Today’s Washington Read:

With 2015 Budget Request, Obama Will Call for an End to Era of Austerity
from Washington Post by Zachary Goldfarb

President Obama’s forthcoming budget request will seek tens of billions of dollars in fresh spending for domestic priorities while abandoning a compromise proposal to tame the national debt in part by trimming Social Security benefits. With the 2015 budget request, Obama will call for an end to the era of austerity that has dogged much of his presidency and to his efforts to find common ground with Republicans. Instead, the president will focus on pumping new cash into job training, early-childhood education and other programs aimed at bolstering the middle class, providing Democrats with a policy blueprint heading into the midterm elections. Obama would retain some parts of his grand-bargain framework, including a proposal to require wealthy seniors to pay more for Medicare benefits than they do now. White House officials said the president continues to believe that entitlement programs such as Medicare and Social Security must be reformed to be sustainable.

 

Today’s Business Strategy Read:

Justice Department to Join Suit Against Tenet Healthcare, Health Management Associates

from Wall Street Journal by Christopher Weaver

The Justice Department will join a whistleblower suit against Tenet Healthcare Corp. and Health Management Associates Inc. alleging the firms’ Georgia hospitals illegally paid kickbacks to obstetrics clinics for referring low-income and undocumented patients to their facilities for deliveries, the department announced Wednesday. The suit is the latest in a wave of similar cases the Justice Department is pursuing against hospital operators, including at least eight separate cases against HMA for a range of tactics. HMA was acquired earlier this year by former rival Community Health Systems Inc., which didn’t immediately respond to a request for comment. In the latest case, a former HMA executive filed a lawsuit alleging that four Tenet hospitals and one HMA hospital in Georgia entered into bogus contracts with Hispanic Medical Management, Inc., an Atlanta-area operator of clinics treating undocumented Hispanic patients.

 

Today’s Chart Review:

Medicaid: Demographics and Service Usage of Certain High-Expenditure Beneficiaries
from GAO by Carolyn Yocom

 

 

Mark Your Calendars (All Times Eastern):
Friday: Quarterly earnings: Acceleron Pharmaceutical
Friday: Institute for Defense and Government Advancement event on military behavioral health @9am
Friday-Sunday: National Governors Association Winter Meeting

NEWS ARTICLES

1-4: General
5-9: Payers
10-12: Providers
13-16: Pharma/Biotech/Device
17-18: Health IT

OPINIONS, EDITORIALS, PERSPECTIVES

19, 20: USA Today
21: Washington Post
22: Forbes
23: Health Affairs

RESEARCH REPORTS, ISSUE BRIEFS, CASE STUDIES

24: Government Accountability Office
25: HIMSS and Medical Group Management Association
26: Kaiser Wood Johnson Foundation and Urban Institute

NEWS ARTICLES

 

General
1) Public Sector Cuts Part-Time Shifts to Bypass Insurance Law
from New York Times by Robert Pear

Cities, counties, public schools and community colleges around the country have limited or reduced the work hours of part-time employees to avoid having to provide them with health insurance under the Affordable Care Act, state and local officials say. The cuts to public sector employment, which has failed to rebound since the recession, could serve as a powerful political weapon for Republican critics of the health care law, who claim that it is creating a drain on the economy. President Obama has twice delayed enforcement of the health care law’s employer mandate, which would subject larger employers to tax penalties if they do not offer insurance coverage to employees who work at least 30 hours a week, on average. But many public employers have already adopted policies, laws or regulations to make sure workers stay under that threshold.

2) More Than 12,000 Congressional Staffers Have Enrolled in Health Plans Through Obamacare

from Washington Post by JD Harrison

Thousands of people have purchased health coverage through the District of Columbia’s new small-business insurance marketplace, but only a tiny fraction of them actually own or work for a small business. The rest are members of or work for a single large organization — Congress. Starting this year, new rules require federal lawmakers and their staffers to enroll in health-care plans through the small-business exchange on the city’s new insurance marketplace, known as DC Health Link. So far, 12,359 representatives and staff members, including those who work in district offices across the country and those working on Capitol Hill, have purchased plans, according to numbers obtained by The Washington Post from city health officials. Others have complained that they were forced to switch from the Federal Employee Health Benefits Program, which is still used by other federal workers, to plans on DC Health Link. In part, that’s because the city’s online exchange, like many others across the country, experienced a number of technical problems during the first few months.

3) With 2015 Budget Request, Obama Will Call for an End to Era of Austerity

from Washington Post by Zachary Goldfarb

President Obama’s forthcoming budget request will seek tens of billions of dollars in fresh spending for domestic priorities while abandoning a compromise proposal to tame the national debt in part by trimming Social Security benefits. With the 2015 budget request, Obama will call for an end to the era of austerity that has dogged much of his presidency and to his efforts to find common ground with Republicans. Instead, the president will focus on pumping new cash into job training, early-childhood education and other programs aimed at bolstering the middle class, providing Democrats with a policy blueprint heading into the midterm elections. Obama would retain some parts of his grand-bargain framework, including a proposal to require wealthy seniors to pay more for Medicare benefits than they do now. White House officials said the president continues to believe that entitlement programs such as Medicare and Social Security must be reformed to be sustainable.

4) U.S. Stock-Index Futures Advance Before Homes-Sales Data

from Bloomberg by Trista Kelley

U.S. stock-index futures rose, indicating that the Standard & Poor’s 500 Index will post a third week of gains. Futures on the S&P 500 expiring in March added 0.2 percent to 1,839.20 at 10:54 a.m. in London. The equity benchmark has gained 3.2 percent this month and 0.1 percent this week. Dow Jones Industrial Average contracts climbed 28 points, or 0.2 percent, to 16,128 today.

Payers

5) Private Exchange Sees Surge In Health Care Enrollment
from USA Today by Kelly Kennedy

The number of customers on the nation’s largest private health insurance exchange increased by 50% in the final three months of 2013, a direct result of demand created by the Affordable Care Act, the company’s CEO saidThursday. Gary Lauer, CEO of eHealth Insurance, said individual memberships rose 50% in the fourth quarter of 2013 compared with the same period in 2012, from 113,600 applications in the last three months of 2012 to 169,800 in 2013. “The impact of the Affordable Care Act provisions were especially significant in the individual market,” Lauer said Thursday afternoon. The opening Oct. 1 of the enrollment period for people to buy health insurance “drove significant demand,” he said. Only 10% of those buying new policies had bought policies from eHealth Insurance in the past, he said. Consumers who grew frustrated with HealthCare.gov may have turned to eHealth when the federal site was down in October, he said. None of the new eHealth customers came through the state or federal health exchanges, Lauer said.

6) Anthem Blue Cross Widens Enrollment Lead on California’s Exchanges
from LA Times by Chad Terhune

Insurance giant Anthem Blue Cross stretched its lead over rival Blue Shield of California in the state’s healthcare-coverage exchange, new data show. Anthem signed up 223,630 people through Jan. 31, or 31% of California’s exchange market as part of the healthcare law. Anthem is a unit of Indianapolis-based WellPoint Inc., the nation’s second-largest health insurer. San Francisco insurer Blue Shield of California trails Anthem with a 29% share or 213,646 enrollees. Kaiser Permanente, the state’s biggest HMO, is third with 131,448 exchange customers, an 18% share. Health Net Inc. gained ground on Oakland-based Kaiser. The Woodland Hills insurer has enrolled 125,921 people for a 17% share.

7) Arkansas Senate Passes, House Rejects Private Option Plan

from Modern Healthcare by Associated PressA compromise plan for Medicaid expansion in Arkansas remained stalled in the state House Thursday, despite the state Senate endorsing legislation to continue the nationally watched program that is providing subsidized health coverage to more than 87,000 people. The House on Thursday voted 72-25 to reauthorize funding for the “private option,” three votes shy of the 75 needed to continue the program using federal Medicaid funds to purchase private insurance for low-income residents. Arkansas was the first state to win approval for such a plan as an alternative to expanding Medicaid under the federal health law.8) Loophole in Healthcare Law May Put Medi-Cal Patients’ Assets at Risk
from LA Times by Eryn BrownLuis Rios, who lost his job at a filling station in December at the age of 56, is newly eligible for Medicaid, the healthcare program for the poor. Following the advice of state-trained medical insurance enrollment workers, he filled out the paperwork required to get coverage — but has a nagging fear that he may have put his family’s financial assets at risk. That’s because, in certain cases, Medi-Cal, California’s version of Medicaid, will be able to collect repayment for healthcare services from the estate after a recipient dies, including placing government liens on property. Despite government assurances that the vast majority of Medi-Cal patients needn’t worry about the state trying to claim their assets, growing numbers of new enrollees under Obamacare are voicing concerns after reading warnings on healthcare notices that after their deaths the state “must seek repayment of Medi-Cal benefits” for services provided once they turn 55.9) CHIP Extension Needed Despite Healthcare Reform, Panel Says
from Modern Healthcare by Virgil Dickson

Congress should extend funding for the Children’s Health Insurance Program because millions of lower-income children could lose coverage if the program ends next year, members of the Medicaid and CHIP Payment and Access Commission said Thursday. The panel, which makes recommendations to Congress on Medicaid and CHIP matters, took no formal vote, but the clear consensus was that lawmakers should extend federal funding for the program before it ends Oct. 1, 2015. After MacPAC staff delivered a report indicating that an extension is needed, the commission members made comments showing their agreement, with no dissenting comments. Some policy experts have questioned the continuing need for the program because of the coverage expansion under the healthcare reform law. But MacPAC found that some kids could fall through the cracks even with that law in place.

Providers

10) Justice Department to Join Suit Against Tenet Healthcare, Health Management Associates
from Wall Street Journal by Christopher Weaver

The Justice Department will join a whistleblower suit against Tenet Healthcare Corp. and Health Management Associates Inc. alleging the firms’ Georgia hospitals illegally paid kickbacks to obstetrics clinics for referring low-income and undocumented patients to their facilities for deliveries, the department announced Wednesday. The suit is the latest in a wave of similar cases the Justice Department is pursuing against hospital operators, including at least eight separate cases against HMA for a range of tactics. HMA was acquired earlier this year by former rival Community Health Systems Inc., which didn’t immediately respond to a request for comment. In the latest case, a former HMA executive filed a lawsuit alleging that four Tenet hospitals and one HMA hospital in Georgia entered into bogus contracts with Hispanic Medical Management, Inc., an Atlanta-area operator of clinics treating undocumented Hispanic patients.

11) Health Centers See Threat From ‘Private Option’ Medicaid
from Kaiser Health News by Phil Galewitz

In this sleepy Mississippi River Delta town in eastern Arkansas, the community health center that opened in 2012 stands out among the downtown’s mostly abandoned buildings constructed over a half century earlier. The 15,000 square-foot brick building with its two-story lobby and green awnings was paid for through a $2.8 million grant from the Affordable Care Act — a federal investment designed to ensure the nonprofit clinic could treat hundreds of additional patients, many of whom would gain health coverage under Obamacare. Now, though, Mid-Delta Health Systems is worried it won’t have enough money to maintain services to low-income patients because of how the state is expanding Medicaid. Arkansas’ “private option” model is putting newly eligible recipients into the same private plans that any consumer might buy in the health law’s online insurance marketplaces. And private insurers pay the community centers far less than they have received from traditional Medicaid — in Clarendon, less than half as much. With an estimated 200,000 Arkansans eligible for expanded Medicaid through the private health plans, the centers fear a big financial hit.

12) Hospital CPI Jumps 0.9% in January After Weak Results in 2013
from Modern Healthcare by Melanie Evans

The Consumer Price Index for hospitals increased 0.9% in January, rebounding after declines and weak growth late last year. Last month’s growth of nearly 1% followed an increase of 0.3% in December and declines of 0.3% each of the prior two months. January’s increase was largely a result of rising inpatient prices, which climbed 1.4% last month, while outpatient prices increased a more modest 0.4%. For the year that ended in January, the index increased 4.8% compared with 4.7% the prior year.


Pharma/Biotech/Device

13) Analysis Warns of Higher Drug Costs in Some Obamacare Plans
from The Hill by Elise Viebeck

Consumers who use specialty medications may face higher costs on ObamaCare’s marketplace plans, many of which include co-insurance rather than copayments for the drugs, a new analysis warned. Researchers with consulting firm Avalere Health found that 59 percent of silver-level plans on the new exchanges charge policyholders a percentage of the cost of specialty drugs rather than a fixed copay. Twenty-three percent of these plans have co-insurance rates of 30 percent or more of the cost of the drugs on the highest formulary tier, the analysis found. This rate increased to 60 percent among the lower-premium bronze plans, researchers said. The findings indicate that some patients will face higher or unexpected out-of-pocket costs on the exchanges when it comes to paying for specialty drugs.

14) Roche May Share Trial Data Amid Brain Cancer Conflict
from Bloomberg by Naomi Kresge

Roche Holding AG and a group of outside investigators may share raw data from conflicting trials of Avastin to help determine whether the $7 billion-a-year treatment really helps patients with deadly brain cancer. The data is from two trials that both found the drug didn’t help patients with glioblastoma live longer, but differed on a more subjective measure: quality of life. In results published yesterday in the New England Journal of Medicine, researchers who led a Roche-sponsored trial said Avastin improved or maintained quality of life and brain function. An independent study dubbed RTOG 0825 said Avastin patients were worse off on both counts. The outcome may help determine how broadly Avastin is used for glioblastoma, a cancer whose patients have few other options for treatment. Roche, based in Basel, Switzerland, got accelerated approval for Avastin in glioblastoma in 2009 based on earlier, smaller trials. The drug, with sales of 6.25 billion Swiss francs ($7.04 billion) last year, is also used to treat tumors including metastatic colorectal and kidney cancers.

15) Furiex Said to Seek Buyer as Experimental Drug Meets Targets
from Bloomberg by David Welch

Furiex Pharmaceuticals Inc., the drug developer whose irritable bowel treatment is moving toward regulatory approval, is working with Bank of America Corp. to find a buyer, people with knowledge of the matter said. Now that the medicine has met targets developed in conjunction with U.S. and European regulators, management believes there is less risk for buyers and has begun contacting other drugmakers to gauge their interest in a deal, said two of the people, who asked not to be named because the Morrisville, North Carolina-based company’s plans are private. Furiex’s experimental treatment eluxadoline alleviated diarrhea and abdominal pain caused by irritible bowel syndrome in two studies, the last of three rounds generally needed for regulatory clearance. On Feb. 4, the company said it would apply for U.S. Food and Drug Administration approval to market the drug in June, sending the shares up 130 percent that day. Chairman Fred Eshelman estimated then that annual sales of the drug would be $750 million to $1 billion.

16) GlaxoSmithKline’s COPD Drug Anoro Receives European Green Light
from Reuters by Paul Sandle

Anoro, a combination drug for chronic obstructive pulmonary disease (COPD) developed by GlaxoSmithKline and Theravance, has received the green light from European regulators, the companies said on Thursday. The drug is a combination of UMEC, a long-acting muscarinic antagonist, and VI, a long-acting beta agonist, in a single inhaler. It is expected to generate sales of more than $2 billion a year by 2018, according to the average estimate of six analysts polled by Thomson Reuters. Recommendations for marketing approval from the European Medicines Agency are usually followed by the granting of full marketing authorization by the European Commission.

Health IT

17) Healthcare Providers Boost Security Spending
from Modern Healthcare by Jospeh Conn

Nearly 1 in 5 healthcare provider organizations have experienced a security breach and about 1 in 8 have had at least one case of medical identity theft, according to a survey by the Healthcare Information and Management Systems Society, with support from the Medical Group Management Association. More than half (51%) of survey respondents indicated their organizations had increased budgeted spending on security, but about half (49%) reported spending 3% or less of their overall IT budgets on it, which is less than adequate, according to industry experts. In a surprising finding, 92% of respondents reported their organizations had conducted a formal data-security risk analysis. Roughly 19% of respondents reported their organizations had experienced a security breach and 12% had a known incident of medical identity theft.

18) 16 HIOs to Collaborate on More Robust Exchange
from FierceHealthIT by Susan Hall

Sixteen health information organizations (HIOs) in Great Plains and Rocky Mountain states are teaming up to address the toughest issues limiting data sharing from a highly mobile populace. Their goal is to ensure that patients’ information follows them, no matter where they go, according to an announcement. Though some of the organizations share data through DIRECT technology and query-based exchange, differing state laws, patient consent policies and approaches to sharing protected health information still present barriers to letting patient records follow them as they travel. The consortium wants to be able share clinical data across state lines in a highly secure, connected system. It plans to advocate for more robust exchange, such as query-based HIE, and to address the unique needs of rural areas.

AHIP’s National Health Policy Conference: ACA and the Year Ahead, March 5-6 in Washington, D.C., will convene key Administration andstate officials, Members of Congress, and the foremost health care thought leaders and health insurance industry professionals to provide high-level insight, analysis and policy recommendations on health care issues and trends. Don’t miss this timely opportunity to engage andshare ideas with industry experts and vested stakeholders. Register today.

 

OPINIONS, EDITORIALS, PERSPECTIVES

 

USA Today

19) Is Your Doctor on a Drug Maker’s Payroll?
from USA Today by Editorial Board

Doctors have long gotten small favors from drug makers: pads with logos, a deli tray sent to the office, tickets to sporting events and free drug samples. But in recent years, those trinkets have evolved into big money for doctors paid to speak to other doctors about new drugs, often using canned scripts provided by the pharmaceutical companies. Some of the paid speakers have become high-volume prescribers of the drugs. Some of the drugs are expensive new entries in markets crowded with generics. And some are no better than older, cheaper drugs. Taken as a whole, the practice has begun to look less like education and more like legalized bribery.

20) Doctors Learn From Other MDs
from USA Today by Thomas Stossel

Change in medicine is relentless. New drugs and devices, new indications for old ones and newly recognized safety issues are hard for busy M.D.s to keep up with. One way to manage all this innovation has been for medical product companies to pay physicians to speak to their colleagues about products, usually at evening events in restaurants. This is one of many industry-sponsored educational activities attacked by critics who want strict apartheid between M.D.s and medical products companies. They denigrate such speaking as company-scripted marketing, not “education,” and insinuate that the meals are so “lavish” they amount to bribery. They confidently charge — without evidence — that such promotion causes physicians to inappropriately prescribe new products that are no better, but more expensive and less safe, than generic alternatives.

Washington Post

21) Proposed GOP Healthcare Bill Aims to Cure Costly U.S. Healthcare System
from Washington Post by Richard Burr, Tom Coburn and Orrin Hatch

The Feb. 15 editorial “Finally, a GOP alternative,” about our health-care proposal, the Patient CARE Act, wrongly charged that it “relies on similar fundamental architecture” as Obamacare. Though crediting Obamacare with “worthy goals” to help Americans have access to better care, The Post didn’t mention that the law’s huge tax hikes, Washington-dictated mandates and unsustainable spending have made it wildly unpopular. Our plan addresses these issues head-on. We repeal Obamacare’s $1 trillion in new taxes that mostly fall on the backs of hard-working middle-class families. We end the law’s unprecedented Medicaid expansion and replace it with concrete, structural reforms. We don’t create giant federal bureaucracies or impose individual or job-killing employer mandates on Americans.

Forbes

22) The Strange Effects Of The Health Insurance ‘Annual Fee’ Tax
from Forbes by Robert Book

The ACA’s individual tax penalty for not having health insurance is widely known. What is less well-known is that the ACA also imposed a tax that will fall on those who do buy health insurance. Recently, I examined this tax with an eye toward estimating how much this tax would increase average premiums. Section 9010 of the ACA imposes a tax on health insurance that takes an unusual – perhaps unprecedented – form. Instead of charging a fixed amount per member, or a percentage of the price, the tax is defined as a fixed amount each year on the entire health insurance industry. That amount – $8 billion for 2014, rising to $14.3 billion for 2018 – is to be allocated across insurers roughly proportional to their market share, as measured by their total premiums. In order to remain in business, as well as to satisfy state and federal actuarial requirements, insurers will essentially be required to pass most of this tax along to policyholders in the form of higher premiums, or possibly higher average out-of-pocket costs or reduced benefits. The result will not be that health insurance companies pay more – it will be that those who pay health insurance premiums will pay more.

Health Affairs

23) To Pay For Medicare SGR Repeal, Build On Bipartisan Health Care Policy
from Health Affairs by John Rother, Joel White, and David Kendall

Something unexpected is happening in Washington. As most eyes track partisan battles over immigration and the Affordable Care Act, key Congressional committees have been quietly advancing truly bipartisan legislation to strengthen Medicare. Since 2002, an outdated Medicare cost control called the Sustainable Growth Rate (SGR) has repeatedly threatened drastic Medicare provider cuts. After a decade of temporary fixes, SGR repeal appears within reach. A bipartisan, bicameral agreement by key Congressional leaders announced on February 6, 2014 goes a step further by pairing repeal with bipartisan reforms that pay physicians for the quality and value of care they deliver, not the number of tests and procedures they order. Offsets that can’t get enacted are easy to dream up. Some Democrats want automatic rebates from prescription drugs used by Medicaid patients. They might also extend cuts to Medicare’s provider payments under sequestration as they did in the unemployment bill. Some Republicans want the offsets to come from cuts to Obamacare or through medical malpractice reform. If Congress wants to actually strengthen Medicare, not just argue about it, lawmakers must take a page from last year’s Murray/Ryan budget negotiations and focus on steps both sides can agree on because they cut waste.

 

ACA’s Future: The Good, The Bad, and The Ugly. Avik Roy of the Manhattan Institute for Policy Research, and Jonathan Cohn of the NewRepublic, will discuss the politics and fiscal implications surrounding the ACA’s full implementation and certain future. You’ll find this andmore valuable sessions and engaging speakers at AHIP’s National Health Policy Conference: ACA and the Year Ahead, March 5-6 in Washington, D.C. Register today.

 

 

RESEARCH REPORTS, ISSUE BRIEFS, CASE STUDIES


Government Accountability Office

24) Medicaid: Demographics and Service Usage of Certain High-Expenditure Beneficiaries
from GAO by Carolyn Yocom

In fiscal year 2009, states spent nearly a third (31.6 percent) of all Medicaid expenditures on the most expensive Medicaid-only beneficiaries, who were 4.3 percent of total Medicaid beneficiaries. States spent another third (33.1 percent) on all other Medicaid-only beneficiaries, who represented 81.2 percent of total Medicaid beneficiaries. Among dual eligible beneficiaries, a similar pattern existed, with a small proportion of the population accounting for a disproportionate share of expenditures. Certain characteristics significantly increased the probability of being a high-expenditure Medicaid-only beneficiary. Specifically, the results of GAO’s analyses indicate that the probability of being a high-expenditure Medicaid-only beneficiary was 24.4 percent for those residing in a long-term care facility, 20.8 percent for those with human immunodeficiency virus/acquired immunodeficiency syndrome, 18.3 percent for those with disabilities, and 13.3 percent for new mothers or infants.

HIMSS and Medical Group Management Association

25) 2013 Annual Security Survey Results
from HIMSS and Medical Group Management Association

Results of the 2013 HIMSS Security Survey show that, despite progress toward hardened security and use of analytics, more work must be done to mitigate insider threat, such as the inappropriate access of data by employees. Although federal initiatives such as OCR audits, Meaningful Use and the HIPAA Omnibus Rule continue to encourage healthcare organizations to increase the budgets and resources dedicated to securing patient health data, in the previous twelve months, 19 percent of respondents reported a security breach and 12 percent of organizations have had at least one known case of medical identity theft reported by a patient.

Robert Wood Johnson Foundation and Urban Institute

26) Tax Preparers Could Help Most Uninsured Get Covered
from Robert Wood Johnson Foundation and Urban Institute

More than 74 percent of uninsured consumers who qualify for insurance affordability programs under the Patient Protection and Affordable Care Act (ACA) file federal income tax returns. This includes over 90 percent of consumers under age 35 who are eligible for subsidies to pay for qualified health plans (QHPs). Policies that effectively enroll federal income tax filers into health coverage could cover many uninsured Americans and secure a good mix of healthy participants, which would help promote a balanced risk pool and marketplace stability. Tax preparers are a promising source of application assistance for these uninsured. Most low-income taxpayers file with the aid of tax preparers, including nearly two-thirds (64.6 percent) of people who claim the earned income tax credit (EITC). Federal and state officials as well as private sector leaders should seriously explore engaging for-profit and nonprofit tax preparers as partners in reaching the eligible uninsured during the final two months of open enrollment.

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