Health Policy Report – December 6, 2024

President-Elect Trump Nominates Dr. Mehmet Oz to Head CMS

Dr. Mehmet Oz has been selected to lead the Centers for Medicare & Medicaid Services (CMS) under the incoming Trump administration. If confirmed by the Senate, Oz will preside over the administration of Medicare, Medicaid, and the Affordable Care Act, which together provide health insurance to over 50% of Americans. He will report to the head of the Department of Health and Human Services (HHS), a position currently expected to be occupied by Robert F. Kennedy Jr. (RFK), though his nomination is also pending Senate confirmation.

Oz, a former television host, has previously expressed support for expanding the role of Medicare Advantage plans. During his 2022 Senate campaign, Dr. Oz expressed support for repealing the Part D non-interference clause in the prescription price negotiations in Medicare. In a statement, President-elect Trump promised that Oz would cut “waste and fraud” as the head of CMS.

To read more about Dr. Oz’s nomination, CLICK HERE.

RFK Weighs Changes to Medicare Physician Payments

Robert F. Kennedy, Jr. (RFK), President-elect Trump’s pick for the Department of Health & Human Services (HHS), is reportedly exploring a plan to change how physician payment is determined.

Currently, the American Medical Association (AMA) has a panel of doctors who make recommendations to the Medicare program about how much services should cost. This is a major source of revenue for the group, which charges royalties for the use of Current Procedural Terminology, or CPT, codes.

The coding system has been accused of rewarding providers for surgeries and other costly procedures and has been a target for some Republican lawmakers in the past. Now, Kennedy Jr. is said to be evaluating current billing codes and seeking feedback on what an alternative model might look like.

In the near term, the AMA and other physician groups are pushing Congress to address Medicare physician payment reform under the physician fee schedule (PFS). On November 21, over 40 Senators signed onto a “Dear Colleague” letter urging Senate Majority Leader Chuck Schumer (D-NY) and Minority Leader Mitch McConnell (R-KY) to address proposed cuts to physician payment. Congressional leadership is still assessing what an end of year package will include as they will need to extend funding past the December 20^th deadline.

“Persistent instability in the health care sector – in part, due to consistent payment cuts – impacts the ability of physicians to provide the highest quality care,” they wrote.

Kennedy will still need to be confirmed by the Senate, but if confirmed, he has expressed interest in focusing on his “Making America Healthy Again” (MAHA) movement, an initiative aimed at addressing chronic disease through significant restructuring and reforms of the American health system. The extent of this implementation still remains to be seen.

To read more, CLICK HERE.

To read the Dear Colleague Letter, CLICK HERE.

Prior Authorization Reform on the Table for Lame-Duck Session

Key lawmakers are optimistic that a prior authorization reform package could pass Congress before the end of the year. The Congressional Budget Office found that the Improving Seniors’ Timely Access to Care Act, which seeks to standardize electronic prior authorization in Medicare Advantage, would be budget neutral.

The legislation has been cosponsored by the majority of lawmakers in both congressional chambers. Its sponsors, Senator Roger Marshall, M.D. (R-KS) and Representative Mike Kelly (R-PA), have expressed optimism that the bill could move forward during the lame-duck session. “We’re going into lame duck. If we can get it done, that’s what I’d like to see,” said Representative Mike Kelly.

Separately, despite lobbyist efforts to secure a two-year telehealth extension in the year-end package, the upcoming extension is expected to last only 90 days or, at most, one year. This schedule aligns with House Speaker Mike Johnson’s (R-LA) reported plan for a three-month continuing resolution in mid-December, followed by a reconciliation package early next year.

To read more, CLICK HERE.

To read the Improving Seniors’ Timely Access to Care Act, CLICK HERE.

To learn more about telehealth extension, CLICK HERE.

Advocates Push HHS to Address Copay Accumulators

The clock is ticking for the Centers for Medicare & Medicaid Services (CMS) to issue guidance on the use of copay accumulators. Earlier this year, a federal judge shot down a Trump-era rule that allowed insurers to not count copay assistance towards a patient’s deductible or out-of-pocket costs.

Now, the HIV+Hepatitis Policy Institute, which originally brought the lawsuit against insurers, is urging CMS to address the issue in rulemaking before the Trump administration takes over.

“In the closing days of this administration they must do the right and very simple thing to help patients afford their prescription drugs–tell insurers that they must comply with the Court decision,” Carl Schmid, executive director of the HIV+Hepatitis Policy Institute, said in a statement. “They have been disregarding the law for over a year, haven’t issued a promised new rule, and time is running out. They need to stop siding with the powerful insurers and their PBMs, and instead side with patients.”

To read the statement, CLICK HERE.

PBMs Strike Back at FTC and Experts Speculate on FTC’s Path Under Trump Administration

On November 19, Express Scripts, Caremark and OptumRx – the nation’s three largest pharmacy benefit managers (PBM)– sued the Federal Trade Commission (FTC) for trying to upend drug rebate contracts. “This sweeping attempt to reshape an entire industry via law enforcement would never pass muster in a U.S. District Court,” the plaintiffs said.

The lawsuit comes just months after the FTC sued PBMs and their affiliated group purchasing organizations (GPOs) for engaging in anticompetitive and unfair rebating practices that artificially inflated the list price of insulin drugs, impaired patients’ access to lower list price products and shifted the cost of high insulin list prices to vulnerable patients.

The future of the FTC’s lawsuit against PBMs remains unclear. While the Biden administration targeted anti-competitive behavior in the healthcare space, industry experts anticipate that the Trump administration will not pursue such behavior as aggressively.

However, much depends on whether Lina Khan, the current FTC Chair, will remain as acting chair under the Trump administration. Traditionally, chairs have resigned with a change in party, but there’s no requirement to do so and Khan can remain acting chair until a replacement is confirmed.

To read more about the PBMs’ lawsuit, CLICK HERE.

To read more about the FTC, CLICK HERE.

Arnold Ventures Releases New Report Supporting Site Neutrality

A new report found that the gap in Medicare payments for hospital outpatient departments (HOPDs) compared to physician offices increased by 4% annually from 2017 to 2022. The analysis, published by Arnold Ventures, found that the gap in reimbursement grew roughly twice as fast as general measures of inflation.

Medicare typically pays two to four times more for services in HOPDs as compared to physician offices. The report noted that patients typically pay 20% of the cost in co-pays and, as such, site-of-service payment differentials generate significant financial burden.

“Sicker patients receiving drug administration services at HOPDs are already paying hundreds (and occasionally thousands) of dollars more for care compared to what they would pay at physician offices.

These beneficiaries would experience the greatest benefit from an expansion of site neutrality,” the report stated.

The study projected that comprehensive site neutral reform could lower out-of-pocket costs for Medicare beneficiaries by $21 billion and save the Medicare system $138 billion over ten years.

To read the full study, CLICK HERE.