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November 2017

November 17, 2017

The big news in healthcare is the revivification of Obamacare repeal efforts in the form of the individual mandate’s repeal being included in Senate tax reform plan. That plan passed the Senate Finance Committee yesterday on a party line vote, though with the Thanksgiving district work period next week, it isn’t likely to see the Senate floor until November 27th at the earliest. Sen. Murkowski (R-AK), one of the three Republican senators to sink the earlier GOP repeal bill, has suggested her vote for the tax legislation is contingent on passage of the Murray-Alexander bill that would appropriate funds for cost-sharing reduction payments beforehand. It’s reasonable to assume that this applies to other moderate Senate Republicans, such as Sen. Collins (R-ME). The Murray-Alexander bill has 12 Republican cosponsors, which means if it came to vote on the Senate floor it would pass under the 60-vote threshold required in the chamber.

In nomination news, the President has sent up his replacement pick for former HHS Sec. Tom Price, choosing former Eli Lilly and Co. senior executive Alex Azar. Azar worked in the George W. Bush administration for six years, both as HHS general counsel and deputy secretary of the department. He has begun meetings with senators who will vote on his nomination in committee, meeting with HELP Committee Chairman Lamar Alexander (R-TN) Thursday. His confirmation hearing before HELP is set for November 29th, though Senate Finance is ultimately the committee of jurisdiction over the vote to send his nomination to the Senate floor. Senate Finance has not yet set a date for their nomination hearing.

On the regulatory side, CMS proposed a rule yesterday that included a request for comments on how to cut the costs of Medicare Part D drugs. They acknowledged in the rule that the true price of the drug is hidden from those purchasing them, and specifically asked how the rebates and discounts negotiated by manufacturers and providers could be better shared so consumers could reap some of the benefit. The other parts of the rule that will likely go into effect sooner than anything gleaned from the public comment period would: reduce costs of biosimilar drugs for low-income and high-needs patients; require plans for patients receiving low-income subsidies and those who exceed the threshold for catastrophic coverage to have lower Part D maximum co-payments for biosimilars; allow Part D plans to immediately substitute generics for brand-name drugs at the same cost or lower should they come to market during the plan year; and allow patients to access drugs at their preferred pharmacy, excepting those at risk of opioid abuse who would be required to obtain opioids from select providers.

  • Defying gloomy predictions, Obamacare enrollment surges – Politico (Nov 15)
    “Doomsday headlines about Obamacare enrollment may be having an unforeseen consequence: booming sign-ups in the troubled insurance marketplaces. Obamacare’s fifth open enrollment season, the first under President Donald Trump, is off to a surprisingly robust start despite the brutal developments of the past year — skyrocketing premiums, dwindling competition, unremitting Republican efforts to eradicate it.”
  • Bipartisan bill would halt cuts to hospitals’ drug subsidies – Axios (Nov 15)
    “Two House members, Republican David McKinley of West Virginia and Democrat Mike Thompson of California, have proposed a billthat would stop pending drug payment cuts to hospitals. Three major hospital lobbying groups and three health systems also sued the feds this week to prevent the cuts to those drug subsidies, which are part of the federal 340B drug discount program.”
  • How Cotton brought Obamacare repeal back from the dead – Politico (Nov 15)
    “Sen. Tom Cotton was about to enter the White House early this month to discuss immigration policy when he got an unexpected call from President Donald Trump to talk about a different topic. For days, the Arkansas senator had been working behind the scenes to convince Republicans that reigniting a battle over repealing Obamacare in the tax fight wasn’t as crazy as it seemed. But Trump, still smarting from GOP’s failures to dismantle the law whom Cotton had first pitched on the idea four days prior, needed little persuading.”
  • Why repealing Obamacare’s individual mandate is so crucial for tax reform – Washington Post (Nov 14)
    “Senate Republicans slipped the repeal of a key Affordable Care Act provision into their tax bill Tuesday, adding a provision that would allow them to declare a victory on health care while gaining more than $300 billion to offset the cost of tax reform. The individual mandate is one of the most unpopularparts of the ACA — a requirement that people either buy health insurance or pay a penalty. About5 million taxpayers paid a fine in 2016, according to a January letter sent by IRS Commissioner John Koskinen.”
  • CBO: Tax Plan Could Cut Medicare By $25 Billion – Roll Call (Nov 14)
    “Medicare, the largest nonexempt mandatory program, would be cut $25 billion since cuts to the seniors’ health insurance program are limited to 4 percent in any fiscal year under the law. That would leave $111 billion in other nonexempt cuts, affecting programs such as agricultural subsidies, state workforce development grants for individuals with disabilities, and even some mandatory funding streams for the immigration enforcement and border protection agencies.”

November 10, 2017

This was a big week for tax reform with the Ways and Means Committee marking up their bill and the Senate Finance Committee releasing their own, different version of comprehensive tax reform. As a result, there was not as much activity with healthcare in Washington this week. Although there was speculation that a repeal of the Affordable Care Act’s (ACA) individual mandate might make it in to the tax reform bill as way to bring in more revenue into the bill, ultimately, Chairman Brady decided against adding the individual repeal to his bill.

The Trump Administration did issue new regulations that will allow employers to not cover birth control in their health insurance plans. Previously, the ACA included birth control as part of the essential health benefits with an exception for religious organizations, who the Obama Administration had exempted. Critics wanted the waiver for religious organizations to go further and late last week, the Departments of Health and Human Services, Treasury, and Labor issued interim final rules that will allow businesses that have moral objections to offering birth control coverage to avoid doing so. Because these are interim final rules, they policy change will take effect immediately.

Outside of Washington, the voters in Maine approved a ballot initiative to expand Medicaid under the ACA. The ballot measure passed with nearly 60% of the vote. The governor and legislature will now grapple with funding Maine’s share of the expansion. Republican Governor LePage has strenuously objected to expanding Medicaid and has vetoed 5 different attempts from the legislature to expand Medicaid.

  • Despite Trump’s scorn, early ‘Obamacare’ sign-ups top 600k- WaPo (Nov 9)
    “Despite President Donald Trump’s efforts to take down “Obamacare,” more than 600,000 people signed up for coverage the first week of open enrollment, the government said Thursday. With only four days of data, experts said it’s hard to discern a trend. But definitely the Affordable Care Act doesn’t seem to be collapsing. If anything, sign-ups for 2018 are on track with previous years. Figures from the Centers for Medicare and Medicaid Services showed that 601,462 people signed up Nov. 1-4 in the 39 states served by the federal HealthCare.gov website. Of those consumers, about 77 percent were renewing their coverage, and about 23 percent were new customers, a split that mirrors previous years. Because sign-ups for states running their own health insurance markets are not included in the early data, overall national enrollment is guaranteed to be higher.”
  • States will be allowed to impose Medicaid work requirements, top federal official says- WaPo (Nov 7)
    The government will give states broader leeway in running their Medicaid programs and allow them to impose work requirements on enrollees, a top federal health official said Tuesday in outlining how the Trump administration plans to put its mark on the insurance program for low-income Americans. Seema Verma, who heads the Health and Human Services Department’s Centers for Medicare and Medicaid Services, did not spare criticisms of the Obama administration and called its opposition to work requirements “soft bigotry.”
  • Maine Voters Approve Medicaid Expansion, a Rebuke of Gov. LePage- NYT (Nov 7)
    “Voters in Maine approved a ballot measure on Tuesday to allow many more low-income residents to qualify for Medicaid coverage under the Affordable Care Act, The Associated Press said. The vote was a rebuke of Gov. Paul LePage, a Republican who has repeatedly vetoed legislation to expand Medicaid. At least 80,000 additional Maine residents will become eligible for Medicaid as a result of the referendum. Maine will be the 32nd state to expand the program under the health law, but the first where voters, not governors or legislators, decided the issue. Other states whose leaders have resisted expanding the program were closely watching the campaign, particularly Utah and Idaho, where newly formed committees are working to get Medicaid expansion on next year’s ballots.”


November 3, 2017

Release of the comprehensive tax reform proposal from the House Ways and Means Committee took most of the oxygen out of the room this week. However, there still were some developments in the healthcare world. The House Ways and Means and Senate Finance Committees introduced their Affordable Care Act (ACA) stabilization bills this week. Action on these bills is not likely until tax reform is behind us, which will almost certainly push this issue into 2018.

The House passed a 5-year extension of the Children’s Health Insurance Program (CHIP) this week. The bill passed largely on a party line vote with only 15 Democratic members voting in favor. The bill also includes some additional Medicaid funding for Puerto Rico and the Virgin Islands for two years. Also included is $5 billion for the Disproportionate Share Hospital (DSH) program. The bill extends a number of other expiring health programs, including Health Centers and the National Health Service Corps, but it does not carry any of the Medicare extenders. The bill uses increases in Medicare premiums for high income earners and taps the ACA’s Prevention and Public Health Fund as pay-fors, both of which are objectionable to Democratic members of Congress. We expect the Senate to pass a bipartisan CHIP extension in the coming weeks, as opposed to taking up this House bill.

The Centers for Medicare and Medicaid Services (CMS) issued a final rule for the hospital outpatient prospective payment system that made dramatic changes to the reimbursement under the 340B program. The rule cuts payments for separately payable non pass-through drugs to average sales price (ASP) minus 22.5% from ASP plus 6%. Hospitals are reacting strongly to this rule and may need to fight this in the courts.

The President’s Commission on Combatting Drug Addiction and the Opioid Crisis issued their final report this week. The report contains over 50 specific recommendations for combatting this opioid epidemic. Of note, the report calls on the expanded use of drug courts to channel substance abusers into treatment. The report attempts to tackle prevention, prescribing practices, supply reduction and better enforcement practices, improvements in treatment, and further research and development.

  • House passes bill to fund children’s insurance program – The Hill (Nov 3)
    “Legislation to fund the Children’s Health Insurance Program for five years passed the House on Friday over the objections of Democrats, who oppose how the legislation is paid for. The bill passed 242-174. It now heads to the Senate, where it is unlikely to get a floor vote, leaving lawmakers at an impasse.”
  • Hospitals sue CMS over 340B drug changes – Axios (Nov 1)
    “Three hospital lobbying groups — the American Hospital Association, America’s Essential Hospitals and the Association of American Medical Colleges — are suingthe Centers for Medicare & Medicaid Services after the agency finalized a rule Wednesday that would drastically cut outpatient drug payments under the federal 340B drug discount program.”
  • The bicoastal bid to shore up Obamacare – Politico (Nov 1)
    “Two big blue states on opposite sides of the country have a mission: Save Obamacare. California and New York, which run their own health insurance exchanges and will spend tens of millions this year on marketing and outreach, don’t expect to have a stellar year in the sign-up season that starts Wednesday.”
  • Trump throws curveball in tax talks, says bill should include Obamacare changes – Washington Post (Nov 1)
    “President Trump on Wednesday said congressional Republicans should make a major change to their upcoming tax cut bill by including changes to the Affordable Care Act, an idea that has divided the GOP for months. The idea had already been rejected one day earlier by House Ways and Means Committee Chairman Kevin Brady (R-Tex.), who had said it risked bogging down the process. But Trump, in two Twitter posts Wednesday, pushed the idea, which has gained currency with some Senate Republicans.”
  • Conservatives push to repeal Obamacare mandate in tax package – Politico (Nov 3)
    “Conservatives are attempting to revive efforts to gut Obamacare’s individual mandate as part of the Republican overhaul of the tax code. Despite a public push last week by Sens. Tom Cotton (R-Ark.) and Ron Johnson (R-Wisc.) to include repeal of the mandate in the tax package, tax bill writers didn’t include that in the measure released Thursday. But POLITICO Playbook reports there may be new momentum for adding the repeal into the bill.”
  • House votes to repeal ObamaCare’s Medicare cost-cutting board – The Hill (Nov 2)
    “The House on Thursday voted to repeal a controversial Medicare cost-cutting board that has drawn the ire of both parties. Lawmakers voted 307-111 to abolish what is known as the Independent Payment Advisory Board (IPAB). The board is tasked with coming up with Medicare cuts if spending rises above a certain threshold but has been criticized as outsourcing the work of Congress.”