maximum penalty is $1,500. Above 300: $950 per taxpayer unit. Maximum penalty for family above 300 is $3,800. Auto Enrollment Employers over 200 employees must auto-enroll. States have option to set up automatic enrollment. Must be 2.5 percent of the difference between AGI and tax filing threshold. Penalty could not exceed the national average premium for plans offered in exchange. Minimum penalty no more than $750 per year New America Foundation, Health Policy Program 7

8 approved by HHS. EMPLOYER RESPONSIBILITY Pay or play Employers not required to offer. If employer does not offer coverage and worker gets tax credit in exchange must pay fee per worker, which is capped at value of $400 per employee in entire firm. Requirement for Employees can seek a waiver if plan offering employers is less than 65 actuarial value or employee contribution is more than 13% of income. Above fees will apply for employees seeking an affordability waiver. FINANCING New taxes 35% tax excise tax on insurers on health coverage in excess of $8,000/$21,000 (indexed to CPI-U) Fees: PhRMA, health insurers, device manufacturers, clinical laboratories. Changes in old tax breaks Limit flexible spending accounts in cafeteria plans to $2,000 Eliminate deduction for expenses allocable to Part D subsidy Conform the definition of medical expenses for flexible spending 8 percent pay for firms with payroll above $400,000 Sliding scale from 2 to 8 percent between $250,000 and $400,000 No requirement below $250, percent of premium for fulltime individual; 65 percent for a family; proportionate amount for part time. Option of providing part-time workers coverage by contributing a share of the expense or contributing to the exchange. In 5 th year of exchange, companies must meet benefit standard of exchange. Surtax: household income $350,000- $500,000 = 1%; $500,000 -$1 million = 1.5%; excess of $1million = 5.4%. First two rates increased to 2% and 3% respectively if health care cost savings not achieved. Delay until 2020 a tax break for multinational corporations, now slated to take effect in 2011, that allows these companies more latitude in allocating interest expense. That tax break has already $750 per uninsured full-time; $375 per part-time Exempts firms under 25 For firms subject to assessment, exempts first 25 employees Must pay 60% of premium New America Foundation, Health Policy Program 8

9 accounts to the definition of the itemized deduction for medical expenses (including prescription purchases of over-the-counter medicines) Increase the penalty for nonqualified health savings account distributions to 20% Additional requirements for section 501(c)(3) hospitals DELIVERY SYSTEM REFORM General Reforms Quality Patient Safety Offers sense of the Senate that health care reform provides a unique opportunity to address medical malpractice reform. o Encourages states to propose and test alternatives to litigation Quality Goals and Measurements Establish quality reporting for long term care hospitals and inpatient rehab facilities Establish value-based purchasing implementation plans for HHAs and SNFs by 2011 and 2012 National Strategy to Improve Health Care Quality o Priorities to improve delivery of care, outcomes, and population health o Include a strategic plan to achieve prioritiese been delayed once. Codify the economic-substance doctrine - targeting transactions that have no business purpose other than to avoid taxes. Deny certain deductions to foreign corporations doing business in the U.S., by limiting tax treaty benefits those firms now take advantage of. Requires hospitals and ambulatory surgical centers to report information on healthcareassociated infections to the CDC. Establish national priorities for quality Develop, test, and update these priorities (with audits from GAO) multi-stakeholder group to evaluate which quality measures should be used for payment adjustments. Creates a center of Quality Improvement at AHRQ to focus on quality improvement activities and research. Creates the Patient Safety Research Center (in AHRQ) to support research, technical assistance, and implement and disseminate grants to local providers to implement best practices. Secretary of HHS will establish a national quality strategy and implement its priorities. It will consider: health outcomes, geographic variations, and health disparities, delivery of health services, and population health. They will also eliminate waste and improve efficiency Creates the interagency working group on health care quality President will create the group to coordinate, collaborate, and New America Foundation, Health Policy Program 9

10 Comparative Effectiveness Research o Consider rec s from a qualified consensus-based entity Interagency working group of health care quality convened by President Develop new quality measures at least triennially to fill in gaps of current knowledge o Consensus-based entity would identify gaps and Secretary would develop measures o Multi-stakeholder group would help develop measures Develop process for consultation with consensus-based entity and multi-stakeholder group to obtain their input Create Patient-Centered Outcomes Research Institute, to assist in making informed health decisions through research and evidence synthesis o Board of Governors would oversee the Institute o Institute will identify national priorities for comparative CER and research agenda o Institute must pursue research that takes into account potential differences in subpopulations o Will appoint expert advisory panels to identify priorities and the research agenda Establishes Center for CER within AHRQ to conduct, support, and synthesize research relevant to the comparative effectiveness of the full spectrum of health care items, services, and system Establishes public/private stakeholder commission (Comparative Effectiveness Research Commission) to over see the Center, determine priorities, disseminate findings, etc Funding comes from Comparative Effectiveness Research Trust Fund. streamline federal quality activities. AHRQ will provide grants to develop quality measures in gap areas where no measures exist or where measures are lessthan-ideal. AHRQ and NQF will determine which measures to use with Federal health programs, under the Secretary s discretion. Data on these measures will be collected and disseminated in a user-friendly way. HHS will establish a Center for Health Outcomes Research and Evaluation within AHRQ that will promote research and evaluation of health outcomes. There will be a diverse advisory committee and public input to ensure that the research is meaningful to patients and providers New America Foundation, Health Policy Program 10

11 Health Information Technology Reporting Financial Relationships o Standing methodology committee to define and maintain practice of CER o Findings must be disseminated to clinicians, patients, and the public o Use of Findings not allowed for coverage, reimbursement, or other policies for any payer; cannot deny coverage based solely on findings of Institute; cannot use findings to create incentives to treat the life of an elderly, disabled, etc as less valuable than a younger, nondisabled, etc Manufacturers/distributors must report to the HHS OIG any payments valued above $5 made to a covered recipient Entities that bill Medicare must Standards and protocals will be developed to promote the interoperability of systems for enrollment of individuals in health insurance program. Standards will require: electronic data matching, and electronic documentation All new technical standards must be designed to provide a common technical platform for more seamless administration of health care. New America Foundation, Health Policy Program 11

12 Medical Homes/Care Coordination Emergency/Trauma Services Shared Decision Making report any ownership share by a physician Failure to report is subject to monetary penalties Secretary will create Community Health Teams which will support the development of medical homes by increasing access to comprehensive, community based, coordinated care. Patient Safety Research Center will provide grants to local providers for medication management services. Provides funding to state/local governments to improve regional coordination of emergency services grants will be provided to Trauma centers to strengthen trauma care especially in underserved areas HHS will give grants to NQF to develop, test, and disseminate educational tools to help patients understand their treatment options. Develop quality measures in relation to utilization of these tools by providers. Prescription Drugs Process will be established for FDA to determine if the use of New America Foundation, Health Policy Program 12

13 Medicare Reforms drug fact boxes in warranted. Medical Education Grants will be given by AHRQ to universities to develop curricula that integrate quality improvement and patient safety into clinical education Readmissions Hospitals will be required to report to HHS their preventable readmission rates. High Rate hospitals will work with local patient safety organizations to improve their care. Fraud and Abuse HHS will appoint a Senior Advisor for Health Care Fraud and Atty. General will appoint a Senior Counsel for Health Care Fraud Enforcement Broadens the definition of false statements under ERISA Adds three crimes to the list of federal health care offenses Market Basket Updates/Payment updates Update Home Health payments through Rebasing to reflect number and mix of services, intensity of services, and average cost of providing care 3 Percent add-on payment for Home Health providers in rural areas After consulting with MedPAC and hospice providers, revise payments for hospice care. Incorporates productivity improvements into market basket updates for inpatient hospitals, SNFs, inpatient rehab hospitals, psych. Hospitals, and hospice care beginning in Sets a floor to the update so that the combination of the productivity adjustment, quality reporting adjustments, and meaningful use adjustments cannot make the New America Foundation, Health Policy Program 13

14 DSH Payments SGR o Impose accountability requirements on hospice providers. Reduce market basket updates for o Home Health providers by 1% in 2011/12 o Hospice providers by 0.5% in o Hospitals by 0.25% in 2010 and 2011 and another 0.2% from Provide updates based on the MB or CPI minus full productivity for all providers subject to MB or CPI updates Starting no later than 2015 (and annually thereafter) DSH payments will equal 25% of what DSH payments would otherwise have been o An additional payment would be made to fund uncompensated care costs (tied to the proportion of uninsured) The annual update factor would be 0.5% in Subsequent updates would be computes as if the 2010 increase never applied. update negative. Market basket freeze for SNF and inpatient rehab facilities for Q2-4 of FY o Savings: Part A $132.9 billion over 10 o Savings: part B $21.6 billion over 10 o Savings: Home Health $14.9 billion over 10 HHS must submit a report to Congress by 2016 on DSH payments If the uninsured rate drops by 8+ points, in 2017 HHS must lower DSH payments to the justified level. o No Scored Savings Permanently reforms SGR formula o Costs $228.5 over 10 Primary care can grow at a higher rate than other services; no reductions to pay rates for increases in spending on drugs or lab services Encourages formation of ACOs through specialized targets and New America Foundation, Health Policy Program 14

15 High-Utilization Services Secretary would periodically indentify services as being misvalued and make appropriate adjustments. A key indicator of misvalue will be high use or fastgrowing use Increase the utilization rate assumption for payment of advanced imagine from 50 to 60% until 2013 and to 75% thereafter o Also increase payment reduction for sequential imaging from 25% to 50% Regional Disparities Increase payment in FY11 & 12 for low-volume hospitals in relatively underserved areas. Require MedPAC to review payment adequacy for rural healthcare providers. Make a plan to reform the Medicare Hospital Wage Index to not fluctuate based on geography. update factors Payment rates will be updated based on MEI in 2010 HHS must review rates for physician services, especially those with high growth rates. Secretary has more power to adjust rates that are misvalued or inaccurate o Cost: $200 million over 10 Increases expense units for imagine to reflect a utilization rate of 75% instead of 50% Adjusts technical discount on single session studies on more than one body part from 25% to 50%. o Savings: $4.3 billion over 10 Payment incentives for physicians in cost-efficient areas of the country o Cost: $500 million over 10 years IOM will report to CMS on effects of geographic adjustments for payment; CMS must respond and spend up to $4 billion for 2 years to increase any rates. Adjusts fees paid for physician services based on geographic variations. Extends floor on these payments to the work portion of the fee schedule through 2011 New America Foundation, Health Policy Program 15

16 Existing Programs Expand RHQDAPU program to pay for performance, not just reporting of quality data o Start adjusting payments based on quality in 2013 o In 2014, the Secretary could expand the program to include efficiency measures o Would fund bonuses through an incentive pool made up of reducing IPPS payments to hospitals o Also demos to determine if VBP can be used in small and/or critical access hospitals Establish a new PQRI option in 2011 to eligible physicians who, every 2 years, participate in a certification or MOC program or complete an MOC assessment o Establish appeals o process Offer feedback to physicians Expansion of Physician feedback Program reports of resource use for physicians of other similar physicians o In 2015, payment would be reduced by 5% if resource use is above the 90 th percentile. (raises rural physician payments) Extends PQRI payments through 2012 for physicians reporting quality data o Cost: $1.6 billion over 10 New America Foundation, Health Policy Program 16

17 Eventually the measure will be the mean of resource use. Extension of Gainsharing Demo: extended to September 30, 2011 Medigap: create new model plans for C & F that include nominal cost sharing to discourage overutilization Readmissions In 2013, hospitals with readmission rates above a threshold would have payments reduced by 20% (readmitted within 7 days) and 10% (readmitted within 15 days) for preventable readmissions Transitional care program to reduce readmissions: 3 year pilot program where eligible hospitals provide transition services to high-risk patients Bundled Payments In 2013, establish national, voluntary pilot to provide incentives to providers to coordinate care across the continuum and be jointly accountable for episodes of care. o If it works, Secretary must submit implementation plan to In FY 2012, adjust payments for hospitals based on the dollar value of the hospital s percentage of preventable readmissions for 3 conditions determined by the National Quality Forum (which will expand to all conditions determined by MedPAC in their 2007 report). Provides assistance to hospitals for transitional care and noncompliance issues Interim readmission policy for post-acute providers in FY 2012, with a fully phased in one and payment system by FY 2015 o Savings: $16.0 billion over 10 HHS must prepare a report within 3 years of enactment on how to implement post-acute bundled payments. Converts ACE demo into a pilot project and expands to bundling of hospital and post-acute payments in New America Foundation, Health Policy Program 17

18 Congress to make permanent o Must first develop relevant quality measures, determine conditions to be included in pilot o May cover hospitalizations, physician services in and outside hospital, outpatient hospital, ER visits, readmissions, PAC services (home health, nursing, etc ), and other services o Episode would be 3 days prior to hospitalization and 30 days after Legal Issues Closes loophole in self-referral rules where physicians can refer to hospitals in which they have a financial interest Prohibits physician ownership in new hospitals as of 1/1/09 Existing physician-owned hospitals can only grow within set parameters. o Savings: $1 billion over 10 Medicare Advantage Base calculations of MA benchmarks on actual plan costs as reflected in plan bids rather than statutorily set rates In 2012 MA benchmarks would be blended with plan bids (33% of enrollment weighted average of bids and 67% of the current law Reduces MA benchmarks to FFS levels over 3 years will be equal by 2013 o Savings: $156.3 billion over 10 incentive system to increase payments to high quality plans and improving plans over New America Foundation, Health Policy Program 18

19 MA benchmarks) o By 2014 it would be it would be all based on plan bids o Create bonus payments for care coordination and management activities of MA plans and efficiency bonuses for plans significantly below FFS costs (bonuses must be used for additional benefits to enrollees) o Prohibit cost-sharing that is greater than cost sharing in the Medicare program Medicare Part D Establish discount program for beneficiaries who fall in the coverage gap. Eligible people (who don t receive subsidies and make under $85,000 per year) would receive a 50% discount on brand name drugs in the coverage gap. o Still count 100% of the price toward out-of-pocket thresholds Require the Secretary to exclude MA rebates and bonus payments from the premium amount when calculating regional low-income subsidy benchmarks Allow plans who bid a small amount about the LIS benchmark to absorb the costs and serve as an LIS-eligible plan Reduce the premium subsidy for beneficiaries who exceed the Part B period o Cost: $9.6 billion over 10 Eliminates MA regional plan stabilization fund. o Savings: $200 million over 10 Limits beneficiary cost sharing to what they would pay either under FFS or Medicaid (if dual eligible) Requires CMS to public MA plan administrative costs Eliminates donut hole: $500 reduction in 2011, completely phased-out in o Cost: 47.0 billion over 10 Requires drug companies to provide Medicaid rebates for drugs used by dual eligibles o Savings: $63.0 billion over 10 Incorporates PhRMA agreement to discount drugs used in Part D by 50% Allows enrollees to make mid-year changes to their PDP if the plan changes the formulary to increase cost-sharing or reduce coverage. New America Foundation, Health Policy Program 19

20 thresholds and determine levels in similar fashion to Part B; inflate thresholds by CPI after 2019 Secretary must create plan categories based on actuarial value, like bronze, silver, gold, etc End of Life Care Provides coverage for consultation between enrollees and practitioners for discussion of end of life directives o Cost: $2.8 billion over 10 Accountable Care By 2012, eligible ACOs (defined below) would be able to qualify for an incentive bonus o Eligible ACOs are: groups of providers and suppliers who have an established mechanism for joint decision making, such as for capital purchases o The would have to agree to account for overall care of ALL FFS patients; 3 year participation; have a formal legal structure; be primary care for 5,000 patients; provide data to Secretary; have leadership/management structure; define processes to promoted EBM, quality reporting, and coordinate care; and, meet patient-centered criteria. o To earn incentives, the ACO Pilot program o Savings: $2.2 billion over 10 Creates alternative payment model within FFS Medicare to reward ACOs ACOs can include groups of physicians organized around a delivery system; an IPA; a group practice; or other common practice organizations. ACOs that reduce costs relative to benchmarks and reach quality targets will be rewarded with share of savings. New America Foundation, Health Policy Program 20

21 must meet quality thresholds (that can be amended over time) 3 year baselines based on 3 years of data Secretary will determine shared savings ratio. Medical Home An expansion/reorinentation of the medical home demo to pilot feasibility of reimbursing PCMHs 2 models: independent patientcentered medical home for highneed beneficiaries with multiple chronic conditions; community abased medical home for the broader population with chronic disease. o Cost: $1.8 billion over 10 Primary Care 10% bonus on select evaluation and management codes for 5 years under Medicare fee schedule o Available to primary care practitioners who specialize in primary care; spend a majority of their time on those codes o General surgeons could also get the bonus on major procedure codes o Funded through reduction to all other codes except for physicians in HPSA zip codes Graduate Medical Education Redistribute currently unused residency slots to primary care and increases primary care patient rate by 5% for physicians specializing in primary care (defined by specialty and by share of practice in primary care) o Cost: $5.0 billion over 10 Waives all cost sharing for preventive services o Cost: $2.8 billion over 10 HHS must redistribute unfilled residency positions (for 3 years) to New America Foundation, Health Policy Program 21

22 Fraud, Waste, and Abuse general surgery o Certain hospitals would be exempt and only 80% of unused slots would be redistributed. Greater flexibility for residency training programs for rural and underserved areas o All time spend by a resident would could toward payment without regard to the setting of care Medicare would count time spent in didactic programs and seminars toward DGME payments as well as vacation and sick leave (same for IME payments) Preserve resident places in the same city/state/area as those in hospitals that were closed or acquired Hospital-Acquired Payment adjustment for hospitals training of primary care HHS must preserve residency spots at hospitals that have closed Modifies rules about IME and DGME funding for residents in a non-provider setting Set new goals for residency training that focus on working in non-acute settings, within teams, focusing on cost and value of treatment options, participating in quality improvement programs, and demonstrating meaningful use of EHRs. o Cost: $1.5 billion over 10 Increased funding and flexibility to fight fraud, waste, and abuse Enhanced penalties for false information, delayed inspections, marketing violations, etc Enhanced program safeguards in hospice care. Generally increases the Secretary s oversight of Medicare/Medicaid programs o Savings: $3.1 billion over 10 New America Foundation, Health Policy Program 22

23 Infections New Programs/Entities ranked in top quartile of riskadjusted HAI rates o 99% of payment if in top quartile Create CMS Center of Innovation to test, evaluate, and expand payment structures o Exempt from budget neutrality for an initial testing period o Lists goals of payment models that Center should test and evaluate Independent Medicare Commission that would develop and submit proposals to congress to slow cost-growth and improve care o If projected excess cost growth is greater than the average of CPI & CPI-M, the Commission would submit a proposal to Congress that would reduce excess cost by 0.5% in 2015 (If it is less than 0.5% proposal must eliminate excess growth). o Proposal must be reported out by SFC by April 1 or else it is automatically discharged, then considered under post-cloture rules of debate. o If nothing passed by August 15, proposal is automatically enacted New America Foundation, Health Policy Program 23

24 Dual Eligibles Medicaid/CHIP Special Needs Plans Extend SNP authority through end of 2013 o Add additional certification and enrollment rules Allow Erickson demonstrations to be a type of MA special needs plan (for residents in a continuous care environment). New Programs/Entities Prevention Establish Office of Coordination for Dual Eligible Beneficiaries to align Medicare and Medicaid financing, administration, oversight, and policies for dual eligibles Establish a set of Medicaid Quality measures to be implemented and reported on in each state. Extends SNP program through 2012 and fully integrated dual eligible SNPs until 2015 Requires coverage of preventive services Must cover tobacco cessation products Payment Rates Programs must reimburse for primary care services at no less than 80% of Medicare in 2010, 90% in 2011, and 100% in 2012 and after. Maintains payment differentials between physicians and other practitioners Medical Home Establish bundled payments demo project in up to 8 states o Provided for acute episodes and follow-up post-acute care 5 year pilot program to test medical home with high-need beneficiaries (medically fragile children, high risk pregnancies). Federal government would match cost of community care workers at 90% in first 2 years and 75% in the New America Foundation, Health Policy Program 24

25 WORKFORCE following 3 years. Prescription Drugs After January 1, 2011, limits Medicaid payments for multiple source drugs to 130% of average manufacturer price Increases the minimum rebate for brand-name drugs to 22.1% Requires rebates to also apply to Medicaid managed care organizations Expands participation in 340B program to certain rural and other hospitals as well as outpatient drugs Health-care Acquired Conditions Managed Care Organizations Prohibit federal payments to states for Medicaid services related to HACs (using Medicare s definition) including those that occur outside hospitals Prohibits federal matching payments from covering these conditions (effective 2010) limits spending on administration, marketing, etc.. to 15% of Medicaid premiums (Effective July 1, 2010) Amends the 340B program by allowing more providers to qualify for the drug discount includes drugs used in connection with inpatient services at eligible hospitals allows members to obtain inpatient drug through a group purchasing agreement Health Service Corps Appropriates an additional $3.9 billion from FY 2010 to 2019 for the Corps Increases loan repayment to $50,000 per year Allows part time service and teaching to count toward corps service General Strategy Establishes National Health Care Workforce Commission to review the workforce and New America Foundation, Health Policy Program 25

26 Loan Repayment for Non-Primary Care Primary Care/Dentistry Loan repayment program at HRSA for health professional needs areas not currently designated as in need. Reduces loan interest rate to 2% below rates available for students pursing primary care Builds academic capacity in primary care training programs projected needs. Goal is to provide unbiased information to Congress and the Administration. State workforce development grants established for states to complete planning and create strategies for approaches to increase the health care workforce National and regional centers are established to collect, analyze, and report workforce data. Eases criteria for schools and students to qualify for loans, shorten payback periods, and ease non-compliance. Loan repayment program for pediatric subspecialists and mental and behavioral health providers for kids and teens who are working in a shortage area, underserved area, or underserved population Creates a Primary Care Extension Program to provide assistance to primary care providers about evidence-based medicine, preventive medicine, health promotion, chronic disease management, and mental health. Provides grants to establish, New America Foundation, Health Policy Program 26

27 Authorizes $3 billion for for primary care programs Funds training programs for dentistry including loan repayment benefits Nursing Increases loan repayments for nurses and faculty Authorizes $1.45 billion for nursing programs maintain, and improve academic units in primary care with priority given to team-based care approaches. Makes dental programs eligible for grants now only available to medical schools Secretary my establish training programs for alternative dental health providers $12 million for geriatric education centers Increases the grant amounts and updates the years for nursing schools to establish student loan funds $50 million grant to support nurse-managed health clinics to be administered by HRSA Grants to nursing schools to strengthen nurse education and training programs Allows faculty at nursing schools to be eligible for loan repayment programs Establishes loan repayment program where nurses teach at an accredited school for 4 of 6 years Other Care Workers Loan repayment for allied health professions degrees in qualifying locations (health agencies, underserved areas, etc ) New America Foundation, Health Policy Program 27

28 Public Health Establishes public health workforce corps like the national health service corps Funds training programs for public health Funds grant program for preventive medicine physicians $600 million from for public health workforce Diversity/Training for Evolving Health System Scholarships and loan repayments for those from disadvantaged backgrounds serving as health professionals Nursing workforce diversity grants Secretary may award grants for scholarships for mid-career professionals in public health positions to received additional training $10 million over 3 years to establish new training for direct care workers Grants to schools for programs in social work, psychology, child/teen mental health, and pre-service training to paraprofessionals in mental health. Loan repayment program for public health professional degrees in exchange for at least 3 years of full-time employment Grants to promote the community health workforce Establishes youth public health program to interest them in careers Secretary must address workforce shortages in health departments in applied epidemiology, lab science, and informatics Centers of Excellence Program to develop minority applicant pool is reauthorized at 150% of 2005 levels, $50 million Provides scholarships for New America Foundation, Health Policy Program 28

29 PREVENTION & WELLNESS Grant at HRSA to promote cultural and linguistic competence Grant for HRSA to develop and operate interdisciplinary training programs for health professionals Creates Advisory Committee on Health Workforce Evaluation and Assessment to ensure the health workforce is meeting our needs. $2.2 billion from to fund workforce programs. Trust Establishes a prevention and wellness trust and appropriates $35 billion over 10 years to fund its activities National Strategy Requires HHS to submit a national strategy to improve the nation s health through prevention and wellness activities within one year, and updated every 2 years thereafter Must identify specific goals, standards, and priorities Task Forces Converts the US Preventive Services students who commit to work in underserved areas as primary care providers, also increases loan repayments for faculty members at this institutions Establishes community-based training and education grants to target individuals seeking health careers from urban and medically underserved communities ($125 million per year through 2013) Expands diversity grants to include completion of associate degrees, and other pre-entry preparation activities. Creates a program to support curricula for cultural competency New America Foundation, Health Policy Program 29

30 Task Force to the Task Force on Clinical Preventive Services to conduct evidence-based review of data and literature on effective clinical preventive services. Codifies Task Force on Community Preventive Services to determine what services that are NOT clinical are scientifically effective Research Provides funding to the CDC to support research on community preventive services Directs CDC and NIH to consider national strategies of prevention in conducting research on prevention and wellness Delivery of Services Establishes grant program at CDC to fund preventive/wellness services across the country. 50% of funds must be targeted to reducing health disparities. Infrastructure Establishes grant program at CDC to improve core health infrastructure. New America Foundation, Health Policy Program 30