HealthCare Roundtable e-News – January 15, 2021

2020 Year in Review

Although COVID-19 shaped most of the legislative and regulatory agenda throughout 2020, we continued to advance the priorities of our members.
The Roundtable has prepared a brief summary of the events of 2020.

Outlook for Health Care Policy in the Biden Administration

The Roundtable’s Senior Policy Adviser Andrew MacPherson and his colleagues at Healthsperien have prepared a summary of what they expect from the incoming Biden Administration. Read their commentary here.

Biden Proposes $1.9 Trillion COVID-19 Relief Package

President-elect Joe Biden is proposing a massive, $1.9 trillion coronavirus relief package to accelerate states’ vaccination efforts, boost coronavirus testing and shore up an underfunded public health workforce. The plan is the first glimpse into how Biden would fulfill his pledge for a robust federal response to the pandemic that has killed over 387,000 Americans and battered the economy. (Politico)

Biden is proposing $20 billion to help states, tribes and localities launch community vaccination centers and deploy mobile units to rural America. His administration has pledged to ensure underserved areas get access to vaccines, as well as more federal help to states struggling to administer the shots. Biden aims to expand vaccination sites beyond hospitals and pharmacies — which are scarce in many low-income neighborhoods of color — and to help states set up sites at schools and other accessible community spaces, along with hiring a diverse workforce to staff them.

Biden has been critical of the Trump administration for putting too much responsibility on cash-strapped state health departments to provide vaccinations, while the Trump administration says states must move faster to use the shots they already have. States have received about 30.6 million doses, but only 11.1 million shots have been administered, according to the most recent federal data.

Biden also wants Congress to subsidize employer health insurance for people who lost workplace coverage during the pandemic. The subsidies would last through September for 2-3 million newly unemployed people believed to have lost their insurance, though it’s not clear whether premiums would be fully covered. Biden will also ask Congress to vastly expand Obamacare premium subsidies so people wouldn’t have to pay more than 8.5 percent of their income on their individual market plans. This would open up subsidies to more middle-class people and is similar to a plan House Democrats approved last summer.

The plan also calls for $50 billion to expand lab capacity and purchase rapid tests so all Americans can be tested for free. A large portion of tests will be provided to schools, prisons, long-term care facilities and local governments to ensure they can safely reopen while the vaccination campaign is underway. (Politico)

Senate Democrats Weigh ‘Budget Reconciliation’ in New Term as Moderates and Progressives Shift the Majority

The recent Georgia runoff elections confirmed Democratic control of the Senate, as Rev. Raphael Warnock (D) and Jon Ossoff (D) defeated Republican candidates Sen. Kelly Loeffler and David Perdue. The election results will shift the conversation in Congress around lowering drug costs and how moderate and progressive Democrats will work with the Republican minority.

In order to effectively push their healthcare agenda, Democrats will likely consider budget reconciliation as a tactic to coincide with a tie-breaking vote by Vice President-elect Kamala Harris and avoid a Republican filibuster. Politico reporter Caitlin Emma calls the tactic “a powerful procedural tool that can steer billions of dollars and reshape a host of social policies all while evading the dreaded filibuster,” stating that many senior lawmakers are planning to deploy it. Prior to the 2020 elections, House Speaker Nancy Pelosi (D-Calif.) said budget reconciliation procedures would be used to enhance the Affordable Care Act and provide pandemic relief, should the party maintain control of the House and gain control of the Senate and White House. (InsideHealthPolicy)

With moderate and progressive Democrats in the Senate, many expect Congress to move on Bidencare as an enhancement of Obamacare; a public option that includes expanded premium subsidies for Obamacare plans and the addition of subsidies for people with employer coverage. In 2017, Republicans had utilized budget reconciliation in a failed attempt to repeal Obamacare, then utilized it a second time to successfully pass the Tax Cuts and Jobs Act.

HHS Prepares for Rulemaking Pushback in Surprise Billing Legislation

HHS is preparing for pushback from provider groups, hospitals, and insurers over new legislation passed to end surprise billing in 2021. Included in Congress’ $2.3 trillion year-end spending bill, the No Surprises Act will mandate the secretaries of HHS, Labor, and the Treasury, to finalize details surrounding arbitration, pricing, and payments in order to solidify the ban on surprise billing. Where insurers had hoped to see a solution that settled out-of-network payment disputes with benchmark payment rates, providers wanted to solve disputes with arbitration, which was ultimately included in the bill.

HHS is expected to establish the methodology that insurers use to determine payment amounts, the information that plans or issuers will share with providers when making this determination, and a process to receive complaints that requirements have been violated. The agency will also be expected to define geographic areas so that a median price or in-network rate be calculated. (InsideHealthPolicy)

Some large employer groups have said that batching claims could also help bring down administrative costs relating to arbitration. Chip Kahn, CEO of the Federation of American Hospitals, said that ensuring the law is workable for providers when it comes to the timeliness of batching claims and processing bills will be a priority for his group, noting that a broad definition of what a similar service or similar claim means will allow providers to bring more claims to arbitration and ultimately speed up the payments to providers over disputed out-of-network payments. (InsideHealthPolicy)

States Sharpen Focus on Lowering Drug Prices Amidst Supreme Court PBM Ruling and Drug Importation Demo

As states across the U.S. continue to consider on policies to lower drug costs in 2021, many are expected to do so thanks to recent Supreme Court rulings and demos of the federal government’s drug importation program. Also at the top of many state legislators’ list is the reduction of insulin costs.

In December, the Supreme Court ruled 8-0 in Rutledge v. Pharmaceutical Care Management Association (PCMA) in favor of an Arkansas law regulating how much pharmacy benefit managers (PBMs) can pay pharmacies. The decision determined that the Employee Retirement Income Security Act (ERISA) did not preempt the law, opening the door for other states’ regulations that had previously been thought to preempt ERISA, and will likely enable states to further expand on consumer protections in the new year.

Many states are also expected to begin evaluating applications for drug importation plans, which, if approved, would enable states to begin importing drugs from Canada with the exception of bulk exports, which Canada recently halted. The Trump administration’s final rule, “poses no additional risk to the public’s health and safety and will result in a significant reduction in the cost of covered products to the American consumer,” said HHS Secretary Alex Azar.

Additionally, several states will look to cap insulin costs this month, with Illinois setting a $100 cap on 30-day supplies in the state’s self-regulated commercial plans, but not including federally regulated plans, starting on January 1. Virginia and Washington have also implemented policies effective January 1 that will cap insulin at $50 and $100 per month respectively. Other states, including Massachusetts and Kentucky, are expected to introduce legislation on capping insulin costs this year. (InsideHealthPolicy)

Report Suggests Biosimilars Could Help Curb Annual Specialty Drug Spending

According to the Pharmaceuticals Strategy Group (PSG), biosimilar drugs will have an important role to play in curbing specialty drug spending. The group’s annual State of Specialty Spend and Trend Report, which analyzes data from 2019, notes that specialty drug spending increased by an average of 13.6% per patient with the two factors driving specialty costs being increased utilization and rising costs per claim.

The report analyzed 99 million pharmacy and medical claims to provide an integrated understanding of the current state of specialty spend and trend, noting overall increases in members utilizing at least one specialty drug and projected annual specialty growth rate over the next three years.

PSG claims that increasing the total number of biosimilars entering the market could help lower overall specialty drug costs, predicting that as patients become more comfortable with biosimilars, overall spending on specialty drugs will continue to go down. Michael Kolodij, a pharmacy benefit consultant at PSG, commented that there is currently low utilization of biosimilars in the US, suggesting it’s the reason why only one of the 50 drugs in President Trump’s most-favored-nation program is a biosimilar drug. (InsideHealthPolicy) The full report from PSG can be downloaded, here.