Supreme Court Upholds the Provision of Tax Credits in Federal Exchanges under ACA
On Thursday, June 25, the U.S. Supreme Court sided with the federal government in a landmark 6-3 decision in King v. Burwell, upholding the provision in the Affordable Care Act (ACA) that provides federal tax credits to individuals to purchase health insurance in states using federally facilitated health insurance exchanges. Writing for the majority, Justice Roberts found that the ACA as written allows the federal government to provide these tax credits. Had the Court struck down the provision of tax credits in federal exchanges, 6.4 million low- and middle-income individuals would have had lost their federal assistance used to purchase health care coverage. This likely would have resulted in rising premiums as fewer individuals would choose to enroll in the exchanges in the affected states. This decision ensures that these individuals will maintain their tax credits. The Supreme Court’s ruling marks perhaps the final hurdle for the ACA. Since its enactment in 2010, the law has survived a prior legal challenge before the Supreme Court in National Federation of Independent Business v. Sebelius in 2012 and dozens of repeal votes. Congressional Republicans have expressed interest in continuing to pursue piecemeal changes to the ACA. The Court’s slip opinion in King v. Burwell is available HERE.
IPAB Repeal Legislation Passes the House
On Tuesday, the House passed H.R. 1190, the Protecting Seniors’ Access to Medicare Act of 2015, by a vote of 244-154. The legislation, introduced by Representatives Phil Roe, M.D. (R-TN) and Linda Sánchez (D-CA), repeals the Independent Payment Advisory Board (IPAB), the unelected 15 member board that was created under the Affordable Care Act (ACA) to extend Medicare solvency. Eleven House Democrats sided with Republicans to repeal the measure, and 35 House members did not vote. The bill is offset by a $7.1 billion cut from the ACA’s Public Health and Prevention Fund. The legislation now moves to the Senate, where the prospects for its consideration are uncertain.
House and Senate Appropriations Committees Approve FY2016 Funding Bills for HHS
On Wednesday, June 24, the House Appropriations Subcommittee approved the FY2016 Labor, Health and Human Services, Education, and Related Agencies (Labor-H) bill funding various agencies and the Department of Health and Human Services (HHS), except for the Food & Drug Administration (FDA), for FY2016. The bill provides $71.3 billion in discretionary funds for HHS, a $298 million increase over FY 2015, including $31.2 billion for the National Institutes of Health (NIH), 1.1 billion above the FY2015 level; and $3.3 billion for the Centers for Medicare & Medicaid Services (CMS) program management, $344 million below the FY2015 level. The bill eliminates funding for the Affordable Care Act (ACA) as well as all funding for the Agency for Health Research & Quality (AHRQ).
On Thursday, June 25, the Senate Appropriations Committee passed their FY2016 Labor-H bill. The Senate bill funds HHS at $70.4 billion, a $646 million decrease from FY2015 levels, including $32 billion for NIH (a $2 billion increase over FY2015) and $3 billion for CMS program management (a $642 million decrease from FY2015). Like the House Labor-H bill, the Senate bill eliminates funding for the ACA’s discretionary programs as well as all funding for AHRQ.
Full text of the House Labor-H bill can be found HERE. Full legislative text for the Senate Labor-H bill, S.1695, is not yet available.
OIG Issues Reports on Fraud Vulnerabilities in Medicare Part D
On Tuesday, June 23, the Department of Health and Human Services (HHS) Office of the Inspector General (OIG) issued two reports highlighting the Medicare Part D program’s vulnerabilities to fraud. In the first report called “Ensuring the Integrity of Medicare Part D,” OIG discussed the need for more robust oversight and more effective collection and analysis of program data to proactively identify and resolve program vulnerabilities. OIG recommended several reforms to CMS, including requiring plans to report data on suspected fraud, expanding the range of drugs reviewed for potential fraud and abuse, and implementing edits to reject prescriptions written by excluded providers. In an accompanying report on questionable billing and geographic hotspots for fraud, OIG identified more than 1,400 pharmacies with suspicious billing patterns that accounted for $2.3 billion in prescription drug claims to Part D in 2014. OIG also cited as a concern the growing spending on opioids, which has increased by over 150 percent since 2006. The “Ensuring the Integrity of Medicare Part D” report is available HERE. The accompanying report identifying suspicious billing patterns is available HERE.
CMS Issues April 2015 Medicaid and CHIP Enrollment Report
On Tuesday, June 23, the Centers for Medicare and Medicaid Services (CMS) issued its April 2015 Medicaid and Children’s Health Insurance Program (CHIP) monthly eligibility and enrollment report. According to the report, approximately 12.3 million additional individuals have enrolled in Medicaid and CHIP since October 2013 when the initial exchange marketplace open enrollment period began, compared to enrollment in the previous three months. About 71.1 million individuals have enrolled in Medicaid and CHIP through April for the 49 states that reported data. The full report is available HERE.
House Ways & Means Committee Holds Hearing on ACA Premium Increases
On Wednesday, June 24, the House Ways & Means Oversight Subcommittee held a hearing to examine the effects of the Affordable Care Act (ACA) on healthcare premiums. Witnesses at the hearing included several state insurance commissioners from Tennessee, Maryland, and Washington. In his opening statement, Subcommittee Chairman Peter Roskam (R-IL) described how providers across numerous states are asking state insurance commissioners for premium rate increases of over 20% to offset losses associated with implementation of the ACA. Several panelists testified that the largest health insurance providers in their states are requesting significant premium increases to offset losses before general and administrative costs are incurred. Three panelists also stated that the current pace of provider losses due to ACA regulations is unsustainable. The Administration has predicted that health care claims will increase by 14% in 2016. Panelists noted that 2014 and 2015 data is having an important impact on their decisions for 2016 insurance rates, which are due in mid-late August. A full recording of the hearing can be found HERE.
Energy & Commerce Committee Holds Hearing on Medicaid Demonstrations
On Wednesday, June 24, the House Energy & Commerce Health Subcommittee held a hearing entitled “Examining the Administration’s Approval of Medicaid Demonstration Projects.” Witnesses at the hearing included Katherine Iritani, Health Care Director, Government Accountability Office (GAO) and Matt Salo, Executive Director, National Association of Medicaid Directors. No representative from the Centers for Medicare and Medicaid Services (CMS) participated in the hearing. The hearing focused on how CMS applies its guidelines for assessing Medicaid demonstration proposals and how the process can be improved and refined. Republicans at the hearing raised concerns about the lack of transparency and accountability in the Administration’s spending on Medicaid demonstration programs, noting that one-third of Medicaid dollars are spent on demonstrations. Katherine Iritani testified that the GAO is concerned about the long-term stability of the Medicaid program. Matt Salo testified that State Medicaid Directors would support legislation to increase transparency and bring predictability to the waiver approval process, but that emphasis should be placed on outcomes and defining a path to make successful demonstrations permanent. A full recording of the hearing can be found HERE.
Trade Promotion Authority Passes the Senate
On Wednesday, the Senate passed legislation known as “fast-track” or Trade Promotion Authority, granting the President the authority to finalize trade agreements, by a vote of 60-38. The bill allows the Administration to negotiate trade agreements with Pacific Rim nations and the European Union and send them to Congress for approval, without the ability of Congress to amend or filibuster them. The expedited process lasts until 2018 with the possibility of extension until 2021, and is seen as a key step towards completing negotiations on the Trans-Pacific Partnership (TPP). The TPP trade deal includes 11 other Pacific Rim nations, and addresses various trade priorities for the drug and device industries. With fast-track legislation in place, focus will now shift to TPP, where a vote is expected this fall.
Senate Finance Committee Marks Up Various Health Bills
On Wednesday, June 24, the Senate Finance Committee held an executive session to mark up a series of healthcare related bills dealing with a wide ranging set of issues. The bills considered are listed below:
S.607 – The Rural Community Hospital Demonstration Extension Act of 2015
S.1349 – The Notice of Observation, Treatment and Implication for Care Eligibility (NOTICE) Act of 2015
S.1461 – A One Year Extension of the Enforcement Instructions on Supervision Requirements of Outpatient Therapeutic Services in Critical Access Hospitals (CAHs) and Small Rural Hospitals
S.313 – Prevent Interruptions in Physical Therapy Act of 2015
S.1253 – Patient Access to Disposable Medical Technology Act of 2015
S.1347 – Electronic Health Fairness Act of 2015
S.704 – The Community Based Independence for Seniors Act
S.1362 – The PACE Innovation Act of 2015
S.861 – Preventing and Reducing Improper Medicare and Medicaid Expenditures Act of 2015
S.349 – Special Needs Trust Fairness Act of 2015
S.466 – Quality Care for Moms and Babies Act
S.599 – Improving Access to Emergency Psychiatric Care Act of 2015
All of these bills were approved, en bloc, by voice vote.
E&C Releases 21st Century Cures Committee Report
On Thursday, June 25, the House Energy & Commerce (E&C) Committee released its Committee Report on H.R. 6, the 21st Century Cures Act, as reported by the Committee in May. The full committee report includes the bill’s legislative text and history, cost estimate, and an explanation of the provisions via new report language. While current Congressional Budget Office (CBO) estimates indicate that the legislation would cost $106.4 billion from 2016-2020, this figure includes three years of funding for the National Institutes of Health (NIH) to boost its research and development capabilities. The score is unlikely to inhibit the bill from moving forward, with a vote on the floor of the House expected soon after the Independence Day recess. The full report can be found HERE.