Health Policy Report (10/13)

October 14, 2020

Capitol Hill Update

While Senators on the Judiciary Committee convene for the Judge Amy Coney Barrett’s confirmation hearing, House Majority Leader Steny Hoyer (D-MD) announced yesterday that no votes are expected in the lower chamber this week as Congressional Democrats and the Trump administration remain far apart on the next round of COVID-19 relief aid. After originally walking away from negotiations via tweet last week, President Donald Trump has since indicated that he wants to reach a compromise on pandemic relief aid prior to the Nov. 3. election. While the two sides did find common ground on issues such as health care and $1,200 stimulus checks in the negotiations, there is much work to be done on some of the key sticking points that have held up the negotiations thus far — namely unemployment insurance, state and local aid, and liability provisions.

While Speaker Nancy Pelosi (D-CA) and Treasury Secretary Steven Mnuchin could theoretically strike a deal at any moment, it is important to note that getting a deal passed through both chambers of Congress prior to the election is a tall task at this late date. With the Senate set to begin the confirmation process for Judge Amy Coney Barrett’s nomination to the Supreme Court, there is limited bandwidth between now and the end of the month in the upper chamber’s legislative calendar. Further, it remains to be seen whether there is any appetite for additional stimulus spending within the Senate GOP Conference, as there has been resistance from fiscal conservatives such as Sens. Rand Paul (R-KY), Mike Lee (R-UT), and Pat Toomey (R-PA). Speaking to reporters late last week, Senate Majority Leader Mitch McConnell (R-KY) stated that a new stimulus deal “[is] unlikely in the next three weeks.” 

President Trump Issues Mental and Behavioral Health EO

Last Monday, President Donald Trump issued an executive order (EO, Fact Sheet) to address mental and behavioral health concerns resulting from the pandemic. The EO states that it is the policy of the United States to prevent suicides, drug-related deaths, and other poor behavioral health outcomes that are “induced or made worse by prolonged State and local COVID-19 shutdown orders.” The President tasks a new working group with providing him a plan to improve service coordination among public and private stakeholders. The EO also directs federal agencies to use existing authority to award contracts and grants to enhance behavioral health services, though it brings to bear no new resources.

Consistent with President Trump’s reproach of COVID-19-related shutdowns, the EO emphasizes the use of in-person behavioral health services and places shutdowns front-and-center as a cause of behavioral health issues. In addition to the October 5th EO, the White House highlighted resources from the VA, National Institutes of Health, Centers for Disease Control and Prevention, and the Department of Health and Human Services (HHS) on managing behavioral health during the pandemic. The EO establishes a cabinet-level working group to assess the mental health needs of the elderly, minorities, children, veterans, people with disabilities, small business owners, those with substance abuse disorders, and abuse victims. The group will assess current strategies for assessing the mental health needs of these groups and consider applying PREVENTS and the Department of Labor’s (DOL) Employer Assistance and Resource Network on Disability Inclusion’s Mental Health Toolkit and Centralized Accommodation Programs. The order also aims to provide grant funding to support mental health treatment services including telehealth, peer-to-peer, and safe in-person therapeutic services. This goal will include awarding contracts and grants to community organizations that provide mental health and suicide prevention support. The EO also calls on agencies to award grants to community organizations and localities for enhanced suicide prevention and behavioral health services, though it does not make new funds available to do so.

Plan to Issue Prescription Drug Discount Cards Leaked

TRP last week obtained a leaked copy of a controversial, election year plan to distribute $200 copay cards to Medicare Part D-enrolled seniors that President Trump previewed in a speech two weeks ago. The draft plan describes a nationwide demonstration to test whether copay assistance would result in enhanced medication adherence. Beneficiaries enrolled in a Part D plan as of September 1, 2020, including beneficiaries receiving a partial low-income subsidy (LIS), would be eligible for the demonstration and notified of the plan with a letter before being mailed a debit card between October and December. Notably, Part B drugs would be excluded and only cost-sharing on Part D drugs could be paid using the card. The draft plan explains that beneficiaries who primarily fill brand-name prescriptions may derive more benefit from the cards than those who fill primarily generic prescriptions.

Key questions would need to be answered by the demonstration, such as whether copay assistance would improve medication adherence and whether improved medication adherence would lower costs in other areas of the health system. The leaked draft noted that it could be difficult to observe such reductions in these long-term outcomes given the short duration of the demonstration, and that an examination of total cost of care is not possible for MA-PD beneficiaries. CMS would use claims-based quality indicators in programs such as the Quality Payment Program (QPP) to evaluate the demonstration. The plan also states that unanticipated drug costs incurred by Part D sponsors as a result of this assistance would likely be shared with the government through risk corridors and reinsurance. It also says that increased medication adherence would lower costs for MA plans. The draft plan estimates that there are 39 million eligible beneficiaries, resulting in a total card value cost of $7.8 billion to be borne by the Federal Supplementary Medical Insurance Trust Fund.

SCOTUS and the ACA: Implications for the Exchanges and Beyond

Amidst President Donald Trump’s nomination of Judge Amy Coney Barrett for the Supreme Court, the Affordable Care Act’s (ACA) future remains uncertain as the law’s constitutionality will once again be considered by the U.S. Supreme Court in November. The case now known as California v. Texas (previously Texas v. Azar) will be argued at the Supreme Court on November 10, 2020 — just a week after election day, and most likely after the confirmation of Judge Barrett to the high court. And based upon our review of public comments from various Supreme Court scholars and health law gurus, Judge Barrett’s likely confirmation significantly increases the chances that the ACA could be struck down. The Senate Judiciary Committee will begin the confirmation process this week, with hearings Monday through Thursday to consider Judge Barrett.

While the focus of the case is on the constitutionality of the individual mandate (which may no longer be considered a “tax” since the penalty was reduced to $0), the ACA’s insurance reforms aren’t the only element of the 2010 health care overhaul that hang in the balance. A key argument made by the plaintiffs in the case is that the individual mandate is “inseverable” from the remainder of the law, raising questions as to whether a Supreme Court’s ruling could also take down other key tenets of the ACA — including the Exchanges, insurance subsidies, Medicaid expansion, closure of the Medicare Part D “donut hole,” the Innovation Center (or CMMI), the biosimilars pathway, and more. 

The outcome of the Supreme Court decision will undoubtedly have major political ramifications, and depending on the result of November’s election, Congress could take various steps to address the fallout of a decision to strike portions the law. For example, if Joe Biden is elected in November along with a Democratic Senate majority, lawmakers could move to make changes to the law in order to address the Court’s concerns and may consider using the budget reconciliation process to build on the ACA by adding a “public option” and expanding the law’s insurance subsidies. On the other hand, if President Trump is reelected and the entire ACA is struck, lawmakers could attempt to preserve a more limited set of the law’s policies, while the Exchanges and Medicaid expansion could be significantly pared-back or eliminated. 

Trump Announces EUA Coming for COVID-19 Antibody Drugs

In a video posted to twitter last Wednesday, President Trump announced that he had authorized the Food and Drug Administration (FDA) to grant emergency use authorization to COVID-19 antibody therapeutics developed by Regeneron and Eli Lilly. Without specifying details, the president added that these therapies would be distributed to patients at no cost and called Regeneron’s therapy — which was used to recently treat the president for COVID-19 — a “cure” despite a lack of current scientific evidence to back the claim. Regeneron received $450 million from the administration in June to scale up production of the company’s combination of two monoclonal antibodies. Both Regeneron and Eli Lilly have applied for EUA form the FDA, but the agency has not yet approved their requests.