Health reform implementation

New Ohio Attorney General Mike Dewine explained why his state is joining a multi-state challenge to the healthcare law.

Lawmakers have called for political rhetoric to be toned down, but a looming showdown over abortion may make that difficult.

Healthcare reform's requirement that people buy insurance is constitutional because everyone participates in the healthcare system, the Obama administration argued in an appeal to a legal challenge in Michigan. 

The brief was filed Friday in the Sixth Circuit Court of Appeals in a case brought by the conservative Thomas More Law Center. Thomas More says the mandate exceeds the government's constitutional powers by regulating inactivity.

The administration won the first round in that fight in October when Detroit-based U.S. District Judge George Caram Steeh, a Clinton nominee, upheld the individual mandate. Another Clinton-appointed judge in Virginia has upheld the law, while a George W. Bush appointee rule against the mandate in the case brought by Virginia Attorney General Ken Cuccinelli.

Separately, a ruling is expected as early as next week in a 20-state challenge in Florida.

Friday's brief argues that while the four plaintiffs in the case have opted not to buy insurance but instead pay out of pocket for healthcare costs, such decisions have repercussions on government budgets, insurance profitability and people's premiums. Uncompensated care provided to people without insurance reached $43 billion in 2008, the brief argues, creating "substantial adverse effects on the interstate health care market."

"Unlike in other markets," the brief argues, "consumers receive very expensive forms of medical treatment without regard to their ability to pay. Health insurance is the most effective means to restrict the extent to which individuals shift their health care costs onto other market participants."

A California health insurer is following through on plans to submit its large rate hike proposals to an independent third party, it confirmed Friday afternoon.

Blue Shield of California drew criticism earlier this month by proposing to hike some individual rates by up to 59 percent. On Friday morning, the company said it would submit its rates to an independent actuary and would provide rebates to customers if the rates were found to be too high.

A few hours after issuing the morning press release, the company retracted the release without further explanation.

However, a few hours later, the company re-issued the original press release, again without explanation.

The company’s plan is already receiving pushback from California. The state insurance commissioner expressed disappointment the company didn’t inform it about plans to hire an auditor.

"We are surprised and disappointed that the message from Blue Shield came out before the conversation with the Commissioner," the insurance commissioner's office said in a statement to CNN. "They said it was a mistake and apologized."

Federal regulations proposed last month would require states to review proposed insurance rate hikes of at least 10 percent in 2011. The federal government cannot block the rates from being implemented, but it will require insurers under scrutiny to publicly justify rate increases.

The actuary hired by Blue Shield can consult with the Insurance Department, and he will try to complete the review in 30-45 days, according to the Blue Shield release. He will determine if the rates are “excessive, unjustified or unfairly discriminatory,” as described by the federal proposed regulations for rate review.

Earlier this week, newly elected California Insurance Commissioner Dave Jones called on Blue Shield and other large insurers to halt premium increases for at least 60 days so he can review them.

The schedule has the GOP-controlled House starting debate on its legislation on Tuesday before a Wednesday vote.

A number of organizations supporting healthcare reform will gather in the Capitol on Wednesday to oppose a House bill that would repeal the law.

Families USA, which is organizing the event in the Capitol Visitor Center, said it will feature groups representing individuals with health problems and disabilities, seniors, children, women, care providers, small business owners, minorities and consumers.

A spokesman for the organization said the event will focus on the popular consumer protections included in the reform law. Members of Congress are not expected to attend.

Blue Shield of California said a Friday morning press release about the insurer's plans to submit rate hikes to an independent auditor was sent in error.

It is unclear at this time what the error is related to.

"URGENT!" the updated release said. "Please disregard the message sent this morning about actuarial review of Blue Shield of California's individual insurance rates. It was sent in error."

A company spokesman told Healthwatch that the company will issue a corrected release today.

Correction: An earlier post incorrectly identified the company as Blue Cross of California.

A California health insurer proposing massive rate hikes said Friday morning that it will subject its rates to independent actuarial review.

Blue Shield of California drew criticism earlier this month after it proposed hiking rates as high as 59 percent for some individual policy holders. The proposal came just weeks after the federal health department announced proposed regulations that would subject "unreasonable" rate hikes to new scrutiny under the healthcare reform law.

"We regret that our members have received significant rate increases in recent months and want to be absolutely certain that the rates reflect our actual cost of providing medical care," said Blue Shield Chairman and CEO Bruce Bodaken in a statement. "To establish trust and confidence in our rate-setting process, we have taken the unprecedented step of agreeing to be bound by the conclusions of an independent third party. If this independent review finds that the rates are not sound, we will hold our members harmless by refunding the difference with interest."

New regulations proposed by the Obama administration would require states to scrutinize insurance rate hikes of at least 10 percent in the individual and small-group market in 2011. If a state does not have an “effective” process to review rate hikes, the feds will conduct the review.

However, the law does not allow the federal government to block a rate hike. The law relies on the power of the federal government to shine a light on large insurance rate hikes by requiring insurers facing scrutiny to post their justifications for the increase on their websites and on HealthCare.gov.

A massive rate hike proposal by another California health insurer last January boosted Democratic arguments for the healthcare reform law. The proposed 39 percent increase by Anthem Blue Cross was eventually lowered to an average of 14 percent after errors were discovered in the original filing.

Several states, including California, Massachusetts and Connecticut, made headlines last year by blocking large rate hikes after the reform law was enacted.

In its statement, Blue Shield said the company expects to lose $20 million to $30 million on individual health plans in 2011, citing risings costs for hospitals, physicians and prescription drugs. The proposed increases average 15 percent, the company said.

After Blue Shield announced the proposed increases, Health and Human Services Secretary Kathleen Sebelius said the proposal demonstrated why the healthcare reform law is necessary to protect individuals against insurers.

“If the law were repealed, we would be left with few tools to protect consumers against these kinds of rate increases,” Sebelius said in a statement. “Insurers would be able to spend more on profits, marketing, and CEO bonuses, instead of care.”

Welcome to The Hill's evening roundup of the day's health policy news and advance look at tomorrow's schedule.

Thursday’s health news:

Repeal vote next week: A vote on repealing the healthcare reform law will be held next week, a spokesman for Majority Leader Eric Cantor (R-Va.) confirmed Thursday afternoon. A detailed schedule will be released Friday. http://bit.ly/fYOlN7

A vote on the repeal bill, a priority of the House’s new Republican majority, had been scheduled for Wednesday of this week until leaders delayed its consideration following Saturday’s shooting tragedy in Arizona. When Congress returns to debate the repeal bill, it will be interesting to take the temperature of the rhetoric. Some lawmakers have called for toned-down language in light of the Arizona shooting, which left six people dead and their colleague, Rep. Gabrielle Giffords (D-Ariz.), critically wounded.

Appropriations cardinal ready to take on 1099: The new chairwoman of the House Appropriations Committee's Financial Services subcommittee told The Hill she is ready to use the appropriations process to eliminate the healthcare reform law’s 1099 provision requiring businesses to report payments over $600 to vendors for the purchase of goods. http://bit.ly/gDLipm

Meanwhile, fast action expected on 1099: House Republicans signaled that repealing the 1099 provision is one of their top priorities — after repeal of the entire healthcare reform law itself. Rep. Dan Lungren (R-Calif.) last week already introduced a 1099 repeal bill, which was numbered H.R. 144, but it was renumbered to H.R. 4 on Wednesday.

The White House and lawmakers agree the requirement should be removed, but not enough lawmakers have yet agreed on how to do it. H.R. 4 has 245 co-sponsors, including 12 Democrats. http://bit.ly/gU0W2r

Consumer advocates say new FDA guidelines not enough: The consumer advocacy group Public Citizen is criticizing federal regulators for not extending new limits on acetaminophen to over-the-counter (OTC) drugs. The Food and Drug Administration (FDA) announced Thursday it is restricting the amount of acetaminophen in combination prescription painkillers to 325 milligrams because of acetaminophen's link to liver damager. However, the FDA left OTC drugs, which make up 80 percent of the acetaminophen market, untouched. http://bit.ly/gtfe9k

For more on acetaminophen: http://bit.ly/DEgxP

More data needed on disparities: There is insufficient evidence regarding the effectiveness of certain interventions in reducing healthcare disparities based on income level, race/ethnicity, gender and other attributes, according to a new Centers for Disease Control and Prevention (CDC) report. The report also said more national healthcare data is needed on disability status and sexual orientation. http://bit.ly/fuq6mn

Insurers warn against exchange requirements: America's Health Insurance Plans (AHIP) urged federal advisers against recommending specific "essential" items or services that must be included in health plans offered on new exchanges starting up in 2014. The health insurance lobby said the requirements set by the reform law are already specific enough. http://bit.ly/gCVcEt

New surveys show interest in EHR incentives: About 80 percent of hospitals and 40 percent of physicians are planning to apply for Medicare and Medicaid incentives for using electronic health record (EHR) technology, according to new surveys announced by President Obama’s health information technology czar. About two-thirds (65 percent) of hospitals and 32 percent of office-based physicians plan to enroll in meaningful use programs by the end of 2012 in order to receive the maximum incentives available under the 2009 stimulus package. http://bit.ly/giQTJ7

Nutrition groups praise school meals proposal: Child nutrition advocates are hailing a proposed rule that would tighten school lunch nutrition standards as part of the Obama administration’s effort to reduce childhood obesity. The proposed rule would require that by the 2012-2013 school year, schools increase the availability of fruits, vegetables, whole grains and fat-free and low-fat milk in school meals while reducing their sodium and saturated-fat levels. The standards also set age-based calorie requirements. http://bit.ly/emL2GO

Miller applauds: Rep. George Miller (Calif.), the Education and Workforce Committee's ranking Democrat, said the proposed rule follows through on the child nutrition reauthorization signed by President Obama earlier this year.

"The proposed rule today follows the spirit of the law by overhauling and improving the foods served to our nation's children," Miller said. "These sweeping changes will make a huge difference in our schools, for our children and for the future of our country."

Pharma’s top 11 for ’11: Tompkins Associates lists the pharmaceutical, biotech and medical products industries’ top 11 priorities for the new year. http://bit.ly/hbihsa

Health insurers boost Medicaid changes: With a number of states considering Medicaid cuts to balance their budgets, AHIP is circulating three Medicaid reports: one on Medicaid managed care cost savings, one on adding value to states and beneficiaries and another on innovations in Medicaid managed care.

Tobacco penalties might pose risk: States’ tobacco taxes may encourage individuals to use more harmful tobacco products, according to a new report from the free-market National Center for Policy Analysis.

On the agenda for Friday:

RNC chairman vote: The Republican National Committee (RNC) is scheduled to vote on a chairman Friday. The Susan B. Anthony List, an anti-abortion group, has been campaigning hard for the committee to elect a chairman with likeminded views. Current RNC Chairman Michael Steele, who is facing an uphill battle for reelection, angered anti-abortion-rights advocates two years ago when he called abortion “an individual choice,” but he recently backtracked from those remarks.

Abortion-rights advocate's outlook: NARAL Pro-Choice America on Friday will release its 20th edition of a report grading states on women’s reproductive rights.

MedPAC meeting wraps: The Medicare Payment Advisory Commission (MedPAC) will finish up its two-day meeting with a focus on assessing payment adequacy for long-term care hospital services and hospice care, as well as an update on quality in the Medicare Advantage program. http://bit.ly/eqaIUM

Around the Web:

MedPAC recommended that Medicare beneficiaries make a copayment for home health visits, The Associated Press reports. http://wapo.st/euK1QB

A Massachusetts requirement for individuals to purchase health insurance was pivotal to the success of the state’s universal healthcare system, The Boston Globe reports. http://bit.ly/ga5CoO

Kaiser Health News provides a guide on accountable care organizations, which are encouraged by the reform law. http://bit.ly/gswTKy

New Jersey Gov. Chris Christie, a rumored 2012 Republican presidential candidate, said healthcare costs will “bankrupt” the state unless workers chip in more for medical coverage, Bloomberg reports. http://bit.ly/gtGUNi

Rhode Island Gov. Lincoln Chafee (I) formed a state healthcare commission to implement the federal reform law, The Associated Press reports. http://bit.ly/feMjHm

A Health Affairs blog recommends a more permanent fix to the Medicare physician payment formula. http://bit.ly/fMHKbe


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The health insurance lobby urged federal advisers against recommending specific "essential" items or services that must be included in health plans offered on new insurance exchanges starting up in 2014.

The 10 general categories of benefits outlined in the reform law already specify an "appropriate set" of items or services that should be included in the essential health benefits package, America's Health Insurance Plans said in Thursday written testimony to the Institute of Medicine (IOM).

"Other programs, such as the Federal Employee Health Benefits Program and the Massachusetts Exchange, generally use a consistent model in which the benefit package only specifies general categories of items or services and does not indicate number and frequency of services that should be covered," wrote Carmella Bocchino, executive vice president of clinical affairs and strategic planning for AHIP.

AHIP's comments were considered in the middle of a three-day IOM meeting as the body prepares recommendations to the Department of Health and Human Services on essential health benefits.

The health insurer advocate also said the essential benefits package should not have the effect of forcing individuals and small employers to purchase a richer scope of benefits than what is currently available today.

"Broadening the scope of the essential health benefit package could have the unintended consequence of making products unaffordable and thereby limit access and consumer choice," Bocchino wrote.

The group also strongly urged against requiring plans on the exchanges to comply with state mandates. AHIP said more than 2,000 state mandates currently exist.

"It would be impossible to include this large number of existing mandates in a national essential benefit package while at the same time providing affordable access to care for consumers," the group said.

The IOM should recommend an essential benefits system that allows for plans to vary levels of co-payments, deductibles and coinsurance within different benefit categories, AHIP further recommended.