HealthLawProf Blog

Editor: Katharine Van Tassel
Akron Univ. School of Law

A Member of the Law Professor Blogs Network

Monday, December 30, 2013

ACA: The Miracle Policy?

As health care cost inflation has slowed markedly, some observers have cited the Affordable Care Act (ACA) as a major factor—even though the moderation in health care spending began before ACA’s enactment. To be sure, some of ACA’s important cost containment provisions may be playing a role, such as its push for accountable care organizations and its emphasis on paying for quality of care rather than just quantity of care.

Or maybe cost containment is simply the result of a recession that has reduced the spending power of Americans, with a significant contribution from an important pre-ACA trend (about 20 percent of the cost slowdown according to one study). For some time, employers and insurers have been increasing the public’s “skin in the game” by increasing the individual’s share of health care costs through premiums, deductibles and copayments. We’ve known for a long time that making health care more expensive for patients can discourage them from seeking care, so it isn’t surprising that higher patient costs would help contain health care spending. But we also know that patients don’t always distinguish between unnecessary care that can be forgone and necessary care that should be sought.

Time will help us sort out the causes of health care cost containment—if indeed it persists. In the meantime, we should be careful to distinguish between what we would like to be true and what we know to be true.

[cross-posted at orentlicher.tumblr.com]

December 30, 2013 in Affordable Care Act, Health Care Costs, Health Care Reform, Spending | Permalink | Comments (0) | TrackBack (0)

Saturday, November 23, 2013

Dynamic Medicaid Expansion

Yesterday's reports on the annual meeting of the Republican Governors Association indicated disarray over the Medicaid expansion, and an opinion piece in the NYT highlighted the common story that only half of states are expanding their Medicaid programs.  If CMS is counting, then this tally is correct, as the federal agency can only account for those states that have submitted the proper documentation for expansion.  But this is not the only way to consider the states' decisionmaking regarding the expansion.  I have just posted a short essay preliminarily detailing research I have performed over the last several months, which reveals that many states currently counted as "not participating" are acting to expand their Medicaid programs.  Here is the abstract:

In the run up to the ACA’s effective date of January 1, 2014, the sleeper issue has been the Medicaid expansion, even though Medicaid stands to cover nearly a quarter of the United States citizenry. While the national press has portrayed a bleak picture that only half of the states will participate, the Medicaid expansion is progressing apace. Though this thesis may sound wildly optimistic, it is more than predictive; it is empirically based. I have gathered data on the implementation of the Medicaid expansion during the crucial months leading up to the operation of the insurance provisions of the ACA, and it is clear that most states are moving toward expansion, even if they are currently classified by the media as “not participating” or “leaning toward not participating.” The data thus far reveals counterintuitive trends, for example that many Republican governors are leading their states toward implementation, even in the face of reticent legislatures and a national party’s hostility toward the law. Further, the data demonstrates dynamic negotiations occurring within states and between the federal and state governments, which indicates that the vision of state sovereignty projected by the Court in NFIB v. Sebelius was incorrect and unnecessary.
 

November 23, 2013 in Affordable Care Act, CMS, Constitutional, Health Care Reform, Health Law, Health Reform, HHS, Medicaid, Obama Administration, PPACA, Spending | Permalink | Comments (0) | TrackBack (0)

Thursday, October 17, 2013

Dartmouth Institute Publishes Atlas of Medicare Part D Areal Variations

The Dartmouth Institute has just published its Atlas of areal differences in utilization of prescription drugs by Medicare Part D recipients.  The Atlas--unsurprisingly but disturbingly--details significant differences.  Pharmaceutical interventions are classified as effective, discretionary (where there is diagnostic or therapeutic uncertainty), and likely to be harmful in the patient population at issue.  A caveat, however, is that the report measured prescriptions filled and thus may underestimate actual provider behavior.

An initial variation involved sheer numbers of prescriptions, with a high average of 63 per year in Miami and a low average of 39 per year in Colorado (overall, the average was 49 standardized 30 day prescriptions filled per year per Part D beneficiary).  In general, the Mountain West had the lowest prescription average and the Rust Belt and Appalachian states the highest.  These differences could not be explained primarily by overall burden of disease but instead appear to reflect variations in provider prescribing practices.  For example, the American Heart Association recommends use of beta blockers in heart attack patients for three years post-attack.  However, rates of prescriptions for these drugs in the first six months ranged from highs of 94% to lows of under 68%, and persistence in the next six months was only slightly lower, ranging from highs of 92% to lows of under 68%.  Variations in statin use were even greater, ranging from just over 91% in Ogden, Utah, to below 45% in Abilene, Texas.  Interestingly, there was little correlation between effective use of beta blockers and effective use of statins.

The other two therapies analyzed in the Atlas were treatment of diabetes and treatment of patients with fragility fractures.  Diabetic patients fared somewhat better than heart attack patients, albeit still with significant variations.  Osteoporotic patients, however, fared dismally, receiving a high of 28% and a low of 7% with filled prescriptions for drug to combat osteoporosis after fragility fractures in sites other than the hip (such treatment is recommended to decrease the risk of future hip fractures).

Most interesting of all, there was no correlation between drug expenditures and measures of effective care.  In other words, patients in some regions may be spending a great deal on their drugs (paid for under Part D), but receiving far less benefit that patients in other regions who spend a great deal less.

[LPF]

 

October 17, 2013 in Access, Chronic Care, CMS, Consumers, Cost, Drug and Device, Health Care, Health Care Costs, Medicare, Prescription Drugs, Quality, Spending | Permalink | Comments (0) | TrackBack (0)

Monday, October 7, 2013

Federal-State Tensions in Fulfilling the ACA's Promises

[Cross posted today at Constitution Daily:]

The Affordable Care Act expresses many goals, but its heart is the desire to create a health insurance home for all Americans.  The American healthcare system historically exists at the pleasure of a number of stakeholders and is not a coherent whole. This lack of system is reflected in the consistent tensions that underlie American healthcare, most notably federal power versus state power; the collective versus the individual; and the individual versus the state.  In creating near-universal health insurance, the ACA has resolved one of those tensions, individual versus the collective, in favor of the collective.  To that end, the ACA eliminated many of the practices health insurers used to cherry pick policyholders, which excluded people who need medical care from their risk pools.  In so doing, the ACA represented a federal choice to make all people insurable, whatever their wealth, age, medical history, sex, race, or other distinguishing factor. 

Despite the redirection this leveling of the health insurance playing field represents, the ACA did not craft a coherent whole out of the American healthcare system.  Instead, the ACA remodels the preexisting, unstable healthcare system.  In building on the old foundation rather than starting anew, the law retained the historic role of the states in regulating medical matters.  To that end, the ACA urged the states to implement two key aspects of its insurance modifications: Health Insurance Exchanges and the expansion of the Medicaid program.  The federal government has the power under the Spending Clause to create a federally-run insurance mechanism, but it chose instead to employ cooperative federalism to keep states engaged in healthcare policymaking.  The trouble is that some states have not been cooperating with these central legislative goals.

 The Exchanges, or Marketplaces, are an instrument through which qualified private health insurance plans can be purchased by individuals or small businesses.  The states were offered federal funding to create their own state-run Exchanges, which were operative as of October 1, 2013 (Tuesday last week).  Many states created Exchanges, but many rejected them as an expression of their distaste for the ACA.  Predictably, many of the states that have refused to create their own Exchanges were the same states that challenged the constitutionality of the ACA.  While there is value in dissent, the states that refused to create Exchanges invited more federal power into the state, because rejecting the federal offer for funding to create a state-run Exchange did not halt Exchanges from coming into existence. Instead, the ACA tasked the federal government with operating Exchanges in states that did not create their own.  While expressing a desire to protect their state sovereignty, these states have invited federal authority into their borders.  Though the Exchanges at both the state and federal levels have experienced some technical glitches this week, it appears that many people are eager to purchase insurance through them and that they have been successful at doing so.  The states that rejected Exchanges have not stopped implementation of the law, but their actions have other notable ramifications.

The Medicaid expansion was designed to catch childless adults under age 65 and below 133% of the federal poverty level in Medicaid’s safety net.  As with other modifications to the Medicaid program over the years, the expansion added a new element to the Medicaid Act that states could reject, but they could lose all of their funding if they made that choice.  The day the ACA was signed into law, states challenged the expansion of the Medicaid program as unconstitutionally coercive.  They succeeded on this claim in NFIB v. Sebelius, and the Court rendered the expansion optional for states. Immediately pundits began to question whether the states would participate in the Medicaid expansion. 

Though national media tallies make it appear that just over half of the states are participating in the Medicaid expansion, in reality the number is and will be much higher.  In almost every state reported as “leaning toward not participating,” and in many states reported as “not participating,” some significant act has occurred to explore implementation of the Medicaid expansion.  Some states have special commissions or task forces researching expansion; some state governors have indicated a desire to participate and have included the expansion in the budget; some legislatures have held debate or scheduled it for the next session; and so on.  Though some states will not have their Medicaid expansions running by January 1, 2014, it seems very likely that most if not all states will participate in the expansion in the relatively near future.

 In the meantime, state non-cooperation will have a direct effect on some of the nation’s poorest citizens.  People from 100% to 400% of the federal poverty level are eligible to receive tax credits for purchasing insurance in the Exchanges.  In states with no expansion, people above 100% of the federal poverty level who would have qualified for Medicaid will still be able to obtain insurance through federal subsidies in the Exchanges.  But, people who are below 100% of the federal poverty level will be too poor for tax-credits and living in states that have not yet expanded their Medicaid programs, therefore they will not be able to enroll in Medicaid either.  These very low income people will not be penalized for failing to carry health insurance, but they will not have health insurance either.  These individuals will get caught in a health insurance black hole that exists in part because the Court allowed states to refuse Medicaid expansion and in part because of state resistance to partnering in the implementation of the ACA.   

State cooperation in the Medicaid expansion is even more important than state participation in the Exchanges, because many thousands of people may not get the access to health insurance that is the promise of the ACA.  The debate over the meaning of federalism that swirls around political and academic circles will have a direct and important effect on the people who can least afford it.  The good news for them is that Medicaid’s history indicates that all states eventually participate in the program and its amendments, but this week’s implementation of the Exchanges keeps access to medical care through health insurance tantalizingly out of reach.

October 7, 2013 in Affordable Care Act, Constitutional, Health Care, Health Care Reform, Health Law, Health Reform, Medicaid, Obama Administration, PPACA, Private Insurance, Spending, State Initiatives | Permalink | Comments (0) | TrackBack (0)

Friday, September 27, 2013

More states are expanding Medicaid than you might think

Big news in the world of ACA implementation: CMS approved Arkansas' proposed waiver for an alternative mechanism for Medicaid expansion, which is to be called the Arkansas Health Care Independence Program.  Arkansas proposed a premium assistance program, wherein newly eligible Medicaid beneficiaries will obtain insurance through the Arkansas health insurance exchange by receiving financial assistance for premium costs.  This will place the new Medicaid population in qualified health insurance plans, i.e. private health insurance, which is administratively more expensive than government-sponsored insurance, but it may help to deal with the problem of "churn" between Medicaid and Marketplace-based private insurance.

CMS's approval of Arkansas' Medicaid demonstration program is significant for a number of reasons, but here I'd like to focus on what I think is one of the biggest: this waiver approval will pave the way for other states that are "undecided" to finally declare their intent to expand their Medicaid programs.  I believe this will happen relatively quickly, because most states are already working on expansion.  You would not think this is true from the national media's reporting on the Medicaid expansion.  If you have been following any of the many color-coded maps depicting the five possible categories of expansion (expanding, not expanding, leaning toward expanding, leaning toward not expanding, and alternative model), you would think that just over half of the states are participating in the Medicaid expansion.  The national media has gotten this story wrong, because they do not pick up on the negotiations, investigations, committees, special commissions, and other ways in which the "leanging toward not participating" states are actually exploring how they can expand their Medicaid programs.  To understand how dynamic the state decision making is, you have to track the local newspapers that follow every move of the state legislatures and their conversations with their governors (which I have been doing all summer).

After NFIB v. Sebelius was decided, I wrote that most states would still expand their Medicaid programs.  It appears that most states are now working toward Medicaid expansion in some form.  In future posts, I will explain this dynamic federalism story in more detail.  For today, I will emphasize that CMS has opened the door to more state waivers, which will lead to more states expanding their Medicaid programs.  Though I am not necessarily on board with federalism by waiver, espcially given states' history of waiver mistakes and failures, I do think that in this instance, alternative expansion is better than no expansion.  Otherwise, many of our poorest citizens will be left out of the attempt at national insurance coverage, not paying a penalty, but not having access to much-needed healthcare either.    

September 27, 2013 in Affordable Care Act, Constitutional, Coverage, Health Care Reform, Health Reform, HHS, Medicaid, PPACA, Spending, States | Permalink | Comments (0) | TrackBack (0)

Saturday, August 17, 2013

Another ACA Delay--and a Proposed Solution

This past week, the New York Times published a story about yet another delay in the implementation of the Affordable Care Act.  Earlier this summer, NPR also reported the delay, which concerns total limits on out of pocket costs that consumers can be required to pay.  Under ACA, beginning in 2014 consumers were supposed to have to meet only one out of pocket limit--$6,350 for an individual and $12,700 for a family--including all deductibles and co-payments.  But the Times story reports that insurers have been granted a year's grace in implementing this requirement and quotes an administration official as attributing this decision to the inability of insurance plans to communicate with each other in determining out of pocket costs. 

Both stories emphasize the plight of patients who are covered under separate medical and pharmacy benefit plans.  Pharmacy plans in particular may have very high copayments, without annual limits.  Patients with expensive drug needs for diseases such as multiple sclerosis are especially hard hit by these benefit structures.

As I ruminated on this delay, it occurred to me that the problem of the plans' inability to communicate with one another is the plan's problem, not the patient's.  To say the least, it does seem rather unfair to have patients bear all of the costs of the delay. 

Moreover, there is a model that could have been used to implement the single limit:  submission of claims for out-of-network care.  Patients do this all the time and receive reimbursement to the extent covered by their plans.  The payer has a record of the claim and can credit it against the patient's deductible.  Why couldn't this model have been applied to the problem of multiple plans for patients?  It would be simple.  These are primarily patients with employer-provided plans.  All that would be needed would be to stipulate which plan is primary for the purpose of maintaining the single out of pocket total.  Medical plans are used to maintaining such totals. If the medical plan were stipulated to be the primary plan, all the patient would need to do would be to submit records of out of pocket payments under their pharmacy plans.  When patients meet the out of pocket total for the year, they would no longer be responsible for copays or deductibles from the primary plan.  How would other plans know about this?  Patients will receive records from their primary plans that they have met their deductible for the year.  They would then be responsible for submitting these records to their other plans--after which the other plans would no longer be able to charge copays or deductibles.

This approach, to be sure, puts the burden on patients to solve the communication problem.  But I'm surprised notbody seems to have entertained this suggestion, in a health care climate that heralds patient responsibility.  Perhaps the difficulty instead is that the multiple-plan structure emerged as a way to limit health care costs for payers by shifting costs to consumers.

[LPF]

August 17, 2013 in Accountable Care Organizations, Affordable Care Act, Consumers, Cost, Employer-Sponsored Insurance, Health Care Costs, Insurance, Payment, Reform, Spending | Permalink | Comments (0) | TrackBack (0)

Wednesday, June 26, 2013

US v. Windsor: Some Constitutional Uncertainty, Many Healthcare Implications

The Court's decision striking down section 3 of DOMA in United States v. Windsor was unsurprising, yet still a relief to many.  Section 3 defined marriage for federal statutory purposes to mean only marriage between one man and one woman.  Based on the late March oral arguments in Windsor, as well as Justice Kennedy's majority opinions in Lawrence v. Texas and Romer v. Evans, the common wisdom was that federalism would be the prevailing reasoning because the states historically have governed family law matters, including marital status.  One of Justice Kennedy's projects has been revitalization of the Court's enforcement of federalism to protect the states, especially as a method to protect individual liberties (see, e.g., Bond v. United States). 

And so it was.  Justice Kennedy provided both structural and substantive reasons for striking down section 3 of DOMA.  From a structural perspective, Justice Kennedy's majority emphasized traditional state dominion over marriage, writing: "By history and tradition, the definition and regulation of marriage ... has been treated as being within the realm of the separate States."  Though the opinion walked right up to the federalism line, it stopped short of holding that DOMA exceeded congressional authority or violated the Tenth Amendment.  Instead, the majority moved forward on substance and held that the federal government cannot take away the marriage right and its attendant societal status once conferred by the states.  To do so was a violation of gay couples' liberty and dignity.  The Court also hinted at an equal protection analysis, condemning Section 3 as creating second class marriages in states that recognize same-sex unions.  The majority applied only rational basis review, rather than heightened scrutiny, holding that DOMA was motivated by anti-gay animus and served no legitimate governmental purpose. 

Neither the federalism, nor the equal protection, nor the due process analysis was either complete or clear cut, and each opens more questions than it closes.  For example, Justice Kennedy views the experiment of the states to protect individual liberty, and here, it happens that twelve states do protect liberty, more than the federal government.  But, this view of federalism's aspirational work does not address the 37 or so states that do not protect the liberty interests of their gay citizens from state discrimination let alone the federal government's limited view of gay rights.  And, this reversion to assessing traditional state law domains does not advance modern conceptions of federalism that acknowledge most state law is ineffibly intertwined with federal law by virtue of statutory interconnectedness, conditional spending, or other cooperative federalism mechanisms.  Instead, Justice Kennedy seemed to be reaching back to the dual sovereign model of doctrinal federalism.

Fortunately, this regressive model of federalism does not seem to hinder the work that Windsor is likely to do with regard to DOMA's far-reaching effects on healthcare.  For example, marital status influences not only access to affordable private health insurance (which is usually easier and cheaper through marriage), but also qualification for the Federal Employees Health Benefits Program as well as Social Security, the gateway for Medicare at age 65.  Section 3 also affected Medicaid enrollment and spend-down requirements for the elderly entering nursing homes.  The Medicaid/DOMA issue was presented to the Court in a petition for certiorari that the Court has not granted or denied yet.  Back in October, I highlighted the First Circuit's decision in Massachusetts v. Department of Health and Human Services, which was mentioned in passing by Justice Kennedy as a case that would suffer vacatur if the Court dismissed for lack of standing.  It seems fair to read approval of the First Circuit's decision into Kennedy's cite, which makes me think the Court will not grant the petition.

In addition to public and private health insurance issues, some healthcare delivery issues are likely to be resolved by Windsor as well.  For example, many stories have detailed how hospitals have turned away same-sex partners under the guise of HIPAA privacy.  Other tales have highlighted how substituted decision-making at the end of life can devolve to estranged family members when same-sex partnerships are not recognized as giving the gay spouse decisional authority that would ordinarily be given without a second thought to a heterosexual spouse.  Doctors' offices have refused to recognize same-sex spouses as parents of children who need medical attention.  And, care for infants of same-sex couples may become easier now that the Family Medical Leave Act will apply to same-sex marriages.  It seems that the federal recognition of gay marriage that will flow from Windsor will be beneficial in many healthcare situtations, even in states that do not recognize same-sex marriage.  Federal agencies have much work to do interpreting the word marriage in the coming days, but it seems that these decisions will facilitate a more functional approach to families' experiences in the healthcare system.

[NH]

June 26, 2013 in Aging, Constitutional, Health Law, HHS, Medicaid, Medicare, Politics, Spending, States, Unconstitutional | Permalink | Comments (0) | TrackBack (0)

Thursday, June 13, 2013

Tax credit litigation on the move

For those of you who thought we could forget about ongoing ACA litigation, here's a little update: the issue of premium assistance through tax credits for insurance purchased in federal exchanges is alive and well.  The plaintiffs in the recently filed Halbig v. Sebelius claim that the ACA does not permit tax credits in federally run exchanges (opponents state that this is merely a statutory oversight, as I wrote in September.)  A nice summary of the ongoing litigation on this issue was published yesterday on California Health Line

These challenges seem to reveal the angst that the ACA is producing as the January 1, 2014 deadline creeps nearer.  They also seem to reveal the upside-down federalism occuring in the states that have rejected the state-based exchanges.  Those states have exercised their sovereign prerogative, but they are also inviting more federal power into the state, which aggrandizes federal power.  Though I don't think these cases have a strong chance of success, if the plaintiffs are successful, undoubtedly we'll see more testing of the fence by states and private litigants.

[NH]

June 13, 2013 in Affordable Care Act, Constitutional, Health Care Reform, PPACA, Spending, States | Permalink | Comments (0) | TrackBack (0)