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January 2018

January 26, 2018

The government shutdown finally came to an end early this week. Included in the short-term continuing resolution that will fund the government until February 8 was the reauthorization of the Children’s Health Insurance Program (CHIP) for six years through fiscal year 2023. The deal will also extend funding for the same length of time to the Child Enrollment Contingency Fund, the Childhood Obesity Demonstration Project, and the Pediatric Quality Measures Program. It also included delays for some of the less popular taxes in the Affordable Care Act.

Later in the week, the Senate voted to confirm the new Department of Health and Human Services (HHS) Secretary Alex Azar. The vote was 55-43. Azar’s confirmation fills the void left by Tom Price, who resigned last year after sustained criticism for his frequent use of private charter flights. Azar previously worked as an executive for pharmaceutical company Eli Lilly, as well as working in the George W. Bush administration at HHS, overseeing the implementation of Medicare Part D.

In state news, Mississippi is the latest state to attempt to implement work requirements for their Medicaid program. Gov. Phil Bryant (R) submitted a five-year waiver request that would require nondisabled adults to participate in at least 20 hours of “workforce training” per week. This comes off the back of the administration’s guidance earlier this month that encourages states to apply for these waivers. Kentucky was the first state to be approved to implement work requirements, though fifteen Medicaid recipients in the state are suing the federal government in an attempt to block the rules going into effect.

Medicaid patients sue over Trump administration’s new work requirement policy – Los Angeles Times (Jan 24)
“The lawsuit – spearheaded by three public-interest legal groups – accuses the federal Department of Health and Human Services of violating the core purpose of the half-century-old government health plan for the poor by granting a request from Kentucky to impose the work mandate.”

January 19, 2018

Washington is collectively holding its breath as it watches this stalemate over keeping the federal government open beyond midnight tonight. The House Republican leadership put together a bill that continues to fund the government until February 16th, reauthorizes the Children’s Health Insurance Program (CHIP) for six years, includes a two-year delay on the unpopular Affordable Care Act taxes on medical devices and so-called Cadillac health plans and one-year delay on the tax on health insurance providers.

Republican leadership included the bare minimum needed to get the necessary votes to get the bill through the House. There were a lot of health items not included in the bill including Medicare extenders, an extension for Community Health Centers, and an extension of reimbursement for hospitals that operate Graduate Medical Education programs. Not to mention not addressing other priority items such as addressing the President’s termination of the Deferred Action for Childhood Arrivals (DACA) program.

The continuing resolution package did pass the House largely on a party-line vote, though there were 6 Democratic Members voting in favor and 11 Republican Members opposing. While the bill was crafted to get out of the House, it was not written to gain the necessary Democratic votes to pass in the Senate. The House adjourned for the week after their votes this morning and are on a recess next week putting additional pressure on the Senate to pass the House-passed continuing resolution. Senate Democrats are united in their opposition so it looks like we are headed into a shut-down of the federal government.

The Senate Finance Committee approved the nomination of Alex Azar to be the next Secretary of Health and Human Services (HHS). The vote was on party-lines, save for Senator Carper (D-DE) being the only Democratic senator to support the nomination.

HHS released a proposed rule to provide protections to health care workers who object to performing certain procedures such as abortion or sterilization for religious or moral reasons. The proposed rule further provides protections to health care workers who refuse to treat transgender individuals. The American Medical Association and the American Nursing Association have in their ethical codes that doctors and nurses should not refuse care based upon characteristics such as gender identity, sexual orientation, or race.

  • How a government shutdown could affect drug safety, flu response, and more – STAT (Jan 17)
    “The Food and Drug Administration would likely have to forego updating mislabeled medications or conducting routine food safety inspections. The Centers for Disease Control and Prevention would furlough key staff amid one of the most severe flu seasonsin recent memory. And the National Institutes of Health might have to stop enrolling hundreds of patients in clinical trials. All of the federal government’s health agencies, moreover, would be hamstrung in their efforts to help address and coordinate a response to the ongoing opioid epidemic.”
  • CDC director’s conflicts keep her from testifying – Politico (Jan 18)
    “Brenda Fitzgerald is the top public health official in the country, but she is unable to speak before Congress about much of what her agency is doing because of financial conflicts of interest still unresolved after seven months on the job. Her recusals on key issues — including cancer detection and aspects of the opioid crisis, potentially — have hindered her ability to lead and openly address some of the most important health concerns facing the country, all because she and her husband have more than $300,000 in investments in GW Ventures and Greenway Messenger, both deemed conflicts of interest.”
  • Trump admin unveils protections for health workers citing religion to refuse medical services -CNN (Jan 18)
    “The Department of Health and Human Services announced a rule Thursday aimed at protecting health care workers who cite moral or religious reasons to not provide certain medical procedures. HHS said its move establishes “conscience protections,” whereby the department’s Office for Civil Rights would take the side of individuals who do not want to provide services, such as abortion, that they say conflict with their morals or religion.”
  • The Medicare drug policy war between pharma and insurers – Axios (Jan 19)
    “Health insurers and pharmacy benefit managers are blasting a proposed federal policythat would lower what patients pay out of pocket when they pick up their prescriptions, saying it coddles the pharmaceutical industry. But drug companies are firing back, accusing insurers and PBMs of keeping larger drug discounts for themselves and screwing over consumers in the process.”

January 12, 2018

The Centers for Medicare and Medicaid Services (CMS) issued new guidance on January 11, 2018 to states seeking Section 1115 waivers to impose work requirements in their Medicaid programs. Currently seven states have applied for waivers to restrict Medicaid coverage to able-bodied working age adults who are actively studying or volunteering. An additional three states have applied for waivers for restrictions based upon broader community involvement requirements.

The guidance from CMS directs states to be mindful of high unemployment areas and individuals who are caring for dependent children or elderly family members. They are directing states to use their own funds to provide additional job-training resources for those individuals. If CMS grants waivers to these states, it is likely to be challenged in the courts.

The House Ways and Means Committee announced a new roster of subcommittee members and chairmen with the resignation of Rep. Pat Tiberi (R-OH) from Congress. Rep. Peter Roskam (R-IL) was chosen as the new Chairman of the powerful Health Subcommittee and Rep. Mike Kelly (R-PA) was added to the panel. Rep. Darin LaHood (R-IL) was chosen by the Republican Steering Committee to fill the vacancy on Ways and Means created by Mr. Tiberi’s departure.

The Energy and Commerce Committee released their report on the 340B program providing discounts on medications to a number of institutions including non-profit hospitals. The report includes a series of recommendations for the program. These include giving direction for how the covered entities can use the savings from the drug prices, additional reporting requirements, and granting more authority to Health Resources and Services Administration (HRSA) to administer the program. A federal court ruling in 2014 limited HRSA’s authority over the program to three specific areas. Chairman Walden announced with the release of this report that the committee will be moving forward with legislation to implement those reforms in the next couple of months.

With the repeal of the individual mandate of the Affordable Care Act (ACA) signed into law, the Congressional Budget Office (CBO) dramatically altered its score of the reauthorization of the Childrens’ Health Insurance Program (CHIP). CBO’s rationale is based upon their estimate that repealing the individual mandate will raise insurance premiums. Therefore, it is more expensive to provide premium support through the ACA than to provide coverage through CHIP. A six-year reauthorization is now budget neutral and a ten-year reauthorization would save $6 billion.

The scoring relief from CBO expedited bipartisan negotiations over a reauthorization package. However, it is still not clear whether a CHIP reauthorization would move on its own or with Medicare extenders and other must-pass legislation before the continuing resolution expires next Friday.

Finally, on January 9th, the Senate Finance Committee held a hearing to consider the nomination of Alex Azar to be Secretary of the Department of Health and Human Services (HHS). The tone of the hearing was similar to previous high-profile confirmation hearings. Democratic senators expressed their concerns about his time at Eli Lilly, specifically how a number of drugs under his purview as chair of a drug pricing committee appeared to have risen significantly during his time there. The topics of drug pricing and how Azar anticipated he might lower them were the main focus of the hearing.

  • Trump paves the way for states to impose Medicaid work requirements – Politico (Jan 11)
    “The Trump administration took a major step Thursday to let statesestablish the first-ever work requirements for Medicaid recipients. The policy guidance is the most concrete development yet toward achieving goal of tying Medicaid benefits to employment — a long-time conservative goal that has never been permitted since the health care entitlement program for the poor was created 52 years ago.”
  • Medicaid work requirements are one of the least politically controversial things Trump has done – Washington Post (Jan 11)
    “The big news Thursday morning — besides President Trump undercutting his own White House on FISA— was that his administration is moving to allow states to impose work requirements on Medicaid recipients. And as The Washington Post’s Amy Goldstein reports, it’s a legally controversial decision because it would impose such requirements for the first time in Medicaid’s half-century history. It’s simply not clear that the law allows for it. And opponents quickly cried foul, arguing that the move would harm the poor.”
  • Health Care Overhaul Appears Unlikely Before Midterm Elections – Roll Call (Jan 10)
    “Republicans are at risk of facing voters this year with no cohesive strategy to fulfill their seven-year campaign promise to repeal and replace the 2010 health care law or address the rising cost of health care. Following a meeting at Camp David over the weekend between President Donald Trump and top congressional leaders, members said a major overhaul of the law is unlikely this year.”
  • Centene says over 1.4 million sign up for Obamacare plans – Reuters (Jan 8)
    “U.S. health insurer Centene Corp said on Monday more than 1.4 million people had paid for its insurance plans via the federal Obamacare marketplace as of Jan. 7. “The growth in the exchange has been so dramatic … We had planned on incremental growth, but not that much,” Centene Chief Executive Michael Neidorff said, adding “We’ve had people working all weekend, playing catchup.” The enrollment number represents an increase of at least 400,000 from the third quarter ended Sept. 30 and over 200,000 since last year, Evercore ISI analyst Michael Newshel said in a note.”
  • Republicans Scale Down Agenda for Safety-Net Programs, Health Law – WSJ (Jan 9)
    “Republicans are scaling back their ambitions to overhaul safety-net programs and dismantle the Affordable Care Act following President Donald Trump’s weekend retreat with GOP leaders, due to concerns they can’t muster enough support ahead of the 2018 midterm elections. Instead, Republican lawmakers are likely to embrace a slimmed-down agenda focused on the basics, including funding the government, raising the government debt limit and striking a deal on immigration, according to GOP lawmakers and aides.”
  • CBO slashes cost estimate for CHIP financing: report – The Hill (Jan 9)
    “The Congressional Budget Office (CBO) drastically lowered its estimate of the cost to renew a health insurance program for low-income children, likely making it easier for lawmakers to agree on a plan for extending the program. In a lettersent Friday to Senate Finance Committee Chairman Orrin Hatch(R-Utah), the CBO said that financing the Children’s Health Insurance Program (CHIP) would cost $800 million over the next 10 years — far lower than analysts’ original estimate of $8.2 billion.”


January 5, 2018

This week’s big news was the release of a proposed rule from the Department of Labor on association health plans (AHPs).  The proposed rule redefines who an “employer” is under the Employee Retirement Income Security Act (ERISA) for the purposes of offering health insurance.  The definition of employer under the rule has a two-pronged test: the first test is whether they are in the same trade, industry, line of business, or profession; the second test is whether they have a principal place of business within a region that does not exceed the boundaries of a state or metropolitan area.

Since the second prong includes metropolitan areas, it can sometimes be the case where businesses group together across state lines such as in the Greater New York City Area which comprises areas in New York, New Jersey and Connecticut. With this redefinition of employer, these businesses could offer plans that do not have to satisfy the essential health benefits under the Affordable Care Act.  The Trump Administration is trumpeting this proposal as a way to offer small businesses more options and to afford them the ability to offer lower cost health plans.  Opponents are concerned that the healthiest people in the small group market would be weeded out, thus leaving older, sicker people in that market with higher costing plans and fewer options.

The proposed rule only has a sixty-day comment period – somewhat short considering how ambitious the proposal is. If the final rule remains close to the eventual proposed rule, we expect it will be challenged in the courts.

January is shaping up to be a busy month with Congress returning to work out the details on some significant unfinished business including the Medicare extenders package and the reauthorization of the Childrens’ Health Insurance Program (CHIP).  We are hearing there is an effort underway to find a bipartisan agreement on the pay-for for CHIP reauthorization.  If that comes together, that package could move on its own.  Medicare extenders will likely need to catch a ride on another moving vehicle such as the next continuing resolution or even the omnibus appropriations bill that will follow.

Finally, the new HHS secretary nominee Alex Azar is scheduled to get his confirmation hearing next Tuesday. If you’d like a detailed summary of the hearing, please contact jacob.beaver@prime-policy.com.

  • Trump administration rolls out health plan rules that could weaken Obamacare – Politico (Jan 4)
    “The Trump administration on Thursday proposed new rulesto let certain small businesses and trade groups band together to buy health care, in its latest move that could weaken Obamacare’s insurance marketplaces. The expansion of so-called association health plans is part of a broader effort to encourage the rise of cheaper coverage options that are exempt from certain Obamacare patient protections and benefit rules.”
  • Trump administration proposes rules for health plans without certain ACA protections – Washington Post (Jan 4)
    “The proposal, issued by the Labor Department, would carry out the most significant part of an executive order that President Trump signed in October, directing the government to foster alternative types of insurance. Proponents say the association health plans would be less expensive and enhance consumer choice, while critics — including the insurance industry — fear they would promote substandard coverage and weaken the ACA’s already fragile insurance marketplaces.”
  • Conservatives press for ObamaCare repeal ahead of Trump meeting with GOP – The Hill (Jan 5)
    “As President Trumpand GOP leaders prepare to meet this weekend to chart the Republican agenda for 2018, conservatives are urging high-ranking Republicans to make health care a top legislative priority. The meeting comes as Senate Majority Leader Mitch McConnell (R-Ky.) has indicated his chamber will likely move away from repealing ObamaCare in favor of passing bipartisan legislation. Conservative groups are pushing Republicans to try again to gut President Obama’s signature health care law, but McConnell has acknowledged the effort will be harder now with an even slimmer, 51-49, majority.”
  • Trump, Congress Spoil for Fight With Shutdown Again at Stake – Bloomberg (Jan 2)
    “Several health-care issues are also outstanding. Republican Senator Susan Collins of Maine voted for the GOP tax-cut bill in exchange for a promise from her party’s leaders to vote on two bills aimed at shoring up Obamacare. One would restore subsidies for co-payments and deductibles suspended by Trump, while the other would establish a reinsurance program to help insurers cover people with chronic and costly illnesses.”
  • Republicans knock holes in Affordable Care Act but don’t demolish the law – Washington Post (Dec 25)
    “Before Congress left Washington for the year, Republicans finally made good on their determination to knock big holes in the Affordable Care Act, crippling its requirement that most Americans carry health insurance and leaving insurers without billions of dollars in promised federal payments. At the same time, public support for the perennially controversial law has inched up to around its highest point in a half-dozen years. Nearly 9 million people so far have signed up for ACA health plans for 2018 during a foreshortened enrollment season, far surpassing expectations.”