'As we undertake our efforts to free up competition from the federal level, we hope all of you will examine what can be done in the states.'
This article first appeared August 09, 2018 on Medpage Today.
By Joyce Frieden
NEW ORLEANS -- States should consider relaxing restrictions on scope of practice and lessening Certificate of Need requirements in order to broaden the free market for healthcare, Health and Human Services (HHS) Secretary Alex Azar told state lawmakers Thursday.
"I would urge all of you to take a look at how state and local regulations can be impeding healthcare competition, raising costs for American patients, and depriving them of choices," Azar said at a meeting of the American Legislative Exchange Council, a group of conservative state legislators. "Regulations like Certificates of Need and scope of practice can have a legitimate purpose. But too often, these rules can be a significant barrier to new competition and lower-cost market disruptors."
"Fundamentally, when we wonder why American healthcare costs so much, why patients feel so disempowered, so often the answer is that government rules are standing in the way of necessary innovation," Azar said. "As we undertake our efforts to free up competition from the federal level, we hope all of you will examine what can be done in the states."
Azar was interrupted by applause several times in his 20-minute speech, after which the audience gave him a standing ovation. The first applause came when he said, before outlining his department's top priorities, "In each of these areas, one of our first steps is to see how we at HHS can get out of the way: how we might be inhibiting innovation by state governments and private actors."
He also received a warm response when he mentioned the department's new rules allowing for short-term insurance plans. "We look forward to offering states all the flexibility possible under the law to craft solutions that promote affordability, fiscal sustainability, private coverage, and consumer choice. As one example, we recently finalized new regulations for short-term, limited-duration insurance plans that are free from most Obamacare regulations and, therefore, as much as 50% to 80% cheaper than Obamacare plans."
But he chided some states "[that] place restrictions on these plans that can limit their usefulness, like limiting the initial contract period to around 6 months, rather than up to a year. We believe sensible state regulation of these plans is important. But millions of Americans are in need of affordable insurance options, and states can help build this market outside of Obamacare's broken regulations."
Azar also used the speech as an opportunity to announce a new HHS policy regarding the rebates that drugmakers pay to the Medicaid program. "I am pleased to announce ... that HHS is issuing a guidance today to drug manufacturers that will ensure they are paying the full Medicaid rebates they owe on certain prescription drugs," he said.
"When drug manufacturers roll out what's called a 'line extension' for a drug, like an extended release, once-daily form of a pill they already sell, some of them have used it in the past to reset the price that's used to calculate the inflation rebates they have to pay," Azar explained. "This meant they could pay less than they would otherwise owe, just by introducing a new drug formulation."
"This is the kind of abusive behavior from drug companies that this administration will not tolerate. Starting today, we've made clear that manufacturers must pay the full amount of rebates that they owe under the law."