HRI regulatory center

Regulatory and legislative updates and analysis

President Donald Trump: The latest healthcare developments

HRI Trump administration spotlight: House Republicans release bill to partially repeal/replace ACA

HRI Trump administration spotlight: House Republicans release bill to partially repeal/replace ACA

On March 6, House Republicans unveiled legislation, the American Health Care Act (AHCA), aimed at repealing and replacing provisions of the Affordable Care Act (ACA). Although the bill may change significantly, uncertainty and risk will continue for the next few years. Organizations can survive and thrive by taking steps to build resilience, scenario plan and identify potential opportunities in light of this legislation.

Read HRI’s spotlight, House Republicans release bill to partially repeal and replace the Affordable Care Act

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HRI Trump administration spotlight: Policy impacts on payers

HRI Trump administration spotlight: Policy impacts on payers

As they mull the ACA’s fate, Republican lawmakers are weighing four options to replace the individual mandate. Any replacement to the mandate would need to accomplish two goals: encourage sign-ups by healthy enrollees, and discourage voluntary coverage gaps.

Read HRI’s spotlight, Replacing the individual mandate

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HRI Trump administration spotlight: Policy impacts on providers

HRI Trump administration spotlight: Policy impacts on providers

The American Health Care Act (AHCA) aims to partially repeal and replace the ACA, by phasing out the ACA’s Medicaid expansion and capping federal funding for the program, among other things. Under the AHCA’s Medicaid plans, healthcare providers could experience a gradual increase in uncompensated care, cuts in Medicaid reimbursement rates, or both.

Read HRI’s spotlight, Implications of phasing out Medicaid expansion

Republican lawmakers are promoting Medicaid block grants as a way to control federal healthcare spending. Providers can expect a shift from an entitlement to a free market Medicaid approach, along with a possible rise in the uninsured population or decrease in reimbursement.

Read HRI’s spotlight, Medicaid block grants and per capita funding

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HRI Trump administration spotlight: Policy impacts on pharma and life sciences

President Trump has consistently argued for lower prescription drug prices, but no specific plan has emerged from the White House. Pharmaceutical and life sciences companies are beginning to take steps to increase drug price transparency, limit price increases and explore novel approaches to demonstrate the pharmacoeconomic value of medicine, in light of pressure from all sides to justify pricing decisions.

Read HRI’s spotlight, Preparing for new drug-pricing risks


Tax proposals from the Trump administration could result in pharmaceutical, medical device and medical equipment companies restructuring their supply chains, repatriating overseas capital, and moving manufacturing back to the US. Such reforms, though, pose a sharp deviation from current global operational structures and thus could take years to be fully realized.

Read HRI’s spotlight, Tax reform proposals could impact pharma, medical device and equipment supply chains

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HRI Trump administration spotlight: Cross-sector policy impacts

HRI Trump administration spotlight: Cross-sector policy impacts

Healthcare reform efforts by Congress will create challenges and opportunities that may require changes in operating models across the US healthcare industry. As the legislation undergoes debate and negotiation in Congress, healthcare organizations face considerable uncertainty. Organizations that have developed enterprise resilience—the ability to adapt the business model to change, anticipate disruption and recognize opportunities to generate a competitive advantage—may be best positioned to survive and thrive in these conditions.

Read HRI’s spotlight, Developing enterprise resilience in the face of health reform


The inaugural festivities are over, the revelers have gone home, and President Donald Trump has moved into the White House. With so much change in the air, what actions can health organizations take today?

Read HRI's spotlight, (Some) change is coming to healthcare

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HRI's analysis of the 2016 presidential election results

Like a chief executive hired to turn a failing company into a profitable one, president-elect Trump has said he will take an unflinching corporate approach to overhauling the US healthcare system. For an industry that prefers stability to surprises--and one that has worked to adapt to the Affordable Care Act—Trump’s “repeal and replace” agenda may create new uncertainty and opportunity for healthcare leaders.

Read HRI's report, President-elect Donald Trump: Turnaround time


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Trump administration highlights – March 20, 2017

House postpones pivotal vote on American Health Care Act

Mid-afternoon Thursday, the House announced it would postpone a vote on the American Health Care Act (AHCA) after it became clear Republicans did not have enough votes to pass the bill. As of late Thursday, it was unclear whether, or when, a vote would be scheduled. The AHCA partially repeals and replaces the Affordable Care Act (ACA), which was signed seven years ago Thursday. Republican House members were unable to reach consensus despite intense efforts by House Speaker Paul Ryan and President Donald Trump. Earlier in the week, Republicans made a series of policy changes and technical tweaks to the bill allowing states to choose Medicaid block grants over per capita spending caps while boosting the annual inflation increase for per capita Medicaid funding for elderly and disabled enrollees. The changes also would allow states to impose work requirements on Medicaid enrollees who aren’t disabled, elderly, children under 19, students under 20 or single parents or guardians of children under age 6 or any disabled child. Republicans also added a provision prohibiting non-expansion states from expanding Medicaid after 2017 and made some changes to how expansion funding would work. (For a more detailed look at the Medicaid program changes under the March 22 version of the bill, please see HRI’s Spotlight). The changes also would accelerate repeal of many of the ACA’s taxes and fees.

HRI impact analysis: On Thursday evening, the Congressional Budget Office and Joint Committee on Taxation released a new analysis on the March 22 version of the bill, concluding it would boost the number of uninsured by 24 million by 2026 – the same as the original version – while reducing federal deficits by less, about $150 billion between 2017 and 2026. Federal Medicaid spending is estimated to be reduced by $839 billion between 2017 and 2026, according to the analysis. The House vote has turned into a nail-biter for the healthcare organizations, consumers, employers, new entrants and policymakers as the final legislation could have widespread impact on the industry. Most of the most recent changes revolve around Medicaid and timelines for changes, which would be sped up. The bill, as written, likely will have the most impact on healthcare providers serving high numbers of Medicaid and low-income patients, who are most likely to lose coverage under the AHCA. (For a more detailed examination of the AHCA, please see HRI’s spotlight).

Trump administration: President Donald Trump proposes deep budget cuts for Health and Human Services

In its FY 2018 “skinny” budget, the Trump administration has proposed cutting HHS’ discretionary funding levels by $12.6 billion. HHS’ budget would drop from $77.7 billion in FY 2017 to $65.1 billion in FY 2018, a 16 percent decrease. The National Institutes of Health (NIH) would be hardest hit of the HHS agencies, absorbing a $5.8 billion decrease. NIH received $31.7 billion this year. Additional HHS cuts would come from eliminating the Low Income Home Energy Assistance Program and the Community Services Block Grant, which address issues affecting impoverished Americans. Health profession and nurse training programs would absorb $433 million in cuts because they “lack evidence that they significantly improve the nation’s health workforce,” according to the budget.

HRI impact analysis: The “skinny” budget is more a political statement of presidential priorities than anything else. The budget, which did not address entitlements such as Medicaid, Medicare and Social Security, lays out significant increases in funding for the military and veterans paid for by deep budget cuts to HHS, the US State Department and other areas. The budget promises a “major reorganization of NIH’s Institutes and Centers to help focus resources on the highest priority research and training

activities,” and proposes axing the Fogarty International Center, which focuses on global health and research. Decreases to NIH funding would have serious repercussions for medical research and the nation’s academic medical centers. Over 80 percent of NIH’s funding is distributed to research efforts around the world. The agency awards almost 50,000 competitive grants to universities each year. Academic medical centers and other groups dependent on NIH funding should watch developments closely as the Trump administration hammers out a more complete budget.

Trump administration: Life science industry could see FDA user fees double

President Trump’s "skinny" budget proposes “recalibrating” the FDA’s user fee programs for medical products, requiring the life sciences industry to pay about $1 billion more in fees to cover regulatory reviews and inspections. The user fee programs—which cover drugs, generic drugs, medical devices, biosimilars and veterinary products—help speed product reviews by allowing the FDA to hire additional staff and invest in technology. As of FY 2017, the fee for a company to submit a new drug with clinical data was just over $2 million. The fee increase would help offset a 17.9 percent reduction in federal HHS funding. The White House wrote in its budget that, “in a constrained budget environment, industries that benefit from FDA’s approval can and should pay for their share.”

HRI impact analysis: The substantial increase in user fees—almost double the existing rate—would mark a significant departure from the user fee programs’ purpose, which was to supplement, not replace, federal funding. The doubling of fees could hurt smaller medical product manufacturers. Except for the medical device user fee program, user fees are the same for all companies regardless of size or ability to pay. New or small companies could have difficulty getting products to market. The majority of the programs are set to expire in October and must be renewed by Congress. The Trump administration’s willingness to examine the user fee program in the budget may indicate a desire to use the program to negotiate concessions, including drug pricing reform.

CMS: Improved educational resources to encourage use of Connected Care

CMS is trying to get more people to use Connected Care, an initiative launched in 2015 that pays healthcare providers a $42 per patient monthly incentive—20 percent of which comes from patient copays—to coordinate care for Medicare beneficiaries with multiple chronic conditions. CMS recently found that many providers ignore the program because their patients are reluctant—or refuse—to pay the copay. CMS has launched an educational campaign for patients and providers to promote the program’s benefits.

HRI impact analysis: Two-thirds of Medicare beneficiaries suffer from multiple chronic conditions and account for 93 percent of Medicare spending. Yet these complex patients often receive fragmented care. Connected Care is part of a larger CMS effort to nudge the health industry toward value-based care by encouraging a more coordinated approach to treating these often-costly patients. While clinicians and consumers say they are interested in coordinated care, CMS’ experience with Connected Care highlights the challenges of executing these programs. Any program aiming to reduce spending strives for better care coordination; a properly coordinated care team can achieve $1.2 million of projected savings for every 10,000 patients with multiple chronic conditions.

GAO: Most patients aren’t logging in to their EHRs

Nearly 90 percent of hospitals and physicians that use electronic health records (EHRs) offered their patients digital access to certain health data in 2015, according to a study by the Government Accountability Office. Nevertheless, relatively few patients—15 percent of hospital patients and 30 percent of office patients—log into patient portals to access their health information, the GAO found. Why? Patients reported frustration with uneven portal function, missing health data and records spread among multiple portals from different providers, the report said. Among patients who did access the data, half said they did so for “convenience factors,” such as appointment scheduling, medication refill requests or to message their provider, according to the GAO. Patients also may question the value of accessing this information. Nearly two-thirds of patients didn’t access their medical records online because they didn’t need the information, according to a survey by the Office of the National Coordinator for Health Information Technology conducted in 2013 and 2014.   

HRI impact analysis: In 2016, a time of near-ubiquity for EHRs, 46 percent of consumers believed that these records systems would improve their care. In 2005, when the systems were scarce, 34 percent thought so, according to HRI survey data. In GAO interviews, patients said the login process was burdensome and time-consuming, data were often difficult to download or transmit electronically, and the information was often incorrect, missing or presented in unhelpful ways. Health IT developers surveyed by GAO said that lack of standardization across EHR systems contributed to some of these issues. Many patients’ data is strewn across multiple EHR systems in multiple states. However, emerging technologies such as blockchain, and efforts to improve and customize the data in patient portals, may encourage more patients to use them. The GAO study recommended that HHS develop ways to measure how well efforts to improve patients’ electronic data access succeed, and use that information to achieve Medicare EHR program goals. Providers also may have to work harder to promote the use of EHR systems, such as soliciting patient feedback on how to improve data presentation and the user experience.

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Trump administration highlights – March 13, 2017

Trump administration: CBO says repeal/replace bill increases uninsured by 24 million, cuts Medicaid by $880 billion by 2026

The Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT) released their much-anticipated scoring of the House GOP’s American Health Care Act (AHCA) on Monday. The analysis concluded that by 2018, 14 million more people would be uninsured than would be under the Affordable Care Act (ACA), largely because the ACA’s individual mandate would be eliminated. That number is expected to climb to 24 million by 2026 because of changes to Medicaid and premium tax credits, and the elimination of subsidies to help low-income Americans pay the out-of-pocket costs associated with their plan, such as deductibles and co-payments. The report estimates that federal funding for Medicaid would drop $880 billion between 2017 and 2026 — a 25 percent reduction — and that by 2026, 14 million fewer people would be enrolled in Medicaid. Federal deficits are expected to be $337 billion lower by 2026. (For more detail on the AHCA and the CBO/JCT report, please see HRI’s spotlight.) 

HRI impact analysis: Released just days before the House Budget Committee was scheduled to consider the bill, the CBO/JCT report triggered heated reactions. Senate Minority Leader Chuck Schumer, D-N.Y., called the report a “knockout blow” for congressional Republicans. House Speaker Paul Ryan, R-Wis., said he was encouraged by the report, as the analysis indicated long-term individual market stability and a drop in premiums. HHS Secretary Tom Price said the administration “strenuously disagrees” with the CBO’s assessment. Speaking at a rally in Nashville on Wednesday, President Donald Trump said, “We’re going to all get together; we’re going to get something done.”

The CBO/JCT’s estimates for the rise in the uninsured — which would result in 52 million total uninsured Americans by 2026 — have received the most attention from the media and federal legislators. But healthcare providers and state lawmakers may be more interested in another figure: the $880 billion drop in federal Medicaid funding by 2026, achieved by rolling back the ACA Medicaid expansion and capping expenditures. The reduction would force states to make up the difference, cut benefits and/or cut enrollees. The bill “would make the country worse off than we were before the ACA,” Bruce Siegel, CEO of America’s Essential Hospitals, told Politico. Under the AHCA, the fate of some healthcare providers heavily dependent on Medicaid — such as safety-net hospitals and long-term care facilities — could hinge on state and local lawmakers, each state’s financial health, and residents’ priorities. Consolidation among providers could accelerate in states with dramatic Medicaid funding reductions as hospitals seek scale, more varied payer mixes and financial safety.

Trump administration: Repeal/replace bill would drop ACA public health fund

The AHCA would eliminate the ACA’s Prevention and Public Health Fund, which has distributed nearly $1 billion since 2010. Most of that money has funded work at the Centers for Disease Control and Prevention (CDC), making up about 12 percent of its annual budget. The fund supported work on infectious disease surveillance, preventing hospital-acquired infections, immunization, and disease prevention and awareness. Republican lawmakers have remained critical of the fund, with Rep. Andy Harris, R-Md. — who sits on the House appropriations health subcommittee — labeling it a “slush fund” that has “been used by the secretary [of health and human services] for whatever the secretary wants.” 

HRI impact analysis: Public health spending sits below prerecession levels despite new concerns, such as the opioid epidemic. Reducing this funding could shift costs to providers and insurers, which could see increased demand from patients, such as opioid abusers, for long-term inpatient and outpatient treatment plans. As demand increases, patients could wait longer for care, become sicker, depend more on emergency rooms, and require more costly care.

Trump administration: President Trump nominates familiar face as FDA commissioner

President Trump nominated Dr. Scott Gottlieb last week as FDA commissioner. Gottlieb is well known in the pharmaceutical and life sciences industry; he works at the American Enterprise Institute, a conservative-leaning think tank, and New Enterprise Associates, a venture capital firm. He holds director positions on several pharmaceutical companies’ boards, including those of Glytec and American Pathology Partners, and is a member of the Federal Health IT Policy Committee. Gottlieb also has experience in the public sector; he was the FDA’s deputy commissioner of medical and scientific affairs under President George W. Bush. His nomination must be confirmed by the Senate.

HRI impact analysis: Gottlieb could profoundly affect the life sciences industry. He would enter the FDA just as the 21st Century Cures Act ramps up and as the agency prepares to complete several user fee agreements. President Trump has spoken repeatedly about streamlining the regulatory process for evaluating drugs and devices. Gottlieb, a frequent commentator on FDA regulatory issues, has written and spoken about lower drug prices, generic drug labeling, stem cell regulation, complex generic drug regulation, drug shortages and more. His philosophy is that regulatory barriers should be simplified, reduced or eliminated to help promote innovation.

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About the center

As the US healthcare system continues to undergo transformation, health industries are confronted with an evolving and complicated regulatory environment. With an eye towards how public policy impacts the business of healthcare, the HRI regulatory center serves as a vital resource for executive decision makers who must navigate the changes that lie ahead.

HRI's regulatory center is a group of seasoned professionals that analyze legislative and regulatory policy in Washington and in key states. The group, which focuses on all health sectors, publishes a weekly newsletter and more focused reports that detail the interconnection between Washington and healthcare. The HRI regulatory center calls upon key contacts in government and industry to develop a point of view that is both informative and actionable for health industry leaders.

Contact us

Benjamin Isgur
Health Research Institute leader
Tel: +1 (214) 754 5091

Trine Tsouderos
Health Research Institute director
Tel: +1 (312) 241 3824

Alexander Gaffney
Health Research Institute, senior manager, Pharma/New entrants
Tel: +1 (202) 414 4309

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