Legislative Discussions on Surprise Billing Begin
House Energy and Commerce Committee staff held a bipartisan briefing between health aides and stakeholders. Surprise bills are one issue that Chairman Frank Pallone (D-N.J.) hopes to address in a bipartisan manner this Congress. The House Ways and Means Committee and Education and Workforce Committee have also expressed interest in tackling surprise medical bills this year. The Senate appears to be further along in the legislative process, with a bipartisan group working to revise draft legislation released last September. Senate Health, Education, Labor, and Pensions (HELP) Committee leadership continue to await a response from the Congressional Budget Office (CBO) to their letter outlining policy options for analysis.
The Congressional Research Service (CRS) released a new report on surprise billing last week, warning lawmakers that any forthcoming federal legislation should consider existing state laws on the issue as well as the potential for litigation over payment rates. Given that fifteen states have already passed bills to address the problem of surprise medical bills, the agency recommends that Congress clarify the parameters of federal preemption of state laws. CRS suggests that Congress include an enforcement mechanism to address the violation of any potential federal legislation. According to the report, lawmakers should also expect surprise billing regulations to face legal challenges in court.
OIG To Review Use of Prior Authorization in Medicaid MCOs
The U.S. Department of Health and Human Services (HHS) Office of the Inspector General (OIG) will begin a review of whether Medicaid managed care organizations (MCOs) are complying with federal requirements on prior authorization. The OIG investigation follows a letter from Sen. Bob Casey (D-Pa.), member of the Senate Finance and HELP Committees, outlining his concerns on the issue. Casey referenced reports of unnecessary red tape that resulted in the denial of medical and dental services as well as prescription drugs for those in need of care
New CBO Report on Medical Liability Reform
The Congressional Budget Office (CBO) has released a new working paper updating the agency’s approach to estimating the effects of changes to medical malpractice liability laws on federal spending. According to CBO, recent literature indicates that revisions to liability laws intended to decrease the liability of physicians and other medical providers have an uncertain effect on Medicare spending, and decrease by a small amount the spending of privately insured and Medicaid patients. CBO also offers a preliminary estimate of the budgetary effects of the changes, predicting that the enactment of federal legislation that caps noneconomic damages at $250,00 and caps attorneys’ fees would reduce direct federal spending by about $20 billion and would have a net effect of reducing the deficit by about $28 billion over 10 years.
Court Strikes Down Expansion of Association Health Plans
U.S. District Court Judge John Bates ruled that the administration’s efforts to expand the availability of association health plans is a deliberate and illegal “end run” around the ACA. Association health plans allow businesses and individuals to band together to create less expensive group plans that are not subject to the coverage requirements of the 2010 health care law. The White House and Republican lawmakers argue that such plans offer a more affordable options for people, who have been priced out of the individual market. The Labor Department’s rule to expand the availability of association health plans was issued to comply with the President’s October 2017 executive order.
HELP Hopes to Advance Health Care Cost Legislation this Summer
The Senate Health, Education, Labor, and Pensions (HELP) Committee plans to vote on legislation to lower health care costs early this summer, according to Chairman Lamar Alexander (R-Tenn.). He stated that the panel has received more than 400 specific recommendations on improving health outcomes and patient care experiences at a lower cost. The recommendations were sent to the HELP Committee in response to a letter that Alexander sent at the conclusion of the 115th Congress to the American Enterprise Institute, the Brookings Institution, governors, state insurance commissioners, economists, doctors, hospitals, patients, and innovators. Alexander will compile the proposals, which could include efforts to increase transparency, lower drug costs, eliminate surprise billing, expand primary care, improve electronic health records (EHRs), and address consolidation in the health care industry, into a single package to be voted on by HELP.
McConnell to Introduce Bill Raising Tobacco Purchasing Age
Senate Majority Leader Mitch McConnell (R-Ky.) announced plans to introduce legislation that would raise the minimum age to buy tobacco from 18 to 21. The policy would cover all tobacco products, including vaping devices, but would have exemptions for individuals who serve in the military. Eleven states have already enacted laws raising the age required to buy tobacco. McConnell’s legislation is expected to be introduced sometime in May.
Sanders Releases Medicare for All Legislation
Sen. Bernie Sanders (I-Vt.) has introduced an updated version of his “Medicare for All” legislation (S. 1129). Similar to previous iterations of the policy, the bill would replace nearly all forms of private health insurance with a government-managed, single-payer version of Medicare that guarantees coverage to all Americans. The universal health care program would include coverage of primary care, hospital stays, mental health treatment, and prescription drugs. The latest bill would also include coverage for dental, vision, hearing, and home and community-based long-term care services, in line with the House- version of Medicare for All (H.R. 1384) introduced by Rep. Pramila Jayapal (D-Wash.) in February.
States would be allowed to provide additional benefits from their own budgets. The Indian Health Service (IHS) and Veterans Health Administration (VHA) would remain in place. The plan would be phased in over four years by gradually lowering the Medicare eligibility age. The House bill would be implemented over only two years. The transition period would phase in benefits while eliminating Part A and B deductibles and waiting periods for Medicare coverage of disabled individuals. It would also provide for continuity of care for people transitioning from private health coverage or from other health care programs such as Medicaid and the Children’s Health Insurance Program (CHIP). When the transition period ends, all individuals would be automatically enrolled in the new system.
While the bill does not specify how the health system overhaul would be paid for, Sanders himself has outlined several possible options, including a 4 percent income-based premium on employees and a 7.5 percent income-based premium on employers, eliminating health tax expenditures, imposing a marginal tax rate of up to 70 percent, instituting a higher tax on inheritances, imposing larger fees on financial institutions, or repealing corporate accounting “gimmicks.” Sanders unveiled the Medicare for All bill with the backing of 14 democratic cosponsors. Republicans and the White House have criticized the plan for its lack of any financing mechanisms, raising concerns about the potential adverse impact on access that would result from requiring Americans to switch to a “one-size-fits-all" type healthcare system.
Annual Medicare Trustees Report Released
The Social Security and Medicare Board of Trustees released its annual report, projecting that the Medicare Hospital Insurance Trust fund will run out of money in 2026. This is in line with the prediction made in last year’s projection, despite a $2 billion decrease in the fund’s reserves in 2018. The trustees argue that further legislation is required to either increase revenue or decrease benefits to address Medicare’s substantial financial shortfall. Starting in 2026, Medicare revenues would only pay for 89 percent of trust fund costs; this figure would drop to 77 percent by 2046, without action by Congress. The program’s total costs are projected to grow from 3.7 percent of gross domestic product (GDP) in 2018 to nearly 6 percent by 2038 and 6.5 percent by 2093. Trustees attribute this growth to an increase in people aging into the program and increases in the volume and intensity of health care services. Part B expenditures are projected to grow at an average of 8.7 percent over the next decade. Premiums for Medicare prescription drug coverage are projected to grow at an average of 7.7 percent over the next decade.
OCR Offers New Legal Interpretation of HIPAA Violations
The U.S. Department of Health and Human Services’ (HHS) Office for Civil Rights (OCR) has issued a legal interpretation regarding the fines health care providers pay for violations of HIPAA privacy and record sharing regulations. Providers pay up to $1.5 million annually for each category of HIPAA violation, regardless of severity. The penalties supplement OCR’s operating budget. As a result of this latest legal interpretation, only top tier violators, or those who demonstrate “willful neglect,” will face up to $1.5 million in fines per violation. Lowest-tier violators will pay a maximum $25,000 for each violation going forward. Last year, the Office collected $28.6 million in penalties, with about 40 percent of cases involving at least one count of willful neglect.