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Jun 18, 2018

Washington Healthcare Update

This Week: Opioid legislation moves…Insurers lose in court…OMB clears Association Health Plan Rule…and more.

1. Congress

House

Senate

2. Administration

3. Courts

4. Reports


1. Congress

House

House Passes Opioid Bills

The House began its two-week vote-a-thon on opioid legislation. On June 12, the house passed 25 bills and continued to work on opioid legislation throughout the week.

On June 12 all but two of the bills were decided by voice vote, and the debate period for the bills rarely exceeded 10 minutes. Many of the bills dealt with enforcement actions to be taken by HHS and FDA, while others were centered on CMS and its coverage of various opioid-related treatments.

Below is a list of the bills approved by the House and a brief description of their mandates:

  • Rep. Frank Pallone (D-NJ)’s “Stop Counterfeit Drugs by Regulating and Enhancing Enforcement Now (SCREEN) Act of 2018” would set up a $110 million account to support FDA in its surveillance and screening of imported drugs, including ramping up staff at international mail facilities (IMFs); increase the maximum dollar amount of drugs subject to destruction; and amend drug law so that any drug or device liable to seizure is not governed by maritime rules.
  • Rep. Barbara Comstock’s (R-VA) Better Pain Management Through Better Data Act of 2018 requires FDA to establish criteria for collecting information about opioid sparing to be included on drug labels.
  • Rep. Buddy Carter’s (R-GA) Abuse Deterrent Access Act of 2018 requires the HHS secretary to conduct a study and submit to Congress a report on the “adequacy of access to abuse-deterrent opioid formulations” for Medicare Advantage and Medicare Part D beneficiaries. As part of the study, HHS must take into account barriers that prevent individuals from accessing ADFs, including cost-sharing tiers, fail-first requirements, the price of formulations and prior authorization requirements.
  • Rep. Tim Walberg’s (R-MI) Jessie’s Law mandates HHS establish best practices for including information about a patient’s history of opioid use disorder in medical records. The bill includes Rep. David McKinley’s (R-WV) amendment clarifying certain Health Insurance Portability and Accountability Act (HIPAA) rules.
  • Rep. Hakeem Jeffries’ (D-NY) Synthetic Drug Awareness Act of 2018 requires the U.S. surgeon general to submit to Congress a report on the effects on public health of the increased use rate of synthetic drugs among youth aged 12 to 18.
  • Rep. Lynn Jenkins’ (R-KS) H.R. 3331 amends Title XI of the Social Security Act to promote testing of incentive payments for behavioral health providers for adoption and use of certified electronic health record technology.
  • Chairman Bob Latta’s Indexing Narcotics, Fentanyl and Opioids (INFO) Act of 2017 directs HHS to create a public electronic dashboard linking to all nationwide efforts and strategies to combat the opioid crisis.
  • Rep. Judy Chu’s (D-CA) Ensuring Access to Quality Sober Living Act of 2018 authorizes the Substance Abuse and Mental Health Services Administration to develop and distribute best practices for operating recovery housing.
  • Rep. Debbie Dingell’s (D-MI) ACE Research Act provides NIH with new authorities to conduct innovative research on new non-addictive pain medications.
  • Rep. Fred Upton’s (R-MI) Medicaid IMD Additional Info Act directs the Medicaid and CHIP Payment and Access Commission to conduct a study on institutions for mental diseases (IMD) that receive Medicaid reimbursement.
  • Rep. Katherine Clark’s (D-MA) Substance Use Disorder Workforce Loan Repayment Act of 2018 creates a student loan repayment program for substance use disorder (SUD) treatment providers.
  • McKinley’s Preventing Overdoses While in Emergency Rooms (POWER) Act provides resources for hospitals to develop protocols on discharging patients who have presented with an opioid overdose.
  • Rep. Bill Johnson’s (R-OH) TEACH to Combat Addiction Act of 2018 supports learning institutions that have promoted SUD treatment education for health professionals.
  • Rep. Steve Stivers’ (R-OH) H.R. 5272 ensures programs funded by an HHS grant, cooperative agreement, loan or loan guarantee to prevent or treat a mental health or substance use disorder are evidence based.
  • Rep. Susan Brooks’ (R-IN) Poison Center Network Enhancement Act of 2018 reauthorizes the national network of poison control centers.
  • Rep. Leonard Lance’s (R-NJ) Eliminating Opioid Related Infectious Diseases Act of 2018 authorizes CDC to start an injection drug use-related infection elimination initiative and work with states to improve education, surveillance and treatment of those infections, such as HIV and hepatitis.
  • Special Registration for Telemedicine Clarification Act of 2018 clarifies telemedicine waivers so that patients can more easily be prescribed controlled substances in legitimate emergency situations.
  • Rep. Yvette Clarke’s (D-NY) H.R. 5583 requires state Medicaid programs to annually report on certain adult behavioral health quality measures.
  • Rep. John Faso’s (R-NY) Medicare Opioid Safety Education Act of 2018 directs CMS to compile education resources for beneficiaries on opioid use, pain management and alternative management treatments and include those resources in the “Medicare and You” handbook.
  • Rep. Mark DeSaulnier’s (D-CA) Empowering Pharmacists in the Fight Against Opioid Abuse Act helps pharmacists detect and decline fraudulent prescriptions.
  • Rep. Bill Pascrell’s (D-NJ) Alternative to Opioids (ALTO) Act establishes a demonstration program to test alternative pain management protocols.
  • Rep. Ben Ray Luján’s (D-NM) Peer Support Communities of Recovery Act enhances the Comprehensive Addiction and Recovery Act’s (CARA’s) Building Communities of Recovery Program and authorizes HHS to award grants for peer support organizations for developing and expanding recovery services.
  • Rep. Morgan Griffith’s (R-VA) H.R. 5812 improves current federal support for state-run prescription drug monitoring programs.

Legislation requiring recorded votes included the Safe Disposal of Unused Medication Act, which would amend the Controlled Substances Act to allow hospice employees to help dispose of controlled substances in the homes of deceased hospice patients, was postponed and voted on later in the day on June 12. It was passed by a vote of 398-0.

Rep. Brett Guthrie’s (R-KY) Comprehensive Opioid Recovery Centers Act of 2018 also required a vote. The bill, which would amend Title V of the Public Health Service Act to establish a grant program to create comprehensive opioid recovery centers, was postponed and then passed later in the session by a vote of 383-13.

Other legislation also passed by votes. H.R. 5788 would crack down on international shipments of illicit drugs through the mail. It was approved 353-52, with three Republicans and 49 Democrats opposing. The legislation, sponsored by Rep. Mike Bishop (R-MI), requires the U.S. Postal Service to obtain by 2020 advance electronic data for most shipments from overseas and imposes civil penalties on USPS for accepting packages without it. Some Democrats objected to penalizing the postal service.

Another proposal, H.R. 5735, approved on a vote of 230-173 with seven Republicans and 166 Democrats opposing, creates a new demonstration program to reserve some Section 8 housing vouchers for supportive and transitional housing for people recovering from addiction. The bill’s sponsor, Rep. Andy Barr (R-KY), said the vouchers would go to nonprofit organizations that have “a good record of providing services for individuals transitioning out of rehab.”

Most Democrats opposed the bill, saying it would reallocate housing to people with addiction and away from others who had been waitlisted.

Barr said he asked the House Appropriations Committee to consider new funding for the demonstration.

Matsui Introduces 340B Legislation

Rep. Doris Matsui (D-CA) on June 12 introduced a bill to reform the 340B drug discount program—including explicitly laying out a purpose for the 340B program that says hospitals do not necessarily have to forward drug discounts to patients and reversing the CMS cut to hospitals’ Medicare reimbursement for 340B drugs.

“Hospitals and clinics doing life-saving work rely on the 340B Program to help them provide inclusive and affordable care in their communities,” Matsui said. “Unfortunately, the program is being incorrectly used as a scapegoat for high drug prices by the Trump Administration. This legislation makes clear the importance of preserving the program so safety net providers can continue to serve low-income and vulnerable patients, while expanding it to help address the opioid crisis.”

Matsui’s bill would codify that the purpose of the program is to help providers stretch scarce federal resources, and that the discounts to providers are based on that they met certain eligibility criteria for the program and are not given directly to individual patients.

The legislation would also codify the 1996 definition of a 340B patient, which is still currently used, and says HHS can’t narrow that definition. The Obama administration considered changes to that definition; hospitals were not pleased with the changes as laid out in so-called “mega-guidance,” but the changes were never finalized.

The Biotechnology Innovation Organization and the Pharmaceutical Research and Manufacturers of America expressed concerns with the bill.

Senate

Senate Finance Passes Bipartisan Opioid Legislation

On June 12, the Senate Finance Committee unanimously approved a package of opioid-related legislation. The legislation, The Helping to End Addiction and Lessen Substance Use Disorders Act,” is considered noncontroversial and some Democrats have called on the committee to do more to respond to the opioid crises.  

Sen. Rob Portman (R-OH) said he would take to the Senate floor a more controversial proposal to expand Medicaid coverage for care provided in institutional settings. Portman’s proposal would roll back a prohibition on federal Medicaid money being used to pay for substance abuse treatment in residential treatment centers with more than 16 beds. Concerns over expense have derailed previous efforts to eliminate the so-called IMD exclusion, which refers to facilities classified as “institutions for mental disease.”

The Senate Finance package is titled the Helping to End Addiction and Lessen Substance Use Disorders Act. The legislation’s provisions include:

  • Providing more information to Medicare beneficiaries about opioid use and pain management.
  • Requiring screenings for substance use disorders during Medicare beneficiaries’ annual wellness visits.
  • Eliminating Medicare geographic restrictions on the originating sites of telehealth services for the treatment of substance use disorders.
  • Expanding e-prescribing in Medicare Part D.
  • Increasing data-sharing among HHS, Part D plans and Medicare Advantage plans about opioid overprescribing.
  • Requiring HHS to identify and notify outlier prescribers of opioids in Part D.
  • Requiring CMS to provide clarification to states on treatments that can be covered by Medicaid, including telehealth services and non-opioid pain management.
  • Allowing Medicaid to pay for prenatal care provided to pregnant recipients who are also receiving substance abuse treatment in an institutional setting.
  • Prohibiting states from imposing lifetime limits on medication-assisted treatment in Medicaid.
  • Encouraging states to use Medicaid money to offer substance abuse treatment in family-focused residential treatment programs.

The committee also approved an amendment offered by Sen. Pat Toomey (R-PA) to beef up the overutilization monitoring system that Medicare uses to track beneficiaries who may be misusing opioids. The committee approved an amendment offered by Sen. Sherrod Brown (D-OH) to allow Part D beneficiaries in a lock-in plan to auto-escalate their appeals, as well.

Senate HELP Committee Hears From HHS Secretary

HHS Secretary Alex Azar told the Senate Health Education, Labor and Pensions Committee on June 12 that he believes the administration has the authority to mandate disclosure of list prices in direct-to-consumer ads, but added that he welcomes congressional action on the issue, given that he expects the idea will be challenged in court. Senate HELP Committee Democrats were quick to point out that no Republicans have cosponsored the Democratic-sponsored “Drug-price Transparency in Communications (DTC) Act of 2017,” which would mandate such disclosures.

Although President Trump had said there would be “voluntary massive drops in prices,” Azar told senators that “several drug companies … are looking at substantial material decrease in drug prices,” but it will take time for the cuts to evolve. Sen. Elizabeth Warren said she asked 10 major brand drug manufacturers whether they plan to voluntarily reduce prices and none said they were planning to do so.  

Other points of his testimony included: 

  1. HHS plans a demonstration project to test new ways of paying for Medicare Part B drugs—either by moving these physician-administered drugs into Part D or by bringing the drug cost negotiation tactics used in Part D into Part B, Azar said. A demo would allow the agency to figure out how to address concerns that Part B changes could actually raise costs for seniors. Sen. Michael Bennet (D-CO) pointed to a recent study that found that patient out-of-pocket costs for new cancer drugs were on average 33 percent higher when the drugs were covered by Part D than when the patient got new cancer drugs from Part B.
  2. Azar believes the administration has the authority to mandate disclosure of list prices in direct-to-consumer ads, but added that he would welcome congressional action on the issue given that he expects the idea would be challenged in court. Azar committed to coming back to Congress if the administration determined it does not have the ability to administratively mandate such disclosures.

Senate Judiciary Committee Passes CREATES Legislation

The Senate Judiciary Committee voted 16-5 to advance a bill that would make it easier for generic drug makers to sue brand-name pharmaceutical companies that hinder access to samples of a product needed to make less-expensive generic versions. GOP Sens. Jeff Flake (AZ), Mike Crapo (ID), Orrin Hatch (UT), Ben Sasse (NE) and Thom Tillis (NC) opposed the legislation, known as the CREATES Act.

The CREATES Act was in the works long before the Trump administration laid out its plans to lower drug prices, and was included in the blueprint.

Brand drug manufacturers sometimes use REMS—the risk evaluation and mitigation strategies that FDA imposes on some of the highest-risk pharmaceuticals—to block generic drug developers’ access to those products. The bill, S. 974, sets up a pathway for generics companies to sue to obtain samples.

The legislation would save $3.8 billion over a decade through greater availability of lower-cost generics and biosimilars, the Congressional Budget Office estimates. Judiciary Chairman Chuck Grassley (R-IA) maintains that consumers’ savings would be much higher.

All three amendments offered late Wednesday were withdrawn before the legislation was voted on in the mark up.

A motion by Sen.Orrrin Hatch (R-UT) would have limited generic drug companies’ use of inter partes review, which is a faster and cheaper pathway Congress created in 2012 to deter patent trolling. An amendment from Sen. Jeff Flake(R-AZ) would have directed any savings from CREATES to reduce the federal deficit. Another from Sen. John Cornyn (R-TX) would have tightened the evidence required by generics to prove blocked access; Grassley said he’d work with Cornyn on that before the bill reaches the floor.

Grassley said he was unsure when the bill could be brought to the Senate floor but that there were some “possible packages” it could be attached to.

2. Administration

OMB Clears Association Health Plan Rule

The Office of Management and Budget completed its review of the highly anticipated association health plans rule, June 13. OMB held at least four meetings with key stakeholders on the administration’s controversial plan to allow more employers to band together to form AHPs which likely would be less robust than Obamacare plans. The final rule is expected to be issued imminently.

The proposed version of the rule would loosen the definition of an employer under ERISA to encourage employers to band together and create fully insured or self-insured AHPs. Under the proposal, AHPs could cover workers from various industries and sole proprietors could join; and some of products could form across state lines. The overarching idea is to align regulation of AHPs, which are a form of Multiple Employer Welfare Arrangements (MEWAs), with rules governing the large group market.

Currently, MEWAs, including AHPs, are regulated under a mix of federal and state laws, and the DOL made clear that the proposed rule would not change that authority. But the department said it was considering using its authority to exempt self-insured AHPs from state laws in order to promote more consumer choice, and sought feedback on the idea. Comments were due in March, and stakeholders were split on the subject. Insurance issuers, state officials and providers urged DOL to clarify state regulatory authority and AHP proponents argued for federal preemption.

CMS Reverses Coverage Policy on Continuous Glucose Monitors

In a policy reversal, Medicare will let seniors use an FDA-approved mobile app to send results from continuous glucose monitors to their doctors, families and caregivers. CMS says the durable medical equipment Medicare Administrative Contractors will issue a revised policy article soon, and the change will take effect at that time.

“CMS heard from numerous stakeholders who shared their concerns that Medicare’s CGM coverage policy limited their use of CGMs in conjunction with their smartphones, preventing them from sharing data with family members, physicians, and caregivers,” the agency’s announcement says, referring to continuous glucose monitors. “After a thorough review of the law and our regulations, CMS is announcing that Medicare’s published coverage policy for CGMs will be modified to support the use of CGMs in conjunction with a smartphone, including the important data sharing function they provide for patients and their families.”

At issue is a Medicare policy that prohibited beneficiaries from using an FDA-approved mobile app to share results from continuous glucose monitors. CMS covers continuous glucose monitoring devices for patients with intensively managed diabetes. The Dexcom G5 monitoring system is accompanied by an FDA-approved mobile app, but patients were prohibited from using it and instead had to visit their doctors in person to have data from the device downloaded for interpreting the results. The American Association of Diabetes Educators said they, along with peer support communities and others, have been advocating for this change since the original guidance designating approved CGMs as Durable Medical Equipment and a covered benefit was released in early 2017.

Some view this step as setting a precedent for coverage of remote patient monitoring devices.

CMS Will Not Update Hospital Star Ratings

CMS has postponed updating the July hospital quality star ratings for the Hospital Compare website because hospitals are concerned performance ratings are unreliable. America’s Essential Hospitals said a July preview of reports showed large shifts in overall hospital star ratings since December. The hospital lobby said those changes created confusion and raised questions about the reliability and validity of the methodology used to calculate the ratings. The American Hospital Association also raised questions with the agency about the data in the star ratings preview reports.

Both of the hospital trade groups said CMS made the right decision to not update the data. CMS said that as part of that process, it will ask for feedback from a multidisciplinary technical expert panel, a provider leadership group and a public comment period.

Navigators on Hold

The Trump administration has yet to tell Obamacare outreach workers when or how to apply for another round of federal grants to boost enrollment around the country for 2019, compounding worries that federal officials will undermine the law during the upcoming sign-up season.

The delay in starting the funding process for groups working as so-called navigators is increasing anxiety that they could lose staff or be hindered as they hone their outreach tactics for 2019 enrollment.

The groups have played a particularly large role in states with higher uninsured rates, where political leaders are often more hostile to the health law and haven’t devoted a lot of their own state funds to help get people enrolled.

In past years, the federal grant process for enrollment navigators was underway by April. This year, CMS as of mid-June has not put out a formal call for grant applications. Nor has it given details on how much money will be available to groups in about three dozen states using the federal sign-up system—HealthCare.gov—leaving them guessing on their upcoming budgets a year after many had their funding slashed. An agency spokesperson declined to comment.

Current funds run out by September, roughly two months before the Nov. 1 start of the 2019 enrollment season.

Navigators had been told their funding levels earlier in the fiscal year, but HHS abruptly shifted course and in August said that it would set aside only $37 million. Some groups were forced to completely shut down their programs while others saw virtually no cuts. Still, sign-ups nationwide exceeded expectations last year in spite of the grant reductions to in-person enrollment aides and advertising.

Florida, the second most populous state to not expand Medicaid, behind Texas, has the country’s largest individual marketplace and navigators have played a major role. More than 1.7 million Floridians who aren’t covered through their employer turn to the individual marketplace for health insurance. Many depend on navigators to help them pick the best plan, consumer advocacy groups say.

CMS last issued a formal call for navigator grant applications in 2015, with funding getting sent to groups every 12 months over a three-year window. The grant solicitation was issued in April 2015 and organizations had to submit proposals by June. Typically, navigator funding is finalized in August or September.

HHS under President Donald Trump has also made other changes to the navigator program that could impact who receives money to educate individuals about their coverage options for the upcoming year. The Obama administration required that at least two types of entities work as navigators and one of them had to be a consumer-focused nonprofit. But HHS recently finalized regulations eliminating those requirements starting in 2019. Navigators also no longer have to have a physical presence in the state, with HHS saying the changes would grant officials more flexibility to ensure that funds go to the strongest applicants.

Groups will also be confronting the absence of the Affordable Care Act’s individual mandate. Congress’ decision to zero out the mandate’s tax penalty starting next year is expected to result in less enrollment from the young and healthy, a population that’s needed to offset the costs of the sick and help keep premium increases in check. And the Trump administration’s recent decision to try to get a court to throw out the law’s pre-existing condition protections along with the mandate adds more uncertainty and confusion to the markets.

CMS Leverages Medicaid Program to Combat the Opioid Crisis

On June 12, the Centers for Medicare & Medicaid Services (CMS) released guidance aimed at ensuring states have the flexibilities and the tools necessary to combat the opioid crisis. This new guidance provides information to states on the tools available to them, describes the types of approaches they can use to combat this crisis, ensures states know what resources are available and articulates promising practices for addressing the needs of beneficiaries facing opioid addiction. Notably, CMS released an Informational Bulletin that provides states with information they can use when designing approaches to covering critical treatment services for Medicaid-eligible infants with Neonatal Abstinence Syndrome (NAS). Additionally, CMS issued a letter to states on how they may best use federal funding to enhance Medicaid technology to combat drug addiction and the opioid crisis.

  • Addressing Neonatal Abstinence Syndrome

Medicaid services can play a critical role in helping ensure access to treatment for these vulnerable infants who have Neonatal Abstinence Syndrome (NAS). Neonatal Abstinence Syndrome is a postnatal drug withdrawal syndrome that occurs primarily among opioid-exposed infants shortly after birth. Experts consider NAS to be an expected and treatable result of women’s prenatal opioid or other substance use, although long-term ramifications for the infants are still unknown. As of 2012, there was an average of one infant born with NAS every 25 minutes in the United States and roughly 80 percent of infants treated for NAS receive their care through Medicaid.

Appropriate treatment using the best evidence-based practices can help these infants withdraw from opioids and other substances and lead healthier lives. NAS treatment may occur not only in hospitals, but also in other settings. In addition to Medicaid-covered treatment for infants, it is important for states to involve mothers and other caregivers in the infant’s care, as appropriate. The use of interventions like swaddling, quiet environments, little stimulation, skin-to-skin contact and other environmental approaches like critical first-line care for these infants.

States may also seek to cover initial or ongoing SUD treatment services for Medicaid-eligible mothers and/or fathers concurrently with NAS treatment services directed at the infant. Services that begin at this critical time, and continue to follow and support the infant and caregiver when the infant returns home, provide the highest likelihood for optimal health status and positive outcomes for infants born with NAS. Medicaid services can play a critical role in helping ensure access to treatment for these vulnerable infants and their families.

  • Enhancing Medicaid Technology

    The opioid technology guidance advises states on which funding authorities may support health information technology efforts that could be used for the prevention and treatment of negative opioid outcomes.

    States may access enhanced federal funding to integrate into Medicaid care coordination technologies innovative substance abuse treatment in areas facing provider shortages, particularly in rural areas, such as virtual treatment centers or remote counseling.  The letter also describes how states can draw federal support for shared electronic care plans, which allows patients and providers to view and update a shared care plan describing goals for pain management regimens and counseling, and could complement Medication Assisted Therapy (MAT). 

    Support for patient-facing technology in the form of apps and remote monitoring technology is also mentioned as possible state technology investments eligible for funding. Further, states may reduce provider burden by creating a single sign-on interoperability between Electronic Health Records (EHRs) and prescription drug monitoring programs, allowing physicians to e-prescribe in the same platform where electronic health records are held.

    Enhanced technologies, which might support the development of public health surveillance, may also be developed that can help strengthen the understanding of the crisis through better public health data and reporting. Most notably, the letter describes how states might draw federal financing to support recommendations from the President’s Commission final report, such as integrating prescription drug monitoring systems data into EHRs and supporting interstate data sharing and electronic prescribing of controlled substances. In addition, the letter shows how states might use systems and funding to support advanced analytics for those looking to leverage data sources to create prediction models of patients at risk for opioid dependency and connect them with appropriate case management.  

View more information regarding the Neonatal Abstinence Syndrome Informational Bulletin.

View more information on the Medicaid Technology Letter.  

FDA Guidance Updates How Companies Can Communicate With Payers

FDA issued two updated guidances on drug and device company communication with payers with the aim of encouraging more competitive contracting and lower drug prices.

The first guidance updates an Obama-era draft that outlines how companies can communicate off-label health care economic information about their products to drug purchasers like a health plan or a hospital.

There are two major changes in the final document. First, the guidance is expanded to apply to medical devices, not just drugs. Second, the final guidance applies to communication about unapproved products or unapproved uses of already cleared drugs or devices.

Freeing up companies to share more information about their products—like the economic consequences of their drug’s clinical outcomes compared to other drugs—should help companies develop agreements with payers that more closely tie the price of drugs to the usefulness of the product, Commissioner Scott Gottlieb said in a prepared statement.

FDA also finalized another Obama-era guidance today that outlines when companies can share information not explicitly on their product’s FDA-approved label without violating rules against off-label promotion, because the information is generally consistent with what is on the agency-approved product label.

While the policies should give companies more freedom to discuss their products with payers, they do not affect how companies give information to doctors or patients about unapproved products, Gottlieb added.

FDA Approves Generic Version of Suboxone

In keeping with the Food and Drug Administration’s goals related to the opioid epidemic, the FDA approved the first generic version of Suboxone, a film strip that dissolves under the tongue and is used to reduce withdrawal symptoms and cravings for opioids. The agency said the approval of the drug made by Mylan N.V. and Dr. Reddy’s Laboratories SA is meant to make treatment more available to people suffering from addiction.

3. Courts

Insurers Lose Court Fight to Claim ACA Payments

The U.S. Court of Appeals for the Federal Circuit ruled that the federal government doesn’t have to pay billions of dollars to insurers under an Affordable Care Act program that sought to attract them into ACA marketplaces by helping to cover monetary risks. In its majority opinion, the three-judge panel said that while the ACA provided for the payments, Congress included riders in future appropriations bills that repealed or suspended the government’s commitment to paying insurers the amounts they requested.

The legal ruling isn’t likely to create any immediate problems because insurers have already adjusted to the funding shortfall, largely by increasing premiums or exiting the marketplaces. Even in the ACA’s first year, insurers’ performance was so poor that the government could pay only a sliver of what the law had required to make up the losses.

The legal fight isn’t completely over. Moda Health and Land of Lincoln Health—the two insurers involved in the cases—have the option of asking the full appellate court to take up the lawsuits. If that fails, they can petition the Supreme Court.

4. Reports

Academy of Actuaries Says Trump Policies Decrease Enrollment and Increase Rates

According to a new report released June 13 by the American Academy of Actuaries, the largest factor driving up 2019 premiums for plans under the Affordable Care Act is expected to be increasing medical costs. However, the report says a number of other changes to the marketplaces are likely to exacerbate those rate hikes. In addition, the Trump administration’s efforts to make it easier to buy cheaper, skinnier plans that don’t meet the ACA’s coverage requirements likely will boost rates because insurers expect them to siphon off healthier Obamacare customers. Repeal of the health insurance provider fee will decrease rates by 1 to 3 percent, the group said.

View the report.


If you have any questions, contact the following individual at McGuireWoods Consulting:

Stephanie Kennan, Senior Vice President

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