Note: Late today the Biden administration published notices on delayed effectiveness of certain late Trump-era rules. Links and short description included below. Also, correcting misnaming the current president of the United States who issued Executive Orders this week. Four years of typing "President Trump" is a harder habit to break than I thought.
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Order Please. President Biden released a few Executive Orders Thursday aimed at the hot button issues among the health policy intelligentsia. The first of those, “Strengthening Medicaid and the Affordable Care Act,” does the following:
- Asks the SecHHS to consider a Special Enrollment Period for plans offered on the federal marketplace exchanges
- Ask the Secretaries of HHS, Treasury and Labor to review all “all existing regulations, orders, guidance documents, policies and any other similar agency actions” to identify:
- Policies or practices that undermine protections for people with preexisting conditions (i.e., short-term insurance plans)
- Demonstrations and waivers and policies related thereto that may undermine individual, small group or large group markets (i.e., HRA and Association Plans as well as Health Ministries)
- Policies or practices that present unnecessary barriers for access to Medicaid or ACA coverage (i.e., work requirements).
- Policies or practices that may reduce the affordability of coverage or financial assistance
Agencies are also asked to consider rescinding any policy or guidance inconsistent with the Executive Order. Finally, the new EO revokes the Trump Era orders including the important EO 13813 “Promoting Healthcare Choice and Competition in the United States” which gave rise to rules on transparency and site neutrality.
The importance of the order is to demonstrate that the Biden White House is committed to preserving and protecting the structure and mission of the ACA. Opening a new SEP from Feb. 15 to May 15, which is estimated to attract an additional 9 million people, may be giving $CNC actuaries heartburn but it is a powerful symbol of Biden’s commitment to the law.
However, reversing certain Trump-era policies won’t be that easy. Medicaid waivers like those requiring work or closing formularies are negotiated over many months between the state and federal government and put in place using extensive resources. What is more likely to happen is new waiver applications with things like work requirements will be halted.
On the other hand, things like Association Plans and HRA expansion are more easily reversed as is the 12-month duration of short-term plans. However, a quick end to all these things may cause more disruption than its worth so grandfathering provisions seem like a strong possibility for those using good-faith reliance on Trump-era rules.
The second executive order revokes President Trump’s Mexico City Policy that prohibits use of federal aid in the performance of abortions overseas. Another important signal but not one likely to have a significant impact on U.S. health care delivery.
Rules Deferred but Not Denied. Late today the Biden administration issued notices for the delay in the effective date of three rules we had flagged as possibilities.
- The effective date of the change to the Safe Harbor Rule on drug rebates has been delayed until March 22, 2021 while the administration assesses the ongoing litigation and determines if any changes need to be made. Notably the administration has declined to open a new comment period as the Regulatory Freeze Executive Order allowed.
- The effective date of the Conditions of Participation for Organ Procurement Organizations has been delayed until March 30, 2021. Additionally, CMS is opening a 30-day comment period on this rule that amends the quality measures for OPOs to encourge more transplants.
- The effective date for a rule titled Secure Electronic Prior Authorization for Medicare Part D has also been delayed until March 30, 2021. No new comment period was offered and no action so far on similar proposal for the Medicaid program.
Considering the public perception that the Biden administration is reversing all Trump-era policies, these delays are fairly benign. Also, so far anyway, the administration has remained silent on the drug MFN rule.
China: The Latest Risk Factor. Sunday, 60-minutes is expected to air a story on Beijing Genetics, a company often mentioned as a collaborator/competitor/threat to $ILMN.
When pandemic broke out, according to the story, BGI leapt into action and offered lab testing services in five states. Washington, among others, were waved off by U.S. intelligence.
Leaving aside the intent of BGI’s offer, the story brings into the mainstream two issues. First, genetic privacy is a national security interest. Second, China’s work on genetics could present a threat to U.S. interests and enabling it should be scrutinized.
Coupled with ongoing concerns about IP, the threat suggested by intelligence sources calls into question the global TAM for many innovative health care companies. If the U.S. government has concerns about allowing BGI to operate in the U.S., the Chinese government seems likely to reciprocate.
Food Supply. As we have emphasized before, the fragility of the American food supply chain revealed during COVID, and specifically the working conditions at meat processing facilities, are going to be the target of regulation in the Biden administration. The Biden COVID Relief/Stimulus bill includes direction to Occupational Safety and Health Administration to develop COVID-19 related standards for the workplace.
Activists shareholders, however, long critical of the meat processing industry are not waiting on the White House. They have submitted proposals at $TSN and $SAFM, designed to address working conditions, among other things.
Regardless whether the shareholder proposals are a success, supply chains, especially in food and medicine will continue to get a close look. Inflation deferred by offshoring and heavy use of migratory labor will come home once again.
Accelerated Decline of Nursing Homes. New York State Attorney General Tish James released a 76-page report on nursing home deaths. The report confirmed what we, and others had concluded; that New York had under-reported deaths in long-term care facilities due to COVID-19.
The report has political ramifications for Governor Andrew Cuomo, of course, but the more long-lasting impact will be felt by an industry already in secular decline. The AG’s report credits inadequate staffing and PPE, and poor infection control, all of which correlate to low star ratings.
The conditions that allowed New York nursing homes to be such disease vectors and contribute to overall mortality are long standing concerns at CMS. Unfortunately, the nursing home business, together with hospitals, have long dominated state politics which has had a chilling effect on policy and oversight. Nonetheless the report call for more and better qualified staffing and other standards that would seem to make the economics of the industry more difficult than they already are.
The labor disruption we have highlighted in the context of $AMN is only making things worse. It is hard to see how this industry, especially its smaller players, survive the post-COVID-19 fallout.
Replays.
The Realities of a 50-50 Senate | A Talk with Chris Jacobs. If you want to understand what can be accomplished with COVID relief under reconciliation or otherwise, this talk is worth your time. If you need timestamps to speed through it, see the replay note here.
Upcoming Events.
Feb. 17 @10 am ET (Add to Outlook Calendar) - Direct Contracting in Primary Care | A Threat to MA Plans' Dominance? (Cano, Cityblock, CLOV). We will take a deep dive into the CMS direct contracting models, financial structure, TAMs, real and imagined.
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Emily Evans
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