Republicans to Push Medicare Changes in 2017, Budget Chairman Says

BNA’s Health Care Daily Report™ sets the standard for reliable, high-intensity coverage of breaking health care news, covering all major legal, policy, industry, and consumer developments in a...

By Alex Ruoff and Michael D. Williamson

Nov. 17 — Republicans will use the same budget mechanism needed to repeal Obamacare to pass changes to Medicare in 2017, Rep. Tom Price (R-Ga.) said Nov. 17.

Price, chairman of the House Budget Committee, told reporters he expects his party to approve two federal budgets in the next Congress and to use the fiscal year 2018 budget to spur a second reconciliation process to pass Medicare reforms. This would likely take place next summer, he said.

Republicans have long promised a number of changes to Medicare, including strengthening Medicare Advantage and addressing Medicare’s site-neutral payment policy for hospital outpatient departments. The prospect they are signed into law increases after President-elect Donald Trump is inaugurated in January.

Price met with Trump in New York Nov. 16, Jason Miller, a member of the president-elect’s transition team, told reporters on a Nov. 17 phone call. Price’s name has been mentioned among a number of possible candidates for secretary of health and human services.

Privatization Ahead?

Deregulation and some privatization of Medicare will likely serve as the overarching goal of Republican lawmakers designing changes to the program, Susan Feigin Harris, a Houston-based attorney with Baker & Hostetler LLP, told Bloomberg BNA Nov. 17. Harris advises hospitals and health systems on reimbursement issues.

Health-care reform proposals put forth by House Speaker Paul Ryan (R-Wis.) and conservative think tanks, such as the American Enterprise Institute and the Heritage Foundation, call for giving Medicare Advantage plans greater flexibility, Harris said. Under these proposals, MA organizations could design their plans to allow for more value-based insurance, she added.

In addition, there are some Republican proposals to combine Medicare Part A, which covers treatments at hospitals and several post-acute care providers, with Part B, which largely reimburses doctors for their services, Harris told Bloomberg BNA.

Parts A and B have different payment rates. The rationale of combining the systems is to recognize what’s already happening in the marketplace—that is, there is already a great deal of care integration and coordination between hospitals and physicians, Harris said.

However, combining the two systems may prove to be far more complicated than anyone anticipates, Harris told Bloomberg BNA. Many legal entanglements would arise. For example, there could be questions about whether the federal anti-kickback statute that providers must abide by would survive under a combined system, Harris said.

Harris added that there are limits to what can be done in budget reconciliation and some of these proposals may not fit into the process.

How to Prepare

Clients at the law firm Holland & Knight LLP are being advised there are significant changes to the health-care industry that Congress will likely debate in the coming months, Miranda Franco, senior public affairs advisor at the firm’s Washington office, told Bloomberg BNA Nov. 17 in an e-mail.

“Given Republican control of the Congress and Presidency, we anticipate that some changes will be enacted affecting patients and major segments of the health care industry,” Franco said. While this dynamic offers challenges for providers, it also presents an opportunity for them to partner with lawmakers and the incoming Trump administration as Republicans implement their vision of health-care reform, she said.

To contact the reporters on this story: Alex Ruoff in Washington at aruoff@bna.com and Michael D. Williamson in Washington at mwilliamson@bna.com

To contact the editor responsible for this story: Brian Broderick at bbroderick@bna.com

Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.