HealthCare Roundtable e-News – July 7, 2017

Senate GOP Aiming for Health Care Vote Within 2 Weeks

Republicans in the Senate are reportedly planning to vote on a revised health care bill the week of July 17.

The “Better Care Reconciliation Act” is the Senate GOP’s answer to the “American Health Care Act” (H.R. 1628), which passed the House on May 4 but found little support in the upper chamber.

Both bills would, among other things, eliminate or make major changes to the Patient Protection and Affordable Care Act’s (ACA) individual and employer mandates, Medicaid expansion, subsidies for the purchase of health insurance in the state-level exchanges, prohibition on setting premiums based on a person’s health status, and requirement that policies cover certain “essential health benefits,” all while cutting taxes ($701 billion over 10 years in the Senate bill; $883 billion over 10 years in the House bill).

The GOP has only a two-seat majority in the 100-member Senate, so Republicans need near unanimous support from party members to pass the bill. (They plan to use a procedural maneuver that will avoid the possibility of a Democratic filibuster and require only a simple majority for passage.) However, several conservative senators have objected that the bill is not sufficiently different from the ACA, while some moderate Republicans, have expressed concerns about the sudden loss of coverage – 15 million people within a year – that would result from the legislation, according to the Congressional Budget Office (CBO). So Senate GOP leaders are trying to cobble together a new bill that can get at least 50 votes (which would allow Vice President Mike Pence to cast a tie-breaking vote for passage).

“We’re just trying to get a good picture of what the alternatives are and, hopefully, next week we’ll be prepared to take the bill up and vote on it,” Senate Republican Whip John Cornyn of Texas said on July 10. Cornyn indicated that Republicans might publicly release a revised bill within a few days.

Republicans are waiting to receive a “score” on a new legislative draft – an analysis of its impact on insurance coverage and the federal budget – from the CBO, and a spokesman for Senate Majority Leader Mitch McConnell, R-Ky., said that the score is “forthcoming,” USA Today reported.

Sen. Ted Cruz, R-Texas, has proposed allowing insurance companies to offer plans that do not meet the ACA’s coverage requirements as long as they offer at least one that does comply with those mandates. While this may draw some support from conservatives – since the non-compliant plans would, presumably, be offered at lower premiums – moderates have expressed concern about how this would affect the broader insurance market.

“I believe that it would cause further destabilization of the individual market,” Sen. Susan Collins, R-Maine, said. “It would erode protections for people with pre-existing conditions.”

It is not publicly known if Cruz’s proposal is included in the legislative draft being scored by the CBO.

The Senate, like the House, was scheduled to go into recess on July 28 and not return to Washington until Sept. 5. However, McConnell announced that he will delay the start of the Senate’s August recess for two weeks “in order to provide more time to complete action on important legislative items and process nominees that have been stalled by a lack of cooperation from our friends across the aisle.” Lawmakers have to address several major issues before the end of the year, including debt ceiling legislation and budget bills, and the GOP also still hopes to take up other priorities like tax reform. The odds of a health care bill being passed this year are, thus, generally thought to be slim unless the Senate completes its work on it before leaving for recess.

President Donald Trump urged senators to do exactly that.

“I cannot imagine that Congress would dare to leave Washington without a beautiful new HealthCare bill fully approved and ready to go!,” Trump tweeted.

Even if Senate Republicans are able to pass a bill, that legislation would have to go back to the House for another vote, and the changes made by the upper chamber could upset the delicate balance that was put together to get the bill through the House the first time.

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Generics Group Sues to Block Maryland Law on Drug Pricing

The leading trade association for generic pharmaceutical manufacturers asked a federal court to block a Maryland law that targets drug price spikes.

The law, which is to go into effect in October, states that, “A manufacturer or wholesale distributor may not engage in price gouging in the sale of an essential off-patent or generic drug,” and it defines price gouging as “an unconscionable increase in the price of a prescription drug.”

The law does not address the prices of brand-name drugs.

The Association for Accessible Medicines (AAM) filed a lawsuit on July 6 that argues that the law is unconstitutional because it would affect interstate commerce and because it is vague in its prohibition of “unconscionable” price hikes.

“Rather than allow the vibrant competition in the generic drug marketplace to continue working for patients, Maryland would become the first state to reject generic competition in favor of more government regulation – of generic drugs, the only segment of health care costs that is actually declining.” AAM CEO Chip Davis said. “If this new law goes into effect, it will harm patients and our communities by reducing choice and limiting access to essential medicines that people need.”

In a statement, the association also criticized the law by saying that it “protects high-priced brand name drug companies, while it punishes lower cost generic alternatives.”

“The new law will create instability in the market for generic drugs and provide an incentive for decreased generic drug competition,” the association stated.

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Commonwealth Fund Report Identifies Drivers of High Drug Prices

Lawmakers and regulators “can undertake a wide range of policy actions” to rein in high prescription drug costs, The Commonwealth Fund concluded in a report.

The organization, a progressive research and advocacy group, identified 10 drivers of high drug prices, including:

  • Lack of competition among manufacturers of generic drugs
  • Lack of competition among biologics and biosimilars
  • Anticompetitive behavior by some manufacturers
  • Lack of information about the comparative effectiveness of drugs

“Price increases for currently marketed drugs continue to outpace inflation, with an average annual price increase of nearly 10 percent over the past three years, compared to 2.3 percent inflation rate,” the report stated. “Among widely used brand-name drugs, approximately 97 percent had price increases in excess of general inflation. These trends are expected to continue if no action is taken.”

The report suggested several legislative and regulatory measures to address each of the 10 drivers.

“Any effort must start with identifying common ground on the problems of drug pricing,” the report stated. “Taking on these problems today should be guided by policy goals that rebalance incentives for innovation and price competition, prioritize patient access and affordability, and maximize availability of information to improve patient care.”

The report was written by four consultants from Waxman Strategies, whose chairman – and one of the report’s authors – is Henry Waxman, a former Democratic congressman from California who was one of the namesakes of the landmark 1984 Hatch-Waxman Act that promoted the development of generic drugs.

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Trump Administration to Continue CMS Value-Based Programs

Though under new leadership, the Centers for Medicare & Medicaid Services (CMS) will continue its efforts to reward value rather than volume, an agency official said.

During the Obama administration, CMS launched several programs aimed at moving toward value-based payments. In January 2015, the Department of Health and Human Services, which oversees CMS, announced that it had set a goal of having 30 percent of Medicare payments made through alternative payment models tied to quality or value by the end of 2016, with the goal rising to 50 percent by the end of 2018. The agency reached its 30 percent goal in 2015, with about $117 billion out of a projected $380 billion in Medicare fee-for-service payments tied to alternative payment models that year.

While there has been some uncertainty about how the Trump administration would handle the value-based programs that it inherited, the director of CMS’s Center for Clinical Standards and Quality, Kate Goodrich, indicated that no major changes are planned.

“We’ve gotten a lot of questions about where the new administration is headed with value-based care,” Goodrich said. “I want to send the clear message that valued-based care is here to stay.”

The alternative payment models being used by CMS include, but are not limited to, accountable care organizations (ACOs), advanced primary care medical homes, and bundling of payments for episodes of care.

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