Chart of the Week
Congress
Medicaid Enrollment: Higher for Longer. Medicaid MCOs wrote to Congress and asked that, as part of the reconciliation package, once the public health emergency ends Medicaid and CHIP eligibility would be extended for 12 months beyond the end of the Public Health Emergency without regard to the usual requirements. As we expect Delta to continue its march northeast as the weather cools, accelerating, along with RSV and more run-of-the-mill respiratory viruses into the winter months, the Public Health Emergency is likely to last through at least 1H 2022.
Given that PHE timeline, the MCOs are asking to retain enrolled members as of July 1, 2022 until July 1, 2023. The existing guidance from CMS already allows states to take up to a year after the end of the PHE to disenroll members no longer eligible. Furthermore, CMS will require states to collect new eligibility information such as age, employment status, disability and income after the PHE ends. This two guidance provisions, again assuming an end to the PHE on June 30, 2022 means Medicaid enrollment could stay elevated through late 2023. ((+) ANTM, CNC, MOH)
Medicare Dental Coverage. The tussle over a Medicare dental benefit continues with the latest move being CMS’s appointment of a Chief Dental Officer. Some in Congress have been pressuring CMS to use its administrative power to expand the definition of “medically necessary” dental work.
The idea behind redefining “medically necessary” is that an expansion of the benefit under consideration as part of reconciliation would have a new baseline cost and would then score better at the CBO. The problem with that approach is, as a friend pointed out, the Social Security statue has a hardwired prohibition on paying for dental work:
Not payable under the Social Security Act:
(12) where such expenses are for services in connection with the care, treatment, filling, removal, or replacement of teeth or structures directly supporting teeth, [unless requiring hospitalization].
h/t BQ
Meanwhile the Medicare Advantage plans are worried a core benefit will be added without a change in their base pay immediately. Of course, over time, the additional Fee-for-Service expenditures will make their way into the MA PMPM rates but that could take a few years.
Drug Prices in Employer Sponsored Plans. Employer benefit groups have stated their support for including in reconciliation provisions that would extend the drug price regulations being proposed for Medicare to employer sponsored insurance.
Their fear is that pharmaceutical companies and the PBMs will make up for lost margin by raising prices for commercial plans. That would not be the first time that has happened. Unfortunately, extending price regulation to employer-sponsored plans may not survive the rules imposed on reconciliation. If it gets tossed, the support offered by corporate America for drug price regulation may evaporate, sending the entire provision into the legislative abyss.
Reconciliation. Lest the above sound like reconciliation is a foregone conclusion, it important to note that resistance remains among moderates. What happens with respect to new benefits or payment cuts will depend on how big a package Congress can stomach especially in the face of rising inflation and normalizing unemployment rates.
The White House
Pandemic Preparedness. The White House unveiled a $65B pandemic preparedness and response plan. Some portion of that amount is being requested as part of reconciliation. Part should be available from COVID-relief bills in 2020. The White House also announced another $3B in funding for onshore vaccination production including fill and finish capabilities and production of ancillary materials like swabs and syringes. It means more money for onshore production of vaccines, therapeutics and PPE plus loads of cash for research. ((+) ILMN, DHR, PFE, MRNA)
Eviction Ban. In light the SCOTUS decision to strike down the CDC’s latest effort to extend the Trump administration’s eviction ban, CMS has suggested MA plans can offer rental assistance for beneficiaries as a supplemental payment. It seems unlikely to be effective as MA plans have their hands full with rising acuity due to delayed and foregone care. ((-) HUM, UNH, ANTM, CLOV, ALHC)
FDA Still MIA. Close watchers of the FDA have puzzled over their absence during important debates about vaccinations for the young, boosters for the old, among other things. The CDC has been the chief mouthpiece for COVID response, often clumsily wading into the FDA’s jurisdiction and leaving analysts and reporters wondering who, exactly, was in charge.
A couple weeks ago, President Biden announced, presumably after consultation with PFE and MRNA, that a third COVID shot would be available on Sept. 20, subject to approval by the FDA and CDC.
Of course, no one remembers the qualifier to the president’s promise, giving the appearance – or the reality – that the White House was front running the scientific community. In response or perhaps due to a long list of frustrations, the FDA’s senior vaccine regulators are retiring/quitting. Their announcement comes on the heels of the White House’s decision not to nominate acting FDA Commissioner, Janet Woodcock to the permanent spot.
The White House may be getting the hint. Rumor has it they will be delaying any roll-out of boosters until more data is available.
Medicare Rule-A-Rama. No rules pending
Other Rules.
Proposed Rule on OTC Hearing Aids. The FDA is considering rules, as required by statute, governing the sale of hearing aids Over The Counter. (i.e. no required visit to physician/audiologist)
New Revised Proposed Rule on Medicare Coverage of Innovative Technology and the Definition of Reasonable and Necessary. This rule which would create and accelerated pathway for devices – including tests – that were deemed breakthrough technologies by the FDA. Think: liquid biopsy. It would also codify the definition of reasonable and necessary, compliance with is required for reimbursement. The Trump administration has finalized this rule and the Biden administration decided to revisit it.
Other Stuff
Employment. Half a million people are still missing from the health care workforce, according to today’s BLS release. Those that remain are working harder. Aggregate hours worked total 474K, down from about 485k in February of 2020. Demand for services remains strong. One hospital leader we spoke to recently indicated acuity levels have increased 10%. In a given year, a 1% increase gets noticed so we appear to be in unprecedented territory.
SPAC and S-1 Corner
IPOs.
Warby Parker. Direct Listing. “A pioneer of the direct-to-consumer model, Warby Parker is one of the fastest-growing brands at scale in the United States. Through our multichannel business, we have unlocked access to affordable, quality eye care for millions, starting with our two-million-and-growing active customer base as of June 30, 2021.”
Dice Molecules Holdings, LLC. BofA “We are a biopharmaceutical company leveraging our proprietary technology platform to build a pipeline of novel oral therapeutic candidates to treat chronic diseases in immunology and other therapeutic areas.”
Healthcare Triangle. “We are a healthcare information technology company focused on advancing innovative industry-transforming solutions in the sectors of cloud services, data science, and professional and managed services for the healthcare and Life Sciences industry.”
iFit Health and Fitness. “We are a health and fitness subscription technology company, fueled by our passion to innovate, grow and provide meaningful solutions for our members. iFIT is an integrated health and fitness platform, designed to connect our proprietary software, experiential content and interactive hardware to deliver an unmatched connected fitness experience.”
Cue Health Inc. “ We are a health technology company, and our mission is to enable personalized, proactive and informed healthcare that empowers people to live their healthiest lives.” Thought Bubble: Leveraging COVID for POC and in-home diagnostics. Not the worst idea.
SPACs.
A little progress for deSPACing names but little new to report. There is still about $13B in closed but unspent SPAC money targeted at health care.
You can access the updated SPAC spreadsheet here.
Recent Events. Replay Brad Smith, former Director of the Innovation Center at CMS and I will be talking about the history and potential of direct contracting.
Upcoming Events.
Sept. 7-10th What is Next for Health Care? Virtual Event with Matthew Holt of The Health Care Blog and Jess DaMassa, Host and Executive Producer of WTF Health. At this point, it looks like I will be sharing a panel with Matthew and Bill Taranto of MRK’s Global Health Innovation Fund, among others. The line-up is great if you are interested in innovation.
Emily Evans
Managing Director – Health Policy
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