TRP Health Policy Report

April 6, 2015

The House and Senate are in recess until April 13. When lawmakers return, the Senate is expected to vote on a Medicare deal (H.R.2) that passed the House on March 26. Additionally, both chambers are likely to begin the Fiscal 2016 annual appropriations process and try to beat a May 31 deadline to renew federal infrastructure spending. Legislators in both parties have expressed a desire to avoid a transportation-funding shutdown, but there is no consensus on how to pay for extending the highway trust fund. The House and Senate may also hold votes on legislation that would force President Obama to submit any nuclear agreement with Iran for Congressional approval. Senators may also hold a confirmation vote on attorney general nominee Loretta Lynch and resume debate on a stalled human trafficking bill. Congress has a number of other high priority issues in the coming weeks, including raising the debt ceiling and renewing the Export-Import Bank. 

CMS Delays SGR Cuts, ‘Two-Midnight' Rule Enforcement
Last week, the Centers for Medicare and Medicaid Services (CMS) told providers that it will hold onto their checks for two weeks after Congress missed its deadline to prevent a 21 percent payment cut that went into effect on March 31. CMS said that, barring Congressional action, it would not begin processing a 21% cut to physician reimbursements under Medicare's sustainable growth rate formula (SGR) until April 15. Before adjourning for the two-week April recess, the House voted 392-37 to approve legislation (H.R.2) that would eliminate the flawed SGR. The bill includes several other measures related to health spending, such as funding for community health centers which serve low-income individuals in every state. In addition, the bill would delay enforcement of the Medicare “two-midnight” rule for six months. CMS had been scheduled to start enforcing the rule after a Congressionally-imposed delay ended at the end of March.
In total, the SGR replacement measure would cost $213 billion. The deal would offset about $70 billion of the projected costs: roughly half of the deal's offsets would come from cuts to hospitals, insurers and acute-care providers, while the other half of the offsets would come from cuts to Medicare beneficiaries, such as additional means-testing for high-income beneficiaries. The Senate is not scheduled to consider the measure until it returns from recess on April 13. Meanwhile, stakeholders are continuing to lobby Senate lawmakers on the SGR replacement bill, with some children's health advocacy groups urging lawmakers to extend funding for the Children's Health Insurance Program (CHIP) for four years, rather than for two years as called for by current measure. However, most health policy experts do not expect lawmakers to want to make changes to the package, which would require sending the revised bill back to the House.
NIH Names Panel of Experts for Precision Medicine Initiative 
Last week, the National Institute of Health (NIH) named more than a dozen top doctors, researchers and business leaders to help steer and inform President Obama’s Precision Medicine Initiative. In his fiscal year 2016 budget proposal, the President asked Congress for $215 million in funding for an initiative that centers around the creation of a massive database containing the genetic data of at least one million volunteer participants. The participants will share their biological, environmental, lifestyle and behavioral information, as well as tissue samples with researchers.
The funding specifics include:

  •  $131 million for NIH to identify and recruit volunteer participants;
  • $70 million for NIH's National Cancer Institute to study genetic diseases and drug development;
  • $10 million for the FDA to establish a database and regulatory structure; and
  • $5 million to the Office of the National Coordinator to develop interoperability policies, data exchange and privacy standards

 Formed as a Working Group of the Advisory Committee to the NIH Director, the team of experts will seek input from stakeholders in the Precision Medicine Initiative and define the scope and scale of the project, the issues that need to be addressed, and what success would look like five and 10 years out, the NIH said. The panel will deliver a preliminary report in September that will inform efforts to explain the role that individual differences play in health. “I'm confident that we've pulled together the best of the best in this working group to put us on the right path forward,” NIH Director Francis S. Collins, M.D., said in a March 30 announcement. “We look forward to broad input from a wide cross-section of stakeholders as this process moves forward.”
Lukewarm Reception for Special ACA Enrollment Period
Last Wednesday, CMS announced that about 36,000 people have taken advantage of a second chance to sign-up for coverage under the Affordable Care Act. While the agency did not provide an estimate of how many people would sign up in the extra enrollment period, the number is relatively small, considering that an estimated 4 million people are potentially eligible. The special enrollment opportunity is being offered to uninsured people who didn't realize they were legally required to have health insurance starting in 2014, and are getting hit with a tax penalty for not signing up. The White House and enrollment organizations have been pushing to get people signed up for coverage under the ACA. Unlike the main enrollment period, which ended in February and saw 11.7 million people sign up, not everyone qualifies for this extra opportunity. It only applies to residents in states that used the federal exchange for enrollment. However, states that have established their own exchanges can choose to offer a similar enrollment stage. Individuals who sign up during the special enrollment phase could still be subject to last year's penalty of $95 or 1% of their household income, whichever is higher. The special enrollment period will allow enrollees, however, to sign up for 2015 coverage and avoid the 2015 penalty of $325 or 2% of household income. The special enrollment period began on March 15 and will end on April 30.
Supreme Court Declines To Hear IPAB Lawsuit
Last Monday, the Supreme Court declined to hear Coons v. Lew, a case challenging the constitutionality of the Independent Payment Advisory Board (IPAB). Created under the Affordable Care Act, the IPAB is a 15-member panel of healthcare experts tasked with making cost-cutting suggestions annually if Medicare spending exceeds a target growth rate of 3.03%. The recommendations would take effect unless Congress develops an equivalent alternative. While it was scheduled to convene in 2014, the panel can’t make decisions unless per-enrollee Medicare spending outpaces regular inflation, which it has not done in recent years. Two Arizona residents filed suit against the IPAB, arguing that they would be harmed by prospective Medicare spending cuts recommended by the panel. The suit also argued that the board violates the Constitution's prohibition against Congress delegating its responsibilities to other parties.
In response to the challenge, the government said the Supreme Court has recognized that in order to function, Congress must delegate some of its powers. The government argued that doing so is legal as long as it is made clear how the delegated duties are to be performed. In August 2014, the 9th U.S. Circuit Court of Appeals dismissed the lawsuit, ruling that the IPAB could not be reviewed by the courts because it had not yet been established or issued any recommendations. Given the earlier rulings, the Supreme Court's refusal was expected by many legal analysts. The Goldwater Institute, representing the plaintiffs, said it intends to challenge the IPAB once the board issues cost-cutting proposals. The IPAB has been the source of controversy since its inception, with a variety of bills sponsored in Congress to kill the board. Hospitals are also opposed to the IPAB, claiming that it limits Congressional oversight on policymaking in regard to the Medicare program.