Health Policy Report

January 3, 2017

The Week in Review

No major legislative stories broke during the holidays, but political observers continue to monitor the presidential transition process as President-elect Donald Trump prepares to take office on Jan. 20. Over the break, Trump sent mixed messages about the transition, claiming in comments to the press that it was going “smoothly,” but then tweeting that the Obama White House was creating obstacles for the incoming administration. Look for President Obama to give his impression of the incoming administration in farewell remarks on Jan. 10.

The Week Ahead

The 115th Congress meets for the first time today and the 59 new Members of Congress will be officially sworn-in. On Capitol Hill, the day will be marked by scores of “swearing in receptions” in the offices of newly minted congressmen and senators, as hordes of well wishers descend to pay their homage. While Republican leaders are planning an ambitious agenda for the first quarter of 2017, this week will be a slow start as bills targeting any last-minute regulations from the outgoing Obama Administration are set to hit the House floor. Republican legislators want to preclude the White House from issuing any additional regulations that may run contrary to the priorities of the GOP and President-elect Trump. Additional measures related to Veterans’ Affairs accountability and oversight of the Government Accountability Office (GAO) are also scheduled to be considered under suspension of the rules in the lower chamber.    

On Wednesday, President Obama has scheduled a Capitol Hill speech to House and Senate Democrats to discuss strategies for protecting the Affordable Care Act from Republican real efforts.  According to a spokesman, “[Obama] will discuss the work still left to do, including the ideas he has put forth to strengthen the Affordable Care Act (ACA). And he will share his perspective about the dangers posed by Congressional Republicans’ stated strategy to repeal the ACA before proposing any replacement, creating chaos in the health system in the short run ― and holding hostage Americans’ health care ― while Republicans develop their plan.” 

Democrats Plan To Fight ACA Repeal Over Break

House Democrats participated in a caucus-wide conference call on December 29th to weigh strategy in the fight to protect the Affordable Care Act (ACA) and other federal programs against GOP attack under the new Congress and Administration. Minority Leader Nancy Pelosi (D-CA) announced the call and several other activities in a letter to Democratic colleagues before Christmas.

Additionally, House Democrats planned press events and “days of action” in order to highlight the importance of defending the ACA against Republican repeal efforts. Pelosi asked members to plan press events on Jan. 7 to highlight the potential damage of repealing the ACA or ending Medicare and asked that member reach out to advocates and health care groups who “stand ready to participate and help.” The following Saturday (Jan. 14) there will be another national “day of action” during which Democratic House members will work with senators and governors to “continue the drumbeat” against GOP plans. Pelosi said lawmakers will receive further information about those events soon. She also asked lawmakers to inform the House Democratic Caucus about planned events.

HHS Releases Regulations on Alternative Pay Models and More

Despite Republicans’ call for a moratorium on new rules, The Department of Health and Human Services (HHS) pushed regulations regarding Medicare and Medicaid alternative pay models and insurance exchange stability out the door in the final weeks of the Obama administration. Lobbyists say the administration wanted to finish changes to demonstrations, which test pay and delivery reforms in Medicare and Medicaid. However, the next administration might undo some of the biggest demonstrations for which the Centers for Medicare & Medicaid Services (CMS) published rules in December because they apply policies that Republicans oppose. Republicans warned the administration weeks ago to not promulgate more regulations, and they're threatening to repeal them.

CMS in December published regulations on mandatory bundled-pay demonstrations for cardiac and joint-replacement services and announced a demonstration that pays bonuses to accountable care organizations for reducing Medicaid spending on beneficiaries enrolled in both Medicare and Medicaid. The federal government is letting states share in Medicare savings for the first time, which offsets what states lose when CMS shares Medicaid savings with providers. The regulations published before Christmas also included an alternative pay model that providers praised. That model, called the accountable care organization Track 1 +, aims to get more physicians to accept the risk of penalties for poor performance.

Furthermore, HHS published regulations aimed at stabilizing the exchange-plan market. The final rule maintains several changes to the Affordable Care Act's permanent risk adjustment program and adds a provision to reduce the statewide average premium used in the risk-transfer formula. The final rule also lowers the fee for state-based exchanges seeking to use the platform to 2 percent in 2018, and dedicates 3 percent of the 3.5 percent user fee for other federally facilitated market states to education and outreach efforts. CMS also set 2018 certification deadlines for qualified health plans. The final 2018 letter to federally facilitated market issuers mostly keeps the same time-frame despite issuers' assertions that the process should be delayed until at least summer to account for uncertainty.

Trump Floats Idea of ‘Public-Private Option’ for VA

Last week, a transition official said that President-elect Donald Trump is considering a “public-private option” for the Department of Veterans Affairs (VA). The official stated that a public-private option might solve some of the issues surrounding the multiple complex needs of VA services. Trump spoke often about veterans and reforming the VA during his campaign, and in October, outlined a plan to allow competition between VA facilities and non-VA hospitals, saying he would allow any veteran to see a doctor that accepts Medicare and receive care. The senior official said Wednesday that the public-private idea is "one of the options on the table,” and the President-elect is considering setting up an advisory committee to "help us navigate through what's a very complicated process, providing healthcare to veterans."

The department, which provides health care to 9 million veterans at nearly 1,300 facilities, has long struggled to overcome high-profile problems. But current Secretary Robert McDonald, the former CEO of Procter and Gamble, has been lauded by major veterans groups like the American Legion and Veterans of Foreign Wars, for the progress the department has made in recent years. In a recent letter to president-elect Trump, the groups praised the department’s efforts to improve its claims backlog, as well as the recently improved access to health care, and McDonald’s openness to working closely with them. The groups, which represent over 5.5 million veterans, encouraged Trump to continue the current policies, and have expressed dismay that Trump’s “private-public idea” could harm the current system and leave many veterans with complex medical problems without good treatment options.