27.49 Percent of Everyone's Tax Bill Is Spent on Health Care

    Every year since 2011, the White House has used tax time to post a "Federal Taxpayer Receipt" showing taxpayers how their federal tax dollars are being spent. President Obama introduced the concept in his 2011 State of the Union address, and Wednesday the White House posted the fifth installment so taxpayers can see how "tax dollars are being spent on priorities like education, veterans benefits, and health care."
    While users can punch in their own tax liability and see dollar amounts assigned to each category, the figures are based on percentages from the prior fiscal year budget. Comparing those percentages from year to year, taxpayers can see that from 2012 to 2014, the percentage of their taxes going towards federal healthcare expenses has jumped 22 percent.
    In 2010, the year the Obamacare passed and was signed into law, the healthcare percentage was 24.10. The following year, 2011, it dropped to 23.7 percent, and in 2012 dropped still further to 22.45 percent. After this, however, the trend sharply reversed. In 2013 the healthcare share jumped to 25.19 percent, and the latest numbers posted this week for 2014 show the highest proportion yet at 27.49 percent, a full 22 percent increase over 2012. This means that for every dollar a taxpayer pays in 2014, an additional nickel is going to pay for healthcare that had been spent elsewhere in 2012. Presently, over 27 cents on every dollar is spent by the federal government on healthcare, primarily Medicaid and Medicare.
     One area impacted is national defense. For the five years of the National Taxpayer Receipt, the share for national defense was highest in 2010 at 26.3 percent. By 2014, this figure had fallen to 23.91 percent, a decrease of nine percent. Other budget areas have changed to varying degrees, such as veterans benefits which increased from 4.1 percent in 2010  to 5.93 percent in 2014, a 45 percent increase.
    Although the White House characterizes the Federal Taxpayer Receipts as a promise kept by President Obama to let taxpayers easily know where their tax dollars are going, the administration also used the opportunity to take a dig at Republicans, providing a link to "See how two starkly different tax plans would impact you" where viewers can read about the president's "tax cuts for the middle class" and the Republicans' "giveaways for the wealthy few." In the end, the White House doesn't just want taxpayers to know where their money is going, but where everyone else's is going, too.

Note: A version of this post first appeared at The Weekly Standard.

HHS Spokesperson: "No One Likes to Watch the Daily Show Make Fun of HHS"

    In October 2013, as the Centers for Medicare and Medicaid Services (CMS), a division of the Department of Health and Human Services (HHS), was launching Healthcare.gov, CMS also launched a quieter initiative. As part of Ignite, an internal HHS program designed to spur innovation, a team within CMS's press office designed a system to help CMS communicate more quickly and efficiently with the press. The team envisioned that such a system, if functioning well, could also improve CMS's portrayal in the media.  As project leader Emma Sandoe, CMS's Medicaid spokesperson, put it in her presentation of the team's report to other CMS employees, "no one likes to watch the Daily Show make fun of HHS and our job here in the press office is to make sure that doesn't happen as often as it sometimes does[.]"
    The CMS team called their project the Coordinated Press Response Strategy.  In her presentation, Sandoe noted the irony of the project's launch coinciding with that of Healthcare.gov: "We launched this tool in the month of October, which - you may have heard [laughter] we also launched a little website, Healthcare.gov..."
    Ms. Sandoe further said that her team hoped to "develop a coordinated press response strategy in order to get better media and diffuse more media bombs."  "Media bombs" referred back to the beginning of Sandoe's presentation when she likened the atmosphere in a government press office to an episode of the TV terrorism drama "24."  The "ticking time bombs" are reporters' deadlines that the press office is hoping to defuse, but whereas Jack Bauer only had one bomb at a time to worry about, a press office may have dozens.  Sandoe's audience seemed to appreciate the anaolgy.
    The system Sandoe and her team developed was intended to be a "memory vault" to remind press officers what statements they had already made and what cleared information had already been released.  The system was designed not only for official press statements, but a variety of off the record and background information, as well. According to Sandoe, the ease of access to information allowed the CMS press office to cut its average response time on press inquiries from 49 hours to 22.5 hours while the project was in operation.  Sandoe expressed the desire to expand the tool beyond CMS to the press offices of all departments of HHS.
    In addition to improving the response time for inquiries, Sandoe also hoped the project would improve relations with the press and perhaps result in more favorable coverage for her agency.  In Sandoe's words, "if a reporter likes you and the reporter likes working with you, they will write better stories about you; so we're working to improve the stories that are written about HHS."  She later added, "[T]he worst words that you can see in the newspaper as a press officer is 'CMS did not comment.'"
    The Project Summary for the Coordinated Press Response Strategy presented the results in terms of "Time (hours) spent between report inquiry and official response to the inquiry" and "Attitudes of the press officers (via survey)":

The team saw a 52% decrease in the response time for reporter inquiries and a generally positive view from staff of the design. In order to continue the testing and implementation, CMS would like to see increased utilization throughout the department achieved through greater exploration of this workflow model with communications specialists across HHS that are working directly with media.

    To seek clarification and further explanation of the details of the project, THE WEEKLY STANDARD contacted the CMS press office, the Media Relations Group, via email and inquired about what percentage of inquiries CMS responds to and what percentage go unanswered, does CMS prioritize which news outlets will be responded to first, and does CMS usually only respond to 'mainstream' news outlets, or also to less traditional outlets, such as bloggers.  About nine hours later, CMS responded, but with just a single line: "This was an internal project initiated by staff to test a way to improve our operating procedures and increase efficiency within the office."
    A follow up email was sent to CMS: "I assume from your reply that CMS is not prepared to share any further details about the project or whether the system is still being used within CMS’s press office?"
    Shortly thereafter, CMS replied again, this time with but a single word: "Correct."


Note: A version of this post first appeared at The Weekly Standard.

Under Obamacare, HHS Begins Fingerprinting "High Risk" Medicare Providers and Suppliers

    Four years after Obamacare became law, the Department of Health and Human Services (HHS) is notifying Medicare providers and suppliers of new fingerprint-based background checks.  Eventually, all individuals who hold a five percent or greater stake in a Medicare supplier or provider that is categorized as "high risk" will be subject to the requirement.  The provision is part of the Medicare, Medicaid, and CHIP Program Integrity Provisions (Title E) of the Affordable Care Act, and gives the HHS secretary broad discretion in applying the background check requirements depending on the potential for abuse, fraud and/or waste.

    The new requirements are spelled out in a document posted online on the website of the Centers for Medicare and Medicaid Services (CMS) last Friday.  The new rules will apply to both current and future enrollees who are classified as "high risk," the stated purpose being to weed out "bad actors" in the Medicare program and prevent any more from enrolling.

    This particular document is a "News Flash" from CMS's Medicare Learning Network and is addressed to suppliers and providers who submit claims for "Durable Medical Equipment Medicare Administrative Contractors (DME MACs) and Home Health and Hospice (HH&H) MACs for services provided to Medicare beneficiaries."  There is no effective date or implementation date listed on the document; rather, the document states that "fingerprint-based background check implementation will be phased in beginning in 2014," and that those affected will receive letters after which the individuals will have thirty days to comply with the finger-printing requirement.  The fingerprints will be submitted to the FBI for a background check and will be stored by the government in accordance with federal requirements and FBI guidelines.

    Although initially the new regulations will only be applied to providers and suppliers of "Durable Medicare Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) suppliers or Home Health Agencies (HHA)," the "high risk" category is defined at the discretion of the HHS secretary and may be expanded in the future.


Note: A version of this post first appeared at The Weekly Standard.

Obamacare Contractor Blamed for Slow Medicare Payments to Hospitals

    The contractor building the financial management system for Healthcare.gov is being blamed by a Houston hospital for delayed Medicare reimbursements that have caused the hospital to miss payrolls for weeks. Novitas Solutions is the federal government's new Medicare payment processor for the south-central region of the country hired by the Centers for Medicare and Medicaid Services (CMS), a division of the Department of Health and Human Services (HHS.)  ABC's KTRK in Houston reports:

According to the CEO Jason Leday, more than 150 employees haven't been paid in nearly a month. 

"I understand that they have children and a house payment, bills. Not getting paid is wow," nearby resident Theresa Gutierrez said. 

The hospital is strapped for cash not because its not making money, but because Leday says a new Medicare payment facilitator named Novitas Solutions is taking too way long to pay out Medicare claims to the hospital. 

Leday says he's owed nearly $3 million in payments from Medicare and can't make payroll...

The Texas Medical Association says they are familiar with complaints like this one regarding the medicare payment facilitator- and a representative told us smaller community hospitals like this one are in similar situations. 

    Novitas also runs the south-central region's Medicare website which was launched just two days before the October 1 launch of Healthcare.gov.  As THE WEEKLY STANDARD reported on December 19, that site has experienced problems reminiscent of Healthcare.gov's troubles, and the site will not be fully operational until well into 2014.
    Novitas's direct connection to Healthcare.gov stems from an emergency, no-bid contract for "financial management services" awarded in August and first reported by THE WEEKLY STANDARD in September.  The services required included accounting, tracking of accounts receivable and accounts payable, documenting funds collected by CMS, and data validation, among other things.  CMS justified the no-bid award because the "prospect of a delay in implementing the Marketplace by the operational date of January 1, 2014, even for a few days, would result in severe consequences, financial and other" and that the services required were "beyond what was initially anticipated and beyond CMS' currently available resources."
     Novitas did not respond to KTRK for its story, and so far has not responded to a request for comment since the story ran.  In the past, Novitas has referred requests for comment to HHS.
    Despite initially promising more information about the August contract, HHS/CMS has ignored repeated requests for clarification about the nature of the work and how it relates to the mission of Healthcare.gov.  HHS has not responded to a request for comment about the reports of slow payments to hospitals either.


Note: A version of this article first appeared at The Weekly Standard.

Obamacare 'Back End' Contractor Also Runs Troubled Medicare Website

    As the October 1 launch of Healthcare.gov drew closer, the Centers for Medicare and Medicaid Services (CMS) realized it was in trouble.  The agency, which is the primary Health and Human Services (HHS) department in charge of the implementation of the Affordable Care Act, decided in early August that the "specialized financial management services and expertise [needed were] beyond what was initially anticipated and beyond CMS' currently available resources," and that development and testing were "already minimally two months overdue."  By that time, the need for these so-called "back end" services had "reached an unusual and compelling level of urgency," and CMS awarded an emergency, no-bid contract for the work, as first reported by THE WEEKLY STANDARD in September.  After HHS initially responded with a promise of more information, the agency has ignored repeated requests for further details.  Reuters was stonewalled by the agency as well in a November story about the contract.

    To avoid the "severe consequences" that CMS feared would result from further delay, the agency turned to a current HHS contractor, Novitas Solutions, a wholly-owned subsidiary of Diversified Service Options, which is in turn a wholly-owned subsidiary of Florida Blue (Blue Cross/Blue Shield of Florida.)  Novitas already administers three different Medicare-related healthcare programs for HHS, including the Medicare Administrative Contract for Jurisdiction H, which covers seven south-central states.
    Coincidentally, Novitas launched a new website for Jurisdiction H on September 29, just two days before the launch of the main Obamacare site.  The new Jurisdiction H website has experienced problems reminiscent of those experienced by Healthcare.gov, and some of the "fixes" will not be in place until well into 2014.  In fact, the latest update from Novitas informed users that the Jurisdiction H website would be taken offline completely at 7 PM on Wednesday, December 18, for up to five hours for maintenance.
    A report on the website of the Oklahoma Hospital Association (OHA) on December 4 gave some details of the issues facing users of the troubled Novitas Medicare site:

Hospitals continue to experience problems stemming from system changes at Novitas Solutions, the Medicare Administrative Contractor (MAC) for Oklahoma and other south central states. 

Novitas launched a new website on Sep. 29. This was the most visible change stemming from the transfer of Novitas’ business operations platform from the data center of its former owner, Highmark, to that of Blue Cross and Blue Shield of Florida. 

As an example of the website problems, Novitas intended to display content for Part A and Part B separately. This is not working as planned. A manual process of splitting all website content is underway, with a completion goal of February 2014. 

While some of the website problems are apparent to users, more serious problems remain to be resolved behind the scenes in the MAC’s workflow management. David Vaughan, Jurisdiction H project manager for Novitas, told OHA that the system changeover caused a delay of a week or so during which Novitas was unable to use its imaging system. This created backlogs in processing documentation related to medical reviews and appeals. Although the backlog has been reduced, the problems have not been fully resolved.

    Unlike the government has done with Healthcare.gov, however, Novitas maintains a detailed  webpage listing the ongoing issues with the Jurisdiction H site.  The page asks users to "[p]lease pardon our dust as we continue to squash bugs and implement improvements on our new internet site." More than a dozen problems are listed as unresolved as late as Thursday, December 11, the last time the page was updated.  The issues range from web pages not loading properly to duplicate enrollment determination letters to long wait times for customer service.  Another item noted is the planned Interactive Fee Schedule Calculator which is still unavailable.  The status of that issue indicates that "[r]esolution of issues encountered since 9/30/13 is expected by mid-January" 2014.
    When asked for comment on the December 4 Oklahoma Hospital Association report, a spokesperson for Diversified Service Options, Novitas's parent company, wrote:

It is not a news story but an association update, so I have no comment on the Novitas website operation facts as they are stated. As mentioned by OHA, Novitas has been very transparent and proactive with providers, and listed the status of the operational problems.

    Inquiries to HHS/CMS about the Jurisdiction H website, as well as the original emergency, no-bid contract with Novitas for Obamacare-related financial services, continue to go unanswered.


Note: A version of this article first appeared at The Weekly Standard.

Medicare Pays $8.6 Billion to Doctors, Hospitals for Electronic Health Records Switch

    The Obamacare website Healthcare.gov has been grabbing all the headlines lately, but another aspect of the Affordable Care Act (ACA) may come under increased scrutiny in the weeks and months ahead: Electronic Health Records (EHR).  The ACA requires medical providers to transition to electronic record keeping by 2015.  In addition to increasing privacy concerns over the systems, the financial benefits of EHR are less clear after reports in January that the RAND Corporation had backed off from an optimistic $81 billion annual savings predicted in a 2005 report.  The New York Times reported that:

...evidence of significant savings is scant, and there is increasing concern that electronic records have actually added to costs by making it easier to bill more for some services. Health care spending has risen $800 billion since the first report was issued, according to federal figures...

     With savings from EHR in question, a recent report by the Government Accountability Office (GAO) may raise concerns about incentive payments through Medicare to medical providers for the EHR transition.  Healthcare providers and hospitals were paid $6.3 billion in 2012 alone, up from $2.3 billion in 2011.  Participation in the program by eligible providers approximately tripled from 2011 to 2012 matching the increase in incentive payments.  However, the GAO reports that not quite "half of eligible hospitals and less than a third of eligible professionals received Medicare EHR incentive payments for 2012," so participation is far from universal.
    While the maximum incentive payment to a hospital in 2012 was $4.7 million, the median amount was $1.4 million.  The median payment to individual health care professionals was $18,000.


Note: A version of this article first appeared at The Weekly Standard.

Audit: Medicare Paid 80% of Unqualified Claims for Cancelled Elective Surgery

    A recent audit by the Office of the Inspector General (OIG) for Health and Human Services (HHS) found that in four out of five cases when elective surgeries were cancelled for one reason or another, Medicare still paid even though the claims submitted by the hospitals failed the "reasonable and necessary" standard.  The OIG estimated that for the two-year period audited, the errors resulted in over $19 million per year in overpayments [emphasis added]:

Most inpatient admissions related to short-stay hospital claims involving canceled elective surgeries were not reasonable and necessary.  For 80 of the 100 claims in our sample, Medicare made payments totaling $345,717 for hospital inpatient claims involving canceled elective surgeries when a clinical condition did not exist on admission or a new condition did not emerge after admission that required inpatient care.  Therefore, these inpatient claims did not satisfy Medicare’s requirements that the admissions be reasonable and necessary...
On the basis of our sample results, we estimated that Medicare made $38.2 million in Part A inpatient hospital payments in CYs 2009 and 2010 for short-stay, canceled elective surgery admissions that were not reasonable and necessary.  Hospitals may bill Medicare Part B for services related to the incorrectly billed Medicare Part A admissions.

    In its response to the audit recommendations, the Centers for Medicare and Medicaid Services (CMS) noted that it may have difficultly researching and recovering the overpayments in full:

Of the 80 sampled claims with overpayments valued at approximately $345,717,27 representing a value of approximately $116,342 cannot be reopened as a result of the claims being beyond the four year reopening period or are uncollectible for other reasons. 

    For the remaining 10,915 claims not included in the audit, CMS noted follow up was unlikely due to  "resource limitations."
    With the increased responsibility the federal government will be assuming in 2014 with the launch of Obamacare, the results of this audit cast doubt on the ability of the government to keep up since "resource limitations" are likely to persist.  And since the administration is counting on squeezing hundreds of billions in savings out of Medicare in the coming years, the 80% payment error rate found in this audit is anything but encouraging.


Note: A version of this article first appeared at The Weekly Standard.

The Fiscal Clift

    Eleanor Clift, writing at the Daily Beast, gamely tries to split the difference in the "fiscal cliff" debate, suggesting that voters are far ahead of the politicians in seeing the need to address entitlements as part of the solution to the ongoing budget debate.  But she begins her argument giving the president far too much credit:

The voters gave President Obama a second term, and now he’s counting on them to help him resolve the fiscal cliff in a responsible way...
Obama spent the better part of this year campaigning for a balanced approach to bring down the deficit. That means reining in the country’s most cherished entitlement programs—Social Security, Medicare, and Medicaid—in addition to raising taxes on the top 2 percent of households. 

    In fact, the president's "balanced approach" consisted largely of raising taxes $3 for every $1 in promised spending cuts, with the accent on "promised."  Entitlement reform largely received lip-service, mainly vague promises to cut Medicare and Medicaid costs by simply paying providers less.  (This is like a family reforming "housing costs" by sending the mortgage company $100/month less, without actually securing the bank's agreement first.  Doctors may not have as much sway over the government as banks have over a mortgagee, but they won't just sit and take it either.)  Social Security reform is virtually invisible on the White House's agenda.  If entitlement reform made it into the great electoral conversation at all, Paul Ryan, whom Clift does not even mention, deserves the credit.

    Clift goes on to site the president's challenge:

The expectation is that the real faceoff is between Obama and the Republicans over taxes, but the president faces an equally daunting challenge to convince liberal groups that they too will have to yield.

    However, there is no evidence that President Obama has any intention of challenging the AFSCME, SEIU, and NEA (three unions Clift lists,) or any other group on the left.  After all, they were part of the e pluribus coalition that gave him another four years.  More than six million voters from 2008 deserted Barack Obama in 2012, but not the unions.  And as Clift notes:

AFSCME, SEIU, and NEA—three powerful unions—launched an ad campaign this week in several states aimed at key senators calling for “Jobs Not Cuts,” urging that Medicare, Medicaid, and federal funds for education be protected.

    So what does Clift see as the game changer?  In spite of acknowledging that "the election results are being read by many Democrats as evidence that Obama should hold firm and resist any meaningful changes to Social Security, Medicare, and Medicaid," Clift seems to see promise in the Third Way:

That’s where Third Way comes in as the only Democratic leaning group that is actively working toward a major deal, or grand bargain. Beginning in August, Kessler and his colleagues visited 100 congressional offices on Capitol Hill, 90 Democrats and 10 Republicans, making the case for increased tax revenue, spending cuts, and entitlement reform...

[E]ven that party’s most left-leaning members no longer say entitlements are off the table, a sea change in partisan thinking. “I could be hallucinating,” [senior vice president for policy at Third Way Jim] Kessler concedes, but he finds the Democratic caucus moving toward acceptance of changes in the programs they hold dear, bolstered by an increase in moderate New Democrats. They went from 42 before the election to over 50, making them a quarter of the caucus and a potentially decisive voting bloc. 

    The addition of a whopping 9 or so "moderate New Democrats" does not exactly strike me as a mandate for entitlement reform.  (To be fair, Kessler did admit "I could be hallucinating.")

    Clift and Kessler do deserve credit for highlighting the extent of the entitlement crisis:

 In the mid '60s, when these programs [Great Society, New Frontier] came into being, federal investment outpaced spending on entitlements 3 to 1; in 2012, that ratio was reversed, and in 2020, the nonpartisan Congressional Budget Office says spending on entitlements will dwarf government investments 6 to 1.

    But the reality is that Democrats and President Obama have shown little if any inclination to seriously address the growth of entitlements.  Republicans, with the addition of the Medicare Prescription Drug benefit during George W. Bush's presidency, have often been no better.  But if there is to be any benefit derived from the 2012 election, it should be that a serious plan to reform entitlements was set forth by the Republican party via its vice presidential candidate Paul Ryan, and that the result was not electrocution by that proverbial third-rail topic.  Perhaps it's difficult to claim a mandate by saying, "We proposed entitlement reform and didn't lose in a landslide," but it may be the GOP's best argument.  Now we just need some more Republicans with the guts to say it.

The 100th Day of the Romney Administration

    This is not a parody, but I'll bet heads will roll over at the Onion for not coming up with this first.  Make sure you're not drinking anything when you watch it:

Paul Ryan Setting the Terms [Updated]

    The Obama Truth Team along with the rest of the Democrats have been flinging everything they can think of at Paul Ryan since he joined Mitt Romney on the GOP ticket.  The latest comes in a tweet on Monday night, and I believe it demonstrates the threat Ryan poses to the Obama campaign:

    Mitt Romney selects Paul Ryan as his vice-president and within three days the Obama campaign is conceding "President Obama['s]... Medicare cuts."  Who would have imagined the Truth Team would ever explicitly acknowledge how ObamaCare affects Medicare using those terms?  In January, the Truth Team went to great lengths (including an odd repetition of two whole paragraphs) to debunk the notions of ObamaCare's Medicare cuts.  Conservatives and Republicans should be encouraged that the Obama team feels the heat from Ryan enough to play on his home turf.

Update:  OK, panic has really set in.  Now the Truth Team is tweeting a link to an ABC News article titled:  FACT CHECK: Obama, Ryan, Romney Backed Medicare Cuts.  Obama bragging about backing Medicare cuts?  What's next, Obama backed Voter ID all along?  They are on the run!