McDermottPlus Check-Up: June 26, 2020 - McDermott+Consulting

McDermottPlus Check-Up: June 26, 2020

This Week’s Dose

House Democrats introduced a bill to build on the Affordable Care Act (ACA), and the Trump Administration filed a new brief urging the Supreme Court to strike down the law. A federal district court upheld the Administration’s hospital price transparency rule.


House Democrats Introduced ACA Expansion Bill. The Patient Protection and Affordable Care Enhancement Act (H.R. 1425) incorporates several Democratic priorities aimed at strengthening the ACA, including expanding premium subsidies, increasing federal Medicaid funding to encourage states to expand the program, and reversing the Trump Administration’s expansion of short-term, limited-duration insurance plans, which Democrats argue undermine the ACA marketplace. The bill also would allow the Secretary of Health and Human Services (HHS) to negotiate Medicare drug prices, the signature proposal House Democrats put forth in the Elijah E. Cummings Lower Drug Costs Now Act (H.R. 3) in 2019. The House is expected to vote on the bill early next week, though it is not likely to advance in the Republican-controlled Senate. Democrats will use the bill as a messaging tool heading into the 2020 elections, having won control of the House in 2018 in large part by campaigning on healthcare issues. Many of the proposals align with those supported by former-Vice President Joe Biden, who has pledged to build on the ACA if elected, drawing a stark contrast with President Trump who is seeking to overturn the entire law in court. This week, the Administration filed a new brief urging the Supreme Court to strike down the law, reiterating the argument of Republican attorneys general that the ACA is invalid without the individual mandate in effect. Expect this dynamic to continue to play out as we head deeper into election season.


CMS Released Data on COVID-19 Health Disparities. The data on the total number of reported coronavirus (COVID-19) cases and hospitalizations among Medicare beneficiaries between January 1 and May 16, 2020, derived from Medicare claims data, shows significant health disparities between demographic groups. The data breaks down COVID-19 cases and hospitalizations for Medicare beneficiaries by state, race/ethnicity, age, gender, dual eligibility for Medicare and Medicaid, and urban/rural locations. According to the data, Black people were hospitalized with COVID-19 at a rate nearly four times higher than whites, and Hispanic and Asian people were also more likely to be infected and hospitalized. End-stage renal disease patients had the highest rate of hospitalization among all Medicare beneficiaries, followed by dual eligible beneficiaries. The announcement follows repeated calls from Congress for the Administration to release comprehensive demographic data on COVID-19 cases. Earlier this month, House Energy and Commerce Committee Chairman Frank Pallone (D-NJ) sent a letter suggesting the Committee would legally compel the Centers for Medicare and Medicaid Services (CMS) to release the data if the agency did not respond to congressional requests. In addition, HHS hosted a stakeholder engagement call this week with Assistant Secretary for Health Brett Giroir, Surgeon General Jerome Adams, and Deputy Secretary for Minority Health and Director of the Office of Minority Health, Dr. Felicia Collins, to discuss efforts to address racial health disparities.

HRSA Held Two Webinars on the Application Process for Medicaid Relief Funds. Approximately $15 billion of the $175 billion Provider Relief Fund (PRF) has been targeted to eligible providers that participate in Medicaid and the Children’s Health Insurance Program and that did not receive a payment from the PRF General Distribution. Providers must apply for the distribution through a website portal by July 20, 2020, to receive the funding. The webinars provided a general overview of the Medicaid PRF funding and application process. Health Resources and Services Administration (HRSA) staff made two key points about eligibility: (1) providers who received payments under the PRF General Distribution are not eligible for the Medicaid distribution (even if they returned the payment); and (2) providers are only eligible if they are on a list states submitted to HHS. HRSA noted that if there are no issues with a provider’s application, the provider should receive payment by the end of August. The PRF distributions have offered roughly 2% of net patient revenue to eligible providers, and now will make a similar payment available to Medicaid providers. The process has been complicated, with continuous updates, conflicting information, and a rapidly shifting subregulatory guidance process. More information on the Medicaid Distribution is available here.


Federal District Court Ruled in Favor of the Administration on Hospital Price Transparency Rule. The decision upholds the requirements finalized in the 2020 Outpatient Prospective Payment System, which mandates that hospitals that accept Medicare provide patients with accessible information about the “standard charges” they should expect to face for the items and services the hospital provides, including payer-specific negotiated rates, the amount the hospital is willing to accept in cash, and the minimum and maximum negotiated charges for 300 common “shoppable” services. Hospitals must make this information available in a single, machine-readable file, and update the information at least annually. CMS may monitor and audit hospitals, as well as impose civil monetary penalties of up to $300 per day for non-compliance. The court held that the rule is within CMS’ authority and serves the government’s interests in informing patients and lowering the cost of healthcare. These requirements are scheduled to take effect on January 1, 2021. The plaintiffs have already expressed intent to appeal the decision, but any decision is not likely to come in time for hospitals to practically avoid planning for implementation.

Quick Hits

  • In the House this week, the Education and Labor, Energy and Commerce, and Ways and Means committees held hearings on racial inequities in healthcare, the Administration’s response to COVID-19 and the COVID-19 crisis in nursing homes, respectively. In the Senate, the Health, Education, Labor and Pensions (HELP) Committee held a hearing on preparing for the next pandemic.
  • The House Energy and Commerce Committee released a report on its investigation into short-term, limited-duration insurance plans. The report concludes that enrollment in these plans increased significantly after the Trump Administration expanded their use and that they harm consumers by offering limited coverage and often avoiding paying claims, resulting in high out-of-pocket costs.
  • CMS announced a new Office of Burden Reduction and Health Informatics that will evaluate the impact of new regulations on healthcare system operations and increase stakeholder engagement to inform the agency’s burden reduction efforts.
  • CMS updated data on COVID-19 cases and deaths in nursing homes. The agency also announced the members of the Independent Coronavirus Commission on Safety and Quality in Nursing Homes, which will assess the overall response to the pandemic in nursing facilities.
  • CMS released updated frequently asked questions on COVID-19 surveillance testing for nursing homes and other long-term care facilities.

M+ Resources

  • CMS has issued more than 100 waivers giving healthcare providers the flexibility to meet the demands presented by COVID-19, all of which flow from the national emergency declared by the President and the Public Health Emergency declared by the Secretary of HHS. More on the emergency declarations and waiver authority is available here.
  • Our consultants discuss the emergency declarations and their implications for healthcare stakeholders on this week’s episode of the Health Policy Breakroom.
  • During the COVID-19 pandemic, litigation impacting a wide range of healthcare issues continues to move through the judicial process. This month’s updates to the McDermottPlus Health Litigation Tracker include significant rulings affecting the Administration’s efforts to increase transparency around healthcare costs. Get the Tracker along with all McDermottPlus analysis related to COVID-19 from our COVID-19 Resource Center.

Next Week’s Diagnosis

The House plans to vote on legislation to expand the ACA. The Senate HELP Committee will hold a hearing on safely returning to work and school, and the House Energy and Commerce Committee will hold a hearing on legislation to improve mental health. We’ll be back with your weekly Check-Up on July 10. Happy Fourth of July!


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