Mila Becker, Esq.

2010-09-01

Director, Government Relations and Practice, ASH

On March 23, President Obama signed into law the Patient Protection and Affordable Care Act, and, one week later, he followed with modifications in a budget reconciliation bill. Soon after, The Hematologist included a summary of the new law and a timeline of when the major provisions would go into effect. Below is an update on the health reform implementation and its initial impact.

Health reform is now the law of the land. A major focus of the legislation was to expand insurance coverage, and it is estimated that the new law will result in 32 million uninsured Americans and legal immigrants obtaining coverage by 2019. One of the first provisions to go into effect is a program designed to provide access to high-risk insurance pools for people who have been uninsured for at least six months and have been unable to obtain private health coverage because of a pre-existing health condition. Application details and coverage dates vary by state, but the Department of Health & Human Services expects that 200,000 individuals will gain coverage this year through the “pre-existing condition insurance plan.” Other coverage-related initiatives that will be implemented this year include closing the coverage gap in the Medicare prescription drug benefit by providing a $250 rebate to beneficiaries who reach the benefit cap, expanding preventive coverage in Medicaid, and covering annual physicals and wellness visits for some Medicare beneficiaries.

Also being implemented this fall are several private insurance market reforms that were designed to address some of the behaviors of the insurance industry that upset consumers. This includes barring insurers from denying people coverage when they get sick or denying children who have pre-existing conditions, barring insurers from imposing lifetime caps on coverage, and requiring insurers to allow young adults to stay on their parents’ policies until age 26.

The nearly $1 trillion cost of expanding coverage will be financed in part by higher Medicare payroll taxes on upper income families, excise taxes on so-called “Cadillac” health insurance policies, and fees paid by pharmaceutical companies, hospitals, and insurers. Payments to Medicare Advantage, the private Medicare plans, will also be restructured to eliminate current overpayments. All of these efforts, however, will not take effect for several years.

A second goal of the new law is to reduce health-care costs. One of the new cost containment tools will be the Independent Payment Advisory Board, which will make Medicare payment and waste-reduction recommendations to Congress (hospitals are exempt through 2019). Another is the Center for Medicare and Medicaid Innovation, which will allow patient-centered care models to be tested and introduced system-wide with more speed and flexibility than traditional demonstration projects. These new institutions could have significant impact on hematologists by introducing new payment and delivery systems and experimenting with new ways to reward care management and coordination. ASH has been monitoring the development of these organizations, has submitted comments on initial regulatory proposals and priorities, and has recommended hematology experts to advise the new Center. Additional cost containment provisions included in the new law are the creation of a pathway for approval of biogenerics (drugs derived from live cells, including recombinant proteins and monoclonal antibodies), steps to strengthen the primary-care workforce, and a new Patient-Centered Outcomes Research Institute to oversee federally sponsored comparative effectiveness research to determine what drugs, devices, or procedures work best. Although the Institute’s creation is still in early regulatory phases, ASH has nominated hematologists to work with the new Institute and has already weighed in on a number of early proposals, as the Society believes this entity could have a major impact on hematologists.

The third goal of health reform is to improve quality of care. Many of the law’s provisions are modest steps or pilots, focused on government-run programs like Medicare and Medicaid, and it is not clear how quickly or effectively they will ripple through the whole health-care system. The law, however, requires a national quality improvement strategy, which includes wellness and population health, as well as a new effort to document and address health-care disparities. Among the initiatives aimed at creating a high-performing health system that ASH is monitoring are: encouraging the creation of Accountable Care Organizations (groups of providers who can jointly be held accountable for the quality and cost of care for a defined population) that would use a more integrated and evidence-based approach to care by meeting quality benchmarks; providing financial incentives for hospitals to reduce unnecessary re-admissions and bring down rates of hospital-acquired infections and related conditions; establishing payment bundling programs that would pay a team of providers for one episode of care across several health-care settings in a way that would regard quality, coordination of care among providers, and outcomes; and providing funding to assist and incentivize “meaningful use” of health information technology.

As President Obama noted at the law’s signing, passage of health reform was a “remarkable and improbable” achievement. Yet, in the country’s current polarized and partisan environment, it remains fraught with political and policy uncertainties that could shadow implementation in the years to come. The law and its implementation is a work in progress. The 2010 legislation will need tweaks, adjustments, and, possibly over time, major amendments. States will also continue to experiment on their own. Some insurers and health plans may resist change. ASH will continue to be actively involved and represent members’ interests and concerns as implementation moves forward. 

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