CMS Officials Go On Speaking Tour – Give Hints of Agenda to Come

Though Congress is on recess, health care policy was very embedded in conversation, with the Department of Health & Human Services (HHS) officials making their rounds at speaking engagements. Through the speeches and chats with reporters, we have learned some insights into the agenda moving forward for the remainder of 2018. Some takeaways:

Drug Pricing: Speaking at the World Health Care Congress, HHS Secretary Alex Azar laid out what he calls a comprehensive strategy in tackling high drug prices. The plan includes four areas: tackling high list prices, seniors and government health programs paying too much for drugs, rising out of pocket costs, and foreign governments “free-riding” on American investments in innovation.

Value Based Care: During the speech, the top priority cited by Azar is accelerating the move to value based care, focusing on four areas of emphasis: health IT, price and quality transparency, new models in Medicare and Medicaid, and removing burdens that impede care coordination. The Centers for Medicare & Medicaid Services (CMS) recently unveiled the 2019 proposed payment rule that aims to drive greater transparency in hospital inpatient services, with hospitals now being required to publish standard lists of charges on the internet. CMS will continue this move toward transparency with more regulations, including the issue of surprise billing. On the models front, CMS recently released a request for information regarding direct provider contracting, something that should be closely watched once CMS reviews the comments and issues a proposal.

Medicaid Waivers: In a private meeting with reporters, CMS Administrator Seema Verma discussed CMS’ progress and rationale on Medicaid waivers. Verma warned states against work requirement waivers in non-expansion states, focusing on the harm it would pose to those who suddenly make more than the Medicaid eligibility but are not eligible for Marketplace plans if the state did not expand Medicaid. Verma stated this fell out of the current administration’s goal of creating a “bridge out of poverty”, as arguably this could incentivize someone to stay below the threshold and keep their Medicaid benefits. Verma was expected to reject Kentucky’s lifetime limits proposal, but did not do so, reportedly due to last minute internal disagreement about the waiver. However, prospects look dire as Verma stated that the administration understands people’s circumstances could change over time, and they are trying to “think about all the nuances”.

Obamacare and Marketing: the outlook was not good for Marketplace plans, with Verma suggesting the program no longer requires the same level of investment. Additionally, she states that she is not sure what marketing the plans can do with the higher rates, limited choices, and narrow networks. This response suggests that the $400 million proposal from California for additional marketing funds is out of the question, and we should expect a minimal marketing effort from the administration in the fall.

Finally, in an interesting plot twist, former HHS secretary Tom Price made the news with his remarks at the World Health Care Congress, in which he reportedly stated that the tax plan, specifically the repeal of the individual mandate, will hurt the market in the long run and drive up prices. While this is pretty solid reasoning, and once echoed by the Congressional Budget Office (CBO), it was surprising to hear the remark from Price, who previously advocated for the repeal of the individual mandate. This may provide some insight into the politics of the 2018 midterm elections, and likely means other members of Congress will avoid the debate around the Affordable Care Act as well.

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