Stay ahead of developments in federal and state health care law, regulation and transactions with timely, expert news and analysis.
Nov. 29 — Health-care groups are praising President-elect Donald Trump’s selection of an HHS secretary with hospital experience, the first since 1989, which is seen as a potential boon to the industry even amid worries from patient advocates.
But under Rep. Tom Price (R-Ga.) as proposed HHS secretary, the nomination of Seema Verma as new CMS head could be a harbinger of things to come. The contrast between an HHS secretary who has advocated for immediate repeal and replacement of the Affordable Care Act with a CMS administrator who implemented Medicaid expansion in Indiana, with conservative limitations, could mean in-fighting over who will take the reins on the top Republican priority of overhauling health care.
The Senate must confirm both for the positions.
“We may see some little power struggles or policy struggles,” Lloyd Bookman, founding partner of health-care law firm Hooper, Lundy & Bookman in Los Angeles, told Bloomberg BNA.
Whatever form changes take, the picks together indicate a Trump administration’s vision of moving toward bare-bones health coverage under entitlement programs, he said.
That would reverse course from the goals of President Barack Obama’s hallmark law that extended need-based health insurance coverage through premium-assisted exchanges and, in many states, expanded the Medicaid program to individuals whose income is up to 133 percent of the federal poverty level.
The plan taking shape is to shift “costs from the federal government to states, to move benefits from low-income people to high-income people and to basically move away from government regulation and oversight,” Timothy Jost, Washington and Lee University School of Law professor, told Bloomberg BNA.
The priority is a doctor-centric approach, in keeping with provisions Price has pushed during his time as a legislator and heading the House Budget Committee.
Price, an orthopedic surgeon, has aggressively opposed Obamacare and proposed legislation that would dismantle it, as well as a 2015 bill that would have replaced it with a new system.
He supports creating health-savings accounts and offering age-adjusted, fixed-dollar tax credits for health insurance assistance, including additional tax credits for beneficiaries of Medicare and Medicaid who choose to leave the rolls behind for private insurance. He has also backed plans from Republican leadership to privatize Medicare, change payments to allow doctors to bill patients beyond the program’s reimbursement and limit medical malpractice lawsuits.
Verma’s track record in Indiana includes extensive work on state waivers that offered measured Medicaid coverage to thousands of newly eligible beneficiaries. The waivers incorporated requirements for “personal responsibility” including cost sharing and tiers based on such factors as medical frailty, concepts that analysts said could be extended to the Medicaid program in all states. She has supported the idea of using Medicaid as a temporary program, rather than an extended, broad-based one.
The CMS has continually rejected work-requirement options for Medicaid eligibility, but that might change. As administrator, Verma wouldn’t be working on waivers; she would be issuing them.
Ultimately, millions of Americans the ACA aimed to cover will likely lose health insurance, Jost said. And there won’t be much of a safety net for low-income patients to fall back on.
Bookman agreed, noting that the net result of a Price-Verma leadership would be a “lack of real meaningful coverage over time,” with an eventual backlash to insure more vulnerable patients. “This is going to be a rocky road for a while—not just a couple years but a while being four, eight, 12 years.”
Though there will likely be modifications to some of these ideas over time, he said, there will still be a move toward a market-driven health-care approach that will shift payment responsibility.
“We’ll see more and more of burden being shifted to hospitals, particularly inner-city rural hospitals that treat a lot of poor people in trouble... as people buy insurance coverage that has high deductibles and perhaps bare-bones catastrophic coverage,” Bookman said.
Verma’s nomination reinforces the notion there will be a greater emphasis on flexibility in Medicare and Medicaid in a Trump administration, assuming she gets confirmed, Fred Bentley, with the Washington-based consulting firm Avalere Health, told Bloomberg BNA Nov. 29. Bentley is vice president of Avalere Health’s Center for Payment & Delivery Innovation.
In particular, eyes will be on how the CMS uses its Center for Medicare and Medicaid Innovation (CMMI), which has broad authority to experiment with different payment and delivery models, Bentley said.
Verma’s work has primarily has been in the Medicaid program, where she’s focused on getting Section 1115 waivers for Indiana’s Medicaid program, he told Bloomberg BNA.
As for Medicare, her background suggests she may use the CMMI to test payment models built around providing premium support to beneficiaries or to encourage greater enrollment in Medicare Advantage plans, Bentley said.
Additional flexibility could be a boon for the health-care industry, organizations said, energized by the idea of having one of their own heading the HHS.
“We feel both of these nominees will be proactive voices that most importantly understand the health-care system, and in Mr. Price’s case, his role as ortho surgeon actually delivering care and understanding the rehabilitation process I think is going to add some insight and uniqueness in that role we’ve not had the opportunity to experience in the past,” Clifton Porter, American Health Care Association Government Relations senior vice president, said in a media phone call Nov. 29. “At the end of the day it’s all about quality.”
He added that achieving quality outcomes would “ultimately save costs to the system in aggregate.”
And America’s Essential Hospitals, which represents many of the types of safety-net hospitals Bookman said would bear the brunt of the change, said in a statement that it was “pleased.”
“Particularly noteworthy about both nominees is their experience caring for low-income and other vulnerable people, shaped by their work at hospitals with a safety net role—essential hospitals,” Bruce Siegel, president and CEO of America’s Essential Hospitals, said in a statement. “We look forward to working with Price and Verma to ensure essential hospitals can sustain their commitment to those in need and to underserved communities.”
Other industry groups, such as America’s Health Insurance Plans, praised the decision as a chance to reduce health-care costs by promoting competition and spur medical innovation.
Trump has chosen wisely in Verma, Susan Jo Thomas, executive director of Covering Kids & Families of Indiana, told Bloomberg BNA. Covering Kids & Families is a not-for-profit organization dedicated to ensuring Hoosiers have access to health-care coverage.
Verma’s work with both the Healthy Indiana Plan (HIP) and HIP 2.0 has had a dramatic effect on the number of residents having health-care coverage, Thomas said. The uninsurance rate for the state is now in the single digits, she said, an improvement that would have seemed all but impossible years ago.
Before Indiana’s Medicaid expansion, Thomas said, her work could be heartbreaking because her organization was forced to turn away individuals who didn’t qualify for existing federal and state programs and couldn’t afford private health insurance, leaving them with no coverage. Through HIP, and the later HIP 2.0, she said her organization is now able provide coverage to many individuals for the first time.
Thomas said while HIP 2.0 requires cost sharing, nearly 100 percent of those applying ultimately enroll for coverage. She said the biggest hurdle to enrolling more individuals is reaching individuals, particularly those in rural areas.
Thomas said she has worked with Verma, both in negotiations and in the same office. What the CMS will be getting, she said, is a practical thinker.
Thomas added that her job with Covering Kids & Families is to be the “squeaky wheel’’ to Indiana government, telling it what parts of state programs don’t work. She said Verma and the Pence administration listened to her complaints and looked for solutions. They never took an adversarial position, she said, but instead chose to work though problems.
Doug Leonard, president of the Indiana Hospital Association, issued a statement commending Verma’s nomination. He said she understands the importance of coverage to those served by programs like Medicare and Medicaid and has a “truly transformational vision’’ for health care.
Republican members of Congress, who have advocated for ways to reduce government spending on federal programs such as Medicare and Medicaid, lauded Price and Verma.
House Speaker Paul Ryan (R-Wis.) referred to Price as an “absolute perfect choice,” and Senate Finance Committee Chairman Orrin Hatch (R-Utah) called Verma someone whose “strong health policy background will benefit the reform effort at CMS, a mammoth agency whose responsibilities ballooned under President Obama and his health law.”
But that doesn’t mean they will allow the new agency heads to take the lead. Kevin McCarthy (R-Calif.) told reporters on the Hill Nov. 29 that the House will look to Ryan’s Better Way agenda to guide replacement plans, not Price’s repeal and replace bill. Price was part of developing Better Way and he’ll be part of planning the path forward for replacement, McCarthy said, but there will be collaboration.
Democrats, however, strongly disavowed the appointments, with many repeating that they were ready to fight the leadership choices that threaten to cut insurance for both middle-class and most vulnerable citizens.
Sen. Charles Schumer (D-N.Y.) told reporters he’s urging his fellow Senate Democrats to try to block Price’s nomination, which he equated on Twitter to “asking a fox to guard the hen house.” He said Price will privatize Medicare and harm seniors. He believes he can get enough Republicans to support the block and stop Price’s nomination.
White House Press Secretary Josh Earnest in a Nov. 29 briefing said the proposals from the incoming leadership should be weighed against the successes of the ACA. He pointed to figures showing an insured rate of 91.9 percent of Americans; ACA achievements in slowing a “rapid growth in healthcare costs,” including employer-based health insurer premiums; and Congressional Budget Office projections that the law would reduce the deficit by $3 trillion in next 20 years.
“So that certainly sets a pretty high bar for evaluating the budget impact of a proposal from the other side, but that is an important metric, one that Republicans have long prioritized,” he said. “And if and when they put forward their own proposal, it should be measured against the kind of progress that the country has made under Obamacare.”
—With assistance from Michael Williamson, Mark Wolski, Alex Ruoff and Cheryl Bolen.
To contact the reporter on this story: Victoria Pelham in Washington at email@example.com
To contact the editor responsible for this story: Brian Broderick at firstname.lastname@example.org
Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)