Why the Trump administration is pursuing hospital payment cuts that courts have rejected

• In pursuing hospital payment cuts rejected by courts, the Trump administration aims to convince Congress to provide authority for such cuts, says an administration executive.
• The administration is preparing for a variety of possible legal rulings on a constitutional challenge to the Affordable Care Act (ACA).
• Any ruling striking down the ACA would be stayed while a bipartisan replacement is crafted.

The senior White House official on healthcare policy said there was a clear rationale for pursuing two major hospital payment cuts even after courts ruled them illegal.

Hospital advocates were bewildered when the Trump administration retained two controversial hospital payment cuts in the final rule for the Medicare Outpatient Prospective Payment System (OPPS).

The first cut completed a two-year phase-in of an $800 million reduction in Medicare payments for clinic visits furnished in off-campus hospital outpatient departments, which are the most common service billed under the OPPS. The second cut was a $1.6 billion payment decrease for the 340B discount drug program.

Even though previous versions of the latter cut also were rejected by federal courts, the Trump administration appealed the 340B decision and is considering an appeal of the site-neutral payment ruling.

Why pursue those policies in the face of court opposition?

“The policy is solid, and we think we can win,” Joseph Grogan, JD, assistant to the president and director of the Trump administration’s Domestic Policy Council, said at a recent media briefing.

Additionally, he said, pursuing the cuts in the face of court opposition illustrates the need for Congress to act.

“We can go to Congress and say, ‘Hey listen, the courts have [blocked] us here and here; you need to clarify the law because we’re on the right track here,’” Grogan said. “‘Here’s the policy we’re pursuing, and it’s probably not going to be as robust as it could be without a legal change.’”

Grogan said the administration expected its “aggressive” policymaking to risk court reversals.

“We can shrink from all of these fights and make our lives a lot easier,” Grogan said.

What happens if the ACA is overturned?

The Trump administration also has sided with a constitutional challenge to the Affordable Care Act (ACA) by some states. A federal district court found the law unconstitutional, and that ruling has been stayed while the case is under appeal.

“We will be prepared after that decision comes down with any number of permutations that get decided,” Grogan said. “It is important to recognize, though, that nothing is going to happen immediately. The decision will be stayed pending a Supreme Court decision.”

The Supreme Court is unlikely to rule on the case before the 2020 election, Grogan said.

Grogan said the ACA fell short of achieving two of its fundamental goals: providing universal coverage and allowing enrollees to keep their physicians.

“We spent $50 billion a year to drive the individual market from over 10 million to slightly over 15 million, and we have 28 million people who are uninsured in this country,” Grogan said.

Grogan cited many Democrats’ support for replacing the ACA with “Medicare for All” or a Medicare buy-in program as evidence that they too view the law as a failure.

“We need bipartisan approaches to help with solving healthcare in America, and when we use things like one party ramming things through, bad things happen,” Grogan said.

Bipartisan solutions are possible on providing protections for pre-existing conditions, for instance, Grogan said.

“If you want to help the poor and you want to help people with pre-existing conditions, you can do that far more effectively and far cheaper than the ACA,” Grogan said.

Grogan said any post-ACA legislative replacement would start with protections for people with pre-existing conditions. However, beyond “restoring the rest of the market to health,” he did not identify what else that package would include.