TRP Health Policy Report

The House and Senate were out last week for the five-week summer recess. In notable Affordable Care Act (ACA) implementation news, Sens. John Barrasso (R-WY) and Lamar Alexander (R-TN) wrote to CMS Administrator Marilyn Tavenner on Wednesday, seeking an update on how many people are covered under the health law ahead of the second enrollment period that starts in November. In May, HHS reported a surge in sign-ups, which pushed ACA enrollments to over 8 million people. Republicans are skeptical of the figure and have suggested the total was inflated. Barrasso and Alexander asked CMS to provide updated information on how many people had signed up for coverage through the exchanges as of Aug. 15.

Elsewhere, the White House on Thursday released guidance for businesses that must comply with the ACA’s employer mandate. The IRS posted draft instructions related to the mandate's reporting requirements, a final step before businesses can construct the databases they need in order to comply. The employer mandate, which requires businesses to offer health coverage to workers, is scheduled to take effect in January for larger firms. Medium-sized companies can avoid penalties until 2016 under the Administration's second delay of the policy. Also on Thursday, CMS approved Pennsylvania Gov. Tom Corbett's (R) alternative plan to expand the state's Medicaid program under the ACA. The approval makes Pennsylvania the 27th state – in addition to Washington, D.C. – to expand its Medicaid program under the healthcare reform law.
 
The Week Ahead
 
The House and Senate are adjourned until September 8. When Congress returns, lawmakers plan to take up a series of ‘must-pass’ issues, including a continuing resolution to fund the government past September 30, a border security bill, reauthorization of the Export-Import Bank, extension of the Internet Tax Freedom Act and consideration of a fiscal 2015 Defense Authorization bill. The Senate may also consider a constitutional amendment regarding campaign financing, legislation on the minimum wage, student loans, and a bill to address the Supreme Court’s Hobby Lobby ruling. Senate leaders say the chamber will be in session straight through September 23rd, when members will adjourn again until after the November elections. The House is scheduled to be in session from September 8-19 and September 29-October 2.
 
CBO Projects Lower Medicare, Medicaid and SGR Fix Costs
 
According to CBO estimates released last Wednesday, Medicare and Medicaid will cost a combined $89 billion less over 10 years than the CBO previously projected. In an update to the budget office’s April forecast, Medicare is expected to spend $49 billion less from 2015 to 2024, while Medicaid spending is expected to be $40 billion less over the same time period. CBO said that cost-cutting measures under the ACA and the 2011 Budget Control Act have helped curb healthcare spending, along with reduced spending on medical services and labor costs. Analysts said the reductions mean that the federal government's long-term budget deficit will be significantly less than projected a few years ago. However, experts have cautioned that slowdowns in healthcare spending could reverse as the economy improves.
 
While spending on Medicaid and Medicare will drop over the next 10 years, CBO said spending on major healthcare programs as a whole is expected to increase this year by about 9%, or $67 billion. The agency noted that Medicaid accounts for the largest increase this year, growing by about 15%, or $40 billion. It also found that federal subsidies to help consumer who enrolled in health plans through the ACA's health insurance exchanges will cost about $17 billion this year and Medicare costs will likely increase by around $12 billion this year. CBO said that Medicaid expansion and premium subsidies under the ACA comprise a majority of the short-term increase.
 
In related news, CBO said that a permanent repeal of Medicare's sustainable growth rate (SGR) would cost about $131 billion over 10 years, markedly lower than the $316 billion CBO projected it would cost in 2012. Congress has struggled for years to replace the current Medicare physician payment formula and have repeatedly passed legislation to avoid scheduled cuts. While the price of an SGR replacement has dropped and there’s bipartisan support to replace the formula, Congress has yet to agree on how to pay for a replacement. Many policy analysts and lawmakers have recommended that Medicare physician payments be based on the quality of care provided, rather than the volume of services.
 
Lawmakers Continue Push for 21^st Century Cures Initiative
 
In the past two weeks, a group of lawmakers on the Energy and Commerce Committee have met with academic researchers and patient groups about medical innovations that could be included in the House 21st Century Cures Initiative. Rep. Leonard Lance (R-NJ) who is promoting the idea of extending patent exclusivity to spur innovation said that he expects the initiative will continue to get bipartisan support within the House, but further action will depend on which party controls the Senate in 2015. Lance was one of several lawmakers to hold 21st Century Cures events in their home state during the recess. He said the meetings confirmed what the committee has heard during a series of hearings and roundtables during the past few months, including the need for more orphan drug incentives and for clarification about FDA's drug special protocol assessment (SPA) agreements between the agency and manufacturers. The Energy and Commerce panel is expected to introduce a bill based upon the initiative early next year.
 
Health subcommittee Chair Joe Pitts (R-PA) said last week that he also will host a roundtable in Lancaster, PA with a group of key stakeholders, including FDA Commissioner Margaret Hamburg and NIH Director Frances Collins. The roster also will include committee Chairman Fred Upton (R-MI), Rep. Michael Burgess (R-TX) as well as top officials from the biotech industry. Additionally, FDA drug center Director Janet Woodcock is slated to participate in a roundtable on personalized medicine hosted by Rep. Diana DeGette (D-CO) in Denver on Sept. 3. Other lawmakers collected stakeholder comments on the House initiative, including Reps. Gus Bilirakis (R-FL), Susan Brooks (R-IN) Bob Latta (R-OH) and Bill Johnson (R-OH). The lawmakers serve on the broader committee, but not the health panel that has been driving discussions on the 21^st Century Cures Initiative.
 
Sources:  More Data to Be Withheld from Open Payments System
 
Last Friday, sources familiar with the Open Payments System said CMS will withhold data on research grants that drugmakers make to physicians through intermediaries when the site goes public on Sept. 30. The Open Payments System, which is required under the ACA's Sunshine Act, aims to boost transparency by making public those payments healthcare providers have received from drugmakers and medical device manufactures. CMS said earlier this month that about one-third of the CMS Open Payments Systems records will be withheld when the system launches because of data inconsistencies. The Open Payments program has been criticized by physicians because of problems registering with the system as well as the overall accuracy of the data. On August 5, over 110 state medical groups and industry associations asked CMS to delay the launch of the database by six months, expressing concern that the database will “lead to the release of inaccurate, misleading and false information.”
 
CMS took the database offline for nearly two weeks after a series of reporting problems were detailed in the media. The agency also announced that doctors would have until Sept. 8, rather than Aug. 27, to contest the information reported about them. It since has extended that deadline to Sept. 10, citing plans to take the system down for maintenance. CMS has reaffirmed its commitment to the planned public go-live date of Sept. 30. CMS’s handling of the planned database continues to draw criticism from stakeholders and lawmakers alike. Sen. Charles Grassley (R-IA) said, “CMS has had more than four years to figure everything out. It's disappointing and irresponsible that so many basic questions are unresolved at this late stage.”

Connecticut Exchange CEO Named to Run HealthCare.gov
 
Last Tuesday, HHS Secretary Sylvia Burwell announced that Kevin Counihan will serve as HealthCare.gov's CEO. Counihan previously oversaw Connecticut's health insurance marketplace, Access Health CT. Connecticut has been acclaimed for reducing the state's uninsured rate from 7.9 percent in 2012 to 4 percent. Burwell created the executive job in June as part of the Obama Administration's effort to overhaul the site in time for the second enrollment season. Counihan's appointment comes less than three months before the Nov. 15 start of the second open enrollment period for private insurance.