Washington Watch

Carter L. Alleman, J.D.

New Medicare Cards Offer Greater Protection to More Than 57.7 Million Americans

The Centers for Medicare & Medicaid Services (CMS) is readying a fraud prevention initiative that removes Social Security numbers from Medicare cards to help combat identity theft, and safeguard taxpayer dollars. The new cards will use a unique, randomly-assigned number called a Medicare Beneficiary Identifier (MBI), to replace the Social Security-based Health Insurance Claim Number (HICN) currently used on the Medicare card. CMS will begin mailing new cards in April 2018 and will meet the congressional deadline for replacing all Medicare cards by April 2019.

Providers and beneficiaries will both be able to use secure look up tools that will support quick access to MBIs when they need them. There will also be a 21-month transition period where providers will be able to use either the MBI or the HICN further easing the transition.

CMS testified on Tuesday, May 23rd before the U.S. House Committee on Ways & Means Subcommittee on Social Security and U.S. House Committee on Oversight & Government Reform Subcommittee on Information Technology, addressing CMS’s comprehensive plan for the removal of Social Security numbers and transition to MBIs.

Work on this important initiative began many years ago, and was accelerated following passage of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). CMS will assign all Medicare beneficiaries a new, unique MBI number which will contain a combination of numbers and uppercase letters. Beneficiaries will be instructed to safely and securely destroy their current Medicare cards and keep the new MBI confidential. Issuance of the new MBI will not change the benefits a Medicare beneficiary receives.

CMS has a website dedicated to the Social Security Removal Initiative (SSNRI) where providers can find the latest information and sign-up for newsletters. CMS is also planning regular calls as a way to share updates and answer provider questions before and after new cards are mailed beginning in April 2018. For more information, please visit: https://www.cms.gov/medicare/ssnri/index.html

Administration Releases Budget for FY 2018

The budget proposal includes $1.5 trillion in nondefense discretionary spending cuts, and would balance the budget within a decade. While the White House budget would drastically reshape federal spending on anti-poverty and safety net programs, it leaves the Medicare program untouched. The budget assumes that repeal and replacement of the Affordable Care Act (ACA) will be accomplished, resulting in estimated savings of $250 billion over the next ten years.

The budget features deep cuts to the U.S. Department of Health and Human Service (HHS) – totaling a reduction of $12.4 billion in discretionary funding.

  • Funding for the National Institutes of Health (NIH) would be reduced by nearly 20 percent, or $6 billion.
  • The budget proposes to decrease spending at the Centers for Disease Control and Prevention (CDC) by $1.3 billion, or 17 percent.
  • The budget proposal would consolidate the Agency for Healthcare Research and Quality (AHRQ) into the NIH, but maintain the Agency’s $272 million in discretionary funding. Additionally, the method by which AHRQ processes grants would be restructured in order to lower operating costs.
  • The President’s budget would increase industry user fees at the Food and Drug Administration (FDA) by almost 70 percent while reducing taxpayer funding for the agency by 30 percent. Congressional leadership has already said this proposal is definitely unfeasible given the current status of user fee negotiations.
  • The budget includes medical liability reforms as one of its major savings components. Proposals such as capping noneconomic damages, enactment of a statute of limitations, and creation of a safe harbor for clinicians are estimated to produce $55.8 billion in savings.
  • On the issue of drug pricing, the President’s budget expresses support for updating value-based purchasing arrangements, and for encouraging manufacturers to communicate with payers ahead of FDA approval. The White House budget proposal would also overhaul the Medicaid program in order to rein in entitlement spending. Medicaid’s federal funding would be capped, which would result in $610 billion in savings over the next decade.

Medicaid would be transitioned to either a block grant program or a per-capita limit. While states would receive a fixed amount of funding for Medicaid, they would be provided additional flexibility in the administration of the program. The budget proposal’s handling of Medicaid mirrors the policies contained in the House-passed American Health Care Act (AHCA), to repeal and replace Obamacare. The combined proposals would slash a total of $1.4 trillion from the Medicaid program. The budget proposal indicates the President’s interest in reforming the program regardless of whether AHCA becomes law. The President’s budget also includes a $5.8 billion cut to the Children’s Health Insurance Program (CHIP), along with a two-year extension of CHIP. While Republicans praised the President for his commitment to balancing the budget, most have distanced themselves from the budget proposal nonetheless.

Congressional Telehealth Caucus Launched

Members of the House of Representatives have launched a coalition to bring awareness to the issue of technology use in the delivery of health care. The Congressional Telehealth Caucus will welcome input from stakeholders to educate lawmakers, particularly those outside of committees with Medicare jurisdiction, about the importance of telehealth.

The four founding members of the caucus are Reps. Mike Thompson (D-Calif.), Gregg Harper (R-Mass.), Diane Black (R-Tenn.), and Peter Welch (D-Vt.). The Medicare Telehealth Parity Act (H.R. 2550) and the CONNECT for Health Act (S. 1016) were also introduced last week. Both bills would improve reimbursement for and expand the use of telehealth services. Components of the CONNECT for Health Act were included as part of the CHRONIC Care Act (S.870), which was advanced by the Senate Finance Committee earlier this month.

CBO Scores the American Health Care Act

The Congressional Budget Office (CBO) has released its score of the American Health Care Act (AHCA), which would repeal and replace Obamacare. Per the non-partisan budget agency, AHCA would lead to 23 million more uninsured over the next decade. This estimate is in keeping with previous versions of the bill. The House-passed legislation, however, would produce fewer savings than previous versions of the bill. CBO estimates that the AHCA would reduce the deficit by $119 billion over the next ten years, down from earlier projections of $151 billion and $337 billion. Premiums would increase for two years before decreasing by 20 percent in 2018 and five percent in 2019. CBO predicts that the changes to the Medicaid program would reduce coverage by 10 million people and cut program funding by $834 billion over the next decade. The agency also warns that the bill could undermine the stability of insurance markets in one-sixth of the country – those states which choose to waive ACA insurance regulations. As a result, older and sicker Americans would see a drastic increase in the cost of their insurance coverage. While the score was well-received by Speaker of the House Paul Ryan (R-Wis.) for confirming that the bill would lower the deficit, Secretary of the U.S. Department of Health and Human Services (HHS) Tom Price questioned the score’s accuracy. In the Senate, some Republican members warned that the CBO’s analysis underscored the need for the upper chamber to pass legislation that does more to protect those with pre-existing conditions. Majority Leader Mitch McConnell (R-Ky.), however, reiterated that the ACA status quo was unacceptable and unsustainable, regardless of the CBO report.

Senate Drafts ACA Repeal Legislation

Senate staff spent the week of Memorial Day recess drafting a health care bill and building consensus around a plan to repeal and replace the Affordable Care Act (ACA). Staff conferred with the Senate parliamentarian to discuss which aspects of Obamacare repeal and replacement can be accomplished through reconciliation. Majority Leader Mitch McConnell (R-Ky.) confirmed that he does not yet have the votes to bring repeal legislation to the Senate floor.

The biggest sticking point appears to be Medicaid – lawmakers in the Senate cannot seem to agree on how much to scale back Obamacare’s expansion, or how to rein in program spending. Additionally, there is still disagreement about whether to allow states to waive the health care law’s insurance regulations, which require coverage of essential health benefits and community rating. The Senate GOP is currently in the early stages of weighing a proposal to stabilize the insurance market in 2018 and 2019, while postponing ACA repeal until 2020. Lawmakers are also considering the idea of reinsurance as an alternative to the use of high-risk pools to provide coverage to high cost patients.

Lawmakers Request Clarification on HHS Whistleblower Memo

Senate Judiciary Committee Chairman Chuck Grassley (R-Iowa) and House Oversight Committee Chairman Jason Chaffetz (R-Utah) have written to U.S. Department of Health and Human Services (HHS) Secretary Tom Price regarding HHS staff’s ability to speak to lawmakers. Agency employees received a memo telling them to contact the Office of the Assistant Secretary for Legislation prior to speaking with members of Congress. “Protecting whistleblowers who courageously speak out is not a partisan issue — it is critical to the functioning of our government,” the letter states. The lawmakers request that Secretary Price issue a clarification telling federal workers that they have a right to contact members of Congress.

Trump Seeks Further Delay in Health Care Subsidy Lawsuit

The Trump administration again delayed a decision in a major case that could upend the health insurance markets created by the 2010 health care law, in a motion filed in federal court Monday.
Justice Department lawyers asked in the motion for another 90-day delay in a case that centers on about $7 billion of annual subsidies that are aimed at making health care services more affordable for low-income people who gained coverage under the 2010 law.

The payments are "critical" to the success of the health marketplaces established by that law, insurance companies have testified to Congress. Without them, many insurers have warned they will stop selling plans in 2018.

Though the delay may be welcome politically, insurers were quick to decry the delay as bad policy. It leaves them facing uncertainty about a major aspect of the 2010 health care law's funding, just as they must file their proposed 2018 health insurance premiums with state and federal policymakers. Some state deadlines for those proposals have already passed. The federal deadline is June 21.

The 90-day delay will force the companies to guess about the premiums they need to charge to cover the costs of insuring the individual market population. Regulators reviewing those rates will also have to speculate about whether the subsidies will remain in place. Some companies have suggested the uncertainty could force them to increase premiums by as much as 20 percent. Rates for the 2018 plan year are finalized throughout the fall according to various state and federal deadlines.