By Melissa Attias, CQ Roll Call

December 9, 2015 -- The Obama administration on Wednesday downplayed concerns about the long-term viability of insurance marketplaces created by the Affordable Care Act, presenting an upbeat assessment of the 2010 law's third open enrollment period. 

Andy Slavitt, acting administrator of the Centers for Medicare and Medicaid Services (CMS), said the agency saw a surge of interest ahead of the Dec. 15 deadline to sign up for coverage that starts on Jan. 1, with more than 65,000 people visiting the federal exchange healthcare.gov at once and more than 1 million calls placed to a call center last week. More than 1 million new consumers have signed up for plans since open enrollment began Nov. 1, he added. The sign-up period ends Jan. 31.

Slavitt declined to specifically address an announcement by the nation's largest health insurer, UnitedHealthGroup, that it may withdraw from the health law exchanges in 2017. He said insurer participation is "incredibly high," with hundreds of plans offering thousands of options. Slavitt added officials are reluctant to discuss a specific insurer's strategy and pricing because companies will cycle in out and of the market and change prices.

"I think it's important not to get too caught up in any one particular company and their particular data point," Slavitt told reporters on a conference call, noting that he's encouraged by what he's seeing.

Kevin Counihan, CEO of the health insurance marketplaces at CMS, added that officials are seeing "high growth" and "tracking in a way that's highly encouraging," which he said bodes well for the stability and attractiveness of the market. "Individual firms will always have individual strategies," he said.

Later on the call, Slavitt similarly downplayed comments made by the CEO of Cigna that the insurer is not making money on the exchanges this year. He reiterated that the marketplace isn't dependent on any one health plan and cautioned "not to be overly swayed by any one or even a handful of companies' discussion of whether they're making money or not."

More than 25 percent of the current customers for healthcare.gov actively renewed coverage compared to a percentage in the teens at the most comparable point last year, according to Slavitt. He said about 2 million people have searched for their doctor or prescription drug while shopping for coverage using tools phased in during this open enrollment period, citing that as evidence that consumers are making better choices and are more educated about their options.

Overall, CMS reported that 2.8 million people have selected a plan through healthcare.gov since open enrollment began Nov. 1. The data is for the 38 states using the healthcare.gov website for this enrollment period.

Health and Human Services Secretary Sylvia Mathews Burwell has previously said her department aims to have 10 million people nationwide paying for coverage through the federal and state-run marketplaces set up under the 2010 law by the close of next year, up from a projected 9.1 million by the end of 2015. Slavitt described the current dynamic as a good start to reaching that goal.

Counihan warned that the special enrollment period around tax filing time that was added for consumers who were unaware of the fee for not getting coverage will not be offered again. The penalty for individuals who do not have health coverage will increase in 2016 from $325 or 2 percent of taxable income in 2015 to $695 or 2.5 percent of income, whichever is more.

"If consumers want to avoid paying the fine, they'll need to sign up for coverage by Jan. 31," Counihan said, referring to the last day of the open enrollment period.

By Andrew Siddons, CQ Roll Call

December 9, 2015 -- In the months after Turing Pharmaceuticals raised the price of a drug from $13.50 to $750 a pill, outraged congressional Democrats have accused their Republican counterparts of refusing to take on the rising prices of prescription drugs. But on Wednesday, for the first time since the latest iteration of the drug debate broke out, a bipartisan Senate committee criticized recent price hikes.

"One goal of our bipartisan investigation is to understand why such companies can impose egregious price increases on off-patent drugs they have acquired, and what policies we should consider to counter this disturbing practice," said Senate Aging Committee Chairwoman Susan Collins, R-Me.

Senators expressed deep concern about the high cost of drugs and the implications for the health care system and patients. "It is hard not to get emotional about it," Sen. Claire McCaskill, D-Mo., the committee's ranking member, said.

Collins acknowledged the need for sufficiently high drug prices for companies to recoup the cost of investment, and she said the United States had found a good balance between the need for companies to innovate while promoting access to consumers. But what Turing did, she said, was "egregious."

"That balance we have struck never anticipated companies acquiring off-patent drugs and then jacking up their prices to enormous heights," Collins said.

Turing earlier this year purchased the rights to Daraprim, a drug that treats parasitic infections, and was able to raise the price so high because nobody else was making it. But Turing had not been involved in developing the drug or continuing research in it, a practice of particular concern to committee members.

"This type of price increase in the absence of any improvements to the drug whatsoever is not an isolated incident," McCaskill said.

In addition to Turing, Collins pointed out three other pharmaceutical companies that have engaged in similar practices, including Valeant Pharmaceuticals; Retrophin, Inc.; and Rodelis Therapeutics. Collins noted the companies did not invest in researching and developing the drugs.

No representatives from the companies were at the hearing, but witnesses included doctors who have grappled with the real-world impact of high prices. David Kimberlan, a director for pediatric infectious diseases at the University of Alabama, said his hospital has struggled to acquire Daraprim since Turing purchased it, to the detriment of his patients who could benefit from its treatment.

"Babies' lives literally hang in the balance here," he said.

Erin Fox, director of the Drug Information Service at University of Utah Health Care, explained prices have risen for some of the drugs her hospital uses because only a few companies continue to make them.

"The supply chain for generic injectable off-patent drugs is incredibly fragile," she said.

The committee's investigation into drug prices revealed instances that price increases on two drugs supplied by Valeant raised drug costs at the Cleveland Clinic by $8.6 million, Collins said.

In North Carolina, she said, a pharmacy had dropped Turing's Daraprim from its inventory, and a local child diagnosed with toxoplasmosis was treated with an alternative that hadn't been widely tested in children.

The committee's investigation is meant to bring attention to the issue of high drug prices, but it's unclear if it will result in any legislative action.

McCaskill said that the situation required the government to act in some way.

"This is a market failure, and when there's a market failure, the government has a role in addressing it," she said. "I hope that this hearing and the future hearings we are planning can start the process of developing solutions," she said.

By Kerry Young, CQ Roll Call

December 11, 2015 -- An influential panel this week highlighted some of the stubborn challenges in managing more than $300 billion in annual Medicare expenses, seeking to bolster the case for an overhaul of post-hospital care and venturing into a new discussion of a federal discount drug program.

The Medicare Payment Advisory Commission (MedPAC) on Thursday and Friday reached apparent consensus on seven recommendations on 2017 payment policies to Congress and the Department of Health and Human Services. It likely will formally adopt these next month with little further discussion, while having more conversation on proposals affecting the insurer-run Medicare Advantage plans, hospitals and inpatient rehabilitation centers, said Francis J. Crosson, the MedPAC chairman. MedPAC will vote at its Jan. 14-15 meeting on a package of formal recommendations for its annual March report to Congress. 

Underlying many of the discussions about payment are concerns about the effects that spending decisions have on elderly and disabled Americans. MedPAC appears likely to reiterate a recommendation for essentially flat payments for long-term care hospitals, which are intended to serve the most critically ill people. Members of the panel agreed that current reimbursement policy has been at least adequate for long-term care hospitals, with Medicare paying about $5.4 billion last year. But there also are questions about whether this high-tech setting is the right choice for those patients who are nearing the end of their lives, given alternatives such as hospice care, said Rita Redberg, a MedPAC member and cardiologist at the University of California, San Francisco. In many cases, there's little "realistic hope of improvement" for patients in these institutions, which can be costly, she said.

"People don't like to die in institutions on ventilators. They like to be at home if possible," she said.

MedPAC members, lawmakers in Congress and officials at Medicare have wrestled for years with ways to improve the care for people who have suffered serious illnesses and surgeries, a roughly $60 billion annual expense for the program. This post-acute care includes skilled nursing and inpatient rehabilitation facilities, as well as long-term care hospitals and home health services.

While addressing the immediate question of making recommendations on 2017 payment rates, MedPAC members noted the need for more substantial changes in this field with an effort to identify which settings benefit patients most. Commissioner and University of Pennsylvania professor Mary Naylor on Friday suggested the January report include supportive comments on efforts to establish a "whole system of post-acute care."

MedPAC may also move into the contentious debate about the 340B drug pricing program in the March report. The commission likely will further discuss in January a plan that would cut Medicare payments by 10 percent for medicines bought through this program. This would allow beneficiaries enrolled in the program to save about $70 million, and federal officials would then redirect $300 million in Medicare savings to a pool of money that would remain with the hospitals for uncompensated care. Still, groups including the American Hospital Association have objected strongly to this proposal.

MedPAC's recommendations carry clout with lawmakers, although it often takes many years for them to have an effect.

MedPAC members this week supported a draft recommendation that largely sticks with the status quo for the payment rate for doctors. It would back the slated 0.5 percent increase in 2017 for a factor used to set doctors' payments, a figure that was in the April overhaul of Medicare physician reimbursements (PL 114-10). This law fulfilled some of MedPAC's long-standing requests for major changes in Medicare reimbursement for doctors, including the implementation of steps intended to tie physicians' payments more to the quality of care delivered.

Other draft 2017 recommendations proposed for January votes include:

• Medicare Advantage insurer-run plans: Congress should eliminate a cap on benchmark amounts and the doubling of the quality increases in specific counties.
• Ambulatory surgical centers: Congress should eliminate the update to the payment rate for calendar 2017. It also should require ambulatory surgical centers to submit cost data.
• Dialysis: Congress should increase the outpatient dialysis base payment rate by the update specified in current law for calendar 2017.
• Home health services: Congress should direct HHS to eliminate the payment update for 2017 and implement a two-year rebasing of the payment system beginning in 2018. Congress should direct HHS to eliminate the use of therapy visits as a factor in payment determinations, concurrent with rebasing.
• Hospice: Congress should eliminate the update to payment rates for fiscal 2017.
• Hospitals: Update inpatient and outpatient payments by the amount specified in current law, projected to be 1.65 percent. This recommendation also includes the changes proposed for Medicare's coverage of medicines bought through the 340B drug program. 
• Inpatient rehabilitation facilities: Congress should eliminate the update to the payment rates for fiscal 2017.
• Skilled nursing facilities: Congress should eliminate the market basket update for 2017 and 2018 and direct H to revise the prospective payment system. In 2019, the HHS should report to Congress on the impacts of the reformed prospective payment system and make any additional adjustments to payments needed to more closely align payments and costs.

By Kerry Young, CQ Roll Call

December 10, 2015 -- An influential federal panel appears poised to urge Congress to change certain policies that may make it more expensive for older and disabled Americans to enroll in the insurer-run Medicare plans than to stick with the traditional government-run version of the program.

Members of the Medicare Payment Advisory Commission (MedPAC) on Thursday signaled broad support for two draft recommendations for changes to the so-called Medicare Advantage plans. The panel will vote in January on a broad series of recommendations, including its annual suggestions on payment rates for hospital care and other services. MedPAC's recommendations also include targeted proposals on specific issues, such as those discussed Thursday.

At issue are the design of a system of bonus payments tied to quality measures and the coding procedures used to evaluate the health of people enrolled in Advantage plans. These have been criticized for making people in Advantage plans appear to be in worse medical condition than they actually are, thus drawing larger payments.

The payments may contribute to the higher cost of having people enroll in Medicare Advantage as opposed to the traditional fee-for-service program. MedPAC last year estimated that Medicare would pay about $8 billion more this year in total toward the care of people in Advantage plans than it would have spent had they stayed in the fee-for-service program.

Enrollment in insurer-run forms of Medicare such as Humana and UnitedHealth Advantage plans have been rapidly growing, making it one of the largest single health accounts for the federal government with about $160 billion spent last year. About 18.7 million people are expected to enrolled in these plans next year, roughly one-third of the Medicare population.

During Thursday's discussion, MedPAC members expressed support for a plan to eliminate certain caps and bonuses, a move intended to make payments more level between insurer-run and traditional Medicare. Plans operating in certain counties seeing an increase in payments and others likely would see reductions if this change were made, according to MedPAC staff.

MedPAC commissioners generally supported the concept of another Advantage proposal put forward by MedPAC staff but a few raised objections to the draft recommendation. It would advise Congress to direct the secretary of Department of Health and Human Services (HHS) to develop a risk adjustment model that uses two years of diagnostic data from both Advantage and traditional fee-for-service (FFS) Medicare. HHS could then apply "a coding that fully accounts for the remaining differences between FFS Medicare and Medicare Advantage plans," the draft recommendation says.

MedPAC member Scott Armstrong said there is too little effort to fully assess the health status of people in traditional Medicare, which may leave some diseases and health problems unknown to doctors and nurses caring for the elderly and disabled.

"I would argue that the real problem is less overcoding in Medicare Advantage than underdocumentation, undercoding in fee-for-service, which results in horrible problems in our health care system," said Armstrong, who also is president and chief executive of Seattle-based Group Health Cooperative, one of the nation's largest consumer-governed health care systems.

MedPAC member Kathy Buto, a former senior health adviser at the Congressional Budget Office who also served in HHS, questioned why the recommendation would be directed to Congress instead of directly to the federal health agencies involved. This approach could prove cumbersome as a path to changing a health policy, as Congress can be prone to "mischief" and sometimes clears legislation that differs greatly from what policy advocates had proposed, she said. The end result could be a new coding policy set in law that becomes quickly outdated as technology advances.

"I just don't think it's appropriate for Congress to be telling the secretary how to do risk adjustment," she said.

By Melissa Attias, CQ Roll Call

December 9, 2015 --The House may wait until next year to send a budget reconciliation bill to President Barack Obama that would dismantle the 2010 health care law and cut off federal funding to Planned Parenthood for one year, rather than clear the legislation this week as originally planned, several House Republicans said Wednesday.

Republican lawmakers said they're focused on advancing a fiscal 2016 omnibus spending bill and extending a number of tax breaks before turning to the package (HR 3762) that the Senate passed last week in a 52-47 vote. The thinking is that action on the reconciliation legislation so late in the session wouldn't get the attention Republicans desire.

"We're not bringing it to the floor until all this other stuff is done, and really when you finish all the other stuff there's a pretty strong argument to wait until January," said Tom Cole, R-Okla., adding that a final decision hasn't been made.

"We think it's too important to use as a placeholder or something just to spend time on. We really want to highlight it when it happens," Cole added.

A delay would create the prospect of Congress sending a bill that would dismantle Obama's signature domestic policy achievement days before he delivers his final State of the Union address, on Jan. 12. 

House Rules Chairman Pete Sessions, R-Texas, said he doubts the House will take up the package before adjourning for the year. Republicans Joe Pitts of Pennsylvania and Phil Roe of Tennessee also said they expect the House to wait to clear it until 2016.

John Fleming, R-La., said the case is also being made that waiting until 2016 would force a showdown in which Obama–who has vowed to veto the bill–would actively veto it rather than rely on a pocket veto. Ordinarily, legislation that clears Congress becomes law without a presidential signature after 10 days, but if Congress adjourns during that period, it does not become law.

"We would rather have the president actively veto it and then have to answer for it, than to pocket veto, to passively just ignore it and let it fail," Fleming said, noting the issue was brought up in the Republican Study Committee Wednesday and describing it as leadership's thinking. "We want to put it in his hands and we want to see him veto it and answer to the American people."

By Todd Ruger, CQ Roll Call

December 8, 2015 -- A group of 11 House Democrats on Tuesday urged a federal district court to rule in favor of the Obama administration in a lawsuit over the 2010 health care overhaul and the appropriations process.

The amicus brief from lawmakers, including Democratic leader Nancy Pelosi of California and Minority Whip Steny H. Hoyer of Maryland, highlighted the lawsuit's unusual nature. The Republican-led House filed the case against the Obama administration. Democratic members want the House to lose the case.

The lawsuit alleges that the secretaries of Health and Human Services and Treasury are spending $175 billion on insurers over 10 years without congressional approval.

The Democrats' brief filed Tuesday argued that the health care law provides that the government will reimburse insurers and fund it out of a permanent appropriation. That permanent appropriation provides funds for the cost-sharing reductions that are essential to the health care law's effective operation, the brief said.

Congress has never tried to remedy the situation, the lawmakers said.

"Although the executive branch has been using this permanent appropriation to reimburse insurers for those cost-sharing reductions, the House has at no point considered, and Congress has never passed, a law prohibiting the executive branch from making these payments," the Democratic lawmakers stated in the brief.

Other Democrats who signed onto the amicus brief are James E. Clyburn of South Carolina, Xavier Becerra of California, Joseph Crowley of New York, Nita M. Lowey of New York, Robert C. Scott of Virginia, Frank Pallone Jr. of New Jersey, John Conyers Jr. of Michigan, Louise M. Slaughter of New York, and Sander M. Levin of Michigan.

U.S. District Judge Rosemary M. Collyer appears ready to rule on the case within months. Collyer, in an earlier decision that allowed the House to pursue the lawsuit, wrote that the facts were not in dispute and the case could be decided on its merits in months. She rejected Justice Department lawyers' request to appeal her decision.

The House and the Obama administration have both filed motions for Collyer to rule in their favor.

The House suit asks the court to declare that the president acted unconstitutionally in making payments to insurance companies under Section 1402 of the health care overhaul and to stop the payments.

The dispute focuses on two sections of the health care law that subsidize the costs of people who enroll in marketplace coverage. The administration said it could make Section 1402 payments, which reduce the out-of-pocket costs of consumers whose income is up to 2.5 times the federal poverty level, from the same account as Section 1401 Refundable Tax Credit Program payments. Those credits discount the monthly premiums for people with income from the federal poverty level to four times the poverty level. House Republicans say the health care law doesn't permit the tax credit account to subsidize deductibles and other out-of-pocket costs.

The Obama administration, during the fiscal 2014 appropriations process, initially asked Congress for a separate line item for the cost-sharing payments in Section 1402. Congress did not include money for such a line item.

The case is U.S. House of Representatives v. Sylvia Burwell, et al., Case No. 14-1967.