The newly named incoming heads of HHS and CMS have advocated healthcare coverage policies that sharply depart from those codified by the ACA.

Nov. 29—Hospital advocacy groups highlighted the policy experience of Rep. Tom Price, MD, (R-Ga.) after President-elect Donald Trump nominated him to lead the U.S. Department of Health and Human Services (HHS).

Price, an orthopedic surgeon who served as the chairman of the House Budget Committee and as a member of the GOP Doctors Caucus, was nominated on Nov. 29 to serve as secretary of HHS.

“His clinical knowledge along with his congressional experience make him an impressively qualified candidate for HHS secretary,” Rick Pollack, president and CEO of the American Hospital Association, said in a written statement.

Bruce Siegel, MD, president and CEO of America's Essential Hospitals, also praised Price for his “extensive clinical, administrative, and academic background in health care and long experience in the legislative process.”

Darrell Kirch, MD, president and CEO of the Association of American Medical Colleges (AAMC), was supportive but also alluded to the challenges that await the next HHS secretary.

“We are confident that Rep. Price will bring a thoughtful, measured approach to tackling the wide range of issues affecting the nation’s health—from funding for biomedical research to training the next generation of physicians to transforming the nation’s health care system in order to provide all Americans with the care they need when they need it,” Kirch said in a written statement.

Upcoming Struggles

Price, a strong opponent of the Affordable Care Act (ACA), which Trump has pledged to repeal and replace, alluded to the coming healthcare policy battles.

“There is much work to be done to ensure we have a health care system that works for patients, families, and doctors; that leads the world in the cure and prevention of illness; and that is based on sensible rules to protect the well-being of the country while embracing its innovative spirit,” Price said in a written statement.

To some, the selection of Price, who has introduced an alternative healthcare plan in every Congress since before the ACA was enacted, underscored Trump’s commitment to repealing and replacing the 2010 law.

“This pick would suggest that Trump is serious about dismantling Obamacare and replacing it with a market-based alternative,” Lanhee J. Chen, director of domestic policy studies at Stanford University, wrote in a tweet.

Price’s ACA alternative, the "Empowering Patients First" act, differs in some ways from House Speaker Paul Ryan's " Better Way" proposal, which also outlines an ACA replacement. For instance, although both plans would provide federal funding for high-risk pools to cover people with preexisting conditions, Price would provide only $3 billion, while Ryan would provide $25 billion. The employer-sponsored health insurance tax exclusion cap was specified by Price—$8,000 for individuals—but not given a number in Ryan’s plan.

Some worry that beyond repealing some of the insurance coverage components of the ACA, Price could slow the movement toward alternative payment models. HHS Secretary Sylvia Mathews Burwell committed in a January 2015 announcement to shift 50 percent of fee-for-service Medicare payments to quality or value through alternative payment models, such as accountable care organizations or bundled payment arrangements, by the end of 2018.

But Price led 179 lawmakers who wrote the Centers for Medicare & Medicaid Services (CMS) in September to urge a halt to the mandatory payment models, such as the recently launched Comprehensive Care for Joint Replacement model and the proposed Cardiac Bundled Payment model.

"The likely direction of this administration may be to allow the emergence of value based payment arrangements to emerge more naturally on a local basis,” Mike Thompson, president and CEO of the National Alliance of Healthcare Purchaser Coalitions, said in a written statement. “The danger is that would dramatically slow the pace of change.”

Also significant is that Price has supported moving Medicaid to a block-grant model and transitioning Medicare to a system wherein enrollees use subsidies to choose among competing private plans. However, Trump voiced opposition during the campaign to major Medicare changes.

Price’s support for Medicare changes drew early opposition from Democrats.

“Tom Price has led the charge to privatize Medicare, and for this reason, I cannot support his nomination,” Sen. Joe Donnelly (D-Ind.) said in a written statement.

New CMS Administrator

Also named this week was Trump’s acting administrator for CMS, Seema Verma, president and CEO of SVC Inc., a health policy consulting company. Verma designed the Healthy Indiana Plan (HIP) of former Indiana Gov. Mitch Daniels and the HIP 2.0 waiver proposal of former Gov. Mike Pence, according to her website.

In Indiana’s modified Medicaid program, beneficiaries enrolled in a high-deductible health plan with a $2,500 deductible and had access to an account, similar to a health savings account (HSA), with up to $2,500 in state and member contributions. Enrollees were required to make monthly contributions equal to 2 percent of their income in order to stay covered. The required amounts were reduced if enrollees completed preventive services.

Verma also developed recent Medicaid waivers for Iowa, Ohio, and Kentucky, and helped Michigan implement an 1115 waiver.

The Indiana Medicaid overhaul led by Verma “acknowledged the need to improve  hospital and physician pay while undertaking significant reforms,” Julie Allen, government relations director for Drinker Biddle & Reath, said in emailed comments. “Addressing and ensuring market-based payment for services (paid under a value or FFS system) as part of any entitlement reform effort will be critical to its success. It seems that Seema understands that, and that is good news for the hospital, physician, dentist and other communities that have struggled with their standard Medicaid programs.”

 Siegel noted that Verma served as an AEH fellow and that both she and Price worked in hospitals with a safety-net function.

Some health policy observers suggested Verma could support expanded use of such nontraditional Medicaid features, which the Obama administration generally opposed.

“Seema is exceptionally well-versed in what is possible through waivers and has spent years pushing that envelope,” Kip Piper, who also advises states on Medicaid expansion, said in emailed comments. “She has certainly been firmly and consistently in the camp favoring significant state flexibility in the running of Medicaid.”

Under Verma, CMS is more likely to support waivers with HSA provisions, employment or training requirements for Medicaid coverage, use of premiums and cost sharing, and documentation to verify applicants’ identities, Piper said.

“Not every state will request these waivers, but those that do are likely to meet with a favorable response,” Piper said.

But critics focused on concerns that some could lose Medicaid coverage.

“The new CMS pick hasn't been working to reducing the cost of medical care, she's been working to reduce the number of people that get care,” Emma Sandoe, a former Medicaid spokeswoman for the Obama administration, wrote in a tweet.

Others have highlighted new research that found 44 percent of those newly covered by Medicaid were previously eligible—a fact that, along with Verma’s previous expansion efforts, may suggest Trump’s Medicaid changes could be more incremental than previously expected.


Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare

 

Publication Date: Wednesday, November 30, 2016