Healthcare policy in 2019: A look ahead

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Doctors rarely have the time or inclination to follow developments in federal healthcare policy, but 2019 may well be a year where physicians start paying more attention to events in Washington. That’s because lawmakers, judges and regulators are poised to take-or at least consider-steps that could affect the nation’s $3.5 trillion healthcare system for years to come. 

Here’s a look at what 2019 may hold in four areas of healthcare policy of importance to doctors: the future of the Affordable Care Act, expanding healthcare insurance coverage, the cost of prescription drugs and changes to accountable care organizations.

The future of the Affordable Care Act

Since becoming law in 2010, the ACA has survived several near-death experiences, including a 5-4 U.S. Supreme Court vote to uphold it in 2012, an effort to defund the law via a government shutdown in 2013, and a 51-49 vote in the U.S. Senate against repealing it in 2017.

The latest threat to the ACA came in December 2018, when a federal judge in Texas, ruling on a lawsuit brought by a group of Republican attorneys general and governors, declared the law unconstitutional. The judge agreed with the plaintiffs that when Congress zeroed out the financial penalty for not having health insurance (which was part of the 2017 tax reduction law) and because the Supreme Court had previously ruled that the penalty was actually a tax, both the tax and the entire law were invalid. 

The judge agreed to stay his ruling pending appeals, but few legal experts believe the ruling will be upheld. “I wish I could tell you that the judge’s reasoning makes good sense from a jurisprudence standpoint, but it doesn’t,” says C. Timothy Gary, JD, a healthcare attorney with the law firm Dickinson Wright in Nashville, Tenn. “Removing the mechanism requiring everyone to have insurance might call into question the financial viability of the law, but saying it makes the entire statute unconstitutional doesn’t really work.” 

A group of Democratic attorneys general is appealing the judge’s decision in various U.S. Courts of Appeals. That process is likely to take up much of the year, Gary says, adding that the losing side will almost certainly appeal the circuit court’s decision to the U.S. Supreme Court. If the Supreme Court decides to hear the case-which Gary says is not certain-it could wind up issuing its ruling just before the 2020 presidential election.

Gary attributes the courts’ frequent involvement with the ACA to Congressional dysfunction, noting the long and often convoluted process the required to get the law passed, and the fact that no Republicans voted for it. 

“When Congress can’t make decisions, the courts step in to try and do that, and courts aren’t particularly well-suited to the task,” he says. “And what you end up with is a lot of surprise.” 

Expanded healthcare insurance coverage 

In the wake of Democrats gaining control of the U.S. House of Representatives following the 2018 Congressional elections, and with the 2020 presidential election already in full swing, the possibility of extending healthcare insurance to more Americans is again being widely discussed.

For many in the public and the media-and some Democratic presidential candidates-the discussion translates into some version of “Medicare-For-All,” a slogan popularized by Vermont Sen. Bernie Sanders during his 2016 bid for the Democratic nomination. And while that term does apply to some of the ideas being floated for expanding coverage, others are more limited in scope. 

In a study published late last year, the nonprofit Kaiser Family Foundation identified eight pieces of legislation aimed at making insurance more widely available, which the study groups into four categories:

• Two proposals for instituting single-payer coverage for all Americans-in effect, Medicare For All. 

• Three plans for creating a Medicare-like “public option” that would be available to all individuals and some or all employers via the ACA insurance exchanges

• Two bills enabling Americans younger than 65 to buy into Medicare. One proposal would allow buy-ins starting at age 55, the other at age 50.

• One proposal allowing states to offer their residents a Medicaid buy-in option through the ACA marketplaces.

A ninth bill, the Medicare for America (MFA) Act of 2018, was introduced after the Kaiser study was published. It would cover the uninsured, those who buy insurance on the individual market, and individuals on Medicare and Medicaid. Employer-sponsored insurance would remain, but employees who have it would have the option of enrolling in MFA coverage instead.

While all the proposals would come with costs and tradeoffs, the most difficult to navigate would come under Medicare-For-All, or some other form of single-payer system. Some method would be needed to pay for coverage of people who get insurance through their employer, says Joseph White, Ph.D., a professor of public policy at Case Western Reserve University and author of False Alarm: Why the Greatest Threat to Social Security and Medicare is the Campaign to “Save” Them.

“The transition to what we’re really talking about, which is financing through the tax code the portion of healthcare which is currently collected through employers, is really hard,” White says. “There are likely to be a lot of losers, or at least people who think of themselves as losers in the short run, and that’s going to create a lot of political backlash.”

Moreover, White notes, none of the single-payer proposals address what to do about Medicare patients who get their benefits via Medicare Advantage programs, which are administered by commercial payers.

As for doctors, a single-payer system would have the benefit of eliminating much of the paperwork and administrative headaches that comes from dealing with multiple payers. But it would also likely mean a reduction in income, since Medicare traditionally has reimbursed at lower rates than commercial insurers.  

White and other policy experts caution that with the presidency and Senate in Republican hands, the chances for any type of Medicare expansion occurring before 2021 are virtually nonexistent. Nevertheless, they say, just the fact that the idea is being discussed, and will likely be the subject of Congressional hearings, is significant.

“The advantage of hearings is that members of Congress, as well as the general public, will begin to sort of kick the tires and learn more about the mechanics of these proposals and the trade-offs they would involve,” says Tricia Neuman, Sc.D., MS, director of the Kaiser Foundation’s program on Medicare policy and a co-author of the study on Medicare expansion.

Her views are echoed by Robert Doherty, senior vice president for government affairs and public policy for the American College of Physicians. “Having a debate of ideas ultimately is in the best interest of finding lasting policy solutions,” Doherty says.   

Prescription drug prices

The escalating price of many prescription drugs-particularly those such as insulin used to treat chronic diseases-has angered physicians and patients alike for years. Congress and the administration began to address the problem last year, and those efforts are likely to accelerate in 2019.

Congress made its intentions clear late in January, when committees in both the U.S. House of Representatives and Senate held hearings on drug prices on the same day. U.S. Rep. Elijah E. Cummings (D-MD), chairman of the House Committee on Oversight and Reform, said that a “strong bipartisan consensus” exists in Congress for reining in “out-of-control price increases.” The two committees heard testimony from parents of children with diabetes who had died because they couldn’t afford insulin.

But translating general agreement that prescription drug prices are too high into actual legislation won’t be easy, warns David Pugach, JD, senior vice president for public policy for the American Osteopathic Association. “Everybody recognizes there is a problem, but the source of the problem is going to be viewed differently and the proposed solutions are going to vary significantly,” he says. 

Pugach cites the example of a proposal the Trump administration developed last year for lowering the cost of drugs administered under Medicare Part B, where the price Medicare would pay for certain drugs would be tied to an index of prices paid for those drugs in other industrialized countries. While Pugach calls the proposal well-intentioned, he adds that the AOA is concerned it could stifle pharmaceutical innovation and make it harder for Medicare beneficiaries to obtain the medications. “It has to be a balancing act,” he says.

Doherty is hopeful that Congress will pass some sort of legislation in 2019 addressing drug prices, given that Democrats now control the House. Another reason for optimism, he says, is that the Senate Finance Committee, which holds a lot of sway over healthcare legislation, is now chaired by Iowa Sen. Charles Grassley, (R-Iowa), who has a reputation for ferreting out wasteful government spending.

One possibility for legislative action on drug prices, according to Doherty, is a vote on the Creating and Restoring Equal Access to Equivalent Samples Act. First introduced in 2016, the law, which has bipartisan support, would allow generic drug manufacturers to sue pharmaceutical companies for refusing to provide them with enough samples of brand-name drugs to create generic equivalents. 

Grassley has already signaled his interest in the bill. “His emphasis has always been on cost-effective government and going after wasteful spending,” Doherty says. And with the House now under Democratic control, “We’re cautiously optimistic that we could see this legislation advanced through Congress,” Doherty says.  

According to the Kaiser Health News website, other drug-price-related legislation that senators either are considering introducing or have introduced include:

• Allowing the government to manufacture generic drugs in cases where there aren’t enough competitors to keep prices down;

• Letting Medicare negotiate directly with drug manufacturers; 

• Prohibiting drug companies from pricing their drugs higher than the median prices charged in Germany, France, Canada, Japan and the U.K.;

• Allowing drugs to be imported from Canada, and possibly other countries later on, and

• Abolishing the practice whereby manufacturers of brand-name drugs pay generic producers to keep competing drugs off the market. 

“[Drug prices] is an issue that is on Congress’s mind, and public support for government action in this area is pretty clear and crosses party lines,” says Neuman.

Meanwhile, the Trump administration has announced its own plan for lowering drug prices. In early February it released a proposed rule that would prohibit pharmaceutical companies from offering rebates to pharmacy benefit managers who administer drug plans under Medicare Part D or Medicaid managed care organizations, but could offer rebates directly to patients. 

Changes to accountable care organizations (ACOs)

For doctors in ACOs, the biggest issue in 2019 almost certainly will be the impact of “Pathways to Success,” the CMS rule overhauling the Medicare Shared Savings Program. 

Released at the end of 2018, the “Pathways” rule takes effect July 1. It reduces the length of time an ACO can remain on the program’s “upside only” track, where it shares in savings if its spending is lower than its benchmark, but does not incur losses if its spending exceeds its benchmark. Currently, an ACO entering the program can be on an upside only track for up to six years. The rule lowers that to two or three years, depending on the ACO’s revenue. 

“Pathways” consolidates the program’s four tracks into two-a “basic” track that allows new ACOs to start by sharing only in savings and begin transitioning after two years to a model where it also incurs financial risk, and an “enhanced” track that provides an ACO with potential for greater financial rewards, along with greater financial risk.

In addition, the rule creates a distinction between “low revenue” and “high revenue” ACOs, extends the length of ACO contracts from three years to five, and reduces the percentage of shared savings available to newly formed ACOs from 50 percent to 40 percent.

Clif Gaus, Sc.D., president and CEO of the National Association of Accountable Care Organizations, says that while it will take time for the effects of the “Pathways” rule to play out, the association is concerned that the lower shared savings and decreased time allowed for transitioning to a risk-sharing model could inhibit the formation of new ACOs.

“We believe two years is too short a time for ACOs to get their bearings in no-risk models before they’re forced to take on risk,” he says. “Studies show it takes three or four years before ACOs are fine-tuned enough to operate with the necessary degree of efficiency.”