#6Things That Happened in Health Policy This Week

6 Things That Happened in Health Policy This Week is produced by a mix of research assistants from the Healthcare Quality & Outcomes (HQO) Initiative at the Harvard T.H. Chan School of Public Health. In each edition we feature a variety of news articles, reports, and studies focused on U.S. health policy and health services research. This week’s edition is from Yevgeniy Feyman (@yfeyman), Zoe Lyon (@zoemarklyon) and Raj Pammal (@rspammal). 

KHN: House Republicans Unveil Long-Awaited Plan to Replace the ACA

  • House Republicans have finally delivered on their promise to unveil a plan to replace the ACA— “A Better Way,” a 37-page white paper was released this week and includes a massive slew of health policy ideas repeatedly proposed by Republicans.
  • “A Better Way” would bring back high risk pools, would end open-ended funding for Medicaid, and would encourage small business to band together to increase bargaining power.
  • The white paper includes no specifics about how much any of this would cost or how it would be financed. There is also no mention of what would happen to the 20 million Americans who have gained coverage since the law took effect in 2010.
  • Along with huge cuts to the Medicaid program, the plan would repeal the exchanges and replace them with tax credits given to everyone buying policies in the individual market.
  • The proposal encourages the movement of Medicare beneficiaries out of the FFS service and into managed care plans, and would transition to a “premium support” financing structure that puts the cost-controlling burden more on private insurers.
  • Proponents of the ACA were quick to criticize Speaker Paul Ryan’s plan as recycled ideas to increase costs for seniors and take away health insurance from millions.

KHN: Despite Overdose Epidemic, Georgia Caps The Number Of Opioid Treatment Clinics

  • In 2014, more than 1,200 people died of an opioid overdose, according to the CDC.
  • In spite of that, Georgia has implemented a one-year moratorium (which began June 1st) on issuing new licenses to clinics that treat people addicted to opioids.
  • Georgia State Senator Jeff Mullis, who sponsored the legislation implementing this moratorium, questions why a large number of opioid treatment programs have opened in Georgia.
    • The state has 67 programs, compared to 12 in Tennessee, 24 in Alabama, and only one in Mississippi.
  • While opening a clinic in Georgia entails multiple licensing requirements from the federal and state governments, but Senator Mullis notes that Georgia doesn’t have a certificate of need requirement for clinics, unlike neighboring states.
    • Certificate of need laws operate in some 36 states, and typically require permission from state governments before opening new healthcare facilities, or expanding existing ones.
  • Critics of these clinics also argue that they simply have patients replace one drug for another.
  • Jonathan Connell, who heads the Opioid Treatment Providers of Georgia, believes that the moratorium is warranted. He argues that regulations of opioid clinics in the state are not well-enforced by the Georgia Department of Community Health.
    • The Department of Community Health has a small workforce of only three people to keep track of the 67 clinics.

The Hill: New Shots Fired in Drug Pricing War

  • The global drug lobbying group Biotechnology Innovation Organization (BIO) is accusing the Institute of Clinical and Economic Review (ICER) of being a shill for insurance companies.
    • ICER analyzes the cost-effectiveness of various drugs and treatments, and develops recommended prices based on their findings.
    • In a recent analysis of dozens of clinical trials, the group found that many treatments were overvalued at existing list prices.
    • Jim Greenwood, CEO of BIO, has called the group’s results “a completely arbitrary low-balled number.”
  • Drug companies have consistently pushed back against the group’s findings.
  • For the first time, the Centers for Medicare and Medicaid Services (CMS) has said that they may use ICER’s findings to change Medicare Part B reimbursement rates for drugs.
  • ICER receives about 10 percent of its funding from insurance companies, and has a number of prominent executives from insurance companies on its board. Funding from pharmaceutical manufacturers stands at 17 percent, and ICER has plans to add a new former pharmaceutical executive to its board in July.
  • BIO is planning to escalate its efforts against the group including more paid advertisements and “rapid-response.”

The WSJ: Justice Department Announces Biggest Medicare Fraud Crackdown

  • Attorney General Loretta Lynch announced a historic crackdown on Medicare fraud on Wednesday, with around 300 people being arrested.
  • The charges against the suspects range from taking illegal payments for marketing medications to false physical-therapy claims.
  • Other government programs have been implicated as part of this crackdown as well. In California, a man has been charged with receiving illegal payments from Tricare—a government program for active military members, vets, and their families—for marketing compound medications.
  • In New York City, other suspects included managers of physical therapy clinics that laundered money and billed Medicare and Medicaid for unnecessary treatments for patients.
  • Of most policy relevance is the hemorrhaging of money that comes as a result of the fraud; Lynch cited cases around the country where a wide variety of fraud has been found, with losses totaling around $900 million.

Modern Healthcare: Senators push Justice Department to halt health insurance mergers

  • Elizabeth Warren (MA-D) and Richard Blumenthal (CT-D) are among seven Democratic U.S. Senators who wrote a letter to the Department of Justice’s antitrust division pressing it to block pending health insurance mega-mergers.
  • Specifically, the letter raised concerns over Aetna’s takeover of Humana, and Anthem’s acquisition of Cigna.
  • The letter stated that the merger of four of the five largest national health insurers would diminish competition, thereby increasing healthcare costs for consumers and business, and decreasing access to quality healthcare.
  • During the Obama administration, the Department of Justice has been quite active in blocking large-scale mergers that may harm consumers and competition.
  • Aetna and Anthem spokespeople countered the senators’ letter, with T.J. Crawford of Aetna affirming the company’s belief that a combined company is in the best interest of consumers.

New York Times: Medicare and Social Security Trustees Warn of Shortfalls

  • On Wednesday, the Obama administration reported that Medicare’s hospital insurance trust fund (which pays for Medicare Part A benefits and Medicare Program administration) had deteriorated slightly in the past year, and that Social Security still faced serious long-term problems.
  • Trustees projected that Medicare’s hospital trust fund would be fully depleted by 2028, two years earlier than previously expected.
  • Despite claims from Obama administration officials that the Affordable Care Act has slowed the growth of health care spending, the report raised concerns over rising Medicare and Social Security costs, due to accelerating cost growth from the aging of the baby boom generation.
  • Congress took action last year to strengthen Social Security’s disability insurance trust fund, however, it is still estimated that the trust fund will be depleted by 2023.
  • As Medicare is expected to have an increase in average spending per beneficiary from $13,000 to $16,000 in the next five years, leaders from both parties are considering the idea of benefit cuts or tax increases for entitlement programs.

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