Election Year Or Not, Five Health Policy Items Still On DC’s Menu + The Earthquake That Is The Fall of Chevron

As Congress heads towards both the annual August recess followed by being out of Washington and on the campaign trail all of October, we thought it would be a good idea to level-set about where we are in our national health policy conversation. While conventional wisdom holds that not much will happen in an election year, what is often left unaccounted for is the substantial work Congress and CMS engages in during that period. This work sets up future policymaking in a big way and, to be candid, there is a lot being worked on right now to either get ready to move after the election or in the next Congress, whatever the political outcomes may bring.?

On Chevron: A Note Before We Get To Congress (Important Caveat - I am not an attorney)

We would be remiss if we did not begin with a short note about the Supreme Court’s decision to reverse what is known in as the “Chevron deference” precedent. For 40 years, the Chevron deference said that when a statute is unclear or silent, a court should defer to an agency’s interpretation as long as it is reasonable and Congress has not directly addressed it. With Chevron’s overruling, we are likely to see a slowing of federal regulatory churn. However, the ruling has massive implications for healthcare, with two specific areas we think are worth paying attention to:

• Reimbursement - Providers are likely to be empowered to challenge reimbursement policies promulgated by CMS. That may be in fee-for-service, but is Medicare Advantage risk adjustment able to be litigated now too?
• Coverage - The types of services deemed covered by either ACA plans, Medicare or Medicaid - to the extent they are not explicitly delineated in the law - are potentially now up for dispute and/or litigation.

One Last Dynamic - Congress has become quite comfortable deferring decisions to agencies. After all, the thinking has been that is where hyper-specific expertise lies, but it’s also politically easier to pass a law that is ambiguous in certain very specific areas. That said, this old dynamic is now obsolete. Going forward, as laws travel along their legislative journey, Congress is either going to have to provide those expertise themselves, bring in agencies to help them draft those types of specific details, or rely on outside experts - often policy-based lobbyists - to assist. Further, if litigation does commence, policy experts will be necessary to help assist attorneys in drafting briefs and educating judges - newly empowered to shape federal administrative law - about how things work in the real world. It’s a whole new universe here and Platform Government Strategies can help.??

Now, for the main event - What remains on Congress’ menu in 2024…

1. Major Medicare Advantage Market Uncertainty - We’ve written about this since early in the year, but the downward pressure does seem unrelenting. Just this week, the Wall Street Journal published an article entitled, “Insurers Pocketed $50 Billion From Medicare for Diseases No Doctor Treated.” This came after a May article with the headline, “The Medicare Bubble Has Burst.” Taken together with the continued implementation of the v28 risk adjustment model, sustained downward policy and operational pressure from CMS on how MA plans deliver their benefit, congressional interest in prior authorization, increased scrutiny of supplemental benefits, elected officials really caring when MA plans stop working with hospitals, and the big unknown about what CMS will do with the information it received from their Request For Information on Data and Transparency (we have ideas), we remain in the throws of a significant disruption in the MA landscape. One bright spot has been the re-calibration of Star ratings after the SCAN Health lawsuit and the resulting upward movement which will help the bottom line of some plans. That said, with the stock prices of CVS, Humana, United, Molina and Centene down an average of almost 19% for the year while the S&P is conversely up about that much, I think we’re only at the start of this journey.?

*Platform Problem Solving: One advocacy point I’d like to make - with this pressure continuing, and even in a future Republican administration where leading health policy thinkers have put out policy ideas that have bipartisan appeal including further risk adjustment reform and ending the quality bonus system, both MA plans and their sub-delegated partners need to better position themselves inside DC and have identities above and beyond their relationships with trade and industry associations. No one will have your best business interests at heart more than you, so take charge of your own narrative.*

2. Value-Based Care 2.0 - In June, there were two important hearings on the future of VBC. The first was held by the Energy & Commerce Committee and featured CMMI Director Liz Fowler. The efficacy of CMMI as a government entity split along partisan lines, with significant Republican focus on a CBO report saying the Center has yet to save money. One week later, the House Ways & Means Subcommittee on Health held a hearing on improving value-based care. While Republicans continued to question the efficacy of CMMI, the Democratic witness said VBC had gotten off track and that pay for performance and MA plans have not worked as envisioned; he even went as far to call it operationally flawed and dysfunctional. There was also GOP interest in fewer models within CMMI and Democratic focus on private equity.?

*Platform Problem Solving: What may be of greatest note for companies in this space is the opportunity it presented to speak with Members of the Committee about your company’s views, innovations and policy priorities. There’s a lot happening here and a great amount of uncertainty. However, individual companies can have a big impact if they advocate strategically. Issues being set up for action after the election include modernization of the MSSP and CMMI’s focus on value-based specialty care for 2025.*?

3. Pharmacy Benefit Manager (PBM) Reform - After a year and a half of bipartisan and bicameral hearings, investigations and scrutiny, we still don’t have policy clarity on what shape PBM?

reform will take. That is not to say scrutiny does not continue to mount, including additional hearings. In fact, the Federal Trade Commission just released a report outlining an investigation holding that the PBM industry is highly concentrated and, “urgently warrant[s] further scrutiny and potential regulation.” The report spurred a statement from Senate Finance Chairman Ron Wyden (D-OR) reminding us that, “This Congress, the Finance Committee has worked on a bipartisan basis to hold PBMs accountable for business practices that increase prescription drug costs, harm patient access, and threaten independent pharmacies that so many communities count on, particularly in rural areas.” The FTC report also comes on the heels of a major New York Times article entitled, “The Opaque Industry Secretly Inflating Prices for Prescription Drugs,” which the head of CVS’ PBM pushed back upon on LinkedIn saying the data contained in the story was not, “representative of our industry.” Finally, breaking late yesterday afternoon, media reports indicate the FTC is suing the three largest PBMs - CVS Caremark, Express Scripts and OptumRx - for directing patients toward more expensive drugs and concerns about vertical integration.?

4. Concerns About Healthcare Consolidation - A year ago, the Senate Finance Committee held a hearing entitled, “Consolidation and Corporate Ownership in Health Care: Trends and Impacts on Access, Quality, and Costs.” A year later, the Senate Budget Committee held a hearing to, “Examine Budgetary Effects of Growing Health Care Consolidation.” The Congressional Budget Office has also testified that, “markets for hospitals’ and physicians’ services have become increasingly consolidated in recent decades.” They further said consolidation affects the, “federal budget by increasing prices in private health insurance, by increasing the intensity of services provided through public programs, or by shifting those services to more costly settings.” And, of course, United Health Group’s CEO was questioned repeatedly about this in front of Congress.?

• Tied up in this conversation is the debate about hospital site-neutral payments, which are not only a policy hot potato in Washington, but are also bandied about as a potential pay-for to accomplish other goals. Whether or not this happens is purely a play on how strong, or not, is the current political power of hospitals.?

5. Medicare Payment Reform Rolling Down The Tracks - On May 17, 2024, the Senate Finance Committee released a long-anticipated bipartisan white paper entitled Bolstering Chronic Care Through Physician Payment: Current Challenges and Policy Options for Medicare Part B. On a bipartisan basis, the Committee has held hearings, spoken to experts including MedPAC, worked alongside a Finance Committee Member driven process led by the Medicare Payment Reform Working Group, and continues to signal their seriousness in fixing this public policy challenge. The impetus to this effort is a bipartisan consensus that 2015’s? Medicare Access and CHIP Reauthorization Act (MACRA) has failed. This work is ongoing and has multiple dimensions, which you can read more about in our summary from two months ago.?

Interested In More?

Platform Government Strategies brings 20 years of experience to bear. If you or your teams have questions on these issues or other areas of government health policy, consider visiting our website, Platform Government Strategies, and looking over the services we offer. You can also email [email protected].

Previous Platform Government Strategies Products

• 5/20/24 - Analysis: On Medicare Payment Reform, The Senate Finance Committee Shows Us Its Work, And Tells Us Where They Want To Go
• 5/2/24 - As Scrutiny, External and Regulatory Pressure on Medicare Advantage Metastasizes, A New Paper With Policy Proposals from The Left Emerges??
• 2/26/24 - Out Last Week: A Paper Offering Medicare Advantage Policy Clarity From The Right, Our Analysis?
• 2/9/24 - There Is More Going On In The Medicare Advantage Landscape Than I Have Ever Seen?
• 2/8/24 Podcast Appearance - The New Healthcare Startup Imperative: Professional Government Advocacy & Where Is CMS/CMMI Going?
• 1/29/24 - Platform Government Strategies Forecast: Medicare Advantage Data Transparency RFI?
• 1/3/24 - After a Decade-Plus of Operating, Some Aspects of The Medicare Shared Savings Program Are Being Teed Up For Modernization?
• 11/21/23 - A Large Reservoir of Bipartisan Congressional Healthcare Knowledge is Retiring
• 11/30/23 - Summary: White House Playbook To Address Social Determinants Of Health
• 6/12/23 Podcast Appearance - How Value-Based Care is Reshaping Healthcare: Insights From Andrew Schwab? - appearance on the Healthcare Trailblazers Podcast?