DCMedical News: Tuesday, March 20, 2018
DCMedical News
Washington, D.C.
Tuesday, March 20, 2018
THE BIG STORY TODAY IN HEALTH CARE
There are three Congressional working days remaining before expiration of the Continuing Resolution on March 23. The “Omnibus” budget bill, now estimated to be $1.3 trillion, will support government spending through the end of this September. (Hearings have begun, see March 20 under “Events” below, on the FY2019 budget proposal.) The Wall Street Journal (here) called this “a mammoth spending bill that offers them [members of Congress] the last chance to settle dozens of long-running policy fights.”
One of those policy fights is in the health field, the issue of how best to stabilize insurance markets for individuals and small groups participating in the state or federal exchanges. The “Alexander-Collins” proposal (see DCMN of 3-19) called for Cost-Sharing Reduction (C-SR) payment, reinsurance and conservative policy initiatives. Now we have the “Bipartisan Health Care Stabilization” bill (here) with a CBO report (here) and a CBO cost estimate (here), an “Alexander-Collins” plus House Energy & Commerce Chair Walden bill, bicameral but not bipartisan. This new entry has C-SRs (for 2017 if no silver-loading, for 2019-2021 for all states), reinsurance, §1332 waiver flexibility, Hyde-lite language (see below), catastrophic plans, funds for promoting/marketing PPACA and no language (either way) promoting or hindering AHPs and STLDIs.
Families USA and some commercial insurers decided that “Alexander-Collins” alone, however well-intended, would not stabilize insurance markets, and might work to the contrary. This line of reasoning was first broached publicly by the Center for Budget and Policy Priorities (see DCMN of 3-12). CBPP noted that C-SR payments may not be as efficient as the premium subsidies already in place, based on the price of the second-lowest cost silver plan. (Insurers almost uniformly - - sometimes under instruction from their respective state exchange plans - - inflated that second-lowest priced silver plan, knowing that it would be used as the “benchmark” for the establishment of all premium subsidies for 2018.) If CS-R payments were to be funded, the “silver-linked” rate hike (and corresponding premium subsidy increase) would disappear, with patients and beneficiaries responsible for a larger part of their insurance premium. The push-back from Families USA (and some insurers) was further complicated by Hyde amendment language under which the prohibition on use of funds to support abortion would now be extended to prohibition on the use of insurance to support abortion.
So the “Alexander-Collins-Walden” bill, newly unveiled Monday night, is the leading health insurance and health policy candidate for a ride on the Omnibus. Disagreement over abortion language, however, may prevent passage.
DOCTORS, NURSES, HEALTH PROFESSIONALS
Another beleaguered minority develops a special interest caucus: Inside Health Policy reports (here) that some House lawmakers have developed a bipartisan caucus to influence policy on physician pay, the Healthcare Innovation Caucus (HIC). Founding members are Rep. Mike Kelly (R-PA), Rep. Ron Kind (D-WI), Rep. Markwayne Mullin (R-OK), and Rep. Ami Bera (D-CA). The main focus, according to Kelly, will be to “explore and advance successful, innovative payment models as well as the technologies needed to support these models.” Currently, the Medicare physician payment plan (through MACRA, which replaced the Sustainable Growth Rate) is the “Quality Payment Program,” relying on Alternative Pay Models. For example, physicians receiving a significant portion of their revenue from alternative pay models have a bonus of 5% of their annual Medicare Part B revenue. The trick here of course is determining what qualifies as an “alternative pay model.” The arena within which that definition is being forged is the Physician-Focused Payment Model Technical Advisory Committee (P-TAC), whose next meeting (see “Events” below) is March 26. HIC is the first such caucus on health care payment methodologies.
HOSPITALS AND HEALTH CARE FACILITIES
HHS Secretary Alex Azar spoke to the National Association of Community Health Centers (text here). The centers, born of federal sponsorship in the Great Society, many of them transformed into Federally Qualified Health Centers (FQHCs) in the Reagan years, and expanded dramatically under Bush ’43, are, according to Azar, partners with a track record of quality care at lower cost and providers who excel at coordinating and integrating levels of care.
Other highlights of Azar’s talk: Blue Button (2.0), the anticipated Medicare system for giving claims data to patients; transparency, extolling the virtue of the Uniform Data System used by the CHCs; an anecdote about how difficult it was for Mr. Azar to acquire price information about a planned echo stress test (he still had it in the hospital, at seven times the doctor’s office list price); how 340B should be focused on low-income Americans; and concerning opioids (projection of a half million overdose deaths in the next decade), $400 million in new substance abuse treatment funding in the 2019 budget, and another $150 million specifically for rural area opioid treatment.
Azar said the administration is “not afraid of disruption,” that the nation’s health care system is at “an inflection point.”
PHARMA
CMS finalizes coverage (here) of Next Generation Sequencing tests. The “National Coverage Determination” will pay for diagnostic laboratory tests using Next Generation Sequencing for patients with recurrent, metastatic, relapsed, refractory or Stage III or IV cancers. CMS undertook a parallel review with the FDA, which had granted its approval of the FoundationOne CDx test November 30, 2017. In its initial approval, CMS had proposed that its decision-making would apply to future Next Generation Sequencing tests as well, and that any test that Medicare covered would have to be FDA-approved. This step was opposed by the diagnostic testing industry. As a compromise, the final CMS determination indicates that nationwide coverage would only be granted to FDA-approved tests, but that local Medicare boards (they mean Medicare Administrative Contractors, MACs, responsible for Local Coverage Determination, LCDs) to determine whether other tests would get coverage within the regions they monitor.
TECHNOLOGY
New tool for debunking overly optimistic health technology press releases (here), HealthNewsReview from Gary Schwitzer and the University of Minnesota School of Public Health. Sign up, stay up with extraordinary claims (over 300,000 health care apps) or fraud (Theranos), attacks on the gullible and optimistic alike.
READING, OTHER PUBLICATIONS
Schumpeter (The Economist column named in honor of the American-Austrian economist known for a dark view of capitalism) addresses this question:
“Which firms make the biggest killing from America’s health-care system?”
In its March 17th issue (column here), Schumpeter examines excess spending, rent-seeking by health care firms, the extraction of “outsize profits relative to the capital they deploy and risks they take.” The worst offenders, says The Economist, are not pharmaceutical firms, but “an army of corporate health-care middlemen.”
Schumpeter examined the top 200 American listed health care firms, recording excess profits as those above a 10% return on capital. The total of excess profits or rent-seeking is $200 per American per year, compared to $69 for telecoms and cable and $25 “by the airline oligopoly.” “Only the five big tech ‘platform’ firms, with a figure of $250, are more brazen gougers.”
Worth quoting: “[P]ockets of rent-seeking have become endemic in America’s economy. Wherever products are too complex for customers to understand, and where subsidies and complex regulation add to the muddle, huge profits can opaquely be made,” and, “In the case of health care, consolidation has probably made things worse by muting competition.”
Medicare for all, the potential: NYT, 3-18, “Back to the Health Policy Drawing Board,” (here) economist Robert Frank, a primer on Obamacare-type coverage, introduction to Jacob Hacker’s Medicare Part E (for “Everyone”).
Medicare for all, one actual: NYT 3-18 on how UK’s NHS quietly outsources surgery to France (here).
Controlled trial of corruption: NIH officials pitch “moderate drinking is good for you” study to liquor industry, NYT exposé, here.
EVENTS & MEETINGS
Your March Calendar:
March 20
10:00 a.m., House Labor-HHS-Education Appropriations Subcommittee, fy 2019, 2358-C, Rayburn.
March 21
9:00 a.m., Energy and Commerce Health Subcommittee begins two days of hearings (bills here) on “Combating the Opioid Crisis: Prevention and Public Health Solutions,” 2123 Rayburn H.O.B., continuing March 22 at 10:00 a.m.
2:00 p.m., House Ways and Means Health Subcommittee, hearing on the implementation of MACRA’s physician payment policies, 1100 Longworth H.O.B.
March 22
1:30 p.m., Competition and Consolidation, Webinar sponsored by Alliance for Health Policy, AHCJ, NIHCM, worth a listen (Tom Scully, Chapin White, flyer here).
March 26
PTAC, Physician-Focused Payment Model Technical Advisory Committee, continuing March 27, information at www.regonline.com/PTACMeetingsRegistration or livestream at www.hhs.gov/live.
FOR REFERENCE
Members of the Senate (here) and Members of Senate Committees (here), Senate Calendar (here).
Members of the House with their House Committees (here), House Calendar (here).
PUBLICATION SCHEDULE FOR DCMEDICAL NEWS
DCMedical News is published every day that either the House of Representatives or the Senate is in session.
Past issues can be accessed by clicking on “View this email in your browser.” Subscription information is found at the bottom of these pages. Trial subscriptions may end without notice.
March publication dates remaining: 21, 22, 23.
April publication dates: 9, 10, 11, 12, 13, 16, 17, 18, 19, 20, 23, 24, 25, 26, 27.
Notes to: Fred Hyde, MD, JD, MBA; fredhyde@aol.com