KHN: Kaiser Health News

That sigh of relief you heard Monday was from hospital administrators in nearly two dozen states, including Florida and Texas.

That’s because the Obama administration announced that for the next two years, it doesn’t plan to penalize states that have yet to expand Medicaid coverage under the federal health law by targeting them for reduced Medicaid funding, according to a proposed rule unveiled Monday. That money goes to  hospitals that treat large numbers of poor people.

The health law is funded in part by a gradual reduction in extra Medicaid payments, called disproportionate share hospital, or DSH. Those payments help hospitals that care for a large proportion of poor patients who are covered by Medicaid, or who are uninsured.

The hospital industry agreed to the cuts during the  negotiations over the law on the assumption that expanding coverage to many people who are now uninsured would mean that hospitals would give away less uncompensated care. But since the Supreme Court made the Medicaid expansion voluntary last year, hospitals fear they will lose Medicaid money while at the same time seeing little or no reduction in how much they spend on uncompensated care.

The HHS secretary must come up with a formula that imposes the sharpest cuts on states with the lowest levels of uncompensated care.

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Four states that have snubbed the federal health law by defaulting to the federal government to build new online insurance marketplaces and not agreeing to expand Medicaid are getting new jobs at call centers that will help consumers understand their new coverage options this fall.

Up to 9,000 jobs are expected to be created at call centers to support the new federally run marketplaces. A Department of Health and Human Services spokeswoman said some of them will be added to existing Medicare call centers in Phoenix, Chester, Va., Lawrence, Kan.,  and Tampa, Fla.– all states with Republican leaders who oppose the  law.

A fifth center in Coralville, Iowa and a sixth in Corbin, Ky., will also be expanded, she said. Plans are still being finalized for other locations, she said.

Of those states, only Kentucky is setting up its own online insurance marketplace that will help people shop for individual or small employer coverage. Iowa, will run its exchange in partnership with the federal government.  The other states are relying entirely on the federal government.

Of the six states getting call centers, only Kentucky has committed to expanding Medicaid in 2014, even though governors in Florida and Arizona say they support it. So far, 22 states have agreed to expand Medicaid.

The jobs are through Vangent, a General Dynamics Information Technology subsidiary, which was awarded a $530 million one-year contract  by the federal government to set up call centers to answer inquiries related to the insurance marketplaces in 34 states where they will be run in whole or part by the federal government. The government estimates that next October, when the marketplaces go live, the call centers will be open seven days of the week, 24 hours a day, handling 6.1 million phone calls and 23,000 e-mails. The contract could be renewed for up to nine more years, making it potentially worth more than $5 billion.

States running their own marketplaces will have their own call centers.

The marketplaces are expected to expand health coverage to about 27 million people by 2016. Under the federal contract awarded to Fairfax, Va.-based Vangent, the company will also field inquiries about Medicare, Medicare Advantage and “other relevant programs,” the award announcement stated.

Once upon a time, there were the navigators, then the in-person assisters, and the certified application counselors.

Now, add community health centers to the list of individuals and organizations available to help consumers sign up for the new health insurance marketplaces scheduled to open Oct. 1.

On Thursday, the Obama administration pledged $150 million to help community health centers provide in-person enrollment assistance to uninsured patients. There are 1,200 health centers across the country, treating about 21 million patients each year.

“Health centers have extensive experience providing eligibility assistance to patients, are providing care in communities across the nation and are well-positioned to support enrollment efforts,” Health and Human Services Secretary Kathleen Sebelius said in a press release.

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Update 3:45 p.m.:  Speaker Boehner sent a letter to the White House Thursday formally declining to recommend appointments to the panel.

Note to the Obama administration: Don’t wait by the phone for those GOP nominations to the Independent Payment Advisory Board, a panel created in the health law to make recommendations to Congress on how to control Medicare costs.

Speaker Boehner (Photo by Mark Wilson/Getty Images)

House Speaker John Boehner, R-Ohio, made it clear Thursday that neither he nor Senate Minority Leader Mitch McConnell, R-Ky., would be sending in any names for consideration.

“This is the 15 unelected, unaccountable individuals who have the authority to deny seniors’ access to care,” Boehner told reporters. “The American people don’t want the federal government making decisions that doctors and patients should be making.”

Known as IPAB, the panel is charged with making proposals to reduce Medicare spending if government funding of the program grows beyond a target rate. Congress can pass alternative changes of the same size instead, but if it fails to act, the IPAB plans would become law. But recent slowdowns in the growth of Medicare spending means there’s no immediate pressure for the panel, which has not yet been assembled, to make spending recommendations to Congress.

During a news conference, Boehner also defended House Republican leaders’ decision to vote yet again next week to repeal the health law.

While the House has taken similar votes more than three dozen times, “we’ve got 70 new members who have not had the opportunity to vote on the president’s health care law,” Boehner said. “Frankly, they’ve been asking for an opportunity to vote on it and we’re going to give it to them.”

And just to be clear, Boehner says he still hates the law and wants to see it repealed. “Obamacare is going to drive up the cost of health care, drive up the cost of health insurance, and make it harder for small businesses to hire workers,” he said. “I believe that at the core of who I am. And I’m going to do everything I can to make sure that we don’t wreck the best health care delivery system the world has ever known.”

This article was produced by Kaiser Health News with support from The SCAN Foundation.

Americans’ per capita spending on prescription drugs fell last year for the first time on record, according to a report released Thursday by the IMS Institute For Healthcare Informatics firm headquartered in Danbury, Conn., which tracks pharmaceutical sales and other health care data.

Photo by Paul Pellerito via Flickr

The report titled, “Declining Medicine Use and Costs: For Better or Worse?” found that in real dollars, total spending on prescription drugs fell by 3.5 percent per capita in 2012, while use of health care services, including  visits to doctors, declined for the second consecutive year.

“The largest driver of this slowdown has been an unprecedented cluster of very popular and effective medicines losing patent protection and facing generic competition at the same time,” said Michael Kleinrock, a lead author and the company’s director of research development.

Total U.S. spending on medications last year was close to $326 billion – or $898 on a per capita basis, down $33 from 2011. Although the number of prescriptions filled in 2012 went up by 1.2 percent, that represented a 0.1 percent decline on a per capita basis, the report said.

The decrease was the first since the company began tracking such data 58 years ago, Kleinrock said. “The rate of growth for spending on prescription medicine has never been below zero,” he said.

The findings had been anticipated because of the scheduled patent expirations of blockbuster medications, such as the anti-cholesterol drug Lipitor, and the antipsychotic Zyprexa, he said.

According to the report, the patent expirations of common prescriptions resulted in a $28.9 billion reduction in spending. The increased availability of lower-cost generic drugs, which made up 84 percent of medications dispensed last year, smaller price increases and reduced spending on newer brands of medications were also factors contributing to the spending decline. The less severe cold and flu season in 2012 may also have contributed.

The report suggested there were some downsides to the reduced spending. “People are staying away from health care and not using preventive services as much,” Kleinrock said. “Many of these choices are being based on finances, and that may not be in the patient’s long-term health interest.”

Sen. Tom Harkin Tuesday removed the hold he had placed on the nomination of Marilyn Tavenner to head the Centers for Medicare and Medicaid Services and said he would no longer stand in the way of a Senate vote despite actions by the Obama administration that he said violate “both the letter and the spirit” of the 2010 health care law.

Sen. Harkin (Photo by Chip Somodevilla/Getty Images)

But after Harkin announced his decision on the Senate floor, Majority Leader Harry Reid said it was unclear when the Senate would vote on the nomination.

Tavenner was introduced at her confirmation hearing before the Senate Finance Committee by House Majority Leader Eric Cantor, R-Va., and has bipartisan support.  The committee approved her nomination with a unanimous voice vote before sending it to the full Senate.

Late last month, Harkin blocked Tavenner’s nomination to protest the White House’s decision to take $332 million from the health law’s prevention fund to help finance its online marketplaces, or exchanges, where eligible individuals and small businesses will be able to buy health insurance coverage. The administration took that step after Republicans denied a request in March for $949 million in additional funding for implementation efforts.

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Two new studies assert that the country’s unusual slowdown in health spending growth rates may be due more to structural changes in the health care system than to the lagging economy, and thus could continue even after business picks up.

National health spending grew by 3.9 percent a year between 2009 and 2011, the lowest rate of increase in half a century. There has been a vigorous debate about whether this slowdown portends a new era of lesser health care inflation or is merely a brief dip caused by the recession. The new studies, published Monday by the journal Health Affairs, are optimistic that the change is permanent, though neither study can pinpoint what factors exactly are responsible.

The first study examined to what degree job loss and insurance benefits were responsible for restraining health care spending. In examining claims of 10 million employees at 150 large companies between 2007 and 2011, the researchers determined that spending rates on medical services by the employed, which had been accelerating at 5 percent before the recession, plummeted in 2010 to less than 2 percent. That was a deeper decrease than appeared in previously released national statistics that included the unemployed and those receiving public insurance. The spending by employees of the big companies accelerated in 2011 to slightly more than 2 percent, but it has not rebounded to the level it was before the recession.

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