CMS Finalizes Rule Requiring Hospitals to Post Prices Online

Image result for CMS Finalizes Rule Requiring Hospitals to Post Prices Online imagesSource: Healthcare Dive

Dive Brief:

  • CMS on Thursday issued its final rule on the Inpatient Prospective Payment System, cementing the agency’s April proposal to increase transparency by pushing hospitals to post standard charges online in a machine-readable format. The rule doesn’t require posting any more information than hospitals are already mandated to provide to the public, but CMS has issued a request for information seeking input on furthering pricing transparency.
  • The final rule boosts payment rates for general acute care hospitals paid under IPPS by about 1.85%, up from the 1.75% bump proposed in April. Payments for long-term care hospitals have been increased 1.35%, up from the proposed 1.15%. CMS estimates the rate hike will increase Medicare spending on inpatient hospital services by about $4.8 billion in 2019, up from the April estimate of $4 billion.
  • On the interoperability front, providers will be required to use 2015 Edition certified EHR products in 2019. The rule also eliminates the 25% threshold policy for long term care hospitals, reduces reporting periods to 90 consecutive days and eliminates 18 reporting measures while “de-duplicating” 25 more.

Dive Insight:

The jump in Medicare’s estimated total spending on inpatient hospital services from $4 billion to $4.8 billion is the result of an increase in new technology add-on payments of $0.2 billion and the projected hospital market basket update, according to CMS. All-in-all, that estimate doubles spending projections made in last year’s final rule.

CMS will also distribute about $1.5 billion more for uncompensated care payments in 2019 than it did in 2018, totaling roughly $8.3 billion. The boost is the result of increases in payments that would have been allocated toward disproportionate share hospitals (DSH). This payment change in part reflects the rising number of uninsured Americans.

CMS will also be starting a full audit process for Worksheet S-10 charity care data this fall in an effort to determine how charity care payments are distributed.

As for pricing transparency, the final rule requires hospitals to “make public a list of their standard charges via the Internet in a machine readable format, and to update this information at least annually.” Patient advocate organizations may find this transparency effort somewhat toothless, as CMS had already required hospitals to make their standard charges public. However, CMS’ supplementary RFI acknowledges swathes of opacity in pricing that need to be addressed.

April’s proposed rule was mostly met with applause from industry associations like the American Hospital Association that had been pushing for reduced reporting periods, the elimination of reporting measures and eliminating the 25% threshold policy for LTCHs. The final rule, which includes all the above, was in turn welcomed by AHA. Tom Nickels, executive vice president for the association, praised most policies included in the final rule in a statement.

“There are a number of policies CMS finalized today that will reduce regulatory burden and help ensure America’s hospitals and health systems can continue to provide high-quality, efficient care for the patients and communities they serve,” Nickels said, noting the association is still studying the rule.

Looking toward the future, CMS Administrator Seema Verma told reporters on a call Thursday evening that the agency is concerned with differentials in the wage index floor that show geographic disparities in payments that favor urban over rural hospitals. This final rule preemptively allows the imputed wage index floor to expire for all-urban states. Nickels said AHA will be analyzing policy changes affecting the area wage index to “determine their ultimate impact.”

Reality Check on PBMs and Drug Costs

Image result for Reality Check on PBMs and Drug Costs imagesSource: Politico

PBMs AND DRUG PRICES: A REALITY CHECK — There’s a big target on the backs of pharmacy benefits managers lately with both the drug industry and HHS drawing attention to the role they play in the pricing of medicines. Pending at OMB is a rule that could dramatically reshape PBMs by changing the practice of drug rebating — the discounts that PBMs negotiate with pharmaceutical companies — with the aim of ultimately lowering the cost of drugs.

Because the PBMs can retain a portion of the rebate as profit, they may have a perverse incentive to favor higher-cost medicines with larger rebates in their insurance plan formularies, leading drugmakers to raise prices on brand medicines, HHS Secretary Alex Azar has said.

But a new analysis sheds light into how little of U.S. drug spending might be addressed by overhauling rebates. That’s because most of the money spent on pharmaceuticals in this country goes to drug companies — not middlemen like PBMs, wholesalers, pharmacies, insurers or doctors.

The U.S. spent an estimated $480 billion on prescription medicines in 2016, including the gross profits of all intermediaries, according to an analysis last week on the Health Affairs blog. Memorial Sloan Kettering Cancer’s Nancy Yu, Preston Atteberry and Peter Bach found that $323 billion of that was drugmakers’ net revenue excluding rebates, discounts and other price concessions like copay coupons — but not accounting for manufacturing expenses.

In comparison, PBMs captured only 4 percent of the pie — or $23 billion in gross profits. That’s less than the profits taken by other players in the supply chain like pharmacies ($73 billion), providers ($35 billion) and wholesalers ($18 billion).

Put another way, as Financial Times reporter David Crow wrote last week: “Even if Mr. Azar’s reforms were to wipe [CVS and Express Scripts] profits out entirely, the savings would not cover the cost of the U.S.’s top-selling medicine, AbbVie’s anti-inflammatory drug Humira, which generated $12.36 billion in sales last year” in the U.S.

Asked whether it was fair to compare net revenue of drug makers to gross profits in the other industry, Bach, one of the authors, said that they were not looking to compare which part of the drug supply chain was more profitable. Instead they were following each drug from the time it’s manufactured and determining how much every player in the supply chain makes as the medicine passes through their hands. “So finding those dollars was the point“ Bach said.

None of this means PBMs are likely to catch a break anytime soon. And there may be legitimate reasons for concern about the industry’s practices. An article by Axios’ Bob Herman caught our eye last week. It contains a wealth of data on the difference between what pharmacies are paying for medicines and what state Medicaid programs are paying PBMs for the same drugs. For example, Indiana’s Medicaid program paid about $300 per pill for a generic version of Novartis’ Gleevec, while the drug’s pharmacy acquisition cost was $84.

Happy Monday and welcome back to Prescription PULSE, where we draw your attention to a very colorful warning letter from the FDA to BioDiagnostics. Agency inspectors found that the company used “kitchen cooking pots and household power tools” to manufacture a drug for vaginal use. It has since recalled all of its products, Fierce Pharma reports. Send your favorite drug manufacturing stories and pharma tips to Sarah Karlin-Smith (skarlin-smith@politico.com or@sarahkarlin) and Sarah Owermohle (sowermohle@politico.com or@owermohle).

A PBM PUSHES BACK  Express Scripts “will be just fine without rebates,” the PBM’s senior vice president and chief medical officer, Steve Miller, said in a media briefing Thursday. The problem, he argued, is how fast you remove what has become a mainstay in drug contracts without shocking payers’ budgets with the full price of therapies.

“Making them go away overnight is probably a windfall to pharmaceutical manufacturers and a punishment to all the plan sponsors,” said Miller. It could be particularly disastrous for Express Scripts’ Medicaid programs, which the PBM says keep 100 percent of their negotiated rebates — and therefore would feel the full brunt of the list price in a rebate-less system. Commercial plans may not fare much better — the company reports that they pocket an average 10 percent of rebates they negotiate for other payers.

The PBM is proposing a “glide path” of at least a few years to transition payers from from buying high-rebate drugs like insulin at their rebated price to buying them at their straightforward list price. The hope is that drugmakers would reduce their prices during that period until they eventually match what the companies would have taken in under the rebate system — and the result would be budget-neutral for payers. The problem is that no drug makers (that we know of) are publicly on board with cutting prices by rebate-equivalent amounts.

Express Scripts has floated the idea with state payers and talked to drugmakers that have concerns about how long such a phase-in would take, Miller said. “There’s a lot of details to work out on this, but we believe we have to be creative going forward.”

SENATE APPROPS: WHERE THE FDA MONEY WOULD GO — The Senate last week approved $159 million in new discretionary spending for FDA in fiscal year 2019 via H.R. 6147 (115) — significantly less than the $400 million requested by the administration. Medical product initiatives would get $88.5 million and new efforts to respond to the opioid crisis would get $49 million. The rest would go to food safety.

The medical product dollars in the Senate bill would go toward promoting domestic drug manufacturing and advanced medical device manufacturing, as well as helping FDA stay current with the science and tools needed to evaluate new drugs. Money is also dedicated for modernizing generic drug development and review and to FDA’s oncology center of excellence and rare disease work. For more details on these programs and how the Senate bill compares to what House appropriators have laid out for FDA, see this handy breakdown from the Alliance for a Stronger FDA.

ICYMI: HOW DRUG COMPANIES ARE BEATING TRUMP AT HIS OWN GAME — At least 10 pharmaceutical makers made pledges to roll back or freeze prices in July following a tweet from President Donald Trump. But those gestures are largely symbolic — efforts to beat Trump at his own game by giving him headlines he wants without making substantive changes to the way they do business, Sarah and Sarah report, along with colleague Andrew Restuccia.

The token concessions are “a calculated risk,” said one drug lobbyist. “Take these nothing-burger steps and give the administration things they can take credit for.”

Even the few companies that actually cut prices mostly targeted old products that no longer produce much income — such as Merck’s 60 percent discount to a hepatitis C medicine that had no U.S. revenues in the first quarter. Others volunteered to halt price increases for six months — in some cases, just weeks after announcing what is normally their last price hike for the year.

The industry’s deft response to Trump’s tweet shaming has also become a test of whether his administration is serious about following up with an aggressive crackdown on the companies — or will simply declare victory based on token measures and move on. Keep reading here.

HIGH-COST DRUGS SHIELDED BY NEARLY 40-YEAR MONOPOLIES — Hundreds of patents shielding the top-selling U.S. drugs have allowed pharmaceutical companies to extend their monopolies for years — meanwhile, those therapies’ prices have risen an average of 68 percent since 2012, according to an I-MAK report.

Four of the 12 best-selling medicines have already been on the market for 20 years, the standard exclusivity time frame for novel medicines approved by the FDA. But drugmakers have become adept at filing new patents for different indications, doses and manufacturing details, sometimes nearly doubling the duration of that monopoly.

AbbVie’s Humira, of course, tops the list for both revenue ($18 billion globally last year) and the number of patent applications (247 since it first hit the market). Though the FDA has approved two biosimilars of the autoimmune medicine, AbbVie has sued or struck deals with companies to keep competition out until at least 2022. Meanwhile, it has raised the drug’s price 144 percent since 2012. These tactics have increasingly drawn criticism — the patent system is one of the many priorities included in the Trump administration’s drug pricing blueprint, and FDA Commissioner Scott Gottlieb recently discussed the issue when launching a biosimilar action plan. But the agency can’t address IP issues itself — that could take FTC intervention.

Only one of the 12 blockbusters, the cancer treatment Herceptin, has dropped in price since 2012. But the Roche product also could potentially be the longest on the market without competition — the company is seeking to make it 48 years before rivals launch, according to the report by the nonprofit Initiative for Medicines, Access and Knowledge. Read the I-MAK report here.

UNAPPROVED ANTIDEPRESSANT COULD POSE EMERGING PUBLIC HEALTH RISK — Use of a nonapproved antidepressant that mimics some of the effects of opioids has spiked in recent years, posing a potential public health risk, researchers reported Friday in CDC’s Morbidity and Mortality Weekly Report. An analysis of calls to poison control centers related to tianeptine — marketed as Coaxil or Stablon, among others — from 2004 to 2017 found that while there were only 11 calls about the drug over the first 14 years combined, the number began rising noticeably in 2014 — reaching 81 calls in 2017 alone. Though the drug isn’t FDA approved, consumers can buy it online as a dietary supplement or research chemical. The authors recommend that misuse of tianeptine be considered when patients have opioid-like overdose or withdrawal symptoms.

“In light of the ongoing U.S. opioid epidemic, any emerging trends in drugs with opioid-like effects raise concerns about potential abuse and public health safety,” they write. Read the MMWR findings here.

PHARMA IN THE STATES

Maine law eases generic development — Generic and biosimilar drug developers may soon be flocking to the Pine Tree State thanks to a new law, ME SP432 (181), that attempts to stop brand drugmakers from using FDA safety programs to prevent cheaper competition. Major pharmaceutical companies have long used the FDA safety programs, known as REMS, to prevent generic and biosimilar manufacturers from acquiring samples of their branded medicines. Samples are needed to do the necessary research for an FDA-approved copycat product. The issue has drawn attention — including bills in Congress — but no concrete action on the federal level. The Maine law, which was enacted on July 4 without Republican Gov. Paul LePage’s signature, will require brand companies to make available any drug distributed in the state to generic and biosimilar makers at a cost no greater than the wholesale price.

It will be interesting to see if brand-name drug companies try to challenge the law, said Nicholas Mitrokostas, a partner at Goodwin’s intellectual property group. They might argue that the state law is preempted by federal law, since REMS are a restriction put in place by FDA, he said.

QUICK HITS

Drug companies ramp up charity efforts in midst of opioid probes —Drug distributors and manufacturers are handing out millions of dollars in grants and donations to organizations in parts of the country that have sued the companies over their role in the opioid epidemic, Bloomberg’s Jared S. Hopkins reports. Wholesaler Cardinal Health, for example, has given at least $3 million to about 70 groups, including some with ties to plaintiffs in the opioid legislation. The efforts could pay off: Researchers at Harvard Business School who studied 20 years of lawsuits against public companies found that targeting advertising after lawsuits are filed increased the probability of a favorable outcome for companies. More here.

Clovis settles government probe over trial data — The company has agreed to pay $20 million to settle an SEC probe into whether it purposely misled investors with a false report of data on an investigational lung cancer drug. The news comes four months after the biotech revealed the SEC was preparing civil charges against current and former executives. More from Endpoints News here.

Opioid alternative may be endangering patients with back pain — The opioid epidemic appears to be spurring the use of injectable drug Depo-Medrol for back and neck conditions, with doctors administering the treatment close to the spinal cord. That’s despite known risks of administering the drug in this location and Pfizer’s own attempt to get FDA to ban that type of treatment five years ago due to risks of blindness, stroke, paralysis and death. Several other countries did so while the FDA beefed up the label warning. Neither Pfizer nor FDA made the request public. More from The New York Times here.

DOCUMENT DRAWER

FDA published the user fee rates for prescription drugs, biosimilars, and medical devices for fiscal year 2019. RAPS has a handy chart comparing the rates to FY 2018.

The Institute for Clinical and Economic Review released a preliminary list of therapies that may get its cost-effectiveness assessments in 2019. ICER also released a final report on AbbVie’s endometriosis drug Orlissa and an updated report on plaque psoriasis drugs. And it announced it will review Novartis’ atherosclerosis drug Ilaris and plans to assess the comparative clinical effectiveness and value of two spinal muscular atrophy drugs.

Bipartisan leaders of the House Energy and Commerce Committee sent lettersThursday to the CEOs of three drug companies — Insys, Mallinckrodt, and Purdue Pharma — seeking information about their roles in the opioid crisis.

FDA is soliciting public comment ahead of planned work to promote development of clinical outcomes assessments and endpoints that could be used in clinical trials and support FDA decisionmaking on drug approvals.

FDA posted draft guidance for developing and submitting nicotine alternatives for regulatory approval as drugs, the latest step in the agency’s push to cut down on cigarette smoking.

Eighty-three members of the House of Representatives sent a letter to HHS Secretary Alex Azar urging him to eliminate retroactive direct and indirect (DIR) fees in Medicare Part D.

Using its authority under the 21st Century Cures Act, the FDA awarded grants to three universities working on the continuous manufacturing of drugs and biological products.

Medicare Part B spending is forecast to grow 8 percent over the next five years, outpacing the U.S. economy, according to a report from the HHS inspector general on fraud, waste and abuse in the agency’s programs. Recommendations in the OIG report include boosting oversight and changing data collection for Medicare Part D and Medicare Advantage plans.

CATCHING OUR ATTENTION: POWERFUL OPIOIDS VASTLY OVERPRESCRIBED DESPITE FDA PROGRAM TO LIMIT THEM — Off-label prescribing of a class of fast-acting fentanyl drugs — some of the strongest opioids — was widespread under a distribution oversight program that the FDA entrusted to a group of pharmaceutical companies, The New York Times reports.

TIRFs — transmucosal immediate-release fentanyl in the form of quickly absorbed sprays, tablets and lozenges — were only intended for cancer patients with severe pain who had built up a tolerance to opioids. Yet thousands of pages of documents show that patients with back pain and migraines also received the lucrative medicines, increasing the risk of overdose or addiction.

Humana Sues Dozens of Generic Drug Manufacturers for Price-Fixing Scheme

Image result for Humana Sues Dozens of Generic Drug Manufacturers for Price-Fixing Scheme images

Source: FierceHealthcare

Humana has filed a lawsuit against more than two dozen pharmaceutical companies for conspiring to fix the prices of widely used generic drugs, a scheme that forced the insurer to pay for drugs at artificially inflated prices.

The complaint, filed in the U.S. District Court for the Eastern District of Pennsylvania on Friday, adds to numerous ongoing investigations by the Department of Justice and nearly every state in the country. Humana said its allegations are “based on personal knowledge” of the price-fixing scheme as well as information made public during the state and federal investigations.

Communications between the drug manufacturers reveal that the companies schemed to obstruct competition and set, increase, or maintain the drugs’ prices, according to the 273-page complaint (PDF). It also alleges that the defendants made arrangements not to compete against each other.

The communications allegedly took place at trade association meetings and conferences, at dinners and other private outings, and via phone and text message. The lawsuit names nearly 30 manufacturers including Mylan, Novartis and Teva, nearly all of which have been subpoenaed by federal prosecutors. Heritage Pharma’s former CEO and president already cut a deal with state prosecutors last year and agreed to assist with the investigation.

Humana said it wants to “recover damages it incurred from egregious overcharges it paid for certain widely-used generic drugs, arising from a far-reaching conspiracy among Defendants and others to blatantly fix the price of such drugs.” The insurer has requested a jury trial and is seeking treble damages under the Clayton Antitrust Act.

Humana’s complaint includes a list of 16 specific generic drugs it purchased in “substantial quantities” for “grossly inflated prices” due to the conspiracy. Five of the drugs are used to treat cardiac conditions, including hypertension and high cholesterol; however, taken together, the 16 drugs treat a wide range of medical issues, from depression to arthritis to multiple sclerosis.

“For most patients prescribed one of the Subject Drugs, the drug is a necessity that must be purchased regardless of price,” Humana said.

Humana claims it spent more than $1.7 billion on the drugs listed in the complaint.

The insurer said there are also “various other persons, firms, entities, and corporations” presently unknown to the company that acted as willing co-conspirators in the scheme.

While Humana points out that the use of generic drugs saved the U.S. healthcare system $1.68 trillion between 2005 and 2014, the defendants’ collusion forced Humana to pay “artificially inflated prices at supracompetitive rates.” According to federal data, the prices of these drugs shot up as much as 8,000% over the course of years, months, or even weeks.

In November, 47 attorneys general representing 45 states, the District of Columbia, and Puerto Rico, and the Department of Justice filed suit against 18 pharmaceutical companies and two of those companies’ chief executives for conspiring to fix generic drug prices as well. Humana references the suit extensively in its own complaint.

One particular line of Humana’s complaint strikes at the heart of the drug pricing debate that has raged for decades.

“The United States is a venue ripe for illegal anticompetitive exploitation of prescription drug prices due to laws that regulate how prescription drugs are prescribed and how the prescriptions can be filled,” it said.

Republicans Eye Another ACA Repeal Vote If Midterms Go Their Way

Image result for Republicans Eye Another ACA Repeal Vote If Midterms Go Their Way imagesSource: Axios

Many Republicans assume their party will take another stab at repealing and replacing the Affordable Care Act if the midterm elections go their way, even though GOP candidates aren’t making a big deal about it on the campaign trail.What they’re saying: “Repeal is like fight club,” one GOP operative told me. “First rule is not to talk about it.”

There’s a decent chance Republicans won’t be in a position to try again, in part because their last effort was so unpopular. Health care is front and center in Democrats’ bid for the House majority, and recent polling shows that Democrats have an edge on the issue.

  • That’s also part of the reason Republican candidates aren’t campaigning on ACA repeal as aggressively as they have in the past.

But if Republicans hang onto the House and expand their majority in the Senate, lawmakers and aides generally assume another repeal vote would happen.

  • “I suppose that it’s all in the numbers, and if you had a significant enough shift in the Senate and you came up with a replacement that really did generate a level of support, yep,” said Sen. Lisa Murkowski, who opposed last year’s repeal bill.
  • That bill failed by just one vote in the Senate, and GOP candidates are emphasizing the ACA as they try to expand their one-seat majority.
  • Republicans challenging Democratic incumbents in places like Wisconsin and Montana have recently reiterated their opposition to the law. Two of those candidates — Patrick Morrisey in West Virginia and Josh Hawley in Missouri — are state attorneys general who have signed on to a new lawsuit arguing the ACA is unconstitutional.

There are two big obstacles: Losing too many House seats to pass a repeal bill there, and finding a replacement plan that could get more votes than the last effort.

  • For now, the block grant proposal that Sens. Bill Cassidy and Lindsey Graham put forward last year remains the leading policy option.
  • “Don’t make it a cutting Medicaid exercise — make it a ‘screw the blue states’ exercise and block grant to states with normal Medicaid growth, and you win,” a senior GOP aide said.

Who Is An Employee? New Standard for 2 Million Workers Spurs Clash at California Capitol

Image result for Who Is An Employee? images

Source: The Sacremento Bee

Ashley Hutton Stanfield’s favorite thing about her job is the freedom to work in the “nooks and crannies of my day.”

Four years ago, after leaving her career at a medical devices company to raise her children, Stanfield became a sales consultant for Arbonne International, a multi-level marketing firm that makes beauty and nutrition products.

Stanfield said she coaches about 1,000 clients per month on how to use and sell a 30-day health regimen. But she can manage her business from the dining room of her Fair Oaks home, between dropping her kids off and picking them up from camp, or take a phone call while running on the treadmill at the gym. She has leisurely breakfasts with her family in the morning and finishes up what she needs to after putting her two daughters to bed.

“I was able to achieve more with this opportunity than I ever could have achieved in that other life,” Stanfield said. “I’m present in every moment.”

Arrangements like Stanfield’s are looking more uncertain after a California Supreme Court ruling on independent contractors in April. That unanimous decision, adopting a new “ABC test” for defining employees, threw nearly three decades of legal precedent up in the air.

It could take years, and plenty more litigation, to sort through all of the implications of the case. Business groups estimate, based on federal labor bureau data, that there are nearly 2 million Californians classified as independent contractors — ranging from truck drivers to construction workers, hairstylists to journalists.

Stanfield worries the decision could wipe out the lifestyle she’s built for herself, which she said allows her to earn more money than she did in a traditional job while working on her own terms.

So does the California business community, which is facing down increased costs for salaries, benefits and regulations, such as minimum wage and overtime, if more workers are declared employees. It is now intensely lobbying the Legislature to suspend the court ruling and develop its own method for determining who is an employee.

On June 20, six dozen companies and industry groups sent a letter to Gov. Jerry Brown and lawmakers expressing concern that a “wide range of industries throughout California will be exposed to costly litigation and will have limited resources to maintain their business. Innovation and investment in California’s economy will be limited or reduced.”

“There’s an awful lot of confusion out there,” said Allan Zaremberg, president and CEO of the California Chamber of Commerce.

Organized labor is pushing back with equal vigor, aiming to defend what it considers a rare win for workers in an economic environment it believes has increasingly turned against them.

Two days after the business community letter, four dozen unions and allied organizations sent their own missive to Brown and the Legislature, urging them not to touch the decision. They argue it clarifies ambiguous standards that employers have used for years to misclassify workers.

“All this did was say, here’s where the line is. It’s still up to companies and workers to decide what side of the line works for them,” said Caitlin Vega, legislative director for the California Labor Federation. “Why would the Legislature intervene to take one more thing away at a time when workers are struggling so much to get by?”

The court case dates back to 2004, when Dynamex, a package and documents delivery company, converted all of its drivers to independent contractors after management concluded the move would save money.

Four months later, a group of drivers sued, claiming they performed essentially the same tasks in the same manner as when they were employees, but without the protections of the California Labor Code and wage orders.

The California Supreme Court ultimately ruled in favor of the drivers this past spring. It based the decision, however, on a new standard that had never been used in the state. Under the test, a worker is only properly considered an independent contractor if:

(A) They are “free from the control and direction” of the company that hired them when they perform their work.

(B) The work they perform falls “outside the usual course” of the hiring company’s business.

(C) They have their own independent business or trade beyond the job for which they were hired.

Catherine Fisk, a law professor at UC Berkeley, said it’s a substantive change from the old California standard, established in 1989, which considered nine different factors. The ABC test is a simpler way to determine who is an independent contractor, she said, but it will almost certainly result in more workers being deemed employees.

The number of independent contractors has exploded over the past 30 years, Fisk said, as companies figured they could lower labor costs, and keep them lower, if they contracted out work. The classification removes the pressure to provide annual raises to employees and eliminates the responsibility for additional costs like payroll taxes, unemployment insurance taxes and worker’s compensation insurance.

“The ABC test is an effort to restore what arguably the law was 50 or 75 years ago,” Fisk said.

Business groups are most concerned about the B factor of the test. They believe it could make independent contracting nearly impossible, because the “usual course” of a company’s business — its core practices — could be interpreted so broadly.

As Arbonne International corporate counsel Karen Tegger put it: Is Arbonne’s essential function to manufacture and distribute health and beauty products or is it to sell them?

The company’s position is that its salespeople are independent contractors because they decide “exclusively on their own terms how much they want to work,” Tegger said, “as long as it follows our policies and procedures.”

“They’re entrepreneurs. They have their own business,” she said.

Arbonne is not sure how the Dynamex ruling will affect its approximately 30,000 consultants in California, though Tegger did not go so far as to say the company could not function in the state if they were reclassified as employees.

Obvious questions now abound about the emerging “gig economy,” where workers are hired on app platforms like Uber, Postmates or TaskRabbit to drive, deliver food or perform errands.

Zaremberg of CalChamber also points to a wide array of traditional sectors where the decision could have widespread effects: Coaches and referees for youth sports programs. Art and music instructors that teach part-time at multiple schools.

He brings up the example of a restaurant that wants to hire a freelance graphic designer to make its menu. Does designing a menu fall within the “usual course” of a restaurant’s business that must be performed by an employee?

“If the worker is an expert in a certain area, but works for 10 different businesses, is it practical to be an employee of 10 different businesses?” Zaremberg said.

The California Supreme Court adapted its ABC test from a standard used in 22 other states. But critics note that all of those states adopted their regulations through the legislative process, not the courts.

Zaremberg said all but one of the states also have a broader B factor that an includes an “or,” allowing workers to perform a similar function as the hiring company’s “usual course” of business if it is at a different location.

Business groups are now asking the Legislature to a conduct a public review and update of California’s wage orders, which are more than a decade old, to clarify industries that should be exempt from employee classifications because don’t they fit the model anymore.

“Let’s bring the rules up to date for the economy and the technology,” Zaremberg said. “The users of these services are at risk.”

Senate President Pro Tem Toni Atkins and Assembly Speaker Anthony Rendon have given no indication they are interested in working on the issue this month as the Legislature finishes work for the year.

Lawmakers will face pressure from labor organizations not to undermine the Dynamex ruling, which they contend has the potential to level the playing field for workers who have been taken advantage of for a long time.

Vega of the California Labor Federation said many companies have benefited from the risky strategy of misclassifying workers, undercutting the competition that played fairly with employees and driving them out of the business. The trend has devalued traditional employment and weakened unions, she said, as everything becomes a “side hustle.”

“They don’t want to have any responsibility to you as an employee, but they want to have control over how you do your job,” Vega said.

She believes business groups are portraying the court decision as a bigger deal than it is, because it “means a lot of money to a lot of powerful corporations.” They will adjust, she said, as they always have.

“An independent contractor is supposed to be someone who chooses to go into business for themselves,” Vega said. “You can’t be forced to take that risk.”

Expansion Of Short-Term Health Plans A Non-Starter In California

Source: California Healthline

The planned expansion of short-term health plans under a new Trump administration rule unveiled this week is on a crash course with a brick wall in California.

The Golden State’s Democrat-dominated legislature is close to banning such plans, which offer consumers lower premiums in exchange for skimpier benefits that do not meet the Affordable Care Act’s coverage requirements for other policies sold in the individual marketplace.

A bill that would prohibit the sale of short-term plans, by state Sen. Ed Hernandez (D-West Covina), has already passed the California Senate and is pending in the Assembly, where two committees have given it a green light.

“Trump’s team continues to do everything possible to destabilize our insurance market and compromise the health care of millions of Californians, but I won’t let that happen,” Hernandez said in a written statement. “This is why the California State Legislature must pass my measure, SB 910, which would keep this junk insurance out of California.”

Under the Trump administration rule, insurers will again be able to sell short-term health insurance good for one day less than 12 months. The action overturns an Obama administration directive that limited such plans to 90 days. It also adds a new twist: If they wish, insurers can make the short-term plans renewable for up to three years.

But the federal rule does not override the regulatory power of the states, which means a California ban on short-term plans would prevail.

“States do have the authority to regulate,” said Randy Pate, director of the Center for Consumer Information and Insurance Oversight at the U.S. Department of Health and Human Services. “We do think some states will move to limit them and some will embrace them.”

Before Obamacare, California had a law on the books limiting short-term plans to 185 days. It later complied with the Obama administration’s 90-day rule, but will revert to the 185-day limit once Trump’s rule is in force. If the Hernandez bill should become law, and take effect on Jan. 1, all health plans of less than 12 months would be banned in the state.

James Parker, a senior adviser to Health and Human Services Secretary Alex Azar, said that in the states embracing the Trump administration’s new rule, it will “help increase choices for Americans faced with escalating premiums and dwindling options in the individual market.”

But the plans could also raise premiums for those who remain in the Affordable Care Act marketplace — and the short-term coverage is far more limited.

“We make no representation that it’s equivalent coverage,” Parker said.

The Trump administration’s approach is expected to please brokers and insurers that offer the coverage in the states that allow it.

“To restore these to 364 days — as originally drafted — is exactly what we are looking for,” said Jan Dubauskas, general counsel for the IHC Group, an organization of insurance carriers headquartered in Stamford, Conn.

Dubauskas, speaking before the Trump administration announced the rule, said she expects IHC to offer 12-month versions as soon as the rule goes into effect, which will be 60 days after it is published.

Administration officials estimate that premiums on short-term plans could be half the cost of the more comprehensive ACA insurance. They predict about 600,000 people will enroll in a short-term plan in 2019, with 100,000 to 200,000 of those dropping ACA coverage to do so.

Just over 14 million people are enrolled in ACA plans this year, including about 1.4 million in California’s exchange, Covered California.

Short-term plans are less expensive not only because of their thinner coverage, but also because, unlike their ACA counterparts, insurers selling these policies can reject people with preexisting illnesses or limit their coverage.

Short-term plans can also set annual and lifetime caps on benefits, and cover few prescription drugs. Most exclude benefits for maternity care, preventive care, mental health services or substance abuse treatment.

The plans “barely cover any services and give people a false sense of security,” Hernandez said.

Some policy experts, including those from the Center on Health Insurance Reforms at Georgetown University, warn that allowing increased use of the skimpier coverage offered by short-term plans could leave some patients in financial or medical difficulty.

“If you get cancer, your plan will not cover oncology drugs, which can cost an average of $10,000 a month,” and “if you are pregnant, you will have to find another way to pay for the cost,” averaging about $32,000 for prenatal care and delivery, the center said in a recent post.

Allowing short-term plans to last longer is the latest move to change regulations issued by the Obama administration. In June, the administration released final rules on association health plans, which grants greater leeway to small businesses and sole proprietors to join together to purchase insurance that doesn’t have to meet all the ACA’s requirements, although these plans are more robust than short-term plans.

In California, association health plans have been relegated to near extinction since the 1990s.

The Trump administration changes to Obama-era rules, along with other congressional actions, are expected to impact the cost of coverage for individuals in the ACA marketplace.

Premiums for the average benchmark ACA plan rose by 34 percent this year, according to a recent Congressional Budget Office report.

Factors driving the increase include medical inflation, but the CBO also cited the administration’s decision last fall to drop payments to insurers for lowering deductibles and other out-of-pocket costs for certain low-income policyholders.

The CBO report projects that premiums for ACA plans will increase 15 percent next year, in part because many consumers may be less likely to buy coverage without the threat of a tax penalty. The tax bill approved last year by Congress ends the financial penalty as of 2019.

Short-term plans, if they appeal to many consumers, could also play a role in driving up premiums.

By drawing younger or healthier consumers out of the ACA marketplace, the short-term plan expansion will lead to a premium increase of up to 1.7 percentage points next year, according to the industry lobbying group America’s Health Insurance Plans.

Short-term plans have been around for decades, meant as a stopgap for job changers, students and others who found themselves without coverage.

Under the Trump administration directive, insurers can renew the short-term coverage for the same amount of time as the original plan — maxing out at 36 months.

HHS officials said current law allows the plans to have this longer shelf life, although critics are likely to argue that a plan lasting three years cannot be considered short-term.

Some observers say the expansion of short-term plans won’t affect the ACA market as much as critics fear because the plans will mainly appeal to consumers already sitting on the sidelines, or ones who don’t get a subsidy to help pay their premiums.

“Subsidized enrollees, the heart of exchange enrollment, are less likely to be drawn away from ACA plans to short-term plans that have a narrower benefit design as well as a renewal restriction,” Kev Coleman, head of research and data at Mountain View, Calif.-based HealthPocket, said in an email. HealthPocket is a website that allows consumers to compare health plans.

Dave Fear Jr., president of the California Association of Health Underwriters, said the insurance agents and brokers who make up his organization are uncomfortable selling short-term plans that don’t provide coverage for “the big stuff.”

But Fear said his association opposes the Hernandez bill, because people sometimes need short-term insurance for various reasons. “We believe that [the bill] would remove a critical tool for coverage,” he said.

Proposed site-neutral payment policy sets the stage for battle royale between CMS, hospitals

Image result for Proposed site-neutral payment policy sets the stage for battle royale between CMS, hospitals images

Source: Modern Healthcare

As the CMS charts a path to level pay for outpatient services, it’s also leading toward a head-to-head battle with powerful hospital lobbying groups as some providers win and lose with site-neutral payments.

If the agency’s 2019 proposal to pay the same rate for services delivered at off-campus hospital outpatient departments and independent doctors’ offices is finalized, the CMS said it would save Medicare $610 million and patients about $150 million via lower co-payments. That represents about 1% of the around $75 billion hospitals receive a year from the CMS for outpatient services.

But hospitals argue that their higher reimbursement rates are needed to pay for expensive overhead costs. Without that payment flow, they contend, many hospitals would likely close as their margins thin. Providers also changed their business strategies with the current rate system in mind.

This is a continuation of the CMS’ aim to reduce payment disparities for virtually identical procedures, said Fred Bentley, a vice president at Avalere Health.

Hospital executives have seen this coming, but that doesn’t mean they won’t put up a big fight, he said.

“There has been a recognition that this disparity was not justified and that it was a matter of time until this gap would be addressed,” Bentley said. “The CMS is starting to come to terms with the task at hand in terms of keeping Medicare solvent. Admittedly, they are going against a powerful lobby.”

The CMS estimates that it was paying $75 to $85 more for the same services in hospital outpatient settings versus physician offices. Patients footed about 20% of that.

“This has a very real human impact, and it is part of the story,” said Dr. Farzad Mostashari, CEO and founder of Aledade, which helps establish physician-led ACOs. “The phenomenon of surprise billing doesn’t conform with reasonable consumer expectations.”

The CMS outlined some winners and losers among health systems if the rule is finalized. Cleveland Clinic would take the biggest hit, losing $22 million of reimbursement for outpatient services from 2018 to 2019. Mayo Clinic would receive $11.3 million less, Eisenhower Medical Center would take an $8 million hit and the University of Michigan Health System, the University of Wisconsin Hospitals & Clinics Authority and the University of Virginia Medical Center would each receive about $7 million less.

On the other hand, Cedars-Sinai Medical Center stands to receive $7.7 million more from the CMS under the proposed rule. Hartford Hospital would get a $7.6 million bump, Ronald Reagan UCLA Medical Center would receive $6.6 million more, and St. Francis Hospital and Medical Center and Lehigh Valley Hospital would each receive about an additional $4.5 million.

Large physician groups also stand to benefit if they are reimbursed at the same level as hospital-employed physicians, Bentley said.

The agency also proposes freezing higher payments for “grandfathered” outpatient sites. In 2016, the CMS passed a site-neutral rule that paid hospital off-campus facilities less than hospital-based outpatient departments if they started billing Medicare after Nov. 2, 2015.

Health systems responded by hiring physicians and placing them in the grandfathered facilities to capture higher reimbursement. Now, the CMS aims to limit how off-campus facilities that were billing Medicare before November 2015 can expand their clinical services.

“There are issues about whether Medicare inpatient payment rates are just getting to be too low with the years of subtractions,” said Paul Ginsburg, director of the Center for Health Policy at the Brookings Institution and director of public policy at the USC Schaeffer Center for Health Policy and Economics. “I am not saying hospitals are OK, but I think they would be much better off to pay hospitals appropriate amounts and avoid this real impediment to a competitive physician market.”

The CMS pays more for the same type of service delivered in a hospital outpatient department setting versus a physician’s office. The agency has been looking to change this dynamic for years, in part because clinic visits are the most common service billed under the outpatient pay rule.

The different payment rates were initially set to account for hospital’s higher overhead costs, since they must maintain emergency services and invest in unique, expensive equipment.

Yet, over time, that premise became distorted, critics of the payment disparities argued. Health systems bought more physicians and physician groups to take advantage of the higher reimbursement rates, which were still doled out even if the hospital-owned clinic didn’t look or operate any differently than a community-based doctor’s office.

“When hospitals started hiring all kinds of physicians who typically practiced in the community, and often did not move their office, it’s clear that that rationale did not apply,” Ginsburg said.

Outpatient care has come a long way since the site-of-service rules were implemented, said Martin Gaynor, professor of economics and health policy at Carnegie Mellon University.

“Even with hospitals’ overhead costs, if they can’t do the same care as cheaply as a physician office, why should patients and the American taxpayers pay more than they need to?” Gaynor asked.

Additional facility fees are paid for a wide range of physician services that do not draw on specialized hospital overhead and are commonly provided outside of hospitals, Ginsburg, Gaynor and Mostashari pointed out in a 2017 white paper. As hospitals bought more physicians, they could also negotiate higher rates with payers.

Higher payment rates give hospitals an extra cushion to pay physicians more, which accelerates the decline of the independent practice and reduces competition, according to the paper.

Medicare’s payments shot up while beneficiaries received surprise bills for separate hospital fees.

Also, hospital-owned practices have incentives to refer patients within their network, even if it isn’t the most effective option, ultimately harming competition, Ginsburg said.

“It also undermines some of the efforts to get physician-led alternative payment arrangements such as accountable care organizations or bundled payments if there are so few independent physicians left in the market,” he said.

Also, if a hospital-owned outpatient department has inflated costs, that could hurt them on value-based arrangements like ACOs, bundled payments, reference pricing and narrow-network plans, Mostashari said.

“I am sure the hospitals will not see this as a great gift, but I would argue that as they are truly thinking of embracing the future, this will be a short-term hit that will yield long-term benefits,” he said.

The CMS also wants to expand last year’s cuts to 340B drug discountsgiven to outpatient facilities that care for a disproportionate share of low-income patients. If that proposal is finalized, the CMS estimates that Medicare and its beneficiaries would save approximately $48.5 million.

With the changes to outpatient payment rules and 340B, it could make physician practices a less attractive acquisition target. But there are still incentives to those deals, said Matt Fiedler, a fellow at the USC-Brookings Schaeffer Initiative on Health Policy.

“This is a useful step in the right direction,” he said. “But I think this proposal is only getting at a portion of the broader site-of-service payment differential problems. There are many other on-campus outpatient departments that are very similar to physician offices.”

The proposed rule didn’t address payment discrepancies related to on-campus outpatient facilities, ambulatory surgery centers, or non-clinic visits at pre-existing off-campus facilities.

The CMS indicated in its comments section that it could be interested in expanding the site-neutral policy.

“There are reasons to believe that hospital ownership of a physician practice is a less efficient way of organizing care than through independent practices,” Fiedler said. “I don’t think we should view an aggressive site-neutral payment plan as a silver bullet to consolidation, but it’s not going to hurt.”

Many rural hospitals and academic medical centers have survived through higher payment rates, experts argue.

Outside of facility fees, rural providers have reaped significant revenue through laboratory services, a practice that has drawn lawsuits and congressional inquiry.

Rural hospitals can bill Medicare for lab tests performed on patients from other facilities and by outside labs. This has helped them stay afloat because insurers pay rural hospitals much more for the tests than they would for large labs like Quest Diagnostics or LabCorp.

“It does raise the question—if there are more direct or rational ways to subsidize rural facilities or others getting hammered by this rule as opposed to using the disparity in payment models as an indirect way to subsidize health systems,” Bentley asked.

America’s Essential Hospitals, which represents safety-net providers, said the “draconian” cuts would limit healthcare access for millions of Americans.

“The CMS frames its proposals as empowering patients and providing more affordable choices and options,” Dr. Bruce Siegel, president and CEO of the trade group, said in a statement. “But we believe these proposals only would create roadblocks to care in communities across the country—communities that already struggle with care shortages and severe economic and social challenges.”

The additional cuts to 340B payments coupled with the site-neutral payment proposal would drain already stretched providers, Siegel said.

Premier, the group purchasing and consulting organization, shared America’s Essential Hospitals’ concern, arguing that provider-based outpatient services support an overall reduction in healthcare spending and improve care coordination and quality.

“The CMS’ proposal fails to recognize the substantial differences between physician practices and provider-based outpatient clinics that translate into higher overhead expenses for provider-based outpatient clinics,” Blair Childs, senior vice president of public affairs for Premier, said in a statement.

Hospitals adapted their operations based on the expectation they would receive higher reimbursement rates, and abruptly changing that dynamic isn’t fair, said Paul Hughes-Cromwick, co-director of sustainable health spending strategies at Altarum.

The CMS indicated that its legal argument lies in Section 4523 of the Balanced Budget Act of 1997, requiring a limit on unnecessary increases in the volume of covered outpatient services.

Considering the significant increase in outpatient versus inpatient costs, it may have a case, Mostashari said.

The Trump administration also proposed another change that didn’t sit well with providers—that they must share patient information when they are discharged as a condition to participate in Medicare.

Mostashari gave credit to the current administration for taking site-neutral payment, and other controversial measures, head on.

“The conventional wisdom is that the hospital lobby is too powerful, but this administration may turn that on its head,” he said.

A year after GOP measure’s demise, Democrats see health care as a winning issue

Image result for A year after GOP measure’s demise, Democrats see health care as a winning issue imagesSource: The Washington Post

One year ago, with the flick of his thumb, Sen. John McCain (R-Ariz.) foiled the Republican Party’s quest to undo the Affordable Care Act and fulfill a seven-year promise to remake the health-care system.

Now, three months from the midterm elections, health care remains a gaping political vulnerability for the GOP. Although Republicans have been unable to produce an alternative to the law, they have succeed in undoing key provisions that critics say are leading to rising premiums for individual buyers of health insurance.

The Trump administration has acted unilaterally to undo aspects of the Obama-era law through executive powers, cutting insurer subsidy payments, slashing advertising and targeting the legislation in courts. The steps have pleased conservatives but have undermined an increasingly popular law that tens of millions of voters rely on.

Democrats consider health care — more than any other issue — their best chance to persuade swing voters in key races nationwide. The party’s candidates and political committees are already on air with ads targeting Republicans who backed the “repeal and replace” effort, and they expect to spend tens of millions of dollars attacking the GOP on health care over the next 100 days.

“It’s effective everywhere,” said Charlie Kelly, executive director of the House Majority PAC. “This is an issue that’s been Number One across the board in every election. I don’t see that changing, and it’s something we’re going to be talking about from now until Election Day.”

Recent polls have shown that health care is one of the top issues motivating voters, alongside jobs and the economy. A Washington Post-Schar School poll in July found that Democrats have a clear advantage among those voters who cite health care as their most important issue, and a Pew Foundation poll in June found that voters trust Democrats over Republicans on the issue by a 16-point margin.

Kelly’s group just this week began running a new round of ads targeting Republican House incumbents for their support of the failed GOP health-care bill. The ads highlight an “age tax” — a provision that would have let insurers to charge older policyholders up to five times as much as younger ones, reversing an ACA regulation that allows no more than a 3 to 1 ratio.

Many Republican lawmakers and strategists interviewed this week conceded that GOP candidates are broadly vulnerable on the issue. Highlighting the concern, the House this week voted on several bills aimed at lowering health-care costs, including a measure that would expand untaxed health savings accounts and allow for the sale of cheaper, less comprehensive plans, as well as another bill that would repeal an ACA tax on medical devices.

But none of those bills are expected to pass the Senate before the election, and several Republicans have pivoted to a message that highlights not the GOP’s own policies but what they perceive as a potential Democratic overreach: the increasing embrace of more aggressive federal intervention in health care, whether by allowing younger Americans to buy in to Medicare or moving to a single-payer system that would eliminate private insurance.

“It comes down to: Do you want a government-controlled health-care system or do you want to have choices and options?” asked Rep. Tom MacArthur (N.J.), who helped craft the GOP bill that passed the House last year. “That’s what I’m working on. My opponent wants a European-style government takeover. It’s that simple.”

Although few Republicans attack Medicare, the government-run program that covers 44 million seniors, the notion of expanding it has sparked pushback at the highest levels of the GOP.

“What do the Democrats want to do? . . . They want to get rid of private health insurance and have a government takeover of the health-care system. They’ve gone so far left,” House Speaker Paul D. Ryan (R-Wis.) said Wednesday on Fox News Channel.

The midterm campaigns will play out against a shifting health-care landscape, as a result of Republican moves that have largely served to discourage enrollment in the exchanges established under the law. That has prompted insurers to anticipate a disproportionately older and sicker population, leading them to raise premiums ahead of the Nov. 1 beginning of enrollment for next year’s plans.

Nearly a year ago, federal health officials announced that they would slash spending for advertising and other outreach intended to encourage Americans to sign up for ACA health plans by 90 percent, while cutting aid to grass-roots groups helping consumers enroll by 40 percent. In October, the Trump administration ended subsidy payments to insurers, totaling about $7 billion last year, meant to offset discounts they are required to give lower-income customers for deductibles and other out-of-pocket costs.

Congress undid one of the ACA’s pillars in December, when as part of the wider GOP tax bill it zeroed out the tax penalty for individuals who do not purchase insurance — eliminating a key mechanism forcing younger and healthier Americans into the exchanges. The administration also has been working to widen the availability of less expensive health plans that skirt the ACA’s requirements that insurers offer a minimum level of benefits and cover preexisting conditions.

And in June, the Justice Department filed a brief in a federal lawsuit arguing for the first time that the ACA’s requirement that insurers must cover enrollees with preexisting conditions — the most popular part of the law — should be discarded on constitutional grounds.

Late Tuesday, the administration backtracked on a recent move following an outcry from the health insurance industry. The reversal involves about $10 billion in “risk adjustment” payments meant to even out costs between insurers with customers who need expensive medical care and those with healthier customers.

Seema Verma, administrator of the Centers for Medicare and Medicaid Services, froze the payments on July 7, citing pending litigation, but reinstated them Tuesday.

Still, nearly 12 million Americans signed up for ACA plans in 2018, and more than three-quarters of them are receiving federal subsidies to afford them. That means that in any given congressional district, tens of thousands could see their health care under direct threat from the GOP policies — especially middle-class suburban voters whose incomes make them ineligible for subsidies and thus more sensitive to price increases.

Democratic candidates are now trying to capi­tal­ize in a spate of TV ads: Kim Schrier, a pediatrician running in a suburban Seattle district, promises to “stop Trump’s attacks on our health care” and allow more Americans to access Medicare. Cort VanOstran , running in suburban St. Louis, is telling voters that when Republicans “tried to take health care away from millions, I couldn’t sit back.” And Antonio Delgado, running in New York’s Hudson Valley, is highlighting Rep. John Faso’s caught-on-video pledge to an ailing constituent not to take away coverage ahead of last year’s ACA repeal vote.

Faso said in an interview that the bill would have done nothing to undermine coverage for people with preexisting conditions and that he was comfortable running on the “incremental” things” Republicans have done since, such as reauthorizing the Children’s Health Insurance Program and pursuing a reinsurance program for high-cost patients. And he said he was happy to contrast his views with Delgado’s support for a more aggressive federal role in health care.

“People on the left want the government to provide everything,” Faso said. “I don’t believe in that, and I don’t subscribe to that.”

Larry Levitt, a senior vice president at the nonpartisan Kaiser Family Foundation, said the political risks for Republicans are clear. “They have tried to unravel protections that people hold dear while not successfully coming up with a replacement plan of their own,” he said.

Rep. Garland “Andy” Barr (R-Ky.), one of the incumbents targeted this week by the House Majority PAC, said that he, too, is ready to focus on GOP support for community health centers, medical research funding and combating opioid abuse — and that he is confident that voters will not ignore the Democratic attacks.

“Look, I know what their narrative is. But guess what? I’ve tried to fix it. It came up short in the Senate,” he said of the vote last July. “Let me tell you, the failures of the health-care system right now are the failures of Obamacare. That’s my message.”

Red-state Senate Democrats are redoubling their efforts to protect Obamacare

Image result for Red-state Senate Democrats are redoubling their efforts to protect Obamacare images

Source: Vox

Red-state Democrats are signaling some solidarity with the rest of the caucus on at least one policy issue flaring in the fight over Brett Kavanaugh’s Supreme Court nomination. Lawmakers including Sens. Joe Manchin (WV), Joe Donnelly (IN), and Heidi Heitkamp (ND) — all Democrats representing states that Donald Trump won by a wide margin in 2016 — are among those backing a new Senate resolution aimed at defending the constitutionality of the Affordable Care Act.

It’s important to note that this resolution is not explicitly related to the Supreme Court nomination. In fact, Manchin stressed that he sees this measure as its own independent effort during a press conference last week. Its main focus does, however, have some hefty overlap with a key argument party leaders have been using to gin up opposition to Kavanaugh:Democrats argue that the ACA could face an existential threat from the Texas v. United States lawsuit if the conservative judge ascends to the bench.

This resolution seeks to stymie this exact threat, suggesting that health care is something Democrats can still agree on across the board. It also indicates that the issue could offer the common ground that party leadership is hoping for as the Supreme Court fight continues.

If enacted, the resolution would give Senate legal counsel the authority to intervene on the Senate’s behalf in the Texas v. US suit, further bolstering defenses for the ACA. It would also pit the Senate legal counsel against the Trump administration directly.

As part of the suit, several states are questioning the constitutionality of the ACA’s protections for those with preexisting conditions, and they’re doing so with the White House’s backing.Their challenge argues that the congressional repeal of the ACA’s individual mandate penalty rendered the mandate and other parts of the law unconstitutional. It would effectively decimate many aspects of the law if successful.

“If the Trump administration’s argument were to prevail, insurers could once again be able to flat-out deny Americans insurance based on their health status,” Vox’s Dylan Scott writes. “No amount of federal subsidies would protect them. Medicaid expansion would remain, but the private insurance market would no longer guarantee coverage to every American.”

This outcome is one that Democrats consider widely untenable. “We cannot go back to a time when insurance companies played God and allow them to decide who will be insured and who will not,” Manchin said in a statement. “This resolution will allow the Senate to play the role the DOJ has refused to take on — one of defending the existing law and West Virginians with pre-existing conditions.”

This isn’t about the Supreme Court nominee … yet

Because it is a nonbinding resolution and Republicans are unlikely to back it, this measure isn’t expected to have a significant impact. Instead, it’s an opportunity for Democrats to put yet another stake in the ground on health care — while attempting to call Republicans’ bluff.

Senate Majority Leader Mitch McConnell has previously said he supports protections for those with preexisting conditions, for example, and a resolution like this could force him to more clearly draw a line in the sand. He has yet to issue a statement on the resolution.

The full Democratic caucus, meanwhile, has thrown its support behind the measure. Whether that’s a portent for the Kavanaugh vote, though, is unclear. Manchin emphasized on Thursday that it shouldn’t be seen as an indication of his position on the nominee.

“It has nothing to do with anything except preexisting conditions for 800,000 West Virginians,” he said. “Not another thing that I’m thinking about except how do I get these people protected.”

Manchin is among the most closely watched lawmakers as the fight over Kavanaugh’s nomination continues to unfold, given his vote in favor of Neil Gorsuch in 2017. As Sen. Lindsey Graham (R-SC) has said, red-staters like him face what appears to be a “nightmare decision”as they weigh their Kavanaugh votes and are seemingly forced to decide between party allegiance and self-preservation. Manchin is also among the first Democrats to say that he’ll meet with Kavanaugh next week.

This measure ultimately enables red-state Democrats to reaffirm their commitment to the ACA. On the one hand, these senators’ very public opposition to Texas v. US could give them an easy out. Even if they vote in favor of Kavanaugh, they can point to other efforts, like this resolution, that indicate they fought on behalf of constituents’ health care.

On the other hand, this resolution could be a way for senators to hint how they plan to vote down the line. If red-staters think Kavanaugh could, indeed, endanger the ACA in the way that Democrats like Senate Minority Leader Chuck Schumer have suggested, a resolution like this suggests their minds could be all but made up.

House votes to expand HSAs, delay ObamaCare health insurance tax

Image result for House votes to expand HSAs, delay ObamaCare health insurance tax images

Source: The Hill

The House on Wednesday passed a measure to delay ObamaCare’s health insurance tax for two years and expand Health Savings Accounts, part of a GOP effort to try to lower premiums.

The bill, which passed 242-176, is part of a Republican effort to blunt Democratic attacks on the GOP for rising premiums – a key argument in the midterm elections this year.

The health insurance tax has been criticized by Republicans and some Democrats for driving up premiums.

“This is a flawed tax that gets passed onto American families,” Rep. Peter Roskam (R-Ill.) said on the House floor.

Democrats, though, said the measures would have no substantial impact on premiums, and instead pointed to Republican efforts to protect themselves in the midterms.

“It’s a political exercise, it’s aimed to help people who are in a vulnerable political position,” said Rep. Sander Levin (D-Mich.). He pointed out that there appears to be little chance the bill will pass the Senate and become law.

Roskam, for example, faces a tough reelection race this year, and could tout his sponsorship of the bill.

Joe Antos, a health-care expert at the right-leaning American Enterprise Institute, told The Hill last week that the GOP measures are “all little adjustments; there’s really not much to them.”

The health insurance tax has already been suspended for 2019. This bill suspends the tax for 2020 and 2021 as well.

The measure also expands Health Savings Accounts, tax-free ways for people to save for health expenses, and expands the number of ObamaCare enrollees eligible to purchase lower premium “catastrophic” plans with high deductibles.

Democrats criticized the overall cost of the measures, which combined with Tuesday’s repeal of the medical device tax, comes to around $90 billion over 10 years. The bills are not paid for.

Last Updated 08/08/2018

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