Hours after taking the oath of office on Friday, January 20, 2017, President Trump signed an executive order that opens the door for the secretaries of the departments of Health and Human Services (HHS), the Treasury, and Labor, as well as the leaders of other federal agencies, to take regulatory action to ease requirements under the Affordable Care Act (ACA) or waive or delay enactment of certain provisions.
The open enrollment period for coverage for 2017 through the health insurance Exchanges created under the Affordable Care Act (ACA) begins today, Tuesday, November 1, 2016. This is the fourth open enrollment period since the Exchanges opened in 2014 and the final open enrollment period of President Obama’s Administration. The open enrollment period will close on January 31, 2017.
Sylvia Mathews Burrell, Secretary of the Department of Health and Human Services (HHS), on October 19, 2016, announced that the Administration expects 13.8 million people to enroll in coverage for 2017 during the open enrollment period. Following the 2012 Supreme Court decision that upheld the ACA’s individual mandate and made it easier for states to opt out of the ACA’s Medicaid expansion, the non-partisan Congressional Budget Office (CBO) projected that 25 million people would be enrolled in coverage through the Exchanges in 2017.1 Notably, enrollment in employer-sponsored coverage has not decreased as CBO projected in 2012, and Medicaid enrollment has exceeded the 2012 CBO projections.
As many in the US prepare to shift their attention to the upcoming presidential debates and the final weeks of the campaign, the Obama Administration is poised to release some far-reaching regulations, which will have a significant effect on the health care marketplace, including a final rule on the new Medicare payment law and some changes intended to help shore up the health insurance Exchanges established under President Obama’s signature health care law.
Highlights of some of the most significant regulatory actions still to come in the final months of the Obama Administration are provided below.
The Centers for Medicare and Medicaid Services (CMS) released a proposed rule that would make a number of changes to the public health insurance Exchanges created under the Affordable Care Act (ACA). Many of the proposals are intended to take effect in 2018, but some would begin in benefit year 2017.
The proposed rule follows announcements from several national health insurers that they would reduce their participation in Exchanges in 2017, following continued financial losses. Policy proposals, such as changes to the risk adjustment program, are intended to help boost the stability of the Exchanges and were addressed in a June 2016 white paper following the Department of Health and Human Services (HHS)-Operated Risk Adjustment Methodology Public Meeting, which was held on March 31, 2016.
On August 27, the Health Resources and Services Administration (HRSA), one of the federal public health agencies within the Department of Health and Human Services, released a long-awaited draft guidance intended to clarify eligibility requirements for the 340B Drug Pricing Program. The publication of this guidance marks the beginning of a 60-day public comment period before the agency releases a final rule.
The “340B Drug Discount Program”, named for the authorizing section of the Public Health Service Act, is a US federal government program created in 1992 that requires drug manufacturers to provide outpatient drugs to eligible health care organizations/covered entities at significantly reduced prices. Pharmaceutical companies must adhere to the program’s price discount rules as a condition of their participation in Medicaid. Over the past several years, Congress, the Administration, and health care stakeholders have been attempting to balance the program’s goals of providing drug discounts to entities that serve lower income populations, while maintaining some parameters about the definitions of qualified drugs, patients, and eligible entities to limit the expansion of the program.
New structures come with new rules and health insurance exchanges (HIX) are no exception. That said, health insurers need to know more than the new rules — they need to understand the protocols and priorities regulators intend to use in building out this new regulatory regime.
This is a significant compliance challenge, but it does not begin with a blank page. Other government programs’ (Medicare and Medicaid) compliance capabilities that may already be in place serve as useful models for the analogous requirements of HIX participation. In fact, many of the exchange compliance priorities the Centers for Medicare and Medicaid Services (CMS) shared in March 2014 are similar to those used to regulate Medicare Advantage and Part D plans. Following that logic, it is likely that enforcement measures on HIX plans may mimic these other existing federally-funded programs.
On November 13, 2014, the Department of Health and Human Services (HHS) announced that it is withdrawing the highly-anticipated and comprehensive 340B drug pricing program (340B program) regulation (also known as the “mega-reg”) and will replace it with program guidance issued early next year through the Health Resources and Services Administration (HRSA). The “mega-reg” was designed to address key topics not fully defined in the original legislation. It was drafted earlier this year and given to the White House Office of Management and Budget in April; however, it stagnated amidst controversy and legal proceedings surrounding the HRSA-proposed orphan drug policy issued in 2013. The withdrawal of the “mega-reg” now leaves more questions than answers for covered entities as we enter into what will likely be a formative year for the 340B program.