Weekly Health care Reform Developments at the Federal and State level

With Congress now recessed for the summer, much attention has shifted to the home front where many Senators and Representatives are conducting town hall meetings to gauge public opinion toward health care reform. It has been widely reported that tempers have sometimes flared at these events.


  • Senate Finance Committee continued its health reform negotiations last week in what is the last hope for a bipartisan bill from Congress. Senators left Washington late last week to start their August recess, but Finance Committee members have vowed to continue negotiations throughout the month.
  • A bipartisan group of six Senators on the Committee, led by Chairman Max Baucus, briefed President Obama on their work Thursday, and they also conducted a conference call with a dozen governors. The emerging legislation would expand Medicaid coverage to millions of additional people, and the governors are concerned about the impact on state budgets. No details of the still-developing proposal have been officially released, but participants have indicated the package could shave $100 billion off the cost of the legislation over the next decade, providing coverage to 94 percent of the nation, expanding Medicaid, abandoning the government-insurance option and possibly replacing it with a state-based co-op plan, and taxing insurance companies that offer health care benefits under the richest plans. Baucus has set a Sept. 15 deadline for a bipartisan deal.


ARIZONA: The State Senate last week postponed a vote on a plan to close the state’s estimated a $3.2 billion budget deficit using spending cuts, funding delays, borrowing, and federal stimulus funds. Approved by the House on July 31, the plan’s health-related provisions include: eliminating the KidsCare Parents Program; reducing AHCCCS (Medicaid) reimbursement rates to non-institutional providers by 5 percent but not reducing AHCCCS reimbursement rates to institutional providers; delaying one month’s capitation payment to AHCCCS contracted health plans; and requiring AHCCCS to comply with the federal False Claims Act.

NORTH CAROLINA: In a very positive development, a new budget was issued by the legislature last week that includes no premium tax increases. Previous budget proposals included increases from 1.9 to 2.25 percent, effective January 2011. Several carriers and trade associations, worked to educate legislators and oppose a premium tax increase. A final vote on the budget is expected soon.

OREGON: Governor Ted Kulongoski has signed legislation enacting a 1 percent premium tax that will be used to expand access to affordable health care for children. The premium tax will be assessed beginning October 1, 2009 through September 30, 2013. Rate filings submitted for approval may include the premium assessment as a valid administrative expense or retention element. The law also establishes the Health Care for Oregon Children program, which includes an expansion of SCHIP and a premium assistance program administered by the Office of Private Health Partnerships (OPHP). Under the premium assistance program: Children in families with incomes at or below 200 percent of the federal poverty level (FPL) and who have access to employer-sponsored coverage will receive a subsidy equal to the full cost of the premium; children in families with incomes above 200 percent but at or below 300 percent of FPL will receive assistance on a sliding-scale basis as determined by the OPHP; and children in families with incomes exceeding 300 percent of the FPL will not receive premium assistance but will have the opportunity to purchase coverage through the new OPHP private health option.

TEXAS: With Dallas saddled by the most expensive health care in the state, Mayor Tom Leppert and a local health insurer last week took a step toward changing the city’s direction. They are working on scheduling a North Texas health care summit on Sept. 30 at which company and government executives hope to agree on payment, practice and transparency fixes leading to greater competition based on quality and cost efficiency. In its national quality-to-cost ranking, Texas is rated third worst, behind Mississippi and Louisiana. Dartmouth Institute for Health Policy data indicates that on average Dallas health care providers submit $10,100 in Medicare claims for every enrollee, the highest among Texas cities with more than 50,000 residents. Dartmouth’s data shows that higher health care spending is not associated with better quality outcomes.

No World Borders observation:

  • Health care providers and payors (insurance) firms: The requirements to move to new electronic health care records including the electronic transfer of claims data (HIPAA EDI 5010) and the new medical coding standard (ICD-10) will require all the time health care companies can get. Don’t wait while the legislators debate the issues. Process impacts as well as data and electronic transfer issues have been under-estimated by may companies. Move ahead now. We can help. See our capabiliites brief and brochure. Business process models of the “as is” and “to be” will be important items to share among business stakeholders.

  • Individual consumers & employers: Respectful participation in the Democratic process is important, and no one should be discouraged from an important opportunity to be heard on health care reform. If you would like to attend a future town hall meeting or express your views, your Senator can be found online as well as your Representative.

Michael F. Arrigo

Michael is Managing Partner & CEO of No World Borders, a leading healthcare management and IT consulting firm. He serves as an expert witness in Federal and State Court and was recently ruled as an expert by a 9th Circuit Federal Judge. He serves as a patent expert witness on intellectual property disputes, both as a Technical Expert and a Damages expert. His vision for the firm is to continue acquisition of skills and technology that support the intersection of clinical data and administrative health data where the eligibility for medically necessary care is determined. He leads a team that provides litigation consulting as well as advisory regarding medical coding, medical billing, medical bill review and HIPAA Privacy and Security best practices for healthcare clients, Meaningful Use of Electronic Health Records. He advises legal teams as an expert witness in HIPAA Privacy and Security, medical coding and billing and usual and customary cost of care, the Affordable Care Act and benefits enrollment, white collar crime, False Claims Act, Anti-Kickback, Stark Law, physician compensation, Insurance bad faith, payor-provider disputes, ERISA plan-third-party administrator disputes, third-party liability, and the Medicare Secondary Payer Act (MSPA) MMSEA Section 111 reporting. He uses these skills in disputes regarding the valuation of pharmaceuticals and drug costs and in the review and audit of pain management and opioid prescribers under state Standards and the Controlled Substances Act. He consults to venture capital and private equity firms on mHealth, Cloud Computing in Healthcare, and Software as a Service. He advises ERISA self-insured employers on cost of care and regulations. Arrigo was recently retained by the U.S. Department of Justice (DOJ) regarding a significant false claims act investigation. He has provided opinions on over $1 billion in health care claims and due diligence on over $8 billion in healthcare mergers and acquisitions. Education: UC Irvine - Economics and Computer Science, University of Southern California - Business, studies at Stanford Medical School - Biomedical Informatics, studies at Harvard Medical School - Bioethics. Trained in over 10 medical specialties in medical billing and coding. Trained by U.S. Patent and Trademark Office (USPTO) and PTAB Judges on patent statutes, rules and case law (as a non-attorney to better advise clients on Technical and Damages aspects of patent construction and claims). Mr. Arrigo has been interviewed quoted in the Wall Street Journal, New York Times, and National Public Radio, Fortune, KNX 1070 Radio, Kaiser Health News, NBC Television News, The Capitol Forum and other media outlets. See https://www.noworldborders.com/news/ and https://www.noworldborders.com/clients/ for more about the company.

Leave a Reply