TRP Health Policy Report

The House and Senate remain adjourned for their five-week summer recess. When Congress returns in September, lawmakers plan to take up a series of issues, including a continuing resolution to fund the government past September 30, a border security bill, reauthorization of the Export-Import Bank, extending 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.

 
CMS Reopens Physician Payments Website
 
Last Thursday, CMS announced that the Open Payments System is back online, about 11 days after it was taken down to investigate data inconsistencies. But just a day later, on Friday, CMS acknowledged that a third of the records in the database have errors and will not be made public in September.
 
“CMS is returning about one-third of submitted records to the manufacturers and [group purchasing organizations] because of intermingled data, and will include these records in the next reporting cycle,” said agency spokesman Aaron Albright. “Manufacturers will have to resubmit the data and it will become public after the manufacturers correct the data and physicians get a chance to review and dispute the data,” he added.
 
Established under the Affordable Care Act (ACA) the Open Payments System intends to increase transparency by making public the payments healthcare providers have received from drug makers and medical device manufactures. It had been scheduled to launch on Sept. 30. However, a recent media investigation uncovered information-related mistakes that could cause harm professional reputations, such as incorrectly listing drug maker payments. On August 5, more than 100 medical societies asked CMS to delay the launch of the database by six months, expressing concern that the database “will not be ready and will likely lead to the release of inaccurate, misleading and false information.”
 
Earlier in the day on Friday, the agency had said that it fixed its problems, but CMS failed to disclose until much later in the day that its solution included removing a considerable amount of the records. The withheld information will not be made available to the public until the next reporting cycle in June, 2015.
 
Biosimilars Naming Dispute Continues
 
Last week, the Generic Pharmaceutical Association (GPhA) met with officials from the FDA to outline their concerns about a World Health Organization (WHO) biosimilar naming proposal. Biosimilars, which are not yet available in the U.S., are designed to mimic brand-name biologics and are projected to save billions in health care costs in the coming years. At issue is whether biosimilars should be given the same International Proprietary Name (INN) as brand-name biologics. The World Health Organization (WHO) has jurisdiction over the INN system and recently suggested leaving the current system largely intact, but its recommendations are not mandatory. This has drug makers and biotechs concerned, since regulators in different countries can pursue different approaches for identifying biosimilars. Brand-name drug makers and biotechs want biosimilars to have unique or generic names to distinguish the medicines. Generic drugmakers believe that a new naming standard would create confusion for physicians and pharmacists, who may have difficulty identifying medications.
 
In a meeting with the FDA’s deputy commissioner for policy, planning and legislation, GPhA representatives said that any change to the current system must apply to all biologics and retroactively. GPhA recommended against adding complexity to the INN system in an April meeting with the WHO and recently noted that a coalition of 32 major pharmacies, health insurers and other stakeholders have asked the FDA not to require distinct biosimilar names. Earlier this month, a group of Senators asked HHS when a formal policy will be adopted and released for naming these medications. Some drug makers have filed similar petitions with the FDA. To date the agency has not established a naming policy, saying only that an “appropriate” policy is being considered. The Biologics Price Competition and Innovation Act, which was implemented as part of the ACA, created a regulatory pathway for approving biosimilars, but did not specifically address a naming protocol for the medicines.
 
White House Changes for Canceled Exchange Plans Could Raise Rates
 
The Obama Administration's administrative fix for plans that were set to be canceled under the Affordable Care Act is expected to drive up premiums in states that implemented the proposed solution. Last fall, when millions of Americans received cancellation notices because their coverage didn’t meet ACA regulations, the White House moved to allow insurers to keep offering the policies if state governments approved. In March, the CMS extended the fix for two years, allowing consumers to renew such plans until 2016, with coverage lasting in some cases until September 2017. Two-thirds of states agreed and about half of all states will allow consumers to keep plans that do not meet the ACA's minimum standards in 2015. 
 
However, insurers say the policy change could drive up rates in the ACA exchanges next year because many younger policyholders stayed on their existing plans, keeping them out of the exchanges. Analysts say that states that have implemented the fix are facing proposed rate increases of 11% to 18% for next year – well above the 7.5% average recently estimated by PricewaterhouseCoopers' Health Research Institute. The upcoming premiums represent a big test for the ACA. The White House is hoping to build on the successful enrollment of 8 million people in ACA plans earlier this year. But senior officials worry that premium increases could threaten not only 2015 sign-ups, but also Democratic prospects in the November elections.
 
New Studies Put Pressure on States to Expand Medicaid
 
A series of recent studies and financial reports are showing the benefit of participation in the ACA’s Medicaid expansion, putting pressure on states that opted out to change their course. On August 8, the Urban Institute released a report that found that states that have not expanded Medicaid will lose out on more than $420 billion in federal funding between 2014 and 2022. In addition, hospitals in non-expansion states are missing out on about $167.8 billion in Medicaid revenue, the study estimated. Similarly, Tenet Healthcare recently reported that its hospitals in five states that have expanded Medicaid have seen “a 54% decline in uninsured admissions and a 27% decline in uninsured outpatient visits.”
 
Meanwhile, Families USA has released 10 different issue reports showing the potential benefits of expansion in different states, including Alabama, Florida, Missouri and Virginia, among others. For example, the organization found that had Indiana expanded its Medicaid program when the option was first offered, “by 2016 new federal funds flowing into the state would have supported 16,400 jobs and increased state economic activity by $1.9 billion.” The federal government traditionally picks up a little more than half of the cost of Medicaid. But funding under the health law is unlike past efforts to expand Medicaid in that the federal government will pick up the full tab this year as well as 2015 and 2016. The state gradually has to pick up some costs in 2017, but by 2020, the federal government will still cover 90 percent or more of the Medicaid tab. There are 24 states, largely led by Republican governors that have yet to agree to the ACA’s Medicaid expansion.
 
Medicaid Expansion States Struggling to Meet Demand for Mental Health Services
 
In recent weeks, state mental health advocates and providers have reported surging demand for their services because of the Medicaid expansion. Mental health officials in Colorado, California, Rhode Island, and Oregon say they're seeing greater demand for behavioral healthcare services by Medicaid enrollees. In May, the Substance Abuse and Mental Health Services Administration (SAMHSA) estimated  that 2 million previously uninsured people between the ages of 18 and 64 will receive behavioral healthcare services under ACA by 2016. Of that number, 1.2 million will be Medicaid eligible, and the other 800,000 will have enrolled in an ACA exchange plan. But states have cut their mental health spending by $4.35 billion between 2009 and 2012, according to the National Association of State Mental Health Program Directors. These cuts could limit access for newly insured people seeking treatment.
 
Advocates hope that the health law's expanded Medicaid coverage will prompt states to direct more funding to mental health services, particularly for prevention and early intervention. There also are growing concerns about a shortage of qualified mental health professionals to care for new patients seeking behavioral services as a result of the ACA. The number of new psychiatrists entering the market fell 14% from 2002 to 2008, as detailed in a recent Health Affairs article. In addition, a 2010 report from the Center for American Progress found that more than a third of patients who receive treatment for mental health disorders rely on primary-care physicians. Advocates say that the services patients receive through their primary-care providers are generally sufficient, but worry about whether the training of staffers in mental health centers is adequate.