State panel recommends $140 million in health care budget savings

Over half the recommended budget proposals for state budget savings from the Commission on Enhancing Agency Outcomes focus on health care spending. The savings center on prescription spending in Medicaid and moving nursing home residents to assisted living. The Commission is Co-Chaired by Sen. Gayle Slossberg and Rep. James Spallone.
Ellen Andrews

Most CT doctors will reduce Medicare participation if rates are cuts

An online survey by the CT State Medical Society found that 78% of the 360 state physicians who responded would restrict access to care for Medicare and TRICARE patients if rates are cut. Nineteen percent of respondents would stop taking any Medicare or TRICARE patients at all, 31% would limit the number of new patients and 28% would only continue seeing current patients. However it is unclear whether many physicians will be able to restrict their participation in the programs that cover more than 600,000 state residents, particularly in specialties that disproportionately treat elderly health issues. Since the survey was conducted, the scheduled rate cuts were postponed from Dec. 1st to Jan. 1.
Ellen Andrews

New Book Club post -- The Treatment Trap

A study found that one third of people who were told they needed heart bypass surgery did not need it. Tens of thousands of Americans have back surgery for pain when there is no evidence to support it; studies have found that pain management and therapy are more effective. The 70 million CT scans performed in 2007 will cause 29,000 cancers in Americans and 15,000 deaths. One third of Americans believe they have received medical care they did not need. There are powerful interests heavily invested in providing too much care, whether we need it or not. The Treatment Trap, by Rosemary Gibson and Janardan Prasad Singh, collects mountains of evidence that we are being overtreated and it is killing us. Moreover, we can't afford it. The authors include heartbreaking real life stories and recommendations that are commonsense and practical. Before people get worked up about "rationing", they need to read this book.

For more additions to your gift giving list for the health policy wonk in your life, check out our CT Health Policy Project Book Club.

Advocates ask CMS to intervene in HUSKY rate reductions

Two years ago, the state increased payment rates to providers in the Medicaid fee-for-service program and required that the HUSKY HMOs pay providers at least fee-for-service rates within the managed care program. The change in HMO contracts to require higher rates was included in the program’s federal waiver and capitation rates paid to plans were raised to pay for the change. (At the time, advocates found the HMO rate increase interesting as plans maintained that they routinely paid providers above fee-for-service rates.)

At the last Medicaid Care Management Oversight Council meeting DSS reported that they have reversed that policy and exempted the plans from the requirement to pay at least fee-for-service rates, retroactive to July 1st. However there has been no reduction in capitation rates to plans allowing the HMOs to reduce their medical costs and divert more state funds to administration and profit. At the October Council meeting we learned that the HUSKY HMOs made $19 million in profit on the program last year while they were still required to pay fee-for- service rates.

A group of advocate and provider organizations have sent a letter to CMS alerting them to the violation of the terms of the federal waiver that “threatens substantial harm” to more than 400,000 HUSKY members struggling now to access care in the program. Advocates are concerned that payment rate reductions will cause more providers to leave the program that already suffers from low provider participation rates. The advocates are asking CMS to intervene and reverse DSS’ policy decision to reduce provider rates.
Ellen Andrews

From the consumer helpline: Medicaid consumers being charged

Two calls just this morning came from consumers covered by Medicaid being charged by hospitals. One was a mother on HUSKY Part A charged $281 by a hospital for services she already received. But the first call was from a man on Medicaid who was told by the hospital that they would not schedule the second surgery he needs to heal an injury and get back to work until he pays $2,000 up front. They were both sent to the appropriate authorities and strongly urged to call their Senator and Representative as well.
Ellen Andrews

Estimated costs of SustiNet options described

Stan Dorn of the Urban Institute outlined the estimated costs of six SustiNet coverage options at yesterday’s Board meeting. Under any of the options Connecticut’s uninsured rate drops by more than half, the state budget deficit is improved, small businesses save (mainly by reducing the number of workers they cover), SustiNet grows into a significant, but not dominating, market presence (which can be leveraged to drive important reforms) and there is little impact on household incomes.

The estimates are based on economic modeling by Jonathan Gruber from MIT, and are estimated for 2017 when implementation should be complete. The committee was given two scenarios -- one extremely conservative that assumes no savings due to delivery system reforms already occurring in CT such as patient-centered medical homes, and another, more likely, scenario that still conservatively estimates those savings to only reduce skyrocketing cost increases by 1%. (Other researchers estimate that delivery system reforms could save twice that much. Below are the more modest 1% savings estimates.)

· Just including state employees and Medicaid in SustiNet saves the state $371 million, saves employers $485 million and covers 620,000 people in SustiNet by 2017.
· Adding the Basic Health Plan option to the model, taking advantage of a federal option to cover people under SustiNet to higher income levels with better coverage, lower costs to families and saves federal dollars, covers 650,000 state residents, saves the state $418 million, and saves employers $459 million.
· Also allowing small employers, nonprofits and municipalities to buy into SustiNet brings coverage in SustiNet up to 815,000 people, saves the state $425 million and employers $466 million.
· Opening SustiNet to everyone covers 1 million people, saves the state $427 million and employers $498 million.
· Raising provider payment rates to private pay levels covers the same 1 million people and saves employers the same $498 million but reduces the state’s savings to a still respectable $244 million. (Note: this option does not include any potentially significant savings from reductions in private pay rates as there will be no need to cost shift to cover Medicaid underpayments and that increasing rates will attract more participating providers, keeping HUSKY families out of expensive emergency rooms.)
· The last option expands HUSKY to higher income adults before national health reform’s schedule which would cover 600,000 people in the program, save employers $217 million but costs the state $103 million. (This is the only option under which the state doesn’t save money).

The Board will consider the options next month and make recommendations to the General Assembly in January.
Ellen Andrews

Consumers protest Anthem rate hike request

Consumer advocates demonstrated their concerns at a CT Insurance Dept. public hearing about Anthem’s request to raise premiums 20% or more. The consumers outlined the enormous economic burden this places on state residents and businesses while unemployment remains high and Anthem’s parent company made millions in profits last quarter. Policymakers questioned Anthem’s documentation to justify the increases. This is the latest in a string of double digit rate increase requests by Anthem that have been approved by the department.
Ellen Andrews