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December 5, 2016

Washington Health Policy Week in Review Archive a489b9c8-f897-47d8-b933-d8c16d6dd350

Newsletter Article


Trump Picks Tom Price for HHS Secretary

By Joe Williams, CQ Roll Call

November 29, 2016 -- President-elect Donald Trump announced Tuesday that he would nominate current House Budget Chairman Tom Price to head the Department of Health and Human Services (HHS).

"He is exceptionally qualified to shepherd our commitment to repeal and replace Obamacare and bring affordable and accessible healthcare to every American," Trump said in a statement.

The department oversees federal agencies including the Centers for Medicare and Medicaid Services, the Food and Drug Administration and the National Institutes of Health. Price, a Georgia Republican, would need a simple majority of Senate floor votes to win confirmation.

Price has been a fierce critic of President Barack Obama's 2010 health care overhaul. Republicans, including Trump, have made repeal of the law and passage of replacement legislation a key task for next year. As HHS secretary, Price would likely have a large amount of influence over the creation of a new system.

Price's nomination will open up the House Budget chairmanship and much jockeying is likely to ensue.

The congressman said in a statement that he is "humbled" and "there is much work to be done to ensure we have a healthcare system that works for patients, families, and doctors; that leads the world in the cure and prevention of illness; and that is based on sensible rules to protect the well-being of the country while embracing its innovative spirit."

The former physician has introduced his own legislation (HR 2300) to repeal the law. The bill would take a similar approach to the route outlined in Speaker Paul D. Ryan's "Better Way" agenda, but with several key differences. Price's legislation, for example, would provide just $3 billion in grants to states to help cover those individuals with preexisting conditions and others that would be covered by a high-risk pool. Ryan's plan would provide $25 billion.

Many lobbyists and aides expect that Republicans will seek to repeal the health care law, but include in the repeal a transition period to allow individuals on the current insurance exchanges time to get new coverage. Price also would have broad authority over how to phase out the current system. He could, for example, choose not to enforce a mandate that requires most individuals to have health insurance, a key provision in the overall success of the law. He also probably will not enforce a mandate for many employers to cover their workers. 

Divisions Among Republicans Over Medicare

Republicans also could try to enact changes to Medicare next session. Staffers for House Ways and Means Chairman Kevin Brady, R-Texas, are already working to draft legislation on the issue. Price, at the helm of HHS, would likely influence what those changes would be.

However, some Republicans are not eager to tackle the politically volatile issue of Medicare.

Sen. Lamar Alexander, chairman of the Senate Health, Education, Labor, and Pensions Committee, said Tuesday that he doesn't think that changes to Medicare should be part of next year's overhaul.

"I think that falls under the rule of not biting off more than you can chew," the Tennessee Republican told reporters. "One of the Democrats' big problems with Obamacare was they tried to do too much, too fast. I think the problems about the solvency of Medicare should be left for another debate, another discussion."

Democratic leaders all but dared Republicans to try to change the popular entitlement program.

"It's clear that Washington Republicans are plotting a war on seniors next year," said incoming Senate Democratic leader Charles E. Schumer of New York. Schumer compared the talk of Medicare privatization to Republican efforts to privatize Social Security after their 2004 electoral victory. "Just as their efforts failed then, they will fail now."  

Schumer predicted that a few Republicans might join Democrats in opposition if Price does not walk back his views on Medicare.

"Maybe he'll modify his views," Schumer said, adding, "If he sticks with them, I think, there's a chance that his nomination will fail."

Some Democrats used Price's desire to cap spending on Medicare, which is now an open-ended entitlement program, as a reason for opposing him.

"Tom Price has led the charge to privatize Medicare, and for this reason, I cannot support his nomination," said Sen. Joe Donnelly, D-Ind., a moderate who is up for re-election in 2018. "The nomination of Tom Price would put us on a direct path to end Medicare as we know it, which would raise health care costs and break a fundamental promise to seniors."

Along with Price, Trump on Tuesday morning also announced the appointment of health policy consultant Seema Verma as administrator of the Centers for Medicare and Medicaid Services (CMS), which administers the health care law.

Verma worked with Vice President-elect Mike Pence on his Medicaid expansion plan in Indiana, which provides health savings accounts to people who qualify for benefits.

Pence's Healthy Indiana plan, a conservative version of expansion, requires consumers to contribute to the cost of their coverage. Those with incomes of more than 138 percent of the poverty line who do not make their payments are kicked out of the program and not allowed to rejoin for six months. The plan was controversial within the Obama administration, which ultimately agreed to it but did not accept other proposals by Pence to lock people out of coverage for longer time periods or to prevent re-enrollment if people didn't return paperwork to renew their coverage.

Democratic Concerns

The Senate Finance Committee and the Senate health panel are expected to hold hearings on the nomination early next year.

Senate Finance top Democrat Ron Wyden of Oregon reacted to Price's nomination by saying he has "grave concerns with what his policies would do to Americans." While Democrats do not have the votes to block Price's confirmation unless Republicans join them, critics of the nomination could seek to slow down action. 

Wyden said, "I intend to give his nomination a full and thorough review in the coming weeks, and I look forward to encouraging him to pursue policies that protect and strengthen the Medicare guarantee, strengthen critical safety net programs for children and families, preserve high quality care for the 73 million Americans benefiting from Medicaid and CHIP, and maintain non-discrimination rules in health care."

Wyden also voiced concerns about protecting women's health care. 

Senate Finance member Sherrod Brown, D-Ohio, said Tuesday he opposes the nomination. 

"To hand the reins to someone with Congressman Price's long record of trying to privatize Medicare is a direct betrayal of Donald Trump's campaign promise to protect and strengthen the program for America's seniors, and you can bet we will do everything in our power to block any attempt to hand the Medicare program that seniors have worked their whole lives for over to Wall Street," said Brown in a statement.

Brown said he would fight Verma's nomination to lead CMS because she "has spent the last 20 years making it harder for families to get the care they need." 

The Center for American Progress, a liberal interest group, sought to stir up opposition with a lengthy list of objections to Price's record.

"His ideas are so extreme and out of touch with the mainstream that he shows no concern for improving the health and livelihood of working Americans," said CAP President Neera Tanden.

Several physician groups, including the American Medical Association (AMA) and the American Academy of Dermatology, are Price's largest campaign donors, according to the nonpartisan Center for Responsive Politics. AMA officials released a statement Tuesday strongly supporting Price's nomination.

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Federal Government Emerges as Top Health Buyer in New Analysis

By Kerry Young, CQ Roll Call

December 2, 2016 -- The federal government rose past private households last year to become the nation's biggest purchaser of health care, due in part to the expansion of the Medicaid program, according to a study released Friday. The findings come as Republicans prepare plans to scale back the government's role in securing health care for Americans.

The Centers for Medicare and Medicaid Services (CMS) released the latest figures from the National Health Expenditure survey, which since 1960 has provided annual snapshots of this spending. The total tab for health care in the United States rose by 5.8 percent last year to $3.2 trillion. The federal government's share of this spending grew at a faster rate than did other major segments, jumping by 8.9 percent last year to $918.5 billion.

Federal spending thus topped that of the previous largest purchasing segment, private households, a category that includes consumers' insurance premiums and out-of-pocket medical expenses. Household medical spending rose by 4.7 percent to $886.8 billion last year. Spending by the third-biggest sponsor of health care, private businesses, rose 5.3 percent to $637.5 billion. The tab paid by state and local government rose by 4.6 percent to $547.7 billion.

Even beyond the partisan debates about the 2010 health law, members of Congress will face pressure to address rising medical bills for many Americans.

Health care spending in the United States is rising at a faster rate than nation's economic growth, which gained about 3.7 percent last year. That's a change from four to six years ago when annual gains in both GDP and health spending hovered around 3.5 percent to 4.1 percent, according to the new CMS research. Health Affairs will publish the CMS estimates in January.

Health care spending last year resumed rising near historical levels after a significant dip linked in part to the 2007 recession. Annual growth in the national health expenditures slipped from 6.5 percent in 2007 to a low of 2.9 percent in 2013, according to CMS data. Growth then rebounded to 5.3 percent in 2014.

A bump in the costs of prescription drugs is helping fuel growth in health care spending, as is the recent expansion in the number of Americans covered by health insurance programs, the CMS researchers said.

"While the 2014–15 period is unique, given the significant changes in health insurance coverage that took place, health spending is projected to increase as a share of the overall economy over the next ten years and will be influenced by the aging of the population," wrote Anne B. Martin, Micah Hartman, Benjamin Washington, and Aaron Catlin, who work in CMS's Office of the Actuary.

Policy experts and Hill staff of all political stripes may look to CMS's data on national health spending to bolster their arguments for the looming battles on federal policies. The politics around changes to Medicaid, the federal–state program for the low-income, could prove somewhat thorny. Republicans have long argued for repealing the 2010 health law, which expanded Medicaid and created subsidies to help Americans with low incomes buy insurance.

Yet a Medicaid repeal could end funding for many states represented by GOP lawmakers in Congress. Some 20 Senate Republicans and 120 more in the House represent the 32 states, including the District of Columbia, that opted to change to eligibility requirements to allow more people to enroll in Medicaid.

The nation's health insurance landscape changed markedly as major planks of the 2010 health law took effect. About 10.3 million more people enrolled in Medicaid in the 2014-2015 period, while 9.7 million gained health insurance, the CMS researchers noted in their paper.

The percentage of people with health insurance stood at 90.9 percent in 2015, up from 85 percent in 2009.

Rising Drug Costs

The CMS research also may add to the debate on drug prices. Many lawmakers in recent months expressed an interest in helping Americans afford medicines.

National spending on prescription medicines rose 9.0 percent to $324.6 billion in 2015. That marked a drop from the 12.4 percent increase in 2014 due in part to the introduction of costly new hepatitis C drugs. Still, the gain in drug spending last year was notably higher than the 0.1 percent to 2.3 percent annual gains seen in the early 2010s, when several blockbuster medicines lost patent protection. The CMS researchers noted that recent successes of the pharmaceutical industry are helping drive this spending.

"In 2015, forty-five new drugs were approved, more than in any one year over the past decade and more than the forty-one in 2014—when new drugs for the treatment of rare diseases and cancer were introduced," the CMS researchers wrote.

Drug spending for federal health programs has continued to rise, even after the sudden jump caused by costly medicines for hepatitis C. The introduction of Gilead Sciences Inc.'s Sovaldi and rival medicines for the liver-damaging viral infection took a hard toll on Medicaid budgets in 2014. Drug expenses for Medicaid spiked 25 percent in 2014, the highest rate since 1986, the CMS researchers said in their paper. Medicaid's tab for prescription drugs then rose 14 percent last year.

Drug spending for Medicare, the program that covers seniors and people with disabilities, rose by 11 percent last year, following a 14.5 percent gain in 2014.

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Bare-Bones Budget Would Quickly Dismantle Obamacare

By Paul M. Krawzak, CQ Roll Call

December 2, 2016 -- Republican leaders racing to repeal the health care law early next year envision using what is described as a new, stripped-down fiscal 2017 budget resolution.

Its sole purpose would be to act as a vehicle for the expedited budget reconciliation process, which means it would green-light a separate repeal bill that could then whiz through the Senate with just 51 votes. "It's just the most expeditious and practical thing to do," House Budget Chairman Tom Price told CQ when asked why a lean framework, rather than the usual full tax and spending proposal, is under consideration.

Meanwhile, House Republicans meeting on Friday morning discussed the outlines of a continuing resolution that would fund the government past Dec. 9, when the current CR (PL 114-223) expires. Several lawmakers and leadership aides said the House seems to be moving toward a stopgap written at the fiscal 2017, $1.07 trillion level, but they said no decisions have been made.

The alternative would be to have the CR reflect the tighter fiscal 2016, $1.067 trillion spending limit.

On the budget resolution, Price, a Georgia Republican, said a minimalist document could help avoid the disagreements that prevented the first fiscal 2017 budget (H Con Res 125) approved by the House Budget Committee from making it to the floor earlier this year.

GOP leaders are looking at marking up and passing the streamlined budget soon after the new Congress convenes on Jan. 3. Once that is done, Republicans could draft and pass separate reconciliation legislation to repeal as much of the health care law as they can in late January or early February. Some provisions of the law could not be rolled back through reconciliation.

The timing makes sense because the House and Senate Budget committees have to get to work on a fiscal 2018 budget resolution in February if they hope to adopt it by the April 15 deadline.

GOP leaders and aides said no decisions have been made on exact dates for work on the budget resolution.

Senate First?

It is also an open question whether the House and Senate would each mark up and pass its own budget resolution, the usual practice, or whether the Senate would go first and send its budget to the House.

In an interview with CQ, Price described the budget under development as a "pared-down one so that it's essentially a vehicle for the reconciliation process." Previous budget resolutions have run 100 pages in length as a result of numerous budget enforcement provisions, reserve funds and policy statements.

This one could be extremely short.

Under budget law, the fiscal blueprint is only required to contain certain numbers such as spending and revenue limits, and levels of deficits or surpluses and debt for a five-year period. The budget resolution that is being contemplated could limit itself to those numbers, plus the reconciliation instructions directing House and Senate committees to draw up legislation to repeal the health care law.

The expedited reconciliation process allows budget-related legislation to advance in the Senate with 51 votes rather than the usual three-fifths majority. Democrats used reconciliation to help pass the Affordable Care Act when they controlled Congress in 2010.

Apart from the reconciliation directive, the most important element in the GOP budget will be the topline discretionary number, which controls how much can be appropriated for military, international and domestic programs.

That number was the source of a huge internal fight that derailed the House's first fiscal 2017 budget resolution, which was approved in committee but never had enough support to be brought to the floor for a vote. Republicans were divided over whether the topline should be $1.07 trillion, the spending limit allowed in the 2015 budget agreement (PL 114-74), or $1.04 trillion, an earlier limit established by the 2011 deficit reduction law (PL 112-25).

Price said the budget resolution topline "will be at whatever we pass in the continuing resolution."

House Majority Leader Kevin McCarthy, R-Calif., said earlier this week the Senate might go first with its budget resolution. But on Wednesday, Senate Budget Chairman Michael B. Enzi said the resolution could be written up in both Budget committees at the same time. "It has to pass both sides, and usually every bill starts independently on each end," the Wyoming Republican said.

Price said Thursday the Senate "was desirous of going first." He cited a longer time it takes to pass a budget in the Senate and the need to abide by stricter rules as reasons. "We're still working through the logistics of that," he said. "Obviously the parliamentarian over there has some unique perspectives."

The Senate Budget Committee never considered a fiscal 2017 resolution, instead relying on a provision in law that allowed Enzi to file budget numbers permitting the appropriations process to move forward.

Replacement Next

Republicans in both chambers anticipate quick action on repealing the health care law next year.

"The American people expect us to," Senate Health, Education, Labor and Pensions Chairman Lamar Alexander said Thursday. He added that Senate Majority Leader Mitch McConnell, R-Ky., also wants to repeal the law early in the year.

Alexander, R-Tenn., cautioned it would take time to then write legislation to replace the health law, perhaps two or three years.

"One of the lessons of Obamacare was they tried to go too far too fast," he told reporters. "And they tried to make too many decisions in Washington, D.C."

Alexander said GOP lawmakers "want to start immediately but it will take a matter of years to fully replace and rebuild the health care system that has taken six years to damage."

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Price Likely to End Mandatory Medicare Payment Test

By Kerry Young, CQ Roll Call

November 29, 2016 -- Rep. Tom Price likely would end compulsory participation in Medicare's programs that test alternative forms of payment if he serves as secretary of the Department of Health and Human Services (HHS), the head of government relations for a trade group predicted Tuesday.

President-elect Donald Trump on Tuesday announced his plan to tap the Georgia Republican to lead federal health programs. As House Budget Chairman, Price in September held a hearing delving into a potential repeal of the Center for Medicare and Medicaid Innovation (CMMI). That center, created by the 2010 health law, has served as the Obama administration's chief vehicle for testing new approaches to pay for care. Price has been among the sharpest critics in Congress of CMMI and its programs, which include a controversial proposed test of payment for drugs given in doctors' offices.

The future of the Innovation Center with Republicans in full control of Congress and the White House is in doubt, said Clifton Porter II, senior vice president for government relations at the American Health Care Association, on a call with reporters Tuesday. Republicans may seek to end that program, although they still may continue with its principal aim of testing alternative ways to pay for care to people enrolled in Medicare. Some lawmakers in both parties want to move traditional Medicare away from its longstanding fee-for-service model, which some policy analysts say results often in poor quality of care and needless duplication of costly services and tests.

Price has criticized the mandatory nature of certain CMMI programs, including the Comprehensive Care for Joint Replacement model that began earlier this year. That program compels most hospitals in 67 regions of the country to participate in tests that may raise or shave their Medicare pay based on how well people fare after hip and knee replacements.

Price, himself an orthopedic surgeon, introduced a bill (HR 4848) in March seeking to delay implementation of this test. CMS also has proposed a cardiac care model that would involve hospitals in 98 regions of the country, with similar mandatory participation requirements. Price likely would only use voluntary participation in future programs, Porter said.

"If I look at Mr. Price's record, it would be something that he would probably have eyes to change," Porter said on the call. "If folks want to get involved with ideas and concepts like this, they'll have the option."

Price has said he was drawn to politics because he felt lawmakers wielded too much power over his actions as a doctor. Price grew up in Michigan, the son of a dairy farmer who decided to attend medical school at age 36 to become an emergency room doctor. He moved to Atlanta for a residency in orthopedic surgery at Emory University and eventually settled nearby with his anesthesiologist wife.

"His role as an orthopedic surgeon actually delivering care and understanding the rehabilitation process, I think, is going to add some insight" to his approach if confirmed as HHS secretary, Porter said.

In tapping Price, Trump has chosen a lawmaker already deeply schooled in the operations of Medicare. Price has proven to be both a partisan standard bearer and a pragmatic dealmaker when it comes to health policy. As House Budget chairman, he's been the point man for efforts to repeal President Barack Obama's signature domestic achievement, the 2010 health law. Yet he also worked behind the scenes last year with the Centers for Medicare and Medicaid Services and congressional Democrats and Republicans on a successful last-minute bill that spared many doctors from facing penalties for failing to meet federal standards for demonstrating use of electronic health records.

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Cures Bill Would Boost Companies' Chances for Medicare Coverage

By Kerry Young, CQ Roll Call

December 1, 2016 -- The so-called Cures bill would offer makers of drugs and medical devices and health professionals two different forms of new assistance in their bids to secure Medicare payments for products and treatments.

The bill (HR 34), which the Senate is expected to clear next week, calls for the creation of a kind of internal referee, or ombudsman, to work with makers of drugs and devices. The measure also would increase public knowledge about how the Medicare program handles regional differences in its coverage policies. The House passed the measure 392–26 on Wednesday.

Winning Medicare coverage for products and treatments can be crucial, as the giant federal health program pays for or influences much of American health care. Medicare spending is more than $600 billion a year and dominates several medical fields, including cancer treatments and cardiology.

Medicare has two different tracks for deciding whether to cover certain treatments. Officials can open a national coverage decision, or allow the program's contractors to make local coverage decisions. The Cures bill would require Medicare's administrative contractors to post online a summary of the evidence used in making a local coverage decision, and an explanation of the reasons for its decision.

Now local coverage decisions "are essentially made in a black box, so the provision will help ensure accountability as these decisions are made, while helping other jurisdictions learn what and why coverage determinations are made," Joel White, president of Horizon Government Affairs and a former House Ways and Means staffer, told CQ HealthBeat. "This will help improve coverage across the program. Medicare is a national program. Beneficiaries shouldn't face inconsistencies due to accidents of geography."

The bill also would require the Centers for Medicare and Medicaid Services to set up a pharmaceutical and technology ombudsman. This official would respond to complaints from companies that have had setbacks in their efforts to obtain Medicare coverage for their products.

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Medicare Debate to Intensify as Democrats Draw Battle Lines

By Kerry Young, CQ Roll Call

November 30, 2016 -- Republicans do not yet have a united approach on whether to push to make significant changes in Medicare. But Democrats are already pouncing on the opportunity to portray themselves as defenders of seniors and people with disabilities against Republicans who want to gut the entitlement program.

"It's clear that Republicans are plotting a war on seniors next year," said Sen. Charles E. Schumer of New York, who will lead the chamber's Democrats next year, on Tuesday.

Lawmakers may turn to a debate about the future of Medicare after Republicans take steps to partially repeal the 2010 health care law, which President-elect Donald Trump has set as a priority. House GOP aides are already working on legislative language for repeal.

House Republicans have been pressing for years for a major shift in Medicare, with Speaker Paul D. Ryan, R-Wis., advocating for a move toward a defined contribution program. Under such a program, seniors would be given a set amount of money to shop for a Medicare plan. Critics say that if capped spending doesn't keep up with health care costs, seniors could suffer.

Under GOP proposals, insurers would play a larger role than they already do in managing Medicare. Already, private Medicare Advantage plans cover roughly one of every three people enrolled in Medicare, which serves people who are 65 and older or who have significant disabilities.

But some Senate Republicans don't appear as anxious as their House counterparts to jump into such a politically risky debate. Schumer already is predicting that GOP efforts to further privatize Medicare will falter, as did their plans for Social Security after their 2004 electoral victory.

Some Medicare changes may fall outside what can easily be handled through the fast-track legislative mechanism that House Republicans are eyeing to quickly undo parts of the 2010 health care law, said Joseph Antos, a researcher with the conservative American Enterprise Institute. The rules for using so-called budget reconciliation allow measures to proceed with simple majorities in the Senate and thus avoid filibusters, but the tool can only be used in limited circumstances. Rules named for the late Sen. Robert C. Byrd, D-W.Va., narrow the number of items to be included in a reconciliation bill to those with the clearest connection to changes in federal spending and revenue.

"All that is so complex and time-consuming that Medicare will have to wait, at least in terms of big decisions," Antos told CQ Roll Call. "The big push will probably not be in 2017 unless there is a grand package of reforms" that sweeps in Medicare and Medicaid, the joint federal–state health program for low-income people.

Senate Republicans Reluctant

Some Senate Republicans don't expect Congress to tackle a Medicare debate next year and say that it would not happen as part of the repeal of the 2010 health care law.

"My impression is that everyone would see [the health law] repeal as an issue in and of itself. It may have some Medicaid components, but I doubt that it has many Medicare components," Sen. Jerry Moran, R-Kan., told CQ Roll Call.

Moran also said he's concerned that House lawmakers will eye Medicare as a source of savings to be used for other purposes. "My view is that any changes in Medicare would be designed to strengthen and improve Medicare, and it should not be a source for funding other things," he said.

Sen. Lamar Alexander, chairman of the Health, Education, Labor, and Pensions Committee, said Tuesday he doesn't think that changes to Medicare should be part of next year's repeal effort.

"I think that falls under the rule of not biting off more than you can chew," the Tennessee Republican told reporters. "One of the Democrats' big problems with Obamacare was they tried to do too much, too fast. I think the problems about the solvency of Medicare should be left for another debate, another discussion."

Sen. Christopher S. Murphy of Connecticut is one of a handful of Democrats who say they would oppose Trump's nomination of House Budget Chairman Tom Price, R-Ga., as secretary of the Department of Health and Human Services due to his support for plans to alter Medicare.

"The nomination vote on Tom Price is the first test of whether Congress is prepared to stand up to the Republicans' clear desire to end Medicare as we know it," Murphy said in a statement.

Still, some Senate Republicans are anxious for a broad discussion of changes to the so-called entitlement programs that rest at the heart of the nation's budget woes.

"The big deal that we've got to do is going to have to include Medicare and Medicaid and Social Security," said Sen. Jeff Flake, R-Ariz.

Flake said he expected this work would have to wait until after completion of the effort to partially repeal the 2010 health care law.

"It's tough to see how it all fits in. It's a packed schedule, so I'd be surprised to see a serious discussion of Medicare in the months ahead," he said.

In contrast, Sen. Johnny Isakson, R-Ga., said it's possible that a broader conversation about changes to Medicare could emerge in the Obamacare repeal debate.

"It will be a part of the conversation," Isakson said. "Everything is going to be open for grabs."

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