The Washington Extension

January 6, 2012

Medicare News

HHS is proposing changes to its quality rating methodology for Medicare Advantage and Part D prescription drug plans for 2013. Plans receive bonus payments based on quality scores. Updated quality ratings would reflect measurements of plan enrollees receiving high-quality hospital care, coordinated care, and medication reviews. The quality scores would also reflect statistically significant improvements in individual quality measures. Public comments are accepted until January 13, 2012.

ACA Updates

HHS released a bulletin proposing minimum requirements for essential health benefits that most health plans in the individual and small group markets must cover by 2014. Rather than list specific benefits, HHS proposes to allow states to choose a benchmark plan that reflects one of the three largest plans by enrollment in the small group market, State employee benefit plans, or national FEHBP plans, or base the benchmark plan on the state’s largest non-Medicaid HMO. Health plans must offer benefits that are “substantially equal” to the benchmark plan, as well as any necessary additions to meet the ten health benefit categories required by the ACA. HHS proposes this approach for 2014 and 2015 and will reevaluate for future years. Public comments are accepted until January 31, 2012.

Alaska will contract with Boston’s Public Consulting Group for exchange planning consultation. PCG already provides operational support for Massachusetts’ exchange. Democrats in Ohio proposed legislation creating a state-run health insurance exchange, though Republicans—including the governor and lieutenant governor—claim that their actions are premature due to continued uncertainty about the law. Republicans in Michigan’s Senate removed authorization for use of federal funding to begin exchange planning in the state, despite Republican Governor Rick Snyder’s support for an exchange. Lawmakers prefer to wait until after the Supreme Court decision about the constitutionality of the ACA but state health officials fear that delay would make exchange preparedness by January 2013 impossible.

On the Hill

A bicameral, bipartisan conference committee will begin working on a longer-term fix for Medicare’s payments to physicians, which were frozen through March 1, 2012 to avoid a 27% payment decrease at the end of 2011. Members of the committee include chairmen of the House and Senate committees of jurisdiction, as well as freshmen members.

The House is recessed until January 17th and the Senate is scheduled to return on January 23rd.

Reports/Other News

Major health insurance companies increasingly derive revenue from government programs like Medicare and Medicaid, rather than from commercial business, according to a new report by Bloomberg Government.  Commercial business now accounts for less than half of the combined revenue of WellPoint, UnitedHealth Group, Aetna, Humana and Cigna. Average operating profit margins have also increased in 2011 relative to the 18 months before the ACA was passed, largely due to expansion into the public sector, according to the report.

Visit Extend Health — the nation’s largest private Medicare exchange.

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