And we continue with the shut down of 25% of the government. Maybe it isn’t such a bad deal for us with the waste and deficit. So, what can we anticipate for the New Year regarding healthcare? Miss Luthi reviewed that year one of a divided government in the Trump era begins with the Affordable Care Act again in legal peril. Political rhetoric around the law and healthcare generally will only intensify in the lead-up to the 2020 election cycle, but the industry is most closely watching how the administration will use executive authority to try to beat down soaring costs.
A Texas judge’s decision to overturn the ACA closed out a year where, despite congressional gridlock on healthcare, the Trump administration gained ground on systemic attempts to trim hospital payments and pharmaceutical prices, as well as reshape insurance markets. HHS Secretary Alex Azar maintains he will not bend to corporate pressure as he pushes policies like site-neutral payments and price transparency.
The policy outlook is less straightforward in Congress, where Democrats plan to use their newfound power in the House to blanket the Trump administration with oversight.
Meanwhile, Sens. Chuck Grassley (R-Iowa) and Lamar Alexander (R-Tenn.) will wrap up their legacies chairing the upper chamber’s two most influential healthcare committees—Finance and Health, Education, Labor, and Pensions, respectively. Grassley has a history of scrutinizing tax-exempt providers. And Alexander orchestrated a series of hearings in 2017 delving into the high cost of healthcare.
HHS and hospitals: It’s complicated
Hospitals want the Trump administration to more aggressively pushing executive authority to roll back red tape, particularly around the Stark law and accompanying regulations, which providers say stand in the way of some pay-for-value reforms, including building clinically integrated networks.
But hospitals have also been quick to sue over what they claim is an executive overreach, such as in the case of HHS’ sweeping cuts to the controversial 340B drug discount program. Pharmaceutical discounts through the program yield tens of millions of dollars annually for a growing number of hospitals, and it has become a territorial fight.
“This administration pushes the envelope on how far they can go with powers from Congress,” said Erik Rasmussen, a vice president at the American Hospital Association. “It’s a double-edged sword. When they go too far, we sue them.”
Hospitals sued over the government’s substantial clawback of money through a cut to 340B hospitals’ Medicare Part B drug reimbursements. Launched Jan. 1 of last year, the policy is winding its way through courts under ongoing litigation after a late-breaking 2018 win for hospitals in a federal district court. The cuts were extended to hospitals’ off-campus facilities at the beginning of this year.
Hospitals also poured lobbying dollars last year into a fight against Republican-sponsored legislation to cut back the 340B program. With a Democratic takeover of the House, hospitals are expecting a break on Capitol Hill and they plan to use the time to try to forestall political pressures over the program. Hospitals will have to disclose the community benefit funded by their 340B discount money from manufacturers, accurately estimate their discounts, and pledge to stick to the letter of the 340B law.
“We want to use the time while the field is fallow to make sure our fences are strong,” Rasmussen said. “Good fences make good neighbors.”
Hospitals and HHS anticipate a ruling on the so-called site-neutral payment policy, proposed in July and finalized in a watered-down version in November. The AHA, along with several other hospital groups, sued over the policy, again claiming executive overreach.
This administration pushes the envelope on how far they can go with powers from Congress. It’s a double-edged sword. When they go too far, we sue them.”
Under the new policy that starts this month, Medicare will pay off-site clinics the same rate it pays independent physicians for certain services.
Economist Douglas Holtz-Eakin, a former director of the Congressional Budget Office who heads the conservative American Action Forum, said it is unclear how hard the administration will ultimately come down on hospitals in light of the intense pressure.
“It has turned out to be harder than the administration expected,” Holtz-Eakin said of the payment policy. “They keep going back and forth on a policy to pay for the quality of the service, rather than paying the same rate for every site, and they’re just struggling.”
While the administration would like to keep balancing Medicare payments, he added, officials “don’t know where to go next” as they try to work out designs for these policy changes.
Hospital priorities for Congress: DSH payments
Congress has a hard deadline of Sept. 30 to decide how to manage the scheduled disproportionate-share hospital payment cuts, passed with the ACA, but never implemented.
Lawmakers last year authorized a one-year-only delay to billions of dollars in cuts to these payments, teeing up a potential legislative overhaul of the program in 2019. Republican Sen. Marco Rubio of Florida, one of the states least favored under the current formulas, has already introduced a proposal to start negotiations.
Hospital lobbyists, eager to protect overall DSH funding, have signaled lawmakers could modify the law, which has largely remained untouched since 1992.
“The devil’s in the details,” said Carlos Jackson of America’s Essential Hospitals—a trade group for hospitals that benefit significantly from the program. “We are happy to have conversations about changes, but the details matter.”
Jackson also questioned whether lawmakers in this supercharged political environment would be able to dive into real policy changes by September.
“Will they have the time?” he asked.
A small number of states—Alabama, Missouri, New Jersey, and New York—benefit more than others from DSH. Financially, the payments are a very big deal for hospitals with high numbers of Medicaid patients, such as major university medical centers.
Here, too, ongoing litigation is a complicating factor. Hospitals have challenged an Obama-era rule requiring them to deduct any Medicare or commercial insurance reimbursements from their total DSH allotment.
Hospitals also want the Democratic House to pick up where Republicans left off on a “Red Tape Relief” project targeting Medicare regulations that hospitals say cost them billions a year in extra work and unnecessary or redundant expenses.
Democrats haven’t decided what they will do, but lobbyists think House Republicans may be able to work with the Trump administration on policy work that could gain bipartisan support.
“It’s been a while since we’ve had a GOP minority in the House with a Republican president,” the AHA’s Rasmussen said. “Republicans in the House will still be important because they can work on the administration on this sort of thing.”
Tax-exempt hospitals are also bracing for the spotlight. Grassley—who for years has been investigating whether hospitals with not-for-profit status are producing enough justifying community benefit—is retiring in two years. Former and current aides said his scrutiny of hospitals with massive tax benefits will continue. Throughout this year, he has kept up communication with the IRS on how the agency monitors the activity of not-for-profit hospitals.
Pharmaceuticals: ‘It’ll be busy’
If hospitals are wary about mixed financial prospects in 2019, the pharmaceutical industry is preparing for full-on political war.
Manufacturers lost a key lobbying battle in 2018 when they tried to recoup billions of dollars from the money Congress appropriated through the Medicare Part D coverage gap known as the “donut hole.”
This year will bring much more: the specifics of a proposal to control U.S. drug prices by tying them to an international price index; step therapy in Medicare Part B; and the authority for Medicare Part D insurers to exclude some protected-class drugs that are currently off limits.
If the issue is that we need to protect Medicare, I’m all in as long as Congress looks at where the real money is: hospitals and elsewhere.”
Said James Greenwood, President, and CEO of Biotechnology Innovation Organization.
“We face all of that, and then there’s the change in the majority of the House,” said James Greenwood, CEO of the Biotechnology Innovation Organization trade group. “Democrats have run very hard on the issue of drug pricing and investigation.”
There’s also Grassley, who has long been zealous on Big Pharma oversight.
“It’ll be busy,” Greenwood said.
He said he is focused on messaging and public perception of manufacturers who, he said “shoulder 95% of the rhetoric” for skyrocketing healthcare costs.
“If the issue is that we need to protect Medicare, I’m all in as long as Congress looks at where the real money is: hospitals and elsewhere,” Greenwood said.
Manufacturers are also looking to the administration’s use of executive authority for some wins, specifically on 340B where they clash most intensely with hospitals.
“There’s a lot the administration can do,” Greenwood said. “The powers they are using with the other proposals, like (the CMS Innovation Center), they can apply to the 340B program.”
Insurers: Focus on the individual market
Obamacare’s individual market premiums have stabilized but at a high price. And as Democratic progressives push a single-payer approach in the lead-up to the 2020 presidential election, insurers want to make sure the individual market can attract people who have ditched or so far avoided the exchanges because of cost.
Justine Handelman of the Blue Cross and Blue Shield Association wants Congress to try again on reinsurance funding and to look at the expansion of the tax credit subsidy, particularly to draw younger people into the exchanges.
Given the breakdown of bipartisan talks to fund reinsurance and cost-sharing reduction payments in 2018, it’s unlikely the Democratic proposal to further subsidize the exchanges will go anywhere with the Trump administration and Republican Senate.
‘Medicare for all’? This we will discuss more in the next few weeks.
Key to watch as the year unfolds is what the fallout of the ACA litigation—panned by most legal analysts but also possibly headed to the Supreme Court—will herald for both parties for healthcare ahead of 2020 when progressive Democrats want their party to embrace “Medicare for all.”
Sen. Elizabeth Warren of Massachusetts, the first Democrat to jump into the presidential race, has already made the policy part of her platform.
Progressive Democratic Reps. Ro Khanna of California and Pramila Jayapal of Washington state, who are leading the way on a new “Medicare for all” draft, plan to push a floor vote on the legislation. They told Modern Healthcare they will introduce the new version once the 676 bill number is available—a nod to the original House legislation from former Rep. John Conyers (D-Mich.).
Dems hit GOP on health care with additional ObamaCare lawsuit vote
As Jessie Hellmann noted The House on Wednesday passed a resolution backing the chamber’s recent move to defend ObamaCare against a lawsuit filed by GOP states, giving Democrats another opportunity to hit Republicans on health care.
GOP Reps. Brian Fitzpatrick (Pa.), John Katko (N.Y.) and Tom Reed (N.Y.) joined with 232 Democrats to support the measure, part of Democrats’ strategy of keeping the focus on the health care law heading into 2020. The final vote tally was 235-192.
While the House voted on Friday to formally intervene in the lawsuit as part of a larger rules package, Democrats teed up Wednesday’s resolution as a standalone measure designed to put Republicans on record with their opposition to the 2010 law.
A federal judge in Texas last month ruled in favor of the GOP-led lawsuit, saying ObamaCare as a whole is invalid. The ruling, however, will not take effect while it is appealed.
Democrats framed Wednesday’s vote as proof that Republicans don’t want to safeguard protections for people with pre-existing conditions — one of the law’s most popular provisions.
“If you support coverage for pre-existing conditions, you will support this measure to try to protect it. It’s that simple,” said Rules Committee Chairman Jim McGovern (D-Mass.) before the vote.
Most Republicans opposed the resolution, arguing it was unnecessary since the House voted last week to file the motion to intervene.
“At best, this proposal is a political exercise intended to allow the majority to reiterate their position on the Affordable Care Act,” said Rep.Tom Cole (R-Okla.). “At worst, it’s an attempt to pressure the courts, but either way, there’s no real justification for doing what the majority wishes to do today.”
The Democratic-led states defending the law are going through the process of appealing a federal judge’s decision that ObamaCare is unconstitutional because it can’t stand without the individual mandate, which Congress repealed.
Democrats were laser-focused on health care and protections for people with pre-existing conditions during the midterm elections — issues they credit with helping them win back the House.
The Trump administration has declined to defend ObamaCare in the lawsuit filed by Republican-led states, which argue that the law’s protections for people with pre-existing conditions should be overturned. It’s unusual for the DOJ to not defend standing federal law.
The House Judiciary Committee, under the new leadership of Chairman Jerrold Nadler (D-N.Y.), plans to investigate why the Department of Justice decided not to defend ObamaCare in the lawsuit.
“The judiciary committee will be investigating how the administration made this blatantly political decision and hold those responsible accountable for their actions,” Nadler said.
Democrats are also putting together proposals to undo what they describe as the Trump administration’s efforts to “sabotage” the law and depress enrollment.
“We’re determined to get that case overruled, and also determined to make sure the Affordable Care Act is stabilized so that the sabotage the Trump administration is trying to inflict ends,” said Rep. Frank Pallone Jr. (D-N.J.), chairman of the Energy and Commerce Committee, which has jurisdiction over ObamaCare.
One of the committee’s first hearings this year will focus on the impacts of the lawsuit. The hearing is expected to take place this month.
The Ways and Means Committee, under the leadership of Chairman Richard Neal (D-Mass), will also hold hearings on the lawsuit and on protections for people with pre-existing conditions.
Those two committees, along with the Education and Labor Committee, are working on legislation that would shore up ObamaCare by increasing eligibility for subsidies, blocking non-ObamaCare plans expanded by the administration and increasing outreach for open enrollment.
GOP seeks health care reboot after 2018 losses
Alexander Bolton reviewed the future strategies of the GOP. He noted that the Republicans are looking for a new message and platform to replace their longtime call to repeal and replace ObamaCare after efforts failed in the last Congress and left them empty-handed in the 2018 midterm elections.
Republican strategists concede that Democrats dominated the health care debate heading into Election Day, helping them pick up 40 seats in the House.
President Trump hammered away on immigration in the fall campaign, which helped Senate Republican candidates win in conservative states but proved less effective in suburban swing areas, which will be crucial in the 2020 election.
While Trump is focused on raising the profile of illegal immigration during a standoff over the border wall, other Republicans are quietly looking for a better strategy on health care, which is usually a top polling issue.
“Health care is such a significant part of our economy and the challenges are growing so great with the retirement of the baby boomers and the disruption brought about by ObamaCare that you can’t just cede a critically important issue to the other side,” said Whit Ayres, a Republican pollster.
“Republicans need a positive vision about what should happen to lower costs, expand access and protect pre-existing conditions,” he added. “You’ve got to be able to answer the question, ‘So what do you think we should do about health care?’ ”
A recent Associated Press-NORC Center for Public Affairs Research poll showed that 49 percent of respondents nationwide said the government should tackle health care as a top priority, second only to economic concerns.
During his 2016 presidential campaign, Trump vowed to lower prescription drug costs, but the Republican-controlled Congress over the past couple of years focused on other matters. House Democrats who are now in the majority say they are willing to work with the White House on drug pricing, but it’s unclear if Republicans will take on the powerful pharmaceutical industry, long considered a GOP ally.
Republican candidates made the repeal of ObamaCare their main message in 2010, 2012, 2014 and 2016 elections. But after repeal legislation collapsed with the late Sen.John McCain’s (R-Ariz.) famous “no” vote, the party’s message became muddled and Democrats went on the offensive.
Some Republicans continued to work on alternative legislation, such as a Medicaid block grant bill sponsored by Sens. Lindsey Graham(S.C.) and Bill Cassidy(La.), but it failed to gain much traction and the GOP health care message was left in limbo.
“We should be the guys and gals that are putting up things that make health care more affordable and more accessible,” said Jim McLaughlin, another Republican pollster. “No question Democrats had an advantage over us on health care, which they never should have had because they’re the ones that gave us the unpopular ObamaCare.”
“We need to take it to the next level,” he added. “You can’t get [ObamaCare] repealed. Let’s do things that will make health care more affordable and more accessible.”
Senate Health Committee Chairman Lamar Alexander (R-Tenn.), a close ally of Senate Majority Leader Mitch McConnell(R-Ky.), says finding an answer to that question will be his top priority in the weeks ahead.
Alexander will be meeting soon with Sen. Patty Murray(Wash.), the top Democrat on the Health Committee, as well as Sens. Chuck Grassley(R-Iowa) and Ron Wyden(D-Ore.), the leaders of the Senate Finance Committee, to explore solutions for lowering health care costs.
“I’ll be meeting with senators on reducing health care costs,” Alexander told The Hill in a recent interview. “At a time when one-half of our health care spending is unnecessary, according to the experts, we ought to be able to agree in a bipartisan way to reduce that.”
He recently announced his retirement from the Senate at the end of 2020, freeing him to devote his time to the complex and politically challenging issue of health care reform without overhanging reelection concerns.
Alexander sent a letter to the center-right leaning American Enterprise Institute and the center-left leaning Brookings Institution last month requesting recommendations by March 1 for lowering health care costs.
In Dec. 11 floor speech, Alexander signaled that Republicans want to move away from the acrimonious question of how to help people who don’t have employer-provided health insurance, a question that dominated the ObamaCare debate of the past decade, and focus instead on how to make treatment more affordable.
He noted that experts who testified before the Senate in the second half of last year estimated that 30 to 50 percent of all health care spending is unnecessary.
“The truth is we will never have lower cost health insurance until we have lower cost health care,” Alexander said on the floor. “Instead of continuing to argue over a small part of the insurance market, what we should be discussing is the high cost of health care that affects every American.”
A Senate Republican aide said GOP lawmakers are prepared to abandon the battle over the best way to regulate health insurance and focus instead on costs, which they now see as a more fundamental issue.
“There’s no point in trying to talk about health insurance anymore. Fundamentally, insurance won’t be affordable until we make health care affordable, so we have to do stuff to reduce health care costs,” said the aide.
“There are lots of things that can be done to reduce health care costs that aren’t insurance, that aren’t necessarily partisan,” the source added.
“We’re looking at ideas that aren’t necessarily partisan and don’t advance the cause of single-payer health care and don’t advance the cause of ‘only the market’ but are about addressing these drivers of health care cost and try to change the trajectory.”
Another key player is Cassidy, a physician, and member of the Health and Finance committees, who has co-sponsored at least seven bills to improve access and lower costs.
One measure Cassidy backed is co-sponsored by Sen. Tina Smith(D-Minn.) and would develop innovative ways to reduce unnecessary administrative costs.
Another measure Cassidy co-sponsored with Sens. Maria Cantwell (D-Wash.) and Tom Carper (D-Del.) would allow individuals to pay for primary-care service from a health savings account and allow taxpayers enrolled in high-deductible health plans to take a tax deduction for payments to such savings accounts.
He is also working on a draft bill to prohibit the surprise medical billing of patients.
McConnell signaled after Democrats won control of the House in November that the GOP would abandon its partisan approach to health care reform and concentrate instead on bipartisan proposals to address mounting costs, which Democratic candidates capitalized on in the fall campaign.
Asked about whether the GOP would stick with its mission to repeal ObamaCare, McConnell said: “it’s pretty obvious the Democratic House is not going to be interested in that.”
Half the 600,000 residents aided by NYC Care are undocumented immigrants
As John Bacon of USA Today reported the comprehensive health care plan unveiled by New York City Mayor Bill de Blasio this week drew applause from the Democrat’s supporters but also skepticism from those in the city who question the value and cost of the effort.
De Blasio said NYC Care will provide primary and specialty care from pediatric to geriatric to 600,000 uninsured New Yorkers. De Blasio estimated the annual cost at $100 million.
“This is the city paying for direct comprehensive care (not just ERs) for people who can’t afford it, or can’t get comprehensive Medicaid – including 300,000 undocumented New Yorkers,” Eric Phillips, spokesman for de Blasio, boasted on Twitter.
State Assemblywoman Nicole Malliotakis, a Republican representing parts of Brooklyn and Staten Island, criticized the proposal as an example of de Blasio using city coffers “like his personal ATM.”
“How about instead of giving free health care to 300,000 citizens of other countries, you lower property taxes for our senior citizens who are being forced to sell the homes they’ve lived in for decades because they can’t afford to pay your 44 percent increase in property taxes?” she said.
Seth Barron, associate editor of City Journal and project director of the NYC Initiative at the Manhattan Institute think tank, noted that the city’s uninsured, including undocumented residents, can receive treatment on demand at city hospitals. The city pays more than $8 billion to treat 1.1 million people through its New York City Health + Hospitals program, he wrote.
Barron said the mayor is simply trying to shift patients away from the emergency room and into clinics. He said that dividing $100 million by 600,000 people comes to about $170 per person, the equivalent of one doctor visit.
“Clearly, the money that the mayor is assigning to this new initiative is intended for outreach, to convince people to go to the city’s already-burdened public clinics instead of waiting until they get sick enough to need an emergency room,” Barron wrote. “That’s fine, as far as it goes, but as a transformative, revolutionary program, it resembles telling people to call the Housing Authority if they need an apartment and then pretending that the housing crisis has been solved.”
The plan expands upon the city’s MetroPlus public option plan, as well as the state’s exchange through the federal Affordable Care Act. NYC Care patients will be issued cards allowing them access to medical services, de Blasio said.
The mayor’s plan has plenty of support. Mitchell Katz, president, and CEO of NYC Health + Hospitals said the plan will help his agency “give all New Yorkers the quality care they deserve.” State Sen. James Sanders Jr., who represents parts of Queens, said he looks forward “to seeing the Care NYC program grow and prosper as it helps to create a healthier New York.”
The drumbeat for improved access to health care is not limited to New York.
California Gov. Gavin Newsom on Monday asked Congress and the White House to empower states to develop “a single-payer health system to achieve universal coverage, contain costs and promote quality and affordability.”
Washington Gov. Jay Inslee on Tuesday proposed Cascade Care, a public option plan under his state’s health insurance exchange.
“We’re going to do all we can to protect health care for Washingtonians,” he said. “This public option will ensure consumers in every part of the state will have an option for high-quality, affordable coverage.”
Newsom pushes sweeping new California health-care plan to help illegal immigrants, prop up ObamaCare
Greg Re noted that shortly after he took office on Monday, California’s Democratic Gov. Gavin Newsom unearthed an unprecedented new health care agenda for his state, aimed at offering dramatically more benefits to illegal immigrants and protecting the embattled Affordable Care Act, which a federal judge recently struck down as unconstitutional.
The sweeping proposal appeared destined to push California — already one of the nation’s most liberal states — even further to the left, as progressive Democrats there won a veto-proof supermajority in the state legislature in November and control all statewide offices.
“People’s lives, freedom, security, the water we drink, the air we breathe — they all hang in the balance,” Newsom, 51, told supporters Monday in a tent outside the state Capitol building, as he discussed his plans to address issues from homelessness to criminal justice and the environment. “The country is watching us, the world is watching us. The future depends on us, and we will seize this moment.”
Newsom unveiled his new health-care plan hours after a protester interrupted his swearing-in ceremony to protest the murder of police Cpl. Ronil Singh shortly after Christmas Day. The suspect in Singh’s killing is an illegal immigrant with several prior arrests, and Republicans have charged that so-called “sanctuary state” policies, like the ones Newsom has championed, contributed to the murder by prohibiting state police from cooperating with federal immigration officials.
As one of his first orders of business, Newsom — who also on Monday requested that the Trump administration cooperates in the state’s efforts to convert to a single-payer system, even as he bashed the White House as corrupt and immoral — declared his intent to reinstate the ObamaCare individual mandate at the state level.
ANALYSIS: AS CALIFORNIA’S PROGRESSIVE POLICIES GET CRAZIER, WHAT’S THE SILVER LINING FOR THE GOP?
The mandate forces individuals to purchase health care coverage or pay a fee that the Supreme Court described in 2012 as a “tax,” rather than a “penalty” that would have run afoul of Congress’ authority under the Commerce Clause of the Constitution. Last month, though, a federal judge in Texas ruled the individual mandate no longer was a constitutional exercise of Congress’ taxing power because Republicans had passed legislation eliminating the tax entirely — a move, the judge said, that rendered the entire health-care law unworkable.
As that ruling works its way to what analysts say will be an inevitable Supreme Court showdown, Newsom said he would reimpose it in order to subsidize state health care.
Medi-Cal, the state’s health insurance program, now will let illegal immigrants remain on the rolls until they are 26, according to Newsom’s new agenda. The previous age cutoff was 19, as The Sacramento Bee reported.
Additionally, Newsom announced he would sign an executive order dramatically expanding the state’s Department of Health Care Services authority to negotiate drug prices, in the hopes of lowering prescription drug costs.
In his inaugural remarks, Newsom hinted that he intended to abandon the relative fiscal restraint that marked the most recent tenure of his predecessor, Jerry Brown, from 2011 to 2019. Brown sometimes rebuked progressive efforts to spend big on various social programs.
“For eight years, California has built a foundation of rock,” Newsom said. “Our job now is not to rest on that foundation. It is to build our house upon it.”
Newsom added that California will not have “one house for the rich and one for the poor, or one for the native-born and one for the rest.”
“The country is watching us, the world is watching us.”
In a statement, the California Immigrant Policy Center backed Newsom’s agenda.
“Making sure healthcare is affordable and accessible for every Californian, including undocumented community members whom the federal government has unjustly shut out of care, is essential to reaching that vision for our future,” the organization said. “Today’s announcement is a historic step on the road toward health justice for all.”
The Sacramento Bee reported on several of Newsom’s recent hires, which seemingly signaled he’s serious about his push to bring universal health care to California. Chief of Staff Ann O’Leary worked in former President Bill Clinton’s administration on the Children’s Health Insurance Program (CHIP), which offers affordable health care to children in families who exceed the financial threshold to qualify for Medicaid, but who are too poor to buy private insurance.
And, Cabinet Secretary Ana Matosantos, who worked in the administrations of Brown and former GOP Gov. Arnold Schwarzenegger, has worked extensively to implement ObamaCare in California and also worked with the legislature to expand health-care coverage for low-income Californians.
This next year should be an exciting time if Congress and the President can figure out how to get along and how to work together to improve health care. I believe that if neither the President nor the Dems come together to solve this wall, fence, or monies for better illegal immigrant deterrents nothing will happen in healthcare and probably nothing will happen on any level. What a bunch of spoiled children!!