HealthCare Roundtable e-News – August 11, 2021

After Months of Review, CMS Proposes Rule to Rescind Trump’s “Favored Nation” Drug Pricing Rule

CMS announced on Friday that it plans to rescind the Trump administration’s Most Favored Nation rule, an effort that aimed to tie Medicare Part B prices to related drugs and products sold in countries overseas. The interim rule was released in November of 2020 and was meant to begin demonstrations in January but faced a series of lawsuits and delays as the Biden administration reviewed the rule.

The proposed rule, which effectively rescinds the Trump-era rule, would allow time to “further consider the issues identified by commenters and would address the November 2020 interim final rule’s procedural deficiencies by rescinding it,” according to CMS. Pharmaceutical groups had largely opposed the rule, with many industry players fearing cuts in Medicare drug reimbursements for Part B drugs that are dispensed in an office setting. In January, the American Hospital Association wrote that the model could hurt some providers by reimbursing them less for “for some critical medicines such as cancer drugs. Some providers will close and their patients will have to deal with the fallout.”

An alternative to the rescinded rule is currently being worked on by Senate Finance Committee Chair Ron Wyden (D-Ore.) who is proposing a policy that would base U.S. pharmaceutical prices on the lowest-cost domestic prices for similar drugs. Wyden claims the savings would help pay for the Senate budget reconciliation package (more on this below).

Budget Resolution Instructions Include Lowering Medicare Eligibility Age Among Mix Of Health Policies

A memo to Senate Democrats from leadership on Monday (Aug. 9) includes lowering the Medicare eligibility age and policies to improve health equity and invest in graduate medical education on the list of other highly expected health reforms the Senate Finance Committee is instructed to consider when it writes its piece of the $3.5 trillion budget reconciliation package, but the memo stresses that individual policies have yet to be scored. Senate Finance Chair Ron Wyden (D-OR) confirmed his plans to include Medicare hearing, vision and dental benefits, an extension of Affordable Care Act tax credits hikes, home and community-based care, Medicare drug negotiation, a Part D out-of-pocket cap and a so-called Medicaid gap-fix in the upcoming reconciliation bill, but he didn’t mention lowering the Medicare eligibility age, which lobbyists have said for weeks was less likely to make it into the package.

In a separate letter to senators, Majority Leader Chuck Schumer (D-NY) said the policies listed in the summary of the fiscal 2022 budget resolution aren’t final. “Please remember that the resolution only includes ‘top-line’ reconciliation instructions to the committees, and that every Senator will have opportunities to shape and influence the final reconciliation bill after adoption of the Budget Resolution,” Schumer says in his Aug. 9 letter to colleagues. (InsideHealthPolicy)

Lawmakers Weigh MA Cuts to Help Pay For $3.5 Trillion Reconciliation Bill

As Senate Democrats finalize their planned budget reconciliation package, lawmakers are weighing using savings from Medicare Advantage to help pay for the bill’s $3.5 trillion price tag. The package, which Senate Majority Leader Chuck Schumer announced is expected to see a vote this week, is a blueprint for legislation that the party plans to pass this year, including various tax incentives and new federal aid for social programs.

Many anticipate the package will include some social infrastructure updates, specifically Medicare benefit changes, closure of the Medicaid coverage gap and extension of the temporary Affordable Care Act tax credit hikes, the savings from which could help pay for the package. The Biden administration has indicated in 2022 fiscal briefing documents that the president is interested in updates to the process of how Medicare pays private insurers, to which the president and other White House officials have offered no comment. (InsideHealthPolicy)

According to the Better Medicare Alliance, MA enrollment has nearly doubled in the last decade. Some health groups are claiming that MA plans are currently overpaid relative to fee-for-service Medicare, with experts like Judith Stein, executive director of the Center for Medicare Advocacy, saying that payments should be closer to what fee-for-service Medicare pays per enrollee. According to a February report from the Center for a Responsible Federal Budget, payment adjustments could potentially lessen Medicare spending by at least $198 billion or by as much as $355 billion. (InsideHealthPolicy)

GOP’s Take on Medicare Price Negotiations, Government Savings Favors Removal from Reconciliation Package

As talks around the Senate’s proposed budget reconciliation bill heat up, Republican lawmakers are in the process of dissecting policies that may not be eligible for inclusion in the upcoming Democrat-led package. Members of the GOP, as well as lobbyists and employers, have argued certain policies cannot be included in the reconciliation bill due to insignificant impact on the federal budget, a key rule of the budget reconciliation package. Among the policies in question is the extension of Medicare-negotiated drug prices to the commercial market, which legislators argue would not produce major savings for the government.

Some experts have countered Republicans’ claims, suggesting that extending Medicare negotiated prices outside of the program would save the government significant amounts of money. James Gelfand, vice president of health policy for the ERISA Industry Committee, has suggested that without Medicare price negotiations in the package, Democrats would likely need to scale back other expensive health care priorities like adding benefits to Medicare, expanding Medicaid coverage in hold-out states and increasing government subsidies for Obamacare insurance. (InsideHealthPolicy)

Employer groups who have hesitations around Medicare-negotiated drug pricing have been in favor of policies that support stances commercial insurance getting the same protections as Medicare. Without the same protections, many employers worry that drug companies would make up losses in Medicare by raising prices even more for everyone else. Lobbyists have proposed that legislators consider solutions that penalize drug companies who participate in prohibited practices, through the use of excise taxes or other, to even the playing field. (InsideHealthPolicy)

CMS Report Highlights Boosted Enrollment, Lower Premiums from ACA State Reinsurance Programs

Last week, CMS shared findings in a report indicating state-level reinsurance programs were able to boost enrollment and successfully lower premiums, increase plan participation and boost enrollment in health programs of the non-subsidized population. Data from the report highlighted that in 2021, premiums in states with reinsurance programs were on average 14.13 % lower than they would have been without a waiver.

Reinsurance programs have been approved by CMS in 14 states under the Affordable Care Act’s 1332 waiver authority, which went into effect in 2017, and are in the process of reviewing a request from Colorado to extend its reinsurance program. The report from CMS provides an overview of the selected programs, most of which are considered traditional reinsurance. The Biden administration says that the report’s findings “underscore the importance of federal regulators working on reforms with state and local governments that are more familiar with their unique populations and markets.” (InsideHealthPolicy)

CMS Administrator Chiquita Brooks-LaSure said that the state level partnerships “are critical as we build on the Affordable Care Act and work to reduce health care costs and by improving health coverage.” Brooks-LaSure said that the administration is encouraged to see that states have taken advantage of implementing section 1332 waivers, which are helping to lower costs for consumers. (InsideHealthPolicy)

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