By Kerry Young, CQ Roll Call

May 21, 2015 -- Given Republican distaste for the Affordable Care Acct, the Centers for Medicare and Medicaid Services (CMS) should consider stepping up the temperate pace of spending for the innovation center created by the measure, said researchers in a paper published Wednesday in the New England Journal of Medicine.

The program has obligated only about a third of the $10 billion provided for it, noted Lawrence P. Casalino and Tara F. Bishop of Weill Cornell Medical College in an assessment of the work from CMS’ Center for Medicare and Medicaid Innovation. The health law calls for this initial tranche of funds to be expended by the center by fiscal 2019.

A recent Congressional Research Service report showed the center, called CMMI or the Innovation Center, has increased the flow of money to participants in its test programs, with an obligation of $1.64 billion slated for the fiscal 2016. Still, given the political climate, it “may be better to spend the money sooner rather than later,” the authors wrote in an article published Wednesday.

The center’s mission actually fits well with a drive by many GOP lawmakers to try to structure medical payments to improve care, a view expressed in the Medicare payment overhaul legislation (PL 114-10) enacted last month, Casalino and Bishop said. But its origin as part of the 2010 health law and GOP skepticism of government as a driver of innovation may doom the program, despite the health law’s call for Congress to act again to extend the center’s work beyond fiscal 2020.

“Republican control of Congress and possibly the presidency make CMMI’s future uncertain,” the authors said.

Some of the center’s more promising projects to date include funding large tests of accountable care organizations, or ACOs; bundling payments for certain treatments; and a move toward a comprehensive primary care approach, according to Casalino and Bishop.

“Indeed, the effect will be substantial if even one of these programs succeeds,” they said.

In a separate article published Wednesday in the New England Journal of Medicine, CMS officials cite ACOs and projects that use episode-based care as among the key areas of focus for the center’s next five years. Earlier this month, Casalino published a companion article to one from CMS officials in the Journal of the American Medical Association regarding nearly $385 million in savings claimed from the center’s Pioneer ACO model.

The results of ACOs may be more easily measured than for other CMMI-funded projects, Casalino and Bishop said Wednesday in the New England Journal of Medicine. Parsing the effects of some other work can be challenging, due in part to the difficulty of standardizing data collection among large numbers of organizations involved in certain projects.

Casalino and Bishop cite as an example the Partnership for Patients program, which includes most of the nation’s hospitals. The program aims to prevent hospital-acquired infections and lower the rate of readmissions. The number of participants—more than 3,700 hospitals—is one factor making it "difficult to definitively determine the impact of CMMI's broad, collaborative quality-improvement programs,” the authors said.

By Paul M. Krawzak, CQ Roll Call

May 19, 2015 -- Keith Hall, the new Congressional Budget Office (CBO) director, acknowledged the challenge of dynamic scoring during his first appearance before a congressional committee since being named to lead the legislative office that estimates the budget impact of federal legislation.

He also told the Senate Budget Committee he is working to improve the agency’s models for analyzing the health care law and health care legislation.

Hall appeared during what Senate Budget Chairman Michael B. Enzi, R-Wyo., said was the first oversight hearing of the agency held by the committee since 1982.

Hall, appointed by GOP congressional leaders to succeed Douglas W. Elmendorf, was challenged by Democrats to maintain the agency’s nonpartisan reputation.

Hall said he would. “The goal of CBO and my goal is to maintain what I think is an excellent reputation of CBO for doing independent, objective work and we will continue to do that,” said Hall, who is a Republican.

Unlike past CBO directors, Hall must contend with a new congressional dynamic scoring rule. The fiscal 2016 budget resolution adopted by the Congress (S Con Res 11) requires the CBO and Joint Committee on Taxation to produce a macroeconomic score of major tax and spending legislation that will serve as the official cost estimate in the House and a supplementary score in the Senate.

Sheldon Whitehouse, D-R.I., questioned Hall’s commitment to implementing macroeconomic analysis in an objective way. “My concern is that in setting the ground rules for the application of dynamic scoring, you might be inclined to set it up in such a way that it favors things that the majority party likes, like big tax cuts for wealthy people, and produce dynamic scoring results that show that that’s such a wonderful thing and not things that they don’t like so much, like the Clean Air Act,” Whitehouse said.

Hall said one of his goals is to promote more transparency at the CBO, in dynamic scoring and in other areas, which he said will invite feedback from outside the agency.

“CBO’s already been using dynamic scoring,” he said, referring to its use in the past to provide usually supplementary cost estimates. “You can sort of see how it’s been implemented. But that’s a big part to me of transparency, is making clear how we’re going to do the dynamic scoring, what models we’re going to use, what estimates we’re going to use.”

Hall added that he plans to vet the agency’s dynamic scoring methodology with the experts who sit on CBO’s Panel of Economic Advisers at its next meeting. “We’re going to talk in some length about our dynamic methodology and get some feedback from those folks,” he said. “The goal is to do this in a way that represents a state of economic science. We’re trying to look for consensus as much as possible in what we do.”

Hall told Georgia Republican David Perdue that while it’s difficult to produce macroeconomic estimates, and while they are uncertain, “there actually is a pretty good consensus on some of these issues that there is some macroeconomic effect, there is some growth effects going forward.”

Improving Models

He said the agency is working to improve the models it uses to assess both macroeconomic effects and health care legislation. “We continue to analyze proposals to modify the Affordable Care Act and the forthcoming Supreme Court decision regarding that act,” he said, referring to the King v. Burwell case before the Supreme Court that challenges insurance subsidies in the law.

Republican lawmakers have been crafting and seeking CBO’s input on various proposals that could temporarily replace federal health insurance subsidies and make other GOP-favored changes in the health care system if the court rules that subsidies cannot be offered on a federal exchange.

Hall said that now that the health care overhaul has been in effect for several years, CBO analysts can draw on experience with the law to analyze its effects.

“Some of the early modeling of the ACA, like I say, was based on theory,” he said, referring to the Affordable Care Act. “And as we’re starting to get some experience, the results are going to change a little bit based on experience.”

By Paul M. Krawzak, CQ Roll Call

May 18, 2015 -- Republicans took care to write their fiscal 2016 budget so that they could use reconciliation to attempt to repeal the Affordable Care Act. Their strategy also would give them the flexibility to use the expedited process to write a response—if needed—to an upcoming Supreme Court ruling on the law.

But even though the filibuster-proof reconciliation process would offer an almost sure path to get the GOP’s response or fix to President Barack Obama, it may not be the route that Republicans take—especially if they are serious about getting their measure signed by Obama.

If the Supreme Court rules in King v. Burwell that the government cannot offer health insurance subsidies in states that did not create their own insurance exchanges, it would rock the nation's health care system, with millions of Americans who depend on the subsidies unable to afford health insurance. The political pressure for Congress to come up with a solution would be intense.

If that happens, the GOP hopes to capitalize on the decision by passing a law to replace the subsidies and start undoing the health care overhaul. Anticipation of the court's action is building, and the justices could issue their opinion at any time, but likely not until near the end of the court term in late June.

In the event the court rules against the subsidies, the GOP has three obvious options:

• Use reconciliation both to repeal the health care law, and to respond to the court decision. But that bill would surely be vetoed.
• Use reconciliation for repeal of the health care law, and separately move a response to the court decision through regular legislation. If the attempt to repeal the law satisfies conservatives, Republicans might be able to unite around a more modest package to replace the subsidies with a GOP alternative without endorsing the health care law.
• Use reconciliation only for the King v. Burwell legislation. Using reconciliation would ease its passage through the Senate. But some conservatives would object strenuously to giving up the use of reconciliation to put a repeal bill on Obama’s desk.

The reconciliation process allows legislation to bypass the usual 60-vote threshold in the Senate, meaning Republicans could advance the bill to the president without Democratic support.

But there are political and policy reasons to avoid reconciliation in this instance. The bill would need to draw some Democratic support to have any chance of being signed by Obama.

Getting enough Democratic backing would negate the need for reconciliation. From a policy standpoint, reconciliation is limited in what it can accomplish because provisions that do not have a budgetary impact are considered extraneous and can be struck from the bill.

House Budget Chairman Tom Price, R-Ga., characterized talks among House Republicans as leaning in the direction of using regular legislation--not reconciliation--for a fix for a court opinion that goes against the federal exchange. “I don’t think that final decision has been made but I think that’s what we have envisioned as being appropriate for a long time,” he said in an interview.

Sen. Richard M. Burr, R-N.C., anticipates moving the legislation through the standard process. He said he believes the bill could be written to draw support from Senate Democrats but he doubts it would get Obama’s signature. “That’s what I would expect,” said Burr, who sits on the Finance Committee and the Health, Education, Labor and Pensions Committee, the two Senate panels that would write a reconciliation bill.

Senate GOP Whip John Cornyn of Texas said no decisions have been made. “I think we’re working now to figure out the appropriate response,” he said. “Should it be a transition plan to deal with the people most immediately affected by King v. Burwell, and then to come back later and use reconciliation on a repeal-Obamacare vote?”

House and Senate Republicans are pretty much committed to using reconciliation to send Obama a bill that would repeal as much of the health care law as is possible under the constrained reconciliation process. They know he will veto it. But it will be their first opportunity, since the GOP takeover of the Senate, to put that bill on his desk.

When he vetoes the repeal, the GOP will have a message for the 2016 campaign: We tried to repeal Obamacare, and the president stopped us.

Beyond the issue of getting the president’s signature on a bill following the court decision, Price said another reason to avoid reconciliation is that it limits what a measure can contain. “If the Supreme Court decides in favor of the plaintiff, in favor of King, then I think it would be hard to do the right policy through reconciliation because I don’t think it would withstand the Byrd rule,” he said, referring to a law that applies to the Senate and limits the content of reconciliation bills.

Citing an example, Price said he wants to shift regulation of health coverage to the states. “When the federal government decides it, then it is a disaster as we have seen,” he said. “To make that policy change is not something you can do in reconciliation because it’s not spending or revenue.”

Wyoming Republican John Barrasso, who is heading up the Senate effort to devise a fix if needed, said GOP leaders are waiting on the court ruling before deciding how to use reconciliation. Even if the court rules against the subsidies, he said, the GOP plan of action will be influenced by whether the decision takes immediate effect or is delayed, and other unknown factors.

“Nobody predicted what the ruling was going to be last time,” he said, referring to the court’s upholding of the constitutionality of the health care law in 2012. “So we’re not going to put anything out there until we see exactly how they rule.”

By Melissa Attias, CQ Roll Call

May 18, 2015 -- With legislation to replace Medicare’s physician payment formula now law, Rep. Kevin Brady said his House subcommittee is moving forward aggressively on the next phase of Republican efforts to overhaul the health program: tackling the way Medicare reimburses other providers.

The Texas Republican said in an interview that the Ways and Means Health Subcommittee would kick off a series of Medicare hearings this week with the goal of introducing legislation in the fall to revamp the payment system for hospitals and post-acute care. He’s especially interested in making inpatient and outpatient payments compatible, calling the current system extremely complicated.

“It is a demolition derby of reimbursements, difficult for hospitals, difficult for patients,” Brady said. “We think we can do better.”

The effort will build on responses to a 146-page discussion draft that Brady released in November, feedback that he said was both specific and constructive. A hearing on competition within Medicare will be first up Tuesday, followed by others on physician shortages, disparities in rural health care, and hospital payments.

Whether legislation would move as a single bill or a series of measures has yet to be decided, but Brady said he likes the idea of moving bite-sized pieces that work toward a broader goal. He plans to coordinate closely with the Energy and Commerce Committee, which shares jurisdiction over most health issues, and is optimistic about the potential for bipartisanship, citing recently-enacted provisions to address fraud in Medicare.

“I see that as a good model for us working together on these issues, not that we’ll agree on every one of them,” Brady said. The fraud legislation was incorporated into the law (PL 114-10) that replaced Medicare’s physician payment formula, which Brady considers the first step toward saving the health program for the elderly and disabled.

Brady said the physician payment formula, known as the sustainable growth rate, or SGR, “simply sucked up all the oxygen” and left other health care proposals offered by both parties neglected. He emphasized that the hospital payment effort will require a lot bipartisan work but maintained that there are fixes to confusing Medicare regulations and reimbursement approaches.

A third and final piece of Brady’s vision for Medicare, which he hopes to turn to next year, would involve overhauling nothing less than the design of the program through steps such as simplifying the parts of the program that cover hospital and physician services and instituting a cap to protect seniors from very high out-of-pocket costs.

He also wants to identify additional options for seniors within the program, chief among them being the "premium support" model championed by Wisconsin Republican Paul D. Ryan as an add-on in later years. That controversial model would provide beneficiaries with a set payment from the government to apply toward premiums.

Like a tax overhaul, Brady said overhauling Medicare is a key priority for Ryan, the former Budget chairman who now sits at the head of the full Ways and Means Committee.

The hospital piece of his agenda includes thorny issues, including outlining the role of government contractors paid to challenge hospital reimbursements and revisiting the so-called two midnight rule Medicare uses to define a hospital inpatient stay.

While Brady envisions the Medicare hearings going through July, the Supreme Court’s ruling in King v. Burwell—the case challenging the availability of health law subsidies in states using the federal insurance exchange—could change that timetable. A decision against the Obama administration would be “an all hands on deck effort,” he said.

Other action is expected to include a markup taking aim at provisions of the 2010 law, such as the 2.3 percent excise tax on medical devices. Brady also said the committee is “getting close” on a package of changes to Medicare Advantage, the program in which private insurers manage program benefits, that could include demonstrations on value-based insurance design and benchmark flexibility.

“For too long, like physicians, health care policy has been held hostage to the SGR,” Brady said. “It’s really an exciting new day.”

By Kerry Young, CQ Roll Call

May 20, 2015 -- Supporters of a federal program that requires drug companies to give certain hospitals and other providers discounts on medications urged House lawmakers Wednesday to wait to see new draft guidance from the Health Resources and Services Administration (HRSA) before revising the program.

The Office of Management of Budget now has under review two proposals from HRSA that would change the so-called 340B program, which has been controversial in recent years.

HRSA, the federal agency charged with improving access to health care in communities where it’s scarce, last month completed work on a proposed rule regarding penalties for drugmakers.

Earlier this month, HRSA finished work on a broader guidance for the 340B program that may address contentious issues including the eligibility of hospitals and clinics to participate and questions of which patients’ medicines should be covered, according to a HRSA spokesman.

OMB’s review of these measures likely is a final step before they will be unveiled publicly, said Ted Slafsky, president and chief executive officer of the nonprofit 340B Health, which represents more than 1,000 hospitals and health systems that get the discount. With that in mind, the House Energy and Commerce Committee should put on hold any bid to wrap the program into its pending 21st Cures bill, on which the panel has been working this week, he said. The committee "has been weighing" whether to wrap a discussion of the 340B program into this wide-ranging measure intended to address the development and regulation of new medical treatments, Slafsky said.

“While we appreciate the committee’s interest in the 340B program, we think Congress should review and consider what HRSA proposes to do before considering any changes to this vital program,” Slafsky said on a Wednesday call with reporters.

Administrators of many hospitals and drugmakers have been at odds for years about the 340B program. Hospitals, clinics and other participants used the program to save about $3.8 billion on the cost of medicine in fiscal 2013. The program was created in the 1990s with a goal of helping hospitals that treat many people living in poverty. Participants have complained about a lack of transparency about drugmakers' prices, while others have criticized a lack of rules on who should benefit from the discounted medicines. The leaders of more than 500 hospitals and health systems sent a general letter of support for the 340B program to top lawmakers Wednesday.

“If the program were to be restricted, vital services to the underserved would be cut back,” said the group in a letter addressed to the top Republican and Democratic lawmakers in each chamber. “Prescription drug costs for our patients would rise dramatically and taxpayers would have to pick up the tab.”

Congress has clearly signaled an interest in revising the rules of the 340B program. Energy and Commerce held a hearing on the program in March. The Medicare Payment Advisory Commission has been asked by lawmakers to scrutinize the program, although it does not fall strictly within its bailiwick.

By Rebecca Adams, CQ Roll Call

May 21, 2015 -- When Karen Ignagni leaves her post as president and CEO of America’s Health Insurance Plans to become the president and CEO of EmblemHealth in New York, it will be the first time in 22 years that she won't be a leading voice for health insurers in Washington.

Ignagni will be based in New York, where her adult son lives.

Dan Durham, who is currently AHIP’s executive vice president for strategic initiatives, will serve as AHIP’s interim CEO while the trade association looks for a successor.

Ignagni got attention more than two decades ago when she left the AFL-CIO labor union's employee benefits department to work for the health insurance industry as leader of the American Association of Health Plans, which was at the time one of two major health insurance trade groups. She served as president and CEO for a decade until 2003, when it merged with the other group, the Health Insurance Association of America, at the time led by former House Ways and Means Committee staffer Chip Kahn.

Ignagni remained at the combined trade group as major changes swept over the industry, including the passage of the 2010 health care law (PL 111-148, PL 111-152). She was one of several health industry leaders who supported the passage of the law but later had concerns about its implementation.

“As the voice of our industry, she has worked tirelessly on our behalf with acumen that is unmatched,” said America's Health Insurance Plans' Board Chairman Mark B. Ganz, CEO and President of Cambia Health Solutions in a statement.

Ignagni’s calm presence and constant advocacy of her industry improved the image of an industry that was derided in the 1990s, when health maintenance organizations were criticized for declining to cover some services.

“With tenacity, intellect and deep policy knowledge, she ensured our industry has a seat at all tables,” said Ganz. “Perhaps her greatest contributions have been highlighting the value and innovations of this industry.”

AHIP officials noted that Modern Healthcare magazine routinely ranks Ignagni on its list of the 100 most powerful people in health care.

Durham is one of several veteran officials who advised the industry during the rocky rollout of the health care law as new marketplaces opened in October 2013. Before assuming his current role, Durham was executive vice president for policy and regulatory affairs at AHIP.

Before joining AHIP, Durham was vice president for policy at the Pharmaceutical Research and Manufacturers of America, where he guided the trade group on negotiations over the health care law and implementation of the Medicare prescription drug program. Dan also worked in senior positions at the U.S. Department of Health and Human Services, the Social Security Administration, and the Office of Management and Budget. He also worked in policy roles at the seniors’ lobbying organization AARP and the California Legislative Analyst’s Office.