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 July 15, 2013

Most of the health care reform news in the past week focused on the implications of a recent decision by the U.S. Treasury Department delaying enforcement of the Affordable Care Act’s (ACA) employer mandate until 2015.  Both politicians and media had widely diverging assessments of whether the decision is a helpful sign of flexibility or a harbinger of growing chaos surrounding implementation of the law. Less widely covered, but far more definitive, was a decision last week from the Fourth Circuit Federal Court of Appeals affirming the constitutionality of the employer mandate in a case brought by Liberty University. On the issue of the Commerce Clause, the court held that the employer mandate “is simply another example of Congress’s longstanding authority to regulate employee compensation offered and paid for by employers in interstate commerce.” The court also held that the ACA did not violate the plaintiffs’ religious freedom rights under the First Amendment because it was a “valid and neutral law of general applicability.”  In June 0f 2012, the U.S. Supreme Court upheld the ACA’s individual mandate. Liberty University now says it intends to pursue its case to the U.S. Supreme Court as well.


The Senate Finance Committee held a hearing last week titled, “Repealing the SGR and the Path Forward: A View from CMS.” The hearing was held to focus on approaches that can be used to repeal the Sustainable Growth Rate (SGR) formula in Medicare, and replace it with other reimbursement methods for physician services provided to Medicare beneficiaries. Jon Blum, Acting Principal Deputy Administrator and Director of the Centers for Medicare and Medicaid Services (CMS), said that Medicare physician payment re-design approaches must consider: 1) how to set a realistic baseline for physician payments; and 2) how best to shift the payment system towards value-based payments rather than volume-based incentives. Blum suggested that Medicare physician payment reform should provide a multi-year period of stable updates to payment rates, while also continuing development of new payment models that hold providers accountable for the cost and quality of care, such as accountable care.

The House Energy and Commerce Subcommittee on Health held a hearing last week titled “Making Medicaid Work for the Most Vulnerable.” Speakers discussed Medicaid expansion under the ACA and potential Medicaid reforms. The hearing built on the Energy and Commerce Committee’s ongoing efforts to review Medicaid’s current weaknesses and identify reasonable reforms, as included in the policy blueprint issued by Chairman Upton (R-MI) and Senate Finance Committee Ranking Member Orrin Hatch (R-UT) in May 2013. Subcommittee Chairman Joe Pitts (R-PA) suggested that health outcomes for Medicaid beneficiaries are typically worse than the outcomes of those who have no insurance, and stressed the need for waiver reform, noting that CMS fails to encourage states to pursue new and innovative models of care. Pitts added that many states attempt to modernize and tailor their programs to the individual populations they serve. However, they often spend years waiting for CMS to approve their waivers, if they approve them at all.

The House Ways and Means Subcommittee on Health held a hearing on the administration’s decision to delay the ACA’s employer mandate and employer information reporting requirements. Subcommittee Chairman Kevin Brady (R-TX) said that he believed the delay in the employer mandate indicates that the President’s health care plan is not ready. Ranking Member Jim McDermott (D-WA) said that the exchanges are on track to open on schedule, and noted that it is impossible to know what the landscape will look like on January 1, 2014. But it is entirely possible that the delay will actually help consumers in the long run, he added. McDermott said that it is more important to delay the employer mandate, and get it right, than to rush and get it wrong.


ARIZONA: The Arizona Public Interest Research Group has issued a press release praising the Department of Insurance (ADOI) for strengthening its rate review process and implementing greater transparency by making more material available to the public. However, greater emphasis was placed on recommending additional changes, including: 1) making the filings easier to locate on the ADOI website and making supplemental filing documents publicly available; 2) requiring insurers to justify rate increase proposals by including additional data and calculations needed to evaluate their proposals, administrative costs, and strategy to lower health care costs; and 3) implementing prior approval of rates. In other news, Arizona is in line to receive $2.3 million in Health and Human Services (HHS) grants to be used by 17 community health centers to operate 140 clinics that will serve an estimated 62,000 people throughout the state.

COLORADO: Governor John Hickenlooper made a significant change to the composition of the Board of the Colorado Health Benefit Exchange when he declined to reappoint two members representing health insurers. Bowing to pressure from a group of patient advocate organizations, the governor appointed a small business owner and an executive from the National Multiple Sclerosis Society.

CONNECTICUT: The Department of Social Services (DSS), an agency that serves nearly 750,000 people including the Medicaid population, unveiled a new phone system last week. On day one the system handled more than 11,000 calls with mixed reviews from consumer advocate organizations. Phone volume is expected to increase as nearly 60,000 more people become eligible for Medicaid on January 1, 2014.

OREGON: The Insurance Division (ID) has finalized rates for the 12 insurers and two CO-OPs that submitted plans for the individual or small group markets for next year. ID said it reduced proposed rates in the individual market by various amounts, "from a few percentage points to 30 percentage points." Meanwhile, requested rates in the small-group market were cut by up to 12 percentage points.



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