HealthCare Roundtable e-News – January 8, 2019

Texas Judge Issues Stay of Affordable Care Act Throughout Appeals ProcessFederal Court Strikes Down Obamacare, Creating Uncertainty

Judge Reed O’Connor, who presided over the Texas federal district court case and ruled the Affordable Care Act’s individual mandate unconstitutional last month, has formally issued a stay on his ruling in order to mitigate confusion as 17 Democratic attorney generals prepare to appeal the court’s decision. O’Connor also issued a final judgment for count 1 of the five-count case, smoothing the pathway for an appeal. (InsideHealthPolicy). Judge O’Connor emphasized in his recent filing that “courts must refrain from resolving policy disputes” created by Congress, although some conservative legal scholars are skeptical that Judge O’Connor’s analysis on severability between the ACA’s individual mandate and tax cut, which is effective this year, is a display of judicial activism. “I’ve been very critical of Judge O’Connor’s severability analysis, but the standing analysis in these opinions may be even worse – and that’s saying something,” tweeted Jonathan Adler, a Case Western Reserve University law professor who was a legal architect of another major ACA challenge. “I will be gobsmacked if O’Connor’s opinion survives review in the 5th Circuit.” Pending the results of the appeals process, the case could likely lead to a Supreme Court hearing in 2020 during the upcoming presidential campaign.

Trump Administration Receiving Pushback on International Price Referencing

The Trump administration’s proposals on Medicare Part B international price referencing is on the receiving end of significant pushback from numerous groups, including the American Hospital Association, American Medical Association, and Community Oncology Alliance, for the proposal’s ambiguity on patient access to medications and the use of value assessments to determine reimbursement levels. Pharmaceutical Research and Manufacturers of America has also criticized the proposal on the claims that patient access to drugs could be threatened. (InsideHealthPolicy). A coalition of 339 state-based patient, provider and caregiver groups sent a letter to congressional leaders last month expressing their concerns for the proposal, suggesting that vendors could use utilization management strategies to limit patient access to drugs.” Medicare Part B beneficiaries have a right to access the Part B-covered drug prescribed by their physician based on his or her medical knowledge and experience. Beneficiaries would effectively lose this right under the model, as vendors that beneficiaries did not choose will dictate the types of drugs they can use,” the coalition, known as Part B Access for Seniors and Physicians, said. (InsideHealthPolicy).The Trump administration has been a proponent of using the International Pricing Index in an ongoing effort to lower prescription drug costs, while HHS has also allowed Medicare Advantage plans to implement step edits and negotiate with drugmakers for better pricing.

House Speaker Pelosi Indicates Support Medicare for All Hearings

House Speaker Nancy Pelosi (D-Calif.) stated last Thursday that she will support hearings on “Medicare for All,” the legislation supported by many Democrats who want to bring a single-payer approach to health care to the United States.  Pelosi, who was elected to her second term as speaker of the House on Thursday (Jan. 3) with 220 votes, has been less an advocate of Medicare for All or other single-payer health policy options than the more progressive members of her caucus.”This is a huge step forward. We have to push on the inside while continuing to build support for this on the outside,” said Rep. Pramila Jayapal (D-Wash.), the primary sponsor of Medicare for All legislation. Jayapal said Thursday that hearings would likely start in the Rules and Budget committees. Single-payer remains a non-starter among members of the GOP, who have largely opposed the concept since Medicare for All was first introduced in 2003, as well as more moderate Democrats. (InsideHealthPolicy). Kaiser Family Foundation Senior Vice President Larry Levitt said that the hearings could be a double-edged sword, as learning more details about Medicare for All could deter some supporters but also attract some lawmakers who do not support the legislation. According to Kaiser Family Foundation polling on Medicare for All, people who say they favor a national health plan often change their tune when asked if they’d still support the plan even if it means increased taxation, government control in the health markets, and the elimination of employer health coverage. “This is all about setting the stage for the 2020 elections. This is a prelude to what Democratic candidates campaign on in 2020 and potentially a Democratic Congress in 2021,” Levitt said. (InsideHealthPolicy).

CMS Finalizes New ACO Overhaul Program, “Pathways to Success”

The Centers for Medicare & Medicaid Services (CMS) published new rules last month for Medicare accountable care organizations (ACOs) that will be effective for the year starting July 1, 2019. The overhaul “dramatically redesigns” the program to ensure that more participating ACOs are “serious about delivering value,” and taking on real risk, according to CMS administrator Seema Verma. The new program, titled Pathways to Success, calls for cutting the time ACOs can avoid risk in MSSP. The program will reduce the risk from six years to two years for new ACO participants and three years for new, low-revenue ACOs, which will also include more rural locations. Verma championed Pathways to Success as a “bold step” towards quality lower-cost healthcare, stating, “The rule strikes a balance between encouraging participation in the ACO program and advancing the transition to value, ultimately protecting taxpayers and patients. Medicare can no longer afford to support programs with weak incentives that do not deliver value. As we structure new payment arrangements, the impact on the overall market will be top of mind.”  Cost savings projections of the program suggest that Pathways to Success will save Medicare close to $2.9 billion over the next ten years. The National Association of ACOs (NAACOS) had opposed the new program requirements and argued that ACOs will need more time to adjust to the shortened timeline.