Health Reform WK-EDGE The doctor is in, and health reform awaits Secretary Price’s treatment
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Tuesday, May 2, 2017

The doctor is in, and health reform awaits Secretary Price’s treatment

By Kayla R. Bryant, J.D.

HHS Secretary Tom Price is uniquely qualified for his position. The first physician Secretary in decades, he also has legislative experience serving in the House as a Georgia representative. His background has led him to be a strong proponent of physician autonomy and a protector of the physician-patient relationship. As Congress tackles health reform and aspects of health policy are debated, Price’s previous statements and proposed legislation provide some insight into where he may lead the Department.

Price’s path to HHS

Price received his M.D. from the University of Michigan, then headed south to complete his residency in Atlanta at Emory University before running an Atlanta orthopedic clinic. After two decades of practice, he returned to Emory University as a professor. After winning the state senate election in 1996, Price served in the Georgia Senate for eight years. In 2005, he began serving in the U.S. House of Representatives.

Voting record. According to votesmart.org, in 2007, Price voted against HR 3043, a bill (passed by the House and Senate but vetoed) that would have appropriated $611.21 billion to various departments, $480 billion of which was earmarked for HHS. In addition to opposing the 2009 budget bill, he voted against the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) in March 2010.

Abortion opposition. As one of his well-known policy points, Price has strongly opposed elective abortions, and has voted against using federal money to reimburse Planned Parenthood for all services. He has supported and cosponsored several other bills prohibiting the use of taxpayer funds to pay for abortions, except in limited circumstances, as well as bills that would prohibit elective abortions motivated by sex, gender, color, or race of the fetus or the race of a parent. He has sponsored a bill intended to prohibit physicians from performing abortions if the fetus has reached a probable age of 20 weeks post-fertilization.

A window into Price’s vision

Perhaps the best look into Price’s ideas for health reform is his Empowering Patients First Act (Empowering Act). Price repeatedly introduced versions of this bill to the House, indicating his commitment to reform. Although it is impossible to know who or what may have influenced any of the provisions in Price’s legislation, his repeated introduction of various versions and the evolution of this bill seem to demonstrate his belief that the changes were necessary. The Empowering Act would completely repeal the ACA and implement changes across the health care landscape—including medical malpractice claims, health care professional student loans, and Medicare physician payment rates.

Age-based tax credits. Price’s 2015 iteration (HR 2300) of the bill foreshadowed the change in calculating tax credits from an income-based to an age-based method, which were found in the recently abandoned American Health Care Act (AHCA) (HR 1628). Instead of sticking with income-based tax credits like those found in the ACA and previous iterations of Price’s bill (such as H.R. 3400 in 2009), in 2015 the now-Secretary proposed starting the credits at $900 per child, then increasing to $1200 for the 18-35 age bracket, $2100 for ages 36-50, and $3000 for those over 50. Although the impact of the change in methodology might not be immediately obvious, the Congressional Budget Office’s (CBO) logic leads to the possibility that consumers will be inclined to work more hours because they would not be "penalized" for making more money by losing some of the tax credit. In 2014, the CBO estimated that between 2017 and 2024, the ACA would reduce the number of hours worked between 1.5 and 2 percent because of the subsidies.

State administration. Under the Empowering Act, states would have had a vital role in ensuring their residents actually received those tax credits. Credits would only be available if the state established a risk-adjustment mechanism, such as a high-risk pool or a reinsurance pool. States would receive a block grant to subsidize the purchase of private coverage. In addition, an issuer would designate one state as its "primary state," and that state’s laws and regulations would govern that policy, even when sold in another state. The law would prevent removing or reclassifying a covered individual upon renewal of the policy, or increase premiums based on health status or claim experiences.

The 2015 version of the bill gave more regulatory power to states, eliminating certain features of the ACA’s open enrollment period. Although this would have effectively allowed insurers to charge higher premiums for those with pre-existing conditions, the bill attempted to head off this problem by extending the continuous coverage protections that exist in the employer market to the individual market. Consumers switching insurers in the individual market would be protected from underwriting, which policymakers hoped would provide an incentive for healthy individuals to have basic coverage to avoid underwriting when switching to a more generous plan after a diagnosis.

Physician Interests. Within the Empowering Act lay the Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act, which would have provided significant protections for providers in the form of liability protections and student loan incentives to address the physician and primary care provider shortages. The HEALTH Act noted Congress’s findings that the health care liability system impeded access to high-quality, cost-efficient health care and presented a deterrent to collaboration between health care professionals. The act would have imposed a statute of limitations on health care lawsuits of three years after the manifestation of injury or one year after the injured party discovered the injury. A provider who prescribed or dispensed a medical product approved, licensed, or cleared by the FDA could not have been named as a party to a products liability suit.

Although damages for actual economic losses were not limited, noneconomic damages were limited to $250,000 and would not be discounted to present value. Punitive damages would have only been awarded if clear and convincing evidence showed that the provider acted with malicious intent or deliberately failed to avoid unnecessary injury that was substantially certain to occur. In a suit involving multiple parties, each party would be responsible for a several share of damages allocated by that party’s percentage of responsibility and would not be liable for the share of any other party. The court would have been required to supervise the arrangement of damages payments and ensured that contingent fees for attorneys were compliant with the act’s limitations.

Where will Price take HHS from here?

Absent paranormal gifts, policy analysts can only comment on released legislation and regulations, any forward-looking statements are solely conjecture. Past statements and proposals released by legislators and agency personnel can indicate their opinions and desires, but opinions can change and concessions may be made during negotiations. The public can count on changes to the Medicaid program in some form, but the type and extent of the changes remains to be seen. The administration will need significant cooperation from Congress as well as state governors to carry out significant changes to funding. In the meantime, states will continue to request and implement waiver programs.

The future of Medicaid. The Empowering Act would have completely repealed Medicaid expansion and offered no replacement coverage options for the newly eligible. However, in 2016, Price’s budget framework proposed changing Medicaid to a block grant program. Price will receive significant input in future program changes from newly sworn-in CMS Administrator Seema Verma, a program expert who developed the Healthy Indiana Plan (HIP) 2.0 under then-Governor Mike Pence. In her confirmation hearing, Verma spoke of her openness to flexible solutions to the issue of Medicaid funding, including but not limited to block grants and per capita caps (see Nominee for CMS Administrator big on flexibility in policy, payment reformFebruary 16, 2017).

Even if the two have some disagreement on how Medicaid financing should change, Price and Verma presented a united front in a letter addressed to state governors in which they took the position that expanding Medicaid to "non-disabled, working-age adults without dependent children was a clear departure from the core, historical mission of the program." They also took issue with the higher federal reimbursement rate for this population and called it an incentive for states to "deprioritize the most vulnerable population." The letter discussed the importance of waiver and demonstration projects, a review of managed care regulations, aligning Medicaid and private insurance policies for nondisabled adults, maximizing tools to fight the opioid epidemic, and working to help low-income adults "improve their economic standing and materially advance in an effort to rise out of poverty."

Medicare premium support gets no support from Verma. Medicare reform is a prime budgetary concern, especially in light of the aging baby boomer population. One reform option is a premium support system, under which the government would provide each Medicare beneficiary with a set monthly payment to pay for the purchase of private insurance or toward traditional Medicare. Supporters of this policy change include Speaker Paul Ryan (R-Wis), who would allow seniors to opt into the program, which would begin in 2024. The proposal has been met with some concern about the actuarial pitfalls of separating newly eligible, younger Medicare beneficiaries on the premium support system from older beneficiaries, who cost more to cover as they age. However, Ryan may have met his match in Verma, who stated in her confirmation hearing that she does not support the idea of these Medicare vouchers. Price could find himself as the middleman between the two over the issue.

Dr. Price’s issues with quality-based payment reforms. From a physician’s standpoint, Price has passionate views about getting the government out of the examination room and maintaining physician autonomy. Although in recent years Medicare payment has undergone a systemic shift away from paying for each service provided toward an attempt at rewarding physicians for providing care that is both high-quality and low-cost, Price has been an outspoken critic of these movements. Believing that the increasing number of rules and regulations governing reimbursement from federal health care programs is directing energy away from patient care and toward administrative concerns, he harbored considerable concerns about the Medicare Access and CHIP Reauthorization Act (MACRA) (P.L. 114-110) and committed to carefully reviewing the implementing regulations. In his confirmation hearing, he reiterated his previous criticisms of the Center for Medicare & Medicaid Innovation (CMMI), which he believes has been dictating the type of care physicians are to provide for patients, even if such care is not in their best interest.

Conclusion

Price will be a critical player in the Trump Administration. Even if sweeping health reform legislation fails to pass, Price has the power to enact significant regulatory change. His background as both a physician and a legislator gives him unique insight into the competing interests of patients, physicians, payers, and policy makers. Although his positions on particulars will likely continue to develop, he has established himself as a passionate leader in the area, willing to offer clear criticism and support as he sees fit.

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