Federalism Issue

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CHAPTER 2 How We Got Here: U.S. Health Policy History

This chapter is designed to give healthcare leaders an understanding of U.S. health policy history by covering the following topics:

■■ The history of health policy ■■ How the U.S. health system developed ■■ How selected major components of the Patient Protection and Affordable Care Act developed

practice of ­medicine lacked standardization, ▸▸ History of Health with almost anyone who desired to practice medicine being able to open a practice and Policy and assume the title of doctor. With the rise of sev- eral alternative options to allopathic medicine, Development of the including homeopathic (1796), osteopathic U.S. Health System (1874), naturopathic (1895), and chiropractic (1895) medicine in the 1800s, the public was he history of health policy development not always certain about what they were get- in the United States had its beginnings ting when receiving treatment from a “doctor.” at the state, as opposed to federal, level, ­Doctors of Medicine were concerned about Twith few exceptions. These exceptions, begin- distinguishing themselves from alternative ning with the Sailors and Marines Act of 1798,1 practices with the establishment of licensing addressed the narrowest of constituencies. laws based on ensuring the quality of treatment State-level action began with a series of medical received from individuals claiming the title of licensing laws passed circa 1800, abolished circa “doctor.” While ensuring quality is the claim 1830, and re-established­ post-Civil War. Prior every trade group uses when seeking licensure, to ­post-Civil War era licensing regulations, the economists view licensure as a restraint of trade

1 This laid the foundation for what would become the U.S. Public Health Commissioned Corps. 22 Chapter 2 How We Got Here: U.S. Health Policy History or a legal method for keeping the “­undesirables” Insurance Law (1883) established sickness out of the business (AMA, 1847). Ironically, funds paid for by the employee (2/3) and there were legal disputes among the alternative employer (1/3); the Accident Insurance forms of medicine, such as the 1907 lawsuit in Law (1884) was employer-funded and pre- Wisconsin in which a chiropractor was jailed cursor to workers’ compensation laws; and for practicing osteopathic medicine (State of Old Age and Disability Insurance (1889) was Wisconsin v. Morikubo). an old-age pension plan and precursor to The Bill for the Benefit of the Indigent Social Security in the United States. About Insane in 1854 was the second recorded fed- 40 years later, British Prime Minister David eral healthcare legislation. This bill’s intent Lloyd George sponsored the enactment of was for the federal government to provide several social service policies, including the land for the establishment of asylums for National Health Insurance Act (1920) that the insane, deaf, and dumb. It was passed by provided laborers protection against illness both houses of Congress but vetoed by Pres- costs and unemployment. ident Franklin Pierce (D), who viewed this as a federalism issue. He claimed that the states, not the federal government, should ▸ be responsible for social welfare concerns. ▸ Brief History of Little, if anything, happened in the United Payment States for another 70 years, with the next mention of federal involvement in healthcare In the United States, health insurance had its provision being Theodore Roosevelt’s presi- beginnings in the 1860s through the late 1920s dential platform in 1912. The third piece of in a series of disability insurance offerings federal healthcare legislation was the Pro- (sickness funds) by a variety of insurance com- motion of Welfare and Hygiene of Maternity panies that were designed to protect laborers and Infancy Act (1921). Also known as the from loss of wages, as opposed to payment Sheppard-Towner Act, this progressive piece for medical costs.2 The Baylor Plan, estab- of legislation, which passed both houses of lished in 1929, was the first organized health Congress and was signed by President Wood- insurance plan, cost 50¢ per month or $6 per row Wilson (D), provided federal funding for year, started so university professors could maternal and child care. pay their hospital bills. The Baylor Plan was During this same 70 years, Germany soon followed by a flurry of similar plans that and Britain enacted social support legis- were ultimately chartered by state laws as Blue lation that would eventually be replicated Cross plans. A decade later in 1939, physician by the modern industrial world and would payment was organized in a similar manner ultimately influence the United States. In under Blue Shield plans. While it may seem an effort to gain the support of labor, Ger- intuitive to assume that physicians would wel- man Chancellor Otto von Bismarck was the come these insurance products that ensured first to propose social support legislation payment, the opposite was what actually hap- and have it passed into law. The Sickness pened. Physicians were vehemently opposed

2 The average length of illness during this era was 4–6 weeks, resulting in no income for the employee during this period of illness and convalescence. Thus, the need for income stability or disability payments was provided through sickness funds costing employees 1% of their wages. When the first sickness (medical) insurance was offered through Baylor University Hospital to help university professors pay their hospital bills, it also cost employees approximately 1% of their wages. Brief History of Payment 23 to these plans, fearing the payer’s interven- non-cash wage benefits in the form of health tion between them and their patient, and fre- insurance coverage. In 1949, the Supreme quently cited that they were “… opposed to Court upheld a National Labor Relations rul- anything that intervened between the physi- ing allowing benefits to include in collective cian-patient relationship.” bargaining, and in 1954, health insurance There was quite a bit of administrative premiums were declared a tax exemption for and legislative activity during the Franklin businesses. Roosevelt (D) and Harry Truman (D) pres- During the decades of the 1940s and idencies that sought to enact national health 1950s, the public became aware that health- insurance legislation. However, none of it care needs of the elderly were often not was fruitful. Both Presidents faced consider- addressed, or addressed in a limited fashion, able and aggressive lobbying efforts against due to their lack of financial resources. Thus, national health insurance by the American the Kerr-Mills bill (1960) was passed to pro- Medical Association (AMA), who continued vide funding for states to care for the poor with their campaign regarding the sacredness elderly, and although the bill was helpful, it of the physician−patient relationship saying was incomplete. The major healthcare legis- that no one should intervene in that relation- lation that came from the 1960s is Medicare ship. President Roosevelt (D) was concerned (1965) and Medicaid (1965). The battle for enough about the aggressive physician lob- these two bills was legendary, with the AMA bying that he dropped his consideration of opposing them until after their passage, and including health insurance as a part of Social was remarkable and exemplary for how Pres- Security legislation, for fear of it causing the ident Lyndon B. Johnson (D) managed the legislation to go down in defeat. The quest for legislative and implementation processes. national health insurance received its final This legislation ushered the United States into blow with the defeat of President Truman’s (D) the provision of national health insurance Fair Deal (1949). With this defeat, the Dem- for the general population, albeit to limited ocrats realized they needed to change strate- populations. gies and, while pursuing the ideal of national The 1970s and 1980s continued to wit- health insurance in some format, they began ness a flurry of legislative and administrative to do so on an incremental basis. Three sig- activity, with the result of the activity primar- nificant healthcare laws passed under Presi- ily being incremental increases in programs dent Truman (D): the National Mental Health ensuring access and legislation addressing Act (1946) established the National Institute the increasing cost of healthcare services. of Mental Health, the Hospital Survey and The most significant of these legislative Construction Act (1946), also known as the actions was the Social Security Act of 1983 Hill-Burton Act, had a goal of establishing 4.5 (Prospective Payment Act) that ushered in beds per 1000 people and required participat- bundled payments based on diagnostic and ing hospitals to provide uncompensated care, historic data. The hospital prospective pay- and the Federal Water Pollution Control Act ment system was introduced as Diagnostic (1948) provided federal funds for the elimina- Related Groups (DRG) in 1983; the Outpa- tion of waste from tributaries. tient Prospective Payment System consist- Due to post-World War II wages and price ing of Ambulatory Payment Classifications freezes, employers were unable to provide (APC) for hospital-based outpatient services their employees with additional cash wages. In and Current Procedural Terminology (CPT) an effort to provide some type of pay increase, for other outpatient-based services were employers began providing employees with launched in 2000. 24 Chapter 2 How We Got Here: U.S. Health Policy History

One federal law enacted in the 1970s—not the National Committee on Quality Assurance often associated by the public with health care, (1990) that broadened the federal govern- although it has had profound, long-term effects ment’s list of concerns from access and cost to on state-level healthcare reform efforts—is the include quality. Employee Retirement and Income Security Act One of the healthcare system’s greatest (ERISA). ERISA was intended to accomplish obstacles has been defining quality. Providers (in addition to many other goals) two health- do not seek to provide poor care, yet they have care goals: to establish a legal requirement for trouble defining quality care. Most recently, basic health insurance portability and to pre- quality has been defined by adherence to empt state insurance regulators from oversight ­evidence-based practices and the patient’s per- of “self-insured” health plans. Although ERISA ception of the care episode. The next notewor- established a legal basis for health insurance thy action was the attempt by President Bill portability, it was found to be ineffective in Clinton (D) to establish a national health sys- practice. Today, we refer to this health insur- tem through this Health Security Plan (1993). ance portability as “COBRA” after the 1985 This plan was burdened with a number of Consolidated OmniBus Reconciliation Act political problems and, ultimately, never made (COBRA) that strengthened the requirement it to legislation. for insurers to offer portability at a stable price The third noteworthy action was the for a set time period. Health Insurance Portability and Account- The long-term effect of ERISA that most ability Act (HIPAA) (1996) that was passed affected healthcare reform efforts at the state by both houses of Congress and signed into level (prior to Chapter 58 of Acts of 2006 of law by President Clinton (D). This law, which the state of Massachusetts) was the preemption was designed to provide portability of health of state insurance commissions from oversight insurance and administrative ­simplification, of self-insured health plans. Prior to ERISA, updated the confidentiality law of 1970. The state insurance commissions were believed fourth activity was an attempt to control­ to hold regulatory oversight over these plans. healthcare costs by a shift from fee-for-­ This was due to the phrasing used to describe service payment to capitated payment under these employer benefit plans as “self-insured.” managed care companies. While the managed The term is a layperson’s phrase that means the care companies were successful in controlling­ absence of an actuarially determined financial costs, the treatment restrictions they imple- instrument. The high capital requirements mented to achieve those cost savings were necessary to operate self-insured health plans so draconian that they resulted in over 1000 restrict this option to medium or large firms. state laws that essentially said, “You can’t The preemption of state oversight of these do that.” As a result of this backlash, man- “health insurance” plans removed the richest aged care companies greatly moderated their source of employer-based covered lives from approach and introduced Preferred Provider healthcare coverage risk pools. It was not until Organizations (PPO) that have become the the 2006 Massachusetts healthcare reform that most common type of health insurance over a state found a path around this preemption the past 20 years. (see Section PPACA). The year 2000 to the present saw a con- The 1990s were noteworthy for contin- tinued activity on the access, cost, and quality ued activity addressing cost and access to care themes with three major legislative actions. with four remarkable additions. The first of The first was the Medicare Drug Improvement these additions was an administrative act, with and Modernization Act (2003), signed into law President George H.W. Bush (R) establishing by President George W. Bush (R), primarily PPACA 25 known for providing prescription drug cover- (PPACA). As evidenced by current politi- age for Medicare recipients. The second legis- cal turmoil, this journey is not over and will lative action was the American Recovery and certainly continue through national shifts in Reinvestment Act (2009) that included the political aptitude and power. Health Information Technology for Economic and Clinical Health Act (HITECH) (Title XIII) that provided incentives for the implementa- tion of electronic medical records throughout ▸▸ PPACA3 healthcare organizations in a meaningful fash- ion. The third legislative action was the Patient The passage of the Patient Protection and Protection and Affordable Care Act (PPACA) Affordable Care Act (PL 111-148 and PL 111- (2010) that sought to increase access for 152) was an attempt by Congress to increase ­uninsured individuals, decrease cost, increase access, increase quality, and decrease the cost incentives for quality, and provide incentives of healthcare services. Its subsequent signing to test innovative care delivery and payment into law by President Barack Obama (D) on models. This act has been noted for the polar- March 23, 2010, was the natural culmination of izing politics that surrounded its development over 100 years of iterative policy decisions and and passage (no Republicans voted for it) and development (see Chapter 1, Table 1.1). Upon the ineptitude and variability, demonstrated close examination of the PPACA, it is clear that in its aggressive implementation (e.g., health there is nothing new in this law. Every policy insurance exchanges), and the substantive idea in this law has either been tried at a lower legal challenges it has endured. The HITECH level of government or been discussed in pol- and PPACA are noteworthy for the coercive icy circles for decades. For a quick summary of negative reimbursement associated with sev- the title names and numbers of subtitles, parts, eral of their programs (e.g., meaningful use, and sections, see TABLE 2.1. In the following value-based purchasing, ACO negative risk sections, we provide three policy development sharing). examples: first, how states worked as innova- Undoubtedly, the past 100 years have wit- tors leading the way on coverage of children nessed a flurry of administrative, legislative, up to 26 years of age; second, how a policy pro- and judicial action regarding how health care gresses through iterative steps with the concept is delivered in the United States. The United of an individual mandate and health exchange States has moved from President Franklin beginning with the Republicans during the Pierce, who in 1854 stated that social support Nixon (R) administration and ending up as matters were the responsibility of the state, to a Democratic concept in the PPACA; third, legislation that has shared that responsibility how the administrative branch used Medicare with the states (Medicaid), to moving more waivers as a tool for testing innovative ideas aggressively toward federal responsibility during the George W. Bush administration

3 Republicans have vowed since the passage of this law to repeal it and replace it with “something better” that has yet to be defined. After taking control of the presidency, Senate, and House of Representatives in 2016, they attempted numerous times to repeal and replace this law and have not been able to bring their caucus to agreement on what a repeal and replacement would look like. Congress was successful in repealing the tax penalty for not complying with the individual mandate through tax reform (PL 115-97) legislation. We believe that it is unlikely they will achieve this goal and that the PPACA will follow the pattern of other legislation by being continually revised and updated to accommodate the needs of the populace and nation. Due to unsuccessful legislative repeal, the executive branch is attempting to weaken the PPACA through the administrative rules process. 26 Chapter 2 How We Got Here: U.S. Health Policy History

TABLE 2.1 Titles Within PPACA and HCEARA

PL 111-148—Patient Protection and Affordable Care Act

Title Topic Subtitles Parts Sections

I Quality, Affordable Health Care for All Americans 7 11 72

II Role of Public Programs 11 0 41

III Improving the Quality and Efficiency of Health Care 7 6 95

IV Prevention of Chronic Disease and Improvement of 5 0 27 Public Health

V Healthcare Workforce 8 0 48

VI Transparency and Program Integrity 8 2 49

VII Improving Access to Innovative Medical Therapies 2 0 8

VIII CLASS Act 0 0 2

IX Revenue Provisions 2 0 20

X Strengthening Quality Affordable Health Care for All 8 2 84 Americans

PL 111-152 Health Care and Education Reconciliation Act of 2010

I Coverage, Medicare, Medicaid, and Revenues 6 0 31

II Education and Health 2 2 19

Congress.gov. that resulted in the CMS Innovation Center turns 26 years age.” As with many other sec- and Accountable Care ­Organizations (ACOs). tions of the PPACA, this idea was adopted from similar statutes enacted by 31 states Coverage of Dependent Children (NCSL, 2016). These states had a variety of requirements for children to be between the up to 26 Years Age ages of 19 and 25 years and to be either sin- Title I (A)(II)(2714) of the PPACA provides gle, dependent, in college, or some combina- for the coverage of children “… until the child tion of these three. In contrast, the PPACA PPACA 27 allows any child between the ages of 19 and 25 ­managed competition. Just prior to the years to continue to get coverage through their enactment of the PPACA, the Massachusetts parent’s health insurance regardless of marital Health Plan (2006) included a mandate for status or dependency. The restrictions of this the possession of health insurance coverage plan include limitation of the coverage to the and the Massachusetts Corridor (exchange) child and do not include coverage of a grand- for the purchase of individual policies. One child (child of the child) or spouse. Levine, lesson learned from the Massachusetts Plan McKnight, and Heep (2011) found that the was the need for counselors to assist indi- state plans resulted in an increase in insur- viduals in the sorting out of insurance needs ance coverage for the 19–25 years age group and options (AHRQ, 2013). This resulted in of approximately 3%. Meanwhile, the PPACA the PPACA provision of grant funding to has demonstrated an increase of this same age train navigators to provide this assistance to group of 10%, or 3.2 million young adults, ­individuals seeking policies on the Health resulting in decreasing the uninsured rate for Insurance Exchange (Marketplace; PL 111- this age cohort from 30% in 2010 to 14.9% in 148 (III)(F)(3510)). 2016 (Gallop, 2016; NCSL, 2016). Implementation of the Health Insurance Marketplace was challenged by a number of barriers, including Supreme Court chal- Health Insurance Exchanges lenges to the individual mandate, Medicaid A major premise of the U.S. health system is expansion regulations, vendor performance, that access to healthcare services is linked to management oversight and involvement, payment and payment is linked to possession and time. Within hours of President Obama of health insurance. In an effort to address the signing the PPACA into law, lawsuits were uninsured, Congress mandated that all Amer- filed by state attorney generals and industry icans have health insurance or pay a penalty groups to block the law and to question the (tax), unless the purchase of health insur- constitutionality of portions of the law, such ance posed a significant hardship, defined as as the individual mandate. These lawsuits 8% of gross adjusted income. Congress also were combined in National Federation of provided expanded Medicaid for individuals Independent ­Businesses et al. v. Sebelius, Sec- under 138% of the poverty level and an indi- retary of Health and Human Services, et al. vidual market health insurance exchange for (No. 11–393) including Department­ of Health individuals between 133% and 400% of the and Human Services et al. v. Florida et al. federal poverty level. In an effort to blunt the (No. 11–398), and Florida­ et al. v. Depart- financial impact to low-income families, Con- ment of Health and Human ­Services et al. (No. gress provided premium subsidies, with the 11–400); argued: March 26, 27, and 28, 2012, largest of the subsidies going to individuals and decided: June 28, 2012. In this case, the and families between 133% and 250% of the Supreme Court ruled in part for the United federal poverty level. States that the individual mandate and the The concept of an exchange for the pur- tax (penalty) were constitutional and in part chase of health insurance was alluded to by against the United States that the requirement Butler (1989) in his discussion of a conserva- of the states expanding Medicaid or losing tive plan for healthcare reform that advocated all Medicaid funding was too coercive. This for a transfer of the tax credit to individuals, ruling had several practical implementation including a mandate for coverage and some ramifications, including at minimum, a loss of type of purchasing alliance, and described 2 years of preparation time for development by Enthoven (1993) in his discussion of of the exchange and a flurry of legislative 28 Chapter 2 How We Got Here: U.S. Health Policy History activities in the states as they debated if or through the Department of ­Homeland Secu- how to expand Medicaid. rity. One argument in favor of the vendors When the Health Insurance Marketplace is that due to the legal challenges, they were opened in the fall of 2013, 24 states had devel- deprived of adequate time to appropriately oped their own exchanges and 36 defaulted, develop and test this IT infrastructure. The either completely or in some type of hybrid counterarguments include vendor incompe- fashion, to the federal exchanges. The ini- tence, lack of CMS management supervision, tial debut of federal health insurance mar- and political unwillingness to delay imple- ketplaces was bereft of technical and design mentation to provide additional time for IT precision, resulting in multiple consumer development. Regardless, the functionality delays and frustrations. The Department of of the exchanges has steadily improved and Health and Human Services (HHS) imme- is now working fairly well (from a consumer diately began a process of addressing and lens), although not all of the intergovernmen- remediating these problems with changes in tal department links have been established. vendors and CMS managers that addressed The prime rationale for the health these problems. Unfortunately, the negative exchanges was to allow a greater number of consumer experiences had already sullied individuals the option, although a mandatory the exchange, despite continuously improved option, to gain access to healthcare services technical performance during the initial and via the purchase of a health insurance pol- subsequent years. Development of the federal icy meeting a predefined minimum standard. health insurance exchange was a complex pro- There is no doubt that the uninsured rate has cess that included the functions of linking the dropped since the implementation of expanded various private insurance options with income ­Medicaid and the Health Insurance Market- verification through the IRS and citizenship place (see TABLE 2.2); however, the increase in

TABLE 2.2 Uninsured Rate, Health Insurance Exchange Estimates, and Actual Enrollment

Uninsured Rate QI CBO Estimates Enrolled Year (%) (millions) (millions)

2010 16.0 – –

2011 15.7 – –

2012 17.3 – –

2013 16.3 – –

2014 15.6 13.0 8.0

2015 14.0 20.0 11.7

2016 11.0 25.0 12.0

ASPE Issue Brief Health Insurance Marketplace Premiums for 2014, 2015, 2016, and 2017. PPACA 29 the number of individuals possessing health and 60% (bronze). What the actuarial value insurance policies has underperformed esti- means is that the insurance plan would pay for mates by the CBO, while the number of the actuarial value and the consumer would individuals added to the Medicaid roles has be responsible for the remaining portion. exceeded expectations. Two reasons (one neg- Another requirement written into the PPACA ative and one positive) have been frequently was that these plans had to be based on a com- cited as the cause for the under enrollment munity rating that included age, gender, and in the health insurance exchanges: (1) under smoking history, with a 1:3 spread being the enrollment of the 18- to 35-years age group and maximum allowed difference in premiums. (2) an unexpected number of small businesses The factors of a new product, narrow allow- continuing health insurance to their employees able actuarial rating knowledge, and competi- as opposed to dropping coverage, paying the tiveness resulted in these products having very penalty for not offering coverage, and send- low initial prices. The result of these low prices ing their employees to the Health Insurance and the effect of adverse selection resulted in Marketplace. large annual losses for insurance companies. Finally, the insurance product defined by Due to the large losses, several insurance the PPACA has a set of 10 requirements, a set companies exited selected unprofitable mar- of actuarial values for consumers to choose kets, completely exited the health insurance from, and a requirement that rate increases exchange, or requested large annual premium be approved by both the state insurance reg- increases that have frequently been approved. ulatory agency and CMS. The actuarial values TABLE 2.3 demonstrates the national averages are 90% (platinum), 80% (gold), 70% (silver), and increases for these insurance plans.

TABLE 2.3 Insurance Plan Averages and Increases

27-Year-Old with Family of Four with 27-Year-Old Before Tax Credit Income of $25,000 Income of $50,000

Second Second Second Second Lowest Lowest Lowest Lowest Silver Silver Silver Silver Before After Before After Lowest Lowest Lowest Lowest Tax Tax Tax Tax Year Bronze Silver Gold Catastrophic Credit Credit Credit Credit

2014 $165 $204 $222 $149 $208 $145 $753 $282

2015 $265 $336 $382 $439 $222 $143 $803 $407

2016 $294 $359 $406 $550 $240 $143 $896 $405

2017 $366 $433 $538 $674 $303 $142 $1090 $405

ASPE Issue Brief Health Insurance Marketplace Premiums for 2014, 2015, 2016, and 2017. 30 Chapter 2 How We Got Here: U.S. Health Policy History

Accountable Care Organizations 2011). As this concept matured, physician Accountable Care Organizations (ACOs) groups found themselves to be undercapi- appear in Section 2706 Pediatric Accountable talized and underprepared as professional Care Organization Demonstration Project ­managers needing to establish and manage and Section 3022 Medicare Shared Savings these complex organizations. While organiz- Program of the PPACA. In both of these sec- ing a network of physicians remains the core tions, the ACOs must “… be willing to become concept of ACOs, the organization and man- accountable for the quality, cost, and overall agement of them has been absorbed by health care …” (Sec. 1899 (2)(A)) of their assigned systems that have greater capital and manage- beneficiaries. This accountability for the care rial resources. Since 2010, hospitals and health of these beneficiaries is achieved through systems have embarked on a process of vertical deliberately planned coordination of benefi- integration that has included the purchase of ciary care. physician practices, allowing them to develop ACOs can best be understood by first the organizational depth necessary to develop gaining an understanding of “Care Organiza- ACOs and positively respond to many other tions” and then a discussion of “Accountabil- PPACA care coordination and payment pro- ity.” Care Organizations have been around for visions. Once a care organization has become a long time and refer first to a group of physi- a legal entity, it can begin to bill Medicare for cians who have agreed to work through a net- services and take on the “accountability” role work concept to provide coordinated care for a for the “… cost, quality, and overall care …” of group of beneficiaries. Care Organizations can Medicare beneficiaries.4 take the organizational form of highly orga- ACOs are an organizational model still nized business models, such as large multispe- under fee-for-service payment, but with risk cialty group practices (e.g., the Mayo Clinic component associated with the quality of or Cleveland Clinic) or a network of inde- patient outcomes. CMS has a very detailed pendent physician practices that have agreed process for ACOs to determine their perfor- to work together in a coordinated manner. mance benchmarks and an equally detained Two federal examples of Care Organizations process for determining quality perfor- are HRSA-sponsored rural networks and the mance. Under the Shared Savings Program, Geisinger Cardiac Trial (Medicare Waiver). ACOs can agree to a one-sided (positive risk) In both of these examples, the act of coordi- option with payment ranges of 2%–3.9% or nation of care and fluid communication that two-sided (positive and negative risk) agree- accompanied it has resulted in greatly reduced ments with payment options of 2%. CMS fragmentation of care, increased quality of care recommends that organizations with limited and health outcomes, and financial savings of to no experience managing care coordina- several million dollars. tion, quality, and patient outcomes choose The initial literature on ACOs described the one-sided risk option until they gain groups of physicians that would come together adequate experience. The two-sided (risk) as a legal entity and then enter into additional shared savings program is only suitable for network agreements with other institutional organizations that have extensive experience providers, such as hospitals (Bard & Nugent, managing patients in a coordinated manner,

4 In the current environment, “Accountable Care Organization” is a legal term used by CMS for Medicare payment, whereas “Clinically Integrated Network” is an equivalent care coordination and payment model associated with non-Medicare beneficiaries. Physician Payment: Usual, Customary, and Reasonable to MACRA 31 including robust tracking of patient quality The model for valuing physician services was and outcomes. For example, two-thirds of the established through Resource-Based Relative initial ACO programs (CMS referred to these Value Scale (RBRVS), which considers “… the as Pioneers) have left due to their inability to relative value of the work, practice expenses, absorb the negative risk. All of the “exited” and malpractice risks associated with each organizations from the Pioneer ACO pro- physician service” (PL 101-239), and took gram are well-developed and well-managed into consideration geographic variation, healthcare organizations. These organiza- inflation, changes in demand, service-related tions remain committed to the ACO model technology, and inadequate access. This bill but are simply not yet able to sustain the risk also sought to cap payment for physician associated with the Pioneer ACO program. services by setting the increase in unit ser- For CY 2015, the mean shared savings for vice inversely proportional to past increases the remaining Pioneer ACOs was $3 million, in service quantity. This rationale resulted in with a range of savings from $24.5 million to the establishment of Medicare Volume Per- $1.6 million. formance Standards (MVPS) in 1992 that ini- tially decreased the growth rate in payment for physician services. Eventually, surgeons ▸▸ Physician Payment: and primary care physicians found these caps to be disadvantageous, petitioned Congress, Usual, Customary, and and received separate surgical and primary Reasonable to MACRA care caps. Decreased growth in physician payment The federal government entered into the did not last long, causing Congress to address realm of physician payment with the passage rapidly growing physician payment again in of Medicare and Medicaid in 1965. Medicare the Balanced Budget Act of 1997 (PL 105-33). was patterned after the 1960s-era Blue Cross This legislation replaced the Medicare Vol- and Blue Shield program. Thus, physician ume Performance Standard with the Sustain- payment followed suit, patterning physician able Growth Rate (SGR). The SGR calculation payment on these same plans and paying phy- included (1) the estimated percentage change sicians based on usual, customary, and reason- in fee for physician services, (2) the estimated able charges. Usual, customary, and reasonable percentage change in the average number of charges paid physicians whatever they billed, Medicare fee-for-service beneficiaries, (3) the so long as it was in line with similar bills for estimated 10-year average annual percent- physician services or procedures within the age change in real gross domestic product geographic area. per capita, and (4) the estimated percentage Due to the lack of payment controls built change in expenditures due to changes in reg- into this payment model, physician payments ulations (Spilberg, 2014). As with MVPS, the grew at a steady and rapid pace, resulting in SGR initially controlled physician expendi- Medicare Part B (75% payment for physician tures; however, beginning in 2002, the SGR services) becoming the largest domestic pro- resulted in a negative increase of 4.8%, with gram funded through general revenues by the the subsequent 12 years of negative increases mid-1980s. Congress addressed this rapid culminating in a 2014 negative increase of physician payment growth in the Omnibus 20%. Congress did not allow any of these neg- Reconciliation Act of 1989 (PL 101-239) by ative increases to proceed, and, as a result of establishing a physician fee schedule based physician lobbying, passed legislation every on the value of physician services provided. year from 2002 to 2014 to reverse the negative 32 Chapter 2 How We Got Here: U.S. Health Policy History increase and provide for a modest annual the provision of high-quality care for patients increase of no more than 2%. Finally, in 2015, with specific clinical conditions, episodes of both parties in Congress and the physicians care, or populations. Of note, CMS does not had enough of this annual event and passed recommend physicians choose this option the Medicare Access and CHIP Reauthoriza- without previous experience with risk-based tion Act of 2015 (MACRA). contracts. MACRA is a bipartisan statute com- Since 1965 when the federal government monly referred to as the permanent doc fix entered the realm of physician payment, they that passed by wide margins in both cham- have consistently sought to pay physicians bers of Congress (House R-212 & D-180; appropriately for the services they have pro- Senate R-46, D-44, & I-2) and was signed into vided. What has changed over the years has law on April 16, 2015. MACRA consolidated been the desire to control the growth and physician reporting and payment into either predictability of payments. Since 2006, addi- the Merit-based Incentive Payment System tional measures associated with payment have (MIPS) or the Alternative Payment Mod- included quality of care, patient safety, and els (APM). MIPS consolidated reporting by use of an electronic medical record in a mean- replacing Physician Quality Reporting System, ingful way. Stated otherwise, we have moved ­Meaningful Use, and the Value-Based Modi- from paying for cost to paying for value fier and adding Improvement Activities. The (quality/cost). ­Physician ­Quality Reporting System (PQRS) was established in 2006 as part of the Tax Relief and Health Care Act (PL 109-432) to ▸ provide incentives for reporting quality data ▸ Legislation 2010 and to Medicare. These quality data were based on Forward a list of quality measures that were chosen by and appropriate for the type of practice. Mean- Since passage of the Patient Protection and ingful Use came out of the American Recovery Affordable Care act in 2009, there have been and Reinvestment Act of 2009 (PL 111-5) and numerous unsuccessful attempts by Republi- incented physician practices and other health- cans to repeal the PPACA, such as the American care organizations for acquiring and using an Health Care Act (House—passed), Better Care electronic medical record in a meaningful way. Reconciliation Act (Senate—failed), Health Meaningful use incentives were staggered over Care Freedom Act (Senate—failed), and Amer- a series of years, with reporting requirements ican Health Care Act (Senate—failed). These increasing in number and complexity over bills all failed due to the inability of the Repub- time and the rewards of participation more lican caucus to coalesce around support for a generous to the voluntary early adopters and replacement bill that maintained their princi- coercive to those who resisted. The Value- ples of small federal government, while not tak- Based Modifier is applied to the physician ing away healthcare access that many of their fee schedule and rewards physicians for pro- constituents deemed important. The Republi- viding high-quality care at a low cost. Finally, cans were successful in passing tax reform legis- Improvement Activities reward physicians for lation (PL 115-97) that repealed the tax penalty providing care focused on care coordination, for not possessing health insurance (Part VIII, patient engagement, and patient safety. Alter- Sec. 11081). native Payment Models (APMs) are programs The other noteworthy healthcare legislation such as ACOs that provide physicians with 5% passed during this period was the 21st Century additional incentive for assuming some risk in Cures Act (PL 114-225). This is a lengthy piece Federalism 33 of legislation with 18 titles, 24 subtitles, and 228 locally. Confederation is an approach where sections. As the bill is lengthy, it can be divided a voluntary group of states choose to asso- into three main sections: 5 titles and 116 sec- ciate with a central government. Within this tions address research funding, leadership, and model, if the states are weak, the central gov- reporting requirements; 9 titles and 87 sections ernment is strong, and if the states are strong, address mental health programs, payment, and the central government is weak. Federalism is access; 4 titles and 25 sections address Medicare an approach to governance that attempts to and Medicaid access, continuation of services, balance the power between a central or fed- and payment. eral government and its provinces or states. In the United States, the need for this form of governance was driven by a lack of trust and a history of negative experiences with a strong ▸▸ Federalism British central government. This lack of trust resulted in our founders adopting the Articles Unitary, confederation, and federal are three of Confederation in 1777 (see TABLE 2.4) that common models of national or central gov- provided for an extremely weak central gov- ernment. Unitary central government is an ernment and strong state governments. The approach used by the British, in which a cen- Articles of Confederation eventually proved tral authority controls all levels of govern- to be untenable due to states acting like ment and makes laws that are administered their own countries, performing acts such

TABLE 2.4 Articles of Confederation, Constitution, and Bill of Rights

Document Action Date

Articles of Confederation Adopted November 1777

Articles of Confederation Ratified by all 13 states March 1781

Articles of Confederation Congress approved a February 1787 convention for revision

Constitutional Convention U.S. Constitution written May–September 1787

U.S. Constitution Adopted September 1787

U.S. Constitution Ratified by 9 of 13 states July 1788

Bill of Rights Approved by Congress September 1789

U.S. Constitution Ratified by all 13 states May 1790

Bill of Rights Ratified by 10 of 14 states December 1791

Library of Congress. 34 Chapter 2 How We Got Here: U.S. Health Policy History as printing their own currency and charging Constitution delineated federal responsibili- tariffs on goods and merchandise crossing ties and powers, the limits of their encroaching state borders. Ultimately, these actions caused powers on the states are only ensured by the Congress to approve a constitutional conven- Tenth Amendment that states: tion in 1787 to address its weaknesses and provide recommendations to strengthen it. The powers not delegated to the This constitutional convention convened in United States by the Constitution, Philadelphia from May to September of 1787. nor prohibited by it to the States, are Much to the dismay of Congress, it found the reserved to the States respectively, or Articles of Confederation beyond repair and to the people. produced a new U.S. Constitution. Following some acrimonious debate about the members Once the Bill of Rights was approved by of the constitutional convention exceeding Congress, the remaining four states ratified their charter, Congress adopted the U.S. Con- the Constitution by May 1790. Since the Bill of stitution in ­September 1787. Rights were amendments to the Constitution, The new U.S. Constitution first addressed they had to be ratified by two-thirds of the the separation of powers by assigning legisla- states, with that threshold reached in Decem- tive responsibilities to Congress (Article 1), ber 1791. executive responsibilities to the President While the Constitution and Bill of (Article 2), and judicial responsibilities to the Rights balances federal and state responsi- Supreme Court (Article 3). Article 4 delin- bilities, there is a level of ambiguity to these eates the federal government’s responsibility responsibilities that allows this balance to to the states and citizens including: assur- adapt to different times and situations (Hola- ance of public acts, proceedings, and judicial han, Weil, & Wiener, 2003). In the United records (­section 1), citizen rights (section 2), States, we have experienced at least seven admittance of new states (section 3), and a eras of federalism (see TABLE 2.5). The first Republican form of government (section 4). era, Dual Federalism (1789–1933), was the Additionally, the Constitution provided for longest and included the most distinct roles the approval of amendments to the Consti- for the federal and state governments that tution (Article 5) and assurances that debts later came to be known as layer-cake feder- and legal agreements will be honored as the alism. The next two eras, Cooperative Feder- supreme law of the land and that all govern- alism (1933–1960) and Creative Federalism mental officials will be bound by oath to sup- (1960–1968), ushered in a time when the port the Constitution (Article 6), and that nine federal government developed programs that states are required to ratify the Constitution were implemented at the state and local lev- (Article 7). els with federal funding and policy guidance. Over the next 10 months, the Constitution The intergovernmental exchange initiated was heatedly debated in the public and 13 state by these two eras, and the subsequent ones legislatures, with most of the debate focused that followed, became known as marble-cake on the absence of individual and states’ rights. federalism, with the most well-known and Several states were only ameliorated when a successful of its programs being Medicaid. bill of 12 rights was produced (only 10 passed) Finally, the last four eras, New Federalism and included in the debate. In September (1968–1980), New New Federalism (1980– 1788, nine states had ratified the Constitu- 1993), Devolution (1993–2008), and Deep tion, and 1 year later, in September 1789, Con- Devolution (2009–2016), are all character- gress approved a bill of 10 rights. While the ized by progressively providing states with Federal Executive Branch Roles 35

TABLE 2.5 Federalism Eras

Era Characteristics

Dual Federalism (1789–1933) Distinct federal and state roles

Cooperative Federalism (1933–1960) New deal programs; federal grants-in-aid to address state and local needs

Creative Federalism (1960–1968) Great society programs; doubling federal grants-in-aid amount with increased number of more narrowly focused programs

New Federalism (1968–1980) Provided states federal funds with more policy-making discretion

New New Federalism (1980–1993) Less federal money to states with more control given to states and increased unfunded mandates

Devolution (1993–2008) Return of power and legislative authority to states for development of policies addressing local problems

Deep Devolution (2009–2016) More federal aid to states and cities with increased federal control

Modified from Starling, G. (2011). Managing the public sector (9th ed.). Boston, MA: Wadsworth Cengage Learning. fewer federal funds and greater control over by the President. Executive branch agencies policy and program development details. at all three levels of governance carry out the These eras are well known for considering day-to-day government operations. Approxi- states as laboratories for the experimentation mately 2000 positions across all federal agen- of social programs and the waivers allowing cies are appointees, that is, are filled directly the use of federal funds for programs tailored by presidential nominations and are not civil to state needs. service positions. Of those 2000, almost 500 require Senate confirmation before being filled. Despite the large number of appointed positions, most of those filling these positions ▸▸ Federal Executive are careerists. Branch Roles HHS contains all of the healthcare agen- cies, along with most components of public Executive branch agencies implement the pol- health (see organization chart in FIGURE 2.1).5 icies enacted by Congress and signed into law For health administrators, the most important

5 The Environmental Protection Agency houses the environmental health component and the Food and Drug Adminis- tration, within the Department of Agriculture, houses the food safety components of public health. 36 Chapter 2 How We Got Here: U.S. Health Policy History

The Executive Secretarial Secretary Office of Intergovernmental Deputy Secretary and External Affairs (IEA) Office of Health Reform Chief of Staff (OHR)

Office of the Administration for Centers for Medicare Assistant Secretary Children and Families and Medicaid Services for Administration (ACF) (CMS) (ASA)

Program Administration for Food and Drug Office for Civil Support Center Community Living Administration* Rights (PSC) (ACL) (FDA) (OCR)

Office of the Assistant Agency for Healthcare Health Resources and Departmental Secretary for Financial Research and Quality Services Administration* Appeals Board Resources (AHRQ) (HRSA) (DAB) (ASFR)

Agency for Toxic Office of the Assistant Office of the Substances and Indian Health Services* Secretary for Health* General Counsel Disease Registry* (IHS) (OASH) (OGC) (ATSOR)

Office of the Assistant Centers for Disease National Institutes Office of Global Secretary for Control and Prevention* of Health* Affairs* Legislation (ASL) (CDC) (NIH) (OGA)

Office of the Assistant Substance Abuse and Office of Inspector Secretary for Planning Mental Health Services General and Evaluation Administration* (OIG) (ASPE) (SAMHSA)

Office of the Assistant *Designates a component of Office of Medicare Secretary for the U.S. Public Health Service. Hearings and Appeals Preparedness and (OMHA) Response* (ASPR)

Office of the National Office of the Assistant Coordinator for Health Secretary for Public Information Affairs (ASPA) Technology (ONC)

FIGURE 2.1 HHS Organization Chart https://www.hhs.gov/about/agencies/orgchart/index.html# References 37

agencies within HHS are the Centers for Discretionary programs Medicare and Medicaid Services (CMS), the 8% Health Resources and Services Administration (HRSA), the Agency for Healthcare Research TANF Children’s 1% and Quality (AHRQ), the Substance Abuse entitlement and Mental Health Services Administration programs (SAMHSA), and the Centers for Disease Con- 3% trol and Prevention (CDC). Referring to FIGURE 2.2, it is easily discern- Medicare Medicaid 52% ible that the largest of these is the CMS, with 34% over three-quarters of the budgetary outlays for all of the HHS.

Other mandatory programs 2% FIGURE 2.2 Federal Healthcare Spending U.S. Department of Health & Human Services. Federal Tax Policy Center. Retrieved from https://www .taxpolicycenter.org/briefing-book/how-much-does-federal-government-spend-health-care

References AHRQ Research Activities. (2013, November– ASPE Issue Brief. Health plan choice and premiums in the December). Based on the Massachusetts experience, 2017 health insurance marketplace. Retrieved from consumers will need help navigating health insurance https://aspe.hhs.gov/sites/default/files/pdf/212721 exchanges. Retrieved from http://www.ahrq.gov /2017MarketplaceLandscapeBrief.pdf /news/newsletters/research-activities/13nov-dec Bard, M., & Nugent, M. (2011). Accountable care organizations: /111213ra13.html Your guide to strategy, design, and implementation. American Medical Association. (1847). Proceedings of Chicago, IL: Health Administration Press. the National Convention. Retrieved from http://ama Blumenthal, D., & Monroe, J. A. (2009). The heart of .nmtvault.com/jsp/viewer.jsp?doc_id=ama power: Health and politics in the oval office. Berkeley: _arch%252FAD000001%252F0039PROC&view University of California Press. _width=640.0&rotation=0&query1=&collection Butler, S. M. (1989). Assuring affordable health care for _filter=All&collection_name=6863b9b4-a8b5-4ea0 all Americans. The heritage lectures. Washington, DC: -9e63-ca2ed554e876&zoom_factor=current& The Heritage Foundation. search_doc=license&sort_col=publication+date& CDC. (2016). Social determinants of health—Definitions. highlightColor=yellow&color=&CurSearchNum Retrieved from http://www.cdc.gov/socialdeterminants =-1&search_doc1=license&submit.x=0&submit /Definitions.htm .y=0&page_name=&page_name= Enthoven, A. C. (1993). The history and principles of ASPE Issue Brief. Health plan choice and premiums in the managed competition. Health Affairs, 12, 24. 2015 health insurance marketplace. Retrieved from Friedman, M. (2014). ‘Any willing provider’ returns. https://aspe.hhs.gov/sites/default/files/pdf/77176 Arkansas Business, 31(13), 48. Retrieved from /healthPremium2015.pdf http://search.proquest.com.ezproxy.gvsu.edu ASPE Issue Brief. Health plan choice and premiums in the /docview/1524650432?accountid=39473 2016 health insurance marketplace. Retrieved from Furman, A. B. (2004). Federal versus state regulation of https://aspe.hhs.gov/sites/default/files/pdf/135461 insurance: An update. The Investment Lawyer, 11(12), 21. /2016%20Marketplace%20Premium%20Landscape%20 Gallop, Well-Being Poll. (2016). Retrieved from http:// Issue%20Brief%2010-30-15%20FINAL.pdf www.gallup.com/topic/category_wellbeing.aspx 38 Chapter 2 How We Got Here: U.S. Health Policy History

Holahan, J., Weil, A., & Wiener, J. M. (2003). Federalism, http://www.ncsl.org/research/health/any-willing-or health, and policy. Washington, DC: The Urban -authorized-providers.aspx Institute Press. National Conference of State Legislatures. (2016). HRSA Health Workforce Analysis. (2013, November). Dependent health coverage and age for healthcare Projecting the supply and demand for primary benefits. Retrieved from http://www.ncsl.org/research care practitioners through 2020. Retrieved from /health/dependent-health-coverage-state https://bhw.hrsa.gov/health-workforce-analysis -implementation.aspx /primary-care-2020 Occupational Safety & Health Act—PL 91-596. Levine, P. B., McKnight, R., & Heep, S. (2011). How Safe Drinking Water Act—PL 93-523. effective are public policies to increase health Spilberg, G., Nicola, G. N., Rosenkrantz, A. B., Silva, E., insurance coverage among young adults? American III, Schirmer, C. M., Ghoshhajra, B. B., . . . Hirsch, Economic Journal: Economic Policy, 3, 129–156. J. A. (2018). Understanding the impact of ‘cost’ under McCarthy, D. (1997, Spring). Narrowing provider MACRA: A neurointerventional imperative. Journal choice: Any willing provider laws after New York of NeuroInterventional Surgery, 10(10), 1005–1011. Blue Cross v. Travelers. American Journal of Law & doi:10.1136/neurintsurg-2018-013972 Medicine, 23(1), 97–113. Retrieved from http://go Starling, G. (2011). Managing the public sector (9th ed.). .galegroup.com/ps/i.do?p=HRCA&sw=w&u Boston, MA: Wadsworth Cengage Learning. =lom_gvalleysu&v=2.1&it=r&id Ungar, R. (2011). Congress passes socialized medicine =GALE%7CA19552665&sid=summon&asid and mandates health insurance—In 1798. Forbes. =4d9b921618f64a972146c71e965962b7 Retrieved from https://www.forbes.com/sites Medicare.Gov. (2015). Linking quality to payment. Retrieved /rickungar/2011/01/17/congress-passes-socialized from http://www.medicare.gov/hospitalcompare -medicine-and-mandates-health-insurance-in-1798 /linking-quality-to-payment.html?Aspx /#7ec0c3b553ff AutoDetectCookieSupport=1 WHO. (2015). Social determinants of health. Retrieved National Conference of State Legislatures. (2014). Any from http://www.who.int/social_determinants/sdh willing or authorized providers. Retrieved from _definition/en/ © lunamarina/Shutterstock Appendix

Patient Protection and Affordable Care Act

The Patient Protection and Affordable Care a variety of sections ensuring access to services Act (PL 111-148 & 111-152), signed into law either by positively stating a protection or by on March 23, 2010, is a comprehensive health negatively stating how individuals or therapies reform act with 10 titles. may not be excluded. Title I has 7 subtitles, 11 parts, and Title II has 11 subtitles, 0 parts, and 72 ­sections. Subtitle A seeks to increase access 41 sections.­ Subtitle A provides several eligi- to health insurance coverage by expanding bility requirements including income require- existing coverage, such as to adult children up ments based on modified gross income, to age 26 years, ensuring coverage of preventa- extended coverage to young adults graduated tive services, or limiting health insurers from from the foster care system, and payment discriminating against coverage through tac- increases to territories. Subtitle B increases tics such as recessions or lifetime coverage lim- Federal Medical Assistance Percentage and its. Other actions include efforts to decrease the makes technical corrections to the CHIP Reau- cost of care and ensure high-quality care deliv- thorization Act of 2009. Subtitle C provides ery. Subtitle B seeks to ensure coverage by not for enrollment coordination with the health allowing denial of health insurance coverage exchanges and allows hospitals to make pre- due to preexisting illness, reinsurance for early sumptive Medicaid determination. Subtitle D retirees, and consumer assistance in locating allows for payment to freestanding birth cen- an affordable health insurance plan. Subtitle ters, concurrent care and payment for children C focuses on topics such a nondiscrimination under hospice care, and payment to non-phy- in health insurance, guaranteed issuance, and sician providers. Subtitle E broadens home care guaranteed reissuance. Subtitle D provides a eligibility based on the Pepper Commission detailed description of the essential elements Call to Action for Elder Care and State deter- of a qualified health plan, provision of con- mined plan. Subtitle F increases requirements sumer choice in health plans through health for pharmaceutical rebates and adds to the list insurance exchanges, state flexibility in estab- of nonexcludable drugs. Subtitle G provides lishing health alternative programs through rationale for calculating the reduction in DSH waivers, and topics related to reinsurance and payments based on the reduction of the unin- risk adjustment. Subtitle E provides criteria for sured over the previous and current fiscal years. premium tax credits and cost-sharing reduc- Subtitle H provides for a demonstration project tions, eligibility, and small business tax credit. to improve the coverage of Medicare dual eli- Subpart F details individual and employer gible and establishes the CMS Federal Coordi- responsibility for maintaining minimum nated Health Care Office. Subtitle I requires the health insurance coverage. Subtitle G provides implementation of core quality measures and a 40 Appendix compilation of never events that Medicaid will Subtitle E provides criteria for market bas- not pay for, plus three payment demonstration ket updates and establishment of a Medicare projects. Subtitle J revises Medicaid and CHIP Advisory Board to provide recommendations Payment and Access Commission (MADPAC) for maintaining solvency, reducing costs, and membership, review and evaluation topics, increasing quality of care delivery. Subtitle F utilization, and financial performance and provides for the funding of healthcare deliv- requires coordination, as appropriate, with ery system research determining process and the Medicare Payment Advisory Commission approaches that improve patient care delivery (MEDPAC). Subtitle K provides for increased and outcomes; establishment of several deliv- access to Medicaid for American Indians and ery models focused on improving patient care makes permanent Indian hospital and clinic access, delivery, and outcomes; improvement full Medicare Part B reimbursement. Subtitle L in drug promotional literature; and establish- provides for maternal, infant, and early child- ment of the Office of Women’s Health. Subtitle hood home visits and support, education, and G ensures that Medicare benefits (including research on several maternal health concerns. Medicare Advantage) will not be reduced and Title III has 7 subtitles, 6 parts, and Medicare solvency will be maintained while 95 sections. Subtitle A links payment for ser- improving access and quality of care and vices to patient outcomes through value-based reducing costs. purchasing payment effective for and tailored Title IV has 5 subtitles, 0 parts, and to all providers that bill Medicare and provides 27 ­sections. Subtitle A, through the establish- criteria for risk-adjusted reduction in payment ment of councils and task forces, seeks expert to hospitals. Subtitle A also directs the Sec- recommendations on preventive health, retary of HHS to develop a national strategy chronic health prevention and management, for the improvement of patient care delivery, integrative practices, and health promotion, outcomes, population health; a process for the and funds programs focused on improving evaluation of patient outcome data; and collec- public health and restraining private and pub- tion, aggregation, and analysis of patient out- lic health costs. Subtitle B increases access come data. Lastly, Subtitle A established the through the establishment of school-based CMS Innovation Center for the testing of pay- clinics and oral health services to underserved ment and care delivery models that enhance populations; removes beneficiary costs for the effective and efficient coordination and U.S. Preventive Services Task Force recom- delivery of care in a cost-effective manner. mended preventive services; and provides Subtitle B provides for several technical pay- for ­tobacco-use cessation, weight control or ments and care delivery technical corrections reduction, cholesterol reduction, blood pres- that focus on increasing beneficiary access to sure reduction, and avoidance or improved services through extension or enhancement management of diabetes. Subtitle C provides of payment provisions. Subtitle C provides funding for population health programs, the Secretary of HHS the authority to expand negotiation with vaccine producers, restaurant services covered, decreased cost-sharing for nutritional labeling, and a demonstration proj- beneficiaries, and increased accountability for ect to determine if wellness plans reduce health Medicare Advantage insurers. Subtitle D pro- risks, and requires employers with more than vides the Secretary of HHS with the authority 50 employers provide nursing mothers with to increase beneficiary access to pharmaceu- a private area to express breast milk. Subtitle ticals while extracting cost concessions from D provides funding for evidence-based prac- pharmaceutical companies and drug plans. tices for areas identified through the National Appendix 41

Preventive Strategies or Healthy People 2020, establishment and monitoring of key national disparities research, wellness program efficacy, health indicators. Subtitle H directs the need pain management, and childhood obesity. for annual reports from funded agencies. Subtitle E provides a sense of the Senate and Title VI has 8 subtitles, 2 parts, and Congress on the need to work with CBO on 49 ­sections. Subtitle A focuses on physician scoring preventive programs and directs the transparency regarding hospital ownership, Secretary of HHS to evaluate federal health hospital admission when the physician is not and wellness initiatives. present, alternatives to office-provided diag- Title V has 8 subtitles, 0 parts, and nostic procedures, and drug sample report- 48 sections. Subtitle A assesses the need for ing. Subtitle B provides criteria for conflict of an increased healthcare workforce to meet interest declaration by nursing home leader- the healthcare needs of the population and ship, development of compliance and ethics provides a variety of definitions. Subtitle B programs, development and maintenance of a provides for the establishment of a national Nursing Home Compare website, and develop- commission to study the need for and train- ment of a complaint resolution process. Subti- ing of healthcare workers. Subtitle C provides tle B also provides guidelines for reduction for a variety of healthcare workforce develop- in civil monetary penalties for self-reporting ment grants and student loan repayment pro- deficiencies with a resolution plan, demon- grams. Subtitle D provides training grants for stration projects for monitoring large nurs- individuals preparing for careers in primary ing home providers and development of best care, gerontology, and mental and behavioral practices, and notification of residence upon health and preparing to become dentists and nursing home closure. Subtitle B includes alternative dental providers, nurse midwives, agency and contract personnel in ongoing, and baccalaureate nurses and promotes posi- dementia management and patient abuse tive health through community health work- training. Subtitle C provides for the develop- ers and public health professionals. Subtitle E ment and evaluation of a program performing provides for the establishment of Healthcare background checks on all caregivers coming Centers of Excellence and grant funding for in direct contact with long-term patients. Sub- the establishment or modification of health title D provides for the establishment of the education programs and bridge programs for Patient-Centered Outcomes Research Insti- the accelerated advancement of associate and tute for the purpose of conducting patient-­ diploma nurses to baccalaureate level train- centered outcomes research and funded by the ing. Subtitle F increases funding to primary Patient-Centered Outcomes Research Trust care providers, provides enhanced revisions Fund. Subtitle E provides criteria for screen- to primary care residency training, and pro- ing all providers and suppliers to Medicare, vides grant funding for the development of Medicaid, and CHIP; enhanced oversight of new and improvement of existing advanced new providers; establishment of a compliance nurse practice programs. Subtitle G provides program; and enhanced coordination, collec- for enhanced access for underserved popula- tion, and maintenance of fraud and abuse data. tions through Federally Qualified Health Cen- Subtitle E also requires providers ordering ters and directs the Secretary of HHS to define items on Medicare-covered beneficiaries to be medically underserved populations and health enrolled in Medicare and additional enforce- professional shortage areas, provisions for ment mechanisms, including expansion of the the location of primary care practices within Recovery Audit Contractor plan to Medicaid. community mental health practices, and the Subtitle F specifies provider exclusion criteria, 42 Appendix disallows claims for services provided outside insurance was introduced was in 1988 in the the United States, extends time for collections, Medicare Catastrophic Act that was repealed a and requires use of the National Correct Cod- little over 1 year later. In 2010, or 22 years later, ing Initiative or a similar program. Subtitle this same idea was introduced in the Patient G clarifies ERISA, adds association prohibi- Protection and Affordable Care Act and subse- tions, directs the Secretary of HHS to develop quently repealed about 1 year later. We predict a uniform national fraud and abuse report- that the idea of long-term care coverage will ing system, and enhances fraud and abuse be introduced and passed around 2030 when enforcement authority. Subtitle H provides for Baby Boom retirees are projected to peak, thus the establishment of a council, advisory board, providing an enhanced political will for action. and forensic center for the provisions of rec- Title IX has 2 subtitles, 0 parts, and ommendations and training on elder justice 20 sections. Subtitle A includes a large vari- abuse, fraud, and exploitation issues. Subtitle ety of taxes, deduction limitations, charge and I indicates that the Senate recognizes this is collection criteria, and fees and mandates an an optimal time for states to experiment with insurer medical loss ratio of 85%. A tax that malpractice reform. has received a large amount of public atten- Title VII has 2 subtitles, 0 parts, and tion is the 40% excise tax on Cadillac health 8 sections. Subtitle A provides criteria for plans. Other taxes include an increase in taxes submission of biosimilar licensure, patent, on nonmedical withdrawals from HSAs and and evaluation and requires the Secretaries Archer HSAs for 15% to 20%. For nonprof- of Treasury and HHS to determine associated its, this section includes the need to complete savings and to apply any savings to debt reduc- and act on a community needs assessment, the tion. Subtitle B expands options for previously charging of uninsured emergency patients the excluded providers through use of the 340B lowest amount charged to those with insur- discount option, tighter price oversight by the ance, and the disallowance of extraordinary Secretary of HHS, and potential 340B discount collection activities reasonable actions have expansion based on program evaluation by the been taken to determine if the individual qual- U.S. Comptroller. ifies for financial aid. Finally, there are criteria Title VIII is the CLASS (Community Liv- for fees to companies providing branded and ing Assistance Services and Supports) Act with imported pharmaceuticals and durable medi- 0 subtitles, 0 parts, and 2 sections. The CLASS cal equipment providers and the requirement Act provides criteria for establishment of a that insurers maintain an 85% medical loss national voluntary program for the purchase ratio. Subtitle B includes exemption benefits of long-term care insurance that allows indi- criteria for Indian tribal governments, crite- viduals with functional limitations to secure ria for the establishment of cafeteria plans by necessary care while maintaining financial small employers, and criteria for the provision independence and prices based on actuarial of a therapeutic discovery tax credit of 50% of analysis. This act was repealed based on a rec- the annual investment. ommendation from the U.S. Actuaries Office Title X has 8 subtitles, 2 parts, and that it was too unstable to price. Based on 84 ­sections. This title consists of a list of Multiple Streams (Kingdon, 1984 and 1995) amendments per section necessary to enact and Multiple Streams (Baumgartner & Jones) the Patient Protection and Affordable Care theories, the time between when policy ideas Act. Subtitle A includes actions to increase are raised to a national level is 20 years. The access by disallowing insurers from discrim- first time the policy idea of long-term care inating or placing limits on beneficiaries, Appendix 43 ensuring a medical loss ratio of 85% for large allows states to experiment with tort reform insurers or 80% for small insurers or ensuring litigation. Subtitle G provides several technical that most premiums are used to pay for bene- language revisions to program information. ficiary claims, ensuring that beneficiaries have Subtitle H includes several technical revenue transparent cost information and a process for and tax clarifications. appealing disputes, expanding primary care Title I has 6 subtitles, 0 parts, and providers to include pediatricians and OB/ 31 ­sections. Subtitle A includes technical revi- GYN physicians, and several other actions sions for healthcare premium tax credits, indi- focused on increasing beneficiary access and vidual responsibility, and individual penalties; choice. Subtitle B focuses on increasing access provides several technical calculations and to and finding for Medicaid and CHIP. Part definitions including modified gross adjusted II focuses on increasing material, social sup- income; and establishes the Health Insur- port, and educational opportunities for preg- ance Reform Implementation Fund. Subtitle nant and parenting teens and women. Part III B closes the Medicare Part D donut hole and allows the use of a certified dental health aid or makes several technical payment corrections midlevel dental health provider when allowed and clarifications. Subtitle C defines federal under state law. Subtitle C includes 36 sections funding for states and territories that agreed that focus on improving quality accountabil- to expand Medicaid; defines primary care and ity, linking quality with payment, and cost physician payment; and provides criteria for efficiency. Subtitle D—provisions relating to reduction of DSH payments. Subtitle D pro- Title V amendments—includes several tech- vides technical language revisions expanding nical revisions increasing access to services; the reach of community health centers; repeals 100% coverage for recommended preventa- Medicare payment review limitations; pro- tive services and small business ­wellness ini- vides additional funding to fight fraud, waste, tiatives; and provides criteria, program for and abuse; and allows the Secretary of HHS to young women diagnosed with breast cancer, hold DME payments for 90 days if there is a and development of a national congenital dis- determination of the potential of fraudulent ease surveillance system. Subtitle E includes activity. Subtitle E provides several technical increases in individuals qualifying for health tax revisions and adjustments and delays the insurance coverage; multiple incentives start of several tax and revenue programs. Sub- increasing the number of primary care provid- title F establishes grants for community and ers by broadening primary care qualifications career training programs. and several educational, practice placement, Title II has 2 subtitles, 2 parts, and 19 sec- and financial incentives; the establishment of tions. Subtitle A addresses student loans and a National Diabetes Prevention Program; and loan repayment options. Subtitle B adds pro- the establishment of a Community Health visions regarding excessive waiting periods Center Fund. Subtitle F includes clarification and lifetime limits; extends dependent cover- of access and data use for patient-centered age to grandfathered health insurance plans; outcomes research, allows midlevel providers provides a technical correction, striking “cov- working in collaboration with a physician to ered drugs” and inserting “covered outpatient make face-to-face home visits, increases pen- drugs”; and increases the funds available to alties for healthcare fraud convictions, and community health centers.