15 million people will no longer have insurance by 2018

At the agencies

The Congressional Budget Office (CBO) estimates that under the Better Care Reconciliation Act (BCRA) 15 million people will no longer have insurance by 2018 with the total number of uninsured people jumping to 22 million by 2026. CBO also predicts that Medicaid would be cut by 35 percent over the next 20 years, saving $772 billion. With other offsets included in the bill, the CBO predicts that BCRA would ultimately achieve a $321 billion deficit reduction. Read more about the BCRA.

The Centers for Medicare and Medicaid Services (CMS) granted states additional flexibility to not comply with certain Medicaid managed care requirements that were established by an Obama-era rule last year. CMS is exercising its enforcement discretion to work with states that are not able to implement every aspect of the final rule by the required compliance date. However, CMS stated that it cannot provide flexibility on the actuarial soundness requirements, pass-through payments and medical loss ratio provisions. 

CMS released new data that shows $8.18 billion in payments from drug and medical device manufacturers were paid to doctors and hospitals in 2016. Almost half of the payments ($4.36 billion) were dedicated to research, while $2.8 billion was dedicated to general consulting fees and associated expenses. The remaining $1.02 billion was paid to doctors with ownership or investments in a drug or a device company. These payments reflect a slight increase above the previous year.

CMS published a final rule to implement changes to the Payment Error Rate Management (PERM) and Medicaid Eligibility Quality Control (MEQC) programs. The PERM program measures improper payments in the Medicaid program and Children’s Health Insurance Program (CHIP) based on reviews of the fee-for-service (FFS), managed care and eligibility components of the two programs. Changes to the PERM program include:

  • altering the review period,
  • requiring a federal contractor and the PERM program to conduct eligibility reviews,
  • citing improper payments,
  • establishing a national sample size, and
  • allowing the PERM program to seek payment reductions or disallowances in limited circumstances.

Changes to the MEQC program include:

  • increased state flexibility to design their MEQC active case pilots,
  • requirements for states to review a number of items not reviewed under the PERM program, and
  • requirements for states to submit corrective actions for identified errors.

On the Hill

Senate Republicans delayed their vote on their healthcare repeal bill because they were not able to secure the requisite 50 votes to pass it. As originally proposed, BCRA would:

  • eliminate the individual mandate that requires individuals to have health insurance,
  • wind-down cost-sharing reduction (CSR) payments over a period of two years,
  • defund Planned Parenthood for one year,
  • alter traditional Medicaid funding for states,
  • roll back Medicaid expansion over a period of three years (starting in 2021),
  • reduce the number of people eligible for subsidy payments from 400 percent to 350 percent (starting in 2020), and
  • retain the requirement that insurers cover those with preexisting conditions but allows states greater flexibility to waive protections.

Since the original draft was circulated, Senate Majority Leader Mitch McConnell has been trying to corral 50 senators to vote in support of the bill. In order to get the needed support, the Majority Leader needs to address objections to: proposed Medicaid reforms, exchange subsidies, funding for Planned Parenthood (or lack thereof), the number of regulations currently in place at the agency level and disproportionate impact on states.

Senate Majority Leader McConnell was already forced to delay the vote, and recently stated publicly that the alternative to passing BCRA will be bipartisan negotiations to stabilize the insurance market. Negotiating with congressional Democrats would necessitate the end of the Republicans’ repeal effort.

A vote in the next few weeks must take place if Senate Republicans hope to pass BCRA through the reconciliation process, which requires 50 votes instead of 60. At this stage, the path forward for BCRA is unclear.

From the administration

President Trump nominated Dr. Jerome Adams, the health commissioner of Indiana, to be the next Surgeon General. Dr. Adams was appointed to his post in Indiana by Vice President Mike Pence when he was governor. Dr. Adams is an anesthesiologist by training and an advocate for addressing the opioid epidemic. Dr. Adams must be confirmed by the Senate before he can serve as Surgeon General, a position that oversees 6,700 public health officers.

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

Private equity's appetite in the food industry
Next up

Private equity's appetite in the food industry