Bipartisan funding bill contains numerous health provisions, even more CHIP

After a brief government shutdown, the Bipartisan Budget Act (BBA) was signed into law Friday, February 9. BBA contains numerous health policy provisions that will likely have long-term implications for states, providers, and patients.

Notably, the BBA added an additional four years to the Children’s Health Insurance Program’s statutory authorization. CHIP had been reauthorized for six years in January’s budget standoff, and the BBA extension ensures the program will run through September 30, 2027. This extension actually saves the federal government money because of an interaction with the repeal of the Affordable Care Act’s (ACA) individual mandate in last year’s tax package.

The BBA also includes $6 billion over two years to address the opioid epidemic. However, there may be procedural questions as to how that funding will be allocated between health and law enforcement programs, and critics argue this amount—while helpful—will not be enough.

The BBA also provides support for two programs created in the ACA. First, it includes an additional two years of support for a special fund for community health centers that supplements regular appropriations for these safety-net providers. The BBA also extends the Maternal, Infant, and Early Childhood Home Visiting Program through September 30, 2022. The extension requires participating states to conduct a statewide needs assessment and allows them to establish an incentive program for successful outcomes. At the same time, the BBA reduces the ACA’s Prevention Fund, which has become a common offset for other funding priorities.

Given that the BBA extends many expiring Medicare provisions and deals with many other issues such as the debt limit, several political pundits believe Congress has “cleared the deck” of major health policy debates for the remainder of the year.

Labor Department calls for comments on “association health plans,” which some fear will destabilize state insurance markets

Last year, President Trump issued an executive order directing federal agencies to develop “a healthcare system that provides high-quality care at affordable prices for the American people.” Recently, the U.S. Labor Department began implementing one of the stated goals of this executive order by issuing a proposed rule on “association health plans” (AHPs).

On January 5, the Labor Department asked for comments on this proposal, which would allow business associations to sell to small business an insurance plan similar to what many large companies offer to their employees under the federal Employee Retirement Income Security Act (ERISA). Health insurance plans that comply with ERISA are exempt from state law and are regulated by the Labor Department, but to create such a plan is cumbersome even for some large businesses. Proponents say that small businesses would be able to obtain the economies of scale and flexibility that large companies enjoy under ERISA, but opponents argue that AHPs would destabilize state insurance markets and put consumers at risk.

The proposed regulation turns on how to interpret ERISA’s interpretation of “employer.” Currently, business associations like local Chambers of Commerce may offer health insurance to their members, but these insurance policies are regulated by state insurance commissioners. Under Labor’s proposal, the definition of an “employer” would be broadened so that small businesses in the same industry or same geographic region could band together and create an association that could offer a plan similar to a large company might under ERISA. (For a more in-depth overview, click here.)

Many business groups have supports AHPs as a way to achieve equity between large and small businesses. For example, the National Restaurant Association noted that allowing AHPs would be “a key step in leveraging the buying power of small businesses.” The Society for Human Resource Management added that AHPs “could provide an option for small employers to offer competitive and affordable health benefits to their employees, thereby increasing the number of Americans who receive coverage through their employer,” but likely would have little effect on most midsize-to-large employers.” On the other hand, consumer groups, state officials, and Blue Cross plans argue that AHPs would weaken existing state and federal protections, destabilize the individual and small group markets, and prevent state insurance regulators from policing bad actors. Opponents point to problems with a similar policy, multiple employer welfare arrangements (MEWAs), which ultimately led to Congress to pass a law clarifying that states could regulate MEWAs. Additionally, groups like the National Governors Association and the National Association of Insurance Commissioners have opposed legislative attempts to create AHPs for similar reasons.

Comments on the proposal are due to the Labor Department by March 6.

FCC asks for comments on rural health program for broadband

The Federal Communications Commission (FCC) is considering changes to the popular Rural Health Care Program (RHCP), a fund that helps rural health providers access broadband for telehealth and health information exchange. The RHCP is capped at $400 million per year, but for the last two years, requests exceeded the cap.

With increased attention to broadband’s role in rural development generally and its role in healthcare delivery specifically, many stakeholders believe demand on the RHCP will continue to increase, particularly in states with large rural areas. The National Rural Health Association and the American Hospital Association have called for raising the cap to keep up with demand. One analyst noted that the RHCP is a victim of its own success as more providers have turned to the fund due to both growing interest in telehealth and the need for broadband to comply with federal regulations on health information technology. Additionally, Congress recently made skilled nursing facilities eligible to participate, increasing the number of providers potentially able to apply for funding.

In response, the FCC is seeking public comments on possible changes to the RHCP, including raising the RHCP cap. However, the FCC questioned whether increasing the cap will lead to greater incidents of waste, fraud, and abuse. Additionally, the FCC is interested in comments on whether the FCC should adopt certain factors to prioritize which providers should receive a grant.

Interested parties must submit comments by February 2.

Congress passes short-term relief for CHIP

One of the “big ticket” items for Congress to address is the reauthorization of the Children’s Health Insurance Program (CHIP). Although CHIP’s authorization had expired on September 30, 2017, Congress included passed a six-month patch with $2.85 billion as part of H.R. 1370, which also funds the federal government through January 19, 2018. In addition to these new funds, the Centers for Medicare and Medicaid Services (CMS) has roughly $1.7 billion remaining in carryover CHIP funding; CMS has already distributed $1.2 billion to 16 states and the District of Columbia that were close to experiencing a shortfall.

Even so, some advocates worry whether Congress will be able to pass a five-year reauthorization before the short-term patch expires. The Center for Children and Families at Georgetown notes that annual federal spending on CHIP is about $14.5 billion, suggesting that $2.85 billion for six months will be insufficient for states’ needs. Moreover, the lack of certainty is hurting states’ ability to plan and manage their programs for the upcoming year and beyond, and some states are considering dramatic changes to their CHIP-funded programs if Congress fails to pass a full five-year reauthorization.


Written by Oliver J. Kim, CSG/ERC Health Policy Consultant

New Brief – Medicaid Buy-in: A State Option to Expand Access to Coverage

Some states have encountered rising premiums, consolidating markets, and the flight of insurers from some counties in their insurance exchanges. In response, some states are considering developing a Medicaid-buy-in plan, which would open their Medicaid managed care programs to consumers shopping for coverage in their exchanges. Under the concept, consumers eligible for insurance exchange subsidies could use them to purchase coverage in a Medicaid managed care plan. Read more

Antibiotic prescribing down but more needs to be done

In the past seven years, per person antibiotic prescriptions have declined 9%, according to a report by the Blue Cross Blue Shield Association. The rate declined even faster for children and infants. Overuse of antibiotics is blamed for contributing to the rise of antibiotic-resistant bacteria or “superbugs”. Every year 2 million Americans become infected with bacteria that do not respond to antibiotics and 23,000 die of that illness. Public health officials have been working to bring down the rate of antibiotic prescribing, especially for conditions that do not respond to antibiotics, e.g. most colds which are caused by viruses. Antibiotic prescription rates were 16 times higher in rural areas.  States vary significantly in the rate of antibiotic prescribing, suggesting areas to target with public education campaigns.


In more good news, the biggest drop in prescribing was for broad spectrum antibiotics, the most likely to trigger antibiotic resistance, which declined 13% from 2010 to 2016. Unfortunately, a great deal of work remains. The study found that last year 63% of antibiotics were prescribed for conditions which might be appropriate and another 21% for conditions which were not indicated.

Antibiotic prescriptions filled per 100 people, 2016 Rank among states Percent change in antibiotic prescribing, 2010 to 2016
CT 82.7 17th highest -8%
DE 82.5 18th +3%
ME 64.4 42nd -11%
MD 72.5 32nd -9%
MA 67.1 37th -11%
NH 67.0 38th -6%
NJ 72.7 31st -13%
NY 79.2 24th -13%
PA 85.1 16th -6%
RI 81.8 19th -15%
VT 59.1 46th -5%
US 82.6   -9%

Uninsured rates continue to improve, ERC lower than other regions

Three sources of new data on the rate of uninsurance find similar results and, mostly, good news. Reports include 2016 Census coverage data, early 2017 coverage data from the CDC, and a Commonwealth Fund survey also from 2017. All find the percent of uninsured Americans continues to fall, especially in states that chose to expand Medicaid under the ACA. Across the ERC region, the number of uninsured dropped over 2.5 million from 2013 to 2016. However, the Commonwealth Fund survey found that the uninsured rate among adults in three subpopulations increased – people with incomes above the federal subsidy level (not surprising as premiums have grown substantially), but also 35 to 49 year olds, and adults in Medicaid non-expansion states. All three sources found that uninsured rates in the ERC region remain below the national average. According to the Census, as in the past Massachusetts residents were the most likely to be insured among all states last year.

Uninsured rate 2016 Difference in number of uninsured, 2013-2016 Percent covered by Medicaid, 2016
US   -17.876 million 20.9%
CT 25,551 -160,000 20.5
DE 17,784 -30,000 20.3
ME 23,257 -41,000 19.2
MD 137,592 -230,000 18.0
MA 185,578 -76,000 23.5
NH 17,946 -63,000 13.8
NJ 230,960 -455,000 17.2
NY 684,625 -887,000 26.3
PA 342,268 -514,000 19.9
RI 36,262 -75,000 22.1
VT 5,305 -22,000 26.2

State CHIP programs at risk without federal action

MACPAC estimates that, without federal extension of funding for the CHIP program, all states will run out of funds by July of next year. Three states and the District of Columbia will run out of CHIP funds by the end of this year without federal action. Created by Congress in 1997, the CHIP program has provided coverage to 3.67 million children across the US living in families with incomes just over the Medicaid limit. Like Medicaid, CHIP is jointly funded by states and the federal government, but is administered by states. Current CHIP funding expires on September 30th of this year. The program has bipartisan Congressional support but advocates are concerned that legislation to extend CHIP could serve as a vehicle to cut Medicaid or repeal parts of the Affordable Care Act.

Children ever served by CHIP through FY 2016 Month state projected to exhaust CHIP funding without federal extension
CT 25,551 February 2018
DE 17,784 February 2018
ME 23,257 June 2018
MD 137,592 April 2018
MA 185,578 February 2018
NH 17,946 April 2018
NJ 230,960 April 2018
NY 684,625 March 2018
PA 342,268 February 2018
RI 36,262 January 2018
VT 5,305 January 2018t

New data shows more employees in high deductible plans, rate varies considerably by state

Analysis of new federal data by SHADAC finds that almost half (43%) of people covered by employer-sponsored health plans were in high-deductible plans last year, up from 30% from 2013. For purposes of this study, high-deductible plans are defined as meeting the minimum deductible amount required for Health Savings Account eligibility ($1,300 for an individual and $2,600 for a family in 2016). But that rate varies considerably between states. Within the ERC region and among all states, New Hampshire was highest last year with 59.3% of employees in high deductible plans.


The survey found little change in the percent of employers offering coverage from 2015 to 2016. Premium growth was offset by the 10.1% ($155) growth in average deductibles. Four of the five most expensive states for single coverage premiums were in the ERC region last year – Rhode Island, New Hampshire, Massachusetts and New York.

Employees in high-deducible health plans, 2016 Rank among states Employees in high-deducible health plans, 2013 Increase 2013 to 2016
CT 59% 3rd highest 40% 19%
DE 46% 22nd 29% 17%
ME 56% 8th 47% 9%
MD 44% 27th 25% 19%
MA 39% 41st 23% 16%
NH 69% The highest 50% 19%
NJ 41% 36th 26% 15%
NY 39% 39th 22% 17%
PA 37% 42nd 25% 12%
RI 40% 37th 27% 13%
VT 44% 31st 37% 7%
US 43%   30% 13%

CMS finalizes important patient-friendly informed consent payment proposal

CMS has finalized their proposed Medicare rule (regulation) for how hospitals are paid that includes a new measure assessing the quality of hospital informed consent documents given to patients before elective procedures. (The relevant section, Potential Inclusion of the Quality of Informed Consent Documents for Hospital-Performed, Elective Procedures Measure starts here on p. 373 of the pdf file – p. 38362 of the Federal Register Rules and Regulations 82:155, 8/14/17). The rule will make an important difference in supporting patient-centered care in hospitals across the US. The current state of hospital informed consent documents is embarrassingly poor. Under this rule, the 4,700 US hospitals that treat Medicaid members will be paid, in part, based on the quality of their informed consent documents. The measure may also be included in public quality comparisons such as Hospital Compare, allowing patients to use this measure in choosing between hospitals for their care.