Top of the Funnel | Macro Data + Policy Position Monitor
PPI. ((HUM, UNH, ANTM, CLOV, ALHC (-)) While increases for major inputs like instruments and supplies has slowed down, the absolute levels are still quite elevated. Pharmaceuticals, a significant cost driver, accelerated in April.
The cost increases are particularly salient now as negotiations are underway for that third of managed care contracts that expire in 2023 for most providers. Vermont has released their ACA exchange rates and according to press accounts it ain’t pretty.
Inflation chartbook is here.
Policy Position Monitor is here.
CONGRESS
Reforming Prior Authorization. ((HUM, ANTM, UNH, ALHC, (-)) Provider trade groups like the AHA have been beating the drum on prior authorization in Medicare Advantage plans since about 2019. The problem, as they describe it is overly aggressive use of prior auth to limit benefits. They also claim the slow turn around of requests has limited access to care.
Over-use of prior authorization could be fixed administratively but, as we have noted in the context of the No Surprises Act, the administration tends to be more sympathetic to insurers than Congress.
The House has a bill, “Improving Seniors’ Timely Access to Care Act of 2021” would require an electronic prior authorization program that meets certain standards including real time decisions and response. It has 300 co-sponsors which puts in on the fast track for floor action.
ARPA-H To HHS? The new life science research organization has been the subject of some of Washington’s power dynamics. Although the enabling legislation envisioned housing the agency at HHS, SecHHS Xavier Becerra was given the option to switch its home to NIH, the president’s preferred alignment.
Rep. Anna Eschoo and Rep. Cathy McMorris Rogers are working on legislation to move the new agency to HHS with its director reporting direct to SecHHS. There is also talk of placing it at the Texas Medical Center in Houston.
Appears Congress is trying to get ARPA-H as far from the NIH power center as possible,
Ending the PHE is Big Business. ((MMS, TRU, HUM, EFX (+)) House Energy and Commerce Chairman Frank Pallone and Senate Finance Chairman Ron Wyden sent a series of letters last week to EFX, Experian, HUM, LexisNexis Risk Solutions, MMS, and TRU. The chairmen are concerned that the contractors have a poor record of performance and may end Medicaid coverage for people that are, in fact, eligible.
Medicaid redetermination at the end of the PHE are not going to happen without these contractors and Congress has little to say about it. But note the political risk nonetheless.
The White House
WTF? Pediatric Vaccines. ((MRNA, PFE (+/-))There are two worlds when it comes to pediatric COVID-19 vaccines; those that claim there a pressing demand from parents; and those who are clearly foregoing vaccination for older children. The White House and members of Congress are focused more on the former as the FDA’s Peter Marks appeared at hearings this week.
Marks pledged that the agency – whose mission is to protect consumers by evaluating the safety and efficacy of medicines – would not let a low efficacy readout on clinical trials for the 6mo to 5-year-old children prevent an EUA. The FDA, apparently, is lowering the bar in order to respond to “pressure from parents” which presumably is that 28% of moms and dads that had their 5–11-year-olds immunized.
End of PHE. ((ANTM, CNC, MOH (+)) The White House has not indicated when they plan to end the Public Health Emergency but on Tuesday, SecHHS sent a letter to governors outlining its efforts to date on providing an off-ramp for Medicaid beneficiaries at the end of the PHE. The letter also urged the governors to apply the same amount of diligence to their efforts.
Meanwhile advocacy groups like the American Hospital Association and the American Medical Association are lobbying the Biden White House to delay the end of the PHE, citing the uncertain future of the pandemic.
For its part, the Biden administration is in a tough spot. They desire to declare and end to Title 42 on border control, which itself is predicated on the presence of an emergency.
The administration has pledged a 60-day notice ahead of ending the PHE which date would be May 16th.
Home Care Payments. ((AVAH (+)) The Biden administration finalized a rule this week that reverses a Trump-era prohibition on paying third parties for benefits for home care workers. Until 2019, Medicaid agencies were allowed to use Medicaid funds to contribute to health insurance, union dues and other benefits for home care workers.
The context for this final rule is a push by unions to expand their footprint among home care works, especially important now that skilled nursing facilities are near terminal. The Trump administration south to limit their influence. The Biden administration seeks to expand it.
Re-upping on Build Back Better. In a speech on Tuesday, President Biden urged passage of those portions of the Build Back Better bill that filled the Medicaid gap, implemented reforms to drug prices and extended tax credits for ACA exchange policies. These initiatives got the fighting inflation spin.
Making these provisions of the BBB some of Biden’s anti-inflation priorities may prove to be prescient. Health care supply pressures began to emerge in Q1 and persist. Labor, although it has cooled a bit is still expensive. Negotiations for PY 2023 are going to be tough as insurers resist paying more than the usual 3-4%.
Other Stuff
Past Events.
Replay | DVA: Fewer Patients, Even Less Innovation & A Precarious Future
Calendar. You can find 2022 here.
Have a great weekend.
Emily Evans
Managing Director – Health Policy
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