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With Price Out, What To Expect Next In Healthcare

With Price Out, What To Expect Next In Healthcare

The meteoric rise and swift fall of Health and Human Services (HHS) Secretary Tom Price shocked many in the healthcare community, which is now asking what this means for the future of healthcare policy. A number of policy experts are being touted as the next HHS Secretary. The prospects range from those with a more moderate voice on healthcare policy to a continuation of Price’s conservative ideological approach. Those in contention include current Centers for Medicare and Medicaid Services (CMS) Administrator Seema Verma, Acting HHS Secretary Don Wright, Food and Drug Commissioner Scott Gottlieb, Veterans’ Secretary David Shulkin, former Louisiana Governor Bobby Jindal, and Florida Governor Rick Scott.

Whoever succeeds Price as HHS Secretary, we still predict that the Trump Administration will maintain a rather conservative, reformist bent. While the previous administration saw pilots and reform as a mechanism to expand coverage, the Trump path will likely center on reining in benefits and the entitlement nature of healthcare programs. This likely is true whether a more moderate Secretary takes the helm or not.

So what will we see or what do we hope to see?

  • Just as Price’s troubles were enveloping him, HHS and CMS had announced an information gathering process (RFI) for the Affordable Care Act’s (ACA) Centers for Medicare and Medicaid Innovation (CMMI). The RFI seeks input from patient advocates and providers on new and innovative payment models. Price had cancelled or scaled back numerous innovation pilots, including bundled payments in the Medicare fee-for-service (FFS) world that impacted both providers and hospitals. CMS indicated a few areas it might like to look at, including allowing providers to charge above Medicare fee schedules (or balance billing) for certain services, offering incentives to enroll in Medicare Advantage (MA), and value-based purchasing for drugs. The truth is that the CMMI and CMS had some pretty good voluntary and mandatory reform models going. While beneficial to some degree, voluntary models alone are not going to bend the cost curve or improve quality holistically. Despite his maverick status, as a physician, Price was to some degree a hostage to provider and hospital lobbies. A new Secretary may be less beholden to these anti-reform forces and continue the important mandatory programs needed to force change in the archaic, transaction-based system.
  • It is clear that the administration will shift the CMMI and CMS’ Medicaid focus to more conservative reform approaches to healthcare delivery. While we hope that some of the existing Medicare-Medicaid Plan and other Medicaid demonstrations will continue, we would expect that Trump’s CMS will encourage states to submit Medicaid waivers that create premiums in the program for some beneficiaries, limit benefits to certain populations, focus on personal responsibility, and shrink the overall footprint of the Medicaid program. As we have stated in the past, we support such experimentation on creating a Medicaid program that responds to various needs and is not one-size-fits-all. At the same time, waiver and reform efforts should not only focus on reductions and “skinnying down,” but on how to better coordinate the two massive entitlement programs in the areas of both acute and long-term care.
    With Obamacare repeal dead (for now), CMS and HHS will likely entertain similar ACA waivers impacting how Obamacare is delivered in states. Twenty three states have proposed waivers to existing ACA rules in their states.
  • The aging boom requires a concerted effort by both state and federal regulators to look at how long-term care will be delivered in the future. Again, we like the MMP MLTC experiments and the fact that more than a third of states today (and what is estimated to be about half over the next few years) are utilizing managed care to deliver cost-effective and quality long-term care services. CMS and HHS must focus on this area over the coming years. See our previous blog on this topic .
  • With or without further Obamacare repeal efforts, we expect a continued push for legislative changes to both Medicaid and Medicare. We support reforming the entitlement in Medicaid. It should not be as draconian as what many have laid out, but change is necessary to preserve the future of the program. We told you what we think would work in a two recent blogs: Part 1 and Part 2. A Medicare premium support initiative to replace the current entitlement could still be pushed by House conservatives, but this initiative has less political support and chance. However, the administration could work to expand MA and change other provisions to lay the foundation for a premium support model in the future.
  • We were pleased to see that the Senate came together on a bipartisan basis to pass the Medicare Chronic Care Act. We think these elements should continue to be pursued. The Act would expand existing reforms in the Medicaid FFS and MA environments, including:
    • Expanding the Independence at Home (IAH) program (which preserves community living).
    • Expanding the Medicare Advantage Value-Based Insurance Design (which better serves those with chronic conditions).
    • Making permanent the significantly transformed MA Special Needs Plans (SNPs)
    • Expanding supplemental benefits provision in MA.
    • Enhancing Accountable Care Organizations (ACOs), including the option to have beneficiaries assigned prospectively (at the beginning of a performance year) rather than retrospectively (this makes them look more like plans).
    • Expansion of telehealth in MA.
  • Will HHS, CMS, or Congress tackle drug costs, especially in Medicare? With the failure of Obamacare repeal thus far, it could be a potential bipartisan effort in the future especially with the President’s seeming support during the campaign and anti-Pharma comments just after getting elected. See our blog on this topic.

State Children’s Health Insurance Program Expires

Shockingly, Congress just allowed one of the most successful health insurance programs to expire on September 30 right around its 20th anniversary. The State Children’s Health Insurance Program (SCHIP) serves 9 million children nationwide. Some are served in Medicaid, while others are provided services through less-rich benefits and programs.

The program has enjoyed an impressive track record since 1997. While the 9 million number looks low, the SCHIP program also led to increased awareness of the availability of the Medicaid program for children. Today, less than 5 percent of children are uninsured because of Medicaid and SCHIP coverage.

By and large, children represent the lowest cost in the Medicaid program. SCHIP is a bargain as well. It is hard to find a better return on investment. Congress’s inaction allowing the program’s expiration is not without its consequences. While many states budget on a different fiscal year and bank dollars into the future, or have made allowances in their current year budgets for potential delays in funding, others may be forced to reduce or freeze enrollment.

Marc Ryan

Marc S. Ryan serves as MedHOK’s Chief Strategy and Compliance Officer. During his career, Marc has served a number of health plans in executive-level regulatory, compliance, business development, and operations roles. He has launched and operated plans with Medicare, Medicaid, Commercial and Exchange lines of business. Marc was the Secretary of Policy and Management and State Budget Director of Connecticut, where he oversaw all aspects of state budgeting and management. In this role, Marc created the state’s Medicaid and SCHIP managed care programs and oversaw its state employee and retiree health plans. He also created the state’s long-term care continuum program. Marc was nominated by then HHS Secretary Tommy Thompson to serve on a panel of state program experts to advise CMS on aspects of Medicare Part D implementation. He also was nominated by Florida’s Medicaid Secretary to serve on the state’s Medicaid Reform advisory panel.

Marc graduated cum laude from the Edmund A. Walsh School of Foreign Service at Georgetown University with a Bachelor of Science in Foreign Service. He received a Master of Public Administration, specializing in local government management and managed healthcare, from the University of New Haven. He was inducted into Sigma Beta Delta, a national honor society for business, management, and administration.

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