By Kerry Young, CQ Roll Call

February 5, 2016 -- Health and Human Services (HHS) Secretary Sylvia Mathews Burwell on Friday said it seems highly likely that more states in time will expand eligibility for Medicaid as part of a drive to provide greater access to health care for the working poor.

Louisiana's expansion of its Medicaid population will leave a pool of 19 states where expansion of the state-federal program has not yet occurred, according to the nonpartisan Kaiser Family Foundation. Louisiana, which has a new Democratic governor, already is on track to use provisions of the 2010 health overhaul to broaden its Medicaid ranks, a move expected to allow about 350,000 people to gain access to government health coverage.

Burwell said she's excited about discussions in legislatures in Kansas and Maine about allowing more people into Medicaid.

"There is energy in lots of other places," Burwell said in a Friday press conference with reporters, adding that in her view, the expansion of the Medicaid program "is a question of when."

It's unclear how many other states will opt to expand their Medicaid programs during the remaining months of the Obama administration, Burwell said. Many opponents of Medicaid expansion have cited its future costs for states. The overhaul law required the federal government to pay all the costs for covering the people who became eligible through an expansion in 2014, 2015, and 2016. The federal funding phases down starting in 2017, when states must pick up 5 percent of the costs. In 2020 and beyond, states must bear 10 percent of the expenses for the expansion population.

But Burwell said she sees a growing buildup of economic and social arguments for it, including compelling statistics about the potential economic impact.

"Now we actually have the data that show that in states where expansion has not occurred, they do have a higher percentage of hospital closures," Burwell said. "The uncompensated care issues are very real."

Medicaid expansion also often helps people who work but still remain too poor to afford health insurance, a group for whom there is broad popular sympathy, according to Burwell. The Medicaid expansion is meant to help people whose income stands at or below 138 percent of the poverty line, which would have been $27,724 for a family of three last year, according to the Kaiser Family Foundation.

"If we're talking about a group of people who are above the 100 percent of poverty level, obviously they have incomes so they are working," Burwell said. Helping people in this position to secure medical care "is an important concept that most people agree on," she said.

The governors of Virginia, Wyoming, and South Dakota have signaled support for expansion in their fiscal 2017 budget plans, according to a tally kept the Kaiser Family Foundation. Policymakers in Idaho also are considering expansion. Other states that so far have not expanded their Medicaid programs include Alabama, Florida, Georgia, Mississippi, Missouri, Nebraska, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Utah, and Wisconsin.

By Kerry Young, CQ Roll Call

February 3, 2016 -- Sen. Mark Warner said a strong bipartisan coalition of lawmakers from both chambers could succeed in clearing legislation to expand Medicare payments for telehealth services, even with the November presidential contest expected to limit the number of laws enacted this year.

"I know this an election year and there is a general consensus that we are not supposed to get stuff done," the Virginia Democrat said Wednesday at a press conference as he and Brian Schatz, D-Hawaii, introduced a bill regarding health care provided by phone or computer. "At least on the question of telehealth, we are going to prove them wrong."

The new bill arrives with the strong backing of the American Medical Association, which argues that the measure could save $1.8 billion over a decade. It would waive in certain cases a requirement set by federal law that to date has largely limited Medicare payments for telehealth services to cases where people live in rural areas and thus may have great difficulty in reaching medical offices. This requirement, along with some doubts about the effectiveness of some uses of telehealth, led federal officials to reject previous bids to expand payments through the annual updates of Medicare's payment rules for doctors' services.

The bill would seek to use health consultations provided at a distance to aid with a massive shift underway in how Medicare pays doctors. Last year's overhaul of physician reimbursement (PL 114-10) will tie these payments to judgments about the quality of care delivered. Schatz's measure would expand the use of remote patient monitoring for certain patients with chronic conditions as part of an effort to help doctors meet the goals set by the law.

The new bill already is supported by conservatives Roger Wicker of Mississippi and John Thune of South Dakota and liberal Democrat Sen. Benjamin L. Cardin of Maryland.  A similar coalition exists in the House for the companion measure, uniting Rep. Peter Welch of Vermont with Republicans Diane Black of Tennessee and Gregg Harper of Mississippi.

Another key supporter is Senate Appropriations Chairman Thad Cochran, a Republican. His home state of Mississippi is something of a surprising leader in the field of telehealth. Mississippi laws mandating coverage of care provided at a distance has won the state, often a laggard on some other health care measures, top marks from the nonprofit American Telemedicine Association. High rates of obesity and diabetes led the University of Mississippi in 2014 to partner with General Electric and Intel Corp. units to offer access to medical staff through telemedicine for people combating chronic ailments. The approach is a boon for a state where medical care is often hard to find, Cochran said Wednesday.

"In states like mine, when you wanted to go to the doctor, you sometimes went to Memphis or New Orleans," Cochran said at the press conference, which was held in an Appropriations Committee hearing room.

As the top Senate appropriator, Cochran said he would make sure that the future spending for telehealth programs would be "as generous as possible." The fiscal 2016 spending package (PL 114-113) boosted funds for rural telehealth program by $2.1 million to $17 million within the Health Resources and Services Administration. Appropriators also directed the Department of Health and Human Services to move increase cooperation among federal agencies and demanded a report in mid-2016 with recommendations on these efforts.

But the main target for expanding use of telehealth services is Medicare, which pays about $600 billion a year for medical care for the nation's elderly and disabled people. Medicare falls under the jurisdiction of the Senate Finance Committee.
 
A likely eventual vehicle for the provisions in Schatz's measure may be a separate Senate Finance Committee bill being written to improve the care of people suffering from chronic conditions such as diabetes. Warner is working with Sen. Johnny Isakson, R-Ga., and other Finance members leading this chronic care effort. Two other backers of Schatz's bill, Thune and Cardin, also serve on Senate Finance.

The Centers for Medicare and Medicaid Services (CMS) has been wrestling with ways to expand teleheath services while sticking within the current confines of federal law and also making sure there is adequate evidence of a benefit for certain uses of remote access to health professionals.

CMS last year expanded the use of telehealth for cases where people undergo kidney dialysis at home. The change was in the 2016 payment rule for physicians. In that regulation, CMS rejected a bid to expand telehealth payments for pain management and palliative services for cancer patients, citing in part a lack of "evidence of clinical benefit." 

The CMS $10 billion Innovation Center, established in the health law in part to test alternative approaches to payment, has provided another path for expansion of telehealth services. One of its marquee programs, the Next-Generation Accountable Care Organization model, includes coverage of telehealth.

By Kerry Young, CQ Roll Call

February 2, 2016 -- Medicare officials would fare poorly at negotiating drug prices because they would lack a key tool used by insurers in bargaining with pharmaceutical companies, which is the ability to limit which medicines are covered, a health policy researcher said at a conference Tuesday. 

Many Americans would rebel against letting the agency create its own list of approved drugs and thus exclude some products from its payments, Dana Goldman of the University of Southern California said at AcademyHealth's national policy conference. Known as formularies, these lists of drugs approved for coverage help private insurers as they seek lower prices from drugs manufacturers. It's unlikely that Medicare officials would get permission from Congress to create one nationwide Part D formulary if the agency were tasked with negotiating drug prices, Goldman said.

"I don't think they would do better than what an Anthem would do or some of these large insurers" could extract in savings due to federal officials' lack of authority to exclude products from routine payments, said Goldman, director of the USC Schaeffer Center for Health Policy and Economics.  "You are going to have patients on Capitol Hill who are going to be saying `We want innovation for our disease,' and (CMS officials) won't be able to restrict the formulary."

As the nation's top single purchaser of health care, Medicare would hold outsized influence if it negotiated directly with insurers on drug prices. That makes the concept of direct Medicare negotiations on drug prices attractive to some politicians in light of rising pharmaceutical costs. A call to give this power to Medicare serves as a rare point of agreement between GOP presidential candidate Donald Trump and the two Democratic contenders, Hillary Clinton and Sen. Bernard Sanders, D-Vt.

A Kaiser Family Foundation poll last year found that about a quarter of Americans may be having a difficult time paying for their prescription drugs.

Congress, though, left the responsibility for negotiating the cost of most drugs taken routinely by people on Medicare with insurers. At least three Democratic bills are pending in Congress to shift the bargaining duties back to the Centers for Medicare and Medicaid Services, with two of these specifically barring the creation of a formulary for the $101 billion drug program. 

That approach "would take all of the teeth out of" Medicare negotiations on drug prices, Goldman said in an interview Tuesday.

He also doubted that Medicare could mimic the success of the Department of Veterans Affairs, which has been able to hold down its drug costs through use of a formulary.

"The VA has a population where they are used to being told what to do by the military," he said. "Elderly Americans are not going to accept the VA formulary."

By Kerry Young, CQ Roll Call

February 1, 2016 -- Presidential contenders from Donald Trump to Bernard Sanders support moves to allow Medicare to directly negotiate prices with drugmakers. But changing the law would require lawmakers to delve into difficult questions that could dramatically affect the amount of savings that would be generated and the scope of the government's leverage.

The growing costs of Medicare's Part D prescription drug program are expected to keep the program in the spotlight in this election year. Part D premiums are likely to increase by 13 percent from 2015 to 2016, after having been relatively flat in recent years, wrote Chuck Shih, senior officer for the specialty drugs research initiative at the Pew Charitable Trusts, and colleagues in a Monday blog post in Health Affairs.

"Given these rising costs, a growing number of policymakers believe the government, through the Secretary of Health and Human Services (HHS), should be allowed to negotiate drug prices in Medicare Part D," Shih and colleagues wrote. "Eighty-three percent of the public supports allowing the government to negotiate with drug companies for a better deal on Medicare drug prices."

Beyond a widely popular call to have Medicare negotiate drug prices, though, are likely difficult decisions about how the agency would do so.

The Part D benefit was designed by Congress to pay insurance companies to act as middlemen, having these firms apply their established practices for negotiating with pharmaceuticals companies to the massive federal benefit. The cost of the Part D program almost doubled in its first decade, rising to an estimate $92.7 billion expense last year from $47.4 billion in its initial year of operation in 2006, according to the most recent Medicare trustees report. The annual cost of the program could reach $197 billion by 2024, the trustees have estimated.

Estimates for savings from a switch to direct negotiations range from $16 billion per year if prices mirrored those paid by Medicaid and the Veterans Health Administration to $541 billion over a decade if prices were negotiated down to the levels paid for prescription drugs by consumers in Denmark, Shih and colleagues wrote in Health Affairs. How such savings are reached would depend on steps such as deciding whether to limit the list of approved drugs, or formulary, they noted.

"Any proposal advocating for an HHS role in Medicare Part D price negotiations must include details on the scope of the government's authority as well as the mechanism for negotiating drug prices," the researcher wrote. "Important considerations, such as what is being negotiated (e.g., prices and/or formulary placement) and what to do if the negotiating parties are unable to come to agreement, need to be specified."

Democrats in Congress already have shown split views in how they would handle a shift in Medicare' s approach to drug purchasing through Part D.

One of the boldest proposals seen in the current session of Congress has come from Sen. Richard J. Durbin, D-Ill. His bill (S 1884) would create a formulary to drive down Medicare Part D prices. He has attracted only five Democratic cosponsors and Angus King of Maine, an independent, as backers. More popular is a bill (S 31) from Sen. Amy Klobuchar, D-Minn., which calls for Medicare to negotiate drug prices but doesn't allow for the creation of a formulary. Sanders is among the eight cosponsors of this measure, and also has introduced a separate bill (S 2023) that calls for Medicare to negotiate drug prices but doesn't authorize the establishment of a formulary. It has one Democratic cosponsor.

By Melissa Attias, CQ Roll Call

February 1, 2016 -- Hospital operators are bracing for the possibility of more reductions to their Medicare and Medicaid fees in the coming budget cycle after absorbing billions of dollars in cuts since 2010.

The American Hospital Association (AHA) appealed to President Barack Obama in a Jan. 27 letter "to protect access to health care services for seniors and the disabled" by excluding proposed Medicare reductions from his fiscal 2017 budget plan due to be released Feb. 9.

The Federation of American Hospitals (FAH), which represents for-profit institutions, also warns that further cuts would make it harder for hospitals to meet their communities' needs, coming on top of almost $158 billion in approved cuts starting in 2010, including $35 billion enacted last year.

"We think front and center should be preservation of patient access to quality hospital care and we hope the president will draw a line here," FAH spokesman Sean Brown said in an email.

In its letter, the AHA states that additional reductions would threaten hospitals' ability to buy new technologies, upgrade facilities, and move forward with information systems and other steps to make the delivery system more efficient. It also predicts job losses if cuts are implemented, noting that labor costs comprise almost half of a hospital's budget.

But, as the letter itself notes, it would be surprising if Obama doesn't seek to extract more savings from hospitals in his final budget proposal. The AHA tallied $423 billion in proposed reductions to Medicare providers in the administration's fiscal 2016 budget plan and fought seven proposals, including cuts to the Medicare-supported system for training doctors and strengthening a yet-to-be-appointed Medicare cost-cutting board in the health care law.

Beyond the budget process, hospitals could also face an effort by House Ways and Means Chairman Kevin Brady to revamp the system of payments for Medicare providers. The Texas Republican has said he would like to see a package of changes to hospitals, post-acute care and medical education. A broad overhaul is unlikely during a sensitive election year, however.

"Our committee will continue the next step in Medicare reform, which is to improve the way we reimburse through other providers," Brady told CQ Roll Call late last year. "Every day we wake up we ought to be thinking: How do we make Medicare stronger for the long term? And every step, small or large, we ought to move it."

Ways and Means members are holding a retreat Monday with possible Medicare payment changes expected to be on the agenda. Lawmakers also are expected to discuss a replacement for the 2010 health care law and changes to the Medicare program's design.

Squeezed Dry?

In the letter to Obama, AHA President and CEO Richard J. Pollack said "many hospitals are at a breaking point in their ability to ensure patients have access to the care they need, when they need it," due to past cuts, including billions of dollars lost to sequestration. He also noted that Medicare's hospital reimbursement was 14 percent lower than the cost of care last year and that hospitals are treating more uninsured patients than anticipated, because the health law's coverage expansion "has not yet been fully realized."

Beyond protection from cuts, the FAH wants Obama to use the budget plan to pitch "market-oriented solutions" to the rising cost of prescription drugs and work toward eliminating a policy that blocks psychiatric hospitals from billing Medicaid for many patients.

The group also wants the budget to encourage states to expand their Medicaid programs under the health law—an area the administration already announced in a blog post it would address. And while FAH says its hospitals support alternative payment models and new ways to deliver care, it notes there are complex challenges linked to moving away from a fee-for-service system that will require time and investment.

"We would hope the budget addresses this issue while acknowledging that moving too fast, mandating too much, and limiting flexibility and the room to realign is counter-productive, disruptive, and could harm patient access to a fragile health care delivery system," Brown said.

February 2, 2016 -- House tax writers will move beyond efforts to repeal the 2010 health care law and begin crafting a GOP alternative this year, but details about what the plan would look like and whether Republicans will try to advance it through the legislative process have yet to be nailed down.

House Ways and Means Chairman Kevin Brady previewed the panel's 2016 agenda after its members attended a day-long retreat on Monday to debate and pinpoint their priorities. Brady said some areas of consensus include replacing the health care law (PL 111-148, PL 111-152), overhauling the tax code and advancing changes to the welfare system.

"We have a lot on our plate, and we're going to be strategic going forward," the Texas Republican told reporters Monday night.

Brady said one of his panel's top goals is to "offer an alternative to the very damaging Obamacare bill, and work with the other committees in doing so." A timeframe and details have yet to be determined by the conference, he said, but lawmakers will continue their discussions at a Thursday policy meeting and hope to build off their work from a GOP retreat last month.

In addition to Ways and Means, the Energy and Commerce and Education and the Workforce Committees are likely to take roles in establishing a replacement.

Assembling a health care proposal that Republicans can unite around has been an elusive task. Still, the GOP has repeatedly attempted to repeal the law – including a Tuesday vote in the House to override President Barack Obama's veto of a reconciliation bill (HR 3762) that would dismantle pillars of the health care overhaul. That effort is almost certain to fall short of the required two-thirds majority.

Backing a plan this year could help tamp down Democratic criticism that Republicans lack a concrete vision for an alternative. The move could also potentially lay the groundwork for the party's nominee for president.

Brady previously expressed interest in addressing Medicare plan design and revamping the payment system for hospitals and post-acute care. Although he reiterated his commitment to "improving the solvency of Medicare" on Monday, Brady stopped short of calling for immediate panel action on either issue.

"Last year, the bipartisan solution to solve the way we pay our doctors in Medicare was a critical first step," Brady said of efforts ( PL 114-10) to replace Medicare's oft-criticized physician payment formula. "This year, you're going to continue to see steps towards that solvency."