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July 2017

Better Care Reconciliation Act Released
The bill would provide $50 billion over four years to stabilize the insurance market. This funding would be in addition to cost-sharing subsidy payments, which would be extended through 2019. It also includes $62 billion over eight years for a state innovation fund, which could be used for coverage of high-risk patients, reinsurance, or other similar purposes.  The bill would retroactively eliminate the individual and employer mandates to 2016. It repeals taxes on health insurers, medical devices, prescription drugs, and indoor tanning. It also eliminates the Affordable Care Act’s (ACA) investment income tax and the Medicare surtax. The Cadillac tax on high cost health plans would be delayed from 2020 to 2026. Unlike the House-passed AHCA, the bill does not contain the 30% surcharge for lack of continuous coverage. Like the House bill, the Senate bill includes a provision to give states the flexibility to alter their health markets, which may include waiving essential health benefit requirements. However, unlike the House bill, the Senate uses a waiver process that is already in place – section 1332 waivers, with additional changes to the current waiver program. Like the House bill, it also changes insurer age rating to allow older adults to be charged as would be provide much as five times younger people. Premium subsidies in the individual market making up to 350 percent of the poverty level beginning in 2020. The current cutoff is 400 percent of the poverty level. The insurance subsidy system would also be plan rather than less generous than under current law, and based on 58% of actuarial value (the cost of a low-level bronze plan (which the Centers for Medicare and Medicaid Services has estimated to be near 70% actuarial value). The bill includes a provision to tighten subsidy eligibility on the basis of immigration status. Medicaid expansion would be phased from 2021 until 2024. Unlike the House bill, Federal spending on Medicaid would be capped using a more stringent measure of inflation (CPI-U), rather than the medical inflation rate (CPI-M) used in AHCA, beginning in 2025. The bill includes an additional $2 billion in fiscal year (FY) 2018 to address the opioid epidemic and (like the House bill) would defund Planned Parenthood for one year. The legislation was recently amended with Senator Ted Cruz’s (R-Texas) Consumer Freedom Act, which would allow the sale of plans that don’t comply with the Affordable Care Act’s (ACA) insurance regulations on pre-existing conditions and essential health benefits (EHBs). The revised bill includes an additional $70 billion in new funding over the next seven years aimed at reducing costs for individuals who remain in the regulated-insurance plans. Beginning in 2022, states would begin having to share an increasingly higher portion of this cost. The new BCRA would keep in place several ACA taxes on the high earners, which would result in a revenue stream of nearly $232 billion over the next ten years. The revised measure includes the addition of $45 billion to combat the opioid epidemic. It would also allow individuals to use health savings accounts (HSAs) to pay for insurance premiums. Additionally, individuals would be allowed to purchase high deductible catastrophic coverage plans with federal tax credits. Medicaid payments to hospitals for coverage of uncompensated care would be calculated according to the state’s uninsured population, instead of the state’s Medicaid enrollment, as originally drafted.

2017 Trustees Report Released; IPAB Not Triggered

The 2017 Medicare Trustees Report, which projects the long-term finances of the Medicare program, was released last week. The Board of Trustees finds that Medicare spending will not trigger the Independent Payment Advisory Board (IPAB) until 2021. The Board had previously forecast that the cost-cutting panel would be triggered this year. The 2017 report also indicates that the Medicare trust fund will remain solvent until 2029, a year later than previously predicted, though the reason for the slowdown is unclear.  

GAO: Locations and Types of Graduate Training Were Largely Unchanged, and Federal Efforts May Not Be Sufficient to Meet Needs

The GAO released a report on GME. The report describes (1) changes in number of residents in GME training by location and type of training from academic years 2005 through 2015, (2) federal efforts intended to increase GME training in rural areas, and (3) federal efforts intended to increase GME training in primary care. To determine changes in the locations and types of residents in GME training, GAO analyzed resident data from the accrediting bodies overseeing GME training. To identify and describe relevant federal efforts, GAO also reviewed federal laws, reports, and data, and interviewed agency officials  

Cybersecurity Report Released

The Health Care Industry Cybersecurity Task Force released a report last week asserting that improved cybersecurity protections are needed for medical devices and health information technology. The public-private task force includes representatives from both the U.S. Department of Health and Human Services (HHS) and the U.S. Department of Homeland Security, and was created by the Cybersecurity Act of 2015. The report recommends increased information sharing between the public and private sector on cyber-risks. The Task Force also supports the creation of exceptions to health care anti-fraud laws to allow health care organizations aid physicians in the purchase of cybersecurity software.  

GAO: CMS Should Track MA Dropouts

The Government Accountability Office (GAO) has recommended that the Centers for Medicare and Medicaid Services (CMS) should track whether the Medicare Advantage enrollees who drop out of managed care plans are getting adequate care. The GAO report found that beneficiaries in poorer health are more likely than others enrolled in Medicare Advantage to voluntarily leave their health plans. These plans tended to have lower quality scores, with enrollees more likely to face difficulty in accessing care. The plans were also more likely to be restricted provider network health maintenance organizations. The GAO suggests that CMS take advantage of the opportunity to use disenrollment data to better target oversight and identify problems within the Medicare Advantage program.

CBO Releases Estimate on BCRA

The Congressional Budget Office (CBO) released an estimate of enacting this legislation would reduce the cumulative federal deficit over the 2017-2026 period by $321 billion. That amount is $202 billion more than the estimated net savings for the version of H.R. 1628 that was passed by the House of Representatives. The Senate bill would increase the number of people who are uninsured by 22 million in 2026 relative to the number under current law, slightly fewer than the increase in the number of uninsured estimated for the House-passed legislation. By 2026, an estimated 49 million people would be uninsured, compared with 28 million who would lack insurance that year under current law.

Trump Nominates New Surgeon General

President Trump has tapped Jerome Adams to be U.S. Surgeon General. Adams is an anesthesiologist and is currently serving as the health commissioner for the state of Indiana, a post he was appointed to in 2014 by now-Vice President Mike Pence. He has previously worked as a staff anesthesiologist and assistant professor of anesthesiology at the Indiana University School of Medicine. If confirmed, Dr. Adams would replace Rear Admiral Sylvia Trent-Adams, the current acting surgeon general, who took over the post after Vivek Murthy was dismissed by President Trump.

House Passes Medical Malpractice Reform Legislation

The House of Representatives passed legislation to overhaul the medical liability system last week. H.R. 1215, the Protecting Access to Care Act (PACA), was passed by a vote of 218-210, with 19 Republicans crossing the aisle to join all House Democrats to vote against the bill. PACA is considered a part of the GOP’s broader effort to repeal and replace Obamacare. The bill would limit damages and lawyers’ fees for cases related to federally subsidized health care. Medical malpractice awards for non-economic damages would be capped at $250,000 under the bill. The bill would also establish a three-year statute of limitations after an injury, or one year after the discovery of an injury. PACA would preempt state laws, except in cases where the state has already specified a shorter time period for the statute of limitations, or a particular amount of damages that can be awarded in a lawsuit. The Congressional Budget Office (CBO) estimates that the bill would reduce the deficit by $50 billion over the next decade. It is unclear whether the bill will advance in the Senate, where Democrats are opposed to the liability cap, and some Republicans have voiced concerns about infringing upon states’ rights. More than two-dozen states already have award caps in place. To respond to concerns related to state’ rights, the provisions in the PACA legislation are limited to when a medical liability case involves federal healthcare funds.

CMS Releases 2018 QPP Proposed Rule

The Centers for Medicare & Medicaid Services (CMS) released a proposed rule June 20 that describes changes that would be made to the Quality Payment Program (QPP) in 2018, as required under the Medicare Access and CHIP (Children’s Health Insurance Program) Reauthorization Act (MACRA) of 2015. The QPP provides two tracks for participation: the Merit-based Incentive Payment System (MIPS) or an Advanced Alternative Payment Model (A-APM). Most providers will participate in the MIPS program during the early years of the QPP. The proposed rule alters existing requirements while also introducing new policies that aim to simplify QPP, particularly for small, independent, and rural practices, while maintaining fiscal sustainability and high-quality care within Medicare.   Important provisions of the proposed rule are as follows:

  • CMS proposes to maintain the 2017 transition year weights for the MIPS components—60 percent for Quality, 25 percent for Advancing Care Information (ACI), 15 percent for Improvement Activities, and 0 percent for Cost.
  • CMS proposes to allow MIPS-eligible clinicians to continue participation in the ACI category by using 2014 certified electronic health record technology (CEHRT), thereby providing additional time for practices to move toward use of 2015 CEHRT.
  • CMS proposes to increase the low-volume threshold to exempt providers or groups with less than or equal to $90,000 in Part B allowed charges or less than or equal to 200 Part B beneficiaries (from a 2017 low-volume threshold of ≤$30,000 in Part B allowed charges or ≤100 Part B beneficiaries) from having to meet the MIPS participation requirements.

For more information, see the 2018 QPP Proposed Rule and the CMS Fact Sheet.