The monthly healthcare wrap-up: April 2018

The monthly healthcare wrap-up: April 2018

Let us be your source for monthly updates on the ever-evolving healthcare industry. From legislative changes to policy updates, we’ve got you covered.

Physician groups push back against short-term insurance expansion

The Department of Health and Human Services (HHS) proposed a rule in February to return the duration of short-term insurance plans’ validity to a pre-Obama era:

  • Prior to 2016, insurers could sell short-term insurance plans valid for 364 days; President Obama shortened these plans’ validity to 90 days to encourage participation in Affordable Care Act (ACA) plans
  • Representatives of the American Medical Association (AMA) and the American Academy of Family Physicians (AAFP) stated they are concerned the rule would enable plans that lack crucial patient protections and would cost more for individuals with chronic conditions
  • The AAFP wrote a letter to the HHS stating it “strongly opposes the proposed rule” because it permits the sale of low-value policies “that could subject patients to catastrophic medical bills and medical bankruptcy”
  • Short-term insurance plans are exempt from several ACA rules; they can charge higher premiums for individuals with pre-existing conditions and do not have to comply with the ACA’s minimum coverage requirement
  • The Trump administration estimates 100,000 to 200,000 people would leave ACA plans for short-term plans if the rule is finalized; think tanks and consulting groups, however, estimated up to 4.3 million people would make the switch

The CMS and the FDA separately encourage the use of data, digital tools

The Centers for Medicare & Medicaid Services (CMS) and the Food and Drug Administration (FDA) made two separate announcements at the 2018 Health Datapalooza conference in Washington D.C. concerning the use of patient data and digital tools:

  • The CMS unveiled its Data Driven Patient Care Strategy, which will release Medicare Advantage (MA) claims data to researchers to better understand healthcare trends related to seniors
  • FDA Commissioner Dr. Scott Gottlieb stated the agency intends to incorporate review of digital adherence tools into the drug review process
  • The CMS collected this data—including patients’ clinical conditions as well as the services they subsequently receive—since 2012
  • CMS Administrator Seema Verma declared the agency intends to release the MA encounter data annually moving forward
  • These tools include mobile devices and software that help ensure prescription adherence, as well as software designed to monitor medications’ side effects and patients’ symptoms through cameras and facial recognition

New CBO budget outlook predicts increased healthcare spending

The Congressional Budget Office (CBO) released its latest budget outlook spanning 2018 to 2028 and predicted a federal deficit that exceeds $1 trillion by 2020, two years prior than its previous estimate:

  • The office projects ACA subsidies, Medicare, Medicaid and the Children’s Health Insurance Program (CHIP) will account for 6.6 percent of the country’s gross domestic product (GDP) in 2028, up from 5.3 percent in 2018
  • Between 2019 and 2028, the CBO predicts the U.S. government will spend $757 billion on ACA subsidies
  • The outlook also forecasted a 7 percent increase in government spending on Medicare annually, and a 5.5 percent increase in spending on Medicaid annually—both due primarily to rising healthcare costs rather than enrollment growth

For more information on this topic, or to learn how Baker Tilly healthcare specialists can help, contact our team.

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