The Healthcare Legislative Landscape

1. The Healthcare Legislative Landscape Jeffrey Gold & Cara Zucker Henley January 10, 2012

2. Federal Legislative Update

3. Federal Landscape - Election 2012 Dropped Out Representative Michele Bachmann (R - Minnesota) Former Representative Newt Gingrich (R - Georgia) Governor Jon Huntsman (R - Utah) Former Representative Ron Paul (R - Texas) vs. President Barack Obama Iowa Caucus Winner Iowa Caucus Runner Up Governor Rick Perry (R - Texas) Former Governor Buddy Roemer (R - Louisiana) Former Governor Mitt Romney (R - Massachusetts) Former Senator Rick Santorum (R - Pennsylvania)

4. Federal Landscape – Challenge to PPACA • In fall 2010, the Supreme Court agreed to hear Florida et. al. v. United States Department of Health and Human Services • The Supreme Court will hear oral arguments beginning March 26 • A decision is expected in the late fall

5. Health Benefit Exchanges • Virtual marketplace where individuals and small businesses can compare and purchase health insurance policies

6. A Brief Timeline 2013 2014 2015 HHS to certify each State’s Exchanges or elect to oversee Exchange operations State based Exchanges must be operational State based Exchanges must be financially self sustaining

7. State Action to Implement Health Insurance Exchanges National Conference of State Legislatures, http://www.ncsl.org/?TabId=21388

8. Affordable Insurance Exchange “Partnership Options” • Option 1: Plan management States take the lead on working with health plans who want to participate in the exchange to offer coverage. • Option 2: Selected consumer assistance States will help consumers understand their options – states will conduct outreach and education and will provide in-person consumer support for Exchanges. • Option 3: Both Option 1 and Option 2

9. The Shared Savings Program (SSP) • Encourages collaborative care through the ACO model for Medicare fee-for-service (FFS) beneficiaries • Providers paid FFS rate + incentive payments earned by providing high value health care • Great enthusiasm in New York to transition into an era of collaborative care • Proposed rule had a chilling effect on this excitement

10. The Shared Savings Program (SSP) • HANYS submitted comments to CMS detailing its concerns with the proposed requirements for the SSP • We recommended the rule be modified in four key areas: • Beneficiary Assignment • Program Parameters • Risk Tracks • Shared Savings and Incentive Payments

11. The Shared Savings Program (SSP) • CMS received over 1300 comments from stakeholders on the proposed rule • In response to the large amount of criticism it received, CMS made significant changes to the final SSP rule

12. State Legislative Update

13. State Landscape State of the State January 4, 2012 Deliver Budget by January 17, 2012 Approval Rating (12/20/11) 68% First Day of Session January 4, 2012 Pass Budget April 1, 2012 End of Legislative Session June 21, 2012

14. State Landscape Redistricting Election 2012

15. 2012-13 Budget • Cuomo’s tax restructuring plan produces ~$1.9B per year, reducing future budget deficits • Next year’s budget deficit is estimated to be ~$2.2B

16. Medicaid Redesign Team (MRT) • Phase 1: MRT developed a package of reform proposals that achieved the Governor’s Medicaid budget target, introduced significant structural reforms that will bend the Medicaid cost curve, and achieved the savings without any cuts to eligibility. • Phase 2: MRT created a coordinated plan to ensure that the Medicaid program can function within a multi-year spending limit and improve program quality. Work groups focusing on specific issues developed recommendations for the MRT.

17. MRT Work Groups and Timeline • Affordable Housing • Basic Benefit Review • Behavioral Health Reform • Health Disparities • Health Systems Redesign: Brooklyn • Managed Long Term Care Implementation and Waiver Redesign • Medical Malpractice Reform • Payment Reform and Quality Measurement • Program Streamlining and State/Local Responsibilities • Workforce Flexibility and Change of Scope of Practice November 1: MRT approved recommendations of behavioral health, program streamlining and state/local responsibilities, managed long-term care and waiver redesign, and health disparities work groups. December 13: MRT approved recommendations of basic benefit review, workforce flexibility/change of scope of practice, affordable housing, and payment reform/quality measurement work groups. There were no recommendations from the Health Systems Redesign: Brooklyn or the Medical Malpractice Reform work groups.

18. Health Insurance Exchanges • Identified as a priority in Governor Cuomo’s State of State Address “Almost 16% of New Yorkers . . . are uninsured . . . We have a unique opportunity to address this challenge by developing a New York State Health Insurance Exchange . . .” 2012 State of the State Address

19. New York Exchange Grants Planning Grant Phase I Grant Early Innovator Grant

20. New York Health Benefit ExchangeA.8514(Morelle)/S.5849(Seward) • Public benefit corporation • Nine voting directors • Separate Exchanges for small group and individual markets • Five regional advisory committees • No purchasing model chosen Passed Assembly – June 23, 2011

21. G.O.P. Senators in Albany Block Federal Aid to Fulfill Part of Health Law “[S]everalRepublican lawmakers in New York, say they do not want to have anything to do with what they call “Obamacare,” [and] have thus far succeeded in blocking the state from seeking large amounts of federal assistance to put into place a mandatory health insurance exchange . . .” New York Times, September 11, 2011

22. NY ACO Demonstration Program • Article 29-E of PHL authorizes the Commissioner of Health to establish a demonstration program to test ACOs as a delivery system • Seven certificates of authority will be issued and none can be issued after December 31, 2015

23. FEDERAL VS. STATE LAW

24. FEDERAL VS. STATE LAW

25. Gottfried’s ACO BillA.8869 • Converts the budget statute from a demonstration to a permanent program • Eliminates the limit of seven ACO certificates that can be issued • Extends the date by which new certificates can be issued from December 31, 2015 to December 31, 2016

26. Gottfried’s ACO BillA. 8869 • Requires an ACO to include an FQHC, although DOH may waive this requirement if there is no FQHC in the area • Limits payers from imposing cost-sharing requirements on ACO enrollees that are higher than they otherwise would be • Deems an ACO to be a health plan for certain purposes, including in relation to access to utilization review and external appeal • Adds ACOs to the definition of "managed care provider" in the social services law • Authorizes $10 million to be allocated without a competitive bid to promote the formation of ACOs and improve their operation

27. Cuomo’s Settlements & New Database UnitedHealth Group $50,000,000 Aetna $20,000,000 Cigna $10,000,000 Wellpoint $10,000,000 Excellus $775,000 MVP Healthcare $535,000 Guardian Life $500,000 Independent Health $475,000 CDPHP $300,000 Health Now $212,500 Total $92,797,500

28. Cuomo’s Settlements & New Database UnitedHealth Group $50,000,000 Aetna $20,000,000 Cigna $10,000,000 Wellpoint $10,000,000 Excellus $775,000 MVP Healthcare $535,000 Guardian Life $500,000 Independent Health $475,000 CDPHP $300,000 Health Now $212,500 Total $92,797,500 FAIR Health, Inc.

29. FAIR Health, Inc. “FAIR Health is an independent, not-for-profit corporation whose mission is to bring transparency to healthcare costs and health insurance information through comprehensive data products and consumer resources. FAIR Health uses its national database of billions of billed medical and dental services to power a free website that enables consumers to estimate and plan their medical and dental expenditures. The website also offers clear, unbiased educational articles and videos about the healthcare insurance reimbursement system. In addition to its consumer offerings, FAIR Health licenses data products to businesses, governmental agencies, healthcare providers and researchers. With its professional staff of experts in healthcare, statistics, technology and communications, FAIR Health strives to offer accurate, consistent and timely information to all stakeholders in the healthcare system.” http://www.fairhealthus.org/about-us/mission

30. New York Proposed LegislationA.7489-A(Gottfried)/S.5068(Hannon) • Requires plans to provide enrollees with description of methodology for reimbursing OON services • Policy must provide significant coverage of the 80th percentile of UCR as determined by FAIRHealth • S.5068 - Services performed by same or similar specialist in the same county • A.7489-A - Services performed by same or similar specialist and provided in the same zip code or geographic area • Passed Assembly – June 1, 2011 Recalled from Senate and Amended – June 13, 2011

31. http://www.crainsnewyork.com/article/20111128/PULSE/111129963http://www.crainsnewyork.com/article/20111128/PULSE/111129963

32. HANYS’ Managed Care 2012 Legislative Agenda • Ban administrative denials • Silence of a health plan in response to a claim shall be deemed an approval, not a denial • Prohibit unilateral payor down coding • Extend timeframe for provider appeals to 120 days • Find legislative fix for non-par provider/balance billing issue at hospitals

33. Jeffrey Gold Vice President, Managed Care &Special Counsel (518) 431-7730 or jgold@hanys.org Cara Zucker Henley Policy Specialist, Managed Care (518) 431-7827 or czucker@hanys.org