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Medicaid Spending In New York State

Russ Buettner has a great piece in the New York Times about the big money to be made in New York States’ unusually expensive Medicaid programs for people with developmental disabilities:

The [Levy] brothers, Philip and Joel, earned close to $1 million a year each as the two top executives running a Medicaid-financed nonprofit organization serving the developmentally disabled. They each had luxury cars paid for with public money. And when their children went to college, they could pass on the tuition bills to their nonprofit group. Philip H. Levy went as far as charging the organization $50,400 for his daughter’s living expenses one year when she attended graduate school at New York University. That money paid not for a dorm room, but rather it helped her buy a co-op apartment in Greenwich Village.

The rise of the Levy brothers, from scruffy bearded social workers in the 1970s to millionaires with homes in the Hamptons, Sutton Place and Palm Beach Gardens, reveals much about New York’s system for caring for the developmentally disabled — those with conditions like cerebral palsy, Down syndrome and autism.

The state spends, by far, more than any other caring for this population: $10 billion this year, and roughly 20 cents of every dollar spent nationally. More than half of that money goes to private providers like the Levys, with little oversight of their spending.

Something I think about a lot lately is the screwy politics of service providers in the United States. If you have a program that delivers services, and the expense of providing the services seems disproportionate to the benefits, and if the reason the expense seems disproportionate is something that unionized public workers have gotten out of the political process, then it’s easy to get conservatives hopping mad about it. But if you have a program that delivers services, and the expense of providing the services seems disproportionate to the benefits, and if the reason the expense seems disproportionate is something that private firms have gotten out of the political proces, then suddenly increased government oversight (regulation of for-profit colleges, IPAB, etc.) is a slippery slope to socialism. The Levys, perhaps, hit upon the ideal situation. They run a non-profit. It’s private but not a dastardly and evil “corporation.”

The point I would make about this is simply that there’s no magic fairy dust involved in organizational form. If you want to provide services, you’re going to need to hire service-providers. And the pecuniary interests of the service providers are not going to be identical with the interests of the public.

Brewer Swallows Opposition To Affordable Care Act, Accepts Grant To Pursue Mental-Illness Model

Hoping to improve the quality of health services offered to Arizonans with serious mental illness, Gov. Jan Brewer (R-AZ) will forego her own reservations about the Affordable Care Act to accept funding from a $500,000 federal health grant that will provide mental-health clinics with traditional doctors:

“The idea is to put one entity in charge of a person’s health care, both medical and mental. Data sharing and on-site coordination between health professionals have been shown to reduce medication costs, identify untreated conditions, improve overall health care and keep people out of the hospital.

A one-stop shop is more comfortable for people with mental illness, who often avoid the typical doctor’s office, let conditions go untreated and wind up in emergency rooms…[D]ata shows that three-fourths of the 12,000 people with serious mental illness don’t have a primary-care doctor. The partnership between Magellan and Maricopa Integrated Health Services is intended to change that.”

By creating a wholistic medical home, the Maricopa County health system and Magellan Health Services will use the money to lower the number of preventable deaths among mentally-ill patients, who face a life expectancy 30 years below that of the average Arizonan.

Despite accepting its funds, Brewer still opposes the federal health care law and has called the individual mandate “a sweeping violation of these fundamental principles established by the founding fathers.” Arizona has also joined 25 other states in challenging the constitutionality of the measure.

Meanwhile, Brewer has worked to reduce access to health coverage in Arizona, eliminating insurance for 310,000 beneficiaries enrolled in Arizona’s Medicaid program and shutting down the state Children’s Health Insurance Program, which effectively robbed 47,000 low-income children of health coverage. In January, Brewer tried to balance the budget by cutting a further 280,000 residents off from their Medicaid funding.

–Sarah Bufkin

NEWS FLASH

Pelosi’s Appointees To Super Commitee Won’t Cut Entitlement Benefits | That is a priority for us,” Pelosi said. “But let me say it is more than a priority – it is a value… it’s an ethic for the American people. It is one that all of the members of our caucus share. So that I know that whoever’s at that table will be someone who will fight to protect those benefits,” Pelosi said during today’s press conference. She was responding to a question about whether the three members she appoints to the super committee established by the debt ceiling deal compromise will vote down any proposal that targets entitlement benefits.

What The Super Committee’s Health Care Cuts Will Actually Look Like

Managed Care Matters’ Joe Paduda brings me back down to earth from my ‘maybe they can do delivery system reform in the bipartisan super committee’ heights and offers a more realistic look at what the cuts will look like (if you believe the group will agree on a set of reductions in the first place):

With Medicare and Medicaid accounting for a large and ever-increasing part of the deficit, by necessity the super-committee is going to have to look at provider reimbursement. As Bob Laszewski points out, they don’t have time to fundamentally alter reimbursement methodology, can’t change the eligibility parameters under the terms of the deal, and they are starting from a deficit projection that assumes the pending 29.5% cut in physician reimbursement is actually going to happen.

The 29.5% alone accounts for about $300 billion, so the super-committee has to find another $1.2 trillion on top of that $300 billion.

Where’s it going to come from?

Physician reimbursement under Medicare and Medicaid is going to get hammered.

Hospitals are going to see substantial cuts in reimbursement as well.

Pharma and PBMs participating in Part D are another big target, and one with less political pull in DC.

Insurers heavy in Medicare Advantage have been reporting nice earnings of late; that’s not going to escape the notice of deficit-cutters in Washington.

Expect to see means testing for Medicare as well.

These are all cuts that will have the effect of shifting costs onto beneficiaries and won’t rid the system of waste and inefficiency or encourage providers to deliver better care. It’s so depressing, isn’t it?

The New Bipartisan Super Committee And The Future Of Health Care Spending

Janet Adamy has an article in the Wall Street Journal arguing that the health care cuts in the debt ceiling deal — either from the bipartisan committee or the triggers that kick in should that committee fail to agree on a package of reductions — has the health industry and some seniors worried about the future of Medicare and Medicaid:

To hit the $1.5 trillion in spending cuts, the congressional committee is likely to reconsider major changes to Medicare that the White House and congressional leaders put on the table during this summer’s debt-ceiling negotiations. President Barack Obama in earlier negotiations floated the idea of raising the Medicare-eligibility age to 67 from 65 in an effort to win Republican concessions. He also said he was open to a means test.

“All those type of issues will certainly be looked at by the committee,” said Tom Nickels, a senior vice president at the American Hospital Association.

Should the committee’s recommendations not make it into law, the backup spending-cut mechanism would include cuts to Medicare. The agreement says these cuts would affect health-care providers, not beneficiaries, and would be capped at 2%.

Some health-care-provider groups contend they couldn’t absorb such payment cuts without affecting patients. The hospital industry says the cuts could overload emergency rooms, shut down trauma units and reduce patient access to the latest treatments.

The committee’s recommendations — and Suzy Khimm previews what those may be — will be fairly troubling as far as beneficiaries are concerned. President Obama has previously tentatively agreed to raise the Medicare eligibility age and so (with that door open) one could imagine the proliferation of other similar ideas that would take more people out of the program.

But the committee could also offer proposals to hasten the kind of delivery and payment reforms that are already part of the Affordable Care Act. These changes would not be so much about slashing reimbursement rates as they would be about paying providers differently to encourage them to provide more efficient care. It’s a tricky thing to figure out — particularly since nobody is quite sure how to reform and modernize the health care reimbursement system — but one policy makers should at least consider if they’re truly interested in lowering health care costs over the long haul. What’s a good place to start? All-payer rate setting.

Fox ‘Expert’ Blasts Expanding Access To Birth Control: ‘Are We Going To Do Pedicures And Manicures As Well?’

Family PAC Federal Vice President Sandy Rios

This week, the Obama administration announced that all health insurers will be required to cover birth control and other women’s health services without charging co-pays. This historic move has sent the burgeoning right-wing campaign against birth control into an apoplectic fit. Today, Fox News’ America’s Newsroom decided to feature one such activist in a “fair and balanced debate” on whether ensuring a woman’s access to birth control is a good idea.

Former Women’s Media Center president Jehmu Greene offered the facts that support greater access to birth control. Namely, “50 percent of pregnancies in this country are unintended pregnancies” –the leading reason why women seek abortions — which costs the U.S. over $11 billion a year. Noting that contraception not only allows women to space out their pregnancies and commit to parenting, but also reduces the number of abortions, Greene determined the new policy to be a “text-book definition of win-win.”

Fox’s anti-birth control “expert,” Family PAC Federal Vice President Sandy Rios, however, found her own reasons to lambast the policy as “ridiculous.” Telling Greene that she lives in “la la land,” Rios offered the following “arguments” against the new policy and a woman’s right to use birth control, which are so ludicrous they’re worth listing:

– “Is the White House out of their mind? Does the West Wing not know what the left wing is doing? We’re $14 trillion in debt and now we’re going to cover birth control, breast pumps, counseling for abuse? Are we going to do pedicures and manicures as well?

– “Why in the world would you encourage your daughters, and your granddaughters, and whoever else comes behind you to have unrestricted, unlimited sex anytime, anywhere and that, somehow if you prevent pregnancy, that somehow you’ve helped them. I would submit to you that uncontrolled sexual behavior is what is harming our girls, not our lack of birth control — which by the way they don’t seem interested in taking anyway. Having a baby is not the worst thing. I think having multiple sex partners without any kind of restraint or responsibility is much more damning, why would you support that?

– “In Red China, they have this down to a science. The local health care centers make women come in every month to be examined to see if they’ve had their cycle to make sure they are taking their medication and if they have a baby they are roundly punished, if they have an extra baby that baby is aborted. That is the control we’re moving toward.”

– “I’d like to say that the morning-after pill has other detrimental affects. In Great Britain where it was legalized first, there was an outbreak of older men taking young girls in for the morning-after pill so they wouldn’t get caught and so there are no consequences.”

Watch the segment:

Surveying all of Rios’s “arguments,” Greene stated that Rios’s ultimate goal “is she wants to put ideology over public health.” To which Rios replied, “Yes, I suppose I do.” Rios then offered these parting words to Greene: “You all make science a laughing stock. You present science and facts just to present your viewpoint.”

138 Supporters Of Repealing IPAB Voted For IPAB-On-Steroids In Debt Ceiling Deal

Two more Democrats, Reps. Loretta Sanchez (D-CA) and Tim Bishop (D-NY) have signed on to Rep. Phil Roe’s (R-TN) bill to repeal the Independent Payment Advisory Board (IPAB) — a 15-member cost-cutting commission established by the Affordable Care Act. The Board is tasked with making binding recommendations to Congress for lowering health care spending if costs increase beyond a certain point.

“IPAB shifts health-care decision-making power away from the patient; it will operate without transparency or accountability, bypassing all congressional oversight; and it places the focus on slashing Medicare costs, rather than on improving the quality of care,” Roe said earlier this month. “I am pleased there is growing bipartisan support to repeal the IPAB because it will lead to rationing of care by government bureaucrats.” But a ThinkProgress analysis of the 198 Democratic and Republican lawmakers who are co-sponsoring the measure shows that 138 members also voted in favor of yesterday’s debt ceiling bill, a measure which could have a far more substantial effect on “slashing Medicare” than the ACA’s IPAB board:

138 co-sponsors of Roe’s IPAB repeal bill voted for the debt ceiling deal; 6 Democrats and 132 Republicans.

60 co-sponsors of Roe’s IPAB repeal bill voted against the debt ceiling deal; 3 Democrats and 57 Republicans.

The deal reached yesterday would raise the debt ceiling through 2012 by immediately cutting $917 billion from mostly discretionary spending and establishing a joint congressional committee to recommend $1.2 trillion to $1.5 trillion in additional cuts. And while Medicare is protected from the first round of reductions, it will likely be targeted in the second. In fact, the committee is free for slash provider reimbursements or make a wide array of benefit cuts from raising the eligibility age to offering premium support to means testing the program.

If the committee’s recommendations are not enacted by December 23, 2011, across the board spending cuts are triggered, affecting up to 2 percent of Medicare’s total spending, but excluding Medicare benefits. Still, the committee’s cuts or the triggered reductions would do far more to “slash” Medicare expenditures and potentially undermine seniors’ access to Medicare than the IPAB. Here is why (after the jump):
Read more

NEWS FLASH

Ohio Voters Take First Step Towards Placing Medical Marijuana On The Ballot | Supporters of the proposed “Ohio Alternative Treatment Amendment,” which would amend the state constitution to permit patients with certain ailments to treat their conditions with medical marijuana, submitted the first round of signatures necessary to begin a petition campaign to place the amendment on the ballot. Under Ohio law, supporters of a ballot initiative must submit two rounds of signatures; the first round requires only 1000 signatures, and the second nearly 400,000.

NEWS FLASH

States Worry That Deep Cuts To Medicaid May Lie Ahead | Stateline examines what the debt ceiling deal will mean for states and find a mixed bag — at least as Medicaid is concerned. The bill — which the Senate is expected to take up later today — spares Medicaid from immediate cuts and a “trigger” mechanism “that would reduce spending automatically if the special congressional committee does not achieve its deficit-reduction goals.” However, “governors are worried that deep cuts to Medicaid could be an outcome of the committee’s work,” particularly given the administration’s support for a so-called “blended-rate” proposal to shift more Medicaid costs to the states.

SURVEY: More Than 90 Percent Of Businesses To Continue Offering Health Coverage

A new survey of nearly 900 employers from Mercer finds that more than 90 percent businesses are committed to offering medical coverage, even as they anticipate small cost increases from the provisions in the Affordable Care Act. The results are in line with the vast majority of other business surveys and economic reports and contradict critics’ claims that health reform will force employers to drop coverage.

“Employers have spent the past year studying the new law and developing strategies to deal with the increased costs and administrative burdens,” said Beth Umland, director of research for health and benefits for Mercer. “But they don’t seem to have changed their minds about the value of continuing to offer their employees health coverage”:

Employers — who have already seen enrollment increases as a result of the ACA’s requirement to extend coverage to young adults — anticipate that compliance with some of ACA’s provisions (extending coverage to all employees working on average 30 or more hours per week, auto-enrolling new full-time employees and ensuring that plans pay for at least 60% of covered services) will add “at least another 3 percent to their projected 2014 plan costs, with 15 percent expecting an additional 5 percent or more”:

Read more about the survey here.

Morning CheckUp: August 2, 2011

House passes debt ceiling bill: “The House of Representatives passed, 269 to 161, a deal to lift the federal government’s borrowing authority by about $2.1 trillion and to cut federal spending by a similar amount over the next 10 years.” The Senate will take up the bill today. [Modern Healthcare]

More health cuts on the way: “The White House is emphasizing that Medicaid for the poor and benefits guaranteed to seniors under traditional Medicare would not be touched if automatic reductions become necessary as a backstop. But the new congressional “supercommittee” created under the deal is under no such restrictions. It can shape its own menu of cuts to Medicare, Medicaid and Obama’s health care law, assuming the panel could get the votes to pass a package through Congress and buy-in from the White House.” [Ricardo Alonso-Zaldivar]

Health industry criticizes deal: “The morning after the deal was struck, health industry groups began focusing their attention on ducking the Medicare cuts likely to result from the legislation. The American Hospital Association (AHA) blasted the bill, while Pharmaceutical Research and Manufacturers of America (PhRMA) hinted that they would continue lobbying Congress against extending Medicaid drug rebates into the Part D low-income population.” [Sahil Kapur]

Exchange governance: Patient advocates are “worried about the insurance industry influencing governance boards overseeing the health exchanges. That’s because the governance boards could be tapped to handle a lot of the heavy lifting on key policy questions, such as which health plans can sell on the exchanges and how to finance the online insurance marketplace and prevent conflicts of interest. [Jason Millman]

Insurers unhappy with free contraception rule: From AHIP’s Karen Ignagni: “The IOM’s recommendations would broaden the scope of mandated preventive services beyond existing evidence-based guidelines, suspend current cost-sharing arrangements for certain services, and encourage consumers to obtain a prescription for routine supplies that are currently purchased over-the-counter.” The Council for Affordable Health Insurance estimates that coverage of contraceptives adds 1 to 3 percent to the cost of group health plans. [AHIP]

Federal court says ACA doesn’t cover abortions: “Whether it is possible, under contingent circumstances, that at some point in the future, upon the execution of x, y, and z, that the [Patient Protection and Affordable Care Act] would not prevent taxpayer funded abortion is entirely different from providing for ‘tax-payer funded abortion,’” a federal court concluded in a lawsuit between former Rep. Steve Driehaus (D-OH) and the Susan B. Anthony List. “The express language of the PPACA does not provide for tax-payer funded abortion. That is a fact, and it is clear on its face.” [Sam Baker]

Indiana still fighting to defund Planned Parenthood: “Indiana asked a federal appeals court Monday to lift a judge’s order blocking parts of a new abortion law that cuts some public Planned Parenthood funding, saying the issue should be decided by Medicaid officials and not the courts.” [Stamford Advocate]

Employers see enrollment increases: “In all, 40% of employers said expanding their plans to comply with the age-26 adult-child coverage mandate boosted plan enrollment by between 1% and 2%, while just under a quarter said enrollment rose by at least 3%, and 21% said enrollment increased by less than 1%. Fifteen percent said they were in compliance with the requirement prior to 2011.” [Business Insurance]

Florida submits Medicaid privatization plan to feds: Florida’s Agency for Health Care Administration has submitted its plan to turn the state’s entire Medicaid program over to private managed care to the Centers for Medicare and Medicaid Services. CMS will evaluate it “make tweaks and possibly demand revisions. Such negotiations can easily take six months to a year.” [St Petersburg Times]

Hospital-based doctors increasing health costs: A new report finds that “hospitalized Medicare patients checked out sooner when they were cared for by a hospital doctor than when their primary care physician followed them. Yet they were also more likely to bounce back into the hospital over the next month.” [Reuters]

Medicare tweaks hospital readmission rules: “Medicare today scaled back its proposal to hold hospitals accountable for the cost of patient care in the 90 days after discharge. Medicare announced in its final rule that hospital payment would be reduced if the hospital’s average patient had a higher than normal cost to Medicare during their stay until 30 days after discharge — two months less than it had originally proposed.” [Kaiser Health News]

More states apply for MLR adjustments: “Michigan and Texas have both requested that HHS adjust the medical loss ratio (MLR) requirements for their states, with Texas’ application making it the largest state to request such an adjustment.” [Rachana Dixit]

Health spending gap between Latinos and Whites: “Latinos, including both the native-born and foreign-born populations, were 68 percent more likely than whites to have no health care spending at all and were 6 percent more likely than whites to pay out-of-pocket if they did spend. They also found that Latino health expenditures were, on average, only 57 percent of white expenditures.” [Medical News Today]

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