News in brief - Feb. 6, 2012

HHS denies Texas' request for insurer spending waiver

HHS' Center for Consumer Information and Insurance Oversight on Jan. 27 denied Texas' request to phase in the health system reform law's limits on health plan administrative spending.

The law's medical-loss ratio provision, which started applying to health plan spending in 2011, requires most health insurers to spend 80% to 85% of premiums on clinical services or quality improvement. Insurers that do not meet the minimums must provide rebates to enrollees beginning in August 2012.

Texas asked for a minimum spending standard of 71% for 2011, 74% in 2012 and 77% in 2013, citing concerns that many health insurers would discontinue individual market policies in the state if they were not allowed more time to adjust their business practices. CCIIO concluded that many health plans in the state already come close to meeting the 80% spending threshold.

The Texas Dept. of Insurance, which had submitted the request, disagreed with the decision in a Jan. 27 statement. A majority of the 34 health plans in Texas subject to the spending provision will be required to provide rebates this year, according to 2010 data. More than 700,000 Texans have individual market coverage, according to the insurance department.

CCIIO has denied requests by eight other states and Guam to implement the medical-loss ratio requirements more slowly: Delaware, Florida, Indiana, Kansas, Louisiana, Michigan, North Dakota and Oklahoma. The office approved waiver requests from Georgia, Iowa, Kentucky, Maine, Nevada and New Hampshire. Requests by North Carolina and Wisconsin had not been decided at this article's deadline.

More information about federal medical-loss ratio determinations is available online (cciio.cms.gov/programs/marketreforms/mlr/).

Back to top

Grassley probes state monitoring of high-prescribing Medicaid doctors

Sen. Charles Grassley (R, Iowa), the highest-ranking Republican on the Senate Judiciary Committee, sent requests to 34 states on Jan. 30 for more information about their monitoring of physicians who write large numbers of prescriptions for pain and mental health medications.

The letters follow requests by Grassley in 2010 for information about states' highest-volume prescribers. States' responses revealed that the most frequent prescriber of pain and mental health drugs sometimes writes two or three times as many as the second-highest prescriber. For example, the most frequent Xanax prescriber in Texas wrote five times as many prescriptions for the drug as the second-most-frequent prescriber, Grassley said.

In his newest letters, Grassley has several questions, including asking whether states have cross-referenced their top Medicaid prescribers against databases documenting complaints of misconduct. He also asks if states discovered the high-prescribing physicians through federally mandated Medicaid audits. Grassley asked the states to respond to the requests by Feb. 13.

The states receiving letters are: Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Iowa, Kansas, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nevada, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Vermont, Virginia, Washington and Wyoming.

Back to top

Federal rule requires healthier food at schools

The Obama administration has finalized new school nutrition standards that will impact nearly 32 million children participating in daily breakfast and lunch programs.

First lady Michelle Obama announced the new requirements with Agriculture Secretary Tom Vilsack on Jan. 25. The final rule aims to reduce the amounts of saturated fat, trans fats and sodium in meals served at school.

"As parents, we try to prepare decent meals, limit how much junk food our kids eat and ensure they have a reasonably balanced diet," she said. "And when we're putting in all that effort, the last thing we want is for our hard work to be undone each day in the school cafeteria."

The nutrition rules, which had not changed in 15 years, now require both fruits and vegetables to be served each day of the week, and it mandates more foods rich in whole grains.

Milk products would be restricted to fat-free and low-fat varieties. Restrictions on starchy vegetables would be eliminated, but minimums would be established for dark green, red or orange, and bean and pea vegetable subgroups.

The new standards, which were published by the Agriculture Dept., come from recommendations created by the Institute of Medicine and the 2010 Dietary Guidelines for Americans.

Back to top

GAO: Medicare private plans overpaid due to risk scores

The Medicare program overpaid Medicare Advantage plans by as much as $3.1 billion in 2010 because of differences in diagnostic coding between private plans and the traditional plan, government auditors found.

Coding differences led to higher payments for private insurers compared with pay in the Medicare fee-for-service program, according to a January report by the Government Accountability Office. The Centers for Medicare & Medicaid Services should improve the accuracy of pay adjustments made because of differences in coding, the GAO recommended.

CMS calculates a risk score for every Medicare beneficiary. Chronic conditions, disabilities, age and enrollment in the Medicaid program are all factors used when compiling risk scores. For Medicare Advantage plans, the scores provide a financial incentive to cover all types of patients regardless of health status or the resources they are likely to consume, the GAO said.

The Medicare agency said it found the study insightful, but it did not comment on the recommendation in a memo responding to the report. In 2010, CMS spent $114 billion on the Medicare Advantage program.

Back to top

Bone marrow donor ruling should be thrown out, Justice Dept. says

The U.S. Justice Dept. wants the 9th U.S. Circuit Court of Appeals to overturn a court panel's decision allowing bone marrow donors to be compensated.

A panel of the appeals court in December 2011 ruled it legal to provide financial incentives to encourage people to donate bone marrow cells using a method similar to regular blood donation. The 1984 National Organ Transplant Act forbids payment or any other compensation for organs such as kidneys, lungs or eyes.

But the panel said paying people for bone marrow using the nonsurgical collection method is not covered under the act. The plaintiffs in the case, MoreMarrowDonors.org, are a group that wanted to encourage more people to donate bone marrow by offering up to $3,000 in scholarships or other payments.

The Justice Dept. and the National Marrow Donor Program in January asked the full court to rehear the case. The panel's ruling could have disastrous consequences for patients in need of a transplant, the agencies said. At this article's deadline, the court had not said whether it would rehear the case.

Back to top