This week, MedHOK gives some brief updates on a myriad of issues in the healthcare arena.
California drug pricing transparency
In healthcare, as California goes, so goes the nation. So, many policymakers are looking closely at the drug transparency bill that Gov. Jerry Brown will sign shortly. Although several other states have enacted similar bills, the brand drug manufacturers lobby, PhRMA, worked tirelessly to kill the California bill, albeit to no avail. They know this new law in California could sweep the nation and get the attention of President Donald Trump and Congress.
The bill would require drug companies to give 60 days’ notice to state agencies and health insurers if a drug price will increase by 16 percent or more over two years. The drug companies would also have to justify the increase.
The reason PhRMA opposes it because they know it could get a reaction from Donald Trump, who is known to harbor opinions on drug regulation that are not standard GOP ones. Stay tuned.
Some Medicaid relief for Puerto Rico may be coming
As we stated in a recent blog, Puerto Rico is experiencing a Medicaid funding crisis because Congress does not treat the commonwealth as a state in terms of federal financial participation (FFP). If treated as a state, Puerto Rico’s reimbursement would be 83 percent. So far this year, due to caps and the use of temporary funding, reimbursement for Puerto Rico is just 23 percent. Congress distributed several hundred million dollars earlier this year to help stabilize the Medicaid situation on the island. Now, the House Energy and Commerce Committee is proposing an extra $1 billion over the next two years as part of the State Children’s Health Insurance Program (SCHIP) reauthorization bill. Certainly, Puerto Rico will take the money, but it is yet another temporary measure that does not solve the long-term funding crisis.
SCHIP funding ran out at the end of last month, which could lead some states to rein in spending and change eligibility standards. Nevertheless, some additional time may pass before the popular program gets the needed funding. House Republicans want to fund the program through health care cuts, including increasing Medicare premiums on high-earning seniors, making it harder for lottery winners to get on Medicaid, and delaying certain cuts to Medicaid payment cuts to hospitals now in exchange for additional cuts a decade from now. The Senate funds the program but does not discuss offsetting cuts.
Trump leverages Democrats against GOP
The President this weekend tweeted (say what!) that he has spoken with Senate Minority Leader Chuck Schumer, D-NY, on whether there is a possibility of a bipartisan healthcare bill. Schumer quickly told the media that he would be happy to talk but there would be no discussion of repealing the foundations of Obamacare. Of course, we support bipartisan action to stabilize the system and find a solution for long-term reform. But this outreach to Schumer appears to be yet another of the President’s ill-conceived and feeble attempts to get repeal action going again.
As we have outlined in a number of previous blogs, the following would help to stabilize healthcare immensely. The ideas are getting traction with a bipartisan group of Senate lawmakers as well as the Council for Affordable Health Coverage (CAHC)
- A commitment to fund the cost-sharing subsidies through 2018. This appears to be one of the priorities of the bipartisan group of senators.
- Re-establishing the reinsurance program (which helped insurers with catastrophic claims) that was one of the “3 Rs” from 2014 through 2016. The Council advocates this idea as well.
- State grants to fashion other ways to help stabilize markets and premiums in their states.
- Be open to innovation waivers in states. The administration struck down an Obamacare waiver application in Iowa. The move garnered criticism, but we are not sure all of it is warranted.
MedPac Urges Repealing MIPS
Just as the Sustainable Growth Rate (SGR) formula was sunset (in truth it never really was implemented as it was overruled continually by Congress), the successor to the physician payment system is under attack. The Medicare Payment Advisory Commission (MedPAC) is recommending the repeal of Merit-based Incentive Payment System (MIPS). Passed as part of the Medicare Access and CHIP Reauthorization Act in 2015, MIPS called for Medicare physicians to avoid a 2 percent annual payment reduction by either (1) participating in one of the alternative payment models in place or (2) be subject to MIPS. MIPS rates physicians in four categories: quality, resource use, clinical practice improvement, and health information technology use.
MedPAC, an advisory board to Congress, says MIPS is very flawed, is a huge administrative burden, and won’t mean increased quality. It says too much discretion is given to doctors on what they are rated on, it relies too much on self-reporting of data, and could discriminate against specialists and those serving hard-to-serve beneficiaries and dual eligibles. Under MedPAC’s alternative, physicians who are not participating in an alternative model would face the 2 percent reduction unless they join a group of providers evaluated on claims-based performance measures. Admittedly, some of the same concerns outlined above could impact the MedPAC proposal.
This is more evidence that reforming the archaic Medicare fee-for-service beast is no easy task.
Houses of Congress outline blueprints to advance tax reform
With Obamacare repeal very unlikely, Republicans in Congress are moving on to tax reform for a major victory. Their efforts are complicated by the fact that the Obamacare repeal was supposed to provide hundreds of millions in “funding” over time for tax cuts. To continue their efforts on tax reform, each house has outlined its FFY 2018 budget blueprint. The Senate package provides the ability to increase the debt by about $1.5 trillion over ten years for tax cuts, while the House package does not. Thus, the House version includes more demonstrable cuts to spending. Its $4 trillion plus budget blueprint for FFY 2018 would:
- Cut about $5 trillion in spending cuts over the next 10 years.
- Cut Medicaid by about $1 trillion over the next 10 years.
- Continue to seek Obamacare repeal.
- Turn Medicare into a premium-support voucher program for future retirees.