Recent weeks have brought much activity around health policy, from changes at Health and Human Services (HHS), to the ongoing efforts to repeal and replace the Affordable Care Act (ACA) to the first budget proposal from President Trump. While none of these events offers much in the way of certainty, they nevertheless provide some insight into possible changes to the healthcare delivery system and related federal initiatives.
Republican effort to “repeal and replace” key elements of the ACA fails in House. After several weeks of debate and negotiations on the House Republican bill to repeal and replace the ACA (aka Obamacare), last Friday House leadership pulled the bill from consideration hours before it had been scheduled to move to the House floor for a vote. Despite several amendments and last-minute deals aimed at securing support from Republican colleagues, President Trump and House Speaker Paul Ryan ultimately failed to secure the 216 votes needed to pass the bill. Following the decision to cancel the vote, Speaker Ryan expressed his disappointment at the legislative failure and noted that “Obamacare is the law of the land” and will remain so “for the foreseeable future.” Meanwhile, President Trump vowed to return to healthcare at some point in the future but also noted he was ready to “move-on” to tax reform. (See here and here for more details.)
Trump Administration continues to staff up at HHS. Following Dr. Tom Price’s installment atop the HHS, former health policy consultant Seema Verma was recently confirmed and sworn in as the new Administrator of the Centers for Medicare & Medicaid Services (CMS). Additionally, Trump has nominated Scott Gottlieb, a former George W. Bush administration official and conservative scholar, to be Commissioner of the Food and Drug Administration (FDA). Also notable, former Representative Dr. John Fleming (R, LA) has been named deputy assistant secretary for health technology at HHS, a new position at the agency that will report to Secretary Price and focus on health IT issues. Fleming, a physician who served as congressman for Louisiana’s 4th District from 2009 to 2017, was formerly co-chair of the GOP Doctors Caucus and a member of the conservative House Freedom Caucus. (See here, here, and here for more details.)
With Price and Verma now in place atop HHS and CMS, the Trump team is positioned to pursue its administrative and regulatory agenda in the healthcare space. Meanwhile, Gottlieb whose Senate confirmation is pending and Fleming are likely to play roles in pursuing regulatory reforms impacting the drug, device and health technology industries. Notably, Fleming has said he plans to encourage the use of health technology while also removing barriers to interoperability and cutting down on “providers’ paperwork.”
CMS delays launch of mandatory bundled payment programs for certain orthopedic and cardiovascular surgical procedures. On March 20, CMS announced a three-month delay of several mandatory Medicare bundled payment models that had been finalized last year by the Obama administration and were set to take effect in July. Changes and/or further delay to these programs are widely expected given HHS Secretary Tom Price’s stated opposition to mandatory participation in CMS alternative payment models. The bundled payment models in question tie Medicare payments for hospitals in certain metropolitan areas to cost and quality metrics across a 90-day episode of care (the cardiac models apply to Acute Myocardial Infarction and Coronary Artery Bypass Graft procedures in hospitals in 98 metropolitan areas, while the orthopedic models apply to hip and femur procedures in hospitals in 67 metropolitan areas). (See here and here for more details.)
While this delay and potential changes may slow the pace of the transition to certain Medicare alternative payment models (APMs), the transition to value-based reimbursement is expected to continue as providers participate in voluntary APMs and the Merit-Based Incentive Payment Program (MIPS).
President Trump submits preliminary FY 2018 budget request to Congress, includes 18% cut to HHS. Last week, the White House submitted its preliminary federal budget request for FY 2018 (which begins October 1, 2017). Although Congress ultimately creates and passes the federal budget, the White House’s annual budget request reflects administration priorities. Although the budget did not include any cuts to the Medicare or Medicaid programs or specific funding levels for every federal agency and program, it did include a proposed HHS budget of $69 billion, a $15.1 billion or 18% cut from the FY2017 budget level of $84.1 billion. Within HHS, the FDA and National Institutes of Health (NIH) were singled out for cuts, while additional funding was allocated for public health initiatives including opioid addiction treatment, disease outbreaks, and community health centers. Aside from healthcare, the budget included large increases in military spending and reductions in domestic programs, reflecting President Trump’s stated policy priorities. (See here and here for more details.)
From here, Congress will draft its own budget for FY 2018, likely taking into consideration some of these proposals even though many of the proposed cuts (such as those for NIH) have already been sharply criticized by leaders in Congress from both political parties.