Improving Health Care Through ACA and Additional Reforms
The President’s health plan provides hard-working, middle class Americans the economic security they deserve. American families no longer need to worry about losing coverage due to economic setbacks, such as lay-offs or job changes, or due to pre-existing conditions, such as asthma. The ACA also forces insurance companies to play by the rules, prohibiting them from discriminating against anyone with a pre-existing condition, dropping coverage due to illness, billing patients into bankruptcy because of an illness or injury, and limiting annual or lifetime benefits. Further, as discussed in the first chapter, the ACA has taken historic and significant steps toward putting the Nation back on a sustainable fiscal course, while laying the foundation for a higher-quality, more secure health care system. The ACA is improving the quality of care that Americans receive and reducing cost growth by deploying innovative new payment and delivery models that incentivize more efficient, higher-quality care.
Since the full implementation of the ACA began in 2014, millions of people have enrolled in either private insurance through the Health Insurance Marketplace, or coverage through Medicaid and the Children’s Health Insurance Program (CHIP). As a result, the number of uninsured Americans has dropped by an estimated 10 million. The ACA is helping to enhance competition among insurance companies, expand coverage choices, and increase affordability, by keeping premiums low and offering tax credits to more Americans to help them purchase coverage.
2.10.1
Supporting Implementation of the Affordable Care Act
The Budget fully funds the ongoing implementation of ACA’s health insurance coverage improvements through the operation of Health Insurance Marketplaces and the premium tax credits and cost sharing assistance to help make coverage affordable, drive down long-term health care costs, and improve care for millions of citizens.
Preserving Coverage through CHIP. CHIP currently serves over eight million children of working parents who are not eligible for Medicaid. The Budget proposes to extend funding for CHIP, which ends in 2015, through 2019, ensuring continued, comprehensive, affordable coverage for these children. The proposal is paid for through an increase in tobacco taxes that will help reduce youth smoking and save lives.
2.10.2
Strengthening Medicare and Medicaid
This year will mark the 50th anniversary of the enactment of Medicare and Medicaid. Together, Medicare and Medicaid provide affordable health coverage to support longer, healthier lives and economic security for the Nation’s seniors and low-income working Americans and families. Today, Medicare provides about 55 million Americans with dependable medical insurance. State Medicaid programs provide health and long-term care coverage to more than 68 million low income Americans. The ACA and the Budget strengthen the Medicare and Medicaid programs through reforms that expand health coverage in Medicaid, encourage high-quality and efficient care, and continue the progress of reducing cost growth.
Expanding Health Coverage by Improving Access to Medicaid and CHIP Coverage and Services. The Budget gives States the option to streamline eligibility determinations for children in Medicaid and CHIP and to maintain Medicaid coverage for adults by providing one-year of continuous eligibility. The Budget expands access to preventive benefits and tobacco cessation for adults in Medicaid and ensures children in inpatient psychiatric treatment facilities have access to comprehensive benefits.
Promoting Access to Medicaid Long-Term Care Services and Supports (LTSS). The Budget includes proposals that would expand access to Medicaid home and community-based services (HCBS) as an alternative to institutional care for individuals with disabilities and elderly populations. First, the Budget expands and simplifies eligibility to encourage more States to provide HCBS in their Medicaid programs. The Budget also includes a comprehensive long-term care pilot for up to five States to test, at an enhanced Federal match rate, a more streamlined approach to delivering LTSS to support greater access and improve quality of care. In 2015, the Administration will host the sixth White House Conference on Aging to recognize the importance of these, and other key programs for older Americans, as well as to look ahead to how to improve and advance the quality of life for older Americans in the next decade.
Improving Care Delivery for Low-Income Medicare-Medicaid Beneficiaries. The Budget proposes a budget-neutral pilot in a limited number of States to provide qualifying low-income adults, under age 55, benefits under the Program for All-Inclusive Care for the Elderly (PACE), while promoting community services in line with the integration of the landmark Olmstead Supreme Court decision [1], supporting self-determination, serving people with disabilities in the most integrated setting appropriate to their needs, and achieving better health outcomes. Under current law, PACE provides comprehensive long-term services to qualifying individuals age 55 and older. Pilots will test whether PACE programs can effectively serve a younger population without increasing costs. The Budget also proposes to implement streamlined processes for beneficiary appeals and joint Federal-State review of marketing materials for managed care plans that integrate Medicare and Medicaid payment and services and serve Medicare-Medicaid enrollees. These proposals address the sometimes conflicting requirements in each program. In addition, the Budget proposes to permanently authorize a demonstration that provides retroactive drug coverage for certain low-income Medicare beneficiaries through a single plan, establishing a single point of contact for beneficiaries seeking reimbursement for claims.
[1] The U.S. Supreme Court’s 1999 landmark decision in Olmstead v. L.C. (Olmstead) found the unjustified segregation of people with disabilities is a form of unlawful discrimination under the Americans with Disabilities Act. Olmstead requires States to administer programs in the most integrated setting appropriate to the needs of qualified individuals with disabilities.
Encouraging High-Quality, Efficient Care among Medicare Providers. The Budget continues a set of proposals that build on initiatives included in ACA to help extend Medicare’s solvency while encouraging provider efficiencies and improved patient care. This includes a proposal to encourage efficient post-acute care by adjusting payment updates and other payment modifications for certain post-acute care providers. The Budget also proposes to better align certain special payments to hospitals with the cost of care and reduce Medicare bad debt payments in a way that more closely matches private sector standards. Additional proposals to promote efficiency in the Medicare program include: improving payment accuracy for Medicare Advantage; constraining Medicare cost growth; better aligning payments to teaching hospitals with patient care costs; and addressing excess payments for Medicare Part B drugs to hospitals and physicians. Together, these proposals would save approximately $222 billion over 10 years.
Improving Health Outcomes for Children and Youth in Foster Care. The Budget also establishes a new Medicaid demonstration project in partnership with the Administration for Children and Families to encourage States to provide evidence-based psychosocial interventions to address the behavioral and mental health needs of children in foster care and reduce reliance on psychotropic medications, with the goal of improving overall health outcomes.
Reducing Cost Growth by Encouraging Beneficiaries to Seek High-Value Services. The Budget includes structural changes that will encourage Medicare beneficiaries to seek high-value health care services. To help improve the financial stability of the Medicare program, the Budget reduces the Federal subsidy of Medicare costs for those beneficiaries who need that subsidy the least. The Budget includes several modifications for new beneficiaries starting in 2019, such as a modified Part B deductible and a modest copayment for certain home health episodes. Research indicates that beneficiaries with Medigap plans that provide first, or near-first-dollar coverage have less incentive to consider the costs of health care services, thus raising Medicare costs and Part B premiums for all beneficiaries. The Budget applies a premium surcharge for new beneficiaries beginning in 2019 if they choose such Medigap coverage. Together, these proposals would save approximately $84 billion over 10 years.
Improving Quality and Lowering Drug Costs for Federal Health Programs. The Budget includes a number of proposals that lower drug costs, while improving quality and reducing waste in the Medicare Part D program. The Administration is deeply concerned with the rapidly growing prices of specialty and brand name drugs. The Budget proposes to give the Secretary of HHS the authority to negotiate drug prices for biologics and high-cost drugs in Medicare Part D to help ensure access to and affordability of these treatments. This proposal is one of a range of potential solutions to address these growing costs, and the Administration looks forward to working with the Congress on this challenge. The Budget also proposes to close the coverage gap for brand drugs in the Part D benefit by 2017, three years earlier than under current law, by increasing the discounts offered by the pharmaceutical industry. In addition, the Budget proposes to align Medicare payments for drugs with Medicaid policies for low-income beneficiaries. It also provides the Secretary the authority to suspend coverage and payment for questionable Part D prescriptions. The Budget also establishes a program to reduce prescription drug abuse in Medicare.
Together, these proposals will save Medicare $126 billion over 10 years. In addition, the Budget includes two proposals designed to increase access to generic drugs and biologics by stopping companies from entering into anti-competitive deals intended to block consumer access to safe and effective generics, by awarding brand biologic manufacturers seven years of exclusivity, rather than 12 years under current law, and by prohibiting additional periods of exclusivity for brand biologics due to minor changes in product formulations. These two proposals will save the Federal Government $16 billion over 10 years, including savings in Medicare and Medicaid.
Lowering Medicaid Drug Costs for States and the Federal Government. The Budget includes targeted policies to lower drug costs in Medicaid. First, the Budget improves the Medicaid drug rebate program by clarifying the definition of brand drugs, collecting an additional rebate for generic drugs whose prices grow faster than inflation, clarifying the inclusion of certain prenatal vitamins and fluorides in the rebate program, and taking actions to promote the integrity of the rebate program. The Budget also corrects a technical error to a rebate for new drug formulations, limits to 12 quarters the timeframe for which manufacturers can dispute drug rebate amounts, and excludes authorized generic drugs from average manufacturer price calculations for determining manufacturer rebate obligations for brand drugs. In addition, the Budget improves Medicaid drug pricing by calculating Medicaid Federal upper limits based only on generic drug prices. These proposals are projected to save the Federal Government approximately $6.3 billion over 10 years.
Cutting Waste, Fraud, and Abuse in Medicare and Medicaid. The Administration has made targeting waste, fraud, and abuse in Medicare, Medicaid, and CHIP a priority and is aggressively implementing new tools for fraud prevention included in the ACA. In 2013, the Health Care Fraud and Abuse Control program’s law enforcement efforts produced a record-breaking $4.3 billion in judgments, settlements, and recovery of taxpayer dollars from individuals trying to defraud Federal health care programs serving seniors and taxpayers. In addition, further development of the CMS Fraud Prevention System, a predictive analytic model similar to those used by private sector experts, continues to support CMS’ efforts to identify and prevent wasteful, abusive, and potentially fraudulent billing activities. While these results indicate progress, more remains to be done. Therefore, the Budget proposes a series of policies to build on these efforts that will save nearly $3 billion over the next 10 years. Specifically, the Budget proposes to implement new initiatives to reduce fraud, waste, and abuse in Medicare, Medicaid, and CHIP by:
- Requiring prior authorization for power mobility devices and advanced imaging, which could be expanded to other items and services at high risk of fraud and abuse;
- Directing States to track high prescribers and utilizers of prescription drugs in Medicaid to identify aberrant billing and prescribing patterns;
- Supporting efforts to investigate and prosecute allegations of abuse or neglect of Medicaid beneficiaries in non-institutional health care settings and in the territories; and
- Strengthening the Federal Government’s ability to identify and act on fraud, waste, and abuse through Medicaid Integrity Program improvements and investments.
In addition, the Budget would simplify and streamline State program integrity reporting requirements by consolidating redundant error rate measurement programs to create a streamlined audit program with meaningful outcomes, while maintaining the Federal and State government’s ability to identify and address improper Medicaid payments.
2.10.3
Health Care Delivery System Reforms
Since passage of the ACA, the Administration has developed an aggressive agenda to reform the Nation’s health care delivery system. This means avoiding costly mistakes and readmissions, keeping patients healthy, rewarding quality instead of quantity, and creating the health information technology infrastructure that enables new payment and delivery models to work. Such reforms will help to further slow growth in health care costs, and increase savings for Medicare and Medicaid. Building on the lessons learned and success from existing initiatives, the delivery system reform agenda will continue to improve health care quality and reduce costs using the following three strategies:
- Modify health care payment structures to reward providers for optimal care;
- Support practice redesign and create better capacity to improve care delivery; and
- Improve access to information to encourage data-driven decision-making by consumers, providers, and businesses.
To encourage health care providers who deliver better care and better outcomes for their patients, the Administration has set a goal for 2016 of making 30 percent of Medicare payments through alternative payment models, which link payments to delivery of efficient, high-quality, coordinated health care rather than paying for volume of health care services. By 2018, the Administration’s goal is to make 50 percent of Medicare payments to providers through alternative payment models.
To further align incentives and improve care coordination, the Budget includes a proposal to accelerate physician participation in high-quality and efficient health care delivery systems by repealing the Medicare Sustainable Growth Rate formula and reforming Medicare physician payments in a manner consistent with the reforms included in recent bipartisan, bicameral legislation.
The Budget encourages post-acute providers, such as nursing homes and home health agencies, to deliver care efficiently by making a single (bundled) payment for such services. It also includes proposals that will enhance the ability of Accountable Care Organizations to increase quality and reduce costs. In addition, the Budget improves incentives for providers to deliver care in the most appropriate ambulatory setting and also reduces incentives for physicians to inappropriately order services from which they would financially benefit.
The Budget establishes quality bonuses for the highest rated Part D plans and modifies incentives in the Medicare prescription drug program to encourage patient engagement in health care decisions.
To improve transparency and distribution of information, the Administration has improved access to Federal data through the Open Data Initiative, released Medicare data on cost and quality, and invested in innovative ways to collect and share data, from the way we measure the quality of care to the way health care is documented and communicated to consumers. The Budget increases support to advance interoperable health IT as part of delivery system reform while protecting patient privacy. The Budget supports the Office of the National Coordinator for Health Information Technology (ONC) in developing standards and consensus around policies that will help consumers and providers access electronic health information when and where they need it to make health care decisions, including development of interoperable mobile tools to help consumers use their health information effectively. The Budget also expands Medicare data sharing with qualified entities, which will enable additional third party analysis of data, and may lead to more transparent public discussion of care practices improvement in health care quality and efficiency, and/or reduce fraud, waste, and abuse in the Medicare program.
2.10.4
Public Health, Safety, and Security
The Budget proposes a number of key investments and reforms to improve the Nation’s public health system and to promote access to health care services for vulnerable populations. Further, the Budget invests in protecting the Nation’s public health system against global health security challenges such as infectious diseases, antibiotic-resistant bacteria, and biohazard threats. Since the first cases of Ebola were reported in West Africa in March 2014, the United States has mounted a Government-wide response to contain and eliminate the epidemic at its source, while also taking prudent measures to protect the American people. Emergency funding appropriated in 2014 in response to the President’s proposal will mitigate the epidemic in West Africa, enhance domestic preparedness, speed the procurement and testing of new vaccines and therapeutics, and accelerate the Global Health Security Agenda. These activities will combat the spread of Ebola and will help reduce the potential for future outbreaks of infectious diseases that could follow a similarly devastating, costly, and destabilizing trajectory. The Budget continues to invest in these critical programs to strengthen the Nation’s preparedness capabilities.
Prescription Drug and Heroin Abuse. Every day, more than 100 people die as a result of drug overdose, and more than 6,700 are treated in emergency departments. Abuse of prescription and illicit drugs, such as heroin, is an urgent public health concern. The Budget increases funding for programs across the Centers for Disease Control (CDC), the Substance Abuse and Mental Health Services Administration, the Agency for Healthcare Research and Quality, and ONC to decrease the rates of inappropriate prescription drug abuse. The Budget increases funding for every State to expand existing Prescription Drug Monitoring Programs to improve clinical decision making, interoperability, and effective public health interventions. The Budget also includes funding to expand and improve the treatment for people who use heroin and prescription opioids. In addition, the Budget supports increased dissemination of naloxone by first responders in an effort to prevent overdose deaths in high risk communities.
Modernizing the Nation’s Food Safety System. CDC has estimated that 48 million foodborne illnesses occur each year from contaminated foods. The Budget includes $1.6 billion in total program resources to bolster food safety activities, including an increase of $301 million for the Food and Drug Administration to implement new safety measures under the Food Safety Modernization Act for domestic and imported foods.
Investing in Native American Health Care. The Budget provides the Indian Health Service (IHS) with $5.1 billion, an increase of $461 million over the 2015 enacted level, which will expand health care services, and allow IHS to make significant progress toward the construction of health care clinics in Indian Country. The Budget proposes to fund contract support costs through mandatory funds beginning in 2017. The Administration intends to consult broadly with Tribes on this new approach prior to implementation in 2017.
Combating Antibiotic Resistant Bacteria (CARB). The Budget includes an increase of more than $550 million above 2015 enacted levels across the Federal Government to prevent, detect, and control illness and death related to infections caused by antibiotic-resistant (AR) bacteria. These resources will also help support the advancement of therapeutics for the treatment of bacterial infections. The Budget also fully implements the surveillance, prevention, and stewardship activities outlined in the CARB National Strategy. The investments will protect patients and communities by implementing interventions that reduce the emergence and spread of AR pathogens to prevent current antibiotic resistant threats. By 2020, the United States, together with partners, will reduce the incidence of overall Clostridium difficile infection in half and reduce Carbapenem-resistant Enterobacteriaceae infections acquired during hospitalization by 60 percent.
Preventing, Detecting, and Responding to Infectious Diseases, Both Abroad and at Home. The Ebola epidemic in West Africa underscores the need to urgently strengthen global health security in countries around the world that are not equipped to handle Ebola, including the most vulnerable countries across Asia, the Middle East and Africa that have poor infrastructure, limited capacity, high population density, and major transport hubs. In addition, recent and ongoing outbreaks of Plague, Marburg, Lassa fever, the Middle East Respiratory Syndrome, and avian influenza clearly demonstrate the need to immediately address global vulnerabilities. The Budget continues to invest in the Global Health Security Agenda, increases funding to eradicate polio and for the U.S. contribution to Gavi, the Vaccine Alliance, and creates a new PEPFAR Impact Fund for targeted global HIV/AIDS efforts. The Budget also increases funding for domestic preparedness efforts to more effectively and efficiently respond to potential, future outbreaks here at home and dedicates funding for States to develop HIV Plans to help them reach the goals of the National HIV/AIDS Strategy.
Strengthening Preparedness for all Health Threats, Including Naturally Occurring Hazards and Intentional Attacks. The Budget includes $522 million to enhance the advanced development of next generation medical countermeasures against chemical, biological, radiological, and nuclear threats. The Budget also more than doubles support for Bioshield by providing $646 million to continue the Federal Government’s long-term commitment to the acquisition of new medical countermeasures. The Government response to Ebola has highlighted the importance of sufficient funding and operational capabilities to facilitate an effective and coordinated response to public health crises that may not meet the current criteria for a national disaster or public health emergency declaration, such as those under the Stafford Act. Informed by lessons learned from the Ebola response, the Budget proposes additional funding for HHS to strengthen the Nation’s capability to plan for and respond to public health emergencies and enables potential changes in structure and capabilities to improve our public health emergency response.The Budget includes $110 million to respond to unanticipated public health emergencies through support for domestic or international activities, such as State and local response and emergency staffing, hospital and containment facilities, infection control, laboratory equipment and supplies, data gathering and analysis, countermeasures, and other potential needs in such an incidence. Within the total, there are resources for staff coordination and training, command and control, and other related logistical needs.
2.10.5
Health Centers and Health Workforce
The Budget helps ensure Americans in need of health care services are able to access them in a timely manner. Health centers are a key component of the Nation’s health care safety net that provide Americans with access to affordable comprehensive, high-quality, primary care services regardless of their ability to pay. The Budget also strengthens the primary care workforce by providing increased resources for primary care health care providers who train and practice in areas where they are needed most.
Improving Access to Health Care Services. Across the United States, 1,300 health centers operate over 9,000 primary care sites that serve as high-quality, dependable sources of primary care services in communities. The Budget invests $4.2 billion, including $2.7 billion in new mandatory resources, in the Health Centers program in 2016 to support services for an estimated 28.6 million patients. This funding level will enable health centers to expand services to 1.1 million additional patients. In total, the Budget provides $8.1 billion in new mandatory resources over three years so that health centers can continue to serve their patients.
Improving Access to High-Quality Health Care Providers. The Budget includes new funding to implement innovative policies to train new health care providers and ensure that the future health care workforce is prepared to deliver high-quality and efficient health care services. The Budget invests $810 million in 2016 and $2.1 billion from 2017–2020 in the National Health Services Corps to place and maintain 15,000 health care providers in the areas of the Nation that need them most. To encourage and enhance training of primary care practitioners and other physicians in high-need specialties, the Budget proposes $5.25 billion over 10 years to support 13,000 new medical school graduate residents through a new competitive graduate medical education program that incentivizes high-quality physician training. To continue encouraging provider participation in Medicaid, the Budget extends increased payments for primary care services delivered by certain physicians through 2016, with modifications to expand provider eligibility and better target primary care services.
As discussed in this chapter, the President’s Budget makes balanced investments in health care, infrastructure, clean energy, education, innovation, and research to grow the U.S. economy. By investing in the military, the Budget enhances America’s national security. These investments will be fully paid for by cutting inefficient spending and by reforming tax benefits to make sure everyone pays their fair share.
The President believes that investments in the economy and national security must be done together. We cannot abandon our security in service of our economy, and we cannot abandon our economy in service of our security because harm to one does harm to the other. That is why the Budget provides a roadmap to make the investments needed both domestically and abroad.
As discussed in the next chapter, “A Government of the Future,” the Budget also proposes to make Government work better, by investing in effectiveness and efficiency; using Government data to drive economic growth; and supporting the people who work in Government.
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Improving Health Care through ACA and Additional Reforms
