Overlooked but Not Forgotten: Three Lesser-Known Reforms

Whether it’s just another birthday or your Sweet Sixteenth, it’s never fun to be forgotten on a special day.

Of course, the federal health reform law has nothing to fear — at least not this year.

Hundreds of reform-related public events are taking place this month, with most tied to the first anniversary of the Patient Protection and Affordable Care Act being signed into law. The Obama administration this week scheduled a series of 42 events in 22 states, featuring six cabinet secretaries and other White House officials, in order to trumpet the law’s benefits. A coalition of progressive organizations, including small business groups and labor unions, are holding dozens of pro-PPACA events as well.

Not to be outdone, opponents of the federal health care law have scheduled a full slate of counterprogramming. Senate Republicans have prepared talking points focusing on problems associated with the reform law, such as still-rising insurance premiums. Several Washington, D.C.-based think tanks are hosting events that are critical of the law’s changes — and the Galen Institute even released a new book, “Why ObamaCare is Wrong for America.

Most recent coverage of PPACA continues to focus on the same core issues: the law’s sweeping changes to health coverage and the delivery system, how states are responding to new rules and the overhaul’s constitutionality.

However, PPACA’s sheer scope has ensured that — even a year later — there are some reforms that have been overlooked. Here are three changes that you may have missed.

1.) Investments in Public Health

Many analysts have keyed on the law’s delivery system and insurance reforms, but PPACA also made major investments in public health infrastructure, which some health care stakeholders have long found wanting.

An Institute of Medicine report sponsored by the Robert Wood Johnson Foundation and released last year concluded the United States lacks a “cohesive” national public health strategy. According to Dr. Clint MacKinney of the Rural Policy Research Institute, the U.S. has “probably been behind … [many other] developed countries” in terms of public health. Meanwhile, a recent report published in Disaster Medicine and Public Health Awareness  found that most state health departments are underprepared to respond to a major radiation emergency and insufficiently capable of handling the resulting health crisis — a topic of renewed importance given the nuclear scare unfolding in Japan.

The federal health law mandates spending $15 billion over 10 years in a Prevention and Public Health Fund. Speaking last year at the Alliance For Health Reform, MacKinney credited the law’s newly created National Prevention, Health Promotion of Public Health Council for establishing a structure to bring together senior government leaders to discuss public wellness priorities.

The law also commissioned the Public Health Service Ready Reserve Corps, a 6,500-member program that can be summoned to respond during national emergencies and public health crises. “I don’t think a lot of people realize it, [but the corps] is one of our uniformed branches of service” now, noted Timothy Jost, a health law professor at Washington and Lee University.

Meanwhile, state and local governments can apply for Community Transformation Grants, which could be used for initiatives like creating healthier school food options and improving workplace wellness.

2.) How ACOs Could Improve Behavioral Health

More than one in four adults suffer from mental illness, yet fewer than half get any kind of treatment for it, Kaiser Health News/Washington Post notes — and on the surface, PPACA may only worsen access to mental health care. 

Through the overhaul, more than 30 million U.S. residents are expected to gain insurance coverage within the decade, further weakening access to already-overbooked primary care providers. Meanwhile, mental health providers in various states are concerned that the programmatic growth will strain their dwindling resources. According to a National Alliance on Mental Illness report released this month, states have cut a total of $1.8 billion in mental health spending since 2009.

Weak reimbursement and rising volumes have driven many health care providers out of behavioral health care. One potential salve: PPACA’s creation of accountable care organizations, which could better reward providers for treating mental illness and offer “promising models for integration” of primary and behavioral health care, AIS Health notes.

For example, Mass.-based Harvard Vanguard Medical Associates and Neighborhood Health Plan have improved mental health care using an ACO-type environment. Specifically, a psychiatrist and therapist regularly sit with internists as patients present for routine appointments and other medical needs. According to Dr. Steven Adelman, who directs behavioral health and addiction medicine for Harvard Vanguard Medical Associates, patients’ wait time for behavioral health appointments has been sliced from weeks to “about 20 minutes now.” Meanwhile, Harvard Vanguard shares the funds it receives for traditional medical care with behavioral health clinicians.

3.) Shifts — and Still-Open Questions — in Biologic Regulations

Before PPACA, the United States lacked a formal process to approve generic versions of biologic drugs, which are created via biological processes instead of chemical ones. However, the law allows FDA to approve follow-on drugs that are clinically similar to current products on the market.

As part of the overhaul, the Biologics Price Competition and Innovation Act of 2009 specifically permits drug companies that create biologic products — which are produced via biological processes, rather than chemical ones — 12 years of exclusivity before a generic drugmaker can access the formula to make and sell biosimilar versions.

However, one health care lawyer notes that stakeholders remain locked in heated debate over the definition of exclusivity. According to Emily Strunk of Akin Gump Strauss Hauer & Feld, biologic drugmakers are pushing to clarify that the provision implies “data exclusivity” — specifically that competitors must wait 12 years after FDA approval before using data in the original formula when submitting their own filing. Meanwhile, generic manufacturers want FDA to specify that the agency meant “market exclusivity,” or that competitors must wait 12 years post-approval to begin marketing a generic version of the drug. According to Strunk, while exclusivity consistently favors the brand-name manufacturer, applying the term to data would significantly delay “generic versions of the brand-name … [which] would not even be ready for approval until long after the data exclusivity expired.”

FDA is currently weighing recommendations on how to finalize the term, and upcoming editions of “Road to Reform” will revisit this and other lesser-known provisions of PPACA. Meanwhile, here’s what else is making news on this anniversary week for health reform.

On the Hill

  • Last week, a House Oversight and Government Reform health subcommittee questioned the process by which HHS granted waivers from a provision in the federal health reform law barring limited health plans for workers. Steve Larsen, deputy administrator and director of CMS’ consumer information and insurance oversight division, said that as of late February his office had approved 94% of waiver applications, covering around 2.6 million people. Edmund Haislmaier, a senior fellow at the Heritage Foundation, testified that the reform law provision barring limited health plans does not explicitly allow waivers. He noted that if Congress had intended HHS to issue waivers, lawmakers would have allowed them in the law (Zigmond, Modern Healthcare, 3/18).
  • A Senate Finance Committee hearing last week also focused on waivers. Sen. Chuck Grassley (R-Iowa) suggested the administration is granting “mini-med” waivers to prevent complaints about the reform law. Ranking panel member Orrin Hatch (R-Utah) questioned whether HHS is planning to grant exemptions for the law’s expansion of Medicaid to states with budget constraints. HHS Secretary Kathleen Sebelius declined to discuss the matter but said she is working with states on developing waivers for traditional Medicaid services that would provide more flexibility (DoBias, National Journal, 3/16).
  • Meanwhile, several prominent Republicans have vowed that the next continuing resolution will include provisions to block funding for the implementation of the health reform law. The lawmakers also said that the spending measure will be designed to fund the federal government for the remainder of fiscal year 2011, which ends on Sept. 30, instead of another stopgap measure (Dennis, Roll Call, 3/22). On Monday, Rep. Michael Burgess (R-Texas) — chair of the Republican Congressional Health Care Caucus — said that the debate on the next CR will offer conservative lawmakers the opportunity of a “knock-down, drag-out” debate over the reform law (Adams, CQ HealthBeat, 3/21).

In the Courts

  • The U.S. Circuit Court of Appeals for the District of Columbia will expedite its review of a legal challenge to the federal health reform law. The lawsuit was filed by the American Center for Law and Justice, a D.C.-based conservative Christian legal group, on behalf of five private individuals in New York, North Carolina and Texas. The suit stated that Congress exceeded its constitutional boundaries by passing legislation requiring most U.S. residents to purchase health coverage in 2014 or pay a penalty. The appeals court has scheduled the first round of briefs to be filed in May, with oral arguments before a three-judge panel scheduled for September (Pecquet, “Healthwatch,” The Hill, 3/18).

Analyzing the Overhaul

  • Health insurers, concerned that the federal health reform law could negatively affect profits, have begun to invest in less-regulated companies. Although many observers saw passage of the reform law as a boon to the insurance industry, insurers note that the weak penalty associated with the individual mandate might not push as many people to purchase health coverage as originally expected (Weaver, Kaiser Health News/Washington Post, 3/19).

Rolling Out the Overhaul

  • About 152,000 Medicare beneficiaries over the past two months have received annual wellness visits facilitated by the health reform law, according to HHS statistics. Under the law, beneficiaries as of Jan. 1 became eligible for coverage of many no-cost preventive services, including one-time annual check-ups for those enrolled in Part B (Norman, CQ HealthBeat, 3/16).

In the States

  • Despite several lawsuits challenging the federal health reform law, states continue to implement the overhaul or develop their own reforms. Connecticut, Minnesota and Washington, D.C., have expanded Medicaid coverage for childless adults. Meanwhile, Vermont is considering applying for an “innovation waiver,” which allows states to enact alternative health reforms provided they cover as many individuals and make coverage at least as affordable as the federal overhaul. Oregon is taking advantage of a $48 million “early innovator” grant to develop a statewide health insurance exchange mandated by the reform law. Maryland also is seeking a federal waiver to continue setting hospital payment rates for private insurers, Medicaid and Medicare.  GOP-led states such as Kansas, Maine, Oklahoma and Wisconsin also are accepting federal grants for implementation, despite participating in lawsuits challenging the overhaul (AP/Miami Herald, 3/15).
  • Last week, the Montana House voted 68-32 to approve a bill (SB 106) that would force state Attorney General Steve Bullock (D) to join the Florida-based multistate lawsuit challenging the federal health reform law. The measure faces one more largely procedural vote before it can be sent to Gov. Brian Schweitzer (D). Schweitzer has not indicated whether he will sign the measure. State Democrats have said that the measure is unconstitutional because it conflicts with the separation of powers clause (AP/Bozeman Daily Chronicle, 3/16).
  • Two weeks after President Obama signed the reform law, former Wisconsin Gov. Jim Doyle (D) issued an executive order creating an Office of Health Care Reform. The office helped Wisconsin make headway in planning a new health insurance exchange mandated by the federal overhaul. However, Gov. Scott Walker (R) succeeded Doyle in January and issued an executive order to dismantle the office and replace it with the Office of Free Market Health Care. Walker and Dennis Smith, secretary of the state’s Department of Health Services, said they will create a health insurance exchange in the state — as the overhaul requires — but it will not follow all the requirements of the law (Goldstein, Washington Post, 3/18).
  • Legislation establishing Colorado’s state-based health insurance exchange mandates that at least four of the nine-member board overseeing the exchange be reserved for representatives of the health insurance industry. The bill — which was introduced on Monday — was developed through a compromise between Gov. John Hickenlooper (D) and the state’s House and Senate leaders (Marcus, Denver Daily News, 3/22).
  • The office of Louisiana Gov. Bobby Jindal (R) has confirmed that the state will not administrate its own health insurance exchange. Louisiana becomes the second state after Florida to decline to run its own exchange (Haberkorn/Kliff, “Pulse,” Politico, 3/22).

Medical-Loss Ratio Rules

  • Last week, Reps. Mike Rogers (R-Mich.) and John Barrow (D-Ga.) introduced a bill (HR 984) that would prevent the medical-loss ratio rules from reducing the commissions of insurance brokers and agents. The legislation, which would exclude brokers’ fees from the calculations of insurers’ administrative expenses, has three Democratic and eight Republican co-signers  (Reichard, CQ HealthBeat, 3/17).
  • Georgia Insurance Commissioner Ralph Hudgens (R) recently announced that he will ask HHS for a waiver from new regulations in the health reform law that require insurers to spend at least 80% of premium dollars on direct medical costs. Hudgens said the waiver — which would be valid for 2011, 2012 and 2013 — would not give insurers adequate time to adjust to the requirements, protect consumers with individual health policies, and maintain consumers’ access to agents or brokers who facilitate the sale of those policies. Earlier this month, HHS granted the first MLR waiver to Maine (Zigmond, Modern Healthcare, 3/16).
  • Last week, North Dakota Insurance Commissioner Adam Hamm (R) sent a letter to HHS Secretary Kathleen Sebelius to request a temporary waiver from new MLR regulations in the health reform law. According to Hamm, North Dakota’s insurance market would be “destabilized” if insurers do not have adequate time to adjust to the new regulations. To avert the problem, Hamm urged HHS to allow the state to gradually phase in the new insurance regulations between 2011 and 2014. North Dakota joins five other states — Florida, Georgia, Kentucky, Nevada and New Hampshire (Millman, “Healthwatch,” The Hill, 3/19).

Related Topics

Public Health Road to Reform The Health Law