HealthCare Roundtable e-News – June 23, 2017

Senate Republicans Unveil Health Care Plan

Republicans in the Senate, after several weeks of secret negotiations, on June 22 released their health care proposal, and government analysts say it will increase the number of Americans who do not have insurance by 15 million within one year.

The legislation, 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.

Although the Senate was said to be starting from scratch on its health care bill, the legislation, like the proposal that cleared the House, repeals or significantly modifies several major provisions of the Patient Protection and Affordable Care Act:

  • Both proposals would eliminate the employer mandate and the individual mandate, though the Senate bill would prohibit anyone who goes without coverage for 63 days or more from buying insurance for six months, while the House bill would impose a 30 percent penalty for one year on the premiums of individuals with lapsed coverage.
  • Both would end the ACA’s Medicaid expansion, though the Senate bill would take a few more years to do it than the House bill would, and both would transition Medicaid to a block grant program. (Spending on Medicaid would decrease by $772 billion over 10 years under the Senate bill, by $880 billion under the House bill.)
  • Both would allow states to apply for waivers of the ACA’s essential health benefits requirements.
  • The Senate bill would continue to provide tax credits for the purchase of insurance in the state-level exchanges, with the amount based on person’s income, age and location, as under the ACA, though the tax credits would be less generous than they are under existing law. The House bill would base the amount of the credits solely on age.
  • Both would allow insurers to charge older beneficiaries as much as five times the amount paid by younger ones. The ACA limits the ratio to 3:1.
  • Both would technically retain the ACA’s ban on coverage denials based on pre-existing conditions but would, in different ways, give states the option of sharply weakening that protection.
  • The Senate bill would cut taxes by $701 billion over 10 years by eliminating several levies that were implemented by the ACA, compared to $883 billion in tax reductions under the House bill. The Senate bill would keep the ACA’s “Cadillac tax” on high-value employer-provided health plans, but would delay its implementation until 2026.

There is at least one thing that the Senate bill, the House bill and the ACA have in common: All allow children to stay on their parents’ policies until age 26. (Summary)

Senate Majority Leader Mitch McConnell said on the Senate floor that the Senate bill “will preserve access to care for patients with pre-existing conditions, strengthen Medicaid, and & lower costs from where they are under Obamacare.”

“Better Care will free Americans from onerous mandates under Obamacare, by repealing the employer mandate that reduces hours and take-home pay for too many workers and by repealing the individual mandate that forces Americans to buy unaffordable Obamacare insurance, freeing them to make the best health care decisions for their families on what types of plans they want and can afford,” McConnell said. “Better Care will help stabilize insurance markets that are collapsing under Obamacare, by first implementing stabilization policies, then carefully transitioning away from Obamacare completely, so more families aren’t harmed by its collapsing markets.”

Although McConnell said that Republican senators “share many ideas about what needs to be achieved and how we can achieve it” and that the proposal “incorporates input from so many different members,” passage is far from certain. The GOP has only a two-seat majority in the 100-member Senate, so McConnell, who wants to hold a vote on the bill by June 30, needs near unanimous support from his party. (Republicans plan to use a procedural maneuver that will avoid the possibility of a Democratic filibuster and require only a simple majority for passage.) Multiple GOP senators, though, have already announced their opposition to the bill in its current form.

Four conservative Republican senators said in a joint statement on the day the proposal was unveiled that, “it does not appear this draft as written will accomplish the most important promise that we made to Americans: to repeal Obamacare and lower their healthcare costs.” The senators said they are “open to negotiation,” but one of them, Sen. Rand Paul of Kentucky, said a few days later that, “So far the Senate leadership is not negotiating.”

Moderate Republican senators, meanwhile, expressed concerns about the impact of the bill on, as Sen. Susan Collins of Maine put it, “the most vulnerable people in our society.” Collins said on ABC’s “This Week” on June 25 that she has “very serious concerns about the bill,” and that was before the Congressional Budget Office released its analysis of the proposal.

The CBO concluded that the legislation would result in 15 million fewer people having health insurance in 2018 than would have had it under current law and 22 million fewer people being insured in 2026 than would have been under the ACA.

The CBO also estimated that the bill would reduce federal deficits by $321 billion over 10 years, less than 4 percent of the combined $8.6 trillion in projected deficits during that time. The House bill, according to the CBO, would increase the uninsured total by 14 million next year and 23 million in 2026, while reducing federal deficits by $119 billion over a decade.

The Trump administration dismissed the CBO’s projections, saying the agency has “consistently proven it cannot accurately predict how health care legislation will impact insurance coverage.”

While some Republicans have objected to rushing a vote on a bill that many of them knew almost nothing about until its public release – Sen. Ron Johnson of Wisconsin said on NBC’s “Meet the Press” on June 25 that there is “no way” a vote should be held before Congress’ Independence Day recess because “I have a hard time believing Wisconsin constituents or even myself will have enough time to properly evaluate this for me to vote for a motion to proceed” – GOP leaders may be unwilling to slow the process.

“This is the best we can do to try and satisfy all the different perspectives in our conference,” said Sen. John Thune of South Dakota, who, as chairman of the Senate Republican Conference, is the party’s third-highest ranking senator. “It’s time to fish or cut bait.”

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FDA to Hold Public Meeting on Regulations Being Gamed’ by Drug Makers

The Food and Drug Administration (FDA) has scheduled a public meeting for July 18 “to solicit input on places where FDA’s rules … are being used in ways that may create obstacles to generic access.”

The prices of some generic drugs have increased sharply in recent years, prompting calls from consumer advocates and some lawmakers for a legislative or regulatory response. One area of focus has been on the use by brand-name companies of the FDA’s risk evaluation and mitigation strategies (REMS) and similar programs that are typically intended to control the distribution of medicines for which there are safety concerns to deny generic firms access to their products. Without such access, generic firms are unable to show the bioequivalence – or, in the case of biologics, biosimilarity – that is needed for approval by the FDA.

“We know that sometimes our regulatory rules might be gamed’ in ways that may delay generic drug approvals beyond the time frame the law intended, in order to reduce competition,” FDA Commissioner Scott Gottlieb wrote in a June 21 blog post. “We are actively looking at ways our rules are being used and, in some cases, misused.”

Gottlieb noted that brand-name manufacturers might also use other tactics to prevent generic companies from gaining access to their products, such as inserting restrictive clauses into contracts with distributors.

The July 18 meeting, Gottlieb wrote, will be part of the FDA’s “Drug Competition Action Plan. That plan, he added, will also include working with the Federal Trade Commission to identify and publicize “anti-competitive” practices.

“I want to take steps to address these concerns, to make sure that we are facilitating appropriate competition in circumstances where Congress intended,” Gottlieb wrote. “The forthcoming public meeting is intended to solicit public comment to inform us of circumstances where generic competition may be thwarted by these and other techniques.”

The FDA will accept public comments related to the meeting through Sept. 18.

On April 27, the Republican and Democratic leaders of the House and Senate Judiciary Committees introduced the “Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act,” (S. 974) which would allow generic companies to bring federal lawsuits and seek damages when brand-name companies improperly withhold their products. (Summary)

The Public Sector HealthCare Roundtable signed on to an April 27 letter to lawmakers supporting the proposal.

“Many of these restricted distribution setups are implemented completely independently from FDA mandates, and exist solely to exert control of who purchases the product,” the letter stated. “These abuses are growing and the resulting delay in generic and biosimilars competition is costing patients, the federal government, and the health care system billions of dollars annually.”

Seventeen other groups, including AARP, America’s Health Insurance Plans and Public Citizen, also signed on to the letter.

A similar proposal, the “Fair Access for Safe and Timely (FAST) Generics Act” (H.R. 2051), which would prohibit brand-name companies from using REMS “in a way that restricts or has the effect of restricting the supply of such covered product to an eligible product developer for development or testing purposes,” was introduced by Reps. David McKinley, R-W.V., and Peter Welch, D-Vt., on April 6. The Roundtable is also supporting that bill.

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CMS Proposes Changes to Quality Payment Program

The Centers for Medicare & Medicaid Services (CMS) has proposed several changes to its Quality Payment Program.

In early 2015, Congress passed, and then-President Obama signed into law, the “Medicare Access and CHIP Reauthorization Act” (MACRA), which replaced Medicare’s sustainable growth rate formula and made other changes to the program, including establishing new payment models that provide incentives that are intended to promote quality and value.

CMS issued a rule to implement the law in October, and the agency is now proposing revisions “to ensure that there is meaningful measurement and the opportunity for improved patient outcomes while minimizing burden, improving coordination of care for patients, and supporting a pathway to participation in Advanced [alternative payment models].” (Summary)

“We’ve heard the concerns that too many quality programs, technology requirements, and measures get between the doctor and the patient,” CMS Administrator Seema Verma said. “That’s why we’re taking a hard look at reducing burdens. By proposing this rule, we aim to improve Medicare by helping doctors and clinicians concentrate on caring for their patients rather than filling out paperwork.”

CMS will accept comments on the proposal through Aug. 21.

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