TRP Health Policy Report
October 6, 2014
The House and Senate are adjourned until after the November 4 elections. Following the midterms, members of the House and Senate are expected to return for two weeks before breaking for the Thanksgiving holiday. Congress should next be in session through December, when work will continue on appropriations, expired tax provisions and curbing corporate inversions. Other issues that could be considered during the lame-duck session include defense and intelligence operations reauthorizations, terrorism risk insurance (TRIA) reauthorization as well as bills related to commerce, sanctions and trade.
CMS Launches Physician Payment Website
Last week, CMS launched its online Open Payments System, which aims to boost transparency by making public the payments health care providers receive from drugmakers and medical device manufacturers. According to a CMS press release the data collection contains information on 4.4 million payments assigned to 546,000 physicians and nearly 1,360 teaching hospitals. Cumulatively, those payments are valued at close to $3.5 billion. The data include money paid out as consulting fees, research grants and travel reimbursements during the last five months of 2013. However, CMS said last month that about one-third of the Open Payments records will be withheld upon launch because of data inconsistencies. The agency gave providers until Sept. 25 to review and request corrections to data.
The Open Payments program has been a subject of controversy for doctors and industry groups since the passage of the Affordable Care Act (ACA) in 2010. Two months ago, more than 20 medical societies asked CMS to explain the context that will be provided to help the public understand the justification for payments, such as speaking fees and grants used to fund clinical research. Separately, the AMA and dozens of other medical societies have pressed CMS for additional time to allow doctors to register and review payment data for what they called inaccurate, misleading and false information that may be posted to the database. Last month, 64 health advocacy groups asked CMS to exclude from the database indirect payments they make to doctors. Ultimately, 40 percent of the payment records were published without doctors' names due to possible errors – a move that can be interpreted as a concession to advocacy and stakeholder groups. CMS officials said the figures would be included in the next update, scheduled for June 2015.
Insurers Poised to Cancel Non-ACA Compliant Plans
According to a variety of industry and media sources, insurers are notifying thousands of consumers that they will cancel their health coverage by the end of the year because the plans do not comply with the ACA. President Obama initially issued an administrative fix allowing individuals to keep health plans that did not meet the health law’s requirements in Nov. 2013, following reports that millions of U.S. residents were being notified by their insurers that their existing health policies would be discontinued in late 2014 because they do not meet the law’s coverage requirements. Earlier this year, the Administration extended the administrative fix, which now allows people to renew such plans until 2016, with coverage lasting in some cases until Sept. 2017.
A number of insurers have decided not to extend non-compliant plans, however, including Anthem, CareFirst, Humana and Kaiser Permanente. Industry analysts said that one reason behind the switch is that insurers determined they can make more money selling plans that comply with the ACA, often at higher premiums that may be subsidized by the government. It is unclear how many consumers might be affected by the latest round of cancellations. But experts anticipate less of a backlash this time, noting that last year’s uproar came amid the bumpy rollout of the federal health insurance website, while this year’s enrollment is expected to be smoother. Policyholders who lose their coverage can either switch to a different plan under the same insurer or shop around for new coverage during the upcoming open enrollment period, which begins on Nov. 15.
Judge Rules Against ACA Subsidies in Federal Exchanges
Last Tuesday, a federal judge in Oklahoma ruled that ACA subsidies can't go to consumers who obtained health coverage through the federal exchange. In 2012, Oklahoma challenged an IRS rule that enabled consumers in states that used the federal exchange to get the tax credits, which lower coverage costs. Critics have argued that language in the ACA only allows subsidies to be provided through states that set up their own exchanges. Last week, U.S. District Judge Ronald White ruled in favor of the state's lawsuit challenging the IRS regulation, calling the agency's rule arbitrary and capricious. However, White placed his ruling on hold pending an appeal, which means subsidies for plans purchased through the federal exchanges will still be available in Oklahoma. The Obama Administration can appeal the decision to the 10th U.S. Circuit Court of Appeals in Denver.
The ruling is the latest to weigh in on the legality of subsidies on the federal exchange. In September, the U.S. Court of Appeals for the District of Columbia granted an Obama Administration's request to reconsider a case challenging insurance subsidies in the ACA. A three-judge panel had struck down the IRS regulation making subsidies available nationwide. That decision to rehear the case with a full roster of judges was widely viewed as making it less likely the Supreme Court would get involved. The appeals court said it would hear new oral arguments on Dec. 17. Opponents of the subsidies said White’s ruling could push the high court to review the issue. The Obama Administration is expected to appeal Judge White’s ruling to the 10th Circuit Court of Appeals. The White House and Congressional Democrats say the law was written to allow anyone to get subsidies — and that any contradictory ACA language was written in error.
Senator Calls for Increased Funding to Fight Ebola in Omnibus
Last Friday, Sen. Tom Harkin (D-IA) called for increased funding to fight Ebola as part of an omnibus spending bill in the post-election lame-duck session of Congress. The chairman of an Appropriations subcommittee with jurisdiction over the Centers for Disease Control (CDC), Harkin said lawmakers should increase resources for the agency, which is monitoring the first person diagnosed with Ebola in the U.S. last week. Harkin said that American doctors should be trained to look for Ebola symptoms, adding that quarantine stations at 20 entry-points to the U.S. should be strengthened. He also said that Congress should fund research for better treatment and for a potential vaccine. The Iowa Senator also said the U.S. should expand a program that would help other countries in Africa prepare to fight Ebola. The virus has already infected people in Liberia, Guinea, Nigeria and Sierra Leone.
Congressional appropriators plan to offer an omnibus spending bill in the lame-duck session that would fund the government through Sept. 30, 2015. The government is now operating on a stop-gap continuing resolution (CR) that expires on Dec. 11. The Obama Administration has asked Congress for permission to shift $1 billion in Pentagon funds as part of the fight against Ebola. The Pentagon would manage funding with HHS, but some lawmakers have questioned whether those agencies will coordinate well. Leaders on the House and Senate appropriations panels have asked the White House to provide more details about its request, including funding allocations and the goals and timeline for the mission. When finalized, the $1 billion will be added to the $175 million in federal funds already allocated for Ebola and the $88 million included in the CR that Congress approved before the recess.
Medical Societies Urge SGR Repeal in Lame-Duck Congress
Last week, a group of medical societies urged Congress to pass the Sustainable Growth Rate (SGR) repeal bill from last March during the upcoming lame-duck session after the November 4 general election. With another SGR “cliff” and Medicare pay cut of 20.9% looming in April, the Society of General Internal Medicine (SGIM), the American College of Physicians, and the American Academy of Family Physicians (AAFP) called on Congress to resolve the Medicare payment during this year's lame-duck session of Congress, when politics is expected to take a back seat.
The SGR Repeal and Medicare Provider Payment Modernization Act (H.R.4015) would raise payment rates 0.5% through 2018 while gradually shifting Medicare compensation from fee-for-service to pay-for-performance. By repealing the SGR formula, it also would have averted a 23.7% Medicare pay cut set for April 1. Passage appeared possible in March, but the question of how to offset the cost of the bill – estimated at $138 billion over 10 years by the CBO – torpedoed a bipartisan deal. To avert a crisis, Congress voted to again postpone the SGR-mandated pay cut, this time to April 1, 2015. Lawmakers have delayed similar rate reductions on a yearly basis going back to 2003.
Medical groups and other stakeholders are hoping Congress takes up the SGR reform bill when politics is off the immediate agenda. Several key supporters of the latest SGR repeal bill are retiring, including Rep. David Camp (R-MI) and Rep. Henry Waxman (D-CA), who might push hard for passage during the lame-duck session for the sake of their legislative legacy. The new Congress that convenes in January is less likely to approve a comprehensive Medicare reimbursement bill that eliminates the SGR formula, as newly elected members will need to come up to speed on the issue. In addition, the makeup and leadership of House and Senate committees will change – dramatically so in the Senate if the GOP gains a majority there in the November 4 elections.
Last week, CMS launched its online Open Payments System, which aims to boost transparency by making public the payments health care providers receive from drugmakers and medical device manufacturers. According to a CMS press release the data collection contains information on 4.4 million payments assigned to 546,000 physicians and nearly 1,360 teaching hospitals. Cumulatively, those payments are valued at close to $3.5 billion. The data include money paid out as consulting fees, research grants and travel reimbursements during the last five months of 2013. However, CMS said last month that about one-third of the Open Payments records will be withheld upon launch because of data inconsistencies. The agency gave providers until Sept. 25 to review and request corrections to data.
The Open Payments program has been a subject of controversy for doctors and industry groups since the passage of the Affordable Care Act (ACA) in 2010. Two months ago, more than 20 medical societies asked CMS to explain the context that will be provided to help the public understand the justification for payments, such as speaking fees and grants used to fund clinical research. Separately, the AMA and dozens of other medical societies have pressed CMS for additional time to allow doctors to register and review payment data for what they called inaccurate, misleading and false information that may be posted to the database. Last month, 64 health advocacy groups asked CMS to exclude from the database indirect payments they make to doctors. Ultimately, 40 percent of the payment records were published without doctors' names due to possible errors – a move that can be interpreted as a concession to advocacy and stakeholder groups. CMS officials said the figures would be included in the next update, scheduled for June 2015.
Insurers Poised to Cancel Non-ACA Compliant Plans
According to a variety of industry and media sources, insurers are notifying thousands of consumers that they will cancel their health coverage by the end of the year because the plans do not comply with the ACA. President Obama initially issued an administrative fix allowing individuals to keep health plans that did not meet the health law’s requirements in Nov. 2013, following reports that millions of U.S. residents were being notified by their insurers that their existing health policies would be discontinued in late 2014 because they do not meet the law’s coverage requirements. Earlier this year, the Administration extended the administrative fix, which now allows people to renew such plans until 2016, with coverage lasting in some cases until Sept. 2017.
A number of insurers have decided not to extend non-compliant plans, however, including Anthem, CareFirst, Humana and Kaiser Permanente. Industry analysts said that one reason behind the switch is that insurers determined they can make more money selling plans that comply with the ACA, often at higher premiums that may be subsidized by the government. It is unclear how many consumers might be affected by the latest round of cancellations. But experts anticipate less of a backlash this time, noting that last year’s uproar came amid the bumpy rollout of the federal health insurance website, while this year’s enrollment is expected to be smoother. Policyholders who lose their coverage can either switch to a different plan under the same insurer or shop around for new coverage during the upcoming open enrollment period, which begins on Nov. 15.
Judge Rules Against ACA Subsidies in Federal Exchanges
Last Tuesday, a federal judge in Oklahoma ruled that ACA subsidies can't go to consumers who obtained health coverage through the federal exchange. In 2012, Oklahoma challenged an IRS rule that enabled consumers in states that used the federal exchange to get the tax credits, which lower coverage costs. Critics have argued that language in the ACA only allows subsidies to be provided through states that set up their own exchanges. Last week, U.S. District Judge Ronald White ruled in favor of the state's lawsuit challenging the IRS regulation, calling the agency's rule arbitrary and capricious. However, White placed his ruling on hold pending an appeal, which means subsidies for plans purchased through the federal exchanges will still be available in Oklahoma. The Obama Administration can appeal the decision to the 10th U.S. Circuit Court of Appeals in Denver.
The ruling is the latest to weigh in on the legality of subsidies on the federal exchange. In September, the U.S. Court of Appeals for the District of Columbia granted an Obama Administration's request to reconsider a case challenging insurance subsidies in the ACA. A three-judge panel had struck down the IRS regulation making subsidies available nationwide. That decision to rehear the case with a full roster of judges was widely viewed as making it less likely the Supreme Court would get involved. The appeals court said it would hear new oral arguments on Dec. 17. Opponents of the subsidies said White’s ruling could push the high court to review the issue. The Obama Administration is expected to appeal Judge White’s ruling to the 10th Circuit Court of Appeals. The White House and Congressional Democrats say the law was written to allow anyone to get subsidies — and that any contradictory ACA language was written in error.
Senator Calls for Increased Funding to Fight Ebola in Omnibus
Last Friday, Sen. Tom Harkin (D-IA) called for increased funding to fight Ebola as part of an omnibus spending bill in the post-election lame-duck session of Congress. The chairman of an Appropriations subcommittee with jurisdiction over the Centers for Disease Control (CDC), Harkin said lawmakers should increase resources for the agency, which is monitoring the first person diagnosed with Ebola in the U.S. last week. Harkin said that American doctors should be trained to look for Ebola symptoms, adding that quarantine stations at 20 entry-points to the U.S. should be strengthened. He also said that Congress should fund research for better treatment and for a potential vaccine. The Iowa Senator also said the U.S. should expand a program that would help other countries in Africa prepare to fight Ebola. The virus has already infected people in Liberia, Guinea, Nigeria and Sierra Leone.
Congressional appropriators plan to offer an omnibus spending bill in the lame-duck session that would fund the government through Sept. 30, 2015. The government is now operating on a stop-gap continuing resolution (CR) that expires on Dec. 11. The Obama Administration has asked Congress for permission to shift $1 billion in Pentagon funds as part of the fight against Ebola. The Pentagon would manage funding with HHS, but some lawmakers have questioned whether those agencies will coordinate well. Leaders on the House and Senate appropriations panels have asked the White House to provide more details about its request, including funding allocations and the goals and timeline for the mission. When finalized, the $1 billion will be added to the $175 million in federal funds already allocated for Ebola and the $88 million included in the CR that Congress approved before the recess.
Medical Societies Urge SGR Repeal in Lame-Duck Congress
Last week, a group of medical societies urged Congress to pass the Sustainable Growth Rate (SGR) repeal bill from last March during the upcoming lame-duck session after the November 4 general election. With another SGR “cliff” and Medicare pay cut of 20.9% looming in April, the Society of General Internal Medicine (SGIM), the American College of Physicians, and the American Academy of Family Physicians (AAFP) called on Congress to resolve the Medicare payment during this year's lame-duck session of Congress, when politics is expected to take a back seat.
The SGR Repeal and Medicare Provider Payment Modernization Act (H.R.4015) would raise payment rates 0.5% through 2018 while gradually shifting Medicare compensation from fee-for-service to pay-for-performance. By repealing the SGR formula, it also would have averted a 23.7% Medicare pay cut set for April 1. Passage appeared possible in March, but the question of how to offset the cost of the bill – estimated at $138 billion over 10 years by the CBO – torpedoed a bipartisan deal. To avert a crisis, Congress voted to again postpone the SGR-mandated pay cut, this time to April 1, 2015. Lawmakers have delayed similar rate reductions on a yearly basis going back to 2003.
Medical groups and other stakeholders are hoping Congress takes up the SGR reform bill when politics is off the immediate agenda. Several key supporters of the latest SGR repeal bill are retiring, including Rep. David Camp (R-MI) and Rep. Henry Waxman (D-CA), who might push hard for passage during the lame-duck session for the sake of their legislative legacy. The new Congress that convenes in January is less likely to approve a comprehensive Medicare reimbursement bill that eliminates the SGR formula, as newly elected members will need to come up to speed on the issue. In addition, the makeup and leadership of House and Senate committees will change – dramatically so in the Senate if the GOP gains a majority there in the November 4 elections.