Wash Post: Congress Finds No Direct Evidence that Sulaimon Brown was Promised City Job

Committee finds no direct evidence Sulaimon Brown was promised city job

By Nikita Stewart, Monday, October 31, 12:06 AM

A congressional committee has concluded that Sulaimon Brown appeared to receive money from people with ties to a campaign aide of Mayor Vincent C. Gray but that there is no direct evidence that he was promised a city job in return for disparaging then-Mayor Adrian M. Fenty in last year’s election.

An investigation by the House Committee on Oversight and Government Reform did not find “independent facts to corroborate” Brown’s claim that “he was promised a job” but said there is “circumstantial evidence that may support Brown’s” claim of such a promise, according to its report of the former mayoral candidate’s claims. A copy of the report, which is scheduled to be released Monday, was obtained by The Washington Post.

The committee looked at money orders drawn under the names of people with ties to Gray campaign consultant Howard L. Brooks. Brooks declined to be interviewed by the congressional panel, which also did not interview those whose names appeared on the money orders. The committee did not use subpoena power.

The committee interviewed several Gray campaign and administration staffers as well as Brown, according to the report. It said it based its conclusions on the interviews and on documents provided by the mayor’s office and the D.C. Council, which concluded its own investigation this summer. The report also said that the evidence must be weighed against the credibility of Brown, whom it described as having a “poor grasp of the facts.”

“While there is some circumstantial evidence that may support Brown’s allegations, including cell phone records, internal city e-mails, and copies of text messages between Brown [and the mayor and campaign staff], overall the evidence is insufficient to support Brown’s allegations” that he was promised a job, the report said.

Although the committee did not find conclusive evidence of such a promise, the report does not conclude that Brown’s claim was untrue.

Gray has denied the campaign made payments to Brown or asked him to attack Fenty. The mayor has said that Brown was told that he would get a job interview, not that he was promised a job.

The congressional report cited a D.C. Council contention that Brown effectively committed perjury by violating the District’s false-statements law on a job application. Brown, the report said, signed the application under oath saying he was not “given, transferred, promised, or paid any consideration for or in expectation or in hope of receiving assistance in securing” a position with D.C. government.

The D.C. Council investigation recommended that Brown be prosecuted for what the council thought to be false statements in his job application.

Brown has told The Post that the Gray campaign promised him a job and that the mayor was aware of that promise. Brown claims the payments from Gray’s campaign were aimed at keeping Brown’s financially strapped mayoral campaign afloat as a way to battle Fenty.

The House committee, chaired by Rep. Darrell Issa (R-Calif.), launched its investigation in March after The Post published a story in which Brown alleged that the Gray campaign gave him payments and promised him a job for his attacks on Fenty. His claims also prompted investigations by the D.C. Council, the city’s Office of Campaign Finance, the FBI and the U.S. attorney’s office.

Overall, the House committee’s conclusion is similar to the findings of the D.C. Council probe, which released findings in August that faulted the Gray administration’s hiring practices. But the House report reveals more details from campaign chairwoman Lorraine A. Green, who acknowledged to congressional investigators that “it is possible” she and Brooks met with Brown at Union Station.

Green has denied all of Brown’s allegations. In an interview with The Post, Brooks denied making payments, and he declined to speak further without an attorney.

Brown has alleged that he and Green met at Union Station’s rotunda last summer, when she allegedly gave him the first of several campaign payments — an envelope he claims contained about $750. Brown alleges Brooks delivered other payments.

Green denied Brown’s allegations about what transpired at the Union Station meeting, saying that he was seeking financial help from Gray campaign donors. “I laughed at him,” Green told the investigators, according to the report. “We were running way behind Fenty, who had a multimillion-dollar war chest. The campaign was running on a shoestring . . . we weren’t about to help another candidate.”

She told the congressional committee that she gave Brown “white envelopes containing ‘campaign information’ but said the packages ‘were not for him specifically.’ ”

The report said that if Brown received contributions from Green or Brooks to help finance his campaign “without reporting those contributions, he likely violated D.C. campaign law.” In interviews with The Post and testimony before the D.C. Council, Brown said he used some of the money to pay for personal expenses because he was unemployed.

Harsh assessment of Brown

The report offers a harsh assessment of Brown, based on interviews with Green and Wayne Turnage, director of the D.C. Department of Health Care Finance, the city agency that briefly employed him this year.

The House committee interviewed Brown, Green, Turnage, D.C. Inspector General Charles J. Willoughby and Gerri Mason Hall, Gray’s former chief of staff — called “five key witnesses” in the report. Two other “key figures” — Brooks and Talib Karim, Turnage’s former chief of staff — declined to meet with the committee, according to the report.

According to the report, Brown called Turnage and other staff members at Health Care Finance after he was dismissed, demanding a severance package. Brown has told The Post that he was seeking severance because he thought he was wrongfully dismissed.

Shortly before Brown was hired, Green told the committee, she reported “threatening” text messages she said she received from Brown to security officials at Amtrak, where she was a senior official until April. Brown has told The Post that he did not view the messages as threatening.

D.C. police told the House committee that an Amtrak inspector contacted them about the text messages, according to the report. “A review of the text messages [by police] did not reveal any criminal threats but the messages did not appear to be fully coherent,” the report said.

Green also told the committee that at one point during the campaign, Stephanie Reich, Gray’s campaign chief of staff and personal aide, began receiving calls from Brown. According to Green, Reich, who answered the mayor’s campaign calls, said Brown called repeatedly. Brown has told The Post that he called to try to reach Gray through Reich.

Citing Brown’s cellphone records, the report said there were 45 calls between Brown’s phone and a campaign cellphone that Reich answered between July 13, 2010, and Sept. 13, 2010, of which 39 came from Brown’s phone. “In addition,” the report said, “the records show multiple calls on the same day, often within minutes of each other.”

According to the report: “Green said during the campaign she ‘had discussions with Howard Brooks about Brown,’ telling Brooks and other men in Gray’s entourage that she wanted them to ‘keep an eye on Brown’ during campaign events. Green explained, ‘The security detail was supposed to watch the crowd. I didn’t want them focusing on Brown, so I asked some men in the campaign to help out.’ ”

However, the committee says throughout the report that some of Green’s assertions could not be verified because of the lack of cooperation from Brooks.

Brown has said that when he first met Green and Brooks at Union Station, they were traveling in a dark-colored Volkswagen. He has told The Post that Brooks was driving and that Green said it was okay to speak in front of him. He also told The Post that after Green allegedly gave him the money, she told him additional payments would be handled by Brooks.

According to the report, Green acknowledged that she often traveled with Brooks in a vehicle that met Brown’s description. She “said ‘it is possible’ that Brown saw her in such a car with Brooks at Union Station.” Green acknowledged “it is possible” that Brown approached the car and spoke with her, but she said she had “no specific recollection” of such a meeting, according to the report.

The report, which includes photos of envelopes Brown said he received from the Gray campaign, notes that there is no video footage to corroborate the meeting took place.

Restraining order

The committee also delved into the circumstances surrounding Brown’s dismissal from the city’s Department of Health Care Finance. He was fired after media reports about his past legal troubles, including a restraining order in which Brown was accused of stalking a 13-year-old girl. Police found that the woman who filed for the restraining order and Brown had a “child in common” and that he was ordered to stay away from the child, according to the congressional report.

The committee’s findings shed light on the restraining order. Brown said he believed the Gray administration fabricated court records relating to the court order. The committee concluded that Brown’s allegation is false, according to the report. Brown has declined to speak about the restraining order, saying only that “it’s not what you think.”

Turnage told congressional investigators that Brown’s work performance also was poor. Turnage said Brown “ ‘didn’t know what an RFP (request for proposal) was’ and ‘had no knowledge of Excel’ . . . Turnage also said that Brown’s work product was replete with spelling and grammatical errors,” the report said.

Brown has said that he performed well at the agency.

Staff writer Ben Pershing contributed to this report.

Kevin Wrege, Esq.

Founder & President

Pulse Issues & Advocacy LLC

Office: 202-625-1787

Mobile: 202-253-4929

4410 Massachusetts Ave., NW, #150

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AISHEalth: CMS Responds to ACO Rule Complaints

CMS Responds to ACO Gripes…Now’s Let See Who Signs Up

By Jennifer Lubell – October 25, 2011


So, the federal government really appeared to listen when various industry stakeholders essentially said, your proposal to establish a Medicare fee-for-service accountable care program is unworkable. Sorry, not interested.

CMS’s response: in issuing its final rule on the Medicare Shared Savings Program (MSSP) on Oct. 20, the agency chopped in half the number of measures to assess quality, got rid of its electronic health records use requirement, widened the scope of eligible providers and took steps to lessen risk from one of its “tracks” of shared savings and losses. It eliminated an unpopular 25% fee-for-service payment withholding to cover any potential losses under the program’s payment tracks and is now offering a prospective assignment option for the Medicare ACOs.

Agency officials more or less acknowledge that they had to make some changes to attract more applicants to a program that since March had drawn in mediocre reviews. In its proposed form, industry trade groups said the program was just too prescriptive and difficult to implement. Now that a supposedly kinder, gentler final rule has been issued to establish Medicare ACOs, the lingering question is, did CMS go far enough to entice more providers to participate? Dan Mendelson, CEO of Avalere Health, said the final version is “still difficult for most systems to fully digest. Fundamentally, most health systems continue to struggle with the fact that their present operations are oriented toward billing per service and not taking on risk and responsibility for quality.” Do readers know of any providers that were on the fence about MSSP, but now, in the wake of these new changes, may participate after all? What about the fact that MSSP is based on the fee-for-service model, which many industry stakeholders say is outmoded and should be replaced?

Kevin Wrege, Esq.

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WSJ: It Won’t be Easy to Repeal Health Reform Law

Repeal Health Law? It Won’t Be Easy


Every Republican presidential candidate has promised to repeal the Obama administration’s health-care overhaul. But despite full-throated criticism, it’s going to be hard for any of them to fulfill that pledge if elected.

Despite their full-throated pledges to repeal the health overhaul law, no Republican presidential candidate is likely to fulfill that pledge entirely if elected in 2012. Louise Radnofsky has details on The News Hub.

Standing in the way of that seemingly simple campaign promise—an article of faith among GOP voters—is a welter of practical and political obstacles. They include immovable limits on what elements the Senate can tackle, in the likely event Republicans don’t have a 60-seat majority after the 2012 election, and the party’s need to come up with spending cuts to replace savings promised by "ObamaCare," as it’s dubbed by critics.

These and other hurdles have sparked a lively debate among the candidates over whose approach is best, with former Massachusetts Gov. Mitt Romney battling rivals who say his two-step plan is unrealistic. For now, GOP lawmakers and conservative strategists are pushing separate, piecemeal approaches.

The conundrum is in part a direct consequence of the law’s complexity, something Democrats now consider an asset. In the House, some Republicans have been studying ways to choke off funds for the law while working toward repeal, while in the Senate Republicans are pushing bills to knock out specific pieces of the law.

The complications are evident in Mr. Romney’s two-step plan.

Mr. Romney has proposed signing an executive order on "day one" offering waivers to any governor who wants his or her state to opt out of the law. His rivals note that by law, such waivers can’t take effect before 2017. The move would also leave untouched the focus of conservative opposition: the requirement that individuals carry insurance or pay a fee.

Mr. Romney said he would follow this on "day two" with legislation to repeal the law, using a Senate tactic called budget reconciliation. That would require only 51 votes to succeed, a total the GOP might reach after next year’s election.

But under the rules, such a bill would tackle only parts of the legislation that relate directly to the budget. Anything else would require 60 votes to overcome a Democratic filibuster, and few see Republicans notching that number.

Presidential contenders Rick Perry and Jon Huntsman have attacked Mr. Romney’s approach, particularly the first step of his plan.

"Ultimately there are no administrative silver bullets that can roll back the core provisions," said Tim Miller, a spokesman for Mr. Huntsman. Mark Miner, a spokesman for Mr. Perry, said the candidate would do "as much as is possible through executive order, but will focus on leading Congress to pass a full repeal."

In addition, some provisions of the law are linked with others and would cause problems for health insurers if dismantled. Moreover, while polls show a plurality of the public backs repeal, people also favor certain pieces of the bill.

In a March 2011 survey by the non-partisan Kaiser Family Foundation, 74% said they thought lawmakers should keep provisions that prohibited insurance companies from denying coverage because of a person’s medical history. But a new poll just released by the foundation found that 51% of respondents have an unfavorable opinion of the law, up from 46% in the March survey.

In the coming election campaign, Democrats are expected to highlight such provisions, including a mandate that insurance companies issue coverage for children even if they have pre-existing medical conditions.

"The few policies that aren’t loved, such as the individual requirement to purchase insurance, make the overwhelmingly desirable provisions, such as the insurance-reform protections, workable and affordable," said Chris Jennings, a former senior health adviser to President Bill Clinton.

Another potential problem: The Congressional Budget Office initially found that the law narrowed the deficit, thanks to its tax increases and Medicare cuts. Opponents say such savings are illusory because they expect Congress to put off those provisions. Even so, reconciliation rules require Republicans to provide offsetting cuts.

When the health care overhaul passed in 2010, CBO calculated it would reduce the deficit by $124 billion over 10 years. Since then, the Obama administration has shelved the law’s long-term-care insurance program, which CBO originally estimated would save $70 billion over that time period.

CBO declined to comment on future projections.

Proponents of repeal point out that the law’s deficit-reduction projections are likely to diminish substantially by 2013.

Conor Sweeney, a spokesman for House Budget Chairman Paul Ryan (R., Wis.), said analysts used gimmicks to arrive at their original estimates for the overhaul’s deficit reduction, and that the demise of the long-term-care program leaves a more manageable budget gap to fill.

Enlarge Image

Republican presidential hopeful Mitt Romney

In the Republican-controlled House, Mr. Ryan has led efforts to repeal the legislation in its entirety. He has said he believes it can be replaced with other measures that would contain the cost of health care, such as changes to the structures of Medicare and Medicaid. He also wants to keep insurance companies from being able to deny coverage based on a person’s medical history.

Choking off the law’s funds, which some Republicans recommend, could help thwart the overhaul in 2013. But it would leave the law on the books for Democrats to revive funding for it in the future.

In the Senate, where the procedural problems are most acute, Sen. Orrin Hatch of Utah, the top Republican on the Senate Finance Committee, is pushing smaller bills to address specific pieces of the law, including requirements for individuals and employers to purchase insurance or pay a fine, and a tax on medical devices, according to spokeswoman Julia Lawless.

James Capretta, a top budget official in the administration of George W. Bush, said if drafters were "creative" and went after every provision that had spending implications, they could remove most of the law or make it irrelevant using the budget reconciliation process. "It would take a fair amount of work, but it’s definitely doable," he said.

Senior GOP leadership aides said it was too early to know for sure how they would go about using the reconciliation process, and neither they nor the presidential candidates have specified how they would plug the budget gap.

Kevin Wrege, Esq.

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Office: 202-625-1787

Mobile: 202-253-4929

4410 Massachusetts Ave., NW, #150

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State-By-State Health Insurance Report

Kevin Wrege, Esq.

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10.27.11 State and Reform report.docx

Maryland Health Exchange Market Data

Kevin Wrege, Esq.

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MD Exchange Environmental ScanMarket Analysis Abbreviated deck for presentation_10-24.pptx

DC Wire: Public Service Commission Nominee Noel’s Fate Remains in Doubt

Posted at 11:20 AM ET, 10/24/2011

Nomination of former consumer advocate Elizabeth Noel remains in limbo

By Nikita Stewart

D.C. Council member Yvette M. Alexander says she needs to know how many cases could be potential conflicts of interest for former consumer advocate Elizabeth “Betty” Noel if she becomes a member of the Public Service Commission.

Noel, who has been nominated to the commission by Mayor Vincent C. Gray (D), served 18 years as the people’s counsel, a city position in which she battled local utilities on behalf of consumers. Those cases were heard by the three-member Public Service Commission, and electric utility Pepco says there are too many open matters that once involved Noel, who left the people’s counsel position in March 2010. She would have to recuse herself from those cases.

Alexander (D-Ward 7), chairman of the council’s Committee on Public Services and Consumer Affairs, said she needs more information despite an hours-long hearing this month. Her committee would vote on the nomination, which would then go to the entire council for approval. The position pays $146,457 annually.

In an Oct. 14 letter to Alexander, Peter Meier, Pepco’s vice president for legal services, said Noel participated in 22 of 26 Pepco cases that are open before the commission and was an attorney in 39 of 48 open utility cases.

Alexander said she wants to get a number from the commission and the Gray administration. “I’m not going to move [the nomination] until I get an accurate count of the cases,” she said.

But Alexander added that the controversy speaks to a larger issue: “I want to know why the [commission] has failed to close their cases.”

Kevin Wrege, Esq.

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Wash Post Op Ed: Moten Explains His GOP Ward 7 Seat Candidacy Decision

Why I’m running for D.C. Council as a Republican

By Ron Moten, Published: October 21

Last month, Republican presidential hopeful Herman Cain created waves about his ability to attract blacks to the Republican Party. Blitzer asked why the GOP is seen as “poison for African Americans.” Cain responded, “Many African Americans have been brainwashed into not being open-minded.” I believe that the problem is much deeper and more systemic than that. I believe that most Americans attach themselves to a particular party and lose sight of the fact that all political parties belong to the people.

That certainly appears to be the case in the District. For 40 years, since the District achieved home rule, its government has been led by Democrats. But what has a purely Democratic agenda delivered for the city and its African Americans?

African Americans in the District have made tremendous progress over the years. We have gained high-level positions in government and organizing, and we effectively manage nonprofits that have built communities. But with these achievements have come some enormous costs. The greed and corruption of legacy politics have become entrenched. We have allowed a privileged few to act as kingmakers, crowning as a result generations of lackluster politicians who seem not to have the District’s best interests at heart.

These politicians have consistently spent more money to educate our children but have consistently failed to provide a quality education. We’ve entrusted them with bringing jobs and businesses to the city, but they have continually neglected Wards 7 and 8, where unemployment rates have long been at inexcusable levels. They have declared war on poverty in our neighborhoods, introducing “new and improved” programs. But still Ward 8 has a poverty rate of 35 percent.

The question remains: Who is leading our residents on a path to prosperity?

A lack of political balance has created an alarming trend in our city. With only one cookie-cutter template from which to bring about change, we have created a local political class who all think, act and support the same platform. We seem to be afraid to change the status quo. We support corrupt leadership and blame the messengers who expose the truth, rather than facing facts and withdrawing our support.

It doesn’t have to be this way. I see real opportunity for the District and all of its residents to bring about the changes that have eluded us for so long. That is why I am running to become the next D.C. Council member to represent Ward 7. That is why I am running as a Civil Rights Republican.

Those who question my association with the Republican Party should look back on what it means to be a Civil Rights Republican. The fact is that African Americans have played a considerable role in shaping both major parties. Neither party has been perfect, but our involvement in each has brought about positive outcomes — for us as a people and for our country. Booker T. Washington and Frederick Douglass were Republicans. In 1870, when Thomas Mundy Peterson became the first African American to vote under the 15th Amendment, he did so as a Republican.

During the civil rights era, African Americans changed their allegiance when they saw the Democratic Party embrace their struggle for socioeconomic enfranchisement. (I doubt Peterson could have imagined an African American reaching the pinnacle of U.S. politics as a Democrat.) But it is time for this chapter to draw to a close. Our blind support for Democrats has left Washington politically stagnant. Our inability to secure voting representation in Congress, for instance, can be partially attributed to the lack of a balanced political spectrum in our city. If Republicans in Congress could count on a healthy debate in our halls of government, perhaps they would have less opposition to passing D.C. statehood legislation.

In the early 1900s, two thriving African American communities — Greenwood, Okla., (known as “Black Wall Street”) and Rosewood, Fla. — were built upon Republican principles of strong family values, free enterprise and property ownership. Ultimately, both would be destroyed by the Ku Klux Klan — the terrorist arm of the Jim Crow Democratic Party. Now that we have some measure of political and economic success, I believe we can turn away from cycles of political and economic dependency and rekindle the spirit of Rosewood and “Black Wall Street.” We can be the masters of our own destiny, rebuilding and strengthening our communities. By applying traditional Republican views, such as entrepreneurship, self-reliance and individual responsibility, many overlooked African Americans will find a real and successful way forward.

If our history of fighting for civil rights has taught us anything, it’s that you don’t have a positive effect on a society or a political party by sitting on the sidelines. You must become an active citizen and a formidable participant. My many years of community organizing have taught me that.

African Americans are not and have never been monolithic. Putting all of our eggs in one basket has left us powerless and vulnerable. Those who stood up and sacrificed to give us the rights we enjoy today would be marching right alongside of us to demand fair representation and change in the Ward 7 and accountability in the John Wilson Building. Come join the march for economic freedom. Come join the Civil Rights Republicans.

The writer is a candidate for D.C. Council in Ward 7. From 2004 to 2009, he was the chief operating officer of the nonprofit group Peaceaholics.

Kevin Wrege, Esq.

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Washington Post: Councilmember Alexander to Face General Election Challenge From GOP Convert Moten

Posted at 03:19 PM ET, 10/20/2011

Ron Moten will run for council as a Republican

By Tim Craig

Ronald Moten, the co-founder of Peaceoholics, will leave the Democratic Party on Friday and register as a Republican as he prepares to challenge Council member Yvette M. Alexander next year.

Moten, a lifelong Democrat and fierce supporter of former mayor Adrian M. Fenty (D), said he decided to become a Republican to give Ward 7 voters another choice. He becomes the first Republican to signal an intention to run for the council next year.

“I have been a conservative the whole time,” said Moten, a convicted former drug dealer who later emerged as one of the city’s chief anti-gang and violence prevention activists. “The issues I see going on in D.C., I think what I am doing is the best the decision for the city right now, and with things that need to be fixed, I think this is the way to fix them.”

Moten, 41, had previously stated his intention to run against Alexander, who is seeking a second term, in the April Democratic primary. But Moten appeared to have few paths to the nomination in a race that also includes Kevin B. Chavous, son of former D.C. Council member Kevin P. Chavous.

It’s unclear if District Republican leaders will embrace Moten, who has become well known for some of his antics on the campaign trail, including in an effort to confront him about his campaign tactics.

But if he can secure the GOP nomination, Moten will be able to prolong his campaign until November, giving him a months-long platform to speak out on the issues. And in a one-on-one match against a Democrat, Moten believes, he can effectively position himself as an outsider who will reform city hall.

“We need a balance right now and part of that balance is coming from the Republican Party,” Moten said.

Moten still faces numerous obstacles, including the daunting challenge of reversing Ward 7’s strong ties to the Democratic Party.

Ward 7 is home to both Mayor Gray (D) and Council Chairman Kwame R. Brown (D), and it has the third-highest concentration of Democrats in the city. Out of 58, 596 registered voters in Ward 7, only 1,515 are registered Republicans, according to the Board of Elections and Ethics. No Republican has ever been elected for a Ward-based seat in the District, much less from overwhelmingly black Ward 7.

“I think it’s an uphill battle, but, because of some things I know that are going on in the community, it gives me a chance to win,” Moten said. “If I educate the people on things, they will consider me. All I want is people to have an option and another way to fix something that hasn’t been fixed in five years. “

In an interview with the Washington Post, Moten to declined to discuss his platform, saying he will unveil it Saturday when he officially kicks off his campaign with an event at Woodlawn Cemetery near Fort Dupont. He cautioned he doesn’t “agree with everything the Republican Party does” on national level.

“All politics are local,” said Moten, .

Moten said he hopes his candidacy will inspire other African-Americans to consider joining the GOP to fight for change locally, adding he has met several Republican civil rights leaders from Alabama.

“If people come on Saturday, they will see why I am switching and the history of the Republican Party and the African-American community, which is deep and rich,” Moten said.

So will Moten also be campaigning next year for the Republican nominee for president?

“For now, I still support Obama, but he has one year to get it right,” he said.

Kevin Wrege, Esq.

Founder & President

Pulse Issues & Advocacy LLC

Office: 202-625-1787

Mobile: 202-253-4929

4410 Massachusetts Ave., NW, #150

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AISHealth: Delays in Issuing Reform-Law Regs Start Worrying Insurers as Much as Regs’ Content

Delays in Issuing Reform-Law Regs Start Worrying Insurers as Much as Regs’ Content

Reprinted from AIS’s HEALTH REFORM WEEK, the nation’s leading publication on the business implications of the massive changes for the health industry mandated by reform.

By James Gutman, Managing Editor

October 10, 2011Volume 2Issue 33

The delays in issuing final regulations about several key aspects of health reform — especially, but not limited to, the rules governing benefits and operations in exchanges — are beginning to worry health plans perhaps more than the regulations’ contents themselves. Insurers point to the long time it takes to design, gear up to operate and get regulatory approvals for products as factors making it imperative that federal regulators firm up rules quickly.

But the subject matter of those rules is so complex and important that regulators want to make sure they get input from all stakeholders before finalizing rules, which may wind up substantially different from preliminary ones — as occurred this year with the appeals and grievances regulations (HRW 6/27/10, p. 3). In that case, the changes worked generally in favor of the industry.

Favorable changes notwithstanding, some insurers clearly are exasperated by the collapsing timeline. The Blue Cross and Blue Shield Association (BCBSA), in perhaps the foremost example, told Kaiser Health News last month that it wants HHS to issue all regulations related to the health insurance exchanges by the beginning of 2012. That’s a tall order, even BCBSA admitted. “Given the range of things that have to be put out for comment, I’m worried they won’t be able to do that,” said Kris Haltmeyer, executive director of legislative and regulatory policy for BCBSA, according to Kaiser Health News.

Among the specific concerns raised by Haltmeyer in the article are delays in finding out what “essential health benefits” must be included in plans offered in the exchanges (see story, p. 1), how the low-income tax credits used by purchasers in the exchanges will be administered, how the transfer of funds will occur among plans to account for health differences of people who apply to be insured via the exchanges, and what rules will apply for selling health coverage outside the exchanges starting in 2014.

These indeed are key concerns, David Tuomala, director of actuarial consulting for OptumInsight, a unit of UnitedHealth Group, tells HRW. “Every client we talk to raises the same issues….The problem is a lack of clarity” that threatens to leave insufficient lead time for both product-design and structural needs, he says.

One major issue, according to Tuomala, is that even well-run insurers might have an 18-month product development cycle. Therefore, if HHS comes out with its essential-benefits regs in December, the earliest time seemingly possible, “that’s cutting it close,” he asserts. Tuomala explains that plans really have only until the middle of 2013 — not the Jan. 1, 2014, start of the exchanges — to get everything finalized. This is because they must get approval of their offerings from the exchanges as well as have their administrative systems ready to cover new benefits and products before they can enter the marketing season for the 2014 effective date, he says.

And there are a lot of decisions — some of them at least partly dependent on not-yet-issued other rules — that need to be made between now and then. He cites, for instance, a Medicaid plan deciding whether to enter the commercial market through the exchanges (or vice versa), or a group insurer determining whether to offer an individual-market product via the exchanges. If the answer is yes, continues Tuomala, there is a whole range of systems requirements to be met.

Contents of Gold, Silver Plans Aren’t Known

Moreover, there are still uncertain network-adequacy requirements for “qualified” health plans in the exchanges. Among other outstanding questions, Tuomala adds, are whether sponsors, for instance, can have more than one “silver” plan (i.e., a middle kind of plan to be used in the exchanges) and how they determine actuarially what meets the requirements of a silver plan. He notes that the reform law requires a sponsor to offer a “gold” (i.e., a high benefit level) and silver plan but doesn’t say what constitutes those plans. This will be one key aspect the HHS regulations are expected to clarify.

Once those regs are out, Tuomala explains, plan sponsors will have to decide what size and kind of provider network they will need to deliver the products required under the rules. Then they’ll need to decide on benefit options, figure out how risk adjustment and risk corridors will work on the products, and only then determine product pricing, he says. And all this takes a lot of time.

There is a related unknown that is another time-consuming complication. The transfer of funds among plans required under the reform law to account for health differences among applicants for coverage through exchanges is both an operational and actuarial issue, according to Tuomala. The feds have not yet fully specified how information on this will go back and forth or how the financial transactions related to it will occur. While there are regulations out on this, he acknowledges, “they leave a lot of blanks.” It is not clear, for example, what risk-adjustment mechanisms exchanges would use for this, he says.

Nor are the lingering time-consuming questions related just to exchange participation. If insurers want to market individual coverage outside the exchanges and escape tax penalties for offering products that have benefits too much below the actuarial value required in the exchanges, they need to know the precise requirements soon, suggests Tuomala. Again, he adds, this is a systems as well as a financial issue.

IT issues related to the delay in issuance of the rules are a “legitimate concern,” agrees Tom Bixby, a Madison, Wis.-based attorney who represents health insurers. He tells HRW that one of his clients already had such issues about the summary-of-coverage documents that insurers will be required to furnish consumers starting next March under the reform law (HRW 8/8/11, p. 5). While the National Association of Insurance Commissioners has issued its recommendations on the contents of those documents, and HHS accepted them in proposed rules Aug. 17 (HRW 8/22/11, p. 8), there is an ongoing 60-day comment period, after which the rules could be revised. So insurers, which must meet the deadline, are wondering if they should rely on the proposed rule, Bixby explains.

Sometimes, he recalls, the feds recognize there isn’t enough time to meet requirements in the law and allow a delay, as occurred with the appeals-and-grievance regulations. However, he theorizes that the Obama administration would be “very reluctant” to allow a delay in the start date on such “major aspects” of the reform law as the exchanges, although it might allow delays on certain details of the implementation.

To further complicate the time situation, there are issues related to uncertain state policies that will affect the marketplace in 2014, notes Bixby, who is a former Missouri state regulator. He says state actions are “inhibited” by not knowing yet what the federal rules will say.

Kevin Wrege, Esq.

Founder & President

Pulse Issues & Advocacy LLC

Office: 202-625-1787

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4410 Massachusetts Ave., NW, #150

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There Will Be a Federal Health Insurance Exchange, HHS Official Hill Declares

Oct. 18, 2011 – 5:43 p.m.

There Will Be a Federal Exchange, HHS Official Hill Declares

By John Reichard, CQ HealthBeat Editor

The HHS official in charge of overseeing the creation of insurance exchanges under the health care law emphasized Tuesday that a federal exchange will be ready to step in to the extent states don’t have their own new marketplaces ready to offer insurance choices to the uninsured by Jan. 1, 2014.

“There’s been a lot of backing and forthing in the press saying the feds won’t do it, it’s not going to happen, we don’t have the ability. Well, I’m here to tell you all of that isn’t true,” Tim Hill told a health care conference sponsored by the American Bar Association (ABA). Hill is deputy director of the Center for Consumer Information and Insurance Oversight at the Centers for Medicare and Medicaid Services.

“We’ve made investments in 2011, we’re making further investments in 2012 — in terms of IT, business process, resources that are needed to be able to bring up the exchange,” Hill said. All the things that need to happen to develop a federal exchange are moving forward, he declared.

While the feds are trying to dispel all doubt about whether they will be ready to step in, they are eager to portray themselves as loath to push states around in deciding how exchanges are run. Hill’s mantra during his remarks was that HHS wants a “consumer-centric, state-based exchange.” One size does not fit all, he said, adding that exchanges should be customized to fit the particular insurance market of the state involved.

Hill said officials view the exchanges as an opportunity to make the process of buying insurance unlike anything consumers have ever experienced before. “We want it to mirror and be like any other commercially based transaction that they have today, whether it’s buying a book on Amazon.com or buying a pair of shoes or getting their automobile insurance through Geico,” he said.

The fact is, though, that many states appear to be dragging their feet in creating exchanges. Only 17 have applied for and received “establishment grants” to begin creating them. On Sept. 30, several more applied for those grants. Only 14 states have exchange laws in place. In two other states — Indiana and Rhode Island — governors bypassed their legislatures and issued executive orders to create exchanges, according to an industry tally.

But even the state exchange laws that have been enacted do not address all the details involved in setting up the marketplaces.

In the case of Indiana, there is no commitment to actually create an exchange but only to plan for one.

A handful of states are moving eagerly ahead, said Colleen Gallaher, an official with America’s Health Insurance Plans.

Oregon, New York and Maryland applied for and received establishment grants and “early innovator” money to do pioneering information technology work that other states can copy. “They’re really riding hard and want to get to the finish line, and quite honestly, I think they will,” said Gallaher.

But because of the complexity, lack of certainty about what health plans will be required to offer, and legal challenges to the health care law (PL 111-148, PL 111-152), most states haven’t shifted into high gear.

One questioner at the ABA forum prodded federal officials to say more about what the federal exchange would look like as an incentive to get more states off the dime. The thought is that if the federal exchange is in some way too heavy-handed, states will move faster to set up their own marketplaces.

But Hill broke no new ground in saying what the federal exchange would look like. He referred one reporter to a set of slides presented to state officials at a recent meeting with HHS that did not address some of the things states most want to know, such as whether the federal exchange would be an “active purchaser” that would exclude insurers who don’t offer consumers a good deal.

Gallaher’s remarks carried a strong undertone of uncertainty about whether states — and therefore insurers — will be able to do everything they are being asked to do under the law. She noted that insurers will have to be ready by June of 2013 to file bids to offer coverage on exchanges, with open enrollment to begin that fall. They do not yet know what benefits they will have to cover, among many other questions, including the extent to which federal officials will cushion insurers from losses when they first enter the unfamiliar exchange market.

But states have tighter deadlines. Gallaher noted that states must get HHS certification by Jan. 1, 2013 that they will have a viable exchange ready a year later. “We cannot stress enough that 14 months is hardly enough time to really have mapped-out and sourced-out and vendored- and contracted-out the build-it requirements of an exchange,” she said.

Source: CQ Online News

Same-day coverage of the people and events shaping health care policy from Washington.

© 2011 CQ Roll Call All Rights Reserved.

CMS Developing Federally-Facilitated Exchange Sept2011.pdf


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