Archive for October, 2013

Does ObamaCare let you “Keep Your Insurance,” and is it the Insurance Companies who are Taking it Away?

October 30, 2013

The answer to this apparently simple question is pretty hard to find, especially for folks who are not familiar with navigating the Federal laws and regulations surrounding health care.  It looks like the Obama Administration is  taking advantage of the complexity of these regulations to try to mask the impact that ObamaCare actually has on insurers so they can politick the issue.

But any fair examination of the ACA and the insurance industry response reveals a “cause and effect” relationship.  To blame the insurers for their current actions is to ignore the cause of those actions – ObamaCare and its regulations.  Betsey McCaughey has published a good piece on this subject at Investor’s Business Daily (

Looking at the Affordable Care Act (ObamaCare), the Preservation of Coverage Section [1251(a)(2)] states that

“With respect to a group health plan or health insurance coverage in which an individual was enrolled on the date of enactment of this Act, this subtitle and subtitle A … shall not apply to such plan or coverage,”

So we might think that these existing (“grandfathered”) individual and employer plans would not be affected by the new ObamaCare requirements, as the President has repeatedly stated.  Unfortunately, there are many other requirements in subtitles other than “A,” and their applicability to existing “grandfathered” plans is not at all clear in the Act.

One area that has been clarified by regulation, is the requirement for no cap on maximum lifetime benefits.  Since this requirement is contained in “subtitle A” of ObamaCare, we might think that “grandfathered” plans are exempt, as stated in the Preservation of Coverage clause quoted above.  That would be WRONG!  The regulations published on June 28, 2010, only five months after the Act was signed, contradict that section of the Act!

“The statute and these interim final regulations relating to the prohibition on lifetime limits generally apply to all group health plans and health insurance issuers offering group or individual health insurance coverage, whether or not the plan qualifies as a grandfathered health plan...”

So how much impact could this change have?  Right in the June 28, 2010 Federal Register is the following estimate for 2009:

“Sixty-three percent of large employers had lifetime limits; 52 percent of small employers had lifetime limits and 89 percent of individual market plans had lifetime limits.”

So it’s easy to see, as long ago as June, 2010, that, going forward,  tens of millions of people might be affected.  In general terms, eliminating these lifetime limits would be expected to cause increases in  premiums, copays, and deductibles to offset the risk, and these are exactly the kinds of changes to coverage that we are now seeing throughout the Country.

I find it hard to believe that even this sloppy Administration is ignorant of the information published in its own Federal Register notices. I think they are misleading the Public by claiming they didn’t realize the current increases would occur, and they are in bad faith by blaming the insurance companies, when those companies are just reacting as predicted by the Administration.

Additionally, any corporation counsel worth half his salary, would be alarmed by the fact that when the regulations are published they can conflict with the Act as to what is actually required of “grandfathered” plans.   This casts a shadow over the true, unwritten, legal intent of many of the other ObamaCare requirements.  How do insurers know that they will not be in violation next week or next month as new regulations and interpretations are issued?

In my opinion, this uncertainty is a big factor in the insurance companies’ decisions to just give up offering the old policies.

When is America finally going to wake up and figure out that beating up on the insurance companies is pure propaganda to cover up the intentions and impact of a bad law on a good health care system?

Come back and I will try truthin’ you again.  Maybe some of it will eventually stick.

The Sceptic


Accountable Care Organizations: ObamaCare’s Medicare Walmarts?

October 17, 2013


Walmart employs a business model which is widely regarded as greedy and evil by well-meaning liberals.  These same folks also support ObamaCare unquestioningly,  However, many ObamaCare programs, such as the Accountable Care Organization payment program, are just as focused as Walmart on their primary goal of cutting corners to lower expenses and help the bottom line.  The sad truth is that compared to ObamaCare, Walmart is harmless, because, while no one is forcing you to shop at Walmart, many Seniors may be unable to avoid ACOs for Medicare treatment.  In fact, unless the Affordable Care Act (ObamaCare) is overhauled, ACOs may become your best bet to find a doctor who will still take Medicare patients in the future.  More about this later.

To someone who understands just a little of Government double-speak, even the term “Accountable Care Organization” seems ominous – reminiscent of the “Ministry of Truth” – words fashioned to dupe the Citizen into thinking  that these new ObamaCare organizations might now operate under some increased “accountability”  to patients for patient outcomes.  Of course, that would be incorrect, because ACOs are actually “accountable” to DHHS under a contract that allows the ACO to be paid a bonus for reducing per patient expenditures, and calls for penalties after two years, if that goal is not met.  I wish I were kidding, but I’m not.

Basically, ACOs are economic and legal entities made up of doctors or hospitals that group together in an attempt to make economies of scale in treating Medicare patients. The heart of the program is contained in the law:

  • “…a percent (as determined appropriate by the Secretary) of the difference between such estimated average per capita Medicare expenditures in a year, adjusted for beneficiary characteristics, under the ACO and such benchmark for the ACO may be paid to the ACO as shared savings and the remainder of such difference shall be retained by the program under this title.”

Which means … the already paltry Medicare payment scheme will be pressured downwards for ACO’s, and they will be paid a per patient allotment plus a “shared savings” bonus both based on the ACO’s historically-based benchmark per capita annual expense (there are volumes on how the ACO should determine this). The further an ACO’s annual expenses fall below the benchmark amount, the more “shared savings” they will be allowed to keep, and the balance will be retained by the Centers for Medicare and Medicaid Services (CMS). In other words, the ACO and DHHS are partners in splitting the “savings” that are not spent on the patient, and the ACO actually has a contract with DHHS to fulfill their end of the deal.

“… Government, in its role as insurance company, has coopted your ACO doctors with financial incentives and turned them into instruments of Public Policy rather than advocates for your health care.”

There are a lot of caveats in the regulations that small practices will not be able to keep up – they will fail financially under this system. So DHHS is encouraging only large group ACO’s who can handle lots of patients quickly – think assembly line, pill-prescribing medicine. Besides, there are so many requirements for reporting, feedback, forms, financial and legal requirements etc. that only a large group could afford the non-medical support personnel it will take to sustain this system.

I am trying not to dismiss of the whole ACO concept – there may be parts of it that could be used – but overall, ACOs spell bad news for individual patients.  First of all, the ACO is basically encouraged to withhold access to care in order to stay below their DHHS-defined benchmark.  Thus the doctor-patient relationship is  superseded by the Government-ACO relationship – this is where all the “accountablility” lies, not to the patient.  Even when patient satisfaction and outcomes are a factor in this system, it is up to the Government to determine the acceptability criteria.  In the pilot program, although lip service was given to acceptable outcomes, and they were indeed measured, all of the decision-making regarding “shared savings” was solely based on whether the ACO could stay sufficiently below the benchmark.  The role of the quality metrics is not nearly as well-defined as for the financial metrics, and seems to be left to the discretion of the Secretary.  Essentially, the Government, in its role as insurance company, has coopted your ACO doctors with financial incentives, and turned them into instruments of Public Policy rather than advocates for your health care.

Most seniors won’t even know they have become part of an ACO until after the fact.  My friend, Manny, recently received a note from an ACO he had never heard of telling him that his primary care doctor had joined the ACO, and asking him to complete a  long questionnaire.  He finished about half of it before he gave up,   I checked the regulations for him and it’s true – if your primary care doctor joins an ACO, then you will be automatically assigned to that ACO by DHHS.   The famous line “if you like your doctor, you will be able to keep your doctor,” really pertains only to this “gateway,” primary provider.   Unless the specialists that you see also join the ACO, they will not be readily available to you, and you will need to use whatever specialists the ACO has on staff (the ACO will be penalized for referring you to an outside specialist).

ACO patients can expect to experience delays in scheduling appointments because the ACO receives some payment whether or not they “see” you, so there is reduced incentive for doing so in a timely fashion.  ACO patients can also expect delays in referrals to specialists since this drives up costs. For example, an ACO might be tempted to delay fourth quarter referrals to the next year to keep down the present year per capita cost . The quality of specialists may also  deteriorate as good specialists become discouraged by meager payments under this system, and abandon the ACO.  The amount of patient time spent with the doctors will necessarily shrink under the ACO system, because doctors will be required to see many more patients in order to maintain the ACO’s financial viability.

Additionally, there are incentives for ACOs to use technology to monitor patients remotely via telephone, computer, remote sensors etc. in order to keep patients far away from the doctors as much as possible. These remote technologies may be the only ones that are incentivized under the ACO system.  Studies indicate that ACO patients receive fewer diagnostic tests, especially imaging tests, and new technologies and medical devices tend to be avoided out of cost considerations.  No wonder economists have noted that automatic enrollment in ACOs is necessary because there is no reason why a patient would voluntarily join an ACO.

Of course, these reductions in access to health care are welcomed by ObamaCare proponents, who view what I have called “coopting” doctors away from being advocates for their patients, as absolutely essential for the good of Society (i.e. Government).  They will unblinkingly tell you that we must refrain from using too many resources on individual patients, regardless of their needs.  To put it in a form you may recognize: we must prevent patients from getting more than “their fair share” of health care.  In fact this concept undergirds almost all of ObamaCare’s many patchwork programs and initiatives.  For example, why on Earth would a rational program impose taxes on health insurance policies with higher premiums than a certain cap for individual and family plans?  Isn’t this adding insult to injury for folks that may be stretching to make those payments?  Not all those folks are millionaires who can easily afford such a tax  – many just happen to have good insurance through their union contracts. And besides, why do we care?  The reason for these penalties and the incentivized payment schemes, and all the rest is because those folks are viewed, through the ObamaCare optic, as getting more than their share of health care.

Unfortunately, for all its cost reduction measures, the ACO system could lose as much or more than the current system to fraud.  Without going into details, or giving folks ideas, ACOs who are able to meet their benchmark can misrepresent their actual per capita costs and game the system.  To prevent this, look for even more reporting and recordkeeping requirements that will further reduce the thin ACO margin, while succeeding only in “keeping the honest man honest.”

How do Medicare patients survive this crunch that they are faced with?  The Independent Advisory Payment Board (IPAB) is like the top-down “hammer” reducing Medicare payments to doctors in order to shape their behavior.   The ACOs, by contrast, are the bottom up “anvil” co-opting your doctor with financial bonuses to look after the Government’s cost-saving interest rather than your health.  Caught between this hammer and anvil what chance do you have?

Right now there is a bill under consideration in the House called H.R. 351 which would reduce the power of the IPAB and allow for reasonable payments to doctors for services rendered.   This bill would restore the power of your doctor to act in your best interest and still receive adequate compensation to keep you as a patient.  This bill has some bipartisan support, and I would urge you to call or write your congressional representatives and tell them to finally do the promised “Doctor Fix” and vote for this common sense approach to reigning in the power of a remote, detached, bean-counting bureaucracy that sees you as an expense, not as a Citizen-patient.

An UPDATE on 11/21/ 2014 because I am now linking to this post from the Gruber video: 

Honestly, I am so gullible – I actually believed this when I wrote it- even talked to my congressperson- but HR 351 was gutted of all solutions, except temporary deferrals etc., and the problem was kicked down the road to future doctors and future Congresses. I despair that politicians can ever face the consequences of their own actions and fix them.  At this point, the only thing they will hear is if we go back to a hardline demand for repeal.

Sad but true – the Sceptic

If this resolution, or one like it, does not pass, then the IPAB will proceed to cut Medicare payments to doctors to fulfill the spending reduction targets that are built into the ACA.  Understand, as written in current ACA, the decisions of this board as to where and how much to cut are virtually unchallengeable by Congress, and will change how Medicine is practiced. For example, if the IPAB sets the payment amount for a knee replacement to only a meager amount that doesn’t cover the cost, while at the same time coverage for pain killers and payments for peptalk visits ( “r u taking ur meds?”) are generous, then doctors will tend to stop the knee replacements.

The Medicare actuary has projected that, if the IPAB meets all the ObamaCare spending cut targets, then the payment to a doctor to treat a Medicare patient will fall below the payment to treat a similar Medicaid patient in the not too distant future.  At that point, and even now, many doctors may just refuse to accept Medicare patients.  Notable casualties already are the Mayo Clinic and the Cleveland Clinic.  I have nothing against Medicaid patients, but I do feel Medicare patients were made a solemn promise, and sacrificed heavily to pay into the system over their lifetimes for coverage that is now being quietly dismantled to redistribute the health care to other patients deemed more worthy.  That breach of trust is, quite simply, unacceptable, which is why many of us have been fighting this ObamaCare monstrosity from the beginning, understanding where it will lead.

If there is no H.R. 351 – no relief from the arbitrary power of the IPAB – then, as mentioned at the beginning of this post, your best strategy may well be to join an ACO.  At least these organizations may still honor your Medicare coverage and accept you for health care, and their lean-and-mean approach may give them a chance of surviving under the payment starvation strategy of the ObamaCare bureaucrats.

I will write more in another post.

The Sceptic

Media Matters Rips Fox on Story about Obamacare and Mammograms

October 2, 2013

In response to a September 25, 2013, Fox story on mammography, Media Matters has published a response and critique. Unfortunately it has a lot half-truths and wishful thinking to support their premise that Obamacare is infallible and benign. The tragedy here is that discussions of this subject which fail to categorically condemn the November 2009, decision by an ObamaCare board, the USPSTF (United States Preventive Services Task Force), can only lead to further confusion about mammograms among patients and doctors.

This confusion has already resulted in 54,000 fewer mammograms per year for women between the ages of 40 and 49 according to a Mayo Clinic study released in 2012. You can read about it at″> or at the Mayo Clinic site

However, the Fox story is also incorrect. Let’s take on these claims and evaluate whether dumb Fox or evil Media Matters is more correct about mammograms under ObamaCare.

Fox: The USPSTF recommendations would delay the beginning of regular mammograms until age 50.

Inaccurate – that WOULD have happened except that Senator Mikulski and others amended ObamaCare to nullify the task force’s November 2009 recommendation.

Fox: The USPSTF recommendations would end mammograms at age 74.

Inaccurate – The USPSTF held off judgment on this issue for lack of data

Fox: Cancer patients take a greater reduction in services from ObamaCare than other patients.

True, but it’s not just from ObamaCare. Congress has reduced the budget share for cancer treatment compared to other health care areas several times even before ObamaCare was on the scene.

Fox: Hospitals and doctors are disincentivized from providing care to the elderly.

True – The payment schemes in Medicare will now punish doctors and hospitals exceeding a baseline average per patient expenditure deemed appropriate for their institution. Hospital readmissions will also result in penalties.

And now for Media Matters

Media Matters: ObamaCare Contains “Specific Repudiation” Of the Task Force Recommendation

Inaccurate – Although Media Matters faithfully presents the wording in the Act, the assertion that it is specific, or that it repudiates the USPSTF finding is unfounded – you be the judge. Here is the wording:

“…the current recommendations of the United States Preventive Service Task Force regarding breast cancer screening, mammography and prevention shall be considered the most current other than those issued in or around November 2009,”

Is that clear to you? This awkward wording was added after the issuance of the recommendations to try and fix up the mess in the Act. I will translate – the “current” recommendation (of November 2009) is not the “most current.” Rather, the previous “current” recommendation of 2002 is now considered the “most current.” This wording, far from being specific, does not even mention any problem with the 2009 recommendation, and does not give any hint of disapproval or sanction.

Actually, the vagueness of the wording fulfills that age-old bureaucratic requirement of not admitting to error, and of not tying your hands for the future. The time-specific wording of the rescission also leaves open the possibility that USPSTF could revisit mammography at some time other than “November 2009” and make a similar recommendation. The USPSTF has never rescinded their recommendation, and, in fact, have defended it, so a future similar recommendation would not be surprising.

Media Matters: The task force’s recommendations are “not binding

Inaccurate – They are really reaching here – using only media references including a statement from a paid TV Doc (NBC’s Snyderman). But the law is another matter, and it is quite specific at sec 2713 – USPSTF is empowered to rate diagnostic procedures as “A”, “B”, or “C.” When it rates a procedure as “C,” co-pays can be required by the insurer. All I can guess is that Snyderman was thinking it is not binding on doctors, but, when “C” is decided, it’s pretty binding on patients because their insurers are not going to cover any such procedure for free. The result may be that many patients may elect not to pay for a Class C test that they would just as soon avoid in the first place.

But actually it’s worse than that. Media Matters also uses a statement from the NEA Health Network to point out that the recommendations are not binding, but also were only intended to protect women from unnecessary procedures. That rationale is indeed part of the USPSTF finding and one would have to be extremely dense to think that such a finding published by a Government board of supposed “experts” would not impact doctors’ decisions to prescribe the test. In fact, the Mayo Clinic study has shown that the USPSTF “recommendations” resulted in 54,000 fewer mammograms per year among women 40-49.

Media Matters: Task Force Did Not Recommend Blanket Ban On Mammograms For Women Under 50 AND

Task Force Encouraged Policymakers To Include Additional Considerations And “Individualize Decision Making To The Specific Patient Or Situation”

Misleading – These boiler-plate type disclaimers by USPSTF overestimate the power of both doctors and policymakers to act outside the recommended guidelines. Every guidance document I wrote at FDA prominently bore required statements that they constituted non-binding guidance. However, once issued, these documents were slavishly adhered to by industry, who are just looking for a ‘safe harbor’ where they will have reduced exposure to litigation. Doctors are in this same boat trying to avoid exposure to malpractice, and policymakers are just looking for an expert on whose opinion they can base their position – they are not going to go beyond what they are handed.

So who fared worse in this clash of titans? I would say that Fox made the more egregious factual error in failing to recognize that ObamaCare ultimately did include the Mikulski amendment rescinding the November 2009 recommendation. However, Media Matters’ omission of the desperate need for an 11th hour amendment to “fix” the mistake made by a board specifically empowered by ObamaCare, and the assertion there was no problem anyway because the recommendation was non-binding, puts a happy face on a systemic shortcoming that is far from fixed for every other diagnostic procedure, and maybe even for mammography. This board’s power is essentially unchecked and there are insufficient safeguards to make sure that their future errors are not as catastrophic as this one.

To the extent that Media Matters may have lulled their public to sleep and avoided the root issue that still exists at sec 2713, their errors of omission may have the more severe Public Health consequences.

The Sceptic

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