The Trump administration eliminated funding for fetal tissue medical research by government scientists on Wednesday.
Why it matters: The decision is considered a win for anti-abortion rights supporters and a major blow to scientists who rely on the tissue from elective abortions for research into diseases like cancer, HIV and Zika, the Washington Post reports.
The U.S. Supreme Court on Monday ruled that HHS improperly changed its Medicare disproportionate share hospital payments when it made billions of dollars in cuts.
In a 7-1 decision, the justices said HHS needed a notice-and-comment period for the Medicare DSH calculation change. Justice Neil Gorsuch wrote in the decision that HHS’ position for not following the procedure was “ambiguous at best.”
“Because affected members of the public received no advance warning and no chance to comment first, and because the government has not identified a lawful excuse for neglecting its statutory notice-and-comment obligations, we agree with the court of appeals that the new policy cannot stand,” Gorsuch wrote.
Under the new Medicare DSH formula, the CMS began to lump Medicare Advantage enrollees in with traditional Medicare enrollees to calculate a hospital’s DSH payment.
But Medicare spending is about $700 billion per year, and the program covers nearly one-fifth of Americans.
“Not only has the government failed to document any draconian costs associated with notice and comment, it also has neglected to acknowledge the potential countervailing benefits,” Gorsuch wrote. “Notice and comment gives affected par-ties fair warning of potential changes in the law and an opportunity to be heard on those changes—and it affords the agency a chance to avoid errors and make a more informed decision.”
The majority opinion also emphasized the size and scope of Medicare, noting that “even seemingly modest modifications to the program can affect the lives of millions.” “As Medicare has grown, so has Congress’s interest in ensuring that the public has a chance to be heard before changes are made to its administration,” Gorsuch wrote.
During oral arguments in the case in January, Gorsuch and Justice Sonia Sotomayor doubled down on the economic magnitude of the change, which HHS estimated to be between $3 billion and $4 billion between fiscal 2005 and 2013.
Justice Stephen Breyer dissented from the majority, and Justice Brett Kavanaugh recused himself because he participated in the U.S. Court of Appeals for the D.C. Circuit ruling that the Supreme Court upheld.
Breyer wrote he believed the government had the legal grounds to skip the public comment period in this policy.
“The statutory language, at minimum, permits this interpretation, and the statute’s history and the practical consequences provide further evidence that Congress had only substantive rules in mind,” he wrote. “Importantly, this interpretation of the statute, unlike the court’s, provides a familiar and readily administrable way for the agency to distinguish the actions that require notice and comment from the actions that do not.”
Along with the American Academy of Pediatrics, First Focus and Children’s Defense Fund, Georgetown University CCF held a press tele-conference and released a report examining an alarming trend in children’s health coverage. The report shows that more 800,000 fewer children had Medicaid/CHIP coverage at the end of 2018 compared to 2017. This trend comes amid broader efforts to restrict access to health coverage and discourage participation by legal immigrants.
The report found little evidence to support claims that the improving economy was responsible for the 2.2 percent decline in enrollment. Instead data suggest this 2018 could be the second year in a row that the rate of uninsured children increases. The U.S. Census Bureau will release the 2018 child uninsured rate data later in the fall.
Enrollment declines are concentrated in seven states – California, Florida, Illinois, Missouri, Ohio, Tennessee, and Texas – which account for nearly 70 percent of the losses. Nine states – Idaho, Illinois, Maine, Mississippi, Missouri, Ohio, Tennessee, Utah, and Wyoming – had decreases of more than double the national average.
Please listen to the recording of the press call or read the report for more details. Here a few excerpts from Thursday’s press conference:
Joan Alker of CCF moderated the call and explained why this drop in child enrollment is so alarming.
“We are extremely concerned about what we are seeing and what it portends for the uninsured numbers these fall,” she said. “For many years there’s been a national bipartisan commitment to reduce the number of uninsured children and the effort have borne fruit. Unfortunately, today we do not feel confident that this national commitment still exists.”
Tricia Brooks, lead author of the report, explained the many factors have likely led to the decline in child enrollment.
“Knowing that the economy had a minimal impact at best, we must call on state and national policymakers to address the factors contributing to the enrollment decline,” said Brooks. “From systems and renewal issues to enrollment barriers to threats like public charge, we must take a hard look at what these administrative actions and barriers to coverage mean for our kids’ health.”
Dr. Laura Guerra-Cardus, Deputy Director for the Children’s Defense Fund of Texas said overly cumbersome eligibility checks are causing thousands of eligible children to lose coverage in her state. Nine out of every 10 Texas children being dropped are losing coverage due to red-tape. She said this is causing significant confusion for families and throughout the Texas health care system as many families don’t learn their children are uninsured until they show up for an appointment with their health care provider.
“These income checks are erroneously flagging families – at the very least 30% of the time. Families are not being given enough time to respond,” she said. “They are given only ten days to respond and the timeline starts once flagged by the system which could be before the parents even receive notification.”
Bruce Lesley, President of First Focus, pointed out that bipartisan legislation in the U.S. Congress would address the issues raised by Dr. Guerra by requiring 12 months continuous health coverage for children. He also cited polls that show strong support for children’s health coverage in general.
“The American public is with us on this. Kids are a priority but we’re seeing a failure of policymakers to adhere to what voters want and make children a priority,” Lesley said.
Dr. Lanre Falusi, a pediatrician at the Children’s National Health System and national spokesperson for the American Academy of Pediatrics said pediatricians are very concerned about the decline in Medicaid and CHIP enrollment. In addition to cumbersome enrollment process and administrative burdens discouraging families from enrolling eligible children, she pointed out that immigrant families also encounter the chilling effect the proposed public charge rule.
“The public charge proposal presents immigrant families with an impossible choice: keep your family healthy but risk being separated or forgo vital services like Medicaid so your family can remain together in this country. Although the final rule has yet to be issued, the proposal has already caused immigrant families to avoid or even disenroll from programs they are eligible for out of fear, like Medicaid. I have seen this myself,” Dr. Falusi said.
“We need all children in the United States to reach their full potential if we are to reach ours as a nation. Ensuring children are enrolled in health coverage designed to meet their needs is necessary to making that possible. Our lawmakers must pass policies that keep programs like Medicaid and CHIP strong, not those that jeopardize the critical gains we’ve made in children’s coverage.”
The House Energy and Commerce Committee next week will consider a full repeal of the Medicaid disproportionate share hospital cuts, a sign that hospitals are getting closer to securing the top lobbying priority for safety net providers and academic medical centers.
The committee will hold a hearing next Tuesday on proposed legislation from Rep. Eliot Engel (D-N.Y.), whose home state gets the single largest so-called Medicaid DSH allotment in the country. In fiscal 2018, New York received $1.8 billion of the roughly $12 billion in annual federal payments.
Engel has pitched a full repeal of the cuts mandated by the Affordable Care Act, which are set to take effect Oct. 1. Should those cuts move forward, they would reduce federal DSH payments to states by $4 billion in fiscal 2020 and $8 billion in fiscal 2021. An aide to Engel said that a full repeal “provides the long-term solution.”
Last week, 300 of the 435 U.S. House of Representatives lawmakers sent a letter to the chamber’s leadership urging a two-year delay to the DSH cuts, and hinted that some in Congress believe the Medicaid DSH formulas need to be reconfigured, calling for a “sustainable, permanent” solution.
“This delay will ensure that hospitals can continue to care for the most vulnerable in our communities,” the lawmakers wrote, led by Engel and Rep. Pete Olson (R-Texas).
The amount the federal government pays out for DSH varies enormously across states and is mostly arbitrary, reflecting the caps set by Congress in 1992 instead of a relevant benchmark.
Florida, where about 3.3 million people are uninsured, gets the exact same federal DSH allotment as Connecticut, where about 245,000 people are uninsured.
Finance Committee Chair Chuck Grassley (R-Iowa) has said he wants to see a reset. Sen. Marco Rubio (R-Fla.), whose state has a strong vested interest in a formula change, has used the Sept. 30 deadline to push a proposal that would base the federal dollar allotment on a particular state’s share of U.S. citizens living below the poverty level.
But the major trade groups representing DSH hospitals continue to push for a simple delay, since their constituents include hospitals in all the states. Dr. Bruce Siegel, CEO of America’s Essential Hospitals, said at a briefing to House staff earlier this month that he’d be open to a formula change as long as hospitals don’t see cuts to existing funding. That means Congress would have to allocate even more money to the program.
House Speaker Nancy Pelosi (D-Calif.) said she backed another delay when she addressed American Hospital Association’s annual meeting in April. She noted that she wouldn’t back a program overhaul.
“We cannot support efforts that will reward states for not expanding Medicaid or simply take DSH money from some other state and give it to others,” she said. “Who thought that was a good idea?”
The DSH debate doesn’t fall along the lines of which states expanded Medicaid or not. Alabama and Missouri haven’t expanded Medicaid but receive high federal DSH allotments, and would likely lose money if Congress decided to redistribute the existing payments.
Although the policy rationale behind the ACA-mandated cuts was that Medicaid expansion would shrink hospitals’ need for DSH money, high-DSH expansion states such as New York and New Jersey aren’t giving an inch.
Siegel framed the debate over expansion states’ need as being “a little more complicated now” than in the early years of the ACA.
“I think the market has changed in the last eight years or nine years when we started down the road of Medicaid expansion,” he said at the Capitol Hill staff briefing.
He pointed to the slight rise in the uninsured rate recently, as well as the increase of high-deductible plans that put more fiscal burden on enrollees.
“We are frankly concerned about any moves to move us toward skinny health plans,” he added.
Enrollment in more bare-bones commercial plans doesn’t really affect the Medicaid enrollment, but he argued that expansion still brings Medicaid shortfall — which is the difference between Medicaid and Medicare reimbursement.
“If you have 70% Medicaid patients which some of our hospitals do, you are in a terrible disadvantage in terms of payment streams, with the shortfall becoming enormous for you,” he said.
There is another Medicaid program that can help hospitals with shortfall: the “upper payment limit” supplement for Medicaid fee-for-service. States can deploy UPL payments to hospitals in order to increase their reimbursement based on rates Medicare would have paid for the same treatment.
UPL is the largest Medicaid supplemental funding program, with about $13 billion in annual spending according to the Medicaid and CHIP Payment and Access Commission data from fiscal 2017.
The UPL program is also under scrutiny by MACPAC, whose analysts found that 17 states have overspent billions of these payments.
Large hospital systems and trade groups have vociferously criticized Democrats’ “Medicare for All” proposals, but rural facilities and public hospitals that treat mostly low-income patients are sitting on the sidelines of the debate.
Why it matters: Safety nets and many rural hospitals could hypothetically benefit under Medicare for All, but expressing support would put them at odds with their larger brethren.
President Trump is preparing to issue an executive order to foster greater price transparency across a broad swath of the health-care industry as consumer concerns about medical costs emerge as a major issue in the lead-up to next year’s presidential election.
The most far-reaching element favored by the White House aides developing the order would require insurers and hospitals to disclose for the first time the discounted rates they negotiate for services, according to health-care lobbyists and policy experts familiar with the deliberations.
The idea has stirred such intense industry opposition, however, that it may be dropped from the final version, the sources said.
Compelling disclosure of negotiated rates “would have the ultimate anti-competitive effect,” said Tom Nickels, the American Hospital Association’s executive vice president for government relations and public policy. “I know they are aware of the concerns.”
Other parts of the order are expected to make it easier for people on Medicare, the federal insurance program for older and disabled Americans, to find out what they would pay for treatment at various hospitals by widening the range of services for which hospitals must post their prices.
The order also may include an effort to promote more competition among hospitals by slowing a trend toward consolidation, according to an administration official who spoke on the condition of anonymity about details that continue to take shape.
“We’re still ironing it out,” the official said.
The executive order, likely to be announced by mid-June and first reported by the Wall Street Journal, would carry the force of law but not bring about immediate change. Such orders essentially direct federal agencies to rewrite rules to advance their goals — in this instance, the departments of Health and Human Services, Labor, and Justice, according to people familiar with the White House’s plans.
The order’s moving parts reflect a conservative conception of how to tame rising health-care costs, relying on competition — the idea that consumers will make prudent, price-minded choices if they are given enough information and options about where to get their care. Critics say that patients are seldom in a position to comparison-shop, following their doctors’ recommendations or confronting medical emergencies.
With surveys showing that voters trust Democrats significantly more than Republicans to solve problems in the health-care system, the order is, in part, a strategy by the White House to portray Trump as an ally of consumers for his reelection campaign.
“My understanding is they are trying to figure out what is going to have high splash value,” said Dan Mendelson, founder of Avalere Health, a Washington-based consulting firm.
The executive order would be Trump’s third relating to health care. Hours after his inauguration, he signed an order giving agencies broad powers to undo regulations the Obama administration had created under the Affordable Care Act. In October 2017, Trump signed another order intended to bypass rules under that law, by making it easier for individuals and small businesses to buy alternative insurance with lower prices, less coverage and fewer consumer protections.
Unlike the first two, the upcoming order would be the first on a theme embraced by both political parties.
Republicans and Democrats alike have introduced nearly two dozen bills related to transparency so far this year, and two major bills are in draft form. Most are focused on curbing the price of prescription drugs, and others are designed to protect patients from what have been termed “surprise” hospital bills involving treatment by physicians outside their insurance networks.
The administration official said the executive order would focus on urging hospitals to increase price transparency for consumers, but the official did not specify how far the policy will go.
The work is being directed by Joe Grogan, director of the White House’s Domestic Policy Council, although senior HHS officials are heavily involved, according to several people who have had conversations with those engaged in the process.
The hospital industry has been consulted by the White House, according to one industry lobbyist. But an insurance industry official said the White House has not reached out to health insurers and has “declined to discuss its thinking on an executive order when asked by industry representatives.”
Both hospitals and insurers are vehemently opposed to being told they need to disclose the rates that they negotiate with one another.
“There is good transparency and bad transparency,” said Kristine Grow, spokeswoman for America’s Health Insurance Plans, a main industry trade group. “Good transparency provides consumers with information they can use to make their own smart decision, and causes health-care prices to go down for everyone
“This is bad transparency, because it is highly likely to cause prices to go up for everyone,” Grow said. If all the parties need to expose what rates they were willing to accept, she said, “it creates a floor for negotiations, not a ceiling.”
Nickels of the American Hospital Association said, “In order for entities in any sector of the economy — health care included — to be able to create a situation where there is give and take, there has to be some privacy.”
It seems obvious: better social services. So why are things like food stamps and housing not part of the conversation?
Health care is at the center of the national policy conversation, and with the 2020 presidential election now in full swing, that is where it will probably remain. But for all the talk about how to increase access and reduce costs, we’re missing a critical piece of the puzzle: the inverse relationship between health care costs and spending on social programs.
One reason the United States spends more on health care than any other nation — more than 17 percent of gross domestic product, compared with an average of 9 percent for other advanced economies — is that we spend far less on social services like food stamps, free school lunches and public housing.
If our spending on social programs were more in line with other developed countries, our health care costs would fall. That means that as policymakers evaluate a social program, they should weigh not only its direct and second-order benefits — from reducing crime and recidivism to increasing productivity — but also its effect on lowering federal health care costs.
These safety net programs can lower health care costs by strengthening what medical professionals call the “social determinants of health”: the environment in which people are born, grow, live and work. Effective social programs provide access to good nutrition, clean and safe shelter and a subsistence income, which are critical to avoiding disease. They help food-insecure children receive nutrient-dense meals rather than empty calories, and families with incomes below the poverty line to live in sanitary environments free of serious health risks.
Especially important are programs that ameliorate poor housing conditions and prevent disease, including lead abatement, control of mold and dampness and heating-system repairs. Consider a real-life example.
Days after an elderly patient was treated for heart failure at Mount Sinai Hospital and returned home, the elevator in his apartment building broke down. Lacking the ability to climb stairs, he became a prisoner in his own home, unable to go out for a walk, shop for fresh food and visit his doctors for follow-up care.
A social service worker took up his case, and the elevator was repaired. His substandard housing was literally a threat to his health; the intervention of the social worker may have saved his life — and certainly saved him from a possible relapse and expensive hospital care.
Two programs — one in Chicago, the other in Los Angeles — show the multidimensional benefits of social spending. The Chicago program supplemented federal housing subsidies to help patients with chronic health problems afford stable housing. It reduced health care costs in the University of Illinois hospital system for participating patients by roughly 18 percent. And once in stable housing, beneficiaries can better pursue public benefits and job opportunities.
The Los Angeles program showed even greater cost savings, according to a study by the nonpartisan RAND Corporation. After receiving housing assistance, beneficiaries’ costs to the public health system plummeted. Inpatient services fell by 75 percent. Over all, the study found that, even accounting for the increased housing costs, recipients’ total social service and health care costs fell by 20 percent. And beneficiaries showed signs of reduced involvement in crime and improved mental health.
All of this is intuitive and supported by reams of data. But the United States continues to spend a relative pittance on such programs. Housing programs, including rental assistance, public housing and homeless-assistance grants, account for one-quarter of 1 percent of G.D.P. Nutrition programs, such as food stamps and the Women, Infants and Children nutrition program, amount to one-half of 1 percent of G.D.P.
Our underinvestment sets us apart from other advanced nations around the globe, particularly in Western Europe. France, Sweden and Britain commit far more than the United States to social services, as a percentage of their economy, while spending significantly less per capita and as a percentage of their economy on health care — and boast a higher life expectancy.
Many factors influence discrepancies in health care spending and outcomes between the United States and its counterparts: vastly different views about the financial incentives in health care; the high cost of prescription drugs, diagnostic tests and administrative expenses; and cultural expectations about end-of-life care. But we won’t effectively reduce costs, and improve outcomes, until we think bigger and recognize the critical link between health care spending and social programs.
Even with two dozen Democrats running for President and most touting an expansion of Medicare benefits to everybody, the public is still unclear how a national single payer health plan like “Medicare for All” will benefit them.
A briefing from experts at the nonpartisan Kaiser Family Foundation for health reporters last week revealed there are five general approaches to expanding coverage involving public plans.
Within those approaches are 10 national plans introduced in Congress that include everything from a single payer version of Medicare for All that would uproot private coverage to a “public program with an opt out” that would be offered along side commercial coverage. Other plans would allow Americans to buy into Medicare as young as 50 years old or buy into Medicaid coverage for the poor.
But no matter the effort to expand health insurance coverage, much is to be done to educate the public at large even as single payer supporters like Sens. Bernie Sanders, Elizabeth Warren and Kamala Harris push Medicare for All on the campaign trail.
“Our polling shows some Americans are unaware of how the implementation of a national health plan could impact them,” said Mollyann Brodie, Kaiser’s senior vice president and executive director, public opinion and survey research. “For example, many people (55%) falsely assume that would be able to keep their current health insurance under a single-payer plan.”
Democrats on the campaign trail hoping to challenge President Donald Trump should Republicans nominate him to run for re-election in 2020 see rising support for a national health plan that would make the government the only insurance carrier.
Kaiser data shows 56% favor a national health plan “in which all Americans would get their insurance from a single government plan.” Just 40% favored such a national health plan 20 years ago, Kaiser data shows.
“Our polls have shown a modest increase in support for the idea of a national health plan,” Kaiser’s Medicare for All presentation showed. Some of these health insurance expansions would be single payer versions of “Medicare for All’ like that proposed by Sanders in the U.S. Senate and Rep. Pramila Jayapal (D-Washington) in the U.S. House of Representatives that would uproot private coverage and replace it with government run Medicare.
Other public approaches would involve a “public program with an opt out” known as Medicare for America or a “Medicare Buy in” like that proposed by Sen. Debbie Stabenow (D-Michigan). Other public plans would involve a so-called “federal public plan option” that would be offered along side commercial coverage on a government exchange and there are also Medicaid buy-in proposals being floated in a number of states.
Politically, the lack of knowledge of Medicare for All and public option proposals offers opportunities for both Democrats who favor Medicare for All and Republicans who want to derail a government expansion of health benefits, particular an approach that would essentially replace much of the private system.
“As the public learns more about the implications of each of these proposals, support may increase or decrease,” Kaiser’s Brodie said.
HENRY KOTULA 