Health Policy Report

November 19, 2018

The Week in Review

Following a grueling 2018 midterm campaign, House and Senate lawmakers returned to Washington last week to begin the “lame duck” session of Congress. On the floor, Senators cleared the legislative vehicle (S.140) for Coast Guard reauthorization as well as the nomination of Michelle Bowman to be a member of the Board of Governors of the Federal Reserve. In the House, lawmakers passed 15 bills under suspension of the rules, as well as a bill (H.R. 6784) that would remove the gray wolf from the List of Endangered and Threatened Wildlife published under the Endangered Species Act of 1973.

Behind the scenes, House Republicans held leadership elections for the next Congress and elected Rep. Kevin McCarthy (R-CA) over Freedom Caucus co-founder Rep. Jim Jordan (R-OH) to be Minority Leader for the 116th Congress. The Republican Conference also elected: (1) Rep. Steve Scalise (R-LA) as Minority Whip; (2) Rep. Liz Cheney (R-WY) as Conference Chairwoman; (3) Rep. Tom Emmer (R-MN) as National Republican Congressional Committee (NRCC) Chairman; (4) Rep. Mark Walker (R-NC) as Conference Vice Chairman; and (5) Rep. Jason Smith (R-MO) as Conference Secretary.

Meanwhile, House Democrats are bracing for a contentious battle over the speaker’s gavel after Thanksgiving. House Minority Leader Nancy Pelosi (D-CA) — the presumed favorite for the speakership in the 116th Congress — is facing pushback from a host of incumbent and incoming Democrats who say they have the votes to block her path to victory. While both sides jostle for support behind the scenes, a potential challenger to Leader Pelosi has emerged in former Congressional Black Caucus chairwoman Rep. Marcia Fudge (D-OH) who indicated that she would be interested after other members encouraged her to run. The House Democratic caucus is expected to vote on its leadership slate on November 29, with a final vote on the House Floor in January after the new Congress gavels in.

Additionally, results from the outstanding 2018 midterm election races are continuing to trickle in. Several Democratic challengers ­were declared victorious this past week including Rep-elects Andy Kim (D-NJ), Jared Golden (D-ME), Josh Harder (D-CA), Katie Porter (D-CA), Gil Cisneros (D-CA), and Senator-elect Kyrsten Sinema (D-AZ). Despite mounting Democratic victories, the GOP was able to pad its narrow advantage in the Senate after Florida Governor Rick Scott (R-FL) defeated incumbent Sen. Bill Nelson (D-FL) following a contentious recount. Republicans also appear to have salvaged Utah’s 4th congressional district as Rep. Mia Love (R-UT) has pulled ahead of her Democratic challenger, Ben McAdams, although votes continue to be counted. 

The Week Ahead

Both chambers of Congress have left town for a brief Thanksgiving recess. The Senate returns to town Monday, November 26th, while the House will reconvene Tuesday, November 27th.

HHS Secretary Azar Announces Demonstration Opportunities to Expand IMD Coverage

In a speech to the annual conference of the National Association of Medicaid Directors (NAMD), Department of Health and Human Services (HHS) Secretary Alex Azar announced a new opportunity for states to expand Medicaid coverage of patient care at institutions for mental disease (IMDs). The announcement, which was followed by a letter to state Medicaid directors, outlined a framework under which state Medicaid programs could develop behavioral health care delivery systems that include short-term stays in IMDs for patients with serious mental illnesses (SMIs) and children with serious emotional disturbance (SED). Federal funding will also be available under the demonstrations for care that would ordinarily be covered by Medicaid for patients in IMDs. States that participate by submitting 1115 waivers to the Centers for Medicare and Medicaid Services (CMS) outlining their plans will also be expected to include community-based care as a cornerstone of their approaches to serious mental illnesses.

The announcement goes further than Congress did in its relaxation of IMD restrictions in the SUPPORT for Patients and Communities Act (H.R. 6), which became law in October. H.R. 6 gave states the option to cover care for individuals with a substance abuse disorder (SUD) in an IMD setting. Under the new law, states may receive federal reimbursement for up to 30 days of care per eligible patient, per year in an IMD setting. To date, CMS has also approved 1115 waivers that allow IMD coverage for SUD in 17 states. This announcement gives states the opportunity to expand IMD coverage to patients exhibiting serious behavioral health issues, regardless of whether they also have a SUD. In a press release, CMS said that 12 states have expressed interest in such an expansion in IMD coverage. The letter also emphasized making more early behavioral health screening available under the Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) benefit, bolstering mental health and primary care integration, and expanded use of the Certified Community Behavioral Health Clinic (CCBHC) demonstration.

This new opportunity requires state action. Specifically, states will need to submit waivers to CMS under section 1115 of the Social Security Act with a plan for addressing SMI and SED, and paying for treatment in an IMD setting can be a part of that plan.

CMS Approves Outcomes-Based Drug Pricing for Michigan Medicaid

Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma announced last Tuesday that the health agency had approved Michigan’s waiver to negotiate Medicaid drug prices based on how well the medications work for patients. Michigan is the second state — behind Oklahoma — to gain approval from CMS for outcome-based pricing in the Medicaid program, which could force drug manufacturers to pay additional rebates if their pharmaceuticals do not meet specified treatment benchmarks for patients. Administrator Verma applauded Michigan for their initiative to modernize payment policies aimed at lowering drug prices. State outcome-based drug pricing contracts were included in the President Trump’s drug pricing blueprint.

CMMI to Explore Greater Integration of Social Determinants of Health

Department of Health and Human Services Secretary Alex Azar stated on Wednesday that the Center for Medicare & Medicaid Innovation is developing demonstrations to further integrate social determinants of health, and may include partnerships with the private sector and the Department of Housing and Urban Development. Sec. Azar applauded past work on the issue, including the Accountable Health Communities model that started under the Obama administration as well substance abuse and mental health models and Medicaid waivers the agency is pursuing. He noted that HHS could further integrate social determinants of health in Medicare by providing Medicare Advantage plans with additional flexibility, and pointed to initiatives to increase supplemental benefits such as home modifications and home-delivered meals in the coming years. Sec. Azar indicated the health agency would go further to address housing, nutrition, and other social needs, and floated the idea of allowing partnering organizations the power to pay a beneficiary’s rent or provide nutritious food. The health secretary clarified that the administration is looking to put together models that connect individuals to the services they need, rather than a one-size-fits-all approach. No specifics were given on the timing of such a demonstration.