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A compilation from Aetna of health care-related developments in Washington, D.C. and state legislatures across the country

Aetna reports:

“Week of March 14, 2011

With a law as complex as the Patient Protection and Affordable Care Act (PPACA), unintended consequences are always a concern. Last week The Wall Street Journal reported that the physician community is witnessing the emergence of a significant unintended consequence — since tax-advantaged flexible spending accounts can no longer be used to pay for over-the-counter medications without a prescription, under the law, many patients are now visiting their doctors expressly for the purpose of getting new prescriptions for the OTC medications. The change in the law was meant to discourage wasteful spending on some health products and raise revenue. Instead, critics say the provision is driving up health care costs. Unintended consequences of the health care reform law is an area of focus for Aetna, and we will continue to urge flexibility in the implementation process to help address potential unintended consequences.

Federal

In response to various requests for clarification (including from Aetna), federal regulators last week issued a Question & Answer document that further refines the previous proposed rule on student health. In short, this clarification makes it clear that nothing from PPACA applies to student health plans until policy years beginning in 2012 or until academic year 2012-2013. The Q & A also clarified that the proposed regulation must be finalized to show what parts of the PPACA would apply to student health plans. This is welcome news in the college and university community. Aetna is communicating with its clients in a manner that is consistent with last week’s clarification, though many schools were hearing conflicting advice from state regulators.

The House-passed continuing resolution includes language that would “prohibit the use of funds to pay any employee, officer, contractor, or grantee of any department or agency to implement the provisions” of the PPACA. In a letter to Finance Committee Chairman Max Baucus, HHS Secretary Kathleen Sebelius made several claims that, should the de-funding provisions in the resolution be enacted into law, seniors will lose access to Medicare Advantage plans and other services. Senate Republicans were quick to dispute these allegations stating, the scenarios the Secretary envisions are not allowed under Congressional rules, are not assumed by the Congressional Budget Office (CBO), and can be prevented by HHS. Senator Orrin Hatch and Ways and Means Committee Chairman Dave Camp also sent Secretary Sebelius a letter expressing their disappointment in what they called the letter’s “baseless allegations,” and expressing hope that “the urgency with which this letter was sent to Chairman Baucus is also being applied in answering a growing backlog of serious questions.” The CBO also released a letter regarding the impact of the resolution, including the impact of the de-funding provisions on Medicare Advantage. The letter shows the de-funding provisions would have a minimal MA budgetary impact of $5.7 billion over 10 years.

States

ARIZONA: Governor Jan Brewer’s Special Advisor on Health Care Innovations held a meeting last week with the state’s major health insurers, including Aetna, to discuss identifying IT gaps the state must address to develop the online product selection and enrollment mechanism for an insurance exchange. Social Interest Solutions, the organization that developed the enrollment form currently used by Medicaid applicants, provided a demonstration of that application process. Individual interviews will be conducted with the IT staff of each company to obtain recommendations for the new system.

CONNECTICUT: The Real Estate Committee last week voted out a substitute prior-approval rate bill that retains all the problematic sections of the original bill. The sections of concern cover public hearings, new subpoena powers for the Attorney General and Healthcare Advocate, multiple notice requirements, and new definitions of inadequate, excessive, and unfairly discriminatory. The only change is that the Commissioner would have to promulgate regulations to carry out the proposed public hearing process. The full contingent of Republicans and Rep. Linda Schofield (Dem.) voted against the bill, with Schofield stating that she was concerned the bill gets rid of any timeline under which the Department must act and would require public hearings, nonsensically, for group rates. She also said the bill would provide the Attorney General and Advocate with extraordinary subpoena powers. The Chairs indicated that the bill is a work in progress.

FLORIDA: Insurance Commissioner Kevin McCarty has disclosed that he will be submitting a medical loss ration (MLR) waiver request to HHS this week.

GEORGIA: Insurance Commissioner Ralph Hudgens has indicated he will be submitting an MLR waiver request to HHS within a week. Aetna continues to work with the Chamber of Commerce and plan sponsors to help defeat legislation that would apply prompt-pay requirements to self funded plans, in violation of ERISA.

MAINE: The U.S. Department of Health and Human Services (HHS) has announced it is delaying for three years a requirement that insurers spend 80 cents to 85 cents of every premium dollar on medical care and quality improvement in the state, after one of three insurers offering individual plans in Maine threatened to withdraw from the state. Maine is the first state to receive such a waiver. MEGA Life and Health Insurance Co. has 37 percent of the state’s individual market. Maine’s insurance superintendent says MEGA would probably withdraw if it had to meet the federal standard. Maine’s current standard is 65 percent. Similar waiver requests are pending for Nevada, Kentucky and New Hampshire.

OKLAHOMA: Last week State Rep. Mike Ritze, one of two doctors serving in the Oklahoma legislature, called on state officials to turn down $54 million that would be used to implement the new federal health care law. Shortly thereafter, Governor Mary Fallin joined other state leaders in announcing that Oklahoma will accept the grant to help design and implement the information technology infrastructure to operate an Oklahoma health insurance exchange. Fallin listed the creation of such an exchange as one of her top priorities in her State of the State address earlier this month. She and others announced their support for the grant after working with state agencies to ensure that no unworkable federal mandates were included.

Later in the week, the legislature continued taking steps forward to reduce the number of uninsured Oklahomans. House Speaker Kris Steele authored a bill that defines the membership and appointments to the Health Care for the Uninsured Board (HUB), which is designed to establish a system of counseling, including a website, to educate and assist consumers in selecting an insurance policy that meets their needs. The seven-member HUB consists of representatives from the Insurance Commissioner’s Office, the Oklahoma Healthcare Authority, insurance companies, agents and also consumers. The purpose of HUB is to implement a market-based insurance exchange. The bill passed the House Public Health Committee at the end of the week and will proceed to the floor of the House.

TEXAS: Legislators are wrestling with to what extent they should intervene in what residents eat, drink and breathe. In a state with some of the nation’s highest obesity and diabetes rates, supporters of various proposals say they are trying to give Texans more ways to combat unhealthy decisions by others, as well as make good choices for themselves. The president of the Texas Medical Association testified last week in favor of a bill banning the sale of unhealthful drinks (sugary fruit juices, sodas, whole milk) to students during school hours. Other related bills would allow the state to raise taxes on sweet sodas and fine restaurants for not posting nutritional information.

About 30 percent of Texas schoolchildren are obese or overweight, according to the Texas Public School Nutrition Policy. And last month, Republican Comptroller Susan Combs released a report saying obesity cost Texas businesses $9.5 billion in 2009 — that could rise to $32 billion by 2030 due to the cost of health care services, absenteeism, decreased productivity and disability. Legislators will continue debate on these bills until the session adjourns on May 31.

WASHINGTON: Two similar legislative proposals have emerged that would establish a health insurance exchange, though provisions within each are somewhat different. However it appears that bipartisan consensus is developing around creating a nine-member board with expertise in private and public health coverage, which would be supplemented by a stakeholder advisory group developed by the board. The board would be required to coordinate an implementation plan consisting of a plan and a timeline for establishing the exchange by 2014. The board would make recommendations concerning governance, operations, and administration, as well as whether to establish one exchange to serve both individuals and employers. Other issues to be considered by the board include whether the exchange would serve as an aggregator, whether to adopt a federal basic health plan option as provided for in PPACA, whether to provide access for employers with up to 100 employees, and whether to create a competitive purchasing environment. Stakeholder consultation would be required, including health carriers. Initial setup funding would come from federal grants, but the board would examine the best long-term funding approach. Passage of legislation is expected early next month.”

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