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HLB 2016 Health Policy Outlook
January 8, 2016

Like any election year, 2016 brings a challenging environment for legislators seeking to avoid controversial votes, while still demonstrating to voters their commitment to important public policy issues. As President Obama begins his final year in office, the Administration will make a concerted effort to finalize the President’s legacy accomplishments by locking in existing policies when possible and exercising executive authority to implement additional initiatives as time will allow. What follows is a brief overview of key health care related issues and activities to expect over the course of the year.

Congress 

Conventional wisdom holds that major legislative accomplishment is difficult in an election year, both because of the limited number of legislative days and because many Members of Congress hesitate to take recorded votes on issues that may have adverse implications in their re-election campaigns. However, the Republican-led Congress will also be eager to demonstrate to voters their ability to legislate responsibly as the party seeks to maintain its majority in 2017.  We saw significant Congressional accomplishments last year, including the passage of the Medicare Access and CHIP Reauthorization Act (MACRA) which finally solves the Medicare sustainable growth rate (SGR) problem which has plagued Congress and physicians for more than a decade.  Although the SGR may finally be behind us, there are still countless other Medicare policies that still need addressed.  

In order to have a running start at achieving 2016 accomplishments, key committees started many of those initiatives in 2015.  Below is a summary for each of the committees with health care jurisdiction.

  • The Senate Finance Committee recently released its Chronic Care Options Paper following input from over 530 stakeholder groups. The paper includes over 20 policy options including issues related to the expansion of Medicare Advantage (MA) benefits, increased flexibility for Accountable Care Organizations (ACOs) to care for those with chronic conditions, expanded use of telehealth, coverage and payment for chronic conditions, and developing quality measures for chronic conditions. While these policy options are not formally endorsed by the Members of the Committee, they are an important incremental step towards Senate action in 2016. The Committee is accepting feedback on the options document through January 26, 2016.

  • The Senate Health, Education, Labor and Pensions (HELP) Committee has signaled they will continue their work on the Healthy Americans Initiative.  The House passed their version of this legislation, the 21st Century Cures Act, in the summer of 2015.  Although the two pieces of legislation are related, the HELP Committee has made it clear that they will be producing their own bill.  The Committee will continue to focus on such areas as; reforms and funding for the National Institutes of Health (NIH), Food and Drug Administration (FDA), and telehealth.  Like their counterparts on the House side, HELP Committee Chairman Lamar Alexander and Ranking Member Patty Murray have demonstrated the ability to work on a bipartisan basis and may bring completed legislation forward for the Committee to consider in the early part of the year. 

  • House Committee on Ways and Means Chairman Kevin Brady has indicated his intention to continue work on hospital payment reform early this year. In 2015, the Committee released legislation regarding cross-walking hospital codes for certain surgical services, aligning payments for indirect medical education, and reforming the disproportionate share hospital (DSH) payment system. Another issue which may be addressed is the treatment of hospital outpatient departments (HOPDs) that were under development at the time of  the recently enacted Bipartisan Budget Act restriction (Section 603). Efforts to address such facilities fell short at the end of 2015, but a more narrow fix could be included in a larger legislative package in 2016. 

  • The House Energy and Commerce Committee will most likely continue to pursue public health initiatives, passing as many bipartisan, budget neutral pieces of legislation as they are able. Of note, the Committee has indicated an interest in further examining mental health legislation and initiatives related to the prevention and treatment of concussions in the next few months.  

  • An increase in the federal spending limits set by the Bipartisan Budget Act passed in October 2015 will pave the way for the House and Senate Appropriation Committees to work on funding those programs whose budgets are set annually. A likely legislative scenario is that the committees will work toward a near final set of bills in the first half of the year, but stop short of final action, passing  a short-term funding bill lasting until after the November election.  When Congress returns after the election for their biannual “lame duck” session and depending on the outcome of the that election, an omnibus appropriations bill or another short-term extension could be passed. 

The Administration 

With the approaching end of the Obama Administration, we expect a flurry of  administrative actions both to lock in existing policies and to advance as many additional initiatives as time allows. In 2015, we saw a major Medicaid managed care proposed rule and a Benefit and Program Parameters rule on the Affordable Care Act’s health plans in the Federal exchange. Both of these rules would move the programs toward requirements similar to those in Medicare Advantage such as network adequacy, a move likely to be repeated in 2016. The Centers for Medicare & Medicaid Services (CMS) also expanded its use of waiver and demonstration authority under the Center for Medicare and Medicaid Innovation (CMMI), with major initiatives around joint replacement and oncology care, among others. In addition, CMS, as part of its regular payment rule-makings, expanded the application of value-based purchasing to more providers.

Key policies to watch for in 2016 include:

  • Prescription Drugs. The Administration is quite likely to launch an initiative related to containing prescription drug costs. The recent publication of data on the cost of drugs in Medicare Part D is likely to be just the first piece. Proposals in this area are likely to take several forms. First, where it doesn’t have the legal authority, the Administration may seek legislative authority from Congress. Second, where they do have authority, they are likely to make the most of it. In 2014, CMS proposed an ambitious set of policies in the Medicare Parts C&D Proposed Rule, several of which were withdrawn after causing an uproar. It would not be surprising to see some of those proposals re-emerge. 

  • More episodes and bundles. With the launch of the mandatory Comprehensive Care for Joint Replacement (CCJR) model, episode bundles in 65 communities beginning this year, it would not be surprising to see the Administration push for more such efforts. Coronary artery, bypass grafts, or treatment of congestive heart failure could be possible candidates CMS might advance next. 

  • MACRA Implementation. With its first request for information in 2015, CMS will continue implementation of MACRA provisions with a proposed rule expected to be released sometime in the Spring. In addition, in December, CMS released its Measure Development Plan (MDP) for Alternative Payment Models (APMs) and Merit-based Incentive Payment System (MIPS) as part of their charge in MACRA. Comments on the plan will be accepted through March 1, 2016 and a final MDP will be posted by May 1, 2016. 

  • Medicaid Managed Care rule, possibly modified, will go final. This will be the first major update to Medicaid managed care in over a decade. The rule aims to align Medicaid managed care with Medicare Advantage and private market policies, bolster state delivery reforms, impose new quality ratings, set up best practices. 

  • Additional CMMI demonstrations. As MACRA implementation continues, CMMI will need to continue its demonstrations and most likely, expand significantly or establish a process in which Physician-Focused Payment Models (PFPMs) among others can be accepted as APMs under the new law. Just this week, CMMI announced a new initiative, the  Accountable Health Communities (AHC) Model to focus on the health-related social needs of Medicare and Medicaid beneficiaries, to include not only clinical but also community-based services. 

Judicial Challenge to the ACA

Although much attention was focused on the recent Supreme Court case King v. Burwell, which addressed subsidies for health insurance premiums in Federal exchanges, a second case which is no less important, but has garnered less attention is House of Representatives v. Burwell. Under the ACA, persons under 250% of the poverty level must be offered reduced cost sharing by issuers with products in the exchanges. Issuers are to be reimbursed for the cost of doing so by the federal government.The House of Representatives alleges that the Administration has acted to provide $175 billion in funding for cost sharing subsidies in violation of a Constitutional requirement that “No money shall be drawn from the Treasury but in consequence of an appropriation made by law.”  In short, the House of Representatives is alleging that there is no such appropriation in the statute. The U.S. District Court for the District of Columbia denied the Administration’s motion to dismiss the case and subsequent attempts by the Administration to seek interlocutory review of a key element in the case.

Conclusion 

Overall, the ability for Congress and/or the Administration to move forward on major health policy initiatives in 2016 may be affected by other issues that face lawmakers this year, including those difficult to anticipate; such as foreign policy matters or unforeseen economic developments. But, with the new Speaker of the House of Representatives in place and the momentum of a handful of recent legislative accomplishments, Congressional activity in the next few months will be an important indicator as to what can be accomplished in 2016. 

For additional information, please contact the following members of our Government Relations & Public Policy Department in Washington, D.C. at 202.580.7700: Marty Corry, Keith Fontenot, Alex Brill, Kelly Delmore or Monica Massaro

For media inquiries, please contact Barrett McBride at bmcbride@health-law.com or 916.456.5855.