HealthCare Roundtable e-News – Feb. 3, 2017

Key GOP Lawmakers Talk of Repairing, Instead of Replacing, ACA

Some congressional Republicans appear to be backing off plans to repeal and replace the Patient Protection and Affordable Care Act (ACA), allowing that maybe the law only needs some “repair.”

The GOP-controlled House of Representatives voted dozens of times during the Obama administration to repeal all or part of the ACA. With Republicans controlling both the House and Senate and with Donald Trump in the White House, that goal is now within reach. However, the GOP does not have a replacement plan ready, and many Republican lawmakers are wary of enacting legislation that will result in 18 million people losing health insurance within the first year, with that number climbing to 32 million within a decade, according to the Congressional Budget Office.

Senate Health, Education, Labor and Pensions Committee Chairman Lamar Alexander, R-Tenn., said on Feb. 1 that the GOP’s goal is “repairing the damage Obamacare has caused. It’s more accurate” than to describe the objective as repeal and replace.

He stressed that, “No one is talking about repealing anything until there is a concrete practical alternative to offer Americans in its place.”

Senate Finance Committee Chairman Orrin Hatch, R-Utah, has been one of the staunchest opponents of the ACA, yet he said on Feb. 2 that he “could stand either” replacing or repairing the law.

“I’m saying I’m open to anything,” Hatch said. “Anything that will improve the system, I’m for.”

House Energy and Commerce Committee Chairman Greg Walden, R-Ore., also seems to have dropped the insistence on full repeal.

“I’m trying to be accurate on this that there are some of these provisions in the law that probably will stay, or we may modify them, but we’re going to fix things, we’re going to repair things,” Walden said. “There are things we can build on and repair, there are things we can completely repeal.”

Alexander explained the change in phrasing by noting that, since Republicans plan to use the budget reconciliation process – which prevents the use of filibusters but can only be used for items that address taxes and spending – full repeal is probably not possible.

Harder-line conservatives, however, tend to view such talk as anathema. Rep. Jim Jordan, R-Ohio, a founder of the conservative House Freedom Caucus, said, “You’ve got to repeal the law. That’s the problem. That’s what we told the voters we were going to do.”
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Trump Meets with Drug Makers about Astronomical’ Prices

President Donald Trump met with pharmaceutical manufacturers on Jan. 31, toning down his rhetoric about them “getting away with murder” but still lamenting that “pricing has been astronomical.”

During the campaign and since his inauguration, Trump has frequently said that drug prices are too high. He has indicated that he wants to require drug companies to negotiate with the federal government over the prices of drugs covered by Medicare, a measure that has generally been opposed by congressional Republicans.

At the meeting, Trump appeared to revise that position, stating that he opposes “price-fixing by the biggest dog in the market, Medicare, which is what’s happening.” He added, though, that “we can increase competition and bidding wars, big time.”

Trump pledged to reduce Food and Drug Administration (FDA) regulations to make the drug approval process “much faster.” He praised the meeting attendees, saying, “You folks have done a tremendous job but we have to get prices down.”

The meeting included executives from Merck, Johnson & Johnson, Celgene, Amgen and Eli Lilly, as well as representatives of the trade group Pharmaceutical Research and Manufacturers of America (PhRMA).

PhRMA CEO Stephen Ubi described the gathering as a “positive, productive meeting.”

“Our industry takes seriously the concerns raised about the affordability and accessibility of prescription medicines, and we have expressed our commitment to working with the administration to advance market-based reforms,” Ubi said. “The current system needs to evolve to enable the private sector to lead the move to a value-driven health care system. To do this, we need to reform existing laws and regulations that are currently preventing private companies from negotiating better deals and paying for medicines based on the value they provide to patients and our health care system.”

Consumer advocates, however, criticized Trump’s plan to reduce regulations.

“Trump’s horrifying proposal reflects utter ignorance about the FDA’s essential role in protecting public health and once again demonstrates his commitment to placing corporate profits above protecting the safety of the American people,” Michael Carome, director of Public Citizen’s health research group, said.

After attending the meeting, House Energy and Commerce Committee Chairman Greg Walden, R-Ore., said that, during the week of Feb. 6, one of his panel’s subcommittee’s will take up a bipartisan bill aimed at promoting the development of generic drugs.

The “Lower Drug Costs Through Competition Act” (H.R. 749) would seek to promote the development of generic drugs when there is no competition for an existing generic or there is a shortage by awarding manufacturers who develop a generic in such situations a “priority review voucher.” The FDA has a backlog of applications for generic drug approvals, and the voucher would enable them to jump to the front of the line.

“We keep hearing stories about lifesaving drugs becoming astronomically expensive, sometimes overnight and often with zero explanation,” Rep. Kurt Schrader, D-Ore., the bill sponsor, said. “This outrageous price gouging has to stop. Our bill will increase competition in the market, giving folks more choice while lowering costs, especially for the most vulnerable, whose lives depend on some of these medications.”

The bill has nine Democratic and three Republican cosponsors.

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Exchange Enrollment Numbers Fall

The number of people signing up for insurance coverage through the health care exchanges fell this year amid uncertainty about the future of the program.

The Patient Protection and Affordable Care Act (ACA), which was passed in 2010, created state-level exchanges that were launched in 2014 in which people who do not have access to affordable group coverage can buy insurance, in many cases using income-dependent tax credits. States were not required to establish exchanges, but the federal government created one in any state that did not.

A year ago, during open enrollment for 2017, 9.63 million people signed up for coverage through the exchanges. Before President Barack Obama left office, his administration announced that sign-ups in the 39 federally run exchanges were trending ahead of last year, with 8.8 million enrollments as of Jan. 14. However, the total for 2018, when the open enrollment period ended on Jan. 31, came in 4 percent lower, at 9.2 million, of which one-third were new customers, and the rest renewals.

Data regarding enrollments in the state-run exchanges are not yet fully available.

President Donald Trump campaigned on eliminating the ACA, and congressional Republicans have been pledging to pursue that goal since the law’s enactment. Soon after being inaugurated, Trump signed an executive order directing federal agencies to take actions aimed at “minimizing the economic burden” of the ACA. In addition, the Trump administration scaled back advertising for the exchanges.

“Obamacare has failed the American people, with one broken promise after another,” a Department of Health and Human Services spokesman said. “Premiums in the ACA marketplace have increased 25 percent while the number of insurers has declined 28 percent over the past year.”

An HHS spokesman under Obama, though, accused the Trump administration of “sabotage,” saying, “We were on track to exceed last year’s total. We expected a million people to sign up on the federal exchange in the final week of the open enrollment period.” House Minority Leader Nancy Pelosi, D-Calif., meanwhile, predicted that, “Now, Republicans will cynically point to the dip in enrollment they caused, declare the Affordable Care Act broken and move to steal the affordable health coverage of every American.”

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CMS Proposes 0.25% Average Increase in Medicare Advantage Payments

The Centers for Medicare & Medicaid Services (CMS) has proposed increasing payment rates for physicians who participate in Medicare Advantage in 2018 by an average of 0.25 percent.

Medicare Advantage (MA) offers managed care plans through private companies, which receive a fixed amount of money from the federal government per beneficiary each month. Around 18 million people – about one-third of all Medicare beneficiaries – are in Medicare Advantage.

Coding changes – adjustments to payments that reflect differences in diagnosis coding between Medicare Advantage organizations and fee-for-service (FFS) providers – are expected to boost payments by about 2.5 percent, making the effective 2018 growth rate 2.75 percent. (Summary)

“This moderate growth is consistent with last year’s update and reflects a similar pattern in Medicare fee-for-service,” CMS stated. “Plans that improve the quality of care they deliver to enrollees can see higher updates and can grow and enhance the benefits they offer to enrollees.”

In 2017 payments increased by 0.85 percent, while the overall growth rate, including coding adjustments, was 3.05 percent.

CMS is accepting comments on the proposal until March 3. The final rate announcement is expected by April 3.

Medicare Advantage has strong support in Congress – 65 senators wrote to the CMS acting administrator on Jan. 26 to ask him “to strengthen this vital and proven part of the program that has led the way on value-based care” – which sometimes results in CMS revising its payment rates upward between the initial and final proposals.

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