AHLAlerts: American Health Line’s Blog

Tuesday’s enactment of legislation that included a six-month, $16.1 billion extension to additional federal Medicaid funding was one of the bill’s most sought-after provisions by states. A number of governors and state officials had warned lawmakers that failure to approve the additional funding would cause significant budget and program cuts, layoffs and other statewide problems. The approval of the full $26.1 billion funding measure drew cheers but also was jeered — by many of the expected opponents, and even a few surprising ones.

Igor Volsky of “The Wonk Room” highlights the criticism against the measure from four prominent House Republicans, including Minority Leader John Boehner (R-Ohio), who called it a “a giveaway to state bureaucrats at the expense of American taxpayers.” Volsky notes that although a bipartisan group of 47 governors in February urged the congressional leadership to extend the enhanced federal Medicaid funding, “some GOP governors with presidential aspirations have agreed with congressional Republicans.” Indiana Gov. Mitch Daniels (R) said, “It’s probably not going to help the economy,” even though he was part of the group of 47 governors. Minnesota Gov. Tim Pawlenty (R) and Mississippi Gov. Haley Barbour (R) also released similar statements, Volsky adds.

Andrew Villegas at NPR’s “Shots” notes that with the Medicaid issue temporarily resolved, the “prospects for action on what was once another Democratic health care priority are dimming.” Under the COBRA subsidy program, which helps laid-off workers purchase health coverage program, 35% of the coverage cost is borne by the unemployed worker, while the federal government pays the rest. Enrollment in the subsidy program ended on May 31. A proposal to extend the program through November was eliminated over cost concerns. Villegas notes that although “workers still have the right to stay on their former employer’s health insurance plan for up to 18 months” after they were laid off, “they must now pay the entire cost of the premium, an expense that is often prohibitive.” With a full plate of other non-health-care-bills and the November elections approaching, lawmakers are unlikely to bring the COBRA subsidy in the fall, he notes.

by Santosh Rao, senior writer

What’s the most-important health care news of the day? Subscribers to First Look find out by 8:30 a.m. ET. Start every morning with First Look, American Health Line’s free roundup of the key policy, strategic and clinical developments shaping health care. See a sample issue or subscribe by clicking HERE.

A new — and portable — approach to cutting health care costs is making its way around Boston, one tank of gas at a time in the form of “mobile health clinics.” According to some advocates, the clinics are an increasing trend — nearly 2,000 of them currently travel around the U.S. — and a key piece of the cost-control puzzle.

• “Mobile Clinics Seen as Way To Cut U.S. Health Bill“: Mobile health clinics that provide indigent patients with no-cost general medical care could help curtail U.S. health care costs by keeping individuals out emergency departments, according to Reuters. For example, “Family Vans” provide no-cost blood pressure, blood sugar and cholesterol screenings to patients, so physicians can better help patients manage their chronic conditions. The Family Van estimated that it saves $36 for every $1 dollar it spends on operations, through avoided ED visits and the value of its tests (Malone, Reuters, 8/11).

Meanwhile, most U.S. residents still don’t know how the federal health reform law could affect them — or potentially cut their personal health care costs. To help spread the word, consumer advocate groups have called in marketing reinforcements.

• “With Many Still in Dark, Groups Shed Light on Health Care Law“: After three recent polls found that large percentages of U.S. residents still have misconceptions about the overhaul, consumer advocates are working to inform individuals of the law’s benefits. For example, HHS recently launched healthcare.gov to help consumers sift through insurance plans and CMS posted an advertisement featuring Andy Griffith. In addition, insurers have been posting timelines and frequently asked questions to their websites. However, USA Today notes that “it’s up to individuals” to take advantage of the law’s benefits (Wolf, USA Today, 8/12).

In response to an FDA advisory panel’s vote to keep Avandia on the market, Time investigated the drug’s approval process and uncovered a murky agreement struck between FDA and manufacturer GSK that could have compromised the integrity of the drug’s clinical trial data.

• “After Avandia: Does the FDA Have a Drug Problem?“: According to Time, FDA in the early years of Avandia’s approval speculated that it significantly increased cardiovascular risks. However, the agency allowed its manufacturer GlaxoSmithKline to conduct its own postmarket trial, thereby “abdicat[ing] its responsibility to collect reliable data on Avandia’s safety.” After FDA allowed GSK to “perpetuate the uncertainty about safety rather than clarify it,” it will take strong efforts to “restore the reputation” of the agency (Calabresi/Park, Time, 8/12).

by Cassandra Blohowiak, staff writer

What’s the most-important health care news of the day? Subscribers to First Look find out by 8:30 a.m. ET. Start every morning with First Look, American Health Line’s free roundup of the key policy, strategic and clinical developments shaping health care. See a sample issue or subscribe by clicking HERE.

The Democratic leaders of six influential House and Senate committees on Tuesday sent a letter to HHS seeking to clarify how federal taxes and fees paid by health insurers count under medical-loss ratio rules in the federal health reform law, Politico‘s “Pulse” reports (Haberkorn/Kliff, “Pulse,” Politico, 8/12).

Under the overhaul, large health plans beginning on Jan. 1, 2011, will be required to spend at least 85% of premiums on medical services and quality improvement, rather than administrative costs or profits. The MLR for individual and small-group health plans must be at least 80% (American Health Line, 7/26). The reform law states that “federal and state taxes and licensing fees” should be excluded from the premium revenue number, which essentially means they would be counted as medical costs, “Pulse” reports.

A special working group of members from the National Association of Insurance Commissioners — which is developing draft language of the MLR rules and reporting requirements — this month reached a preliminary agreement allowing federal income taxes on items other than investment income or capital gains to be considered as medical expenses. The group is expected to finalize its MLR recommendations to HHS during NAIC’s annual summer meeting in Seattle this week.

However, the Democrats are concerned that the language of the preliminary agreement is too lenient on insurers, according to “Pulse.” In the letter, the lawmakers state that their objective when drafting the overhaul bill was that only federal taxes and fees relating specifically to revenue generated from the health insurance coverage provision in the reform law should be counted as medical costs. The letter clarified that those taxes include the annual fee on market share, the annual fee on each health policy, and the tax on high-cost employer plans. The lawmakers noted that other taxes, such as income or payroll taxes, would not be considered medical costs.

The letter, which also was sent to NAIC President Jane Cline, was co-signed by Senate Finance Committee Chair Max Baucus (D-Mont.), Senate Banking Committee Chair Christopher Dodd (D-Conn.), Senate Health, Education, Labor and Pensions Committee Chair Tom Harkin (D-Iowa), House Ways and Means Committee Chair Sander Levin (D-Mich.), House Education and Labor Committee Chair George Miller (D-Calif.) and House Energy and Commerce Committee Chair Henry Waxman (D-Calif.).

Insurers Protest Lawmakers’ Clarification

Mike Tuffin, executive vice president of America’s Health Insurance Plans, characterized the Democrats’ actions a “last-minute rewrite of the law” that “would raise costs and destabilize … coverage.” Insurers said that if lawmakers had intended to restrict the types of taxes that count as medical costs when drafting the health reform bill, they would not have included “and state taxes” in the wording, because the reform law does not create any new state taxes.

Insurers Challenge Likely; HHS in Difficult Position

According to “Pulse,” a legal expert on insurance issues suggested that insurers could submit legal opinions challenging the Democrats’ clarifications of the federal law in the next few days. The letter also could serve as an important issue in future legal action over the MLR regulations. “Pulse” reports that the letter also likely would put HHS in a difficult position, as the agency would have to review and approve NAIC’s MLR recommendations for implementation. A draft document outlining itemized spending that insurers likely would have to report to HHS was released at the NAIC’s Seattle meeting, and the executive committee is expected to vote on the document on Tuesday (“Pulse,” Politico, 8/12).

– Santosh Rao

What’s the most-important health care news of the day? Subscribers to First Look find out by 8:30 a.m. ET. Start every morning with First Look, American Health Line’s free roundup of the key policy, strategic and clinical developments shaping health care. See a sample issue or subscribe by clicking HERE.