TRP Health Policy Report (6/8)

June 8, 2015

Last week, the Senate returned a day early from their Memorial Day recess, and worked throughout the week to reform the National Security Agency’s (NSA’s) controversial surveillance powers – eventually passing House-passed legislation (H.R. 2048) two days after the legal authority for the programs expired. The 67-32 vote for the USA Freedom Act came more than 36 hours after three parts of the Patriot Act expired, forcing the NSA to wind down its bulk collection of U.S. phone data.  Senate Majority Leader Mitch McConnell (R-KY) suffered a political blow during the bruising fight over the legislation, after he and other hawkish Republican senators opposed the bill—and failed to pass a series of amendments—even after the House approved it in a broad, bipartisan vote.  In the House, Members passed a $51.4 billion Commerce-Justice-Science (C-J-S) appropriation bill (H.R. 2578), which provides an increase of $1.3 billion from the current fiscal year, $661 million less than President Obama’s budget request. The House also passed legislation (H.R. 1335) to reauthorize fishery oversight activities of the National Oceanic and Atmospheric Administration. 

The Week Ahead
The Senate will consider the annual defense policy authorization this week, while the House will continue work on 2016 spending bills and potentially take up President Obama's trade agenda.  Senators have filed hundreds of amendments to the House-passed National Defense Authorization Act (NDAA) (H.R. 1735), with Senate Armed Services Committee Chairman John McCain (R-AZ) warning that the chamber is expected to finish its work by the end of the week.  But Senate Democrats are taking aim at an additional $38 billion added to Overseas Contingency Operations (OCO), the Pentagon's war fund, meant to help the Defense Department avoid the congressionally-mandated spending caps. Democrats say the legislation uses budget “gimmicks” but are, so far, undecided on whether or not they will block the bill from being passed. 
In the House, Members will continue work on the annual spending bill for transportation and housing programs and potentially take up a slate of trade bills.  The $55.3 billion Transportation-Housing and Urban Development (HUD) spending bill (H.R. 2577) would provide the agency with an additional $1.5 billion in discretionary funds.  However, a projected $1.1 billion decline in Federal Housing Administration receipts would translate into a practical increase of just $25 million above current spending levels.  Depending on how their work on the appropriations bill progresses, the House may consider this week a bill to reauthorize the Commodity Futures Trading Commission (CFTC), while limiting the federal regulators’ power to police overseas derivatives trades.  The House may also vote on a bill (H.R. 2393) to eliminate country-of-origin labeling requirements for pork, beef and chicken, aimed to avoid an estimated $2 billion in retaliatory trade actions from Canada and Mexico.
In healthcare-related Committee activity, the House Ways and Means Committee plans a hearing Wednesday on the implementation of the Affordable Care Act and the Health and Human Services (HHS) Department’s fiscal 2016 budget request. Also Wednesday, the Senate Health, Education, Labor and Pensions (HELP) Committee plans a hearing on health information and strategies for improving patient care.
King v. Burwell Update
House GOP leaders announced that they plan to outline specific policy proposals sometime before the Supreme Court’s ruling later this month in the King v. Burwell case, but will stop short of releasing the legislative text for such a proposal. Justices are expected to rule on whether the law's subsidies for buying health coverage can be given to the 34 states that did not set up their own insurance exchanges. An estimated 6.4 million people would lose their subsidies if the court rules against the administration, potentially creating chaos in the private insurance market.  But Republican leaders will hold off on releasing legislative language until after the verdict, according to a spokesman for Ways and Means Chairman Paul Ryan (R-WI). “We’ll have a plan that will be public before the ruling, but given that we don’t know exactly what they’ll say, we’ll have to wait for the ruling to have text to align with the situation,” spokesperson Brendan Buck said Monday.
Not wishing to wait for the case to proceed, however, House conservatives unveiled their latest blueprint to replace the Affordable Care Act (ACA) while some states have begun to contemplate contingency plans. In specific, members of the conservative House Republican Study Committee (RSC) introduced legislation Thursday that would entirely repeal the ACA and replace the law’s premium tax credits with tax deductions for purchasing coverage. The bill – which has 42 co-sponsors – is similar to the RSC’s previous proposal and would be paid for by reducing non-defense discretionary budget caps by $39.7 billion from fiscal 2017 through fiscal 2021.
Outside the Capitol Beltway, a second state announced a backup plan in case the Supreme Court rules against the ACA when Delaware's top health official said that the state would create its own healthcare exchange to preserve the insurance subsidies at stake in the case King v. Burwell. Delaware is one of at least 34 states that stand to lose subsidies in the case, and it is the second state — after Pennsylvania earlier last week — to announce intentions to protect subsidies.
CMS Issues New Proposal for Sharing Savings with ACOs
In a wide-ranging proposal issued last Thursday, the Centers for Medicare and Medicaid Services announced it had modified the financial incentives for hospitals and physician practices who participate in accountable care organizations (ACOs) – new delivery models of care that were created by the Affordable Care Act to develop and promote greater efficiencies. A large objective of the action is to drive greater ACO willingness to participate in the so-called two-sided model and to reset financial benchmarks in a way that makes it easier for ACOs to earn shared-savings bonuses.
At the urging of industry, the agency is giving ACOs an additional three years without the risk of penalties at the same shared-savings pay rates as the first three-year period. Also in response to industry stakeholders, CMS announced it is streamlining data sharing and promised to write a separate rule to make it easier for ACOs to hit spending targets by comparing ACOs to regional providers, instead of national comparisons, as well as by making benchmarks less dependent on past ACO performance. However, CMS did not reward ACOs with many of the payment waivers they requested.
The new rule also changes the means of beneficiary assignment to ACOs. Providers have asked to know who is being assigned to their ACO in advance, while CMS has only been attributing beneficiaries retroactively. The new proposal offers new options for ACOs to learn about their beneficiary assignment earlier. Also, CMS plans to propose in the 2017 Physician Fee Schedule that beneficiaries sign up for two-sided ACOs if their main doctor is participating in it. Premier Health, which has many members participating in ACOs, praised many aspects of the regulation, but Premier Senior Vice President of Public Affairs Blair Childs criticized CMS for withholding “vital waivers.”
House Panel Passes Repeal of IPAB, Medical Device Tax, MA-Reform Bills
On Tuesday, the House Ways and Means Committee held a markup in which it approved 10 pieces of health-related legislation for broader consideration on the House floor, which Majority Leader Kevin McCarthy has indicated may come during the week of June 15. Two of the bills seek to repeal Affordable Care Act (ACA) provisions: the medical device tax and Medicare’s Independent Payment Advisory Board (IPAB) cost review board. Two other bills seek changes to the general Medicare program, one by adding coverage of a specific benefit and the other by extending a demonstration program. The remaining six bills address various facets of Medicare Advantage, among them risk adjustment.
A description of each bill follows below. The Committee only held a formal roll call vote for the first two bills under consideration; the medical device tax repeal attracted the support of just one Democrat, Ron Kind (WI), while the IPAB repeal bill attracted the votes of Democratic Representatives Lewis (GA), Neal (MA), Thompson (CA), Larson (CT), Pascrell (NJ), Davis (IL), and Sanchez (CA).

  • H.R. 160, “Protect Medical Innovation Act of 2015.” (Adopted 25-14)

    • The bill would repeal an ACA-imposed 2.3% excise tax on revenue for medical device manufacturers.
    • The Chairman’s amendment (see amendment description and Joint Committee on Taxation analysis here) would set the effective date of the law to “sales in calendar quarters beginning after the date of enactment.”


  • H.R. 1190, “Protecting Seniors’ Access to Medicare Act of 2015.” (Adopted 31-8)

    • The bill would repeal the Independent Payment Advisory Board (IPAB) established under the ACA.


  • S. 984, “Steve Gleason Act of 2015.” (Unanimously Approved)

    • The bill would provide Medicare coverage for eye tracking and gaze interacting medical devices that are an accessory to a speech-generating device (SGD). The bill also removes a cap on the amount Medicare will pay to either rent or buy an SGD for beneficiaries.


  • S. 971, “Medicare Independence at Home Medical Practice Demonstration Improvement Act of 2015. (Approved)

    • The bill adds two years to the Medicare Independence at Home Medical Practice Demonstration.


  • H.R. 2580, “LTCH Technical Correction Act of 2015.”

    • The bill, staff explained, would modify an existing requirement that does not allow exemptions for Long-term Care Hospitals (LTCHs) for a moratorium on new beds.


  • H.R. 2505, “Medicare Advantage Coverage Transparency Act of 2015.”

    • The bill, as amended requires CMS to report beneficiary enrollment data categorized by zip code, state, and Congressional district for all facets of the Medicare program.


  • H.R. 2506, “Seniors’ Health Care Plan Protection Act of 2015.”

    • The bill would delay CMS MA contract termination authority until the end of 2018 for plans that do not achieve the minimum required quality rating under the 5-star rating system.


  • H.R. 2507, “Increasing Regulatory Fairness Act of 2015.”

    • The bill extends public notice period from 45 days to 60 days after CMS releases proposed rates for MA plans, effectively giving stakeholders 15 extra days to comment.


  • H.R. 2579, “Securing Care for Seniors Act of 2015.”

    • The bill requires CMS to review the current MA risk adjustment model and to specifically consider whether a change in the model to use more years of claims data and a wider range of conditions would improve the model’s accuracy.


  • H.R. 2581, “Preservation of Access for Seniors in Medicare Advantage Act of 2015.”

    • The bill would provide a second enrollment period to MA beneficiaries, allowing them after the initial three-month enrollment period to switch to a different plan. The bill would also establish a 3-year demonstration program to test value-based design methodologies for MA plans.