Life Science Compliance Update

July 06, 2017

Comparison of House v. Senate Health Care Draft Bills

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A topic of much discussion, but few solutions, has been healthcare in America. President Donald Trump was supposedly elected, in part, because of his promises to “Repeal and Replace” the Affordable Care Act, aka “Obamacare.” Many politicians and reporters were talking about passing the replacement bill prior to the summer Congressional recess. We are currently in that recess, and clearly, no such bill has been passed.

In today’s hyper-partisan world, it is tough to get all senators or representatives from one side of the political aisle to vote for something together; the idea that senators or representatives from the other party may vote in tandem on such a hot-button issue is almost impossible.

Right now, the House of Representatives has passed a bill, the American Health Care Act (AHCA), while the Senate has introduced a discussion draft. It is highly unlikely that Senators will vote on a health care bill during the week they return from recess. Currently, Senate Majority Leader Mitch McConnell is sending several proposals and basic outlines to the Congressional Budget Office for scoring.

In the meantime, below is a side by side comparison of the House-passed AHCA with the Senate discussion draft bill. It is important to remember that this is not a comparison of two bills that have been passed and now must be reconciled – instead, it is more of a guideline to show where one side of the Legislature stands on the issues as compared to the other side of the Legislature.

Repeal of Medicaid Expansion

House-Passed AHCA

Provides the enhanced matching rate only for expansion-eligible individuals already enrolled in Medicaid as of Dec. 31, 2019 and do not have a break in eligibility for more than one month after that date. Those newly eligible or reenrolling could only do so at a state’s regular match rate.

Senate-Introduced Draft

Phases-down enhanced FMAP over three years beginning in 2021 for newly eligible beneficiaries (85% in CY 2021, 80% in CY 2022, and 75% in CY 2023), using regular match if higher. States implementing expansion after Feb. 28, 2017, not eligible for newly eligible match rate.

Incentives for Increased Eligibility Redeterminations

House-Passed AHCA

Requires States with Medicaid expansion populations to re-determine expansion enrollees’ eligibility every six months. Provides a temporary five percent FMAP increase to States for activities directly related to complying with this section. Effective Oct. 1, 2017.

Senate-Introduced Draft

Same as the AHCA, but it permits – not requires – it and allows for more frequent re-determinations.

Work Requirements

House-Passed AHCA

Allows states to apply optional work requirements for non-disabled, nonelderly, non-pregnant Medicaid beneficiaries beginning in FY 2018. Includes increased match for implementation activities.

Senate-Introduced Draft

Same as the ACHA, with parallel exceptions.

Patient and State Stability Fund

House-Passed AHCA

Provides for a fund to reduce costs for patients and to stabilize State markets. The fund:

  • Provides $15 billion in 2018 and 2019 and $10 billion annually for 2020 through 2026.
  • Adds via amendments $8 billion to assist those affected by health status underwriting in waiver states and $15 billion for maternity, newborn, mental health, and substance abuse care.
  • Adds $15 billion for a federal “invisible high-risk pool” to offset high-cost patients’ expenses through reinsurance.

Senate-Introduced Draft

Establishes two funds, short term and long term:

  • Short term: appropriates $15 billion for CY 2018 and 2019 and $10 billion for years 2020 and 2021 to help issuers deal with market disruption.
  • Long term: provides $62 billion over 10 years for high risk program; premium stabilization; provider payments; cost sharing assistance. States must pay match starting CY 2022.

Continuous Health Insurance Incentive

House-Passed AHCA

For Benefit Year 2019, implements a 12-month lookback period to assess whether an applicant went without coverage for greater than 63 days and assesses a 30 percent premium surcharge for one year.

Senate-Introduced Draft

The current draft does not include any incentives for patients having continuous health insurance throughout the year.

State Waivers

House-Passed AHCA

Allows states to seek waivers of certain federal requirements. States may:

  • Waive federal age-rating requirements and allow wider age bands;
  • Waive federal essential health benefit requirements (EHBs) and define their own;
  • Waive the ban on health status rating. Instead of imposing the AHCA’s one-year 30 percent premium surcharge for not maintaining continuous coverage, insurers would be permitted to charge higher premiums to those with preexisting conditions for a one-year period if they do not maintain continuous coverage. States must set up a high risk pool to elect this option.

Requires states to attest that their purpose is reducing premiums. Automatically approves waivers in 60 days for up to 10 years unless HHS intervenes to deny.

Senate-Introduced Draft

Provides $2 billion in grant funding through 2019, to incentivize states to apply for section 1332 waivers established by the ACA, under which a variety of requirements may be waived, including EHBs and regulations prohibiting subsidies off-Exchange. Does not permit waivers of community rating.  It also removes requirements that 1332 waivers be budget neutral or achieve the same coverage rates as would otherwise be attained under Federal law.  Further, it permits the use of State Innovation and Stability fund allotments to carry out waiver implementation.

Medical Device Excise Tax

House-Passed AHCA

Repeals the 2.3 percent excise tax on medical devices beginning in 2017 (when it is already suspended).

Senate-Introduced Draft

Repeals the tax beginning in 2018 (when it would otherwise have taken effect again).

Tax on Prescription Medication

House-Passed AHCA

Repeals the ACA pharmaceutical tax in 2017.

Senate-Introduced Draft

Repeals the tax one year later, in 2018.

Opioid Funding

House-Passed AHCA

Provides $45 billion in opioid funding over ten years.

Senate-Introduced Draft

Provides $2 billion in state grant funding for opioid efforts, in FY 2018.

May 08, 2017

The ACHA Passes the House

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On Thursday, May 5, 2017, House Republicans finally got what they have been asking for, and campaigning on, for several years. They held a successful floor vote on the American Health Care Act (AHCA), approving the bill by a narrow 217-213.

Following the vote, President Donald Trump hosted Republicans at the White House for a celebratory press conference, saying that he was “so confident” that the House version would be taken up and passed in the Senate. Senate Republicans quickly made it clear that they would not use the House-passed AHCA as a starting point, and would instead create their own package that could then be reconciled with what was passed in the House. This next step could take weeks, or even months, as Senate Republicans navigate their own ideological divides and ensure that any legislation conforms with budget reconciliation rules.

The Bill

While many are happy that the bill repealed Obamacare to a certain extent, others are concerned that the bill will hurt healthcare for many. The bill will likely lower premiums for younger, healthier, people and raise premiums for older and less healthy payors. Young people can still remain on their parents’ health insurance until age 26. The bill also does away with the individual mandate, meaning no one will be forced to pay a penalty if they go without health insurance for more than a short period of time, but does provide for different incentives for people to maintain their coverage.

A quick google search can provide readers with pros and cons that align with individual political beliefs, so we will not delve into those much here. To get a jump start on talking points, however, an article from Money on the bill can be found here.

Next Step: To the Senate!

Both moderate and conservative senators have started to discuss their vision for the healthcare bill, with Senator Shelley Moore Capito of West Virginia saying she “absolutely” had concerns with the AHCA’s Medicaid cuts and Senator Rand Paul of Kentucky saying that the conservative changes did make the legislation “less bad,” but that it still has “fundamental problems.” With a much smaller majority than in the House, Senate Republicans can only afford two defections and still advance legislation.

Industry Reaction

Many Republicans acknowledge that the bill is not perfect, and most – if not all Democrats – have come out against the bill and have started campaigns against it. A variety of medical associations and organizations have been closely tracking this bill and below is a sampling of some statements that have been published by various groups.

The Arthritis Foundation released a statement, noting,

The health reform replacement bill passed today threatens coverage and affordability of care for so many of our patients. The Arthritis Foundation, one of the largest patient advocacy organizations, is concerned that the legislation will not provide adequate protections to people with pre-existing conditions, could limit access to Essential Health Benefits and cut benefits for Medicaid. Our patients are already faced with managing a chronic disease and it’s unfair that they may also be faced with paying more for insurance with fewer guaranteed benefits including out-of-pocket medication protections. People with arthritis and other chronic conditions need coverage the most and regular access to affordable care, so they can stay healthy.

Our goal is to continue our work with Congress to ensure health reform replacement legislation provides a more seamless and transparent health care system, insurance protocols that are not overly burdensome and allow patients to remain stable on a drug, policies that ensure out-of-pocket costs for prescription drugs are more reasonable and an emphasis on outcomes-based contracting and value-based insurance design.

The American Medical Association released a statement, clearly unhappy with the passage of the bill:

The bill passed by the House today will result in millions of Americans losing access to quality, affordable health insurance and those with pre-existing health conditions face the possibility of going back to the time when insurers could charge them premiums that made access to coverage out of the question. Action is needed, however, to improve the current health care insurance system. The AMA urges the Senate and the Administration to work with physician, patient, hospital and other provider groups to craft bipartisan solutions so all American families can access affordable and meaningful coverage, while preserving the safety net for vulnerable populations.

Seema Verma, Centers for Medicare & Medicaid Services (CMS) Administrator, released a statement on its passage, stating,

Today is the first of what I am confident will be many historic days ahead as we move toward patient–centered healthcare instead of government–centered healthcare.

I have worked in the field of Medicaid for 20 years and have heard from many mothers like myself who have shared their struggles and their hopes for a more affordable, more sustainable healthcare system. It is important that our most vulnerable citizens, the aged, the infirm, the blind and the disabled have more choices, greater access and peace of mind when it comes to their healthcare.

The bill that was passed in the House is a great first step achieving this goal.

April 12, 2017

AHCA Failed…Now What?

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Moments before a scheduled vote on the bill, Republican House leaders announced that they were pulling the American Health Care Act (AHCA) from consideration. Such a move, made because of a shortage of votes needed to pass the bill, has thrown the political arena into disarray and uncertainty. As of right now, it looks like President Donald Trump is going to leave the Affordable Care Act (ACA) in place and move onto other priorities of his, such as tax reform. Even still, there are other options out there with respect to health care and what may happen next.

The Administration’s authority to make changes in the health arena is extremely broad. It includes: executive orders, rules, or other executive guidance based on the extensive body of statutes governing federal health care programs; pre-ACA demonstration and waiver authority; and demonstration authority given to the Center for Medicare & Medicaid Innovation (CMMI) under the ACA. The Trump Administration also has broad opportunities to aggressively interpret these authorities with minimal chance that its actions will be overridden by Congress.

Further, courts review executive actions with deference, thereby limiting actions subject to judicial modification.

Congress

For example, with respect to legislative possibilities, it is possible that key Senate leaders, such as Senator Lamar Alexander of Tennessee, could take a role in brokering an agreement that could pass the Senate with 60 votes. Under such a scenario, major changes would be likely to the House approach on Medicaid expansion, tax credits, and insurance reforms. Moreover, per-capita caps would be unlikely to pass bipartisan muster. Such efforts could be characterized as an attempt to “fix” the ACA, or could end up being a rebranding exercise altogether – even something to the tune of “Trumpcare,” perhaps. But significant challenges would exist in reconciling such a package with Republican promises to “repeal and replace” the ACA. It is also possible that Republicans could seek to pass a “clean” repeal of the ACA – something they have done before, which was vetoed by President Obama in Jan. 2016 – without any agreement on how to replace it.

Administrative Agencies

While the ACA remains in place, it is likely that Health and Human Services (HHS) Secretary Tom Price will look to his regulatory toolbox to provide “relief” from ACA regulations and reverse Obama administration regulations in general.

Additionally, the Trump administration has indicated they will seek to facilitate expedited approval of Medicaid waiver applications to reshape the program for the poor and disabled. Specifically, Secretary Price and CMS Administrator Seema Verma have suggested that states may consider policies imposing work requirements for able-bodies adults, “Health Savings Account-like features,” and various cost-sharing policies common in commercial insurance, like premium payments and emergency room copayments.

Executive Branch

Within hours of his inauguration, President Trump signed an Executive Order (EO) signaling his Administration’s policy of seeking “prompt repeal” of the ACA through wide-ranging executive action. The EO lays the groundwork for federal agencies’ efforts to take intermediate regulatory steps to unravel parts of the ACA, although no specific policies are implemented via the order itself.

The order says HHS and other ACA implementing agencies, such as the Internal Revenue Service (IRS) and Department of Labor (DOL), shall “exercise all authority and discretion available to them to waive, defer, grant exemptions from, or delay the implementation of any provision or requirement” of the ACA to the maximum extent permitted by law.”

The order identifies burdens on states and taxes and penalties on individuals, insurers, providers, or drug and device manufacturers and encourages flexibility for states as well as action to promote a “free and open market in interstate commerce,” including for health insurance.

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