More policymaking likely as the 2020 presidential election approaches

• HFMA’s Chad Mulvany predicts we could see an increased chance of policymaking as we come into the home stretch of the 2020 election.
• The Hill reported Sept. 13 that President Trump signed an executive order that aims to lower the amount Medicare pays for many drugs by tying the cost to the price tag in other developed countries.
• While the president’s executive order could cut the price for certain drugs, the timing of Trump’s action means implementation won’t happen before Election Day, according to The Hill article.

 As we come into the home stretch of the 2020 election, my forecast is we could see an increased chance of policymaking. We saw  some of it on Sept. 13 when The Hill reported, President “Trump signed a long-awaited executive order Sunday that aims to lower the amount Medicare pays for many drugs by tying the cost to the price tag in other developed countries. While the move could significantly cut the price for certain drugs, the timing of Trump’s action means implementation is unlikely before Election Day.”

Takeaway

The Hill article is correct in noting that any efforts to index what Medicare pays for Part B and Part D drugs will have no impact on spending before the election. We’re probably looking at 12 months or more if something is proposed and finalized. And that timeline doesn’t bake in any legal action that the pharmaceutical industry might take to block implementation of the rule.

To get the ball rolling, I wouldn’t be surprised to see a proposed rule impacting Part B drugs released in the weeks before the election. The International Pricing Index Model for Part B drugs have been at the Office of Management and Budget (OMB) since June of last year. A discussion draft released by CMS in the fall of 2018 likely provides clues as to what the proposed rule might entail. HFMA has a summary available too.

What else could we expect from CMS or the Department of Health & Human Services (HHS) in the coming weeks? The Transparency in Coverage final rule also landed at OMB for review late last week. Given the administration’s focus on transparency, it’s possible that could be released prior to the election. Similar to CMS’s requirements that hospitals post machine-readable files with their negotiated rates and make the prices for a list of shoppable services available, it is anticipated the rule will require health plans to provide cost-sharing amounts, in-network provider negotiated rates and out-of-network allowed amounts to members. In addition, plans and issuers would be required to publicly disclose in-network provider negotiated rates and out-of-network allowed amounts. Read HFMA’s summary of the rule here.

Finally, on Sept. 19, HHS released its anticipated Post-Payment Notice of Reporting Requirements. The instructions require PRF recipients to submit the following:

1. Healthcare related expenses attributable to coronavirus that another source has not reimbursed and is not obligated to reimburse, which may include general and administrative or healthcare related operating expenses.
2. PRF payment amounts not fully expended on healthcare-related expenses attributable to coronavirus are then applied to lost revenues, represented as a negative change in year-over-year net patient care operating income, net of the healthcare-related expenses attributable to coronavirus.

The instructions state that recipients may apply PRF payments toward lost revenue, up to the amount of their 2019 net gain from healthcare-related sources. If a recipient had an operating loss in 2019, then it may apply PRF funds to break even in 2020. If recipients do not expend PRF funds in full by the end of calendar year 2020, they will have an additional six months in which to use remaining amounts. 

The instructions define data elements related to demographic information, expenses attributable to COVID, lost revenues attributable to COVID and non-financial metrics. With the release of the reporting requirements, HHS has updated its website to state that the reporting portal will not be available until early 2021 (delayed from Oct. 1, 2020 as stated in its July 2020 notice). However, HHS does not appear to have delayed the reporting deadline so reports for 2020 expenditures and lost revenue related to COVID are still due 45 days from Dec. 31, 2020.