Health Policy Report

The Week in Review

With Texas still reeling from the effects of Hurricane Harvey, lawmakers began to discuss the recovery process last week, which may have a significant impact on government funding negotiations this month. Harvey is expected to be one of the most, if not the most, expensive natural disasters in American history, necessitating billions of dollars in direct federal aid and funding for relevant agencies such as the Federal Emergency Management Administration (FEMA) and the National Flood Insurance Program (NFIP). That reality has dampened the brinksmanship expressed by both parties over government funding and could prove to be enough to force a deal early in September.

For now, lawmakers from both parties are pressing the non-partisan nature of the Harvey funding, unlike in past disasters where fiscal conservatives were reluctant to dip into federal coffers for local relief. Even President Trump, who in August appeared to threaten a government shutdown should Congress fail to fund a border wall project, was more conciliatory last week and White House officials have reportedly told Congress that the $1.6 billion in funds for the wall would not be needed for a continuing resolution that would provide disaster funds and keep the government funded at current spending levels through December. With a host of other deadlines looming, a continuing resolution along those lines appears increasingly likely.

The Week Ahead

Lawmakers return to Washington today, aiming to hit the ground running ahead a series of pressing deadlines at the end of the month. With government funding set to expire Sep. 30, the House is set to consider an eight-bill appropriations minibus (H.R. 3354) that would supplement the four-bill package passed by the House in July. Notably, the legislation is likely to include policy riders deemed unacceptable by Democrats, such as subjecting the Consumer Financial Protection Bureau (CFPB) to the congressional appropriations process and prohibiting the Department of Health and Human Services (HHS) from using appropriated funds to implement parts of the Affordable Care Act (ACA).

Even without the riders, the bill would likely have a tough time making it through the Senate, where eight Democrat votes will be necessary in order to overcome a filibuster. With only a few weeks before funding expires, and the added impetus for federal relief resources after Hurricane Harvey, the most likely outcome is a short-term continuing resolution (CR) that will maintain current funding levels for federal agencies until Congress negotiates a longer-term deal.

Meanwhile, the Senate is expected to pick up where it left off in confirming nominees, with Timothy Kelly’s nomination to be a U.S. District Judge for the District of Columbia first in line for consideration.

CMS Cuts Marketplace Enrollment Funding Ahead of 2018 Open Enrollment

The Center for Consumer Information and Insurance Oversight (CCIIO) announced that it will spend $10 million on advertising and educational activities for Exchanges’ 2018 Open Enrollment period, a sharp drop from the $100 million spend last year by the Obama administration. CCIIO said it will reach out though “digital media, email, and text messages,” using demographic and geographic data, and emphasize the new 2018 Open Enrollment period dates, Nov. 1 – Dec. 15, 2017. CCIIO said its approach “is not only based on previous evaluation of past Exchange outreach efforts, but is also consistent with promotional spending on Medicare Advantage and Medicare Part D.”

The agency also announced that for the upcoming Open Enrollment period, Navigators will “receive funding based on their ability to meet their enrollment goals during the previous year,” resulting in lower overall expenditures on the program. Navigators attaining 100 percent of their plan year 2017 enrollment target will receive the same funding as last year, while Navigators enrolling 70 percent of their enrollment target will receive 70 percent of 2017’s funding, for instance. The agency told reporters that the new funding approach would reduce last year’s $62.5 million in Navigator funding to $36.8 million. The agency added that Navigators, which are funded by user fees in Federally Facilitated Exchanges, will be asked to educate consumers on the revised Open Enrollment period dates and assist consumers with plan selections, “particularly focusing on consumers who are currently enrolled in coverage in areas where issuers have reduced or eliminated plan offerings.”

Hickenlooper, Kasich Lead Bipartisan Proposal on Market Stabilization Reforms

Led by Govs. John Hickenlooper (D-CO) and John Kasich (R-OH) and joined by Governors from NV, PA, AK, VA, LA, and MT, a bipartisan letter released last Thursday to Senate and House leadership recommends statutory changes to strengthen the individual health insurance market. The letter notes that continued uncertainty about the “direction of federal policy” drives increased premiums, reduces choice and competition, and the governors “strongly encourage” Congress and the Administration to take steps to stabilize the market.

The governors suggest that Congress should retain the ACA’s individual mandate until a more agreeable compromise is reached. The governors also called for the Trump administration to immediately commit to funding key cost sharing reduction (CSR) payments to insurers. Additionally, the letter expressed support for the creation of a temporary stability fund, or reinsurance, to provide money to bring down premiums by helping insurers cover the costs of the sickest enrollees.

The governors further note that “reforms should not shift costs to states or fail to provide the necessary resources to ensure that the working poor or those suffering from mental illness, chronic illness or addiction can get the care they need.” The plan’s release comes ahead of a series of bipartisan Senate hearings starting this week on how to stabilize and strengthen the individual insurance market. Gov. Hickenlooper is expected to testify along with other governors at one of the hearings.

Following FDA Approval of First Gene Therapy, CMS to Focus on Innovative Prescription Payment Models 

The Centers for Medicare and Medicaid Services (CMS) announced last Wednesday upcoming efforts to “ensure patients have access to new high-cost therapies,” while reaffirming the President’s commitment to addressing the rising cost of prescription drugs. Specifically, CMS plans to “issu[e] future guidance” – at a date not specified – that will “explain how pharmaceutical manufacturers can engage in innovative payment arrangements” with the agency.  CMS notes that innovative payment arrangements may include, for example, “outcome-based pricing for medicines in relation to clinical outcomes.” CMS says it will continue to work with state officials and other stakeholders on innovative pricing systems and that the agency plans to leverage the authority of the Center for Medicare and Medicaid Innovation (CMMI) to test these value-based payment arrangements.

CMS’ announcement follows the Food and Drug Administration’s (FDA) approval last week of Kymriah — the first gene therapy available in the U.S. Kymriah is approved for use by certain pediatric and young adult patients (up to age 25) with acute lymphoblastic leukemia. The disease is the most common type of childhood cancer in the U.S., making up 25 percent of cancer diagnoses for children under the age of 15, according the National Cancer Institute. The treatment will be priced at $475,000 for a one-time treatment, according to company executives — but they will only accept payments if patients respond to the drug within the first month.