As we noted previously in our introductory blog post on the 2017 User Fee Act (UFA) reauthorization process, the first UFA hearing on Capitol Hill was convened on March 2, 2017 by the House Energy & Commerce Committee’s (E&C) Subcommittee on Health.  That hearing focused on the UFAs specific to generic drugs and biosimilar biological products.  Since then, Congress has held several more UFA hearings, and multiple FDA-related bipartisan bills that could become important to this process have been introduced.  So it’s time for an update on how things are going with the UFA reauthorizations. Continue Reading FDA User Fee Hearings Picking Up Steam on Capitol Hill

In the alphabet soup that is health and FDA law and policy (if you don’t know what we mean, are you sure you should be reading this blog?), one acronym that doesn’t get a lot of respect is “UFA.” This is the first is a series of blog posts that aim to educate and inform our readers about why the UFA acronym matters and how the UFA legislative process may be particularly significant in 2017.

UFA stands for “User Fee Act,” of which there are many flavors in this modern era – from the old-timer Prescription Drug User Fee Act (PDUFA), born in 1992, to the more toddler-ish Biosimilar User Fee Act (BsUFA) that joined us in 2012. Other important UFAs for the U.S. health care system and stakeholders are the Medical Device User Fee Amendments (MDUFA), which were enacted first in 2002, and the Generic Drug User Fee Amendments (GDUFA) that launched at the same time as their biosimilar companion. Continue Reading Let the 2017 “UFA” Games Begin!

Before we all turn our full attention to the nominations of Representative Tom Price as Secretary of Health and Human Services, and policy consultant Seema Verma to lead CMS, we need to remember that there are still approximately 45 days remaining in the current administration. A perusal of the Federal Register reveals that in the wake of the election, federal agencies are issuing proposed and final rules at a swift pace.

So it may be wise to consider what HHS rules have been published, and what rules could still be acted on by the Office of Management and Budget (OMB) and published before the inauguration of the new administration.  And we also need to consider what action Congress may take on those rules. Continue Reading Forty-Five Days and Counting for Current HHS Leadership: Implications for Rulemaking

There has been much controversy over the Medicare Part B payment demonstration proposed by the Center for Medicare and Medicaid Innovation (CMMI) in March 2016.  As we await the release of the final rule, the fate of this demonstration will be in the hands of a Republican-held Congress and President-Elect Trump.  To move forward, not only will CMMI need to finalize the implementing regulations, but the Part B payment demonstration will also need to survive review under the Congressional Review Act (CRA). Continue Reading The Future of the Medicare Part B Payment Demo under a Republican-held Congress

Republicans have been talking about remodeling the Medicaid program through block grants or per capita caps for years.  Both block grants and per capita caps are designed to limit federal spending by providing a state with a set amount of federal money to fund its Medicaid program.  With the sweeping Republican victory, Republicans are in a position to move forward with these policies, primarily focused on block grants.  But, there are three main questions to consider in designing a block grant program, each of which could prove controversial.

Which populations would be included in the block grant?

Any block grant proposal must determine which populations are included in the block grant.  While some proposals have included all Medicaid populations, others have specifically excluded the elderly and disabled, leaving them in the existing Medicaid program.

What services would be covered by Medicaid under the block grant?

Currently, states are required to provide a set of mandatory services in order to receive federal funds.  A block grant proposal must consider and address whether the current set of services would still need to be covered under the block grant funds, and if not, what services would be covered.  Any reduction in the coverage of mandatory services would likely be hotly debated.

What federal funds would be provided to the states?

A block grant proposal must also determine what federal funds will be provided to the states.  Funding includes two parts: (1) the initial amount provided, and (2) how much is providing moving forward. In any block grant proposal written with the express purpose of reducing federal spending on Medicaid, the funding choices will be extremely controversial and perhaps rejected by states, including those with Republican governors.

While the road to Medicaid block grants may be open for Republicans come January, there are still many questions as to how such a policy would be implemented and how it will fit with other health reform proposals.

The Children’s Health Insurance Program (“CHIP”), created in 1997, helps states provide health care coverage to low-income children up to age 19 whose families fall above the Medicaid eligibility threshold but are unable to afford private insurance. Over the past ten years, federal funding for CHIP has steadily increased.  Congress reauthorized CHIP in 2015 through MACRA, but the program, which represents one of the last remaining annual (or semi-annual) vehicles for Congress to advance health policy initiatives, will lapse September 30, 2017.  CHIP has traditionally received bipartisan support but the question of whether to continue funding the program has recently been at issue.

For the past several years, some experts believed CHIP would slowly wind down as the uninsured rate for children dropped in light of other coverage options under the Affordable Care Act (“ACA”). According to the U.S. Census Bureau, the period of 2013-2015 saw the largest decline in uninsured children ever going from 7.1 to 4.8 percent uninsured.  While the ACA provides additional coverage options for low-income families, CHIP remains popular because in some cases it offers better benefits at lower costs than plans on the exchanges.  This was the subject of debate during the last reauthorization, and in the lead up to MACRA’s passage, the Medicaid and CHIP Payment and Access Commission (“MACPAC”) advised Congress “to extend federal CHIP funding for a transition period of two additional years, during which time policies can be developed to address concerns about affordability and adequacy, with the ultimate goal being integration of children in Medicaid, employer-sponsored, or exchange coverage depending upon their family circumstances.”

Currently, low-income children who are not eligible for Medicaid have three options for healthcare coverage: through their parents’ employer-based plan, through an exchange plan under the ACA, and through CHIP. These three coverage options differ in the benefits offered and cost-sharing requirements for families.  As Republicans determine the fate of CHIP in 2017 and beyond, they will need to consider if coverage variations for low-income children should continue.  In other words, when approaching the ACA, Republicans need to keep in mind the positive aspects of CHIP that may not be included in the current marketplace or employer-based plans.

CHIP has been a bipartisan program throughout its existence, but decisions about whether to extend the program are inextricably tied to decisions regarding the ACA.

Most of the post-election discussion of the ACA has focused on how promises to repeal the law could impact the newly insured. But one priority area of the ACA that has received very little discussion is the federal government’s strategy to try to reign in health care costs by reducing volume and promoting quality.  Complicating the push to fully repeal the ACA is the fact that key elements of the ACA’s cost control strategy have found their way into the Medicare and CHIP Reauthorization Act (MACRA) passed by Congress in 2015.

MACRA was passed on a bipartisan, bicameral basis, creating a two-track system for Medicare provider reimbursement incentive payments. On one track is the more traditional fee-for-service reimbursement structure that will be subject to payment adjustments under a consolidated quality reporting system called the Merit-Based Incentive Payment System (MIPS). The second track, which entails greater incentive payments, addresses reimbursement for providers participating in alternative payment models (APMs) like accountable care organizations (ACOs) and other demonstration programs that have been created under CMS’s Center for Medicare & Medicaid Innovation (CMMI). We discussed these changes at length in our post last month.

While the sweeping Republican election victory portends extensive changes in many areas of health care, MACRA is not likely to see extensive changes–at least not directly.  Moving payment policy away from volume and towards quality was a goal for all the Congressional offices participating in the construction of MACRA. However, the implementation of MACRA could still face challenges if Congressional Republicans decide to repeal or constrain the ACA sections that give CMS the authority to operate the CMMI. Such a move would not be outside the realm of possibility; as we previously discussed, the CMMI has been a frequent target of criticism by Congressional Republicans. A full repeal of the ACA, or even limitations to the CMMI’s authority or budget, could cripple the government’s ability to operate the demonstration projects that are the cornerstones of MACRA.

Stakeholders need to engage with CMS moving forward, albeit a CMS under new management, to ensure that changes to the ACA do not have unintended consequences on MACRA’s implementation.  CMS may seek to streamline the numerous payment policies that have been proposed under the current Administration. Alternatively, it is possible that CMS will be active in creating its own versions of alternative payment models. One area of potential focus for further reform might be the so-called ACO Track 2 and 3 under the Medicare Shared Savings Program (MSSP), participation in which will now make providers eligible to receive APM incentive payments. Yet CMMI to date has struggled to find the right mix of payment reform, such as requiring two-sided risk, with payment incentives to show significant MSSP savings. In either case, the provider community will be closely watching the developments related to this already complex and daunting transition.

The Affordable Care Act (ACA) and the Medicare and CHIP Reauthorization Act (MACRA) provided the Centers for Medicare & Medicaid Services (CMS) and the newly created Center for Medicare and Medicaid Innovation (CMMI) tremendous authority.  With Republicans set to take control of both the White House and Congress, the future of that authority is very much in question.

The ACA created CMMI to test innovative payment and service delivery models to reduce program expenditures and improve care.  To carry out this goal, the ACA allows CMMI to waive any Medicare provision of the Social Security Act, as well as select Medicaid provisions, that may be necessary to carry out and evaluate demonstration policies.  If the demonstrations prove effective, CMS may implement the program nationally.

Over the past few years, CMS has implemented numerous demonstration projects under CMMI’s authority.  These include delivery reform demonstrations such as the Medicare Shared Savings Program and Pioneer ACO program, as well as the Financial Alignment Initiative, which integrates care for dual-eligible individuals in select states. Demonstrations such as the Medicare Advantage Value-Based Insurance Design Model have focused on encouraging the use of high-value clinical services, while others, such as the Diabetes Prevention Program, have focused on preventive service models.  In July of this year, CMS proposed expanding the Diabetes Prevention Program nationally.

While there have been successes, CMS’s use of this authority has not been without controversy and criticism.  Continue Reading Will Republicans Embrace CMMI’s Authority?

As we look ahead to the 115th Congress, Republicans are likely to take up repeal and replacement of the Affordable Care Act.  Repeal and replace is more accurately described as a transition where Republicans design a version of health care reform they will own and defend.  In doing so, Republicans must consider three important factors as they look at policy.  The first two, talking with insurers and avoiding coverage disruption, were discussed in our prior blogs.  The third is making hard choices. 

The economist Thomas Sowell is often credited with this quote “There are no solutions, only tradeoffs.”  In 2009, the Democrats made tradeoffs in constructing the Affordable Care Act.  Now it will be the Republicans’ turn to make tradeoffs as they move to transition away from the Affordable Care Act.  Republicans will consult stakeholders and experts and will engage the Congressional Budget Office, especially around coverage and costs.  Republicans will then have to make hard choices based on the information they receive.

One specific example will involve Medicaid.  Will Republicans reduce the special matching rate states receive to cover those who are newly eligible under the Affordable Care Act?  They are certain to be told that drastically reducing the matching rate will cost millions of Americans their Medicaid coverage.  States have made the decision to cover these low-income individuals, but if the payment is reduced, it is highly likely that state budgetary pressures will force many states to make the difficult decision of reducing or eliminating coverage.

Republicans are going to receive information about the coverage and cost consequence of their policy choices.  They are going to be told things they may not have expected or wanted to hear.  They will then have to decide if they want to reconsider or proceed and face the consequences. 

In the end, Republicans are about to be able to engage in health care policy making in a way they weren’t in 2009.  Republicans want to show they have a better way (the title of the House Republican platform).  Their policies will produce coverage and cost numbers.  They must decide then how they will proceed.  Decisions will have consequences, and they will own those consequences. 

In the coming days, we’ll be continuing to cover health care reform in the 115th Congress with a focus on specific health care programs.  Stay tuned! 

As we look ahead to the 115th Congress, Republicans are likely to take up repeal and replacement of the Affordable Care Act.  Repeal and replace is more accurately described as a transition where Republicans design a version of health care reform they will own and defend.  In doing so, Republicans must consider three important factors as they look at policy. The first, talking with the insurers, was discussed in a previous post.  The second is avoiding coverage disruption.  As Republicans begin the process of transition, they must avoid policies that will cause severe coverage disruption.

For example, Republicans strongly oppose the individual mandate in the Affordable Care Act.  The incoming Administration could order the IRS to create a number of “carve outs” for the individual mandate that would render it ineffective.  While that is a policy choice, the consequence likely would be insurers exiting the marketplace.  Without a mechanism to cause participation, the risk of adverse selection becomes unacceptably high—especially given the experience to date with the Affordable Care Act population.

Republicans do not want to cause millions of people to lose coverage, but, at the same time, they want to make significant changes in the policies of the Affordable Care Act.  Republicans are going to have to make structured policy decisions to minimize coverage disruptions.  After years of holding the Democrats responsible for their policy decisions, Republicans will now have to own the consequences of their policy decisions.

This post is the third in a series, with the first being published on Monday and the second being published on Tuesday.  In the posts that follow, we will describe additional critical issues that Republicans must tackle as they transition the Affordable Care Act and the impact of the new Congress and new administration on certain hot topics in health reform.