Congressional and Administration Health Care Update- Week of 2/13/17

Senate Confirms Price as Health Secretary as ACA Fight Nears

The U.S. Senate confirmed Tom Price, a congressman and physician, to head the Department of Health and Human Services, a post where he’ll have a leading role in Republican efforts to dismantle Obamacare and implement its replacement, and oversee a budget of more than $1 trillion.

The vote was 52-47, making Price the most contentious nominee for the position since at least President Jimmy Carter’s administration. Democrats opposed him because of his free-market, limited-government views on how the American health-care system should operate, and his past efforts to privatize Medicare by turning it into a voucher system. They also strongly criticized him for leaving questions unanswered about stock purchases in medical companies he made while handling health-care legislation.

“President Trump is setting up his cabinet to run our country in a way that benefits those at the top and their allies, but really hurts the workers and families we all serve.” Senator Patty Murray, a Washington Democrat, said on the Senate floor during Thursday’s debate on Price. “It’s hard to imagine who in America would be better off under Congressman Price’s leadership at HHS.”

Senator Orrin Hatch, a Republican from Utah, backed the nominee, who was an orthopedic surgeon before being elected to Congress.

“Dr. Price has extensive insight into our nation’s health-care system, having practiced medicine for two decades in a variety of settings,” Hatch said. He “will put this vast experience to good use and be decisive not only in working with Congress to find solutions but implementing them.”

Guidance Helps Explain One-In, Two-Out Regulatory Order

The Office of Information and Regulatory Affairs quickly issued interim guidance for agencies grappling with President Donald Trump’s new executive order requiring two regulations to be eliminated for every one issued.

All regulatory activity was frozen on Jan. 20 by a memorandum issued by White House Chief of Staff Reince Priebus. Once the freeze is lifted, the new order’s requirements will apply to all significant regulatory actions by agencies between noon on Jan. 20 and Sept. 30, the end of the fiscal year.

In general, executive departments and agencies may comply with the order’s requirements by issuing two “deregulatory” actions for each new significant regulatory action that imposes costs, said the guidance document signed by Dominic Mancini, acting administrator of OIRA.

OIRA requested public comment on the guidance, which should be sent to by Feb. 10. It is likely the guidance, which was presented in a question-and-answer format, will be updated following the comment period.

It is also possible that the guidance could change once the new director of the Office of Management and Budget is confirmed. Trump’s nominee to lead the OMB, Rep. Mick Mulvaney (R-S.C.), is awaiting Senate confirmation.

Medicare Equipment Bidding Stalled by Administration

The Trump administration is temporarily halting an upcoming round of the Medicare durable medical equipment competitive bidding program.

The next steps of the Round 2019 bidding program, which was announced Jan. 31, will be temporarily suspended “to allow the new administration further opportunity to review the program,” the Centers for Medicare & Medicaid Services said Feb. 7 in a brief announcement.

The Medicare agency has said the program saved billions of dollars from the former fee schedule payment since it began in 2011. The program hasn’t been popular with the DME supplier industry due to reimbursement cuts which they say have driven suppliers out of business.

Lottery Winners May Have to Scratch Off Medicaid

Lawmakers cracked down on lottery winners using Medicaid health-care benefits, sending two proposals Feb. 7 to the House Energy and Commerce Committee and moving forward with early Republican efforts to curb what they see as misspending in the $550 billion program.

The proposed legislation would limit Medicaid eligibility for recipients of lump-sum payments by factoring the dollars into their income over a matter of months, as well as close a Republican-deemed “loophole” by including a spouse’s annuity income into Medicaid long-term care eligibility determinations for an institutionalized partner.

The bills, H.R. 829 and H.R. 181, were widely supported by GOP members of the health subcommittee, who called them “first, small steps” in improving Medicaid and noted possible savings for the most vulnerable beneficiaries. But Democrats bristled in a highly partisan vote, calling the proposals trivial at best—masking the ultimate goal of stripping dollars from the safety-net health insurance program—and harmful at worst, chipping “away at the program around its edges” and jeopardizing “hard-working” spouses of patients in need of long-term care.

Sent to the full committee with 20-to-12 and 19-to-13 margins, they represent the first targets for reforming and reining in Medicaid spending, which the Congressional Budget Office estimates could reach $1 trillion annually by 2026. With some members surprised about the lack of consensus, the votes underscore how controversial tweaks to a health insurance program that covers more than 70 million seniors, disabled and children will be.

“We never claimed this was going to fix everything, but this is a starting point,” Rep. Markwayne Mullin (R-Okla.), who authored H.R. 181, the annuities bill, said.

“Let’s just move forward, try to come up with small problems that can be solved,” he said.

Rep. Fred Upton (R-Mich.) was the sponsor of H.R. 829, the lottery bill.

Trump Administration Says Obamacare Failed as Sign-Ups Decline

Fewer people in the U.S. signed up for Obamacare coverage for this year, according to a preliminary report, as enrollments slowed after the Trump administration vowed it would do away with the health law.

In the 39 states where Affordable Care Act sign-ups are done on the website, 9.2 million people enrolled in individual insurance plans — about 400,000 fewer than last year. States like New York and California that run their own sign-up systems are reporting their data separately. The deadline to enroll was Jan. 31.

Even before the data came out, Democrats were claiming that the Trump administration had undermined the law, partly by halting some outreach efforts. While it now runs the health program, the Trump administration called the report another sign of the law’s shortcomings, pointing to a 25 percent increase in premiums and a decline in insurer participation.

“Obamacare has failed the American people,” Matt Lloyd, a spokesman for the Department of Health and Human Services, said in a statement. “We look forward to providing relief to those who are being harmed by the status quo.”

Until Trump took over in January, sign-ups had been trending higher. Then, on the day he was inaugurated, he signed an executive order declaring he’ll seek a prompt repeal of Obamacare and directing federal agencies to work to minimize the law’s burdens. There was also a partial halt to efforts to push people to sign up for coverage, though some of those efforts later resumed.

States with the biggest declines in sign-ups included ones where health insurers pulled out of the markets, leaving consumers with fewer choices. In Mississippi, Alaska, Georgia, Missouri and other states, insurers left the program or scaled back, while premiums climbed.

Obamacare also expanded eligibility for Medicaid and let children stay on their parents’ health plans to age 26. Including those changes, the U.S. estimates that about 20 million people have gained insurance under the law, helping lower the uninsured rate to 8.9 percent.

Medicare Must Do More Outreach on Home Health Coverage

A new website, corrective statement and national call to providers are part of a court-ordered educational outreach program the CMS must conduct to ensure Medicare providers apply the correct home health coverage standard (Jimmo v. Burwell, 2017 BL 31713, D. Vt., No. 5:11-cv-17, 2/1/17).

The U.S. District Court for the District of Vermont Feb. 1 ordered the Centers for Medicare & Medicaid Services to conduct additional educational outreach by notifying Medicare providers and contractors that the program will pay for home health services designed to maintain or slow the decline of a beneficiary’s health. The order comes in litigation brought to force CMS to rectify a prior coverage policy that excluded coverage for treatment that merely maintained a beneficiaries condition.

The court accepted the majority of the CMS’s proposed corrective plan, including language provided by the Center for Medicare Advocacy (CMA), which represented the plaintiff class of Medicare beneficiaries, for a public corrective statement. The court also insisted that the agency hold a national call to disseminate the statement and provide clarification about the correct home health coverage standard.

One key provision that the CMA pushed for was to characterize the new “maintenance standard” for Medicare coverage as a change rather than a clarification of the prior standard, which the CMS originally suggested. Judith Stein, executive director of the Center for Medicare Advocacy, said in a Feb. 2 statement that using the word “change” in the forthcoming outreach initiative, along with “the imprimatur of CMS,” means that “Medicare adjudicators and providers should have no doubt about what the correct coverage policy is.”

The order comes after Judge Christina Reiss found in an Aug. 17, 2016, ruling that program outreach mandated by a settlement between the CMS and Medicare advocacy groups fell short of the parties’ settlement agreement, and ordered the parties to come up with a new plan to correct continued incorrect application of home health coverage standards (25 HLR 1262, 8/25/16). Medicare advocacy groups previously alleged that the CMS was improperly covering only home health services designed, or later found, to improve a beneficiary’s health (the “improvement standard”), and the parties agreed in 2013 (the Jimmo settlement) to conduct an educational campaign that alerted providers, contractors and adjudicators that the improvement standard was too narrow and erroneous.

Medicare Advantage Payments for 2018 to See ‘Modest’ Rise

Medicare managed care plans should expect a “modest” 0.25 percent average increase for 2018, but revenues should go up 2.75 percent when coding trends are considered, the CMS said Feb. 1.

The “moderate growth” is consistent with last year’s payment update and reflects a similar pattern to Medicare fee-for-service payments, the Centers for Medicare & Medicaid Services said in a release announcing the 2018 Medicare Advantage and Part D Advance Notice and Draft Call Letter. Comments must be submitted by March 3, and the 2018 final announcement will be published April 3.

The CMS is proposing updates to the methodologies used to pay Medicare Advantage and Part D prescription drug plan sponsors. However, a Jan. 19 Government Accountability Office report found the new system isn’t ready for prime time, calling into question “the soundness of billions of dollars in Medicare expenditures.”

John Zang contributed to this report


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