What’s Next in Federal Healthcare Policy? Two Industry Observers Offer Predictions

March 22, 2017
Two healthcare attorneys who are following current developments on Capitol Hill share their perspectives on the current moment in healthcare policy—and what’s coming next

On Monday, March 13, Healthcare Informatics Editor-in-Chief Mark Hagland interviewed two healthcare industry observers regarding current developments in federal healthcare policy. Hagland interviewed Jeremy Miller and Miranda Franco just hours before the news broke of the “scoring” of the American Health Care Act (AHCA), the healthcare legislation introduced by Republican leaders of the House of Representatives on March 6, to replace elements of the health insurance provisions of the Affordable Care Act (ACA), passed by Congress and signed into law in March2010 by President Barack Obama. The Congressional Budget Office (CBO) announced late Monday afternoon that, while it anticipated that the AHCA could reduce the federal budget deficit by $337 billion over 10 years, it would also lead to the loss of health insurance coverage of 24 million Americans over that same period of time.

Miller is managing partner in the Miller Health Law Group, a Los Angeles law firm with eight attorneys, all of whom specialize in healthcare law. Franco is senior public affairs advisor at Holland & Knight, a Washington, D.C.-based law firm heavily involved in advocacy issues in healthcare and other areas. Franco does advocacy work on behalf of the Cooperative of American Physicians, Inc. (CAP), a California-based provider of medical professional liability protection and other services, while Miller is involved with CAP in an educational role.

In separate interviews, Miller and Franco answered questions from Hagland around a number of federal healthcare policy topics—the current activity in the U.S. Congress around the American Health Care Act (ACHA), the Republicans’ plan to replace some of the health insurance aspects of the Affordable Care Act (ACA); potential modifications to regulations under MACRA (the Medicare Access and CHIP Reauthorization Act of 2015), including to the MIPS (Merit-based Incentive Payment Program); and potential federal healthcare policy changes coming out of the Department of Health and Human Services, under the new Secretary of Health and Human Services, Tom Price, a former Republican congressman from Georgia.

Why did the AHCA focus solely on health insurance? “It’s largely political,” Miller says. “This is what the Republican Party and President Trump campaigned on, and also what’s been in the public eye. And the content involved in [internal health system reform], around bundled payments and readmissions work, was pretty much under the radar” for federal legislators. Still, he says, numerous federal healthcare policy changes could take place within the administrative sphere, under Tom Price, the new Secretary of Health and Human Services (HHS), and a former Republican congressman from Georgia. “The fact is, a lot can go on below that radar, at the sub-regulatory level, partly based on the fact that Dr. Price is the new HHS Secretary.”

Going back to potential eventual federal legislative action, Miller says that “If any significant repeal-and-replace legislation is passed, that could affect the Center for Medicare and Medicaid Innovation [CMMI] and other things” related to internal health system reform. “Dr. Price has indicated that he’s not a big fan of mandatory bundled payments; he’s indicated hostility towards Medicare audits of doctors. So there’s a great deal that can take place independent of the ACA legislation.”

Can healthcare IT leaders begin to plan more safely around the retention of the internal health system reform provisions of the ACA, now that the Republican ACA-repeal legislation has been introduced, and it focuses solely on the health insurance aspects of the law? “Yes,” says Franco, but with a few qualifications around budgeting. “This [bill] is pretty much the first step in three steps. The fact that Medicare was untouched was purposeful. This first leg, the AHCA, was intended to pass under budget reconciliation, which means that only provisions that have a tax or revenue component can be included. The purpose under Title I was to address taxes under [the] Ways and Means [Committee], and Medicaid, under [the] Energy and Commerce [Committee]. The Republicans had said that Medicaid was fiscally unstable and had to be addressed. So it’s no surprise that they would address Medicaid issues first.”

Meanwhile, Franco says, “In terms of any internal health system reform around value-based purchasing, that might happen in a second round” of major federal healthcare legislation. The [inception of the] TJR [total joint replacement mandatory bundled payment] program was delayed [until March 21]. The cardiac episode payment program has been delayed also. Dr. Price has been very vocal that he’s opposed to mandatory bundled payments,” Franco says. “With that said, he’s a staunch supporter of MACRA,” she notes, “and is a supporter of physicians moving into the APM [advanced payment model] program under MACRA, but might make administrative tweaks here and there to temper the timeline. I don’t think we’re going to see an overhaul of the Medicare program,” she adds. “I think we’ll see modest reforms in the administrative rulemaking space.”

“The biggest question will be how much money would be in the system” in the wake of any ACA-repeal legislation being passed, Miller says. “We could see significant cuts in Medicare and Medicaid funding, to help pay for the loss of revenue that is eliminated through any repeal bill, that would impact hospitals more broadly through uninsurance. That would probably be the most dramatic impact” for providers, Miller says. “Dr. Price is a former physician and someone with strong views on these issues; he clearly is not in favor of fraud, waste, or abuse, of course. So getting more bang for the buck may be a focus” of Price’s term at HHS. “He’s on record saying that he wants physician independence of thought and decision-making to be preserved and not interfered with; that’s an area he might be interested in. I haven’t heard that ACOs [accountable care organizations] were in his gunsights, though.”

Of course, developments are moving rapidly in certain areas. For example, on Monday, Seema Verma was confirmed by Congress as CMS administrator. Certainly, Verma’s policy priorities will carry great weight within CMS, and it remains to see what those priorities are, and how Verma’s priorities might align with those of HSS Secretary Price.

Tort reform in the offing?

What might the chances be now of what is often referred to as “tort reform”—changes in medical-legal laws that Republicans in Congress and in the state legislatures have long advocated, such as changes in medical malpractice laws? “A tort reform bill has been proposed,” Miller says, referring to H.R. 1215, the “Protecting Access Care Act of 2017,” introduced on Feb. 24 into the Judiciary Committee in the House of Representatives by Rep. Steve King (R-Iowa). Among other things, that bill calls for the limiting of noneconomic damages in healthcare lawsuits to $250,000; a three-year statute of limitations for the filing of a healthcare lawsuit; and strong restrictions on plaintiffs’ attorneys’ ability to recover contingency fees in medical malpractice cases.

Could some version of H.R. 1215 pass Congress? “It’s hard to say,” Miller says. “There certainly have been a lot of efforts in this regard over the years. A lot of these things are modeled after California’s tort reform, which is more than 30 years on now. The medical associations are always in favor of it, and the trial lawyers are always opposed. It’s hard to say who’s in the ascendancy or not,” he adds. “But I would say that it’s more possible now than when the Democrats were in control of the White House and Congress.”

More broadly, what should healthcare and healthcare IT leaders be thinking about, when it comes to trends in healthcare policy and payment in the next couple of years? “The laws of economics and math can’t be repealed,” Miller says. “And there’s an increasing Medicare population as the Baby Boomers edge into it; and even though the economy’s been recovering, it’s unlikely that happy days will be here again for providers, given budgetary constraints that can be expected at all levels of government. So I’d say it’s going to continue to be challenging going forward in terms of federal healthcare payment, he says. “But I remember having a discussion with an audience of mostly hospital executives, during the time that the ACA was in the Supreme Court for a decision, and I asked for a show of hands. How many might have put aside their performance improvement work, if the ACA were to be repealed? I asked. And no one raised their hands; and I don’t see that that will change.”

More narrowly, Miller says, he does see the Independent Payment Advisory Board, or IPAB, as being in danger in the relatively near future. “I think that IPAB is very much in the gunsights” of federal legislature, he says, “and there’s a fair amount of bipartisan support for that. And even though the IPAB has not specifically been targeted for extinction, it’s still at serious risk of being extinguished in this legislation or in future legislation.”

One potential target: the CMMI

One department within the Centers for Medicare and Medicaid Services (CMS) that has been a target of criticism on the part of some congressional Republicans—including Tom Price, when he was still a congressman from Georgia—for a long time, has been the Centers for Medicare & Medicaid Innovation (CMMI).  “There’s been a lot of talk for some time among Republicans about scaling back CMMI,” Franco says, “but you have to consider that it’s one avenue for creating reforms administratively. I think they might start looking outside accountable care organizations and bundled payments, and perhaps they might look at bringing in private payers into the discussion,” she says, adding that, in any case, “I don’t envision them totally repealing funding for CMMI, because it’s so connected to MACRA, and MACRA was so much a bipartisan legislation, that physicians are already beginning to comply with. I would not want to say definitively, though.”

What about the future of core elements of the internal health system reforms within the ACA?  “We’ve seen the readmissions program—there’s been success in terms of improving outcomes because of that program—the conditions targeted by that program have gone down,” Franco notes. “And that’s reducing costs. So these are areas in which we might see little tweaks, but I don’t see a huge overhaul” of any of the value-based payment-related provisions of the ACA, she says.

Does that include the mandatory bundled payment programs in the total joint replacement and cardiac care areas that came into existence under the Obama administration? As has been well-known, Tom Price, as a Republican congressman, expressed strong disapproval of mandatory bundled payments. Asked whether Price could totally eliminate the two bundled payment programs himself, Franco says, “Yes ,he does have that authority, because they weren’t established by statute, but by regulation. MACRA advanced alternative payment models, but gave the Secretary the authority. Now, there’s a difference between ending those problems and making them voluntary. So I think that the Secretary might just switch those to voluntary. CJR [the Comprehensive Care for Joint Replacement mandatory bundled payment program] has already been in effect, and the hospitals have already been participating in CJR, so that could continue.” As for the cardiac mandatory bundled payment program, she says that “That program technically is scheduled to launch in March now, with the bundles beginning in July.” And that one, she says is far more likely to be simply eliminated.

Finally, asked how she sees federal healthcare policy evolving forward in the next few years, Franco says that “So much of it depends on what happens here,” referring to the current battle in Congress over the AHCA legislation that is focused on repealing parts of the ACA. “In six or seven years, we’ve seen a complete sea-change,” she notes, speaking of the reversal of the legislation now being debated in Congress. “But whatever version makes its way through passage, the pull of the previous administration will carry through to the new administration that that transition from volume to value,” she says. “That [the ongoing shift away from volume and towards value] won’t change. There might be changes around how much risk we engage on, but value is a shared goal. And I don’t see fundamental change around that. I think there’s a lot of commitment to that.”

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