April 22, 2019
Dive Brief:
- Strong
bipartisan support in Congress could spur passage of surprise billing
legislation before the 2020 elections, a new S&P Global report
predicts. President Donald Trump has promised to end the practice, and
both Senate HELP Committee Chair Lamar Alexander, D-Tenn., and ranking
minority member Patty Murray, D-Wash., have sent proposals to the
Congressional Budget Office for scoring.
- Also likely on the horizon are
termination of drug rebates in the government market and Medicare Part D
reforms, including use of previous authorizations and step-therapy.
- Regarding calls for
"Medicare for All" that have spooked the market in
recent weeks, S&P says the industry shouldn't sweat the impact yet.
"We see almost no chance that these proposals will be implemented
over the near term as there is little agreement among sponsors as to what
form universal coverage should taken, and significant political
opposition," according to the report.
Dive Insight:
These and other reforms could affect ratings
for different healthcare industry players, S&P Global warns.
Republican efforts to repeal the Affordable
Care Act dominated Capitol Hill agendas in the first two years of the Trump
administration. Those efforts ultimately failed, but not before GOP lawmakers
weakened some provisions of the law. Meanwhile, a Texas federal court declared the entire ACA
unconstitutional in December.
The report predicts further repeal efforts
will stall, as the current Democrat-led House pushes a handful of bills to
strengthen the weakened ACA. But those proposals have little chance of passing
the Republican-held Senate, leaving the law's future up in the air pending a
July appeals hearing of the Texas case — a decision that will almost certainly
end up in the U.S. Supreme Court.
With ACA repeal off the table, that opens the
door for more practical healthcare reforms. Efforts to curb surprise billing
— unexpected medical billspatients
receive after being treated by out-of-network providers — have strong support
on both sides of the aisle, and Alexander has alluded to potential legislation
in the coming months. While such measures would be good news for patients,
outsourced physician staffing companies, emergency air and ground medical
service providers, and to a lesser extent hospitals could feel the pinch if
surprise billing efforts succeed.
The report also points to a strong likelihood
of rebate reform, thanks to an HHS proposed rule to
eliminate current safe harbor protections for drug manufacturer rebates to
pharmacy benefit managers in Medicare Part D and Medicaid managed care
organizations. Instead, there would be a safe harbor allowing discounts for
prescription drugs to be passed on to patients and another protecting some
fixed-fee service arrangements between drugmakers and pharmacy benefit
managers. If finalized as is, the rule would take effect Jan. 1.
Eliminating rebates in the government would
have minimal effect on PBMs, the report says, since most pass those rebates on
to the government plan sponsors. The bigger threat comes from killing rebates
in the commercial market, according to S&P. Sen. Mike Braun, R-Ind.,
introduced a bill to end rebates in the commercial market, but passage is in no
way assured.
The report also points to a handful of bills
aimed at thwarting anticompetitive behavior by pharma companies and a change to
Medicare Part B and Part D. The Part B reforms would link the price the
government pays for drugs to an international pricing index and pay doctors who
provide drugs under Part B according to a flat fee, rather than the current
104.3% of the average selling price.
Meanwhile, home health agencies are facing
disruption under the CMS Patient-Driven Groupings Model, set to take effect
Jan. 1, including a 6.4% prospective "behavioral adjustment," according
to the report.
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