Replacing the Affordable Care Act?

By David Orentlicher

[cross-posted at HealthLawProfs blog]

With the future of the Affordable Care Act in doubt after last week’s hearing before the U.S. Supreme Court, Republican lawmakers are busily preparing back-up legislation. New options should not be necessary—the government should prevail against those challenging its interpretation of the Act’s premium subsidy provisions. But it is prudent to consider alternatives in the event that the Court rules against the government.

While most of the ideas being floated would do little to bring health care insurance to the uninsured, there is an option that really could expand access to coverage while also containing health care spending. And it could be attractive to Republicans and Democrats alike on Capitol Hill. Continue reading

King v. Burwell: Appreciating the Stakes of the Case

Yesterday, the Supreme Court heard oral arguments in King v. Burwell, and the Justices seemed split on the central issue of whether the Affordable Care Act (ACA) permits health insurance subsidies to flow to citizens of states that have chosen not to establish their own insurance exchanges.  Trying to predict the outcome of a case like this is notoriously difficult, but I do want to highlight briefly an important difference between the Court three years ago, when it decided NFIB v. Sebelius, and the Court yesterday.

In NFIB, seven Justices declared that the ACA’s Medicaid expansion was unconstitutionally coercive, concluding that the Secretary of Health and Human Services could not condition existing Medicaid funds on a state’s failure to expand Medicaid.  However, the Secretary was instead permitted to offer additional funds to states choosing to expand Medicaid, effectively making the expansion optional.  The Court at the time understood that this outcome could result in a national patchwork, in which certain states would adopt the Medicaid expansion and others would not. Continue reading

UPDATE: Death Spirals…Really to the Rescue?

UPDATE: I posted what follows in January, reflecting on the JALSA amicus brief led by Prof. Abigail Moncrieff from BU that argues that petitioners’ interpretation in King v. Burwell would make the ACA unconstitutional by forcing states to choose between establishing exchanges and torpedoing their individual health insurance markets.  In other words, “death spirals to the rescue.”  It looks like that argument got noticed by Justice Kennedy, who pressed the petitioners hard for a response at oral argument this morning.  (See here.)  A very interesting development, and congratulations are in order to Abby and the other JALSA signatories (as well as other amici who pressed this argument) for at the very least helping to call attention to an argument that wound up playing big at argument.  Will be interesting to see how the opinion comes out!

ORIGINAL POST (Jan. 27, 2015):

We’ve heard a lot about “death spirals” and how they could stand in the way of the Affordable Care Act’s goal of a functioning individual health insurance marketplace.  Seth Chandler has an interesting blog devoted to the subject, “ACA Death Spiral.”  And those who have been following King v. Burwell, the Supreme Court’s latest ACA case, have been predicting that a ruling against the government there would be disastrous because it would only exacerbate the “death spiral” threat to individual health insurance markets.  (See a sum-up of such predictions here.)

But could death spirals save the ACA?  According to a fascinating amicus brief filed in the King case by a number of interest groups and co-signed by several prominent law professors and Bill of Health contributors (I understand that Abigail Moncrieff is the driving force behind the brief, joined by Allison Hoffman, Sharona Hoffman, Russell Korobkin, Joan Krause, Stephen Marks,  Kevin Outterson, and Theodore Ruger), the answer might be yes.  The argument boils down to “death spirals to the rescue.”  (Here is a copy: 14-114 bsac JALSA.)

Continue reading

Open Payments: Early Impact And The Next Wave Of Reform

A new post by Tony Caldwell and Christopher Robertson on the Health Affairs Blog, as part of a series stemming from the Third Annual Health Law Year in P/Review event held at Harvard Law School on Friday, January 30, 2015.

The Physician Payments Sunshine Act, a provision in the Affordable Care Act, seeks to increase the transparency of the financial relationships between medical device and drug manufacturers, physicians, and teaching hospitals. Launched on September 30, 2014 by the Centers for Medicare & Medicaid Services (CMS), the Open Payments database collects information about these financial relationships and makes that information available to the public.

As of early February, the Open Payments database includes documentation of 4.45 million payments valued at nearly $3.7 billion made from medical device and pharmaceutical manufacturers to 546,000 doctors and 1,360 teaching hospitals between August 2013 and December 2013. This included 1.7 million records (totaling $2.2 billion) without the names of physicians or teaching hospitals who received the payments.

These records were intentionally de-identified by CMS because the records had not been available for review and dispute for 45 days, or because the records were not matched by CMS to a single physician or teaching hospital due to missing or inconsistent information within the submitted records. Future reports will be published annually and will include data collections from a full 12 month period. […]

Continue reading here.

Obamacare and States Rights: on the same side of the line this time, in King v. Burwell

By Abbe Gluck

Next week the Court hears a major challenge to Obamacare, King v. Burwell. Readers of this blog know the case has deep importance for health care. But it also is a big case for law. I have previously detailed why the case is the big test for the Court’s current text-oriented statutory-interpretation philosophy known as textualism. Today, in Politico, I explain why the case is also fundamentally about state rights. The question is whether the Court’s many federalism-protecting doctrines–which, let’s not forget, the Court applied against the Government in the last Obamacare case–whether those federalism doctrines, like the Court’s textualist rules, are sufficiently legitimate and objective such they will apply regardless of which side they happen to support, even in a case as politicized as this one. After all, isn’t that the point of having a rule of law in the first place?

Here is an excerpt and a link. Continue reading

Going for gold: behavioral science reveals new biases in ACA exchange shopping

A new New England Journal of Medicine commentary by Peter A. Ubel, M.D., David A. Comerford, Ph.D., and Eric Johnson, Ph.D. highlights significant flaws in the way information is presented to insurance shoppers on state and federal exchange websites. The authors present original survey data to support the argument that subtle aspects of current website designs inappropriately bias decision making. The authors make their case most strongly in an analysis of the well-known gold, silver and bronze labels:

Consider the decision to lump health plans into categories with names such as bronze (for low monthly premiums and high out-of-pocket costs) and gold (for higher monthly premiums and lower out-of-pocket costs). These labels could have unintended effects on people’s attitudes toward which plans are best. After all, gold, silver, and bronze convey best, second best, and third best through association with sporting events, but the best plan for one enrollee will be different from the best plan for another.

To test whether such associations might influence people’s perceptions of insurance plans, two of us recruited a convenience sample of participants from public buses in Durham, North Carolina, and asked them which category of plans they would look at first if they were shopping for health insurance. To half the people, we described the gold plans as having higher monthly premiums and lower out-of-pocket costs — the language used by many exchanges. For the other half, we switched the gold and bronze plans, describing the gold plans as having lower monthly premiums and higher out-of-pocket costs.

Continue reading

Discrimination, by what yardstick?

By Kelsey Berry

It’s time to talk about discrimination again — this time, in insurance benefit design.

A recent study in NEJM by Jacobs and Sommers has coined the term “adverse tiering” to describe the use of drug formularies by insurers “not to influence enrollees’ drug utilization but rather to deter certain people from enrolling [in the plan] in the first place.” [emphasis mine] Evidence of adverse tiering includes the placement of all drugs for certain condition in the highest cost-sharing tiers of drug formularies. This practice, it turns out, occurs fairly frequently – at least when it comes to a common HIV medication, nucleoside reverse-transcriptase inhibitors (NRTIs). Jacobs and Sommers analyzed the placement of NRTIs on formularies for 48 plans in 12 states using the federally facilitated insurance marketplaces, and found evidence of adverse tiering in 25% of plans. Their conclusion? Many insurers may be using benefit design to dissuade sicker people from enrolling in their plans. This raises concerns about adverse selection, as well as discrimination on the basis of health status – a practice the ACA was meant to address via community rating and guaranteed issue requirements, among others.

The study provides an important data point as we continue to assess whether the ACA is living up to our goals for health care reform. I believe we’ll see several more studies of this nature coming down the line, drawing attention to insurer practices that fail to comply with regulations, that are creative interpretations of vague requirements, or that aren’t addressed in existing regulations and may require new scrutiny. As we digest these, I’ll raise two important points for consideration:

Continue reading

Nonprofit Hospitals Sue Patients, and New IRS Rules Offer Limited Protection

[Cross-posted from the Center for Law, Health and Society Blog at Georgia State University]

By Guest Contributor Erin C. Fuse Brown

Last month, NPR and ProPublica reported a story that would be shocking if it weren’t sadly familiar about how nonprofit hospitals like Heartland Regional Medical Center in Missouri are suing their patients and garnishing their wages for unpaid bills.  A few days later, on December 31, 2014, the IRS issued final rules for tax-exempt hospitals that ostensibly will make these practices more difficult, if not illegal.

The IRS rules implement the requirements of Section 501(r) of the Internal Revenue Code added by the Affordable Care Act in 2010. Despite characterizations that these are “sweeping new rules” that protect financially vulnerable patients from excessive charges and aggressive debt collection by nonprofit hospitals, the rules provide fairly thin and spotty levels of protection for patients. Continue reading

Tomorrow: 3rd Annual Health Law Year in P/Review

P-Review_2015_poster_with_borderJanuary 30, 2015 7:45 AM – 5:00 PM
Wasserstein Hall, Milstein East AB
1585 Massachusetts Avenue, Cambridge, MA

Please join us for the Third Annual Health Law Year in P/Review symposium, with leading experts discussing major developments during 2014 and what to watch out for in 2015. The discussion at this day long event will cover hot topics in such areas as health insurance, health care systems, public health, innovation, and other issues facing clinicians and patients.

The full agenda with speakers is available on our website.

Attendance is free and open to the public, but space is limited and registration is required. Please register here. Contact petrie-flom@law.harvard.edu with questions.

Health Care Policy by Common Sense?

By David Orentlicher

[Cross-posted at HealthLawProfs]

In announcing the federal government’s approval of Indiana’s Medicaid expansion, Governor Mike Pence invoked common sense in defending his insistence that beneficiaries shoulder a share of their health care premiums. According to Pence, “It’s just common sense that when people take greater ownership of their health care, they make better choices.”

But relying on common sense is not a good way to make health policy. Common sense leads people to incorrectly believe that they are more likely to catch a cold by going out in cold weather or to take megadoses of vitamins that provide no additional health benefit and can be toxic. Common sense also leads physicians down the wrong path. Because lowering blood sugar has been good for the health of diabetics, medical experts recommended tight control of blood sugar levels. But that resulted in an increased risk of death for many patients. Continue reading

Death Spirals…to the Rescue!

We’ve heard a lot about “death spirals” and how they could stand in the way of the Affordable Care Act’s goal of a functioning individual health insurance marketplace.  Seth Chandler has an interesting blog devoted to the subject, “ACA Death Spiral.”  And those who have been following King v. Burwell, the Supreme Court’s latest ACA case, have been predicting that a ruling against the government there would be disastrous because it would only exacerbate the “death spiral” threat to individual health insurance markets.  (See a sum-up of such predictions here.)

But could death spirals save the ACA?  According to a fascinating amicus brief filed in the King case by a number of interest groups and co-signed by several prominent law professors and Bill of Health contributors (I understand that Abigail Moncrieff is the driving force behind the brief, joined by Allison Hoffman, Sharona Hoffman, Russell Korobkin, Joan Krause, Stephen Marks,  Kevin Outterson, and Theodore Ruger), the answer might be yes.  The argument boils down to “death spirals to the rescue.”  (Here is a copy: 14-114 bsac JALSA.)

Continue reading

Raising the King v. Burwell Stakes

By Nicolas Terry

Today, the Washington Post ran an interview with Laurence Tribe about the King v. Burwell subsidy litigation (recall that oral arguments are scheduled for March 4). Tribe speculated that Chief Justice Roberts will once again be the swing vote, as he was in Nat’l Fed. of Independent Bus. v. Sebelius. Tribe seems to predict another pragmatic Roberts opinion (and one that might bring Justice Kennedy along), finding the subsidy provisions are at worse ambiguous and that the executive is owed deference as argued by the eminently reasonable Nick Bagley.

Even though Tribe wouldn’t label Roberts as a consequentialist, he does believe that the pragmatic Roberts would be influenced by the impact on the States, the disruption of insurance markets, and the consequences for the newly insured. If the Chief wants more data on those issues he could do no better than to consult two excellent reports from the Urban Institute. The first estimates that a declaration that the subsidies are invalid “would increase the number of uninsured in 34 states by 8.2 million people… and eliminate $28.8 billion in tax credits and cost-sharing reductions in 2016 ($340 billion over 10 years) for 9.3 million people.” Perhaps as important, the Urban Institute’s model also predicts general turmoil in private, non-group insurance markets as the young and healthy would disproportionately drop coverage, causing a predicted 35% increases in premiums.

The second and most recent brief from the Urban Institute begins to put faces on those who will suffer: “Over 60 percent of those who would become uninsured are white, non-Hispanic and over 60 percent would reside in the South. More than half of adults have a high school education or less, and 80 percent are working.”

The executive shouldn’t need such help given the ACA’s clear intent as to how the federal and state exchanges were meant to function. But, if a dose of pragmatism is required to secure a majority of the Court, the stakes couldn’t be any clearer.

Last Year Was A Wild One For Health Law — What’s On The Docket For 2015?

A new blog post by Greg Curfman, Holly Fernandez Lynch and I. Glenn Cohen on the Health Affairs Blog:

Everywhere we look, we see the tremendous impact of new legal developments—whether regulatory or statutory, federal or state—on health and health care. These topics range from insurance to intellectual property to religion to professionalism to civil rights. They remain among the most important questions facing Americans today.

This post is the first in a series that will stem from the Third Annual Health Law Year in P/Review event to be held at Harvard Law School on Friday, January 30, 2015. The conference, which is free and open to the public, brings together leading experts to review major developments in health law over the previous year, and preview what is to come.

Read the full post here, and register for the Third Annual Health Law Year in P/Review for free here.

Next Friday (1/30): Third Annual Health Law Year in P/Review

P-Review_2015_poster_with_borderJanuary 30, 2015 8:00 AM – 5:00 PM
Wasserstein Hall, Milstein East AB
1585 Massachusetts Avenue, Cambridge, MA

Please join us for the Third Annual Health Law Year in P/Review symposium, with leading experts discussing major developments during 2014 and what to watch out for in 2015. The discussion at this day long event will cover hot topics in such areas as health insurance, health care systems, public health, innovation, and other issues facing clinicians and patients.

The full agenda with speakers is available on our website.

Attendance is free and open to the public, but space is limited and registration is required. Please register here. Contact petrie-flom@law.harvard.edu with questions.

Cost Containment and Cost Shifting

By David Orentlicher
[Cross-posted at Health Law Profs.]

With Harvard professors protesting their increased responsibility for health care costs, we are seeing just the most visible aspect of the recurring cycle described in “Tragic Choices.” As Guido Calabresi and Philip Bobbitt observed in that book, society tries to defuse societal conflict by hiding its rationing choices through implicit forms of rationing. Thus, for example, health care insurers relied on managed care organizations in the 1990’s to contain health care costs with the premise that managed care would preserve health care access and quality while squeezing the fat out of the health care system.

But after a time, the public realizes what’s going on and rebels against the implicit rationing policy. Hence, managed care’s effective cost containment strategies, such as limited networks of physicians or primary care gatekeeping, were dumped, and health care costs began to climb again.

What did health care insurers turn to after abandoning serious managed care? Shifting more of the costs of health care to patients through higher deductibles and higher copayments. Insurers didn’t need to identify limits on their coverage because individuals would respond to their higher out-of-pocket costs by hesitating to seek care. Costs would be contained by “market forces” rather than rationing. But the Harvard professors and other Americans are now rebelling against the shifting-of-costs policy, just as Calabresi and Bobbitt predicted in 1978. (Indeed, they even included the shifting of costs as an example of an implicit rationing strategy.) Continue reading

A Physician Fights Surgery

Physician and bioethicist Carla C. Keirns described the potentially dangerous impact of medicalization on her own childbirth in the Narrative Matters section of Health Affairs this month. A segment of that writing was reproduced in the Washington Post yesterday.

In each piece, Keirns outlines the challenges she faced in vaginally delivering her son in a hospital environment that seemed committed to performing a caesarian section. Particularly given Keirns’ expertise in and familiarity with health care, the lack of patient-centered care in the story is striking. Several staff suggested that surgery was a foregone conclusion while others appeared unprepared for her son’s long-awaited arrival.

Continue reading

Who Will Own Primary Care in 2016?

By Nicolas Terry

Health reform may have signaled the shift from hospital-based “sick” care to primary care and “wellness” but the ACA failed to provide a detailed roadmap. All we know for sure is that primary care (PC) will be hugely important. Increasingly it also seems that it will look quite different. “Old” PC is being battered; Medicaid primary care physicians (PCP) saw their the two-year ACA bonuses expire in December, the OIG just reported that way too many Medicaid-listed doctors are not taking new patients, and the coverage-doesn’t-equal-access mantra is born out by persistent reports of PCP shortages. If PC as we have known it is not going to step up to the plate, what is the “new” model and who will end up owning it?

The ACA gave hospitals both good (fewer uninsureds in ERs, Medicaid expansion) and bad news (fewer profitably occupied beds because of HAC and readmission penalties). Not surprisingly there was a sharp increase in hospitals buying PCP practices. In part this was just hospitals following the money as usual, looking to roll these practices into their new ACOs. But, longer term strategies also persisted, such as strengthening networks, intercepting patients before they turn up in ERs, and creating local or regional dominant positions. Smaller PCP practices have also been more willing to sell as they faced financial regulatory disincentives (such as meaningful use penalties) if they continued as independents.

However, we are seeing hospitals doing more than increasing the number of hospital-based clinics. Many are also opening their own free-standing urgent care clinics, the “new” PC. There are several models, including full ownership as with the Intermountain Healthcare group or, perhaps for those late to the game, strategic partnerships with urgent care specialists like Premier Health or MedSpring. Continue reading

Do hospitals have a role in population health?

Population health advocates have identified health care providers, and hospitals in particular, as key allies in the effort to create better health and longer lives for Americans nationwide. Despite a growing interest in “community-based’ models of care, hospitals remain the most visible component of the US health care system. What’s more, hospitals are where the money, not to mention many of leading brains and cultural authority, reside. Of the 17.4% of GDP that the United States invests in health care, roughly 30% goes to hospitals – more than any other spending category. Hence why people interested in population health wish to have hospitals on board as they aim to address the always-challenging social, behavior and environmental determinants of health.

But the question remains open: do hospitals really have a role in the pursuit of population health?  Continue reading

More Than Just the ACA at Stake in King v. Burwell

Guest post by Erin Fuse Brown
[Cross-posted from Center for Law, Health and Society Blog]

Commentators have been weighing in since the Supreme Court decided it would hear King v. Burwell, the case challenging the ability of millions of Americans to receive subsidies to purchase health insurance on federally operated Exchanges under the ACA.  Debate swirls over whether a decision striking down these subsidies will gut the ACA or not, but at the very least a ruling in favor of the petitioners would have grave consequences for ACA the and the millions that currently receive these subsidies.

There is, however, more at stake in the King case than the ACA.  If the Court takes this opportunity to cut down the ACA, it does so at the cost of the principle of separation of powers and the Supreme Court’s institutional legitimacy and credibility.

Chevron

The question in King will be resolved under the Chevron framework, which provides that if a statutory provision is ambiguous, then the court must defer to the agency’s interpretation, so long as it is permissible.  Reasonable, learned minds have been disagreeing on the meaning of the statutory provision. As Adrian Vermeule has pointed out, of the 9 federal judges that have reviewed this question, 6 have agreed with the government’s interpretation or concluded the statute is ambiguous, and 3 have concluded that the statute unambiguously precludes subsidies. This type of judicial disagreement is evidence itself of statutory ambiguity.  Continue reading

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Check out the November 14th edition of the Petrie-Flom Center’s biweekly e-newsletter for the latest on events, affiliate news and scholarship, and job and fellowship opportunities in health law policy and bioethics.