Health Reform Weekly

A weekly compilation from Aetna of health care-related developments in Washington, D.C. and state legislatures across the country.

Week of October 5, 2015

Congress may be more willing to consider less dramatic fixes to the affordable care act. The House of Representatives and the Senate have passed a bill that would allow states to treat businesses with 51-100 employees as large employers while retaining the option to classify these groups as small employers. The bill now heads to the President’s desk for his signature or veto.


One of several health care industry leaders called to testify last week at a hearing of the House Judiciary Subcommittee on Regulatory Reform, Commercial and Antitrust Law, Aetna Chairman and CEO Mark T. Bertolini said Aetna’s proposed acquisition of Humana is a way to accelerate the transition from a volume-based health care system to a value-based system that improves the overall health of members. Both companies, he noted, already have a strong record of helping consumers have more “healthy days” through accountable care relationships and will build on that record together. “The Aetna and Humana transaction brings together two highly complementary businesses in a sector that will continue to be marked by significant and dynamic competition. Combining these companies will enable us to offer consumers a broader choice of products, access to higher quality and more affordable care, and a better overall experience in more geographic locations across the country.”

The Department of Health and Human Services (HHS) has announced that insurers would receive $362 million in payments as part of the ACA’s risk corridors program.  The $362 million is far less than the $2.9 billion that insurers requested, raising questions about the long-term sustainability and usefulness of the program.

A bipartisan group of senators and representatives signed letters to the Centers for Medicare and Medicaid Services (CMS) urging the agency to rescind proposed cuts for colorectal cancer screening reimbursement rates.  Earlier this year, CMS proposed rate cuts of up to 20 percent.  The lawmakers indicated that colorectal cancer is a major concern for Medicare beneficiaries, and that cuts in physician reimbursements could reverse recent progress.

The House Ways and Means Committee has requested information from CMS regarding the agency’s oversight of co-op insurers promoted by the ACA.  In the wake of the collapse of Health Republic Insurance of New York—the largest co-op bankruptcy to date—committee members asked CMS to reveal which other co-ops have been placed under “enhanced oversight.”


CALIFORNIA: Director Jennifer Kent of the California Department of Health Care Services, which oversees the state’s Medicaid program, recently stated that the cost of providing Medi-Cal coverage to approximately one million undocumented adult immigrants for emergency and pregnancy related care is relatively low.  Starting in the Spring of 2016, undocumented children will be eligible and it is estimated that a 170,000 children will draw down services. 

A hospitals initiative that would amend the state constitution has qualified for the ballot in 2016.  If ratified, the measure would require voter approval of any change in a special fee that has been levied on hospitals since 2009. The fee provides matching funds of about $2 billion a year for the treatment of low-income patients. 

The Connecticut Hospital Association (CHA) joined State Senate and House Republican leaders at a press conference calling on Governor Dannel Malloy to call a special session on the budget. The group is hoping to avoid cutting nearly $100 million from hospitals’ Medicaid reimbursement.  Several key Democrat legislators have announced they are looking for alternatives to the Governor’s budget reductions.

DELAWARE: Commissioner Weldin Stewart released 2016 health plan rates while urging more insurers to participate in the Delaware marketplace. 
The Commissioner’s office acknowledged that the state’s high health care costs are discouraging insurer participation.

MICHIGAN: The Michigan Department of Health and Human Services (MDHHS) announced that it has received $70 million in federal funding over the next four years to support innovative health care system enhancements.
MDHHS worked with CMS to establish a timeline that begins implementation of new payment models on October 1, 2016.

Insurance Commissioner Monica Lindeen has published the health insurance rates for 2016 plans sold in the exchange.  Unlike the relatively stable rates of last year, the average rate increase across all individual plans ranges from 22 to 34 percent. Lindeen noted that the rates for small group plans sold by the two companies selling the most plans have increased only 5.6 to 6.8 percent.

A longer-than-expected 2015 legislative session of the General Assembly has adjourned for the year, having enacted Medicaid reform and other health care-related bills.  Legislative activity will be limited to legislative research studies or other interim meetings for the remainder of 2015.

Debate over controversial rate cuts for therapy services in the state’s Medicaid program seems to be coming to an end.  While litigation over the cuts continues, the Health and Human Services Commission has started to implement the cuts with the promise from Commissioner Chris Traylor of trying “to achieve the maximum therapy rate reductions possible while maintaining adequate access to care.” The biggest remaining question is whether the courts will prevent the cuts in the long term once preliminary injunctions and fact finding are completed.

WASHINGTON: Premera Blue Cross is facing 38 class action lawsuits over a cybersecurity breech from March that impacted it 11 million of its current and past insurance customers,
according to media reports. Insurance Commissioner Mike Kreidler launched a multistate investigation into the cyberattack and is working with his counterparts in Alaska, California, Idaho, and Oregon and Washington's Office of the Attorney General.

As of September 23, the 155,000 people enrolled in the Washington Health Benefit Exchange (WHBE) must pay their insurance companies directly instead of sending premiums to the state-run program. WHBE officials voted in December 2014 to stop managing customer invoices and payments to simplify the process and curb glitches.

The new Medicaid expansion plan drafted by Utah leaders would hit various health care industry players with $50 million in new fees and cost increases to help pay the state’s share of the expansion effort. In fiscal year 2021, when the state will have to take on 10 percent of the cost of expansion, the plan calls for raising more than $23 million from hospitals through an assessment, $9.3 million from physicians through a licensing fee increase, $7.7 million from "outpatient prescription drug" savings, and more than $5 million through a premium tax on managed care organizations, including fully insured and reinsured business.


Health Reform Connection
The Health Section
Aetna-Humana Transaction
Aetna Story 

Aetna is the brand name used for products and services provided by one or more of the Aetna group of subsidiary companies. Those companies include Aetna Health Inc. and Aetna Health Insurance Company, 151 Farmington Avenue, Hartford, CT 06156.

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