August 2, 2012

The following is a full transcript of FedCentral’ s interview with Kelvin Womack, Principal and Federal Health Leader, Deloitte Consulting LLP and Diane M...

The following is a full transcript of FedCentral’ s interview with Kelvin Womack, Principal and Federal Health Leader, Deloitte Consulting LLP and Diane Murray, Principal and IRS client service lead, Deloitte Consulting LLP conducted by Jane Norris on August 2, 2012. To listen to the full interview go to http://www.deloitte.com/us/fedcentral.

Jane Norris
Welcome to FedCentral, brought to you by Deloitte, a program where executives and federal government leaders talk about the issues and initiatives that are making a real impact on the business of government today, to help government help America.

On June 28th, as most of you know, the Supreme Court handed down its rulings on the four legal challenges to the Affordable Care Act, finding in favor of defendants on the central issue of the individual mandate and upholding the balance of the law with the exception of federal power to terminate states’ Medicaid funding. Today, we’re going to discuss the implications of the Supreme Court and the federal government. We’ll also talk about the Supreme Court ruling on the Affordable Care Act, potential implications for government agencies with health oversight, and immediate steps that governments may take in the aftermath of the rulings.

Joining us today to discuss the Supreme Court ruling is Kelvin Womack. Kelvin is a Principal with Deloitte Consulting and leads the Federal Health Sector and serves as its practice leader. Mr. Womack also serves as a federal health reform executive leader helping federal health clients address their needs related to health reform legislation.

And Diane Murray, who’s a Principal with Deloitte Consulting. She leads the IRS account, and she’s helping the IRS with business and technology changes required to support the health reform legislation. Welcome to you both. Thanks for joining us today.

Kelvin Womack
Thank you.

Jane Norris
Well, there’s a lot going on, so Kelvin, why don’t you give us an overview of the Supreme Court ruling and what it means for federal agencies.

Kelvin Womack
Okay, thanks, Jane. Well first of all, as I think many of us know, the Court found in favor of the defendants on the central issue of the individual mandate and upholding the balance of the law with the exception of the federal power to terminate states’ Medicaid funding, so that was one thing that came out of it.

Second thing was the majority of the Court decided that the Anti-Injunction Act did not apply. The Court did not vote on the question of whether the mandate was severable from the rest of the law because the mandate was upheld, and thirdly the challenge to the federal government’s power to require minimum Medicaid eligibility for the states at 133% of the federal poverty level was limited but it was no invalidated. The Court ruled that the states have a choice to participate in the expansion of Medicaid since the federal government does not have the power to revoke existing Medicaid funds if a state chooses not to participate.

Jane Norris
Alright, so from a federal government agency perspective, what are the next steps that the government will have to engage in, in order to implement the Affordable Care Act or are they already well down the road?

Kelvin Womack
So I think, Jane and Diane, they are already well down the road. What this decision did was it removed a lot of uncertainty from the feds as to how they were going to move forward if, in fact, any portions of the law had not been upheld by the court. They’ve got a full plate. In the next 18 months, there are a lot of things that they need to get done and when I say ‘they,’ there are several federal agencies. It’s not just the Department of Health and Human Services. Diane serves with the Internal Revenue Service, and we’ll talk about some of the things they had to do, but our federal clients have a lot of work to do together collaboratively over the next 18 months to get health insurance exchanges implemented and out— and a lot of other things dealing with some of the public health prevention activities that this law provides, as well.

Jane Norris
So talk a little bit, if you would, Diane, about the number of agencies that are going to be engaged.

Diane Murray
Oh, gosh, probably at least six or seven, if not more. We’ve got HHS, we’ve got the IRS, we’ve got the Department of Homeland Security. Kelvin, can you think of others?

Kelvin Womack
Well, when you talk about HHS, there are several operating components of HHS; the Centers for Disease Control and Prevention has a major role, the Food and Drug Administration, the National Institutes of Health, and at ground zero, of course, the Centers for Medicare and Medicaid Services.

Jane Norris
So with all those agencies engaging, there’s obviously going to be a lot of collaboration between agencies. Is that a technology issue or exactly how does that take place?

Kelvin Womack
Well, I think what I’d like to do is ask Diane to talk a little about the IRS’s role as an example of the collaboration that needs to occur. There’s a major technology implementation effort underway across the federal government as well as with our state and commercial clients in the health plans and provider markets. Diane, do you want to speak to what kinds of things the IRS has on its plate?

Diane Murray
Oh, sure, well, first of all, the IRS is collaborating tremendously with HHS, particularly CMS, on the implementation of the health insurance exchanges. The IRS actually has a central role in making sure that the premium tax credit that individuals and families are eligible for to purchase affordable health insurance is implemented properly. They’ll also levy the tax on individuals who choose not to purchase health insurance, and it’s a technology challenge, so there’s a huge technology push to get the exchanges in place, the interfaces between the states and HHS and between HHS and the IRS, but it’s a lot more than that. It’s more than just technology. There needs to be governance. There’s data being exchanged, there’s tremendous security and privacy impacts, and each organization has its own standards for the protection of data for the exchange of data and they need to come together to do that seamlessly so that the public, when purchasing insurance and interacting with the government around health insurance exchanges, gets a consistent message and really one voice from the government.

Jane Norris
So based on that it does sound like there is a lot of work to engage in. Not just that which is being done now, but also now that the Supreme Court has come down with its ruling, there are going to be more states that come on board, more expansion in the workload that’s done. Is that right?

Kelvin Womack
That’s absolutely right and you mentioned, Jane, that there’s a lot of work that’s already been underway since this law was enacted a couple of years ago. HHS has already stood up two portals for consumers to do research on what health plans options are available for small groups and individuals. They’ve also stood up a portal that allows people with preexisting conditions to go in and shop and find out what insurance options are available to them. The CDC was awarded a lot of money for a public health and prevention fund to do public outreach to US citizens about the kinds of things that we as citizens should be doing to improve our health with the theme that an ounce of prevention is worth a pound of care. There’s a lot of work to be done across all agencies and reaching out to the public so that we as citizens understand what’s going to be available to us in this law and what we should be doing as citizens, quite frankly, to improve our own health.

Jane Norris
And people may not understand that the role of government, to make sure that this is implemented and the people all know what their options are. They really do need to explain how this impacts, so – but that’s part of their workload and that’s part of what they’re undertaking now. Is that right?

Diane Murray
Yes, and I think that one of the thing the government needs to really think about is right now, it’s a matter of outreach, it’s a matter of educating the public on what’s coming down the pike but when you flip the switch, especially when the exchanges go into effect, there are going to be a lot of questions. The public is going to need to know where do I go to get insurance, how do I do it? What if it doesn’t happen right? You know, what’s going to happen to me if I choose not to purchase it, and I think the government’s going to experience a tremendous amount of telephone calls, internet inquiries, and to really make sure that the government has the infrastructure in place to handle the customer service to the public when they are starting to purchase health insurance and get that on board with the exchanges.

Jane Norris
And does that happen at the federal level and the state level or how does that exactly work?

Kelvin Womack
It’s going to happen at both levels, Jane, and it’s going to have to happen, as we’ve said earlier, in collaboration with each other. For example, one of the things the Supreme Court ruling came out- and I think we mentioned earlier – is that the federal government does not have the right to mandate a 133% of the federal poverty level for this new law, so that means states have the option of participating in and receiving that extra federal funding for that. There is an area where both the states and the federal government have to work together again to make sure that the citizens understand what their options are but quite frankly, there’s going to have to be collaboration between, for example, IRS, HHS, and state and local organizations to ensure that since states have options as to what degree they participate in this, that all the systems and technology and again, public education is enacted and put in place to make sure this works well.

Jane Norris
Does that then require an expansion of not just federal architecture, if you will, but also the federal architecture as it relates to how states interact with the federal government?

Kelvin Womack
It certainly requires a modification to the architecture that’s in place right now, and I think Diane has examples, you know, from IRS, but absolutely, it’s going to require more and more coordination and integration of existing infrastructure.

Diane Murray
Right, and so HHS is really front and center with CMS in the delivery of the exchanges and the coordination between the federal government and the states and the exchange of information, and they play a critical role in making sure that that data exchange happens seamlessly.

Jane Norris
And you talked about deadlines earlier, so what are some of the deadlines that are coming up and what do they mean for federal government agencies that are working on this?

Kelvin Womack
Well, I’ll give a couple that come to mind right away— this November, I believe sometime around November 16th, the states have to give the federal government information on whether they are going to implement a state exchange or not because remember, it’s not mandatory and in fact, for those states that do not implement an exchange at the state level, the federal government is going to be implementing a federal exchange to cover the difference, so that collaboration between federal and states, again, happens this November, and then in January, the states have to have a plan that they have provided to the federal government as to how they are going to implement those exchanges in states where they choose to implement an exchange.

Jane Norris
So that’s coming up, literally, in just a few months.

Kelvin Womack
Yes.

Jane Norris
And so once that decision is made by the states, are they able at some point in the future to reverse that decision? Does the law allow for that? Because you can see a situation where you may change leadership and the decisions might change, so do we know how that’s going to be implemented?

Kelvin Womack
I’m not sure how it’s going to be implemented, Jane, but since the states do have options, again, to the extent that they want to participate in these exchanges, I would guess that down the road, if new leadership comes in place in a particular state that those options could be exercised.

Jane Norris
Okay. So we have a lot of work to do and you mentioned earlier that there’s also some preventative care that’s going to take place as a result of this. We’ll talk about that when we come back. Stay tuned; you’re listening to FedCentral on Federal News Radio 1500 AM. We’re talking this morning to Kelvin Womack, Principal, Deloitte Consulting, and Federal Health Sector leader and the practice leader for the Heath – Federal Health Sector and also with us is Diane Murray. She’s a Principal with Deloitte Consulting, as well, and she leads the IRS account and is helping the IRS with their business and technology changes in support of the ACA. We’ll be back in just a moment. You’re listening to FedCentral on Federal News Radio 1500 AM.

Welcome back to FedCentral brought to you by Deloitte. Today we’re talking about the Supreme Court ruling on the Affordable Care Act and how it will impact the federal government, and joining us is Kelvin Womack, Principal with Deloitte Consulting and he leads the Deloitte Health Sector. Also with us on the show, Diane Murray, a Principal with Deloitte Consulting who leads the IRS account for Deloitte.

So we’ve been talking about the ACA and the impact that it’s having with the federal government, with HHS and other industries, other collaborations within the federal government, but talk about industry collaboration for a moment if you will. Talk about how the industry can play a role in how HHS and other agencies actually implement the Affordable Care Act.

Kelvin Womack
Okay, well, first of all, industry I think has a major role in making all this happen. So this is all about increasing access for our citizens, increasing the quality of healthcare and as much as we can, taking out cost, and all of that happens in the delivery system. So as we talk about making this happen, there are several things that are already occurring. First of all, CMS, which I think I mentioned earlier, is at the center of this, has got funding to put in place a center for Medicare and Medicaid innovation and that program is all about getting grants and fundings out into industry to come up with best practices, innovation, and doing the three things that I just mentioned into our delivery system. So that involves our health plans industry, that involves our provider and hospital industry, and it also involves our pharmaceutical industry, working together to provide these best practices and new innovations.

Jane Norris
So that’s an important feature, and the tax provision that the Supreme Court decision came down with basically changed or shifted the way it was being perceived or actually how maybe the law was intended, so how does that impact the IRS, Diane?

Diane Murray
Well, actually, not quite as much as one would think. So basically the Supreme Court kept the ACA intact and the IRS had been working on the provisions of the legislation since it was enacted. I think what the – calling the justification or supporting the individual mandate by supporting the government’s right to pass and levy taxes just puts a little more scrutiny on the IRS, puts them a little more front and center in implementation. Healthcare isn’t their business; tax administration is their business, but this does put them right smack dab in the forefront of the healthcare legislation.

I think it’s also important to point out, that at the IRS there are a lot of tax implications to the ACA and some are already in effect and are being put into effect over the course of the next five years.

I’ll give you a few examples. Tax credits for small businesses to help them afford to purchase insurance coverage for their employees. There are also fees levied on the insurers and pharmaceutical companies and providers that help support what we consider the shared responsibility portion of the legislation, helping to fund the legislation. Another example, and this is already in effect, there is a fee on the import or manufacturing of certain branded prescription drugs that the IRS has already implemented to start bringing in money from the pharmaceutical companies that are importing or manufacturing certain drugs to, as I said, to help pay for the legislation.

Jane Norris
So, all of those changes that you just talked about require changes in tax law or how does that impact the IRS? How do they incorporate those mandates?

Diane Murray
Those are actually relatively simple, because if you think it, the IRS gets tax code changes every year. They’re used to getting changes to tax legislation from Congress based on whatever laws are in place. So implementing those is really a standard process that the IRS goes through every year to make sure that the tax system reflects the current tax laws and the current tax code, and that they are used to getting this legislation, they’re used to doing it quickly, and they don’t often have too much trouble with it.

Jane Norris
So Kelvin talked earlier about the fact that there is going to be a lot of questions that come up around the law, so I imagine that the questions not only will have to do with the healthcare exchanges or questions about implementation but it’ll also have to do with the tax laws, right?

Diane Murray
Yes, so when the IRS is ready and prepared to field questions about taxes and I believe questions about healthcare itself, even if it has something to do to the IRS, it will be routed through to HHS as the one voice for healthcare for the government.

Jane Norris
That requires training, probably new staffing, and helplines, things that are going to be put in place that maybe don’t exist today or need to be changed in order to accommodate that. Is that right?

Kelvin Womack
Yes, and in fact we know that HHS and IRS are going to be increasing their workforce –

Diane Murray
Yes.

Kelvin Womack
-to deal with a lot of what we’re talking about here today, so absolutely, and again, going back to the collaboration that happens between our feds, our state and local governments, and the industry – the same thing is occurring in state and local. I mean, there’s a lot to be done. We all know that our state and local governments also have budget woes and deficits and financial problems, as well. They’ve also got a lot to do when it comes to increasing their workforce, training their workforce to deal with the kinds of things that we’re talking about here.

Jane Norris
So this law is probably the most misunderstood law that currently exists. There are probably so many things in it that we haven’t really thought about, at least from a government perspective, so give us some of the other highlights that you think are little-known and that maybe of major importance.

Kelvin Womack
I think I mentioned earlier, an ounce of prevention is worth a pound of care, so there are major provisions in the law that deal with public health and wellness programs. We mentioned the CDC funds for preventions and public health, so there is a lot in this law about preventative measures. You know, the idea being the more we can keep all of us out of our healthcare system for as long as we can, we can take cost out of the system, so there’s a lot to be said about that. We also talked about outcomes, not paying just for the transaction or for the visit but also paying for quality of care and getting health outcomes. The law stood up a new organization called The Patient-Centered Outcomes Research Institute that works in collaboration with NIH and industry to do research on what are some of the best practices and comparing effective healthcare across the country and to provide that research not only to our provider and our industry and our healthcare industry but also to the citizenry so that we have a better understanding of what are some of the better treatments, if you will, for different types of chronic diseases.

Jane Norris
So does that mean that doctors will need to provide information about the outcome of their treatment for any given patient or do we know exactly how that might be implemented long-term?

Kelvin Womack
The law requires that our delivery network and doctors actually provide reporting on the quality of care and how they are actually implementing and improving quality of care for the citizenry, so that is one of the requirements of the law.

Jane Norris
That’s a major shift, that is part of the whole wellness idea that I think has been proliferating society. People are taking vitamins, exercising, trying to eat more healthy foods, but this is something that’s going to go a little further than that, right? They’re really going to try to prevent disease by leading a healthy life and try to encourage the citizens.

Kelvin Womack
Exactly, Jane. It’s a lot about awareness and putting this information in front of us, as citizens, so we can do a better job of taking care of ourselves.

Jane Norris
Alright, so talk about some of the other time-lines that people might want to think about if they’re working at an agency. Maybe many of the agencies that are working on this I was even unaware of; The Federal Trade Commission, the Department of Justice, the FDA, you mentioned Centers for Medicaid and Medicare Services are just some of the few that come to mind— what are the other time-lines that may be in play here?

Diane Murray
I think the biggest looming time-line is 2014, when the health insurance exchanges go into effect. That’s when you have widespread availability of health insurance to the uninsured and they’ll be able to purchase it. That’s a major change for the government, the public, and for the insurance companies.

Kelvin Womack
Yeah, I would agree with that. That’s a major thing that’s going to come up, and I want to emphasize that a lot of things have already occurred and are already in place. For example, the information portals that I mentioned on preexisting conditions, being able to shop for insurance, and also for small groups and individuals to go on healthcare.gov and get information on being able to shop for insurance.

Jane Norris
So the collaboration that you talk about, is it a collaboration that will take place online? Is it a collaboration that will take place from HHS to the various industry partners— because there are healthcare practitioners, health insurance agencies, citizen engagement, there are a lot of different actors involved in the process, so how does all that collaboration take place?

Kelvin Womack
Yeah, that’s a very good question, Jane. It’s occurring naturally, it’s occurring in face-to-face meetings, conferences, in educational seminars, it’s occurring in industry-led discussions as well as government-led discussions about what it’s going to take to implement this law effectively, so it’s all the above.

Jane Norris
And as they start this collaboration process what’s industry’s role? What do companies like Deloitte do to try to facilitate or implement? What is the next step for you?

Kelvin Womack
As we’ve said, there’s a lot of work to be done for the nation in getting this law implemented effectively. Our role, at Deloitte, is to work with our clients across all of these industries; obviously state and local government, federal government, health plans, the pharmaceutical and the hospital marketplace. We’re working across this entire industry with all of our clients to help them put in place all the things they need to do over the next several years. So there’s plenty of work to do for them and there’s certainly plenty of work to do for organizations like ours to help them.

Diane Murray
Absolutely.

Jane Norris
So talk about that. Talk about the IRS’s next steps. Where do they go from here?

Diane Murray
Well, they keep on keeping on, actually. They are full speed ahead with implementation. They haven’t looked back, and this doesn’t change their course, and they’re – like I said, the next big thing for the IRS is going to be the 2014 implementation of the exchanges.

Jane Norris
Do you think there will be new hiring as a result of ACA? Do you think there will be more jobs in the marketplace because of the Affordable Care Act?

Diane Murray
Well, we know there are going to be some new federal jobs. Many agencies are hiring or plan to hire to support the ongoing administration of the legislation.

Kelvin Womack
Yeah, and as we mentioned earlier, that prevention in public health fund that the law authorized, part of the dollars that are going to go into that are to put more providers and physicians out into the marketplace. By the year 2020, I forget the numbers, but we’re going to need a lot more providers in the American marketplace to take care of all of us, particularly those of us in my generation, Baby Boomers that are about to hopefully not enter the healthcare system, but the law funds that. The law provides for putting more providers in the marketplace to take care of the citizenry.

Jane Norris
Well, so much more to talk about. Fascinating conversation with both of you. Thank you so much for joining us today.

Diane Murray
You’re quite welcome, thank you.

Kelvin Womack
Thank you.

Jane Norris
You’ll be hearing much more about this in the days to come. You’ve been listening to FedCentral, brought to you by Deloitte. Our guests, Kelvin Womack, Principal with Deloitte Consulting and leader of the Deloitte Health Sector, and also with us, Diane Murray, Principal with Deloitte Consulting who leads the IRS account. Thanks so much for tuning in today and thanks for listening to FedCentral. Find out more at FederalNewsRadio.com. I’m Jane Norris. This is FedCentral on Federal News Radio 1500 AM.

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