Washington Extension

January 20, 2012

Medicare News

Medicare Advantage plans that offer gym memberships to enrollees may have the same effect as cherry picking healthy beneficiaries, according to a new study in the New England Journal of Medicine. The authors found that enrollees in plans with gym memberships are healthier and have fewer mobility limitations than enrollees in plans without fitness benefits. The study did not address whether the plans were purposefully trying to attract and retain healthier enrollees, which is prohibited by law.

Gradually increasing the Medicare eligibility age to 67 would save the Federal government $148 billion over ten years, according to a new Congressional Budget Office report, or about a 5 percent annual reduction in Medicare spending. Although most seniors losing access to Medicare would have employer-based coverage, they would face higher premiums and pay more out-of-pocket for health care.

ACA Update

The White House released a report showing that 28 states have taken concrete steps toward establishing a health insurance exchange—half with clear authority to set up an exchange and half with executive orders or studies authorizing exchange work. Another 22 are still studying their options. The report highlights the actions of ten states and summarizes the authority and funding for exchange development in each state.

Wisconsin Governor Scott Walker will officially return a $37 million Early Innovator grant from the Federal government. He has also directed the state health agency to cease work on a state-run health insurance exchange and will rescind the creation of the state Office of Free Market Health Care. Kansas House Republicans are pressuring Governor Sam Brownback to cancel the state’s $135 million contract with Accenture to design a computer system to track social service applicants. Though Governor Brownback has put a moratorium on health insurance exchange work until after the Supreme Court decision, Republicans saw Accenture’s project as laying the groundwork for an exchange. New Hampshire’s Senate voted unanimously to establish a health insurance exchange, with backers citing the need to keep state control over if the ACA is implemented. New Hampshire’s House is opposed to ACA implementation.

The US Department of Health and Human Services faces pushback on its essential health benefits proposal. Patient advocates are asking for an additional 45 day comment period, after the initial deadline of January 31, 2012. Republicans are criticizing the use of sub-regulatory guidance rather than the traditional rulemaking process, accusing HHS of sidestepping regulatory requirements for cost-benefit and unfunded mandate analyses.

On the Hill

The House and Senate conference committee assigned to negotiate a longer-term solution to the payroll tax break and Medicare physician payments will convene on January 24th. The House returned to Washington, DC on January 17th and the Senate returns on the 23rd. Current law expires on February 29th, at which point Medicare’s payments to physicians would fall by nearly one-third.

Other News/Reports

The Congressional Budget Office found that Medicare demonstration programs—used to explore new ways to deliver and pay for Medicare—rarely reduce Medicare spending and in fact are often more costly. Value-based payment experiments struggled to overcome Medicare’s fee-for-service payment incentives while trying to increase the quality and efficiency of care delivered, and only successfully decreased spending by negotiating lower payment rates. CBO concludes that effective demonstration programs focus on transitions in care settings, gather timely data on care utilization, encourage close interaction between physicians and case managers, and target interventions to high-risk enrollees.

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

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