Health Policy Report (4/13)

Capitol Hill Update

Late last week, Senators failed to pass a Republican-designed $250 billion funding bill to bolster the Small Business Administration’s (SBA) Paycheck Protection Program amid disagreements over additional funding for COVID-19 response efforts. Majority Leader Mitch McConnell (R-KY) attempted to pass the additional funding for the PPP by voice vote during a “pro forma” session last Thursday but was met with opposition by Senate Democrats who objected to unanimous consent passage. Democrats instead offered a counter-proposal  that would address additional priorities beyond the small business loan funding in this “Phase 3.5” effort, calling for: (1) $100 billion for health care providers; (2) $150 billion for state and local governments; and (3) a 15 percent increase in Supplemental Nutrition Assistance Program (SNAP) benefits.

Washington is currently at a crossroads with the so-called “Phase 3.5” measure as officials from both sides of the aisle continue to jostle for positioning. Speaker Pelosi emphasized that the Senate’s proposal cannot pass the House in its current state. Additionally, any process requiring the House’s unanimous consent could ultimately be blocked by Rep. Thomas Massie (R-KY) who has expressed concerns about passing the funding package absent a quorum. Conversely, White House officials have stated that President Donald Trump will not sign a bill that includes priorities beyond the PPP, saying that he prefers to handle additional funding for hospitals, state, and local governments in the “Phase IV” legislation. At the same time, however, Treasury Secretary Steven Mnuchin and Senate Minority Leader Chuck Schumer (D-NY) have begun negotiations on a next round of COVID-19 response legislation, and have expressed optimism about the possibility of reaching a compromise before the end of the week. Senators will convene for their next pro forma session this morning at 10 AM, followed by another session on Thursday at 3 PM. 

CMS Announces 2021 MA, Part D Rates

Last Monday, the Centers for Medicare and Medicaid Services (CMS) issued its 2021 Medicare Advantage (MA) and Part D Rate Announcement, finalizing payment methodologies for the two programs for calendar year (CY) 2021. The Rate Announcement encompasses both Parts I and II of the CY 2021 Advance Notice. The Rate Announcement had little changed from the Advance Notices, with the primary differences being updated growth percentages and some other newly-available information. It finalizes policies relating to risk adjustment and kidney care, as proposed.

CMS released Part I of the Advance Notice in January and Part II in February. Part I addressed MA’s risk adjustment model, which was required to have a longer comment period than the topics addressed in Part II. Part II, which was released in February, focused on the bulk of the payment methodology for MA and Part D plans for CY 2020. CMS traditionally releases the advance notice and “call letter” on an annual basis to alert MA and Part D plan sponsors making methodological changes to payments, updating policy and benefit parameters, and instructing sponsors how to enter bids. This year, CMS opted not to release a call letter, instead publishing a proposed rule to make policy changes within the rulemaking process. The comment period on that rule ended last Monday.

The Rate Announcement will be used by MA and Part D plan sponsors to develop their bids for CY 2021. Regarding the rule that replaced the call letter, CMS will review comments and may finalize the rule after considering public input. Additionally, in Part II of the Advance Notice, CMS solicited feedback on a variety of Star Ratings measures. The agency did not finalize these new measures in this Rate Announcement, but it did note that it would take comments into consideration in the development of measures.

Biden Suggests Lowering Medicare Eligibility Age

Presumptive 2020 Democratic presidential nominee and former Vice President Joe Biden last week proposed allowing Americans to opt into the Medicare program once they turn 60. Unveiled only hours after competitor Sen. Bernie Sanders (I-VT) dropped out of the race last Wednesday, Biden’s proposal would open access to government sponsored health care. Former Vice President Biden framed his proposal through the lens of the coronavirus pandemic, noting that lowering the Medicare eligibility age is especially important as older Americans may find it difficult to secure jobs after the crisis ends. Biden clarified that Americans between 60 and 64 years old who choose not to opt-in to Medicare could stay on their employers’ insurance, a public option plan, or other plans available through the primary process. Employers would be required to comply with non-discrimination laws to prevent the possibility of older workers being pushed off employer coverage and onto Medicare. The campaign announced that any new federal costs for the program would be funded through the Medicare Trust Fund, and the proposal would extend benefits with the same cost-sharing arrangements as existing Medicare plans rather than imposing different costs on Medicare enrollees under 65.

Providers Who Benefit From CARES Act Grants Banned From Surprise Billing

The Department of Health and Human Services announced on Thursday that providers will be required to certify that they will not engage in “surprise billing” practices in order to receive grants from the $100 billion aid fund appropriated in the CARES Act. Providers benefiting from the aid in Congress’ third relief bill will not be allowed to try to collect more money from COVID-19 patients than the patients would have to pay if services had been provided in-network, and the ban will apply to patients covered by commercial, government or employer-sponsored coverage. White House spokesman Judd Deere noted that the “Trump Administration is committed to ensuring all Americans are not surprised by the cost related to testing and treatment they need for COVID-19.”

Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma announced Tuesday that $30 billion of the relief fund would be soon distributed to a wide range of providers based on their national share of Medicare payments, and reported Thursday that $51 billion more had been distributed in emergency pay advances. CMS has so far approved more than 21,000 of the 32,000 requests it received from health care providers and suppliers seeking accelerated advance pay during the COVID-19 emergency. Before the pandemic, CMS had approved just over 100 total requests in the previous five years, the agency said, and most of those prior requests were tied to natural disasters. Some stakeholders have criticized the distribution method, noting that it disadvantages providers that treat mostly uninsured and Medicaid patients and does not provide additional funding for providers in areas with more severe outbreaks. Additionally, providers oppose the 10.35 percent interest rate CMS will charge when providers being repaying the advances through adjustments to future Medicare reimbursements. CMS has clarified that it has no authority to waive or change the interest rate on Medicare debts, including in the accelerated advance pay program.

Trump Considering Ending Funding for World Health Organization

President Trump took aim at the World Health Organization (WHO) on Tuesday, stating that he would consider placing a hold on funding over how it has handled the COVID-19 pandemic. The president said that WHO “missed the call,” and “should have called it months earlier.” He suggested to reporters at a White House press briefing that WHO failed to sufficiently warn the global community about the virus and said the administration “would be looking into it very carefully.” He also accused the organization of being “very biased” in favor of China, and claimed that the WHO had wrongfully disagreed with his travel restriction on flights from China.

The United States is currently the largest contributor to the WHO’s budget. The President previously proposed cutting the WHO funding in the 2021 budget request, dropping funding from $122 million to about $58 million. On Wednesday, WHO Director-General Tedros Adhanom Ghebreyesus urged leaders to focus on saving lives and working together, arguing that political attacks would only lead to “more body bags.”