HRI regulatory center

Regulatory and legislative updates and analysis

President Donald Trump: The latest healthcare developments

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

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

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.

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HRI Trump administration spotlight: (Some) change is coming to healthcare

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?

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Trump administration highlights – Feb. 20, 2017

Trump administration: Pharma industry asks FDA to delay off-label promotion rule

Industry groups Medical Information Working Group (MIWG), Pharmaceutical Research and Manufacturers of America (PhRMA) and Biotechnology Innovation Organization (BIO) have petitioned the FDA to indefinitely delay a final rule they say unfairly broadens the definition of off-label promotion. The rule, issued in the Obama administration’s final days, states that a product’s promotion shall be deemed off-label if “the totality of the evidence” establishes that a manufacturer intended to market it that way.Evidence could include internal company information about how a drug is being prescribed. The groups expressed concern that the rule could permit the FDA to pursue companies for implied rather than explicit claims about their products; this could create significant uncertainty about marketing the products. 

HRI impact analysis: Before the delay request, the FDA had already temporarily postponed implementing the regulation because of the Trump administration’s regulatory freeze. The extra time allows the life sciences industry to re-examine recently passed regulations and guidance, and offer new comments to the administration. The FDA has lost several major court cases in recent years related to off-label promotion, and new agency leadership — yet to be nominated — may choose to reverse the rule and loosen off-label marketing restrictions.

Trump administration: GOP House leadership floats another repeal and replace plan

Another plan to repeal and replace the Affordable Care Act (ACA) surfaced last week during a meetingbetween GOP House leadership and members. The plan is based, in part, on House Speaker Paul Ryan’s A Better Way and contains elements drawn from other GOP repeal and replace plans, including age-based tax credits for premium support and Medicaid block grants. On the fate of the ACA’s Medicaid expansion, the plan authors say they don’t want to “pull the rug out from anyone who received care under states’ Medicaid expansions.”

HRI impact analysis: Republican lawmakers and policy experts have introduced numerous repeal and replace plans since the passage of the ACA in 2010, but so far they have failed to coalesce around goals, specifics and strategy. A bill may be coming soon, however. This week, many lawmakers are back in their home districts on recess, meeting with constituents in town halls. Speaker Ryan said he expects a bill will be introduced in the House after lawmakers return next week.

Trump administration: US Rep. Mick Mulvaney sworn in as OMB director

The US Senate voted to confirm US Rep. Mick Mulvaney, R-S.C., as Office of Management and Budget (OMB) director. According to Politico, Mulvaney began his career in antitrust law before joining his family homebuilding and real estate business. In Congress, he had been appointed chairman of the Small Business Committee’s Contracting and Workforce Subcommittee and served on the House Budget Committee and the Joint Economic Committee. Mulvaney was a founder of the House Freedom Caucus, which has called for immediate repeal of the ACA. As OMB director, Mulvaney — with his team — will create the president’s budget and play a crucial role in Republican plans to repeal and replace the ACA. He also will participate in addressing entitlement programs. In Mulvaney’s Senate confirmation hearing, he was asked about Medicaid, Medicare and Social Security. “If we don’t reform these programs that are so important to all Americans, in nine to 10 years the [Medicare] Trust Fund will be empty, and in 17 to 18 years the Social Security Trust Fund will be empty,” Mulvaney said. “We can choose to do something about that now.”

HRI impact analysis: A fiscal conservative, Mulvaney has voted to repeal all or parts of the ACA more than a dozen times. He supports federal spending cuts to Medicare and Medicaid and thinks the federal government should play a smaller role in healthcare. As OMB director, Mulvaney also will participate in thebudget reconciliation process, in which Republicans can repeal and replace budget-related ACA provisions without Democratic support. The new OMB director will be responsible for enforcing President Donald Trump’s two-for-one regulatory executive order, which requires that at least two regulations be eliminated for every new one. That order has the potential to seriously affect the healthcare industry.

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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 – Feb. 13, 2017

Trump administration: Physicians tell senators to protect patient access, new delivery models

The American College of Physicians (ACP) and four other physician groups, representing more than 500,000 doctors and medical students, urged senators to protect newly insured consumers and Medicaid recipients as Congress works to repeal the ACA. In a Capitol Hill meeting, the physician groups asked the lawmakers to keep ACA provisions related to “the ban on lifetime or annual limits on coverage, insurability with pre-existing conditions, maintaining primary care services without out-of-pocket costs and ensuring adequate premium and cost-sharing subsidies to make insurance coverage affordable,” according to an ACP statement. The groups also argued for continued investment in Center for Medicare and Medicaid Innovation (CMMI) delivery models, such as accountable care organizations and patient-centered medical homes.

HRI impact analysis: The physicians’ meeting with lawmakers follows other industry groups’ efforts to ensure their voices are heard as Republicans work on health reform. Many providers have expressed concern that uninsured rates will spike if the ACA’s Medicaid expansion is rolled back and tax credits that help low-income Americans purchase nongroup health insurance are repealed or reduced. Fewer insured consumers could result in decreased use of preventive and disease management services, which could result in excess capacity and decreased revenue. House Republicans are working on a budget reconciliation bill that would repeal parts of the ACA and replace them with more GOP-friendly provisions, though details of that bill have not been released.

Trump administration: Rep. Tom Price sworn in as HHS secretary

On Feb. 10, US Rep. Tom Price was approved by the Senate as HHS secretary and sworn in by Vice President Mike Pence. Secretary Price inherits the challenge of helping craft the Trump administration’s post-ACA regulatory framework. Healthcare industry trade associationspatient advocacy groups and consumers are pressuring the president, Republican lawmakers and the newly minted secretary to maintain key ACA provisions. Shortly after being sworn in, Secretary Price sent HHS staffers a letter stating, in part, that their “efforts will ensure that we advance positive changes to our health care system to improve its affordability, accessibility, quality, and responsiveness.”

HRI impact analysis: Secretary Price is a vocal critic of the ACA. The orthopedic surgeon favors replacing the law with something similar to a bill he has promoted, the Empowering Patients First Act, which includes expanded use of health savings accounts and age-based tax credits to help consumers pay for premiums. Secretary Price will oversee future ACA reforms, including guiding HHS’s efforts to comply with President Trump’s executive order on the ACA. The order calls on agencies to “take all actions consistent with law to minimize the unwarranted economic and regulatory burdens of the Act, and prepare to afford the States more flexibility and control to create a more free and open healthcare market.” Secretary Price also will oversee implementation of the Medicare physician payment reform law, MACRA, and the 21st Century Cures Act, designed to increase medical product innovation and accelerate FDA product approvals.

Trump administration: Court awards Moda Health $214 million in ACA risk corridor back payments

On Feb. 9, a federal claims court judge directed the federal government to pay insurer Moda Health $214 million in unpaid ACA risk corridor program funds. The program — one of the ACA’s 3Rs designed to balance risk for insurers offering ACA exchange plans — failed to pay out the amounts requested by Moda Health and other participating health insurers within the three-year program period, which began in 2014. The federal government owes insurers an estimated $8.3 billion in risk corridor payments for 2014 and 2015, according to Modern Healthcare. Insurers received only 12.6 percent of requested payments for 2014, and have received no payments for 2015. 2016 payments are yet to be determined. The federal government has promised insurers that shortages will be paid from future collections if there is a surplus. However, CMS took in just $362 million in 2014 from more successful plans, while health plans requested nearly $2.9 billion for losses.

HRI impact analysis: At least 17 cases brought by insurers are pending. The government is expected to appeal the Moda decision. The shortfalls in the risk corridor program helped cause 16 of the 23 not-for-profit health insurance co-ops to fail. If insurance companies succeed in court, participating health plans could recoup substantial funds from the federal government. The US Department of Justice, on behalf of HHS and CMS, has maintained that the government need only make payments commensurate with the surplus funds received. The Moda ruling challenges this position by awarding full payment for 2014 and 2015.  

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Trump administration highlights – Feb. 6, 2017

Trump administration: New rule aims to stabilize ACA exchanges

The White House has submitted a rule to the Office of Management and Budget aimed at bringing stability to the ACA’s health insurance exchanges in 2018. Details have not been made public, but early reports suggest it could tighten requirements for enrolling in coverage outside the standard enrollment window, allow insurers to shift more costs onto consumers, reduce consumers’ grace period for failing to pay premiums, and give insurers more leeway to vary premiums based on age.

The rule is set to come as the ACA’s fourth enrollment season drew to a close with 9.2 million people selecting health plans through,  slightly lower than last year’s 9.6 million. Enrollment numbers from some of the state-run exchanges are still pending, but it’s unlikely that HHS will reach its goal of signing up 13.8 million people for ACA coverage in 2017.  

HRI impact analysis: Insurers have told lawmakers they need more clarity on exchange rules and assurance that steps will be taken to stabilize the marketplace before they start submitting premium requests for 2018 plans in April. Some insurers have already expressed doubt about participating. The proposals under consideration by the Trump administration are consistent with some of the insurance sector’s suggestions for bringing short-term stability to the market, but it’s unclear whether the measures go far enough to stem an exodus of insurers. For instance, the ACA sets age band requirements at 3 to 1, meaning insurers cannot charge older customers more than three times what they charge younger enrollees. Insurers have said that expanding the band to 5 to 1 would allow them to reduce premiums and attract young, healthy consumers to help balance the costs of sicker enrollees. Smaller tweaks in the age band may not have enough of an impact for insurers.

Trump administration: Some clarity on the two-for-one executive order

memo released by the White House last week provides guidance to government agencies for implementing President Trump’s executive order, Reducing Regulation and Controlling Regulatory Costs,which requires federal agencies to identify two regulations for elimination before introducing a new one. The order also sets a budget for regulations.

The memo answers some questions raised by the order, including which regulations are covered by it and how regulation costs should be calculated. The memo clarifies that the order applies to any “significant regulatory action,” as defined by section 3(f) of Executive Order 12866 issued by President Bill Clinton. This could include any rule that would have an annual effect on the economy of $100 million or more, creates an inconsistency or interferes with an action issued by another agency, or materially alters the budgetary impact of entitlements, grants, user fees or loan programs. The memo states the “opportunity cost to society” as defined under OMB Circular A-4 should be considered when calculating costs and benefits of a proposed rule. Independent government agencies, such as the Social Security Administration, FTC and the Consumer Product Safety Commission, are spared from this order’s requirements, as are spending rules that cause income transfers from taxpayers to beneficiaries, such as rules governing Medicare spending.

HRI impact analysis: The memo gives federal agencies a framework for implementing the executive order. CMS and FDA will have to determine whether a new proposed rule meets the definition of a “significant regulatory action,” and if so, must identify at least two regulations to cut. The agencies also will have to calculate regulations’ costs and create ways to put the two-for-one rule in place, which could slow the process.

Trump administration: Health industry weighs in on executive order on immigration

The US health industry, which employs thousands of immigrants and treats many foreign patients, is awaiting a judicial decision regarding President Trump’s Jan. 27 executive order temporarily suspending entry for residents of seven nations and admissions of refugees. On Feb. 3, a judge in the US District Court for the Western District of Washington issued a nationwide temporary restraining order, effectively lifting the travel and immigration order. The Trump administration is appealing the case. Other legal challenges to the order have been filed, and many observers warn they could last years and perhaps land in the US Supreme Court, according to The New York Times.

HRI impact analysis: President Trump’s executive order, if upheld by the courts, would have widespread implications for the health industry. International medical graduates represent one in four physicians in the US and provide a disproportionate amount of care in rural and low-income communities, according to the American Medical Association (AMA). Patients from overseas arrive each day to seek care in American hospitals. In a letter to US Department of Homeland Security Secretary John Kelly, the AMA urged the federal agency to clarify the order and “mitigate any negative impact on the nation’s health care system.”

New entrants also have voiced concern. On Feb. 5, tech companies with healthcare interests, including Apple, CareZone, Castlight Health and Google, joined more than 100 fellow technology companies in an amicus brief supporting the state of Washington’s legal challenge. The brief asserts that the order “threatens companies’ ability to attract talent, business, and investment” and makes international travel riskier. “That is true even for persons or countries not currently covered by the order because there is no way to know whether a given country may be added to the no-entry list,” the brief states. Health organizations should consider expressing their opinions on the order to trade organizations and lawmakers and begin planning in case it takes effect.

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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.

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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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