First Edition: July 31, 2014

Jul 31 2014

Today's headlines include reports about the possible hazards that the future might hold for healthcare.gov.

Kaiser Health News: Report Touches Off Fight Over Future Of Doctor Training Program
Kaiser Health News staff writer Julie Rovner reports: "A high-level report recommending sweeping changes in how the government distributes $15 billion annually to subsidize the training of doctors has brought out the sharp scalpels of those who would be most immediately affected. The reaction also raises questions about the sensitive politics involved in redistributing a large pot of money that now goes disproportionately to teaching hospitals in the Northeast U.S. All of the changes recommended would have to be made by Congress" (Rovner, 7/30). Read the story.

Kaiser Health News: Capsules: 6 States, D.C. Extending Medicaid Pay Raise Next Year To Primary Care Doctors
Now on Kaiser Health News' blog, Phil Galewitz reports: "Just six states and the District of Columbia will use their own money in 2015 to sustain the federal Medicaid pay raise to primary care doctors, which was a key provision of the Affordable Care Act intended to make sure millions of low-income people enrolling in the expanding insurance program have access to a physician" (Galewitz, 7/31). Check out what else is on the blog.

The New York Times: Investigators Warn of Possible Perils In Fall With Health Site
The federal health insurance marketplace, a centerpiece of President Obama's health care overhaul, still suffers from serious problems, raising questions about whether it will be ready to enroll millions more people this fall, federal investigators said Wednesday (Pear, 7/30).

The Washington Post: Poor Planning And Oversight Led To Healthcare.gov Flaws, GAO Finds
Federal health officials were responsible for the problem-pocked start of HealthCare.gov last year because of poor planning and lax oversight of outside contractors, according to government investigators who warned that "significant risks remain" that some Americans could again have trouble buying coverage in the federal health insurance marketplace this fall. Such management failures are the central conclusion of the first report issued by the Government Accountability Office as part of a wide-ranging appraisal of the reasons the computer system was not ready when the marketplace opened in October (Goldstein, 7/30).

The Wall Street Journal: Poorly Managed HealthCare.gov Construction Cost $840 Million, Watchdog Finds
The problems of HealthCare.gov have been extensively reported since the federal government opened the website in October to sell insurance plans under the Affordable Care Act. Still, the official conclusions are likely to further fuel debate ahead of November's midterm elections, and as the Obama administration scrambles to finish and revamp the site in time for the next enrollment season. "CMS incurred significant cost increases, schedule slips, and delayed system functionality for the [site] and data hub systems due primarily to changing requirements that were exacerbated by inconsistent oversight," according to the testimony (Radnofsky, 7/30).

The Associated Press: Probe Exposes Flaws Behind Healthcare.gov Rollout
Spokesman Aaron Albright said the administration takes its responsibility for contract oversight seriously and has already started carrying out improvements that go beyond GAO's recommendations. The congressional investigators recommended a cost-control plan and other changes to establish clear procedures and improve oversight (7/30).

USA Today: Probe Faults Oversight Of Healthcare.gov
The Department of Health and Human Services "needs a mitigation plan to address these issues," wrote the report author, William Woods, director of acquisitions and sourcing management for the Government Accountability Office. Unless the government "improves contract management and adheres to a structured governance process, significant risks remain that upcoming enrollment periods could encounter challenges." A new contract went to Accenture Federal Services to take over the site in January after the original contractor, CGI Federal, was essentially dropped after the poor launch. But Accenture's original contract for $91 million has increased to more than $175 million, and some of the back-end issues on the site are still not working, according to the report, which will be presented in a House hearing Thursday (Kennedy, 7/30).

Politico: Probe Exposes Flaws Behind Healthcare.gov Rollout
Major flaws in managing HealthCare.gov contractors led to tens of millions of dollars in extra costs and contributed to the botched rollout of the federal Obamacare website last fall, according to a review by a nonpartisan government investigator released Wednesday. The report also identifies ongoing challenges for the contractor hired to get HealthCare.gov into better shape after CGI, the original contractor, was replaced. Enough improvements were made to allow millions of people to sign up, but aspects of the website are still unfinished, especially the financial management tools insurers need to help balance their books. Health and Human Services Secretary Kathleen Sebelius resigned in April, and Sylvia Mathews Burwell replaced her (Haberkorn and Norman, 7/30).

Los Angeles Times: GOP-Led House Votes To Sue Obama In First-Of-Its-Kind Lawsuit
The House vote to sue President Obama is the first such legal challenge by a chamber of Congress against a president and a historic foray in the fight over constitutional checks and balances. Wednesday's nearly party-line vote followed a feisty floor debate and offered a fresh example of how the capital's hyper-partisanship has led both parties into unprecedented territory, going to new and greater lengths to confront one another (Memoli, 7/30).

The Washington Post: House Clears Way For Lawsuit Against Obama
House Republicans voted to proceed with a lawsuit against President Obama on Wednesday, saying that his executive actions are so extreme that they violate the Constitution. The nearly party-line vote -; all Democrats voted against it, and all but five Republicans voted for it -; further agitated an already polarized climate on Capitol Hill as both parties used the pending suit to try to rally support ahead of the November elections (Kane and Goldfarb, 7/30).

The Wall Street Journal: House Votes To Authorize Boehner To Sue Obama
In a 225-201 vote, the House told Mr. Boehner (R., Ohio) to move ahead with the suit. House GOP leaders have said they would focus the suit on the White House's decision last year to give employers a one-year reprieve on enforcing a requirement under the Affordable Care Act that they offer health coverage or pay a penalty. The requirement was delayed until 2015, and the White House then revised the health law further by saying employers with between 50 and 99 full-time workers wouldn't have to comply or pay a fee until 2016 (Crittenden and McCain Nelson, 7/30).

The Associated Press: Suing Obama: GOP-Led House Gives The Go-Ahead
Just a day before lawmakers were to begin a five-week summer recess, debate over the proposed lawsuit underscored the harshly partisan tone that has dominated the current Congress almost from its start in January 2013. The vote to sue Obama was 225 to 201. Five conservative Republicans voted with Democrats in opposing the lawsuit. No Democrats voted for it. Republicans said the legal action, focusing on Obama's implementation of his prized health care overhaul, was designed to prevent a further presidential power grab and his deciding unilaterally how to enforce laws (7/30).

Politico: House Votes To Sue Obama
The House voted along party lines Wednesday to move forward with a lawsuit against President Barack Obama, escalating tension between the executive and legislative branches months before the pivotal midterm elections. The 225-201 vote authorizes Speaker John Boehner to take Obama to court on behalf of the House for delaying a provision in the health care overhaul that requires that most employers provide insurance to their workers. Republicans see the delay as a clear example of Obama overstepping his executive authority (French, 7/30).

The Washington Post: House Easily Approves VA Overhaul
House lawmakers easily passed a sweeping overhaul of the troubled Department of Veterans Affairs that will make it easier for the nation's military veterans to seek medical care outside the government-run system. On a vote of 420 to 5, the House sent the legislation to the Senate, where it is expected to be easily approved by the end of Thursday. Five conservative Republicans voted against the legislation: Reps. Rick Crawford (Ark.), Walter Jones (N.C.), Jack Kingston (Ga.), Mark Sanford (S.C.) and Steve Stockman (Tex.). It was not immediately clear why they did so (O'Keefe, 7/30).

The Associated Press: House Approves VA Health Care Overhaul
The House overwhelmingly approved a landmark bill Wednesday to help veterans avoid long waits for health care that have plagued the Veterans Affairs Department for years. The $16.3 billion measure also would allow the VA to hire thousands of doctors and nurses and rewrite employment rules to make it easier to fire senior executives judged to be negligent or performing poorly (7/30).

The Wall Street Journal: House Passes $17 Billion Overhaul Of Department Of Veterans Affairs
The legislation, if approved by the Senate and signed by President Barack Obama, would provide the VA with $10 billion to allow veterans experiencing long appointment wait times, or who live far from VA hospitals, to see non-VA doctors to get health care. It would also provide $5 billion to hire new doctors, nurses and other staff, as well as make infrastructure improvements. The bill includes other provisions, including allowing the VA secretary more power to fire underperforming executives, expanding health care for rural veterans and leasing more than two-dozen facilities, bringing the total cost of the bill to $17 billion (Kesling, 7/30).

Politico: House Approves VA Reform Bill
The agency has been widely criticized in the wake of reports that it manipulated data on its wait times, hiding delays that in some cases contributed to the deaths of veterans. There has been overwhelming support in Congress to overhaul the agency after the White House found a "corrosive culture" of corruption within the department - a report that prompted former VA Secretary Eric Shinseki to resign (French, 7/30).

The Associated Press: What's In Bill To Overhaul VA
Congress is set to adopt a landmark bill to help veterans avoid long waits for health care, hire more doctors and nurses to treat them and make it easier to fire senior executives at the Veterans Affairs Department. The House approved the bill Wednesday, with a Senate vote expected Thursday. Congressional budget analysts estimate the bill will cost about $16.3 billion over three years and add $10 billion to the federal deficit over 10 years after cost savings are included, such as changes in a veterans' retirement program and reimbursements by insurance companies (7/31).

The Wall Street Journal: Benefit Costs Pare Humana's Profit
The closely watched health insurer said its profit declined, as expected, because of its investments in health-care exchanges and state-based contracts, while higher costs associated with specialty hepatitis C treatments also weighed on results. Humana saw a large flow of consumers into its individual plans, including those sold through the health law's government marketplaces. It had 1.12 million enrollees in individual plans at the end of June, more than double the 478,000 it had a year earlier. Humana said it is requesting rate increases for health-law marketplace plans next year, a move it said wasn't unexpected because it previously warned that the enrollees' demographics could be worse-;and thus costlier-;than it originally projected when it set 2014 prices. Early drug claims signal that its later exchange enrollees were younger and healthier than those who signed up in the first quarter, the insurer said (Calia and Wilde Mathews, 7/30).

The Wall Street Journal: WellPoint Lifts View Despite Profit Drop
The decline in earning was smaller than expected, however, and the company again raised its outlook for the year. It now expects its per-share profit to top $8.60, compared with its prior forecast for more than $8.40 a share. WellPoint reiterated its expectation for operating revenue above $73.5 billion. WellPoint said it enrolled 769,000 people through the health-law marketplaces through the end of the second quarter, more than the approximately 600,000 it had projected. The demographics of the enrollees, including age, "continue to track well versus our expectations," with a "balanced risk pool," and the trends so far in the claims paid are "encouraging," said Joseph Swedish, the insurer's chief executive. However, WellPoint pointed to a drop in the small-group business that was steeper than it expected, reflecting faster-than-projected moves by employers to put workers into exchanges (Prior and Wilde Mathews, 7/30).

The Associated Press: WellPoint 2Q Tops Wall Street Expectations
WellPoint's second-quarter profit fell 8.6 percent as expenses tied to changes in the nation's health care laws climbed. It still beat Wall Street expectations, and the nation's second-biggest health insurer raised its profit expectations for the year. Its shares fell in morning trading after initially rising (7/30).

The Wall Street Journal: Premiums, Fees Boost Cigna's Profit
Cigna again boosted its per-share adjusted earnings expectations for the year, to a range of $7.20 to $7.40. In May, the company had projected earnings of $7.05 to $7.35 a share. The health insurer said in February that it expected to lose money on health-care exchanges this year as enrollment numbers looked soft in the early going, particularly after a series of technical glitches in the federal HealthCare.gov site that slowed registration (Prior, 7/31).

The Washington Post: Top Maryland Health Official Joshua Sharfstein To Step Down In January
Maryland's top health official, Joshua M. Sharfstein, announced Wednesday that he will leave at the end of Gov. Martin O'Malley's term in January to become an associate dean at the Johns Hopkins Bloomberg School of Public Health (Johnson, 7/30).

The Associated Press: NY To Appeal Federal Medicaid Claim For $1.25B
The New York Health Department says it will appeal a federal claim for the return of more than $1.25 billion in Medicaid funds, saying federal authorities previously approved that funding and the claw back could hurt the state's health care system (7/30).

Politico: Testing Boundaries Of Abortion Clinic Buffer Zones
The court's ruling in McCullen v. Coakley has invigorated groups opposed to abortion and frustrated those that support abortion rights. The Alliance Defending Freedom, which argued the Massachusetts case, has sued New Hampshire over its new law with a 25-foot buffer zone and filed a court brief opposing a Madison, Wis., measure banning protesters from approaching people without permission within 100 feet of a medical center (Winfield Cunningham, 7/30).