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Federal

Owing to multiple blizzards in Washington, Congress ongoing its President’s Day recess a full week ahead of schedule and conducted no official business last week. But, there was some legislative drama as Senate Majority Leader Harry Reid pulled the rug out from under Finance Committee Chairman Max Baucus by scrapping the Baucus jobs bill (without warning), which contained many health indemnity items, and replacing it with a stripped down, narrow jobs bill. Whether the health items Baucus originally inserted with Republican help will make it back to the table remains fuzzy. Among the health items that have been dropped are: the COBRA eligibility extension (to May 31); the “doc fix” (to October, 2010) of Medicare reimbursement tariff; and the favorable statutory direction to CMS to calculate the 2011 Medicare Advantage tariff “as if” the doc fix were in place.

States

California health indemnity The Office of Patient Advocacy released a report card on the state’s HMOs last week. Aetna received 3 out of 4 stars. The goal of the report card is to allow consumers to compare how well health plans use personal medical records and help address conditions such as asthma, arthritis and diabetes.

COLORADO: Governor Bill Ritter held a press conference to announce what he calls “the next round of reforms that speak for common sense.” His legislative package includes bills to preclude indemnity companies from charging uncommon tariff due to a person’s gender, ensure that women have access to breast cancer program, assure plain language is used in indemnity forms, standardize indemnity applications and explanations of benefits, and encourage greater use of online tools to enroll people in public programs. Apart from the Governor’s proposals, a bill that would establish a public option was also introduced.

CONNECTICUT: In a small legislative session of only three months, the Indemnity & Real Estate Committee atrophied no time in putting forth an agenda that includes many concept drafts for repeat legislation from previous sessions. These include prohibiting health indemnity copayments for preventive care, limiting prescription drug copayments, prohibiting Social Security disability payment offsets, and exempting the Municipal Employees Health Indemnity Plans from the premium tax on small group premiums. In addition, the committee reintroduced legislation that includes nearly a dozen new health benefit mandates. The Council for Practically priced Health Indemnity, an independent reflect-tank, says that health indemnity mandates could increase premiums in Connecticut by more than 50 percent overall.

GEORGIA: A bill was proposed last week that would impose significant restrictions on insurers’ ability to rescind health indemnity policies. Aetna, through the Georgia Association of Health Plans and AHIP, met with the lawmaker sponsoring the bill to express concerns with the bill.

INDIANA: The legislative session is at halftime, and the indemnity agenda is now limited. Most indemnity issue bills are officially dead, including a bill that would have prohibited health plot provisions requiring a contracted provider to acknowledge more than a certain number of patients; coverage for dialysis treatment regardless of whether the facility is contracted or not and without certain benefit restrictions; and a bill that would have allowed out-of-network assignment of benefits. But, Aetna is expecting that a bill requiring insurer and HMO annual reporting of premium cost composition, including administrative costs, may be resurrected. A bill that restricts dental insurers and HMOs from establishing fee schedules for non-covered services passed the Senate, with our amendment to accommodate most of the key concerns expressed by opponents of the bill. As the bill stands, dental indemnity plans may impose fee schedules for covered services, regardless of whether the plot really pays for the services rendered.

KANSAS: An amended version of S.B. 389 related to dental services passed the Senate Financial Institutions and Indemnity Committee on February 11. The amended bill prohibits any contract between a health insurer that offers a health benefit plot and a dentist from containing a provision that requires the dentist to acknowledge a fee schedule for services unless the service is a covered service. Committee amendments added to the definition of a “health benefit plot” the following: any subscription agreement issued by a non-profit dental service corporation; any policy of health indemnity bought by an individual; the state children’s health indemnity plot; and the state medical help curriculum under Medicaid. We will continue to update you as this bill progresses and hope to make favorable changes as the bill moves through the House.

MASSACHUSETTS: Governor Deval Patrick filed a 40-page bill that proposes giving the indemnity commissioner the power to hold public hearings on rate adjustments and essentially cap health care price increases. Rate increases for individuals would be held to the rate of medical inflation; those sold to employers with 50 or fewer workers could not exceed one and a half times the level of medical inflation. The legislation would also impose a two-year moratorium on any new health benefit mandates. Legislative leaders praised the intent of the governor’s plot but declined to promise support. Strong opposition is expected from medical provider groups. The Governor simultaneously announced emergency regulations to take immediate effect that will require health insurers to submit proposed small business rate increases for review by the state 30 days before they take effect. Several other proposed provisions include a requirement that insurers offer at least one coverage plot with a limited network of health care providers costing at least 10 percent less than health plans with access to more physicians. The Massachusetts Association of Health plans is lobbying in support of a bill introduced by Senate Indemnity Chair Richard Moore that would initiation a cheaper health indemnity product for small employers by capping payments to providers at just 10 percent above Medicare tariff. The Massachusetts Medical Society is hostile to that proposal.

MISSOURI: An autism coverage mandate bill was amended and “perfected” by the Senate and then sent to the Government Accountability and Fiscal Oversight Committee from which it must emerge before returning to the floor of the Senate. In addition to two mandate-related amendments, a third amendment to the bill allowing for limited cross border sales of health indemnity also passed. In its current form, the bill contains a mandated donation of the coverage in the individual market. Coverage is limited to treatment ordered by a licensed physician or psychologist whose treatment plot the carrier is entitled to review every six months. Coverage for applied behavior analysis (ABA) is limited to $52,000 annually (down from the $72,000 as introduced) for persons under age 21. Meanwhile in the House, a bill containing significant language relating to the credentialing of autism service providers also passed. The bill also contains a mandate to offer coverage in the individual market and to groups of fewer than 25. Groups of 25 to 50 would be entitled to an exemption from the mandate if they could demonstrate an increase in premiums tied to the mandate. The bill limits annual coverage of ABA ($36,000 for children ages 3-9; $20,000 for children ages 9-21). Aetna will continue to monitor the status of these mandates, but it appears positively clear at this point that something will pass on the issue of autism.

NEW JERSEY: Last week Governor Chris Christie confirmed a fiscal state of emergency calling a special session of the legislature to lay out his plot for dealing with state’s current $2.2 billion budget shortfall. His plot calls for significant cuts or eliminations crosswise 375 state programs and withholding $500 million of state education aid. Of note on the curriculum side is a $12.6 million reduction in kindness Care funding to hospitals, which pays for care to uninsured residents. In legislative proceedings, the Assembly Financial Institutions and Indemnity Committee held a three-hour public hearing on out-of-network reimbursement. Much of the hearing focused on the markedly higher billing practices of ambulatory surgery centers and one non-par hospital. Aetna presented authentication regarding its experience with the non-par hospital, citing their disparate year-over-year increase in charges compared to other similarly situated hospitals. Chairman Schaer indicated the committee will work over the next several months to craft a solution.

NEW YORK: With Democratic Senator Hiram Monserrate officially expelled from the Senate, the Democratic majority (31-30) now faces an uphill battle getting the 32 votes needed to pass legislation. But, both the Senate and the Assembly went forward with a public hearing on the Executive Budget proposal for health, including the section mandating the former praise of rate adjustments. The Health Plot Association testified on behalf of the industry. If enacted, Governor Paterson’s proposal for an 85 percent medical loss ratio and a former praise hearing process for all rate adjustments would essentially amount to government control of health indemnity, undermining the private health indemnity market in New York. Price controls would weaken health plot solvency, hurt providers and virtually eliminate innovation and efficiency. At the same time, the proposal ignores the underlying yield of the increasing cost of health indemnity — the increase in the actual costs of health care services.

OKLAHOMA: The second session of the 52nd Oklahoma Legislature convened in Oklahoma City on February 1. Legislators quickly turned to the state’s $1.3 billion budget deficit described by Governor Brad Henry (D) in his eighth and final state of the state address and FY 2011 executive budget. During his address, the Governor focused on his plans for resolving the $1.3 billion budget deficit through precise budget cuts. His only reference to health indemnity was to encourage the expansion of Assure Oklahoma, a curriculum developed by the state in partnership with small employers to provide practically priced health coverage. The legislature is scheduled to adjourn on May 28 but only after addressing a range of legislation including several bills of interest to Aetna.

SOUTH DAKOTA: A dental fee schedule bill (S.B. 108) unanimously passed the Senate Commerce Committee and is expected to be taken up by the full Senate ahead of schedule this week. The bill prohibits any contract between a health insurer that offers a health benefit plot and a dentist from containing a provision that requires the dentist to acknowledge a fee schedule for services unless the service is a covered service. Aetna will continue to follow the bill’s movement as it progresses.

TENNESSEE: Several bills have been proposed that would make changes to the state’s external review law. Aetna and other industry representatives will be meeting with the Tennessee Department of Commerce and Indemnity regarding its proposed changes to the external review law. The bill proposed by the TDCI most closely mirrors the model legislation proposed by the Inhabitant Association of Indemnity Commissioners.

UTAH: The Speaker of the House has introduced a health reform bill addressing health information equipment, individual and small group market reforms and transparency. The overarching theme of the reforms is micromanagement of tariff and rating factors, and a broadening of the Indemnity Commissioner’s authority. The transparency provisions apply plot designs and benefit descriptions submitted by carriers, and would require providers to make available, upon request, a price list for services on both an inpatient and outpatient basis.

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