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Healthcare Reform Update - July 22-28, 2010


Email Alert

July 28, 2010

Compiled by Brian White*

Health Care Industry And Professionals Respond To Seniors' Growing Health Needs

July 26, 2010

USA Today: "The explosive growth of the USA's older population is fueling a grass-roots 'village' movement in neighborhoods across the country to help people age in their own homes. More than 50 villages in a neighbor-helping-neighbor system have sprouted in the past decade from California and Colorado to Nebraska and Massachusetts. They are run largely by volunteers and funded by grants and membership fees to provide services from transportation and grocery delivery to home repairs and dog walking. Most villages have opened in the past couple of years, an indication that the momentum is growing in the face of a demographic tsunami: The number of Americans 65 and older is expected to more than double to
89 million by 2050, according to the Census Bureau" (El Nasser, 7/25).

The Los Angeles Times: "If you're caring for a loved one with Alzheimer's, you're in plenty of company. Nearly 11 million people take care of the 5.3 million Americans with the disease, a number that's expected to grow to almost 16 million by 2050, according to the Alzheimer's Assn. The demands of care-taking often place enormous pressure on a family's time and resources. A 2009 AARP and National Alliance for Caregiving survey found that caregivers—most commonly middle-aged women caring for a parent—give more than 20 hours of their time per week. Most say it interferes with work, and the longer someone is a caregiver, the more likely her own health is to suffer" (Zamosky, 7/26).

Dallas Morning News reports on the "rapidly changing nature of geriatric care—and new approaches doctors are taking to meet the bottom line. As the nation's 78 million baby boomers begin to flood the health care system, doctors focused on caring for the elderly find themselves in greater demand, shorter supply and searching for ways to balance costs with quality care. There are fewer than 8,000 trained geriatricians out of more than 900,000 physicians in the United States, according to the American Medical Association. In Texas, less than 1 percent of its 48,712 licensed medical doctors are geriatricians. Experts predict four times as many geriatricians will be needed by 2020 to serve the nation's aging population." New approaches include a team approach where social workers, nurses and geriatricians work together to better diagnose a senior and take into account their social and other needs (Repko, 7/25).

Arizona Daily Star: University of Arizona "faculty members from the Arizona Geriatric Education Center will train hundreds of health-care workers on how to better care for senior patients." Their focus will include a team approach for dealing with seniors' needs and improving health care workers' knowledge about specific issues for geriatric patients, such as delirium and falls (Pallack, 7/26).

Recession-Weary Workers, States Still Hope For COBRA And Medicaid Subsidies
Andrew Villegas
KHN Staff Writer
July 23, 2010

Although Congress this week approved an extension of unemployment insurance benefits, two health-related proposals initially linked to the measure—extensions of COBRA subsidies for unemployed workers and enhanced federal Medicaid contributions for states—have stalled.

Here's an update on where they stand.

States Desperate For Medicaid Money

With states facing a recession double-whammy of less revenue and more demand for health care services, Congress included extra money to Medicaid programs in the February 2009 federal stimulus package. Before the stimulus, the federal government's share of Medicaid costs was between 50 and 76% (depending on the per capita income of the state). The federal match increased to between 61 and 84% of all Medicaid spending. The higher matching rate was originally slated to expire at the end of 2010, but an early version of the jobs bill extended the funding another six months, at a cost of $24 billion.

Because officials were convinced the money was imminent, 29 states factored the extra money into their budgets for the fiscal year that ends June 30, 2011.

Elected officials, hospital groups and organizations like the AARP are still lobbying for the six month extension, but their focus has yet to translate into legislative success. It was stripped from the House-passed bill in late May. Democrats inserted it in the Senate version, but it failed to pass—three times. In June, Democratic leaders unsuccessfully floated a compromise approach that would have phased out the enhanced funding over six months.

And, Sen. Scott Brown, R-Mass., introduced a stand-alone bill that would offset the cost of the higher matching rate using stimulus funds, but Democrats opposed his approach, maintaining those funds are needed to support other jobs programs.

Governors of both parties continue to argue that the current funding level is critical. Without it, they say they will face budgetary crises that will trigger state employee lay-offs and deep program cuts. Some states— including Michigan and Idaho—are considering revisiting their budgets or tapping into reserve funds to cover the gap, according to a report by the National Conference of State Legislatures, which endorses an extension of the enhanced Medicaid match.

Ann Kohler, director of health services for the American Public Human Services Association and head of the National Association of State Medicaid Directors, said she hasn't heard of any imminent legislative action. "I am worried that it may not be passed," Kohler said in an e-mail. "Or [that] it will not pass until after the election and states would have already begun to make cuts."

An aide to Rep. Chellie Pingree, D-Maine, who offered standalone legislation in late May to extend the extra money for six months, agreed that there has been little House movement on the extension. According to the aide, some lawmakers are looking to offset the bill's cost—though they haven't found a way to do so yet—as a way to draw more congressional support. In the meantime, she says, Pingree's office has been inundated with calls from state government officials and other stakeholders wondering when the legislation will be considered.

COBRA Subsidy: Missing From Jobs Bill

While many believe Congress will eventually take up the Medicaid funding, the prospects for action on what was once another Democratic health care priority are dimming. The COBRA subsidy provided newly laid-off workers with a 65% subsidy to help them stay on their former employer's health plan.

This assistance was also authorized in last year's stimulus bill and was extended three times, through the end of May, but now, workers laid off after June 1 aren't eligible. They still have the right to stay on their former employer's health insurance plan for up to 18 months, but they must now pay the entire cost of the premium, an expense that is often prohibitive.

A new extension of the subsidy was initially included in the House jobs bill; but because of budgetary and political pressures conservative Democrats and Republicans forced the leaders to jettison it. The provision was never in the Senate bill.

Sens. Bob Casey, D-Penn., and Sherrod Brown, D-Ohio, are attempting to advance the COBRA subsidy as a separate piece of legislation and would pay for it by eliminating a tax break. Under their plan, the COBRA assistance would be retroactive, giving people laid off since June 1 six months of the federal subsidy instead of the 15 months that the earlier law provided.

In late June, Brown said that while the economy is showing signs of improvement, many workers don't have access to affordable COBRA coverage. According to a spokeswoman from his office, he remains hopeful that some type of extension will pass this year, though she wasn't sure exactly what it might include. "With the Senate schedule still so in flux . . . we'll just be looking at any potential opportunity to move it. But nothing's been nailed down yet," she said.

Health Law Gives Consumers New Rights To Appeal Insurer Decisions
July 23, 2010

Los Angeles Times: The Obama administration issued regulations yesterday addressing a top consumer gripe with health insurers: The rejected claim. "Rejection notices are often unclear, as are the procedures for challenging them." The new regulations are "designed to simplify the process and expand consumers' rights, as required by the recently enacted healthcare law." Current appeals rules differ by insurer. The regulations will standardize the process, allowing consumers to first take their complaints to the insurer, and then to an independent review panel (Levey, 7/22).

The Associated Press: "First, consumers will appeal directly to the insurer. If they're denied a second time, they can go to an independent reviewer whose decision is binding. Health plans must pay the cost of outside appeals, and if they're overruled, they must cover the disputed claim in full. Consumers can also use the appeals process if their coverage gets canceled. And the rules provide for expedited decisions in medically urgent circumstances" (Alonso-Zaldivar, 7/22).

The Wall Street Journal's Health Blog: "The new rules [also] apply to health plans that are self-funded by employers, which haven't always been subjected to external-review requirements, says [consumer advocacy group Families USA head Ron] Pollack. They do not, however, apply to plans 'grandfathered' in under health-care overhaul legislation, which means they're not subject to some of the provisions of the law" (Hobson, 7/22).

USA Today: "The regulations will apply to new health plans that begin on or after Sept. 23. Most health plans have policy years that start Jan. 1." Existing plans won't have to comply with the rules unless they change their benefits or cost-sharing significantly. (Young, 7/22).

The Hill: "the administration estimates the program will benefit 41 million Americans next year and 88 million in 2013. . . . Thursday's announcement is the latest in a series of White House efforts to publicize each new benefit of the controversial reform law that comes along"
(Lillis, 7/22).

New Rules Guarantee Patients' Right To Appeal Insurance Claim Denials
By Phil Galewitz and Michelle Andrews
July 22, 2010

Patients will find it easier to appeal the denials of health insurance claims under rules issued today by the Obama administration, which is trying to boost political support for the new health law by highlighting potential advantages for consumers.

The regulations guarantee consumers the right to appeal denials—directly to their insurers and then, if necessary, to external review boards.

The external-review requirement will apply, for the first time, to companies that are self-insured—ones that pay their employees' claims directly rather than buying insurance to cover their workers.

"This is huge," said Sara Rosenbaum, head of the department of health policy at the George Washington University School of Public Health and Health Services.

Most states already guarantee consumers the right to external appeals, though their rules vary widely and five states—North and South Dakota, Alabama, Mississippi and Nebraska—don't have laws requiring an external review.

"This is a regulation that benefits everyone—consumers get protections, business and providers get more certainty in the rules and the need for litigation to settle these issues should be dramatically minimized," Phyllis Borzi, assistant secretary of the Department of Labor, said at a briefing for reporters Thursday.

However, the rules don't apply to "grandfathered" plans—those that existed on March 23, when the health law was enacted. Plans can lose their "grandfathered" status if they make significant changes to their plans regarding costs or benefits.

Still, by next year, an estimated 31 million people in employer-sponsored plans and another 10 million people in individual plans will benefit from the new appeals rights, according to the White House.

Advocates hope the changes will give consumers a fairer shot at fighting back when their claims are denied. Insurers deny claims for many reasons: they may determine that a treatment is not medically necessary, for example, or that it's experimental. Sometimes denials relate to coverage of pre-existing health conditions.

America's Health Insurance Plans, the main health insurance lobby, supports efforts to "create uniformity or consistency" in the appeals process, said spokesman Robert Zirkelbach. "We have encouraged every state to have a third-party review system," he said.

But appealing insurers' denials is easier in some states than others. Many consumers don't know that they can appeal insurers' denials. "Not enough consumers know this is an option that they have," said Angel Robinson, the consumer advocate in the Iowa Insurance Division.

To change that, the administration is providing $30 million in grants to states to strengthen consumer assistance offices.

Administration officials said they are hoping the states that do not have an external review system will set one up using the new federal rules. But if they don't a federal review system will be set up for them.

In addition, the federal rules on external appeals will apply to all types of health insurance. Currently, in 13 states those reviews apply only to HMOs.

Another advantage of the federal rules is that all decisions by external review panels will be binding on the health plan. Not all states have such a rule.

"The rules issued today will end the patchwork of protections that apply to only some plans in some states, and simplify the system for consumers," according to a White House fact sheet.

Under the regulations, states are "encouraged" to adopt the new standards by July 2011.

The new regulations take effect for plan years beginning Sept. 23. But they won't automatically apply to residents in states that have their own existing external review laws until next July. That's to give states time to adjust to the new standards.

If states fail to change their rules by next July, their residents will then be able to rely on the federal standards. But federal officials are still figuring out the details.

The system can be hard for patients to navigate.

When Craig Washington suffered a stroke in June 2009, his health plan denied more than $28,000 in claims for the two weeks he was hospitalized in Chicago. The insurer said his stroke was due to a pre-existing condition, and since he had been uninsured before starting a new job that April as executive director of Roseland Community Hospital Foundation, the plan denied his claims. Washington lost two appeals with his health plan.

Now, he's appealing to an independent state review panel. "It's exhausting," he says.

"People think, 'I had an internal appeal, and that didn't work, so why should I push it further?'" says Elizabeth Abbott, director of administrative advocacy for the Health Access Foundation in Sacramento. "But there's often a very different result in external review."

But appealing the decision is often worth it. On average, about 40 percent of denials are reversed on external appeal, according to commentary that was issued along with the regulations issued today. Those reversals resulted in insurers paying about $12,400 per claim.

When Rona Dondzilo was denied coverage for treatment for endometrial cancer because her health plan said her condition was pre-existing, the Spokane, Wash., home care worker worked with the Patient Advocate Foundation in Hampton, Va., to file an external appeal. She won.

The administration expects consumers to file about 2,600 external appeals in 2011.

Consumer advocates applauded the new regulations. "It's a big move in the right direction," said DeAnn Friedholm, Consumers Union's campaign director for health reform.

This information was reprinted from with permission from the Henry J. Kaiser Family Foundation. You can view the entire Kaiser Daily Health Policy Report, search the archives and sign up for email delivery. © Henry J. Kaiser Family Foundation. All rights reserved.

*We would like to thank Brian White, Esquire (University of Iowa Hospitals & Clinics, Iowa City, IA), for selecting the articles for this week's compilation.

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