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 Arrigo, an expert witness, and healthcare executive, brings four decades of experience in the software, financial services, and healthcare industries. In 2000, Mr. Arrigo founded No World Borders, a healthcare data, regulations, and economics firm with clients in the pharmaceutical, medical device, hospital, surgical center, physician group, diagnostic imaging, genetic testing, health I.T., and health insurance markets. His expertise spans the federal health programs Medicare and Medicaid and private insurance. He advises Medicare Advantage Organizations that provide health insurance under Part C of the Medicare Act. Mr. Arrigo serves as an expert witness regarding medical coding and billing, fraud damages, and electronic health record software for the U.S. Department of Justice. He has valued well over $1 billion in medical billings in personal injury liens, malpractice, and insurance fraud cases. The U.S. Court of Appeals considered Mr. Arrigo's opinion regarding loss amounts, vacating, and remanding sentencing in a fraud case. Mr. Arrigo provides expertise in the Medicare Secondary Payer Act, Medicare LCDs, anti-trust litigation, medical intellectual property and trade secrets, HIPAA privacy, health care electronic claim data Standards, physician compensation, Anti-Kickback Statute, Stark law, the Affordable Care Act, False Claims Act, and the ARRA HITECH Act. Arrigo advises investors on merger and acquisition (M&A) diligence in the healthcare industry on transactions cumulatively valued at over $1 billion. Mr. Arrigo spent over ten years in Silicon Valley software firms in roles from Product Manager to CEO. He was product manager for a leading-edge database technology joint venture that became commercialized as Microsoft SQL Server, Vice President of Marketing for a software company when it grew from under $2 million in revenue to a $50 million acquisition by a company now merged into Cincom Systems, hired by private equity investors to serve as Vice President of Marketing for a secure email software company until its acquisition and multi $million investor exit by a company now merged into Axway Software S.A. (Euronext: AXW.PA), and CEO of one of the first cloud-based billing software companies, licensing its technology to Citrix Systems (NASDAQ: CTXS). Later, before entering the healthcare industry, he joined Fortune 500 company Fidelity National Financial (NYSE: FNF) as a Vice President, overseeing eCommerce solutions for the mortgage banking industry. While serving as a Vice President at Fortune 500 company First American Financial (NYSE: FAF), he oversaw eCommerce and regulatory compliance technology initiatives for the top ten mortgage banks and led the Sarbanes Oxley Act Section 302 internal controls I.T. audit for the company, supporting Section 404 of the Sarbanes Oxley Act. Mr. Arrigo earned his Bachelor of Science in Business Administration from the University of Southern California. Before that, he studied computer science, statistics, and economics at the University of California, Irvine. His post-graduate studies include biomedical ethics at Harvard Medical School, biomedical informatics at Stanford Medical School, blockchain and crypto-economics at the Massachusetts Institute of Technology, and training as a Certified Professional Medical Auditor (CPMA). Mr. Arrigo is qualified to serve as a director due to his experience in healthcare data, regulations, and economics, his leadership roles in software and financial services public companies, and his healthcare M&A diligence and public company regulatory experience. Mr. Arrigo is quoted in The Wall Street Journal, Fortune Magazine, Kaiser Health News, Consumer Affairs, National Public Radio (NPR), NBC News Houston, USA Today / Milwaukee Journal Sentinel, Medical Economics, Capitol ForumThe Daily Beast, the Lund Report, Inside Higher Ed, New England Psychologist, and other press and media outlets. He authored a peer-reviewed article regarding clinical documentation quality to support accurate medical coding, billing, and good patient care, published by Healthcare Financial Management Association (HFMA) and published in Healthcare I.T. News. Mr. Arrigo serves as a member of the board of directors of a publicly traded company in the healthcare and data analytics industry, where his duties include: member, audit committee; chair, compensation committee; member, special committee.

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