COVID-19 and the ACA will dominate Biden's early regulatory agenda

Now that President-Elect Joe Biden has been declared the winner of the election, he is making the transition from campaigning on healthcare issues to governing.

It remains unclear how much Biden will be able to accomplish in Congress, as control of the Senate will come down to two runoff elections in Georgia that will be held in January. Still, the likely change in executive branch will have big implications for the healthcare industry.

The COVID-19 pandemic and the Supreme Court's eventual ruling on the Affordable Care Act will also be major factors. Experts said Biden would tackle the virus straight away with a renewed emphasis on public health measures aimed at trying to stop its spread. While the federal government would continue to work on vaccines and therapies, Biden probably wouldn't make them the focus of his messaging, said Dean Rosen, a partner at lobbying firm Mehlman Castagnetti Rosen & Thomas. He expects the federal government to take a more active role in responding to the pandemic and to rely less on states to manage it.

The decisions that the Biden transition team makes in the coming days will set the course for his near-term plans to address the COVID-19 pandemic and set priorities for his longer-term healthcare policy agenda. 

Biden in the coming weeks will make important decisions about who he wants to hold key healthcare-related positions in his administration. 

It's unclear how much latitude Biden will have to get nominees approved by the Senate, as Democrats may not hold the majority. Regardless, a few frontrunners have emerged for top healthcare posts.

Dr. Vivek Murthy, surgeon general during the Obama administration, is seen as a top candidate for posts either at HHS or potentially the CDC. New Mexico Governor Michelle Lujan Grisham has also been floated as a potential HHS secretary, as she formerly headed New Mexico's health department.

Some other individuals who could claim administration slots include Obama White House aide and Affordable Care Act architect Dr. Zeke Emanuel, North Carolina health department head Dr. Mandy Cohen, former Delaware Gov. Jack Markell, former Obama HHS preparedness official Dr. Nicole Lurie, and Rep. Karen Bass (D-Calif.).

Biden's team would also try to depoliticize federal agencies like the Food and Drug Administration and empower the Centers for Disease Control and Prevention to lead the public health response rather than depend on a COVID-19 czar to lead the charge, Rosen said, adding, that there will be less "second-guessing of the public health career officials."

Some expect Greg Simon, who serves as the president of the Biden Cancer Initiative, could be tapped to head the National Cancer Institute or have some role as a public face of a renewed cancer moonshot that Biden has promised to pursue.
Analysts say more funding for cancer research could be doable even with a Republican Congress. Revamping the Oncology Care Model, protocols, reimbursement modalities and payment reform for outpatient drugs could come into play.

There would probably be an attempt to enroll more people in coverage too. Experts said a Biden administration could create a special enrollment period for uninsured people to sign up for coverage and increase spending on marketplace advertising and outreach after the Trump administration slashed the ACA's marketing budget by 90%. It could also allow the family members of people with low incomes to get marketplace subsidies, said Katie Keith, principal at Keith Policy Solutions and an adjunct professor at the Georgetown University Center on Health Insurance Reforms.

Any significant effort to expand ACA coverage or make it more affordable would require congressional action, said Christopher Holt, director of healthcare policy at the American Action Forum. Democrats could increase marketplace subsidies through budget reconciliation if they win the Senate after Georgia's run-off elections. But it could ultimately be for nothing if the Supreme Court tosses out the ACA in its entirety. It would take years to undo the law and Biden would have to work with Congress to find a solution to the ensuing chaos.

"In some ways, having a Republican Senate may just free Biden up to go with the kind of cabinet he would have wanted anyway," Holt said.

Biden would also stop or roll back a wide range of Trump-era policies, experts said. As soon as his first day in office, Biden could direct federal agencies to pause their regulatory pipeline for at least 30 days to give his team time to review ongoing work, said Dan Bosch, director of regulatory policy at the American Action Forum.

His administration might also try to rein in short-term limited-duration insurance, association health plans and other non-ACA coverage; revise guidance for state innovation waivers; stop approving waivers for Medicaid work requirements; and restore Obama-era non-discrimination protections, among other policy changes.

Biden, like Trump, has attacked the high cost of prescription drugs. During the campaign, he proposed allowing Medicare to negotiate prescription drug prices, regulating the launch prices of drugs without competition, limiting drug-price increases to the rate of inflation, and allowing personal drug importation. How high those actions sit on Biden's agenda remain to be seen, especially as COVID-19 and an economic recovery stay center stage.

It's even hazier whether Biden would carry out Trump's transparency agenda.

"My sense is that they let the lawsuits play out," Rosen said. Hospital groups are suing the Trump administration over rules that require them to make public negotiated rates and insurers could sue over a related rule that would require them to do the same.

Biden promised to tackle market concentration, an issue his administration could influence without congressional approval. The Democratic platform calls for a retroactive review of some mergers and acquisitions approved by the Trump administration. Biden pledged to aggressively use antitrust authority to tackle market consolidation in healthcare and scrutinize future acquisitions based on impacts on labor markets, low-income communities and racial equity, as well as prices and competition.

Presumptive Vice President Sen. Kamala Harris pursued antitrust enforcement against hospitals during her time as California's attorney general. She effectively blocked a merger between Prime Healthcare and a safety-net health system, refused to relax charity care requirements, pursued more power to upend settled mergers, and opposed the union of two insurance industry giants. But states still have significant discretion over which deals are approved.

The courts will play a starring role in Biden's ability to put his agenda into practice. He'll face a judiciary that's likely to be hostile toward Democrats' healthcare agenda. In addition to the Supreme Court's new 6-3 conservative majority, there are far more conservative appeals court judges now than during President Barack Obama's administration. According to the Pew Research Center, Trump appointed 53—about 30%—of the nation's 179 federal appellate court judges. He appointed another 162—or 24%—of district court judges.

"You already have Republican AGs … pledging that they're going to do what they can to hold a Democratic administration to the fire," Keith said. "A Biden administration should brace itself to have most of what it tries to do challenged in court."

But before Biden takes office, the Trump administration will have to tie up loose ends. Experts said HHS would likely sign off on long-awaited changes to Stark law and anti-kickback regulations, Medicare's outpatient prospective payment rule and 2021 updates to Medicare Advantage and Part D plans, and act on Tennessee's Medicaid block grant waiver, among other regulatory actions. The administration could also rush through a proposed rule requiring HHS to review regulations every 10 years, 2022 notice of benefit and payment parameters or even prescription drug reforms, but experts aren't sure what a lame duck Trump administration might prioritize.

"It's a little frustrating to watch," Keith said. "Are we just going to play pingpong with these executive branch policies every four years?"