This Week’s Dose: Lots of activity surrounding single-payer this week with a hearing, the introduction of two Medicare expansion bills and a report from the Congressional Budget Office (CBO). Hearings and markups of drug pricing bills continue as well. This legislative session is off to a busy start.
A Busy Week for Medicare Expansion. The House held a hearing on the Medicare for All Act, Democrats introduced two new Medicare expansion bills, and CBO released a report on single-payer health systems.
Congressional Scrutiny of Drug Pricing Continues. Another hearing and markup took place this week as lawmakers develop a drug pricing package.
House Appropriations Approved Funding Bill for HHS. The House Appropriations Labor, Health and Human Services, Education and Related Agencies Subcommittee held a markup of a funding bill that includes nearly $200 billion in funding for the Department of Health and Human Services (HHS), including Democratic priorities like gun violence research and teen pregnancy prevention. The bill also includes $2 billion in additional funding for the National Institutes of Health, $2.4 billion for Alzheimer’s disease research and $8.3 billion for the Centers for Disease Control and Prevention. The bill was reported favorably to the full committee by a voice vote. We will wait and see which Democratic priorities remain in the bill as it heads to the full committee, the full House and then to the Republican Senate.
Senators Reintroduce Bill to Cut Costs at HHS. Senators Bill Cassidy (R-LA) and Tina Smith (D-MN) reintroduced the Reducing Administrative Costs and Burdens in Health Care Act (S. 1260). The bill would require the HHS to cut unnecessary costs and administrative burdens by 50 percent over 10 years. The bill also helps states with $250 million in grants for state-based initiatives to bring down administrative costs, encourage the adoption of electronic health record-keeping, streamline administrative processes and reduce administrative waste. The bill highlights physician and hospital credentialing, data use and exchange, and compliance measures as potential areas for reducing burden and cost. The bill reintroduction comes as the Senate Health, Education, Labor and Pensions Committee (of which Senators Cassidy and Smith are members) is actively working on a larger legislative package to reduce health care costs.
Senate Finance Committee Released Supplemental Payment Report. The Senate Finance Committee majority staff released a report on Medicaid supplemental payment transparency. The report provides a general overview of supplemental payments (disproportionate share hospital payments, upper payment limits, etc.) and calls for greater reporting and transparency. Specifically, it recommends gathering provider level data. The report also highlights Medicaid managed care pass-through payments and suggests that more information is needed on how these payments are distributed to providers. The report is further evidence that Chairman Chuck Grassley (R-IA) is making his case for potential changes to hospital transparency and payment policies.
Trump Administration Will Appeal Court Ruling on AHPs. The Trump Administration said it will appeal a judge’s ruling that struck down much of the rule expanding association health plans (AHPs). The Administration’s rule allowed an association of employers to establish a single employee health plan regulated under the Employee Retirement Income Security Act (ERISA). Eleven states and the District of Columbia filed a lawsuit saying that the definition of “employer” in ERISA was not reasonable. A federal district court agreed and set aside regulations for qualifying associations, saying that the Labor Department failed to put a limit on the types of associations that can qualify to sponsor an AHP. Republicans in the House have introduced legislation to amend the law to accommodate the effort to expand AHPs, while Democrats argue that AHPs are low-quality and should not be promoted.
CMS Innovation Center Released Its 2018 Report. The Centers for Medicare and Medicaid Services (CMS) Innovation Center released its 2018 Report to Congress. The report provides an overview of 36 models and initiatives that ran between October 1, 2016 and September 30, 2018. The report includes links to model materials and evaluations, as well as information about forthcoming Innovation Center work. The report comes as the Innovation Center is rolling out new model ideas to add to its portfolio and attempting to shift additional financial risk onto providers and other entities.
CMS and Treasury Issued an RFI on Section 1332 Waivers. CMS and the Department of the Treasury issued a Request for Information (RFI) asking for more ideas on innovative programs and waiver concepts that states could consider in developing a State Relief and Empowerment Waiver plan (also referred to as “Section 1332 waiver” or “State Innovation Waiver”). The RFI comes after CMS and the Treasury issued guidance in October 2018 outlining how the Trump Administration interprets the 1332 waiver guardrails in the ACA. The Trump Administration’s interpretation differed from that of the Obama Administration’s in several ways: focusing on the availability of coverage rather than the number of individuals covered; concentrating on the aggregate effects of a waiver rather than the effect on a population; and expanding the definition of coverage to include short-term, limited duration insurance plans and AHPs. At the same time, CMS released four waiver concepts to illustrate how states might take advantage of this flexibility. Since the October 2018 guidance and concepts were issued, few states have taken advantage of the relaxed guardrails. CMS has stated that the goal of the new RFI is to develop additional concepts that will allow states to take advantage of Section 1332 waivers. Comments for the RFI are due by July 2, 2019.
Washington State Advanced a Public Option Bill. The Washington state legislature passed a bill to create a public option for health care coverage, available through Washington’s Health Benefit Exchange. The plan would be known as Cascade Care, and would be the first public health insurance option in the nation. Specifically, the bill would require the state insurance authority to contract with at least one insurance carrier to offer a Bronze, Silver and Gold standard plan in at least one county, with the goal of ensuring at least one state-contracted plan options is available in each county in 2021. While these plans must meet all requirements of other exchange plans, the bill holds them to a much higher standard, including a robust contracting process that will include direct negotiation with the Health Care Authority, and higher standards of transparency, reducing administrative burden and aligning with state value-based purchasing programs. Governor Jay Inslee (D), a Democratic presidential candidate, is expected to sign the bill.
CBO Released Its Updated Baseline. CBO released updated budget projections for 2019 to 2029. According to CBO, the federal budget deficit is projected to be $896 billion in 2019, and will exceed $1 trillion each year beginning in 2022. CBO also released two health care reports.
Next Week’s Diagnosis: The work continues next with hearings on the Medicare Access and CHIP Reauthorization Act, health IT and drug patent reform. The Energy and Commerce Health Subcommittee will also hold a hearing on the drug supply chain.
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