Archive for July 2, 2013

States to Offer Additional Subsidies on Health Exchanges

At least three states plan to offer additional subsidies next year for health coverage purchased on Obamacare’s health insurance marketplaces, on top of the federal tax subsidies offered as part of the health reform law.

Officials in Massachusetts, New York and Vermont are considering various state-funded subsidy packages, although they differ in their scope and generosity. It is yet another reminder that, while much of the debate over the Affordable Care Act (ACA) centers on states that are refusing to implement the law, some are going beyond what Congress prescribed back in 2010.

New York and Vermont have one thing in common: They both currently offer Medicaid coverage to people above 138 percent of the federal poverty level, the new Medicaid eligibility threshold under the ACA in states that decide to expand the program. So those people above that line who currently receive Medicaid will instead purchase health coverage through the marketplaces, also known as exchanges, starting next year. The additional state subsidies are intended to make sure that being insured isn’t more expensive for that population when they move to the exchange, state officials say.

Massachusetts is slightly different, though the principle is the same: That state’s 2006 health reform law, which served as a model for Obamacare, included more generous subsidies than the federal law. So the state-funded subsidies on the exchange will help offset any difference in cost once the federal subsidies kick in next year.

“The concern for some states is that the subsidies in the exchanges… just aren’t good enough to enable folks to enroll,” says Jennifer Tolbert, who tracks exchange implementation for the Kaiser Family Foundation. “These states are looking at ways to improve the affordability of that coverage so more people will enroll.”

Vermont is planning to provide state-based subsidies to people with incomes between 138 percent and 350 percent of the federal poverty level (the federal subsidies go to 400 percent of the poverty level, roughly $46,000 for an individual) because those people currently qualify for Medicaid. The subsidies would offset the cost of premiums by another 1.5 percent on top of the federal subsidies. About 40,500 Vermonters are expected to receive the additional assistance, at a cost of $2.9 million to the state in 2014.

The state would also pay insurers to reduce both the deductible and out-of-pocket maximums of exchange coverage for those people. For example: someone making between 200 and 250 percent of the poverty level currently has a deductible of $500 for Medicaid, but that would increase to $1,900 for a private plan under the ACA. The state would therefore pay the difference for someone to purchase a plan with a $700 deductible. For someone making between 300 and 350 percent of the poverty line, the state would pay to lower their deductible from $1,900 to $1,500.

“In our state, Medicaid expansion really means Medicaid contraction,” says Mark Larson, commissioner of the department of Vermont Health Access. “When we thought about transition to 2014, we had a question of how do we maintain an affordability standard that we’ve already achieved in Vermont. What we attempted to do was maintain as close to the standard that we already had.”

The proposal in New York would function similarly to Vermont’s plan for premiums, though it would apply to a narrower income bracket. New York currently covers working parents with incomes up to 150 percent of the poverty level under Medicaid, so the state subsidies would apply to people between 138 percent of the poverty level and 150 percent.

Massachusetts extended Medicaid coverage (administered through private managed care plans) to individuals and families making up to 300 percent of the poverty level under its 2006 law; about 200,000 people were insured as a result. The 2006 law’s subsidies for that coverage were more generous than what the ACA will provide next year, however, so the state plans to offer state-funded subsidies to keep the cost of coverage the same for people up to the 300 percent threshold. As in Vermont, the size of the additional subsidies will be based on a sliding scale. State officials expect 150,000 people to qualify for the state subsidies, which are estimated to cost $120 million.

“We had a lot of success in our state with our first reform, and we expect that this will maintain the coverage gains that we’ve gotten to date,” says Candace Reddy, Massachusetts’s assistant secretary for health care finance.

Similar proposals were weighed to some degree in Connecticut and Maryland before being discarded. Connecticut Gov. Dannel Malloy proposed sending parents currently enrolled in Medicaid with incomes between 138 and 185 percent of the poverty line to the exchange and then providing premium assistance for their new coverage. But the legislature rejected Malloy’s plan, opting instead to keep those people on Medicaid.

The idea of additional state-funded subsidies was also floated briefly in Maryland, though nothing formal was ever introduced.

“I would say it would be a possible consideration for the future, but we’re locked into what we’re doing for year one,” says Joshua Sharfstein, Maryland Secretary of Health and Mental Hygiene.

The approach Massachusetts, New York and Vermont are taking makes some sense because concerns about the affordability of exchange coverage are very real, says Caroline Pearson, who tracks state ACA implementation for Avalere Health, an independent consulting firm.

According to a recent Avalere analysis, patients with incomes of 350 percent of the poverty level and below who reach the out-of-pocket maximum allowed under the ACA would be considered “underinsured” based on the percentage of their income that they could end up spending on medical costs, even with the available federal subsidies. For example: the study found that people making 300 percent of the poverty level could still spend up to 20 percent of their income on health care, while the underinsured threshold is 10 percent.

Therefore, the additional subsidies that these states are considering could help offset those costs and make it more affordable for people to enroll in the exchanges and purchase coverage, Pearson says.

“The subsidies still leave a bit to be desired. They still leave a lot of out-of-pocket costs,” she says. “It’s a pretty big deal for patients in these states if they get additional subsidies, but the question is: Can they sustain it?”

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Federal Data Hub Hobbling Health Exchange Implementation

The federal data hub intended to connect state health exchanges with federal agencies appears to be the most significant hurdle for a timely launch of the insurance marketplaces, according to a new Government Accountability Office (GAO) report.

Seven surveyed states identified the hub as “the major operational challenge” that they face, according to the GAO. Whether that challenge is resolved could determine whether the exchanges are ready to open on Oct. 1, 2013, the date set for their launch by the Affordable Care Act.

“States said, by and large: We’re doing the best we can. We’ve been doing this a while. We think we’re going to be ready, but it’s anybody’s guess because it’s so evolving, especially with the data services hub,” says Stan Czerwinski, who headed the group that authored the GAO report. “State systems have to connect with federal systems, which are still being developed. The challenge is hooking into these systems without knowing what they will look like.”

The data hub — in laymen’s terms, a huge digital warehouse capable of sending information to other online servers — plays a crucial role in the exchanges, which are websites that will allow the uninsured to shop for health coverage and access federal tax subsidies to help them purchase it. The tax subsidies, for example, are supposed to be based on a person’s income; the lower your income, the higher your subsidy.

The exchange is supposed to transmit the income information entered by an applicant to the hub, which will then verify the information with the Internal Revenue Service. That verification is then transmitted back to the exchange, so the person can access their subsidy. The hub will also relay information between the exchanges and other federal agencies, such as the U.S. Citizenship and Immigration Service and the U.S. Department of Homeland Security.

It sounds simple, but it’s a significant headache for the 17 states that, so far, are building their own exchanges. For starters, the hub hasn’t been completely built yet, nor have the rules that will govern its use been finalized. Because tax information will be exchanged through the hub, there is a laundry list of privacy and security standards that must be met. In addition, the IRS is accustomed to receiving and then processing this kind of information over long periods of time, up to a month, while the exchange is supposed to provide verification in almost real-time. Nobody is sure if and how the hub will be equipped to handle that workload.

All the while, states are already building the technical infrastructure for their exchanges, which includes a website and an eligibility system, without knowing exactly how their exchange is supposed to connect with the hub. It’s a major problem with four months left until the exchanges are supposed to be operational, and Czerwinski believes “this is going to go way up until the very last day.”

One state was so pessimistic that officials told the GAO they expected to be still modifying their exchange’s IT infrastructure to connect with the hub into 2014. For its part, the Obama administration told the GAO that it had provided states with information on how to connect with the hub through webinars and conferences, though that apparently has not assuaged states’ concerns.

“Until they’re able to do this testing to make sure that all these points connect, it’s still unknown,” Czerwinski says. “I think they agree that it’s the biggest challenge area and will need adjusting from day one.”

Caroline Pearson, who tracks state ACA implementation at Avalere Health, a consulting firm, said the GAO report underlines an overarching problem with health exchange IT development: it’s hard to know how states are doing. Some steps, such as accepting applications for health plans to be sold on the exchanges, are public, but the GAO’s findings are one of the few public disclosures of progress on the IT side.

“This does feel like an area where there could be pitfalls in rollout. There are a million ways it could go poorly,” Pearson says. “We have touch points and checkpoints on so many other things. All of that is a little more public, but it is really hard for me to assess whether a state’s exchange is going to crash on Oct. 1.”

Officials at the U.S. Department of Health and Human Services did not immediately respond to requests for comment. GAO interviewed officials from the District of Columbia, Iowa, Minnesota, Nevada, New York, Oregon and Rhode Island for the report.

This story was originally published by GOVERNING magazine.

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App Review: CDC’s ‘Solve the Outbreak’

The Centers for Disease Control and Prevention’s free app, Solve the Outbreak, may help public health officials educate Americans about massive sickness and treatment.

The app is an interactive, question-and-answer game that educates players about how medical professionals identify mysterious illnesses that strike large populations. Though Solve the Outbreak doesn’t have much replay value, it’s still an informative experience.

People play as disease detectives in three missions and investigate clues to discover what’s happened to make people sick in scenario. Each clue offers information about the outbreak and asks players what to do next.

In one case, for example, a mysterious stomach bug strikes a bunch of college students, and the player must choose one of three options that will lead them to discover what the illness is. Do they question each victim to find out what they have in common, do they quarantine the students, or do they simply tell them to rest and stop partying so hard?  

By answering questions and diving deeper into cases, players gain insight into how the government handles mysterious illnesses. With only three static missions that don’t change after playing, however, Solve the Outbreak lacks the features necessary to keep people coming back play multiple times. 

Check out Government Technology’s detailed review of Solve the Outbreak in the video above.

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States Prepare to Launch New Health Law

With the Affordable Care Act set to debut in January, state legislators debated dozens of measures related to the historic health care law—from overhauling insurance laws and designing health “exchanges,” to shoring up anti-fraud protections and increasing the ranks of doctors and nurses.

On top of that, the politically volatile question of Medicaid expansion grabbed headlines, especially in the five states that still haven’t decided whether to expand the program.

“It’s been an IT undertaking of Manhattan Project proportions,” says Matt Salo, director of the National Association of Medicaid Directors.

Salo was referring to the need to mesh Medicaid enrollment with the new health insurance exchanges, but he could have been talking about any of the dozens of technical and administrative changes state officials must make to prepare for the Affordable Care Act (ACA).

For example, state insurance regulators in nearly every state have been racing to approve hundreds of new insurance policies that will be offered on the exchanges starting Oct. 1. Meanwhile, the Medicaid expansion debate has highlighted longstanding problems with the federal-state health program for the poor, prompting many states to make changes.

Alabama Republican Rep. Greg Wren said the ACA “provided a real jolt to our governor and our legislative leadership to look at systemic reforms of our Medicaid program.” The result, Wren said, was the state’s first major Medicaid overhaul, designed to better coordinate patient care and reduce costs.

As of today, 21 states and the District of Columbia have decided to expand Medicaid. In at least five more states – Arizona, Florida, Michigan, New Hampshire and Ohio – governors support expansion but Republican-dominated legislatures continue to debate the issue. In Maine, Republican Gov. Paul LePage is threatening to veto an expansion passed by the majority Democratic legislature.

Under the current eligibility rules, Medicaid mostly covers pregnant women and young children, disabled adults and the elderly. Under the expansion envisioned in the ACA,  it also will cover adults, many of them childless, between the ages of 18 and 65 with incomes up to 138 percent of the federal poverty line—about $15,900 for an individual and $32,500 for a family of four.

Many states plan to extend their use of managed care to cover these new adults, aiming to add more primary care providers to their existing networks of obstetricians, pediatricians and other specialists.

To boost the ranks of primary care providers, more than a dozen states enacted laws this year expanding the so-called “scope of practice” for nurse practitioners. These nurses with advanced degrees are trained to provide the same care as primary care doctors, but are prevented from doing so by state medical licensing restrictions. The new laws put nurse practitioners on an even footing with primary care doctors.

States also expanded licensing of retail health clinics, which typically see patients in drug stores or big-box retail stores, and enacted reciprocal licensing laws that allow doctors in neighboring states to care for out-of-state patients in rural areas through the use of telemedicine technology.

Even in states that choose not to broaden Medicaid under ACA, 2014 is likely to bring a substantial increase in state Medicaid rolls: The Congressional Budget Office predicts that millions of Americans who already qualify for Medicaid will enroll for the first time once national ad campaigns publicize the new health law’s individual insurance requirement.

Texas, for example, has firmly opposed Medicaid expansion under the ACA, but the state is expecting 555,000 people to sign up for Medicaid in the next nine years, growth that may cost the state nearly $4 billion.

Nationwide, the total cost of covering a projected 5.7 million people who are already eligible for the program but have never enrolled is estimated at $68 billion for states and $152 billion for the federal government, according to a study by the Kaiser Family Foundation and the Urban Institute.

Meanwhile, some GOP governors and lawmakers who are reluctant to expand Medicaid under the ACA are mulling alternative ways to expand coverage. One plan, referred to as “the Arkansas model,” would cover newly eligible adults through private insurance policies available on the health insurance exchanges. But the federal government has yet to approve that approach.

The health insurance exchanges will be online marketplaces where uninsured people can compare insurance policies, find out whether they qualify for either Medicaid or federal tax subsidies, and purchase insurance. The ACA allows states to either run their own health insurance exchanges, partner with the federal government, or let Washington run an exchange for them.

Insurance regulators in nearly every state began qualifying participating insurance companies and the policies they plan to offer starting in April. The process must be completed by July 31.

So far, California, Colorado, Maryland, Oregon, Rhode Island, Vermont and Washington have made public the names of the companies that have applied and their proposed policy prices. In every state, the new rates for individual and family policies on the exchange are expected to be higher than existing individual insurance policies. But because of new insurance company requirements in the ACA, the benefits for exchange plans in 2014 will be broader and there will be no caps on claims, making it difficult to compare them to today’s policies.

Stateline’s Legislative Review looks at policy and politics in the states since legislatures began their work in January. The five-part series will include analytical articles, infographics and interactives.

Every year, unscrupulous health care providers squander billions of state dollars by overbilling, filing claims for services that were never provided, or otherwise cheating the system. With millions of newly eligible beneficiaries and billions of federal dollars coming into state Medicaid programs next year, the authors of the ACA reasoned that opportunities for criminal activity would surge unless states increased fraud prevention efforts.

In addition to federal requirements, lawmakers in several states voted for additional anti-fraud measures this year. “Fraud fighters have to keep investing in new tactics and technology to stay one step ahead of the bad guys,” said Megan Comlossy, health expert with the NCSL.

Under the ACA, states are required to ramp up background checks on new health care providers and immediately suspend claims payments when there is a “credible allegation” of fraud. Arkansas, Florida, Iowa and Texas enacted laws defining what type of evidence is needed to make such a credible allegation.

The federal health law also calls on states to report doctors and other providers they have kicked out of their Medicaid programs. The list will be kept in a national database that includes the names of providers who have been terminated from Medicare. The database is intended to prevent crooked health care providers from simply moving from state to state or from Medicare to Medicaid.

In addition, the law provides federal money to states that invest in new technology designed to spot criminal activity before claims are paid. Arkansas, Colorado, Massachusetts and Texas this year approved new laws calling for investment in so-called “predictive modeling” software similar to what credit companies use to reveal patterns of illegal activity, according to NCSL.

Whether states can stop more criminals from siphoning money from Medicaid remains to be seen. The same goes for state efforts to attract more primary care providers to serve the newly insured and educational campaigns aimed at convincing low-income adults to sign up for tax credits.

One thing is certain: Though most state legislative sessions will be over by July, the work of implementing the ACA will go on for years.

This article originally appeared on Stateline, a nonpartisan, nonprofit news service of the Pew Center on the States that provides daily reporting and analysis on trends in state policy.

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At Issue: Analytics

“A popular government without popular information or the means of acquiring it, is but a prologue to a farce, or a tragedy, or perhaps both.” — James Madison

Analytics to solve civic problems is not — in its simplest form — anything new. In 1854, for example, cholera broke out in an area of London, eventually killing some 600 residents. Doctors thought that cholera was spread by “miasma,” a fouling of the air. But one physician, John Snow, drew a map of the area and put a mark where each of the afflicted lived. Snow discovered that most of the sick lived within a few blocks of the Broad Street public well, but there were some exceptions. He investigated the exceptions and found that some stricken children that did not live near the pump attended school in the Broad Street area, and had used the suspect pump. And some who lived near the pump but were unaffected drank only beer.

By mapping the outbreak and investigating those exceptions, Snow came to the conclusion that the water was somehow responsible for the cholera outbreak. The pump handle was removed and the outbreak faded away. It was later discovered that sewage pits beneath houses had overflowed into the water supply. The actual bacterium responsible for cholera was spotted — also in 1854 — but was not widely known until much later. So a simple analysis of data led to a conclusion that not only saved lives in the 1854 outbreak, but provided information useful to cities throughout the world.

A more recent example of information in the service of public safety is something called Comstat or Compstat. Back in 1990, a New York City subway cop named Jack Maple began to map where crime occurred in the subway. Which stops, what time of day, etc. These maps, which he called “Charts of the Future” were done on 55 feet of butcher paper. The charts helped predict where and when crimes were most likely to occur, so officers could be assigned accordingly. Between 1990 and 1992, they helped cut subway felonies and robberies by nearly one third. NYPD Commissioner William Bratton later incorporated the system into all NYPD operations and today, police departments around the world use Compstat. The original butcher paper charts of the future were not very sophisticated by today’s standards, but they showed where and when subway crime was likely to occur, and they changed policing forever.

Then in the mid-2000s, a doctor in Camden, N.J., fed up with violence in the city, took a page from Comstat and with a student intern, began mapping hospital data on accidents and injuries. In a lengthy interview for the Frontline television program, Dr. Jeffrey Brenner described the same kind of meticulous data collection and mapping as Dr. John Snow had conducted in long-ago London.

“I went to the hospital that I worked for,” said Brenner in the interview, “and submitted a proposal to collect patient-level information for everyone who had had an accident or injury, so this included people who had been shot, people who had been assaulted or fallen down the stairs. We got the data and began … We mapped it, graphed it, charted it, and it was just an unbelievable data set … It pretty quickly became clear that there were hot spots of everything. There were hot spots by disease, hot spots by patient; there were certain patients who had been [admitted] over and over and over. There were hot spots by ZIP code and by neighborhood … And because I knew the city so well, you could begin to take the data and tell stories with the data. And that’s an incredibly powerful tool for making change.”

Brenner widened his criteria, asking more hospitals for claims data for a full year. The patterns showed “hot spot” buildings where elderly and disabled people lived, who made repeated emergency room visits. Not only is an emergency room visit expensive — from $1,000 to $3,000 — but repeated ER visits are not good health care, and without follow up, patients often ended up in the hospital again within a few weeks.

Brenner discovered that one percent of the residents of Camden were responsible for 30 percent of the hospital and emergency room costs. And the reasons for those visits were, in order of occurrence, head colds, ear infections, sore throats, asthma and stomach viruses. Surprisingly, other groups of patients, including the insured, had a similar pattern.

Now that he had the data, Brenner went into action, figuring if that one percent could be helped outside the ER, it would mean a huge drop in costs, and more personalized care. In 2007, he built a team of home health workers to look in on the patients and help with seemingly minor preventive care such as filling prescriptions for asthma medication, which resulted in huge drops in medical costs, ER visits and hospitalizations, and provided better more personalized health care for those individuals.

The common denominator in each of these cases was the collection and analysis of data which resulted in a strategy leading to action to solve some problem. This approach — now called “analytics” — is increasingly of use in cities and counties to focus on some of local government’s biggest problems such as health, crime, infrastructure, and other difficult challenges.

Recently, however, revelations of the massive collection of surveillance data by U.S. security agencies has caused a backlash against “big data” which could change the dynamics of analytics. For more information on big data and analytics, watch for a special section in the September issue of Government Technology magazine.

Photo: At Pacific Northwest National Laboratory, the science of cyber analytics supports better predictions and guides adaptive responses of computers and computer networks. Courtesy of Flickr/Pacific Northwest National Laboratory.

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