TRP Health Policy Report

August 11, 2014

The House and Senate remain adjourned for a five-week summer recess. When Congress returns in September, lawmakers plan to take up a series of issues, including a continuing resolution to fund the government past September 30, a border security bill, reauthorization of the Export-Import Bank, extending the Internet Tax Freedom Act and consideration of a fiscal 2015 Defense Authorization bill. The Senate may also consider a constitutional amendment regarding campaign financing, legislation on the minimum wage, student loans and a bill to address the Supreme Court’s Hobby Lobby ruling. Senate leaders say the chamber will be in session straight through September 23rd, when members will adjourn again until after the November elections. The House is scheduled to be in session from September 8-19 and September 29-October 2.

CMS Delays Launch of Physician Payment Website
Last Thursday, CMS said it will delay the public launch of the Open Payments System for an undetermined amount of time to investigate a reported issue with the program’s website. The agency’s Open Payments System lists payments from drug and medical device makers to doctors via an online federal government database of payments. It was scheduled to launch on September 30. However, a series of media reports uncovered information-related mistakes that could significantly harm professional reputations if not rectified, such as incorrectly attributing some drugmaker payments to physicians. Last week CMS officials confirmed that a systems glitch allows a number of physicians to see payments made to other doctors who have a similar name but doesn’t allow them to dispute their own reports. The agency released a statement saying that the database “has been taken offline temporarily to investigate” the issue and that physicians will not be able to review any potential errors until the website has been fixed.
On Tuesday, more than 100 medical societies asked CMS to give doctors more time to review their information and request corrections before making the database public. They suggested the agency push back publicly launching the site until March 31, 2015. The groups argued that more time is needed to allow doctors to register and review payment data for “inaccurate, misleading and false information” that may be posted. In response, CMS said that it would adjust its review and launch deadlines after the issue has been resolved, but it did not specify a time frame. However, CMS officials said that the agency “remains committed” to giving physicians a full 45 days to review the information and correct any errors.
The medical groups also expressed concern to CMS about a recently proposed change that would revoke an exemption for payments involving continuing medical education. Additionally, they asked the agency to reconsider a requirement that medical journals and article reprints must be reported by physicians. Last week’s letter marked the second time in as many weeks that medical groups have issued letters to CMS. In late July, more than 20 professional groups asked the agency to explain what context will be provided to help the public understand the justification for payments made to doctors. CMS officials said the agency plans to address the issue in the coming weeks.
Amid Scrutiny, PCORI Announces Funding for 33 New Research Projects
The Patient-Centered Outcomes Research Institute (PCORI) Board of Governors recently announced that it has approved $54.8 million in funding for 33 new patient-centered comparative clinical effectiveness research projects. PCORI is a not-for-profit organization created under the Affordable Care Act (ACA) to fund comparative-effectiveness research. The new projects will study health conditions, including cardiovascular disease, diabetes, chronic pain, mental health conditions, among others, according to a press release. PCORI said the new projects will also include research targeting subpopulations such as older adults, racial and ethnic minorities, children and low-income patients. The projects followed funding approval announced last September, which was granted to institutions throughout 18 states and selected from 325 applicants.
PCORI’s new projects come amid recent questions over whether the organization is meeting its function of filling the void of private sector research, as purported by its advocates. A recent Morning Consult opinion piece called the 33 new research projects awarded “mostly trivial” and for “studies of how to do studies.” The liberal-leaning Center for American Progress issued a similar criticism earlier this year, questioning the efficacy of PCORI funded research projects, including studies on “excessive, uncontrollable worry” among older adults in low-income populations. PCORI officials pushed back against the assertions, noting that some early projects were modest in scale, mostly due to funding limitations. The organization anticipates that the results of initial pilot findings – due later this year – will show the clear benefit of comparative-effectiveness research projects. PCORI has awarded nearly $549 million in aid for 313 research studies since 2012, with a projected $1 billion to be awarded between 2014 and 2015.
CBO Report: Nearly 90% of Uninsured Exempt from ACA Mandate
According to a new report from the CBO and the Joint Committee on Taxation, nearly 90% of the 30 million U.S. residents who are uninsured will not have to pay a penalty under the Affordable Care Act's individual mandate in 2016 because of a growing list of exemptions. Under the health law, most U.S. residents are required to purchase individual coverage beginning this year or risk penalties of between $95 and 1% of an individual's taxable income, whichever is higher. The penalties will increase to $325 or 2% in 2015 and $695 or 2.5% in 2016. The Obama Administration has provided 14 ways people can avoid the fine based on hardships, including domestic violence and having a canceled insurance plan. Those come in addition to exemptions carved out under the ACA for groups, including undocumented immigrants, members of Native American tribes, and certain religious sects.
CBO said the additional exemptions have lowered the total number of people who can be fined in 2016 under the law's individual mandate from six million to four million. Also bringing down the total are the 21 states that have opted against Medicaid expansion for lower earners, and those residents may be exempt from the penalty. Overall, CBO estimated that 23 million U.S. residents will be exempt, and the government will collect about $4 billion in fines, down from an estimated $7 billion. Additionally, the number of exempted individuals could expand further depending on the outcome of a legal dispute as to whether the federal government is permitted to offer subsidies to ACA enrollees using federally operated exchanges. About four million U.S. residents receive subsidies through federal exchanges in 36 states, and those people might be eligible for exemptions to the mandate should that subsidy coverage disappear due to a Supreme Court ruling, because coverage might then become unaffordable.
Gallup: States That Embraced ACA See Big Drops in Uninsured
In related news, a new Gallup survey reports that states that have fully embraced the Affordable Care Act have seen the most reductions in uninsured residents. Released last Tuesday, the Gallup poll found that the 10 states with the largest declines in uninsured rates expanded Medicaid under the ACA and established their own health insurance exchanges. Collectively, those states experienced a four percentage point decline in uninsured residents. Gallup found that Arkansas and Kentucky experienced the largest reductions in uninsured residents. Arkansas' uninsured rate dropped by more than 10 percentage points, from 22.5% in 2013 to 12.4% halfway through 2014. At the same time, Kentucky saw its uninsured rate drop by almost nine percentage points, from 20.4% in 2013 to 11.9% in 2014. The other states with large drops in their percentage of uninsured were Delaware, Washington, Colorado, West Virginia, Oregon, California, New Mexico and Connecticut.
In comparison, the survey found that neighboring state Tennessee — which did not to expand Medicaid or set up its own exchange — experienced a 2.4 percentage point drop in its uninsured rate. A Supreme Court ruling on the health law allowed states to opt out of the Medicaid expansion. Twenty one states opted not to move forward with expanding the health program. States that did not expand Medicaid or establish their own exchanges saw a 2.2 percentage point drop in total uninsured rates, according to the poll. Overall, the poll noted that the country's uninsured rate dropped from a peak of 18% in the third quarter of 2013 to 13.4% by the second quarter of 2014. The report added, “While a majority of Americans continue to disapprove of the [ACA], the uninsured rate is declining, as the law intended.”