Health Policy Report

The Week in Review

After taking the oath of office on Friday, Donald Trump is officially the 45^th president of the United States, turning the page on the mostly gridlock-ridden two terms of former President Barack Obama and ushering in a unified Republican government. While Trump did not mention health reform in his inaugural address, he signed an executive order that night that aims to give federal agencies the authority to waive parts of the law they deem to be too expensive, among other changes. But it's unclear exactly how much additional power the order really gives agencies.

Trump began his presidency with a largely empty Cabinet. Senate Democrats agreed to vote to confirm only two of Trump's national security picks on Inauguration Day: Defense Secretary James Mattis and Homeland Security Secretary John Kelly. While President Obama had seven of his nominees confirmed on his first day in office in 2009, Democrats are delaying action on many of Trump's picks and said they have concerns about eight nominees in particular. Still, Republicans are expected to have the votes to confirm all of Trump’s nominees. In the days leading up to Trump’s inauguration, Senate Republicans held confirmation hearings for many of his nominees, including Rep. Tom Price (R-GA), Trump's pick for secretary of Health and Human Services (HHS).

The Week Ahead

Lawmakers from both parties will be in Washington to start the week, but on Wednesday Republicans will head to a retreat in Philadelphia, where they are expected to talk about their plans for repealing and replacing the Affordable Care Act (ACA). The House has a light floor schedule ahead of their retreat, but are expected to vote Tuesday on legislation that prohibits taxpayer-funded abortions. In key committee activity, the House Ways and Means Oversight Subcommittee will hold a hearing on the effectiveness of the ACA’s individual mandate, while the House Budget Committee will hold a hearing titled "The Failures of Obamacare: Harmful Effects and Broken Promises."

In the Senate, lawmakers aim to move forward with the confirmation process for the rest of Trump’s nominees. The Senate is expected to vote Monday on Rep. Mike Pompeo (R-KS), President Trump’s pick to lead the Central Intelligence Agency. The vote, initially scheduled for Inauguration Day, was postponed due to a formal objection from Sen. Ron Wyden (D-OR). The Senate Foreign Relations Committee is also set to vote on Rex Tillerson’s nomination to lead the State Department. Rep. Tom Price (R-GA) is set to testify before the Senate Finance Committee on Tuesday. And Rep. Mick Mulvaney (R-SSC) will testify Tuesday before the Senate Budget Committee on his nomination to lead the Office of Management and Budget (OMB).

President Donald Trump is widely expected to sign several executive orders in the first days of his presidency, though it's not clear what actions related to health could be coming.

HHS Nominee Undergoes Senate HELP Confirmation Hearing  

The Senate Health, Education, Labor, and Pensions (HELP) Committee held a hearing last Wednesday to discuss the nomination of Rep. Tom Price, an orthopedic surgeon and conservative Member of Congress, to be Secretary of the Department of Health and Human Services (HHS). While the HELP Committee did not hold a formal vote on confirmation of the HHS Secretary (the privilege of the Senate Finance Committee), last week’s “courtesy” hearing provided key insights into Rep. Price’s views on repealing and replacing the Affordable Care Act (ACA) (more details in the next entry), reforming Medicare, addressing prescription drug costs, and other key healthcare issues. Although Rep. Price was hammered by Democrats for his health stock trades as a Member of Congress, Republican support for his nomination hasn’t flagged, and he currently appears to be on track for confirmation at some point in February. The next formal step in Rep. Price’s confirmation will be a Jan. 24 hearing before the Senate Finance Committee.

Rep. Price came into the hearing facing a myriad of ethical questions from Senate Democrats regarding his personal investment into healthcare companies that could have benefitted from legislation he wrote. Specifically, Senate Democrats pointed to Rep. Price’s investment in a biotech company called Innate Immunotherapeutics, castigating him for investing in the company at the same time he was voting on the 21st Century Cures Act. Rep. Price adamantly denied using non-public information to make a profit in the stock market, while admitting that he had instructed a broker to manage the specific investments in question. Rep. Price noted that most of his trades are directed by his broker, and while he may not be always aware of what he owns, he did acknowledge that he signs off on his stock trades on a monthly and annual basis.

With respect to Medicare, Rep. Price said that the focus of the incoming administration is to address more “immediate” challenges, such as the reforming the individual insurance market and Medicaid, noting that there are no immediate plans to change the health care program for seniors. Rep. Price also pushed back on the notion of using money as a measurement metric in order to determine whether or not Medicare reforms are necessary, instead calling on lawmakers to focus on the quality and value of the care rather than a fixed dollar amount for improvement.

In discussing prescription drug pricing, Rep. Price emphasized a bipartisan approach, while declining to specifically address whether he would support President-elect Trump’s call for government negotiations of drug prices in Medicare Part D or importation of medicines from other countries. Rep. Price also sidestepped the issue of reversing the closure of the Medicare Part D ‘Donut Hole,’ adding that this specific decision falls into Congress’ jurisdiction and that he has not aware of any discussion among Republican lawmakers to reverse the donut hole closure.

Rep. Price Pushes HSAs, HDHPs When Pressed on ACA Replacement

At his hearing before the Senate HELP Committee last week, Rep. Tom Price repeatedly stated that the Republicans are not interested in “pulling the rug out from anybody,” saying that it is “imperative” that people be allowed to keep their insurance. His stance on a replacement, however, stopped short of President-elect Donald Trump’s most recent call for “insurance for everybody” (Trump has been decidedly vague in outlining his plan). Rep. Price instead advocated for a system that offers more opportunity for coverage, rather than offering a guarantee. In this vein, he signaled support for Health Savings Accounts (HSA) and high-deductible health plans (HDHPs) in order to give consumers a “full array” of affordable options.

Rep. Price was also on the defensive regarding his 2015 ACA replacement bill that Democrats have repeatedly chided, stating it was not the goal or desire of the new administration for individuals to lose health coverage. While President-elect Trump has stressed expediency when it comes to repealing and replacing ACA, Rep. Price did not commit to a specific date for when a replacement bill might come up in Congress, nor did he commit to using his specific healthcare plan as the vehicle for a comprehensive replace.

Rep. Price was also pressed by Senate Democrats for his stance on Medicaid expansion, and stated that he has does not believe that President-elect Trump will go back on his pledge to cut any of the three major entitlement programs. Democrats on the committee honed in on Rep. Price’s previous stance on Medicaid expansion, criticizing him for his plan to restructure Medicaid through a block grant program. Rep. Price called upon lawmakers to ensure that people “don’t fall through the cracks” during the transition from the ACA to a new law, and suggested retaining the same level of Medicaid participation or providing an option for “something else” that allows coverage that suits the needs of program beneficiaries.

Medical Research Rule Finalized by Outgoing Administration

Last Wednesday, the Obama administration released a final rule that provides sweeping updates to many long-standing federal protections for people who participate in medical research trials. The regulation, known as the Common Rule, has not been revised since 1991, and several contentious provisions included in the September 2015 draft were dropped or scaled back before being finalized. The final rule will require potential research participants to sign consent forms before becoming part of clinical studies and will mandate that institutions in most instances use a single oversight authority, known as an institutional review board, in medical research spanning multiple entities such as universities, hospitals and research facilities. Most provisions in the rule are set to take effect in 2018.

The final rule creates a new set of information that researchers must give individuals before they participate in medical research, but will allow institutions to use a broad form to fulfill the consent requirements. This will permit organizations to obtain agreement from potential participants for future, unspecified research that may be conducted with their information. While the draft version would have extended the Common Rule to all research regardless of funding, the final regulation will apply only to federally funded research.

Also excluded in Wednesday’s rule was a set of proposed privacy guidelines intended to help ensure the safety of identifiable information and a list of exempted activities that would have fallen outside the oversight of the Common Rule. Both were in the draft rule. The draft version also proposed extending the definition of human subjects to include all human material, commonly known as biospecimens, regardless of whether or not a sample could be traced back to the person it was obtained from, although medical research groups opposed its inclusion in the final rule. The exclusion of the provision will likely reduce any opposition to the finalized rule from congressional leaders who were concerned about the impact it would have on medical research institutions.

CMS Announces Continued Interest in Alternative Pay Models for 2017

Last Wednesday, the Centers for Medicare and Medicaid Services (CMS) released a report stating they expect 359,000 clinicians to sign up to participate in Alternative Payment Models (APMs) in 2017, which would serve more than 12.3 million Medicare or Medicaid beneficiaries. By the end of 2018, the agency estimated that 25 percent of clinicians in MACRA’s Quality Payment Program will participate in APMs. Those APMs include the Medicare Shared Savings Program, the Next Generation ACO Model, the Comprehensive End-Stage Renal Disease Care Model, and the Comprehensive Primary Care Plus Model.  The agency touts the numbers as evidence of success in shifting away from fee-for-service and into value-based care, and sees the models as a way to improve the quality of services to beneficiaries while lowering costs.

Two of those models – the Comprehensive End-Stage Renal Disease Care Model and the Comprehensive Primary Care Plus Model – are currently being tested by the CMS Innovation Center (CMMI). The future of the CMMI and the pilot programs it creates are in Republicans' crosshairs. Opponents say the center oversteps its authority when it mandates participation in a program, and the healthcare industry has pushed back at times, saying the agency is moving too quickly for the industry to keep up. While Republicans have often been aligned with industry in sharing these concerns, there has been a bipartisan recognition on the need to lower costs and improve the quality of healthcare delivery.