The HHS secretary-designee expanded his previous criticism of Medicare’s use of mandatory payment models.


Jan. 24—Rep. Tom Price (R-Ga.), who President Donald Trump nominated to lead the U.S. Department of Health and Human Services (HHS), promised during a Senate grilling this week to back Affordable Care Act (ACA) replacement plans that would not cut health insurance coverage.

“Any reform or improvement that I would envision for any portion of the Affordable Care Act would be one that would include an opportunity for individuals to gain the kind of coverage that they want to the highest-quality care,” Price said during his confirmation hearing by the Senate Finance Committee.

Democrats on the committee particularly focused on the expected impact of any repeal-and-replace effort on the ACA’s expansion of Medicaid eligibility to any American earning up to 138 percent of the federal poverty level. Medicaid and Children’s Health Insurance Program (CHIP) enrollment has increased by 17 million since the eligibility expansion started in the fall of 2013, according to an HHS report.

The concern that Price would back a sharp reduction in coverage for the Medicaid population was fueled in part by his previously proposed ACA replacement plan, which would eliminate the Medicaid expansion. Price sought during his hearing to push back specifically on the Medicaid-related concerns.

“Any reform or improvement must include a coverage option and opportunity for every single American, including those who are currently among or close to the Medicaid population in a given state, which changes depending on the state,” Price said.

Democrats repeatedly charged that Republicans would shift Medicaid from an open-ended entitlement to either a block grant or a system with per-beneficiary caps in federal funding, and that such a change would lead to enrollment cuts.

“The Medicaid population has no reason to be concerned,” Price countered. For instance, he noted that the popular Federal Employee Health Benefit program also uses per-beneficiary capped funding to insure federal workers.

However, Price said Medicaid programs need changes to improve patient access beyond a system in which only two-thirds of eligible physicians accept Medicaid patients.

“There have to be better ways to provide care to the Medicaid population because there are huge challenges,” Price said.

Marketplace Coverage

Price also backed major changes to the ACA rules governing the individual and small-group marketplaces. Plans on the ACA marketplaces for 2017 included higher premiums, more out-of-pocket costs, and narrower networks than in previous years, according to a new analysis from Avalere

“Many have a card but can’t get care because they have deductibles that don’t allow them to get care,” Price said about the marketplace plans.

Several Republican plans to replace the ACA have focused on the use of subsidized health savings accounts to help enrollees afford out-of-pocket costs.

Price said any ACA replacement plan should ensure that new coverage is affordable, accessible, of the highest quality, and responsive to the patient, and the plan should also encourage innovation.

Support for ACA Elements

Price also voiced support for retaining some popular ACA provisions, such as a prohibition on denying coverage for preexisting conditions.

“I commit to you that we will not abandon individuals with preexisting conditions,” Price said.

Price mentioned various options for covering people with preexisting conditions, including the establishment of state-based, high-risk insurance pools and the formation of voluntary groups that could obtain discounted insurance coverage.

The fate of the individual insurance mandate was less clear. Repeatedly pressed whether he would use authority under the executive order Trump signed on his first day in office to eliminate or end enforcement of the mandate, Price said his “commitment is to carry out the law of the land.”

Given the wide discretion the ACA provides to the HHS secretary, some health policy experts noted Price could gut the individual mandate and stay within the bounds of the law.

Payment Models

Price underscored his previous opposition to mandatory payment models established by the Centers for Medicare & Medicaid Services (CMS). For instance, Price, said the Comprehensive Care for Joint Replacement model could “potentially” cut Medicare enrollees’ promised benefits.

Price said the Center for Medicare & Medicaid Innovation (CMMI) at CMS, which was created by the ACA to test new payment models, “has gotten off track a bit.”

“What it has done is define the areas where it is mandatorily dictating to physicians and other providers in this country in certain areas how they must practice,” Price said. “That to me is no longer a trial, that’s no longer an experiment, that’s no longer a pilot project to determine whether or not an innovative solution might work—that’s changing the way that American medicine is practiced [as dictated] by folks here in Washington.”

However, Price said he remains “a strong supporter of innovation” if CMMI can move “in a direction that actually makes sense for patients.”

Fraud Enforcement

In potentially significant comments for hospitals, Price spoke out against “trying to determine whether every single incident of care is necessary.” Hospital inpatient status reviews for short-stay admissions have accounted for a substantial portion of overall Medicare payment reviews by recovery audit contractors in recent years, according to federal data. That focus has led to a surge in payment denials and appeals, and in turn to a massive backlog that CMS had to clear by using broad settlements.   

Instead, Price urged a “real-time” focus on “bad actors,” who comprise a minority of Medicare providers, to prevent instances of waste, fraud, and abuse.

“If we were to focus on those individuals that were the bad actors, specifically, then I think we could do a much better job of not just identifying the fraud that exists out there but ending that fraud,” Price said. 

Transparency Support

Price backed increasing transparency in both pricing and clinical outcomes.

“Outcomes are important, and we need to be measuring what makes sense from a quality standpoint and allow patients and others to see what those outcomes are as well,” Price said.

Legislation introduced this week by Sen. Bill Cassidy (R-La.) and colleagues would require providers that participate in an ACA-replacement coverage system to publicly post their “cash prices,” according to a summary.

Such proposals have raised concerns among provider advocates over the unintended impact on providers’ negotiated rates as part of third-party payment agreements.

Other Initiatives

Pressed on the future of CHIP, which needs to be reauthorized this year, Price said an eight-year reauthorization would be even better than the five-year reauthorization sought by Democrats.

Price supported easing federal rules to allow a greater use of telehealth technology as a way to improve care at rural hospitals.

Price also said federal electronic health record reporting requirements need to be addressed to reverse the ongoing transformation of physicians into “data entry clerks.”


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

Publication Date: Wednesday, January 25, 2017