Continuing to enforce the status quo brushes aside some concerns that the Trump administration could seize on an opportunity to immediately abandon ACA-backed programs.
That means the final day of the open-enrollment period for 2019 coverage will carry on Saturday, as planned, according to Centers for Medicare & Medicaid Services Adminsitrator Seema Verma.
"The recent federal court decision is still moving through the courts, and the exchanges are still open for business and we will continue with open enrollment," Verma tweeted Friday night. "There is no impact to current coverage or coverage in a 2019 plan."
In a separate statement released to HealthLeaders by a CMS spokesperson, White House Press Secretary Sarah Sanders said the decision "vindicates" President Trump's position that the ACA is unconstutional.
"We expect this ruling will be appealed to the Supreme Court," Sanders said. "Pending the appeal process, the law remains in place."
Trump celebrated the ruling Friday night in a series of tweets that called on Congress to enact a replacement for the sweeping Obama-era law.
The administration's move to continue enforcing the status quo brushes aside some concerns that the administration could seize on an opportunity to immediately abandon ACA-backed programs.
University of Michigan law professor Nicholas Bagley, who argued in an amicus brief that the judge should reject the plaintiffs' request to invalidate the ACA, said the administration had some discretion in how it would respond to the ruling.
"The wildcard here is the Trump administration, which has choices about how to respond," Bagley said in a tweet prior to the administration announcing its response. "Will it keep enforcing, as it has been, while the case is still pending? That's my expectation. But if it throws a fit of pique and stops enforcing altogether, that could get ugly."
The apparent dip in ACA plan selection follows a year of efforts by the Trump administration to sand off some of the Obama-era law's teeth.
Open enrollment ends this Saturday for federally facilitated Affordable Care Act exchange plans, and the number of sign-ups through the HealthCare.gov platform is lagging behind last year's numbers.
About 934,000 people selected plans using the HealthCare.gov platform last week, bringing the cumulative total for the first six weeks of the 2019 open-enrollment period to about 4,132,000 plans selected, according to the Centers for Medicare & Medicaid Services.
By contrast, there were 546,000 more sign-ups at the same point in last year's open-enrollment period, when the cumulative number of plans selected reached about 4,678,000 at the end of the sixth week.
Comparing this year to last year, however, should come with a bit of a caveat: The cumulative total for the first six weeks of the 2019 open-enrollment period (November 1, 2018, through December 8, 2018) is a day shorter than the first six week of the 2018 open-enrollment period (November 1, 2017, through December 9, 2017) because each week is measured Sunday through Saturday, CMS noted.
Counting the seventh week, the open-enrollment periods for this year and last year are 45 days apiece.
Even so, the apparent dip in ACA plan selection follows a year of efforts by the Trump administration to sand off some of the Obama-era law's teeth.
CMS Administrator Seema Verma has repeatedly rejected claims the administration is seeking to sabotage the law, arguing the administration has instead delivered stabilization.
As demand swells in the final days of open enrollment, CMS said the call center may ask some prospective enrollees to leave their contact information to enroll in a plan after the December 15 deadline.
Patient advocates warned the Medicare Part D proposal could undermine efforts to expand treatment for HIV and cancer.
Health and Human Services Secretary Alex Azar sought to quell concerns Tuesday that a drug pricing proposal announced last month could result in restricted access to HIV treatment.
During a speech at the National Ryan White Conference on HIV Care and Treatment, Azar reassured the audience that the Trump administration's underlying goal is to expand access to lifesaving drugs by making them more affordable.
"I know there have been concerns within the HIV community surrounding our proposal to give Medicare Part D plans more power to negotiate these discounts within the protected classes, which include antiretrovirals," Azar said in his prepared remarks.
"I want to be clear about two things: First, we put forth our proposal because we want to expand patient access to antiretrovirals and other expensive drugs, by driving down prices. If, for instance, prior authorization requirements are getting in the way of take-up or adherence to HIV treatment, that would be of great concern to us," he said.
"Second, we are going to be highly deliberative about this process: Please come to us with your concerns about our drug-pricing proposals. We are eager to listen—you represent a vital patient voice," he added.
The proposal would give plans greater negotiating power by allowing them to impose step-therapy and prior-authorization requirements for protected-class drugs, even declining to cover some drugs altogether, if certain requirements are met.
That drew a swift rebuke from patient advocates, who warned the shift would impede progress in treating HIV and other serious conditions, such as cancer.
The government's participation in the False Claims Act case demonstrates its commitment 'to hold healthcare providers responsible if they fail to ensure that the information they submit is truthful,' a DOJ official said.
The federal government has intervened in a lawsuit against Sutter Health, taking the side of a whistleblower who claims the nonprofit health system inflated the risk scores of Medicare Advantage plan enrollees to secure higher risk-adjusted payments, the Department of Justice announced Tuesday.
The lawsuit alleges that Sutter Health, based in Sacramento, California, and its affiliated Palo Alto Medical Foundation knowingly submitted diagnosis codes that weren't supported by a patient's underlying conditions. Even after they became aware of the problem, they allegedly failed to make sufficient corrections.
Kathleen Ormsby, a former employee of Palo Alto Medical Foundation, brought the lawsuit in 2015 under whistleblower provisions of the False Claims Act. The DOJ opted to intervene after an investigation by the DOJ Civil Division's Commercial Litigation Branch, the U.S. Attorney's Office for the Northern District of California, and the Health and Human Services Office of Inspector General.
"Federal healthcare programs rely on the accuracy of information submitted by healthcare providers to ensure that patients are afforded the appropriate level of care and that managed care plans receive appropriate compensation," Assistant Attorney General Jody Hunt of the DOJ's Civil Division said in the statement. "Today's action sends a clear message that we will seek to hold healthcare providers responsible if they fail to ensure that the information they submit is truthful."
A spokesperson for Sutter Health said in a statement released to HealthLeaders that the defendants are aware of the complaint and take its allegations seriously.
"The lawsuit involves an area of law that is currently unsettled and the subject of ongoing lawsuits in multiple jurisdictions," the spokesperson added. "We intend to vigorously defend ourselves against the allegations in the complaint."
Court filings remained under seal Tuesday following the DOJ's announcement, so details about the alleged conduct remain hidden from public view.
Editor's note: This story has been updated to include a statement from Sutter Health.
A web page that had blasted Envision, as recently as this past weekend, for allegedly 'price gouging' emergency department patients has been updated to say only that a contract extension has been agreed upon.
A public tussle between the largest health insurer in the U.S. and one of the nation's biggest employers of physicians came to a close Tuesday, with the two sides announcing they have agreed to a contract extension.
The heated negotiations between UnitedHealthcare and Envision Healthcare prompted some disconcerting headlines that warned millions could be hit with surprise emergency department bills next month when Envision's approximately 25,000 emergency physicians and clinicians would have suddenly been considered out-of-network.
That threat, however, has subsided, according to a brief notice posted on the UnitedHealthcare website. The notice said simply that the contract had been extended for an unspecified length of time to cover Envision's hospital-based services for all plan participants.
The page on which the notice was posted had as recently as Sunday blasted Envision by name for allegedly "price gouging [ED] patients and demanding to be paid twice as much as what emergency services typically cost."
The page also included links to documents that described Envision's coast-to-coast operations as part of "a national problem with deep local impact." But those documents appeared Tuesday to have been removed from UnitedHealthcare's website entirely, supplanted by the two-paragraph announcement.
"We believe this is an opportunity for clinicians and payors to work together to make progress toward a more effective healthcare system," Envision President and CEO Christopher A. Holden said in the statement.
The finding means that control of a Georgia nonprofit may be transferred to another nonprofit that's controlled by a public hospital authority in North Carolina.
A deal between Atrium Health, based in Charlotte, North Carolina, and Navicent Health, based in Macon, Georgia, has been deemed appropriate by the Georgia Attorney General's Office.
The state regulator released a 14-page report on the proposed transaction last week, finding that it satisfied all 13 factors stipulated by Georgia law, including factors related to completing due diligence, assessing any conflicts of interest, conducting a proper valuation, and guarding charitable interests.
The finding means that control of a Georgia nonprofit may be transferred to another nonprofit that's controlled by a public hospital authority in North Carolina.
Rather than Atrium buying Navicent outright or leasing its hospitals, the proposed arrangement would be based on a member substitution transaction, according to the report. A wholly owned Atrium subsidiary identified as AHNH Georgia Inc. will become Navicent's sole member. Navicent Health Foundation, meanwhile, will continue to operate as an independent entity.
The review by the attorney general's office acknowledged operational and financial benefits as identified by independent analysts, including a commitment by Atrium to spend at least $425 million in capital projects for Navicent over the coming decade.
"Atrium Health has committed to continue to provide certain core services currently provided by the hospitals and is not permitted to terminate those services without agreement from the board of Navicent," the attorney general's report states.
Atrium announced its planned partnership with Navicent last February a day after changing its name from Carolinas HealthCare System. The deal constitutes Atrium's first step out of North and South Carolina.
Navicent President and CEO Ninfa M. Saunders, MD, FACHE, said in a statement at the time that the Atrium deal will ensure that a Macon-centered organization will still lead healthcare in central Georgia and the broader region.
Atrium had been looking also for a deal with UNC Health Care, based in Chapel Hill, North Carolina, but that prospective combination fell apart in March amid disagreement over who would lead.
Officials have made no secret of their disdain for the ACA, so some accused them of making an excuse to destabilize the market. Not so, says the CMS administrator.
Five months after the Centers for Medicare & Medicaid Services sent a wave of uncertaintyacross the health insurance industry by freezing risk-adjustment payments, the agency has finalized a fix for the 2018 benefit year.
The move seeks to appease a federal judge in New Mexico who ruled last February that the government had failed to justify its methodology for calculating the payments for benefit years 2014-2018. That ruling was the basis, CMS said, for the administration's decision to freeze payments suddenly last July.
The freeze lasted only two-and-a-half weeks until CMS announced a final rule to resume the payments for the 2017 benefit year. That final rule re-adopted the existing methodology, with an added explanation regarding the program's budget neutrality and use of statewide average premiums. A similar fix for the 2018 benefit year was proposed two weeks later.
Risk-adjustment payment policies for the 2019 benefit year, which weren't subject to the judge's ruling, were finalized in April.
The risk-adjustment payments are a permanent feature of the Affordable Care Act designed to offset the law's requirement that insurers offer coverage without regard to a consumer's health status. Since some insurers will inevitably attract sicker patient populations than others, the ACA redirects money from insurers with healthier populations to those with higher utilization.
Trump administration officials have made no secret of their disdain for the ACA, so some accused them of using the February ruling as an excuse to inject uncertainty into the market, one exhibit in the menagerie of alleged "sabotage." Even the nonprofit health plan that filed the lawsuit that prompted the freeze accused the government of making "a purely self-inflicted wound" when it could have instead promulgated a new rule all along.
Conservative critics, meanwhile, accused the administration of capitulating to political and industry pressure by ending the freeze, when it should have instead "ended its micromanagement of the insurance market."
CMS Administrator Seema Verma said in a statement Friday that the final rule "continues our commitment to provide certainty regarding this important program, to give insurers the confidence they need to continue participating in the markets, and, ultimately, to guarantee that consumers have access to better coverage options."
Kris Haltmeyer, vice president of legislative and regulatory policy for the Blue Cross Blue Shield Association, lauded the fix.
"We are pleased to see CMS issue this final rule to keep the risk adjustment program in place for the 2018 benefit year, ensuring stability in health care coverage for millions of Americans," Haltmeyer said in a statement. "This important program has worked for years to balance the cost of care between healthy Americans and those with significant medical needs and, as CMS has stated, is working as intended."
"The program’s continued smooth operation is vital to ensure access to a broad range of coverage options for millions of individuals and small businesses," he added.
Verma noted that the litigation is still pending.
Editor's note: This story has been updated to include a statement from the Blue Cross Blue Shield Association.
The unexpected adjustment for 2019 prompted state lawmakers to question the wisdom of the program moving forward.
Minnesota state senators began grappling with some unwelcome news Wednesday, after the Centers for Medicare & Medicaid Services said federal pass-through funding for the state-run reinsurance program would be $99.1 million less for 2019 than had previously been estimated.
The state had expected to receive $183.9 million next year under estimates provided in October 2017. But a letter received from CMS this week advised the state to expect just $84.8 million for 2019, potentially adding a significant financial burden on a state that has dealt in the past with unpleasant circumstances surrounding its reinsurance program.
The final figure will be determined in April, per standard procedure, Minnesota Department of Commerce Assistant Commissioner Peter Brickwedde told state senators during a committee hearing Wednesday.
"It is, obviously, a dramatic change, but this is the same process that played out for the 2018 number that was finalized earlier this April, so we're continuing the same process that we have used all along," Brickwedde said. "But I would expect there to be significant dialogue between the state and federal regulators on a go-forward basis."
This adjustment is much larger than the one Minnesota received a year ago. After earlier estimates said the state would receive about $139 million in federal pass-through funding for 2018, the finalized amount was about $130.7 million, Brickwedde said. Why the difference was so significant this time around remains a mystery.
"The state has not seen—nor am I aware of any other state having seen—into the black box that is the methodology that is used by the federal regulators at the Departments of Health and Human Services and Treasury to do the calculations," Brickwedde said.
"How that calculation is done we are not sure," he added.
Even so, the adjustment doesn't pose a risk to the reinsurance program's operation for 2018 or 2019, nor does it impact rates or premiums or costs for consumers, Brickwedde said. What the change could do is alter the share of the state's responsibility for plan year operations.
A spokesperson for CMS could not be reached Wednesday, as federal offices were closed in observance of former President George H.W. Bush's funeral, and answers to HealthLeaders' questions were not immediately available Thursday morning.
Adjustments Less Drastic in Other States
Minnesota, Alaska, and Oregon are the three states that have pioneered reinsurance programs authorized by waivers under Section 1332 of the Affordable Care Act. And they have all shown signs of success. But the adjustments to their 2019 estimated federal pass-through funding have varied, ostensibly due to a variety of state-specific factors.
After receiving about $54 million for 2018, Oregon now expects to receive about $42 million in federal pass-through funding for 2019, according to the Oregon Department of Consumer and Business Services.
"The funding is based on factors such as projected individual market enrollment, premiums, and plan offerings," department spokesperson Brad Hilliard told HealthLeaders in an email. "It represents the amount of money the federal government expects to save next year due to Oregon's reinsurance program."
This comes after the state had projected $30-35 million in annual pass-through savings, Hilliard noted.
Alaska's original estimate for 2019 pass-through funding was $62.6 million, so the updates estimate of $68.7 million "was right in line with what we were projecting," Lori K. Wing-Heier, director of the state's Division of Insurance, told HealthLeaders.
Several other states—Maine, Maryland, New Jersey, and Wisconsin—are following suit with waiver-authorized reinsurance programs of their own.
Minnesota's Reinsurance Hurdles
Despite the benefits of reinsurance, Minnesota state senators suggested the program may not be worth the hassle and unpredictability caused by these adjustments (which are made because programs authorized by waivers under the ACA's Section 1332 cannot increase the federal budget deficit, per four guardrails written into the law).
"This change significantly impacts the conversation about reinsurance going forward," said state Senate Health and Human Services Finance and Policy Committee Chair Michelle Benson, a Republican, as the StarTribune reported.
State lawmakers agreed last year to spend up to $542 million per year for two years on the program after Minnesota's individual market nearly collapsed, the paper reported. The federal government's contribution is based on how much the program saves the federal government.
This isn't the first trouble Minnesota has had with the federal government over its reinsurance program, as HealthAffairs reported last year.
Changes set to take effect next month will result in a significant reimbursement reduction for hospital-owned outpatient departments that would otherwise be grandfathered into a higher tier.
Two national hospital groups and three individual hospitals sued the Trump administration Tuesday over outpatient payment policy changes set to take effect on New Year's Day.
The changes, which the Centers for Medicare & Medicaid Services finalized last month, represent "an unprecedented assertion of the agency's authority," the hospitals said in their complaint alleging that CMS overstepped its legal bounds.
Central to the suit is the difference between "excepted" and "non-excepted" off-campus hospital provider-based departments. The final rule for 2019 "effectively abolishes any distinction" between the two groups, resulting in hundreds of millions of dollars in payment reductions for hospital-owned departments that would otherwise be grandfathered into a higher reimbursement tier, the plaintiffs wrote.
"CMS cannot exercise its limited authority in a manner so flagrantly inconsistent with the Medicare statute," they wrote.
"CMS may not contravene clear congressional mandates merely because the agency wishes to make cuts to Medicare spending," they added.
The suit alleges, furthermore, that CMS was required to make these changes in a budget-neutral fashion but instead finalized changes that would result in a $380 million reduction next year followed by a $760 million reduction in 2020.
The legal challenge—which was brought by the American Hospital Association; the Association of American Medical Colleges; Mercy Health Muskegon in Muskegon, Michigan; Olympic Medical Center in Port Angeles, Washington; and York Hospital in York, Maine—was expected, as hospitals have been saying for months that the policy change would harm them and appears to be illegal.
In addition to the plaintiffs in this case, the Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System changes for 2019 have drawn criticism from other groups, such as America's Essential Hospitals, plus lawmakers in both houses of Congress.
A bipartisan group of 48 senators signed a letter in September urging CMS to rethink its approach, and a bipartisan group of 138 representatives followed suit in October with a similar letter of their own.
CMS Administrator Seema Verma has said it simply "doesn't make sense" for Medicare to pay higher rates to hospital-owned outpatient departments than it does to physician offices for some of the same services.
The side deal, which antitrust regulators required for the CVS-Aetna deal to proceed, nearly triples membership in WellCare's standalone Medicare Part D plans.
WellCare Health Plans completed its purchase of Aetna's standalone Medicare Part D plans late last week, resolving a key sticking point for antitrust regulators reviewing the megamerger between CVS Health and Aetna.
WellCare announced the acquisition's closure Tuesday, even as a federal judge questioned the U.S. Department of Justice's approval of the CVS-Aetna deal. The judge's words have added a layer of doubt atop the near-certain merger, which the companies said officially closed last Wednesday.
The DOJ and five state attorneys general said in October that they would allow the nearly $70 billion transaction to proceed if certain conditions are met, including the divestiture to WellCare.
D.C. District Court Judge Richard Leon, however, who complained last week that the parties were treating him as a "rubber stamp" on their arrangement, signaled in a highly unusual move that he may order the companies to remain separate while he mulls the terms of their settlement.
"I am concerned that your complaint raises anticompetitive concerns about one-tenth of 1% of this $69 billion deal," Leon said in a hearing Monday, as The Wall Street Journal's Brent Kendall reported.
Kendall drew a comparison between Leon's skepticism of the DOJ's stance on CVS-Aetna and Leon's opinion last June rejecting the DOJ's challenge to a merger between AT&T and Time Warner, for which there's an appellate hearing later this week.
As far as WellCare is concerned, the deal is done, though Aetna will continue providing administrative services and holding the risk for its Part D plans through the end of the 2019 plan year. Although this will delay any increase in revenue for WellCare as a result of the deal, the arrangement nearly triples WellCare's standalone Part D membership, from about 1.1 million members to more than 3.1 million members.
"We're pleased that we could be a solution to our federal partners, as well as CVS Health," WellCare CEO Ken Burdick said in a statement. "This acquisition allows us the opportunity to serve over 2 million additional Medicare Part D members nationwide and complements our long-term growth strategywithin government-sponsored health plans."