What the 2018 Midterm Elections Means for Health Care

https://www.healthaffairs.org/do/%2010.1377/hblog20181107.185087/full/?utm_source=Newsletter&utm_medium=email&utm_content=What+the+Midterms+Mean+For+Health+Care%3B+%22Stairway+To+Hell%22+Of+Health+Care+Costs%3B+Patient+Safety+In+Inpatient+Psychiatry&utm_campaign=HAT%3A+11-07-18

Whatever you want to call the 2018 midterm elections – blue wave, rainbow wave, or purple puddle – one thing is clear: Democrats will control the House.

That fundamental shift in the balance of power in Washington will have substantial implications for health care policymaking over the next two years. Based on a variety of signals they have been sending heading into Tuesday, we can make some safe assumptions about where congressional Democrats will focus in the 116th Congress. As importantly, there were a slew of health care-related decisions made at the state level, perhaps most notably four referenda on Medicaid expansion.

In this post, I’ll take a look at which health care issues will come to the fore of the Federal agenda due to the outcome Tuesday, as well as state expansion decisions. And it should of course be noted that, in addition to positive changes Democrats are likely to pursue over the next two years, House control will allow them to block legislation they oppose, notably further GOP efforts to repeal the Affordable Care Act (ACA).

Drug Pricing

Democrats have long signaled they consider pharmaceutical pricing to be one of their highest priorities, even after then-candidate Trump adopted the issue as part of his campaign platform and maintained his focus there through his tenure as President.

While aiming to use the issue to drive a wedge between President Trump and congressional Republicans, who have historically opposed government action to set or influence prices, Democrats will also strive to distinguish themselves by going further on issues like direct government negotiation of Medicare Part D drug reimbursement.

Relevant House committee chairs, perhaps especially likely Oversight and Investigations chair Elijah Cummings (D-MD), will also take a more aggressive tack in investigating manufacturers and other sector stakeholders for pricing increases and other practices. Democratic leaders believe it will be easier to achieve consensus on this issue than on more contentious issues like single payer (more detail below) among their diverse caucus, which will include dozens more members from “purple” districts as well as members on the left flank of the party

Preexisting Condition Protections

If you live in a contested state or district, you have probably seen political ads relating to protecting patients with preexisting conditions. As long as a Republican-supported lawsuit seeking to repeal the ACA continues, Democrats believe they can leverage this issue to demonstrate the importance of the ACA and their broader health care platform.

A three-legged stool serves under current law to protect patients with chronic conditions: (1) the ban on preexisting condition exclusions; (2) guaranteed issue; and (3) community rating. Democrats will likely seek to bolster these protections with measures to shore up the ACA exchange markets. In the same vein, they will likely strive to rescind Trump Administration proposals to expand association-based and short-term health plans, which put patients with higher medical costs at risk by disaggregating the market.

Opioids

Congressional Democrats believe that there were some stones left unturned in this year’s opioid-related legislation, especially regarding funding for many of the programs it authorized. This is a priority for likely Ways & Means Committee Chair Richie Neal (D-MA) and could potentially be a source of bipartisan compromise.

Medicare for All

While this issue could become a bugaboo for old guard party leaders, the Democratic base will likely escalate its calls for action on Medicare for All now that the party has taken the House. Because the details of what various camps intend by this term are still vague (some believe it is tantamount to single payer, others view it as a gap-fill for existing uninsured, etc.), we will likely see a variety of competing proposals arise in the coming two years. Expect less bona fide committee action and more of a public debate aired via the presidential primary season that will kick off about, oh, right now.

Surprise Bills

The drug industry is not the only health care sector that can expect heightened scrutiny of their pricing practices now that Democrats control the people’s chamber. Most notably, the phenomenon of surprise bills (unexpected charges often stemming from a hospital visit) has risen as a salient issue for the public and thus a political winner for the party. Republicans have shown interest in this issue as well, so it could be another source of bipartisanship next year.

Regulatory Oversight

Democrats believe they are scoring well with the public, and certainly their base, every time they take on President Trump. The wide range of aggressive regulation (and deregulation) the Administration has pursued will be thoroughly investigated and challenged by Democratic committee leaders, especially administration efforts to dismantle the ACA and to test the legal bounds of the hospital site neutrality policy enacted in the Bipartisan Budget Act (BBA) of 2015.

Extenders

While it instituted permanent policies for Medicare physician payments and some other oft-renewed ‘extenders’, the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015 left a variety of policies in the perennial legislative limbo of needing to be repeatedly extended. While the policies in the Medicare space have dwindled to subterranean, though not necessarily cheap, affairs like the floor on geographic adjustments to physician payments, a slew of Medicaid-related and other policies are up for renewal in 2019.

For example, Medicaid Disproportionate Share Hospital (DSH) payments face a (previously delayed) cliff next year. That and the most expensive extender, ACA-initiated funding for community health centers, alone spring the cost of this package into the high single digit billions at least, driving a need for offsetting payment cuts and creating a vehicle for additional policy priorities.

A likely addition to this discussion will be the fact that Medicare physician payments, per MACRA, are scheduled to flatline for 2020-2025 before beginning to increase again, albeit in divergent ways for doctors participating in the Merit-Based Incentive Payment Program (MIPs – 0.25 percent/year) and Advanced Alternative Payment Models (APMs – 0.75 percent/year). The AMA assuredly noticed this little wrinkle in the celebrated legislation but hundreds of thousands of doctors probably did not.

Medicaid Expansion

Of the variety of state-level health policy decisions voters made on Tuesday, perhaps the most significant related to Medicaid expansion. In there states where Republican leaders have blocked expansion under the ACA – Nebraska, Idaho, and Utah – voters endorsed it via public referenda. Increasing the Medicaid eligibility level in those three states to the ACA standard will bring coverage to approximately 300,000 people.

Notably, voters in Montana rejected a proposal to continue funding the Medicaid expansion the state enacted temporarily in 2015 by an increase to the state’s tobacco tax. Their expansion is now scheduled to lapse in July 2019 if the legislature doesn’t act to maintain it. If they do not act, about 129,000 Montanans will lose Medicaid coverage.

Finally, Democratic gubernatorial wins in Maine, Kansas, and Wisconsin will make Medicaid expansion more likely in those states.

As they say, elections have consequences. While the Republican-controlled Senate and White House can block any Democratic priorities they oppose, the 2018 midterm elections assure a busy two years for health care stakeholders.

 

 

HOSPITALS SHOULD BE BRACING FOR SITE-NEUTRAL PAYMENTS

https://www.healthleadersmedia.com/finance/hospitals-should-be-bracing-site-neutral-payments

Even if the Trump administration were to delay its proposed site-neutral payments policy for outpatient facilities another year or longer, the political debate isn’t going away.


KEY TAKEAWAYS

Prominent hospital groups have said the rule, as proposed, would be illegal.

Lawmakers from both sides of the aisle in both chambers of Congress have voiced opposition.

Hospitals should do their long-term budgeting and strategizing with site-neutrality in mind.

A controversial proposal to cut reimbursement rates for hospital outpatient departments could be finalized this week if the Centers for Medicare & Medicaid Services hits its target date to publish the final rule.

The proposed change to the Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System unveiled last July has drawn criticism from the American Hospital Association (AHA), America’s Essential Hospitals (AEH), lawmakers in both houses of Congress, and others who contend the so-called “site-neutral” payment policies fail to account for the added burden hospital-owned facilities shoulder.

Both AHA and AEH said in formal comments last month that the OPPS/ASC proposal for 2019 appears to be illegal. And lawmakers raised related concerns in two separate letters to CMS Administrator Seema Verma, suggesting the proposal flouts congressional intent.

A bipartisan group of 48 senators signed a letter last month urging CMS to rethink its approach, and a bipartisan group of 138 representatives followed suit this month with a letter of their own.

The political pressure could very well leave an imprint on the final version of the rule, which has been under review by the Office of Management and Budget since October 10. A spokesperson for CMS told HealthLeaders that the agency would not speculate on the potential outcome of the review process, reiterating the agency’s plan to publish the final version on or about Thursday, November 1.

But even if the Trump administration were to postpone the site-neutral payments policy another year or longer, hospitals should still be preparing for site-neutrality, since this political debate will play itself out over the next several years one way or another, says Greg Hagood, a senior managing director with the financial advisory firm SOLIC Capital.

That preparation for site-neutrality should include an ambulatory strategy with investments in outpatient settings, Hagood said, with a word of caution for hospitals and health systems.

“I think they need to do their budgeting, though, with an eye toward the fact that certain areas that have historically been anchors to the hospital—whether that’s the emergency room, cardiac care, or some of these hospital outpatient departments—are likely to see diminished margins,” he said.

Basing a budget around more-conservative revenue estimates for these service lines could prompt hospitals to rationalize their cost structures or even adjust their infrastructure, such as by reducing their number of clinics or inpatient beds, Hagood said.

Although the concept of site-neutrality “makes a ton of sense” on the surface, there’s also a complex history in how American reimbursement models have evolved over the past few decades, and hospitals provide expensive services that other outpatient facilities often don’t, such as indigent care, Hagood said. Switching to a site-neutral system would have “a very economically disruptive impact on a lot of large health systems,” he added.

The debate gains another layer of intrigue when you consider how any action taken by lawmakers will be perceived by their constituents.

“If you want to make a congressman vulnerable,” Hagood said, “you’ll say he was supportive of a policy that results in a closure of a hospital in your district.”