Five Health Policy Battles and Trends to Watch in 2012
National Council Public Policy Update January 5, 2012
1. Medicare Physician Pay Fix: In the last hours of its 2011 session,
Congress enacted a short-term deal that postponed for two months a
scheduled 27% reduction to Medicare physician payments. The cut was
required under the Sustainable Growth Rate (SGR) formula, which compels
Medicare to adjust payment rates each year to align with a predetermined
rate of growth in the program. In practice, this has meant that Medicare
payments would take an ever-increasing yearly cut – but each year,
Congress has passed legislation postponing those cuts.
The newest 2-month “SGR fix” gives Congress until February 28 to reach a
longer-term agreement to stave off the cuts. However, the same issues
that plagued the December deal will continue to dog negotiators as they
seek a permanent solution, with the biggest stumbling block being the
question of how to pay for a long-term fix. Fiscal hawks in Congress
have insisted on offsetting all costs with spending cuts elsewhere in
the budget, but other legislators disagree on whether or where to seek
savings. With the 2012 elections putting additional political pressure
on an already divided Congress, it is unclear whether the two-month
delay will be sufficient time for lawmakers to work out the details of a
permanent fix – or whether they will enact another short-term patch.
2. The 2013 Budget and Congressional Efforts to Roll Back Sequestration:
In another piece of 11th-hour dealmaking, Congress reached an agreement
on the 2012 budget shortly before a Dec. 16 deadline – and nearly three
months after the start of the 2012 fiscal year. But lawmakers have only
a short respite, as the 2013 budget battle is set to begin in early
February with the President’s annual release of his budget requests. For
the last two fiscal years, Congress has been unable to pass the 12
annual appropriations bills in time for the fiscal year to start,
meaning that the government has been funded on a series of continuing
resolutions – with frequent threats of a shutdown – until lawmakers have
reached a budget deal. Despite lawmakers’ growing fatigue over the
constant budget battles they have experienced since the start of 2011,
intransigence on the part of the most hardline legislators may once
again hinder a budget deal in 2013.
Meanwhile, this year’s budget battle is complicated by the failure of
the Joint Select Committee on Deficit Reduction to agree on a plan for
cutting $1.2 trillion from the budget. The “Supercommittee’s” failure
means that automatic, across-the-board spending cuts (also known as
sequestration) will go into effect on January 1, 2013. These automatic
cuts are unpalatable for many lawmakers, and Congress will likely spend
much of 2012 debating whether and how to roll back the cuts. Medicaid
could be at risk in this process: during the Supercommittee
negotiations, several plans were put forward that would have stripped
hundreds of billions of dollars from the program by converting it to a
block grant or making other drastic changes. Medicaid will remain a
prime target for cuts as Congress considers the possibility of finding
alternative budget savings that might prevent the need for
sequestration. Our in-depth analysis
<http://echo4.bluehornet.com/ct/14301180:17148369231:m:1:1362575734:501F
215B77F5581519E01EB8F29362B2:r> of the aftermath of the Supercommittee’s
failure is available on our blog.
3. Supreme Court Oral Arguments (and Decision) on the Health Reform Law:
In November, the Supreme Court announced that it would take up the
various legal challenges that have been mounted against the Affordable
Care Act since its passage in March of 2010. Three major issues are at
stake: whether the individual mandate that people have health insurance
is constitutional; whether the rest of the law can stand if the mandate
is struck down; and whether the Medicaid expansion is an
unconstitutional infringement on states’ rights. Oral arguments are
currently scheduled for March 2012, and a decision will be issued later
in the year. Policy analysts are watching closely to see how the
decision will affect the role that health reform plays in the 2012
elections – and how it will impact the rollout of reform. Click here
<http://echo4.bluehornet.com/ct/14301181:17148369231:m:1:1362575734:501F
215B77F5581519E01EB8F29362B2:r> for our more detailed analysis of
what’s at stake.
4. HHS Regulation on Essential Health Benefits: A recently published
informational bulletin from the Department of Health and Human Services
(HHS) outlined how the agency intends to approach its task of
determining what health insurance benefits will be deemed “essential”
under the Affordable Care Act. The ACA requires insurance products and
Medicaid benchmark plans for the newly eligible to cover at least the
minimum essential benefits package – but the law only broadly identified
what these benefits are, leaving the details to be determined by HHS.
Many advocates were hoping that the agency would require a broad range
of covered services, but the recent information bulletin indicates that
HHS will leave states with a great deal of discretion in identifying
essential benefits for their own state. Of critical importance for the
behavioral health field, the bulletin recognized the importance of
including mental health and addictions treatment services at parity with
medical/surgical benefits. However, it did not specify how HHS intends
to apply the parity law, nor how it would ensure that states are
adequately including MH/SUD services in their essential benefits. These
details will likely be included in future rulemaking from the agency,
and could have a major impact on the adequacy of coverage available to
newly eligible individuals in 2014. Read our FAQ on Essential Health
Benefits here
<http://echo4.bluehornet.com/ct/14301182:17148369231:m:1:1362575734:501F
215B77F5581519E01EB8F29362B2:r> .
5. Rollout of Medicaid Health Homes and Medicare Accountable Care
Organizations: 2011 saw the launch of two major initiatives around
integrated service delivery and coordinated care: the Medicaid Health
Homes State Option and the Medicare Shared Savings Program (which
creates Accountable Care Organizations within Medicare). Congress and
the federal agencies will be closely monitoring the outcomes of these
initiatives to get a gage on how integrated care activities may lead to
improved outcomes and lower costs. Currently, two states have initiated
the Medicaid Health Homes option for individuals with mental illness,
and many others are engaged in talks with SAMHSA and HHS. The National
Council will continue to follow the rollout of health homes across the
country and will provide updates, success stories, and resources on our
blog
<http://echo4.bluehornet.com/ct/14301183:17148369231:m:1:1362575734:501F
215B77F5581519E01EB8F29362B2:r> .
Meanwhile, the Medicare Shared Savings Program for the first time
provides a system of federal support for an integrated care model that
incentivizes coordinated care by the comprehensive range of providers
involved in patient care. The nation’s fledgling ACOs are exploring
several models for incorporating behavioral healthcare – from partnering
with community behavioral health agencies to creating their own
behavioral health capacity in-house. Mental health and addictions
treatment organizations in communities where ACOs are forming should be
working to be at the table during these discussions. The National
Council has created several resources to assist, including our fact
sheets “A How To Guide: Partnering with Health Homes and ACOs
<http://echo4.bluehornet.com/ct/14301184:17148369231:m:1:1362575734:501F
215B77F5581519E01EB8F29362B2:r> ” and “Accountable Care Organizations:
The Tipping Point for Behavioral Health.
<http://echo4.bluehornet.com/ct/14301185:17148369231:m:1:1362575734:501F
215B77F5581519E01EB8F29362B2:r> ” Additional information
<http://echo4.bluehornet.com/ct/14301186:17148369231:m:1:1362575734:501F
215B77F5581519E01EB8F29362B2:r> is also available on our blog.