Health Policy Report

 
The Week in Review
 
The House and Senate were in recess last week.
 
The Week Ahead
 
Both chambers of Congress are in recess until Tuesday, September 8. When the Senate reconvenes, members are set to immediately consider a measure which would disapprove of President Obama’s nuclear deal with Iran. For a full rundown on the major legislative issues due to be considered after the summer break, please refer to TRP’s  Fall Legislative Outlook.

Lawmaker Presses GOP on Escalating Drug Prices
 
Last week, Rep. Elijah Cummings (D-MD), the ranking member on the House Oversight and Government Reform Committee, criticized Congressional Republicans for declining his requests to act on high prescription drug prices. Cummings pointed to a poll released last Thursday from the Kaiser Family Foundation which found that three-quarters of the public believes prescription drug prices are “unreasonable.” The Maryland Democrat said the Kaiser survey confirms that drug prices are “skyrocketing,” and expressed frustration that Oversight Committee Chairman Jason Chaffetz (R-UT) and other Republicans have resisted calls for an investigation. According to the Kaiser poll, 72 percent of the public believes prescription drug prices are unreasonable, and the same percentage believe drug companies put profits before patients.
 
Cummings noted that the Kaiser poll also found large majorities of Republicans and the public in general support of action to address rising drug costs. Eighty-three percent of respondents, including 74 percent of Republicans, favor allowing Medicare to negotiate with drug companies for lower prices, a practice currently banned by the 2003 Medicare prescription drug law. Seventy-six percent, including 70 percent of Republicans, favor limiting the amount drug companies can charge for high-cost drugs for illnesses such as cancer and hepatitis. The poll results follow up on a separate Kaiser poll from April that found that a higher percentage of Republicans prioritize making high-cost drugs affordable (66 percent) than repealing the Affordable Care Act (60 percent). The cost of prescription drugs has become a bipartisan issue both in Congress and on the campaign trail.
 
CMS Extends Enforcement Delay of Two-Midnight Rule
 
Last Wednesday, CMS said it would delay enforcement of the controversial two-midnight rule until the beginning of 2016 – a change from the September 30 extension laid out in the SGR replacement legislation passed by Congress in July. According to CMS, newly established quality improvement organizations will begin conducting reviews of short-stay inpatient claims on Jan. 1, 2016, a job that was previously conducted by Medicare Administrative Contractors. The two-midnight rule calls for Medicare's payment and audit contractors to assume a hospital admission was legitimate if it spans two midnights. Shorter stays are assumed to be more appropriately billed as outpatient observation care. Hospitals and physicians, however, have strongly opposed the policy, arguing that it undermines their clinical judgment. Under the SGR replacement bill, CMS said it would allow case-by-case exceptions. Lawmakers and CMS officials have been wrestling for years with the best way to decide which cases should get higher inpatient reimbursements. The Medicare Payment Advisory Commission (MedPAC) devoted a chapter to the issue of hospital short stays in the most recent version of its annual June report to Congress. MedPAC has previously urged that Congress repeal the two-midnight rule in its entirety and suggested several policy changes to address problems raised by short hospital stays. CMS, however, said its public comment period did not produce any viable alternatives.
 
Study: Medicaid Expansion Tied to Mental Health Services
 
According to a new study, the 19 states that have chosen not to expand Medicaid under the Affordable Care Act could be impeding their abilities to care for those living with mental illnesses. If all the states undertook an expansion by 2020, health centers would have nearly $230 million in additional revenue, according to the report from the Psychiatric Services in Advance. In addition, the study found nationwide expansion could provide an estimated $11.3 million for mental health services and $1.6 million for substance abuse services that year. Released last Monday, the report focuses on community health centers that have become increasingly important for low-income and uninsured populations to go to for care.
 
The report found that more than four in five health centers offer on-site mental health services, and half offer substance abuse treatment services. It estimated that 29 percent of patients will be uninsured unless all the states expand Medicaid by 2020. However, the study found that if the holdout states were to open to expansion, almost half of each health center’s patients will be covered by Medicaid and the uninsured rate could drop to 21.5 percent. For behavioral health issues, aside from allowing more patients to be in Medicaid, more of them could be treated. The study notes that an estimated 59,214 more mental health encounters and 11,480 encounters with substance abuse treatment specialists might occur in health centers in those states.
 
Percentage of Workers with Job-Based Insurance Declines, Report Shows
 
Last week, the Agency for Healthcare Research and Quality (AHRQ) released its annual report which found that fewer employees worked for a firm that offers health insurance in 2014 and that insurance cost them more with higher deductibles, especially for family coverage plans. The agency said the percentage of employees working in an establishment where insurance was offered fell from 84.9 percent in 2013 to 83.2 percent in 2014, a continuation of a decline that started in 2008. The biggest drop in coverage offered occurred among firms with fewer than 50 employees, where the percentage of workers with health insurance dropped to 49.8 percent last year from 53.1 percent in 2013. The percentage for those workers in medium-sized firms (50 to 99 employees) fell to 83 percent from 87 percent in 2013, while those working in large firms (100 employees or more) dropped to 97.3 percent from 98 percent. The drop-off in employer-sponsored coverage came as government studies show more Americans are benefitting from the 2010 health care law’s coverage expansion. The Centers for Disease Control and Prevention (CDC) recently reported that the number of Americans without health coverage fell by one-third, or 15.8 million people, since 2013, based on a survey of 26,121 people from the first quarter of this year.