MODERN HEALTHCARE: Hello, Michael Brady. How are you doing?
MICHAEL BRADY: I’m doing well, Kadesha. Thanks for having me today.
MODERN HEALTHCARE: There’s a lot going on. We are pretty much at the 100th day of the Biden/Harris administration, and we’re going to talk to you about recapping some things that have happened, some things that will happen. But before we start our discussion, I want to just share 3 data points before we get into our questions.
In the first months of his presidency, President Biden signed the American rescue plan, a $1.9 trillion plan to support the nation’s recovery from COVID-19. The second thing is that $145 million of the American rescue plan is going to community-based healthcare that provides care to underserved populations — almost two-thirds of which are racial or ethnic minorities. And as of April 20th, nearly 212 million doses of the COVID-19 vaccine have been administered in the US, and more than half of adults have gotten at least one dose.
So, that’s kind of where we are now. For President Biden’s first month in office, it consisted of several executive actions related to COVID-19. What would you say are the top 3 healthcare policy issues that the White House has addressed in these first 100 days?
MICHAEL BRADY: I think it depends on what you care about because the Biden administration hasn’t issued many new rules that would significantly affect the healthcare industry. Most of the new rules have been largely controversial and include modest updates to Medicare payment rules like those for SNFs (skilled nursing facility) and in-patient rehab facilities. But HHS and CMS have pushed through some policy changes that could have some sizable effects.
So, they started to pull back on some Trump administration initiatives — especially those related to the Medicaid program, like work requirements and block grants. They also pulled Texas’ waiver to provide funding for uncompensated care, which many people saw as an end run around Medicaid expansion. They paused the Medicare Drug Rebate rule and cuts to health centers’ 340B drug discounts. And paused or reworked several experimental payment models from the CMS Innovation Center, like direct contracting.
But I think the biggest thing they’ve done since taking office — certainly the highest-profile, in my opinion — is the new special enrollment period, which runs through August 15th. And additional funding for the ACA exchange navigators. Since both of those things should have a sizable impact on coverage — I think we've got more than half a million people who have enrolled in coverage through the special enrollment period. And we should see that number continue to climb through most of the summer. And you could probably also expect those navigators to help boost enrollment during the next open enrollment period at the end of the year, especially if the Biden administration lengthens the open enrollment period.
MODERN HEALTHCARE: So, in what concrete ways does this affect health systems, and how have they navigated these changes?
MICHAEL BRADY: Except for rural providers, hospitals haven’t seen much in the way of new relief funding since Biden took office. His administration is still sort of doling out the existing provider relief funding. We haven’t seen much there, even though that was a top priority for health systems. Providers will get some additional relief because Congress is delaying the Medicare sequester, which would have led to 2% across the board cut to Medicare payments this year. But they could face a larger Medicare cut down the line because of PAYGO (pay as you go) rules — that’s something Congress is going to have to work out. Republicans are concerned about debt deficits, so we’ll have to see exactly how that plays out.
The new temporary increases in Obamacare subsidies should be another boost for coverage enrollments. And there’s also come financial sweeteners for holdout states to expand their Medicaid programs, which could also increase coverage. And that could cut back on some of the uncompensated care costs we’ve seen in a lot of red states that could have a sizable effect.
I think at this point, it seems like most health systems are simply trying to weather the storm of COVID-19 and shift around their resources based on their specific needs. They have different payer mixes, they have different geographies, different rules in their states about what they can and can’t do. And so it really is a case by case basis in terms of how health systems have navigated things.
I think as the policy environment becomes a little clearer and utilization patterns start to normalize a bit more, we’ll see health systems start to refocus their efforts to adapt to whatever the new landscape is. And that’s going to really depend on what the administration does, what Congress does moving forward, and those things are very much in flux right now.
MODERN HEALTHCARE: So, even as we look at what might happen going forward, can you talk about some of the healthcare-related promises that this administration made when they were on the campaign trail but have not yet delivered on?
MICHAEL BRADY: I think in terms of things that are really going to affect the healthcare industry, big things they focused on or wanted to focus on, were expanding coverage which they’ve tried to do and have done with the help of Congress, obviously. And I think lowering drug prices is another big priority for the healthcare agenda — separate aside from all the action around COVID-19, which I think has pushed these other priorities down.
So far, the administration’s focused on coverage expansion using the limited power they have, which is largely around the funding that Congress has appropriated. Trying to make the ACA work as well as they can. For any big changes in terms of coverage, that’s going to require congressional action — realistically the same thing on drug policy. It hasn’t done much on drug policy yet, but that’s probably because they’re waiting for the next CMS administrator to get confirmed. And so we haven’t seen any action on proposals like Most Favored Nation rule and those sorts of things.
MODERN HEALTHCARE: Michael, let’s say you are a health system leader. You’re running a hospital or a network of hospitals — what legislation or rules would you be looking out for this year and over the next 3 years?
MICHAEL BRADY: First and foremost, I would focus on how the Biden administration chooses to enforce the price transparency rules that the Trump administration put in place. To date, there are still many large health systems and probably many smaller systems that aren’t in compliance. The Biden administration recently put out some guidance instructing health insurers to not use special coding to block pricing information from appearing in search results, like on Google. That came after some reports found that hospitals had been posting the information but trying to make it difficult to find — even if they were complying with what seemed to be the letter of the law. Although many of them were only complying with parts of the rules.
So, I’d say if you’re a health system, you really need to be focusing on getting into compliance, probably as a bit of insurance. Because it’s not clear how the Biden administration is going to enforce those rules. The Biden administration is probably going to be a little bit more favorable to providers than the Trump administration was — maybe cut hospitals a break this year on enforcement. But people who are inside the administration are definitely committed to furthering the cause of price transparency, even if they may not be quite as aggressive as the Trump administration was.
The other thing to keep an eye on is what happens with the surprise billing regulations. Congress delegated a lot of the actual rulemaking to the agencies, and so there’s going to be a big fight between providers and insurers about how the dispute resolution process works — because this is really a situation where the devil’s going to be in details. So, from a rulemaking perspective, those are probably the two big things to focus on that are most immediate.
The Biden administration is also probably going to pull back on other Trump administration initiatives like the sunsetting rule, which essentially would review and eliminate old regulations in short order. We’d probably see that change. Something to watch for on the Hill is there are a lot of congressional Democrats that are advocating for more action on drug pricing and coverage. And so, as far as drug price is concerned, there’s a lot of Democrats that want to give Medicare the power to negotiate drug prices.
There’s also members of Congress that are looking to expand some of the temporary ACA subsidies and sweeteners for Medicaid expansion. There’s also folks who would like to see the Medicare eligibility age lowered to 50 years old, not 60 years old, depending on who you talk to. We could see, over the next few years, some significant action on drug pricing and on coverage. But it’s really going to depend on whether that’s something the key players are going to prioritize, and whether Democrats are able to maintain control of Congress through the mid-cycle elections.
MODERN HEALTHCARE: We’ve definitely seen some turnover on the healthcare committees. Is that something we should be paying attention to? If not, are there people you’d recommend health system leaders be keeping an eye on?
MICHAEL BRADY: It’s noteworthy, especially to the extent that Democrats are in control of Congress. But I would say given all of the competing policy priorities of the Biden administration and given the makeup of the Democratic caucus, the things to really focus on are what are Nancy Pelosi and Chuck Schumer prioritizing? Because they are not only trying to get through healthcare legislation, they are also working on a variety of other issues related to economic stimulus, transportation, and infrastructure.
And so there are a lot of different industries that are trying to have their say. And a third person to really look at is Senator Joe Manchin, who is really the swing vote in Congress — especially on some of these issues that are important to healthcare providers and payers. So, whatever appeals to the congressional leadership and Joe Manchin is really going to determine what can make it to Joe Biden’s desk for signature. So, I would focus on those 3 as the key actors.
Having said that, we probably will see some sort of legislation to address issues related to maternal health issues as well as telehealth, and we could also see some smaller drug legislation. Although, I really won’t expect anything major to get through Congress — we’ll see how well that ages.
MODERN HEALTHCARE: Sounds good. Well, thank you so much for giving us this insight.
MICHAEL BRADY: Thanks for having me.
OUTRO COMMENTS: Thank you, Michael Brady, for that insight on the first 100 days of the Biden/Harris administration.
Again, I’m your host, Kadesha Smith, CEO of CareContent. We help health systems reach their growth goals through digital strategy and content.
I invite you to go to modernhealthcare.com to read Michael Brady’s April 19th article on how the US Department of Health and Human Services is allocating money to health centers to fight COVID-19.
And look for more episodes of Next Up at modernhealthcare.com/podcasts, or subscribe at Apple Podcasts, Google Podcasts, or your preferred podcatcher. Thank you so much for listening.