Marilyn Singleton, MD, JD wraps up Congress’ 2017—and looks at what’s ahead for early-2018—in her last legislative update of the year.
All eyes over the last several weeks have been on tax reform. The Tax Cuts and Jobs Act is now signed into law and will take effect on January 1, 2018. Nevertheless, some specifically health-related bills were offered at year’s end. The language in the Alexander-Murray Health Care Stabilization Act proposal (below) was apparently an inducement for Sen. Susan Collins to vote for the tax reform bill.
On December 20, 2017, H.R. 4695, the Bipartisan Market Stabilization and Innovation Act of 2017, was introduced by Rep. Kurt Schrader (D-OR) and referred to House Energy and Commerce and Ways and Means Committees. This bill sets forth language similar to the Senators Lamar Alexander (R-TN) and Patty Murray (D-WA) proposal from October 2017. This proposal makes changes to the Affordable Care Act’s state “innovation waivers” and (1) requires states to “provide coverage and cost sharing protections against excessive out-of-pocket spending that are of comparable affordability, including for low-income people, people with serious health needs, and other vulnerable populations;” (2) States will certify that plans receiving cost sharing reduction subsidies in 2018 pass those benefits on to enrollees or the federal government, and a plan for doing so. This is intended to prevent double-dipping by insurers that charged higher premiums in 2018 in anticipation of not receiving the CSR payments; (3) requires HHS to release guidance on model state plans that meet waiver approval requirements. (Example: a state plan to create a reinsurance program or high risk pool.)
The House bill would amend the Patient Protection and Affordable Care Act to provide for stabilization in the individual health insurance market by (1) using any unappropriated funds in the Treasury to continue the cost-sharing subsidies through 2018, and (2) creating and “Patient and State Stability Fund” administered by the Secretary of Health and Human Services, with $11,500,000,000 per year from 2019 through 2028.
- States may use the Stability funds to (1) provide financial assistance to high risk individuals; (2) provide incentives for insurers to enter state marketplaces; (3) reduce the cost for providing health insurance coverage in the individual market and small group market to individuals who have, or are projected to have, a high rate of utilization of health services (as measured by cost) and to individuals who have high costs of health insurance coverage due to the low density population of the State in which they reside; (4) provide assistance to reduce out-of-pocket costs, such as copayments, coinsurance, premiums, and deductibles, of individuals enrolled in health insurance coverage.
- The bill requires HHS in consultation with the National Association of Insurance Commissioners, to issue regulations for the implementation of health care choice compacts established under section 1333 of the ACA.
- The bill repeals the ACA’s medical device tax.
- The bill also adjusts the PPACA’s employer mandate to change the definition of large employer from 50 to 500 and increase the hours required to qualify as a full-time employee from 30 to 40.
Relevant text of PPACA: https://www.law.cornell.edu/uscode/text/42/18071.
Save Direct Primary Care!
Just a reminder about HR 365, the Primary Care Enhancement Act of 2017 introduced by Rep. Erik Paulsen (R-MN) back in January. This same bill was introduced in 2016 and never came to a vote.
This bill amends the Internal Revenue Code to: (1) permit an individual to pay primary care service arrangement costs from a health savings account; and (2) allow an eligible taxpayer enrolled in a high-deductible health plan to take a tax deduction for cash paid into a health savings account, even if the taxpayer is simultaneously enrolled in a primary care service arrangement.
Under a “primary care service arrangement,” an individual is provided coverage restricted to primary care services in exchange for a fixed periodic fee or payment for such services.
For the purposes of certain tax-deductible expenses for medical care, the bill expands the definition of “medical care” to include periodic provider fees paid to a primary care physician for a defined set of medical services provided on an as-needed basis.
The companion Senate Bill to HR 365 is S 1358.
Action Alert: Ask Congress to Include HR 365 in appropriations or extender legislation to be considered early in 2018 – http://eepurl.com/de7v4j
Health Care Sharing Ministries and the IRS
On November 21, 2017, H.R. 4456, the Health Care Sharing Fairness Act was introduced by Rep. Brian Babin (R-TX) and referred to the House Ways and Means Committee. The bill would amend the Internal Revenue Code of 1986 to allow the self-employed medical expense deduction to include for amounts paid for medical expenses to a health care sharing ministry.
Liberalized Rules on Medicare Contracting
On October 25, 2017, H.R. 4133, the Medicare Patient Empowerment Act of 2017 was introduced by Rep. Pete Sessions (R-TX) and referred to the House Energy and Commerce and Ways and Means Committees. The bill defines the parameters for freedom of choice of, and contracting for health services for Medicare beneficiaries.
(1) Freedom of choice: any individual entitled to Medicare may obtain health services from any institution, agency, or person qualified to participate in the Medicare program if such institution, agency, or person provides that individual such services.
(2) Freedom to contract by Medicare beneficiaries: subject to the conditions below, any Medicare beneficiary may enter into a contract with an eligible professional (includes all physicians) – whether or not the professional is a participating or non-participating physician or practitioner) for any covered item or service.
(a) Claims submission: the beneficiary may submit the claim for payment for services; the payment would be the amount that the practitioner would have received from Medicare at the participating physician rates. Payment made for any item or service provided under the contract shall not render the professional a participating or non-participating physician or practitioner.
(b) Beneficiary protections:
(i) the contract must be in writing, signed by the Medicare beneficiary and the eligible professional, and establishes all terms of the contract (including specific payment for items and services covered by the contract) before any item or service is provided pursuant to the contract, and the beneficiary shall be held harmless for any subsequent payment charged for an item or service in excess of the amount established under the contract during the period the contract is in effect;
(ii) the contract contains the items: (a) the beneficiary agrees to be responsible for payment to such eligible professional for such items or services under the terms of and amounts established under the contract; (b) the beneficiary agrees to be responsible for submitting claims to Medicare and to supplemental insurance (if any); and (c) the beneficiary acknowledges that no limits or other payment incentives that may otherwise apply under Medicare would apply.
(iii) the contract is not entered into at a time when the Medicare beneficiary is facing an emergency medical condition or urgent health care situation.
(a) Emergency medical condition: a medical condition manifesting itself by acute symptoms of sufficient severity (including severe pain) such that a prudent layperson, with an average knowledge of health and medicine, could reasonably expect the absence of immediate medical attention to result in serious jeopardy to the health of the individual; serious impairment to bodily functions; or serious dysfunction of any bodily organ or part.
(b) Urgent health care situation: individual requires services to be furnished within 12 hours in order to avoid the likely onset of an emergency medical condition.
(iv) the contract shall clearly indicate whether the eligible professional is excluded from participation under the Medicare program.
(c) Beneficiary elections under the contract: the beneficiary may negotiate as a term of the contract that (i) the professional files claims on his behalf with Medicare and supplemental insurance company (if any) and (ii) the beneficiary assigns payment to the eligible professional for any claims filed by, or on behalf of, the beneficiary.
More Chipping Away at the ACA
Medical Device Tax Moratorium
On December 12, 2017, H.R. 4617 was introduced by Rep. Erik Paulsen (R-MN) and referred to the House Ways and Means Committee.
This bill amends the Internal Revenue Code to extend through 2022 the moratorium on the excise tax on the sale of certain medical devices. (Under current law, the moratorium applies to sales during the period beginning on January 1, 2016, and ending on December 31, 2017.)
Elimination of Annual Fee on Health Insurers (temporary)
On December 12, 2017, H.R. 4620, the Protecting Families and Small Businesses Act of 2017 was introduced by Rep. Kristi Noem (R-SD) and referred to the House Energy and Commerce and Ways and Means Committees. The bill would amend the Patient Protection and Affordable Care Act to provide temporary relief from the annual fee imposed on health insurance providers.
Restoring Over-the-Counter Medications to HSA Eligibility (temporary)
On December 12, 2017, H.R. 4618 was introduced by Rep. Lynn Jenkins (R-KS) and referred to the House Ways and Means Committee. This bill amends the Internal Revenue Code to temporarily permit tax-favored health savings accounts, Archer Medical Savings Accounts, health flexible spending arrangements, and health reimbursement arrangements to be used to purchase over-the-counter medicine that is not prescribed by a physician. The bill applies during the period beginning on January 1, 2018, and ending on December 31, 2019.
Moratorium on Employer Mandate and Cadillac Plan tax
On December 12, 2017, H.R. 4616 was introduced by Rep. Devin Nunes (R-CA) and referred to the House Ways and Means Committee. The bill would amend the Patient Protection and Affordable Care Act to provide for a temporary moratorium on the employer mandate until January 1, 2019 and to provide for a delay in the implementation of the excise tax on high cost employer-sponsored health coverage until December 31, 2020. Of course, the new Tax Cuts and Jobs Act zeroed out the ACA’s individual mandate.
Direct-to-Consumer Pharmaceuticals Marketing
On November 16, 2017 S. 2157, the Drug-Price Transparency in Communications Act was introduced by Sen. Richard Durbin (D-IL) and referred to the Senate Health, Education, Labor and Pensions Committee. The bill would require drug manufacturers to disclose the prices of prescription drugs in any direct-to-consumer advertising and marketing to practitioners of a drug. The congressional findings are noteworthy:
(1) Direct-to-consumer advertising of prescription pharmaceuticals is legal in only two developed countries, the United States and New Zealand.
(2) Direct-to-consumer advertising of prescription pharmaceuticals is designed to cause patients to pressure physicians to prescribe certain medications.
(3) In 2015, pharmaceutical companies spent more than $100,000,000 on advertising with respect to each of 16 brand-name drugs, primarily new and expensive drugs.
(4) Prescription rates of medications advertised directly to consumers have increased by 34.2 percent compared to a 5.1 percent increase in other pharmaceuticals.
(5) Prescription pharmaceuticals cost more in the United States than they do in any other country.
(6) The American Medical Association has passed resolutions calling for the ban of direct-to-consumer advertising of prescription pharmaceuticals, and to require price transparency in any direct-to-consumer advertising.
(7) The amount of spending by pharmaceutical companies in marketing to health care providers is more than 4 times the spending for direct-to-consumer advertising.
(8) Health care providers are more likely to prescribe a certain drug if they have received payments or marketing materials from the manufacturer of that drug.
Saving Opiate Use in Emergencies
On November 3, 2017, H.R. 304, the Protecting Patient Access to Emergency Medications Act of 2017 passed Congress. The bill amends the Controlled Substances Act to ensure that paramedics and other emergency medical services (EMS) professionals are able to continue to administer controlled substances, such as pain narcotics and anti-seizure medications, pursuant to standing or verbal orders when authorized by State law. Further, the bill specifies that EMS agencies are permitted to have one DEA registration, rather than having separate registrations for each EMS location, so long as certain requirements are met relating to the transportation and storage of controlled substances are met.