Price cham­pi­ons con­tro­ver­sial ACA re­place­ment ideas to Se­nate

Modern Healthcare - - NEWS - By Vir­gil Dick­son

HHS Sec­re­tary Tom Price has tipped his hand and re­vealed some po­ten­tially con­tro­ver­sial stances on his pre­ferred mea­sures for re­peal­ing and re­plac­ing the Af­ford­able Care Act.

Re­spond­ing to ques­tions from law­mak­ers dur­ing his con­fir­ma­tion process, Price said health­care re­form should al­low states to choose if they want to charge women more for cov­er­age; he also sup­ported cap­ping Med­i­caid fund­ing and us­ing high-risk pools to pro­vide cov­er­age for peo­ple with pre-ex­ist­ing con­di­tions.

Price’s writ­ten re­sponses have not been re­leased pub­licly, but were pro­vided ex­clu­sively to Mod­ern Health­care. The re­sponses give a more can­did look at the ideas that Price may push for Congress and Pres­i­dent Don­ald Trump to sup­port. Sev­eral sug­ges­tions are al­ready un­der con­sid­er­a­tion in a bill re­leased by GOP House lead­ers last week.

An HHS spokesman said the ideas that Price is cham­pi­oning for Congress to in­cor­po­rate into health­care leg­is­la­tion will re­turn au­thor­ity to the states and em­power pa­tients by pro­vid­ing them with fi­nan­cial re­lief, more choices and higher qual­ity care than they cur­rently re­ceive.

In his writ­ten re­sponse to Se­nate Fi­nance Com­mit­tee Rank­ing Mem­ber Ron Wy­den’s ques­tion on whether in­surance com­pa­nies should be re­quired to charge men and women the same rate for pre­mi­ums, Price in­di­cated the mat­ter may be best ad­dressed by states.

“The set­ting of pre­mi­ums is some­thing that has his­tor­i­cally been a mat­ter of state law and reg­u­la­tion, so that the dy­nam­ics of that state and its pop­u­la­tion and risk pool and con­sumer be­hav­ior can be taken into ac­count,” Price said.

Be­fore the Af­ford­able Care Act, in­surance com­pa­nies were charg­ing women more for their health in­surance com­pared to men. A 2012 re­port from the Na­tional Women’s Law Cen­ter found that women were pay­ing $1 bil­lion more an­nu­ally for health in­surance than men.

Price’s re­sponse misses the point of the ACA’s pre­mium rate-set­ting re­forms, ac­cord­ing to Da­nia Palanker, an as­sis­tant re­search pro­fes­sor at Ge­orge­town Univer­sity’s Cen­ter on Health In­surance Re­forms. The health­care re­form law didn’t re­peal states’ re­spon­si­bil­i­ties to over­see rate-set­ting, it just pre­vented in­sur­ers from dis­crim­i­nat­ing against women with their rates, she said.

If those pro­tec­tions went away, the im­plica-

“The set­ting of pre­mi­ums is some­thing that has his­tor­i­cally been a mat­ter of state law and reg­u­la­tion, so that the dy­nam­ics of that state and its pop­u­la­tion and risk pool and con­sumer be­hav­ior can be taken into ac­count.” DR. TOM PRICE HHS SEC­RE­TARY

tions would be se­vere, ac­cord­ing to Jean Hall, di­rec­tor of the In­sti­tute for Health and Dis­abil­ity Pol­icy Stud­ies at the Univer­sity of Kansas.

“The end re­sult of charg­ing women more for cov­er­age is that they can­not af­ford in­surance, so many costs for preg­nan­cies are shifted to pub­lic pro­grams like Med­i­caid,” Hall said. “Thus, we all pay more.”

Pre-ex­ist­ing con­di­tions

Price also ex­pressed sup­port for us­ing high-risk pools to cover in­di­vid­u­als with pre-ex­ist­ing con­di­tions, high­light­ing a Blue Cross and Blue Shield plan’s pool as a po­ten­tial model for the re­forms.

Be­fore the ACA, high-risk pools were of­ten the only cov­er­age op­tion for peo­ple with se­ri­ous pre-ex­ist­ing con­di­tions who didn’t have access to health in­surance from an em­ployer or the gov­ern­ment.

The pools were es­tab­lished as a way to en­sure those in­di­vid­u­als main­tained cov­er­age while at the same time keep­ing costs low for other con­sumers in the in­di­vid­ual mar­ket­place, Price said. Op­po­nents of the pools have said that his­tor­i­cally such mech­a­nisms have not worked.

Be­fore the ACA, high-risk pools were pro­hib­i­tively ex­pen­sive and cov­ered less than 1% of the to­tal unin­sured pop­u­la­tion in the 35 states that op­er­ated them, Hall said. Pre­mi­ums ranged from 125% to 200% of the av­er­age in­di­vid­ual plan pre­mium in the state, and de­ductibles were of­ten much higher than those seen in the mar­ket­place. In ad­di­tion, many plans had an­nual and life­time cov­er­age caps.

“They were not suc­cess­ful in any way in bring­ing down costs,” Hall said.

For­mer act­ing CMS Ad­min­is­tra­tor Andy Slavitt said it’s un­clear if there has ever been a truly suc­cess­ful high­risk pool. He said there is much more ev­i­dence that rein­sur­ance pro­grams— which trans­fer funds from in­sur­ers with health­ier pa­tients to those with more high-cost en­rollees—have worked bet­ter.

The fed­eral gov­ern­ment has used rein­sur­ance pro­grams in Medi­care Part D and the ACA to help keep pre­mi­ums sta­ble and af­ford­able. Ac­cord­ing to Ge­orge­town’s Cen­ter on Health In­surance Re­forms, the ACA’s tem­po­rary rein­sur­ance pro­gram re­duced net claim costs for high-cost con­sumers by about 10% to 14% in 2014, and health in­surance ac­tu­ar­ies have found rein­sur­ance to be a sta­bi­lizer of pre­mi­ums in the in­di­vid­ual mar­ket.

The ACA’s rein­sur­ance pro­gram ended in 2016, which some ac­tu­ar­ies note is part of the rea­son why pre­mi­ums in­creased in 2017, ac­cord­ing to the cen­ter.

Yev­geniy Fey­man, a Repub­li­can an­a­lyst, agreed with Price that high­risk pools could be a strat­egy to help peo­ple with pre-ex­ist­ing con­di­tions, but does not be­lieve they are the only op­tion.

“There’s no rea­son in par­tic­u­lar that they should be bet­ter at pro­tect­ing those with pre-ex­ist­ing con­di­tions than sim­ple pool­ing within the in­di­vid­ual mar­ket,” Fey­man said. “High­risk pools shouldn’t be the last stand of Repub­li­cans on health pol­icy.”

The bill in­tro­duced last week ad­dresses cov­er­age for pre-ex­ist­ing con­di­tions. It main­tains the stan­dard that peo­ple with pre-ex­ist­ing con­di­tions main­tain cov­er­age, but al­lows in­sur­ers to charge higher pre­mi­ums to those who let their cov­er­age lapse.

The bill does al­low for fed­eral funds to be used to cre­ate high-risk pools in the event in­di­vid­u­als don’t main­tain con­tin­u­ous cov­er­age and have trou­ble af­ford­ing other cov­er­age.

Block-grant­ing Med­i­caid

Price also ex­pressed sup­port for capped fed­eral fund­ing for Med­i­caid. And he shot back at a com­mon crit­i­cism that the change would hin­der states’ at­tempts to re­spond to un­fore­seen costs as­so­ci­ated with pub­lic health crises, such as the Zika virus or ris­ing pre­scrip­tion drug costs.

He said he be­lieves Congress could help states plan for un­fore­seen pub­lic health chal­lenges by draft­ing leg­is­la­tion that “would en­cour­age states to save for such even­tu­al­i­ties,” Price said.

States al­ready tend to have a rainy day fund, but this fund­ing is in­tended to ad­dress rev­enue short­falls and eco­nomic down­turns, not the cat­a­strophic con­se­quences of a health­care cri­sis, said Dee Ma­han, di­rec­tor of Med­i­caid ini­tia­tives at Fam­i­lies USA.

“In the same vein, per­haps the fed­eral gov­ern­ment should also do away with dis­as­ter re­lief, leav­ing to the states the task of set­ting up re­serves to deal with losses from Cat­e­gory 5 hur­ri­canes,” Henry Aaron, a health econ­o­mist at the Brook­ings In­sti­tu­tion, said with a tinge of sar­casm.

Oth­ers say Price has a point about hav­ing a con­tin­gency plan in the event of an emer­gency.

“If states are wor­ried about an emer­gency event un­der blocked Med­i­caid fund­ing, they should plan for it. It is cor­rect to say that if states are wor­ried about fund­ing emer­gent pub­lic health crises out of cur­rent funds, they should sock away money in a rainy-day fund for such con­tin­gen­cies,” said Michael Can­non, di­rec­tor of health pol­icy stud­ies for the lib­er­tar­ian Cato In­sti­tute.

Un­der the bill cur­rently be­ing re­viewed by Congress, Med­i­caid would be con­verted from an en­ti­tle­ment pro­gram to one that pro­vides a per capita cap on fund­ing to states, de­pend­ing on how many peo­ple they have en­rolled.

More-con­ser­va­tive Med­i­caid pro­grams

In his re­sponses, Price also told law­mak­ers that he felt more states could ben­e­fit from adopt­ing an ap­proach used in In­di­ana’s HIP 2.0 Med­i­caid pro­gram, which charges ben­e­fi­cia­ries pre­mi­ums and locks them out if they fail to pay. The HHS sec­re­tary said HIP mem­bers are more en­gaged with their providers, less re­liant on emer­gency rooms and more sat­is­fied with their cov­er­age than tra­di­tional Med­i­caid mem­bers.

That type of pro­gram could help Med­i­caid mem­bers tran­si­tion suc­cess­fully from the gov­ern­ment pro­gram to com­mer­cial health in­surance plans, an out­come he feels should be an im­por­tant fac­tor in Med­i­caid de­sign.

How­ever, there are se­ri­ous ques­tions over whether the model has truly been suc­cess­ful. In­di­ana re­cently sub­mit­ted a re­port that ap­peared to in­flate the pro­gram’s per­for­mance, ac­cord­ing to staffers at the left-lean­ing Na­tional Health Law Pro­gram and Cen­ter on Bud­get and Pol­icy Pri­or­i­ties who re­viewed the data.

Be­fore the model is ex­panded, the CMS should con­duct an in­de­pen­dent eval­u­a­tion to see if it truly works com­pared with a Med­i­caid pro­gram that doesn’t have the con­ser­va­tive pro­vi­sions, said David Mach­ledt, se­nior pol­icy an­a­lyst with the Na­tional Health Law Pro­gram.

“If fed­eral and state of­fi­cials are con-

The CMS’ fi­nal rule is “caus­ing the big­gest brain drain in the best med­i­cal sys­tem in the world,” Dr. Marc Sw­erdloff, a Florid­abased neu­rol­o­gist said in a comment posted to the Fed­eral Reg­is­ter late last year. “You will reap the whirl­wind you have sown. I would have never thought the cen­tral gov­ern­ment would have so lit­tle re­gard for its pa­tients and doc­tors.”

fi­dent in the ef­fi­cacy of the HIP 2.0 demon­stra­tion, they should be ea­ger to re­solve any data in­con­sis­ten­cies and to hold their pro­gram up against Med­i­caid ex­pan­sions in other states,” Mach­ledt said.

Balance billing

Price is back­ing leg­is­la­tion that will al­low physi­cians to bill se­niors for charges that are more than the rates ap­proved by Medi­care. He claims the move would draw more physi­cians to en­roll in the pro­gram, but sev­eral physi­cian groups say it could back­fire.

Cur­rent law does not al­low par­tic­i­pat­ing physi­cians to bill pa­tients more than the Medi­care pay­ment rate for any ser­vice. Providers not in the pro­gram can balance bill Medi­care ben­e­fi­cia­ries if they choose such an ar­range­ment. In re­sponse to a query from Sen. Bill Nel­son (D-Fla.) dur­ing his con­fir­ma­tion process, Price said he fa­vored chang­ing the law to let doc­tors re­coup un­re­im­bursed Medi­care costs, a prac­tice known as balance billing.

Price, a re­tired or­tho­pe­dic sur­geon, said balance billing would en­tice more providers to work with Medi­care ben­e­fi­cia­ries. Pa­tients typ­i­cally get “sur­prise” bills when a physi­cian prac­tice op­er­at­ing in­side a hospi­tal isn’t part of an in­surer’s net­work. It’s been hap­pen­ing more fre­quently in re­cent years as in­sur­ers se­lect fewer providers for their net­works to keep pre­mi­ums down. Sev­eral states have passed mea­sures to pre­vent the prac­tice.

Dur­ing his time in the House, Price in­tro­duced leg­is­la­tion to al­low balance billing nu­mer­ous times. The idea never gained trac­tion.

Now, as sec­re­tary of HHS with the ear of Pres­i­dent Don­ald Trump and a mem­ber of the party that con­trols both cham­bers of Congress, he is in a bet­ter po­si­tion to make that long-de­sired change a re­al­ity. Price’s spokesman de­clined to ex­pand on his writ­ten com­ments.

As part of Price’s con­fir­ma­tion process, Nel­son and other sen­a­tors ques­tioned Price about his stances on health­care pol­icy, in­clud­ing Medi­care. Nel­son, an op­po­nent of balance billing, said most Medi­care ben­e­fi­cia- ries have lim­ited in­comes and may not have the fi­nan­cial re­sources to pay a provider for the ex­cess price of ser­vices beyond what’s cov­ered by Medi­care.

Price in­sisted the change would spark ma­jor, pos­i­tive changes for Medi­care mem­bers by in­creas­ing the num­ber of physi­cians will­ing to see Medi­care pa­tients. How­ever, ac­cord­ing to the March 2016 Medi­care Pay­ment Ad­vi­sory Com­mis­sion re­port, “most ben­e­fi­cia­ries re­port they are able to ob­tain timely ap­point­ments for rou­tine care, ill­ness, or in­jury, and most ben­e­fi­cia­ries are able to find a new doc­tor with­out a prob­lem.”

An­ders Gil­berg, se­nior vice pres­i­dent of gov­ern­ment af­fairs for the Med­i­cal Group Man­age­ment As­so­ci­a­tion, said many physi­cian prac­tices “would sup­port this leg­is­la­tion in con­cept,” given how provider pay­ments in Medi­care have lagged be­hind in­fla­tion for the past decade. The As­so­ci­a­tion of Amer­i­can Physi­cians and Sur­geons, a far-right provider group, and the Amer­i­can Col­lege of Physi­cians also sup­ported the idea.

Rep­re­sen­ta­tives from the Amer­i­can Med­i­cal Group As­so­ci­a­tion and Amer­i­can Academy of Fam­ily Physi­cians said that the ap­proach might lead providers to limit their Medi­care pa­tients to those who agree to balance billing,

The change in law could be “a lit­tle danger­ous,” po­ten­tially cre­at­ing in­equitable access for low-in­come peo­ple, ac­cord­ing to Shawn Martin, se­nior vice pres­i­dent for pol­icy at the AAFP.


In ad­di­tion to at­tract­ing new providers to Medi­care, Price is also work­ing to en­sure that doc­tors al­ready in the pro­gram will stay. To do this, he is plan­ning to have CMS lead­er­ship take a closer look at the fi­nal rule re­leased in Oc­to­ber un­der the Obama ad­min­is­tra­tion that im­ple­ments the Medi­care Access and CHIP Reau­tho­riza­tion Act.

Price told Sen. Bob Casey (D-Pa.) that when it comes to the fi­nal ver­sion of the MACRA rule, “sig­nif­i­cant chal­lenges re­main with re­spect to provider bur­den.”

The goal of MACRA is to shift physi­cians in Medi­care away from the feef-or-ser­vice model and onto a val­ue­based pay­ment sys­tem. To avoid penal­ties un­der MACRA, physi­cians will par­tic­i­pate in one of two re­im­burse­ment tracks: the Merit-based In­cen­tive Pay­ment Sys­tem or ad­vanced al­ter­na­tive pay­ment mod­els.

Providers have com­plained the fi­nal rule con­tains too many re­port­ing re­quire­ments. To com­ply with all the ones listed in the rule would cut into pa­tient care time, they said.

The CMS’ fi­nal rule is “caus­ing the big­gest brain drain in the best med­i­cal sys­tem in the world,” Dr. Marc Sw­erdloff, a Florida-based neu­rol­o­gist, said in a comment posted to the Fed­eral Reg­is­ter late last year. “You will reap the whirl­wind you have sown. I would have never thought the cen­tral gov­ern­ment would have so lit­tle re­gard for its pa­tients and doc­tors.”

For­mer act­ing CMS Ad­min­is­tra­tor Andy Slavitt said he also sup­ports Price tak­ing a closer look at the fi­nal rule to see if the bur­den can be re­duced. At the CMS, Slavitt at­tempted to al­low doc­tors to slow-walk their pace of com­ply­ing with the law.

Health in­for­ma­tion tech­nol­ogy

Price last week missed two high­pro­file op­por­tu­ni­ties to take a stand on health in­for­ma­tion tech­nol­ogy pol­icy, but used a third com­mu­ni­ca­tion to en­sure that the fed­eral gov­ern­ment will con­tinue to push health IT in­ter­op­er­abil­ity.

At a White House news con­fer­ence,

he spent the bulk of his time speak­ing in sup­port of a House bill to re­peal Oba­macare.

In let­ters to the chair­men of two key House com­mit­tees, he dis­cussed “the first steps to dis­man­tle Oba­macare.”

In nei­ther in­stance did he specif­i­cally men­tion health IT pol­icy ini­tia­tives the new ad­min­is­tra­tion might take.

In the doc­u­ments ac­quired by Mod­ern Health­care, Price elab­o­rated on pol­icy po­si­tions he’d given dur­ing his con­gres­sional con­fir­ma­tion process.

Price re­sponded to ques­tions from Sen. Bob Casey of Penn­syl­va­nia by writ­ing that given uni­ver­sal agree­ment on the need to im­prove pa­tient care and re­duce costs, “One way to do so is for the fed­eral gov­ern­ment to con­tinue to pro­mote the growth of health in­for­ma­tion tech­nol­ogy and elec­tronic health records.

“One suc­cess in this space over the past sev­eral years has been the de­vel­op­ment and growth of the Di­rect Ex­change net­work, which has al­lowed for mil­lions of health­care record ex­changes over the past sev­eral years,” Price said.

Di­rect mes­sag­ing is a col­lec­tion of elec­tronic health in­for­ma­tion ex­change stan­dards and im­ple­men­ta­tion spec­i­fi­ca­tions de­vel­oped in a part­ner­ship be­tween pri­vate-sec­tor par­tic­i­pants and the Of­fice of the Na­tional Co­or­di­na­tor for Health In­for­ma­tion Tech­nol­ogy at HHS.

When asked about his sup­port for Di­rect Ex­change specif­i­cally, Price said, “Elec­tronic in­for­ma­tion shar­ing, as sup­ported by in­ter­op­er­a­ble health in­for­ma­tion tech­nol­ogy (IT) sys­tems, im­pacts over­all care and the pa­tient ex­pe­ri­ence.” Pa­tients and providers of­ten rely on the fast ex­change of rel­e­vant, trust­wor­thy in­for­ma­tion across health IT sys­tems.

“Meth­ods to im­prove flex­i­bil­ity and pa­tient en­gage­ment, and clear the way for in­creased health IT in­ter­op­er­abil­ity should be ex­am­ined as we work to im­prove health­care de­liv- ery,” Price said.

The Med­i­cal Group Man­age­ment As­so­ci­a­tion has sent a letter to the Trump ad­min­is­tra­tion with a long list of health IT pro­gram re­forms. Among them are the re­quire­ments to sim­plify ex­ist­ing pro­grams out­lined in the 21st Cen­tury Cures Act, which passed last year.

But so far, the ONC, which was the venue for most of rule-writ­ing related to health IT un­der the Obama ad­min­is­tra­tion, is with­out a Trump-ap­pointed leader. And, rule-writ­ing for Cures is also partly ham­strung since the fed­eral gov­ern­ment is op­er­at­ing fi­nan­cially un­der rules that limit ex­pen­di­tures for new pro­grams cre­ated by Cures.

Robert Ten­nant, a health IT ad­viser at the MGMA—like most oth­ers in health IT—is watch­fully wait­ing.

“We’re very hope­ful in this en­vi­ron­ment of dereg­u­la­tion and re­duc­ing ad­min­is­tra­tive bur­den that the sec­re­tary will ad­dress some of the key is­sues that af­fect physi­cians,” Ten­nant said.

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