Washington Post: Yvette Alexander fights to stay on primary ballot

Posted at 01:54 PM ET, 01/31/2012

Yvette Alexander fights to stay on primary ballot

By Mike DeBonis

Alexander remains in peril of losing her ballot access. (Yvette M. Alexander) D.C. Council member Yvette M. Alexander remains in peril of being kicked off the April 3 primary ballot as she seeks a second full term representing Ward 7.

A Board of Elections and Ethics hearing on challenges to her ballot petitions has been recessed until Thursday morning, when a lawyer for Alexander (D) is expected to rebut the challenger of her petitions, Dawn Matthews. The board heard preliminary testimony on the challenge Tuesday morning but recessed the hearing after it became clear the proceedings would take longer than planned, said board spokeswoman Alysoun McLaughlin.

According to McLaughlin, Matthews appeared Tuesday with adviser Kemry Hughes, who is managing the campaign of Alexander opponent Tom Brown. Alexander did not attend but was represented by lawyer David W. Wilmot.

Wilmot is also a prominent city hall lobbyist who previously represented Alexander in an Office of Campaign Finance investigation last year. She was largely cleared of wrongdoing in that probe.

The board’s registrar last week presented an initial ruling that Matthews is challenging only 455 specific signatures out of the 1,384 submitted by Alexander — that’s not enough to put her under the 250 signature requirement for ballot access. But Matthews is also alleging that Alexander’s petition circulators did not personally witness a great many of the signatures they attested to collecting; if the board accepts those claims, that could be enough to bounce Alexander from the ballot.

The parties will debate the issue Thursday; the board has until Monday to make a ruling.

The board Tuesday also considered a preliminary ruling that Jauhar Abraham did not qualify for the Democratic ballot for Ward 8 Council member.

Abraham, co-founder of Peaceoholics, had his petitions challenged by fellow Marion Barry challenger Sandra “S.S.” Seegars. The board registrar sustained most of her challenges, leaving Abraham almost 90 signatures short of the 250 required.

Another Ward 8 candidate, Gary Feenster, has withdrawn from the race, McLaughlin said, after being faced with Seegars’s challenges.

Abraham did not appear Tuesday to rebut Seegars’s claims, and he said he would proceed with his campaign as a write-in. “I’ve got a lot of support,” he said. “I still think I can get it done.”

He said he is not daunted by the revelations Monday that Peaceoholics was involved in a housing deal that might have squandered millions of taxpayer dollars. “It’s a smokescreen based on all the other things going on in the Wilson Building,” Abraham said, insinuating his political enemies concocted the allegations. “What better way to divert the attention?”

Kevin Wrege, Esq.

Founder & President

Pulse Issues & Advocacy LLC

Office: 202-625-1787

Mobile: 202-253-4929

4410 Massachusetts Ave., NW, #150

Washington, DC 20016


Cabbies protest proposed D.C. mandates

Cabbies protest proposed D.C. mandates

By Mike DeBonis, Published: January 30

Hundreds of D.C. cab owners and drivers packed into a hearing room at the John A. Wilson Building on Monday to show city lawmakers their displeasure with industry reform proposals that they fear would be financially burdensome.

A bill pending in the D.C. Council, introduced by Mary M. Cheh (D-Ward 3) with the backing of Mayor Vincent C. Gray (D), mandates numerous requirements aimed at improving the taxi industry, including mandatory credit card readers, improved driver training and a single color of paint for cabs. Much of it would be paid for through a rider surcharge.

Most of the drivers who testified said that they recognize the need for service improvements, but they said the bill went too far, particularly in proposing to track their trips via Global Positioning System — an innovation needed, backers say, to analyze taxi trends and improve financial reporting.

Negede Abebe, chairman of the Small Business Association of DC Taxicab Drivers, said the proposal represents an “outright violation of the privacy of the riding public and the driver.” Other drivers bristled at a proposal that would retire cabs from service after seven years or 400,000 miles; another group renewed calls to establish a hard cap on the number of city cabs, creating a medallion system similar to ones used in other cities.

Ron Linton, chairman of the D.C. Taxicab Commission, testified that he was moving forward with plans that would place city-installed “smart meters” featuring credit card readers, GPS navigation devices and emergency alert buttons in every D.C. cab by summer. But he said the plan is predicated on the council’s approval of the surcharge — which, set at 50 cents, would raise $8 to $12 million a year, he said.

Linton’s plans cued a debate over who should have responsibility for implementing any improvements. Jack Jacobson of D.C. Taxi Watch, a rider advocacy group, said the improvements should be paid for by the cab industry.

“The District government should not be providing giveaways to pet industries, nor should consumers continue to serve as taxicabs’ personal ATMs,” he said.

Linton defended his plan, questioning whether it would be fair to require cab drivers and companies to pay as much as $3,000 per cab for improvements.

There was also discussion about the need to increase the number of wheelchair-accessible taxis. There are about two dozen now.

Council Chairman Kwame R. Brown (D) has introduced a separate bill that would create regulations for accessible taxis, establishing a capped “certificate” system. Under the bill, half of the accessible cabs would be required to be powered by compressed natural gas; the rest would be powered by “alternative fuel.”

“It’s sad to be in the greatest city in the world and be in a wheelchair and not be able to get a cab on the street,” he said. “I have a plan to get things done.”

Brown appeared Monday morning at a publicity event held by the Miami-based Vehicle Production Group, which is marketing its CNG-powered MV-1 vehicle as a wheelchair-accessible and environmentally friendly option. Fred Drasner, VPG’s chief executive, testified at the council hearing.

But a competitor questioned whether Brown’s bill would allow for other companies to compete. Ray Torreon of Ride-Away, a Beltsville company that converts vans for use by the disabled, said VPG is the only manufacturer whose vehicles would qualify to build the CNG cabs. “It would be a sole-source or monopoly for 50 percent of D.C.’s accessible cabs,” Torreon said.

Brown said in an interview Monday that he was committed to competition and that it was his understanding that several companies could build suitable vehicles under the law.

States with Least Work on Exchanges Will See Big Benefits Anyway, Study Says

Washington Health Policy Week in Review
States with Least Work on Exchanges Will See Big Benefits Anyway, Study Says

By Jane Norman, CQ HealthBeat Associate Editor

January 23, 2012 — The uninsured residents in the 15 states that have made the least progress in setting up health benefit exchanges are the ones with the most to gain under the benefits of the health care overhaul, according to study released from the Urban Institute.

The study, financed by the Robert Wood Johnson Foundation, says that 15 states have made little headway on setting up their exchanges and might have to rely on a federal fallback instead. Yet those are states with high rates of uninsured residents, and under the health care law (PL 111-148, PL 111-152), they would see the largest percentage drop in the rate of uninsured residents.

These states "will gain the most from the Medicaid expansion and will receive the most federal subsidy dollars per capita," notes the study. The Medicaid expansion, however, is not dependent on whether a state or the federal government operates the exchange.

Progress around the country on exchanges—meant to be a marketplace for health insurance for individuals and small business—varies widely. But this is a crunch year. States are supposed to demonstrate "significant progress" on their exchanges by Jan. 1, 2013, and have until Jan. 1, 2014, to implement their exchanges though Department of Health and Human Services officials have been stressing flexibility for states that can’t make it in time.

The study, by Fredric Blavin, Matthew Buettgens, and Jeremy Roth, divides the states into three groups. The first already has passed state legislation on an exchange or has a governor who has issued an executive order. The second are states whose officials have expressed significant interest in creating a state exchange by passing intent legislation, having legislation pending or receiving an HHS Level One grant for planning.

Then there are the rest, who are resistant to the law. They have Republican governors, GOP-led legislatures, or both. Those states are Alaska, Arkansas, Florida, Georgia, Kansas, Louisiana, Montana, New Hampshire, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Texas and Wyoming.

Nine of the 15 have made some progress by creating an exchange study or planning entity. But in six, legislation was not moved or didn’t pass in 2011, said the study.

Yet in those states the percentages of uninsured would be cut in half or more through the health care law. In Louisiana, for example, there would be a 60 percent decrease in the number of uninsured. The same would be true in Arkansas, says the study.

Enrollment in Medicaid or the Children’s Health Insurance Program would rise by more than 50 percent in these states compared to 30 percent or less in the other states, the study reports. And spending on uncompensated care would also drop the most.

States considered to have made the most progress are California, Colorado, Connecticut, Hawaii, Indiana, Maryland, Massachusetts, Nevada, Oregon, Rhode Island, Utah, Vermont, Washington and West Virginia, and the District of Columbia.

In the second group are Alabama, Arizona, Delaware, Idaho, Illinois, Iowa, Kentucky, Maine, Michigan, Minnesota, Mississippi, Missouri, Nebraska, New Jersey, New Mexico, New York, North Carolina, Pennsylvania, Tennessee, Virginia and Wisconsin.

Wisconsin’s Gov. Scott Walker, however, recently said no work will be done on an exchange in his state until the U.S. Supreme Court rules on the constitutionality of the law, and that the state is giving back $37 million in federal funds allocated for planning its exchange.

Kevin Wrege, Esq.

Founder & President

Pulse Issues & Advocacy LLC

Office: 202-625-1787

Mobile: 202-253-4929

4410 Massachusetts Ave., NW, #150

Washington, DC 20016

The Problem With D.C.’s Lobbyist Disclosure Forms: They Don’t Disclose Very Much!

The Problem With D.C.’s Lobbyist Disclosure Forms: They Don’t Disclose Very Much!
Posted by Alan Suderman on Jan. 27, 2012 at 2:40 pm, Washington City Paper

In case you missed it, The Washington Post editorial page has posted a series of must-read emails between Ward 1 Councilmember Jim Graham and would-be lottery businessman Warren Williams and his lobbying team.

The emails, some of which were cited in The Washington Times last year, raise all kinds of questions about Graham’s behavior in the lotto deal and add even more evidence to the truism that when it comes to contracting with the District government, political concerns count for wayyy too much.

But leaving all that aside for a second, the emails also highlight another problem with District government: its lack of transparency in the lobbying process. Every six months, the District’s Office of Campaign Finance makes lobbyists and companies file reports on which Distirct officials they lobbied, what they were lobbied on, and how much that lobbying cost. Sounds good in theory, right? The public can see who is influencing the city’s elected officials, or at least trying to. But a look at the report filed by Williams’ company: W2 Tech, suggests that we may not be getting anything close to the full picture.

According to the emails the Post published, two W2 Tech lobbyists, Crystal Wright and Jim Link, met with Graham on May 29, 2008 to discuss the lottery contract. (Link also mentioned in an email that he had a meeting schedule that same day with Ward 3 Councilmember Mary Cheh.) Link and Graham then exchanged a few emails over the next couple of weeks following up on their meeting.

But if you go to the W2 Tech’s lobbyist disclosure form filed on July 10th, 2008, there’s no mention that these interactions took place. The form requires that W2 Tech identify "the official and title, if known, in the executive or legislative branch, with whom [W2 Tech] has had oral or written communication during the reporting period relating to lobbying activities, and the date that communication was made." But all W2 Tech reported was that on May 5, 2008, it communicated with ‘Columbia, Council of the District."

Williams & Co. also didn’t identify what they were lobbying about. Under the section where W2 Tech was supposed to identify "matter(s) by subject and formal designation on which the lobbyist/registrant expects to lobby," W2 Tech wrote: "Consulting Services." The word lottery doesn’t even appear anywhere on the form. (By contrast, Intralot, the Greek-gaming giant that tried to team with W2 Tech and was also lobbying for the contract, wrote "D.C. Lottery" on its form, and identified the specific councilmembers it lobbied and when.)

And W2 Tech also indicates that it paid its lobbyists "$0" for their services, which LL has a difficult time believing is accurate.

Nobody involved with W2 Tech immediately returned LL’s calls. (Incidentally: Link’s company bio says he used to be a Republican fundraiser and that he worked for future Vice President Dick Cheney when Cheney was a congressman from Wyoming; he’s been lobbying Congress for internet gambling on behalf of Intralot since 2009, according to House and Senate records, which are much more detailed than the OCF records.)

Wesley Williams, a spokesman for the OCF, says his office is reviewing the emails but "no determination has been made as to how or if we will proceed on the matter."

But why is the OCF just now reviewing this matter? How was W2 Tech allowed to get away with writing "consulting services" on its form and not be challenged by OCF? How could it write "Columbia, Council of the District" when asked which officials it had lobbied and not be ordered by OCF to be more specific?

Ward 4 Councilmember Muriel Bowser says she’s not done with her overhaul of city ethics laws. Let’s hope a look at how good a job OCF is doing at keeping lobbyists honest is on her to-do list.

UPDATE (1/29/12): Warren Williams calls LL to say that his company never paid any outside firms for lobbying, only for public relations. He says he can’t speak to any lobbying done by W2 Tech’s partner, Intralot.

Washington Post: Vincent Gray campaign under vigorous federal scrutiny

Vincent Gray campaign under vigorous federal scrutiny

By Nikita Stewart, Published: October 15

Federal investigators digging into irregularities in the campaign of Mayor Vincent C. Gray have interviewed several of his associates and election staff members, subpoenaed reams of documents, and granted immunity to at least one witness who testified before a grand jury, according to nearly a dozen people familiar with the probe.

The criminal probe began after onetime mayoral candidate Sulaimon Brown alleged in March that he was paid by the Gray campaign to disparage then-Mayor Adrian M. Fenty during last year’s Democratic primary. Brown also claims that the Gray campaign promised him a city job in return for his political attacks on Fenty.

In addition to Brown’s allegations, investigators are examining possible irregularities in money-order donations to Gray’s campaign, some of which appear to have violated city campaign regulations, the sources said.

The mayor and senior campaign staff members have denied any wrongdoing related to either Brown’s allegations or the money-order donations.

Through their questioning of campaign staff members and their interest in campaign documents, investigators appear to be focusing on consultant Howard L. Brooks and possibly others in the Gray campaign, said two sources with knowledge of the probe.

Authorities are trying to determine whether Brooks, a close friend of Gray campaign Chairwoman Lorraine A. Green’s, passed Brown the alleged payments. Brooks and Green have denied any wrongdoing.

Federal investigators have secured fingerprints from Brown and Brooks, according to people with direct knowledge of the probe, who spoke anonymously because they are not authorized to talk publicly about the investigation. It could not be learned who else has been asked to submit fingerprints. The fingerprints could help identify anyone who might have handled documents, money orders or envelopes with cash that Brown claims the Gray campaign gave him or who might have handled apparently fraudulent money-order donations to the mayor’s campaign.

Gray took office with great expectations and the general goodwill of the city. But a Washington Post poll in June found that trust in him has eroded since Brown’s allegations became public and the U.S. attorney’s office began its investigation. Gray has stumbled in hiring staff — missteps at times magnified by ongoing investigations, including one by a congressional oversight committee.

With federal authorities asking questions across the city and presenting their case to a grand jury, Gray’s administration remains under considerable scrutiny.

U.S. Attorney Ronald C. Machen Jr. declined to be interviewed about the investigation. But his spokesman, Bill Miller, said, “We are continuing to look into this.”

Federal authorities want to determine whether there was a quid pro quo when the administration hired Brown as a $110,000-a-year special assistant in the Department of Health Care Finance and whether contributions were illegally funneled to Gray’s and Brown’s campaigns, the sources said.

Gray has said that he promised Brown a job interview, not a job, and that the offer was not made in return for attacks on Fenty.

The grand jury

According to sources with knowledge of the investigation, witnesses who have testified before the grand jury include Peyton M. Brooks, Brooks’s son, and Ken Cummins, whose firm conducted background checks on job candidates for Gray’s transition team.

Two other sources said that Peyton Brooks received immunity from federal prosecutors months ago in return for his cooperation with the investigation. Like Brown, Peyton Brooks landed a $110,000-a-year special assistant job with the District, but he resigned after allegations of nepotism and cronyism were aimed at the Gray administration. The administration initially hired the children of several campaign and administration staff members.

Troy W. Poole, Brooks’s attorney, declined to comment about the investigation or his client’s testimony. “I’m not going to discuss what immunity my client may or may not have with the prosecution,” he said. “I want to make it clear that my client is not a subject or a target of this investigation.”

Howard Brooks declined to comment through his attorney, former Prince George’s County state’s attorney Glenn F. Ivey. Cummins also declined to comment.

Several sources confirmed that HowardBrooks and Brown have submitted fingerprints to investigators, but Lorraine Green’s attorney, Thomas C. Green, said his client had not submitted fingerprints. Asked whether she had been asked to, he said, “I’m not going to get into that.”

But Thomas Green, who is not related to his client, said she provided investigators with documents on the vetting of job candidates for Gray’s administration as well as her e-mails. Brown was among some of the earliest candidates considered for jobs in the administration.

Robert S. Bennett, Gray’s attorney, declined to comment on details of the case, including whether the mayor has submitted fingerprints. “I don’t want to go into detail, but I’ve talked to lots of folks,” said Bennett, who added that he is conducting his own investigation. “Gray did nothing wrong. I’m just hopeful that they [federal prosecutors] conclude that very quickly. . . . This is a cloud over the city.”

James W. Rudasill Jr., Brown’s attorney, declined to discuss his client’s cooperation with investigators. However, Brown said in open court that the federal grand jury had subpoenaed copies of documents, which the subpoena said included checks, money orders or anything of value from Gray or Gray’s staff from his campaign, transition or administration. He was in court because of a D.C. Council subpoena for similar records. Brown told the judge that he had given his records to investigators, and he told The Post that federal authorities also had his three cellphones.

The Post reported in March that Brown’s phone records showed that he often communicated with members of the Gray campaign — including personal assistant Stephanie Reich — and that several of his calls were returned.

“What my client is saying can be substantiated,” Rudasill said.

According to several sources with knowledge of the federal probe, Reich has been interviewed by the U.S. attorney’s office. She declined to comment.

Paper trail

According to sources familiar with the probe, the grand jury heard testimony in August from Cummins, president of Capitol Inquiry, a private investigation firm that did background checks for Gray’s administration. Cummins turned over his records and e-mails to federal prosecutors in April, the sources said.

Capitol Inquiry managed the background checks. Cummins communicated directly with Green, who also headed the Gray transition team. Capitol Inquiry investigated Brown in January, shortly before he was hired by the administration. The background check detected some of Brown’s past legal and financial troubles before he was hired.

In testimony before the D.C. Council this summer, Green acknowledged that she met with Brown at Union Station in 2010, when he claims she handed him an envelope containing about $750 in cash. Green has disputed Brown’s account. She denies that any payment was made and says she only talked to him about consideration for a job. Brown says that Brooks delivered payments later in the campaign.

The Post reported in March on an exchange of text messages in November 2010 between Brown and Gray about an “agreement.” The mayor said any agreement referred only to a job interview.

Campaign volunteers, who spoke on the condition of anonymity because they fear retaliation, told The Post that the campaign invited Brown to some Gray political events. At one of those events, a fundraiser at the Eatonville restaurant, Brown said Gray told him that Brooks has “something for you,” according to his testimony in June before the D.C. Council. Brown says that Brooks delivered another payment at the event.

Photos of the event place Brown, Brooks, Green and Gray at Eatonville, but Gray has denied such an exchange took place.

The donations

Several sources also said the federal investigators are trying to determine who signed money-order donations to the Gray and Brown campaigns in apparent violation of campaign rules.

The Post reported in July that Gray’s campaign had accepted cash contributions above the $24.99 legal limit as well as money-order contributions purportedly from people who have denied contributing to the campaign. Since then, The Post has found that the campaign documented in finance reports more than 100 cash contributions of $25 or more. Interviews with some contributors also showed that the Gray campaign had turned cash into money orders, often in violation of city laws that prohibit doing so.

The sources said the FBI has confirmed that signatures on some money orders were forged. Also of interest to investigators are some money orders that allegedly were signed by the same person and others that are numbered in sequence, which indicates that they were purchased at the same place and time, one source said.

Brown’s campaign received hundreds of dollars in money-order donations allegedly signed by people with ties to Howard Brooks, including son Peyton, Peyton’s girlfriend and a cousin by marriage. The money orders credited to Peyton Brooks were purchased at Safeway and are sequential.

The records also show that on June 1, 2010, the campaign received one $2,000 money order from Howard Brooks and another from Leroy Ellis. Ellis, a friend of Brooks’s, was hired as a $125,000 city employee after Gray took office. Ellis was recently laid off because of budget cuts, according to the administration, and did not respond to calls or an e-mail seeking comment.

Campaign finances were handled by Thomas W. Gore, a longtime friend of Gray’s, and Reuben O. Charles II, who quickly rose through the campaign ranks because of his fundraising abilities.

Gore worked closely with Brooks, Gerri Mason Hall, a campaign consultant who became Gray’s first chief of staff, said in testimony before the D.C. Council.

Two campaign staff members said that Gore was aware of questionable cash donations to the campaign. One source said he told volunteers and staff members, including Brooks, to return them. Other sources previously said he had distributed the campaign finance rules to campaign workers. According to several sources, Gore has been interviewed by federal investigators.

Gore’s attorney, Frederick Cooke Jr., declined to comment. Charles did not respond to calls seeking comment.

Kevin Wrege, Esq.

Founder & President

Pulse Issues & Advocacy LLC

Office: 202-625-1787

Mobile: 202-253-4929

4410 Massachusetts Ave., NW, #150

Washington, DC 20016

Wash Post: District officials announce $240 million budget surplus

District officials announce $240 million budget surplus

By Nikita Stewart, Monday, January 30, 8:57 PM

The District has a whopping $240 million surplus — an amount that prompted some council members to ask whether Mayor Vincent C. Gray and the D.C. Council overshot when they instituted emergency furloughs and increased income taxes last year.

Gray (D) and Chief Financial Officer Natwar M. Gandhi announced the surplus Monday and attributed the windfall to underspending, particularly on tuition to private schools for special-education students.

“The obvious question is, ‘How did we not anticipate this?’ ” Gandhi said at a news conference.

The answer is that the city did, Gandhi said. But officials were conservative with their projections. In an interview, Gandhi said he revised his budget estimate in June to show a $107 million surplus. In September, he said the District netted an additional $89 million surplus.

“I told them this money is available, but we have to be very cautious because the economy is still very uncertain,” he said he told the Gray administration.

Eric Goulet, the administration’s budget director, said that in June the city was still grappling with an estimated $111 million in spending pressures and uncertainty remained in September. “We can’t account for good news that may come in the future when we’re budgeting,” Goulet said.

In a 7 to 6 vote in September, the council approved an increase in the income tax from 8.5 percent to 8.95 percent on residents earning $350,000 a year, affecting about 6,000 residents. The increase is to generate an estimated $160 million over four years and then be sunset.

“All around the executive branch . . . the administration and the CFO’s office, we really missed the mark on this one,” said Council member Jack Evans (D-Ward 2), chairman of the Committee on Finance and Revenue. “We never should have raised taxes. . . . We took money from people under the pretense that we needed it,” he said.

Evans, who voted against increasing taxes, said he wants an immediate sunset of the income tax increase.

Council Chairman Kwame R. Brown (D) also said that city leaders should rethink increases in taxes and fees made to close budget gaps over the past year. “If there are things we should roll back or reduce, we should do that,” he said at the news conference.

But Gray, who has made fiscal responsibility one of his top priorities, and others warned that such moves would not be prudent.

About $130 million of the $240 million surplus is in “special purpose” revenue, meaning the money is already dedicated, Goulet said. That leaves about $110 million in surplus that could be used for general purposes.

Earlier in the year, the council unanimously approved emergency legislation that implemented four furlough days for employees to help save more than $19 million. Goulet said legislation was introduced in December 2010 when Gray was mayor-elect and still council chairman.

Gray said he “pored over” the furlough decision when he learned of the surplus. “It was the best option we thought we had at the time,” he said.

State Flexibility on EHBs Could Encourage Exchange Development

Featured Health Business Daily Story, Jan. 30, 2012

State Flexibility on EHBs Could Encourage Exchange Development

Reprinted from INSIDE HEALTH INSURANCE EXCHANGES, a hard-hitting monthly newsletter with news and strategic insights on the development and operation of state exchanges.

By Steve Davis, Managing Editor – January 2012 – Volume 2 Issue 1

Recent clarity about how essential health benefits (EHBs) are likely to be defined could provide a small push to procrastinating states when it comes to building an insurance exchange.

Rather than develop a national EHB standard, which was largely expected, a 13-page “bulletin” issued by CMS’s Center for Consumer Information and Insurance Oversight on Dec. 16 proposed that states use an existing health plan to define the benefits that must be included in individual and small-group plans beginning in 2014.

“I think most states were anticipating that the feds would be fairly prescriptive about what the essential benefit package would be,” says Rhode Island Lt. Gov. Elizabeth Roberts (D). She says state officials are still reviewing the bulletin, which might allow states to offer less comprehensive coverage than is now required by state law. Massachusetts, for example, created a low-cost coverage option aimed at young adults, she notes.

Ceding a significant degree of plan-design flexibility to the states was an important decision, says Jordan Battani, principal researcher in the Emerging Practices Group at Computer Sciences Corp. (CSC).

“It will be interesting to see if it is the beginning of a trend. 2012 will be a year in which HHS has many opportunities to allow state-by-state variation and/or to ensure standardization by creating federal-level mandates for the products and pricing available through the exchanges.”

Some states might have decided against launching an exchange if HHS had required all qualified health plans to include “a very broad, very deep level of essential benefits. But it doesn’t look like that’s going to happen,” says Bryce Williams, CEO of Extend Health, which operates the nation’s largest private Medicare exchange. “Giving that control to the states gets HHS out of what could have become a political problem as consumer groups pushed HHS to deem certain coverage as essential.”

But some states still might not take action. “As we have seen with the exchanges, some states are more reluctant than others to adopt” reform-law provisions, says Adam Solander, an attorney in the health care practice at Epstein Becker & Green. “I expect that some states will not take action and the default benchmark plan (i.e., the largest plan in the state’s small-group market) will be adopted. However, at the end of the day states will have to choose a plan that balances costs and richness of benefit structure.”

The bulletin calls on states to select an existing and popular plan to set the “benchmark” for items and services to include in the essential benefits package. For 2014 and 2015, states could choose among four benchmark plans: (1) one of the three largest small-group plans in the state; (2) one of the three largest state employee health plans; (3) one of the three largest federal employee health plan options; or (4) the largest HMO offered in the state’s commercial market. HHS said it would assess the benchmark for 2016 and beyond based on evaluation and feedback.

In addition, the reform law outlines 10 broad categories — including emergency services, maternity and prescription drugs — that need to be incorporated into plan design. If states choose a benchmark plan that doesn’t include all of those 10 categories, they will likely be able to borrow from other benchmark plans to “backfill” the overall benefit, explains Chip Kerby, an employee benefits attorney who owns the Washington, D.C.-based law firm Liberté Group. The final benchmark plan could be a composite of more than one plan design.

Allowing states to determine a benchmark based on their most popular plans will help minimize pushback, Kerby says. “At the end of the day this could be a fairly easy decision for states,” he says, adding that the next step will be for some cost evaluations to be developed.

The reform law requires states to cover the cost of mandated benefits that fall outside of what HHS deems “essential” if it uses a state plan as the benchmark. But the bulletin suggests that states will be allowed to define any or all existing state mandates as essential.

Requiring all plans in a state to use a common benchmark also could make it easier for state insurance exchanges to certify qualified health plans, says Mac McCarthy, president of McCarthy Actuarial Consulting, LLC.

With input from health plan operators, state legislatures will need to pore over enrollment and cost data to help determine which benchmark plan will be used to define its EHB.

Find the guidance at http://cciio.cms.gov.

Kevin Wrege, Esq.

Founder & President

Pulse Issues & Advocacy LLC

Office: 202-625-1787

Mobile: 202-253-4929

4410 Massachusetts Ave., NW, #150

Washington, DC 20016