Health Law Daily Administration budget requests ACA repeal, Medicaid caps, lower drug costs
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Tuesday, February 13, 2018

Administration budget requests ACA repeal, Medicaid caps, lower drug costs

By Kathryn S. Beard, J.D.

The Trump Administration’s budgetary wish-list for 2019 asks Congress to repeal the Patient Protection and Affordable Care Act (ACA) and replace it with something similar to a bill proposed in 2017 by Sens. Graham, Cassidy, Heller, and Johnson. The document, which is a statement of administrative priorities and has no force of law unless acted upon by Congress, endorses changes to Medicaid payment including per-capita caps and a block-grant program, and would make cuts to a number of departments and programs. It includes steps intended to lower the cost of prescription drugs through drug pricing and payment improvements, provides some funding for programs to combat the opioid epidemic, and invests in solutions to address the current backlog in the Medicare appeals system. Members of the administration and GOP praised the budget, while opponents called the proposal "morally bankrupt" and predicted that Congress would reject it.

Major changes proposed. The budget repeats President Trump’s call to repeal and replace the ACA (P.L. 111-148), and specifically recommends the failed "Graham-Cassidy" bill (see Graham-Cassidy would reduce coverage by millions to reduce deficit, September 27, 2017). Graham-Cassidy gained notice in September 2017 (see Sanders’ Medicare-for-all, Graham-Cassidy’s block grant legislation introduced in Senate, September 14, 2017) as Congress attempted to end the ACA before the fiscal year ended, but failed because multiple Senators opposed the proposal’s major changes to Medicaid, which would have resulted in lower overall reimbursement, fewer enrollees, and other negative impacts to the program. The proposal also calls for an end to the Agency for Healthcare Research and Quality (AHRQ), a division of HHS that seeks to develop clinical practice guidelines and quality measures to enhance the quality and effectiveness of health care programs for all Americans. According to the Trump Administration, the AHRQ’s work is redundant because the National Institutes of Health (NIH) National Institute for Research on Safety and Quality (NIRSQ). Similarly, it would eliminate the Community Services block grant program and some health care workforce programs.

Drug costs and FDA programs. Proposals in the budget to lower the costs of prescription drugs include allowing state Medicaid programs to establish drug formularies, creating a Medicare Part D out-of-pocket maximum, requiring private Part D plans to share rebates with beneficiaries, and allowing some drugs to move from Medicare Part B’s set formula to payment under Part D, which allows some negotiation. These changes would generally require Congressional action. The budget proposes increased access to cutting-edge drugs and medical devices that treat serious and life-threatening diseases, assumes that the Animal Drugs and Animal Generic Drugs User Fee Acts will be reauthorized, and would continue implementation of the Food Safety Modernization Act (P.L.111-353).

Opioid crisis response. Across HHS, the presidential budget proposal would allocate $10 billion to combat the opioid crisis. It shows a five-part strategy of (1) improving access to prevention, treatment, and recovery services; (2) targeting availability and distribution of overdose-reversing drugs; (3) better public health data and reporting; (4) supporting pain and addiction research; and (5) advancing better pain management practices. According to the National Institute on Drug Abuse, opioid overdose kills more than 115 Americans every day, costing the country $78.5 billion each year in health care, lost productivity, addiction treatment, and criminal justice costs.

Other items. The budget calls for changes to the medical liability system, including capping noneconomic damages and providing safe harbors for providers based on clinical standards, and changes to allowed evidence and statutes of limitations. It would also:

  • explore direct primary care models through state Medicaid programs;
  • support funds to respond to the threat of pandemic influenza;
  • restructure HHS preparedness grants;
  • increase funding to the Health Care Fraud and Abuse Control Program; and
  • restructure agencies and programs within HHS to make the department more efficient.

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