Election update – what to expect next

Election 2016: what should UR members expect now?

  • UR members should expect aggressive action on the ACA from both the incoming Administration and Congress in 2017, with Marketplace provisions likely to be highest priority. However, the “replace” portion of “repeal and replace” is complex and will take multiple years to bring into effect.
  • Despite President-elect Trump’s campaign positions to the contrary, Medicare reform may also be placed into play, since Secretary-elect Dr Price favors private sector alternatives to traditional Medicare in the form of “premium support” for seniors. However,  such reforms would be extremely controversial.
  • MACRA will continue short term, but may change direction in the medium to long term through the actions of the new Administration.
  • The proposed Part B Drugs Demonstration, which has caused concern among United Rheumatology members, is very unlikely to proceed. The CMS Innovation Center is likely to remain in place, since it is a powerful tool for the Administration to test and scale changes to the Medicare program.

Election 2016: what should UR members expect now?
We are all experiencing a maelstrom of news articles, tweets and commentary containing predictions for health policy in the upcoming administration and congress; but much of what we are seeing is still in the realm of conjecture.  What can we be sure about?

  1. Key Administration appointees will take an aggressive stand on the ACA[1]. President-elect Donald Trump has stated that Affordable Care Act “repeal and replace” sits in his top three priorities, along with jobs and immigration.  In nominating Rep. Tom Price for HHS Secretary, and Seema Verma for CMS Administrator – both staunch and experienced opponents of the ACA – he is signaling intention to follow though using the full range of administrative powers available, including rulemaking decisions and decisions relating to Medicaid waivers.
  • HHS Secretary appointee Rep Tom Price is an orthopaedic surgeon who for more than 20 years practiced and taught at Emory University. He has represented Georgia’s 6th Congressional District since 2004, currently serves on the powerful House Ways and Means Committee and is Chair of the House Committee on the Budget in the current Congress.  A “Tea Party” Republican, he has consistently focused on repealing the ACA, and has introduced comprehensive replacement bills in every Congress since 2009.  He frequently takes the position that the ACA interferes with the ability of individual patients and doctors to make medical decisions. [2]
  • CMS Administrator appointee Seema Verma is the President, CEO and founder of SVC, Inc., a national health policy consulting firm in Indiana. She is linked to Vice President elect Pence, having served as the State of Indiana’s health reform lead following the passage of the Affordable Care Act in 2010.   She has specialized in advising Republican state administrations on Medicaid, contributing to the development of the 2011 report “A New Medicaid: A Flexible, Innovation and Accountable Future,” which argues against federally-funded expansion and for greater state control of Medicaid.  As CMS Administrator, she will have authority to follow through on her prior proposals, through the way in which Medicaid waivers are granted to states; but she will also oversee administrative actions relating to Medicare (see below) and to the marketplaces, to the extent that they remain in place.
  1. In Congress, ACA “repeal and replace” will be on the front burner, especially as regards Marketplace provisions of the ACA, but achieving consensus on replacement will take time. Republican control allows immediate movement on “repeal and replace.”  However, because Republicans do not have 60 votes in the Senate, all eyes are on their ability to use the annual Budget Reconciliation process to drive changes through a simple majority.   We could see a “repeal” Reconciliation bill as early as January, but are unlikely to see full details of “replace” until later next year.  We are expecting to see primary attention on repealing the ACA’s individual market mechanisms (Exchanges, Subsidies and Mandates).  However, “replace” is fraught with both practical and political difficulties – including how to fund popular aspects of the law that will likely remain (including closing the Medicare Part D “donut hole” and young adults’ coverage on parents’ plans until age 26).  The effective date of repeal is likely to be set two or more years in the future, to allow planning time for replacement options.  But in the absence of clear consensus on “replace,” even two years may be aggressive, and the transition could take even longer.   “Repeal and replace” may also include Medicaid reforms, by eliminating federally-funded Medicaid expansion; or Congress may decide to focus on Marketplace changes and allow CMS to effect change administratively through Medicaid waivers, at least in the short term.
  1. Across-the-board Medicare reform is possible, but will be extremely controversial if pursued. Throughout the campaign, President-elect Trump promised seniors to keep the Medicare status quo.  However, Dr Price’s appointment may well bring Medicare reform into play, since he has consistently argued for Medicare to be considered a “defined contribution” rather than a “defined benefit” —  meaning that seniors would be given financial assistance to purchase a health plan in the private sector (an option known as “premium support”).  The notion of premium support is receiving ample air time since the election, since has long been supported by both Price and Speaker Paul Ryan.  However, it by no means has the support of all Republicans, and would likely face extremely vociferous opposition by provider groups and industry as well as powerful groups representing seniors.
  1. MACRA and “value based payment” concepts in Medicare will remain in place for now, but the Administration may shift direction over time. United Rheumatology has been closely following the development of MACRA, since almost all members will be subject to the new ways in which the law governs physician payment under Medicare Part B.  The MACRA law itself is very unlikely to be repealed, since it replaced the unpopular and ineffective Sustainable Growth Rate and was supported by both parties.  However, United Rheumatology will be carefully watching how the new Administration may shift the emphasis of MACRA through rulemaking.  The new Administration will inherit a great deal of discretion.  The first year of the law (2017) is mild, with few downside payment adjustments provided that minimum reporting requirements are fulfilled.  But after the first year, the Obama Administration’s rulemaking is open-ended, with much work to be done in 2017 to define how the law will work in 2018 onwards.  Since Dr Price has gone on record expressing concern about over-regulation of physicians, we may see a scaling back of the complexity of the regulation; and decisions that tend towards keeping the bar low for physicians and allowing them to avoid downward payment adjustments.  However, the design of the law itself requires budget neutrality, which means that downward adjustments must be put in place in order to fund bonuses.  United Rheumatology will be carefully tracking and reporting on the development of policies for 2018 onwards.
  1. The proposed Part B Drug Demonstration will likely not proceed, but the new Administration may use the powers of the CMS Innovation Center in other ways. United Rheumatology has also been carefully tracking CMS’s proposals for a mandatory trial of reductions to reimbursement on Part B drugs, which would disproportionately affect rheumatologists’ revenues.  These proposals were contained in Proposed Rulemaking released in March 2016 and were extremely controversial with both provider groups and the pharmaceutical industry.[3]  Final Rulemaking was not released before the election.  Even if it were released today, it would be subject to the Congressional Review Act, which would allow Congress to reverse it.  Therefore, while no statement has been publically made by the Transition Team or Congress, we can feel reasonably sure that the planned Demonstration will not proceed as designed.  This Demonstration would have used the Administration’s ACA-granted powers to test and scale changes to the Medicare program through the CMS Innovation Center. Even though the Innovation Center was a creature of the ACA, we expect the incoming Administration to keep it in place, since it provides powerful tools for the Administration to test alternative models without Congressional approval.  In the next four years, that authority could prove very helpful to the new Administration. Some of the concepts currently being tested – such as Accountable Care Organizations and bundled payments – are likely to stay in place; and the Administration may use the Center to push the concept of premium support administratively.

United Rheumatology is aggressively tracking developments and will keep membership informed as we hear updates.
[1] https://www.washingtonpost.com/blogs/plum-line/wp/2016/12/01/will-republicans-gut-medicare-trump-promised-over-and-over-he-wouldnt-heres-the-video/?utm_term=.129b685e5668
[2] http://www.nytimes.com/2016/11/28/us/politics/tom-price-secretary-health-and-human-services.html?_r=0
[3] http://www.politico.com/tipsheets/prescription-pulse/2016/10/reading-the-part-b-demo-tea-leaves-mylan-settles-on-epipen-icer-makes-a-correction-pharma-and-ttip-216774

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