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President-elect Trump named Tom Price and Seema Verma to lead HHS and CMS, respectively. Here’s what you should know about them.
Here’s five things to know.
1. Price has been a strict opponent of the ACA-and will likely work hard to dismantle it.
After campaigning on a “repeal and replace” platform, President-elect Trump indicated that he could be open to preserving some components of the Affordable Care Act. “Most notably the guaranteed issue provision and allowing children to stay on their parents’ insurance to age 26-both of which are more popular provisions with the electorate,” says Greg Maddrey, director and value-based care practice leader, The Chartis Group. “Yet the choice of Price may suggest a more complete dismantling of the ACA than Trump signaled following the election.”
In fact, Price previously introduced legislation to repeal Obamacare. His Empowering Patients First Act (HR2300) legislation fully repeals Obamacare and provides for refundable tax credits for health insurance coverage and health savings accounts.
“[Price] is known for his continued opposition to the ACA since its outset. Of the many critics of the ACA, Price has perhaps gone farther than any in putting a plan on the table for what repeal and replace may entail with his Empowering Patients First Act,” Maddrey says. Price’s Empowering Patients First Act (HR2300) legislation proposes a full repeal to the ACA offering refundable tax credits for health insurance coverage and health savings accounts.
“The legislation Price has proposed would repeal the Affordable Care Act and offer age-adjusted tax credits for Americans to purchase individual health insurance policies,” says David A. Reid, founder and CEO of Easecentral, a cloud-based HR and employee benefits technology platform. “His proposal would focus more on incentives for people to contribute to health savings accounts currently used to minimize risk for high-deductible health plans. The proposal includes grants to states for higher risk populations, and allow insurers to sell specific types of policies in other states where there are currently restrictions.”
The exchanges will likely look very different, as well, according to Reid. “Employer requirements including the employer mandate and IRS reporting will likely be loosened or eliminated altogether,” he says.
Additionally, Price has voiced support for House Speaker Paul Ryan’s A Better Way agenda, which includes many similar elements as the Empowering Patients First Act, but also addresses some additional topics, including Medicare reform.
2. Price could slow the shift to value-at least within Medicare.
“Within Medicare, Price has expressed concerns about the push to value by CMS under the Obama administration, particularly related to issues of timing, mandates and burden on physician practice,” says Maddrey. “We may see a slowing down of the pace of migration to value-based and alternative payment models by CMS, with an emphasis on voluntary vs. mandatory programs, and high degrees of flexibility for physicians. We may also see CMS look to the states and private sector to drive payment and care innovation, rather than the federal government.”
Some “value” proponents have expressed concern about Price’s stances, according to Devon Herrick, PhD, senior fellow at the National Center for Policy Analysis.
“However, I believe Price’s objections have more to do with the top-down management and cumbersome bureaucracy of HHS value-based purchasing initiatives than actual philosophical differences,” Herrick says.
3. Both Price and Verma have firsthand healthcare experience.
Price spent more than 20 years as an orthopedic surgeon in the metro-Atlanta area, according to his website. He also served as an assistant professor at Emory University School of Medicine and medical director of the Orthopedic Clinic at Grady Memorial Hospital in Atlanta, teaching resident physicians in training. He received his bachelor and doctor of medicine degrees from the University of Michigan and completed his orthopedic surgery residency at Emory University.
“He has been a vocal advocate for physicians and we expect that as secretary of HHS. He will continue to consider physicians as a key stakeholder group,” Maddrey says.
Verma is president, CEO and founder of SVC, Inc., a national health policy consulting company. She has worked on a variety of policy and strategic projects involving Medicaid, insurance, and public health, working with governor's offices, state Medicaid agencies, state health departments, state departments of insurance, as well as the federal government, private companies and foundations. She is the architect of the Healthy Indiana Plan 2.0, the nation's first consumer-directed Medicaid program under Governor Mitch Daniels of Indiana and Vice President-elect Mike Pence.
Alan Portela, CEO of AirStrip, veteran mobile healthcare technology company, calls this move “refreshing.”
“I always wondered about the background of previous leaders as their ideas were not aligned with the market needs and their execution demonstrated lack of business experience,” Portela says. “In addition, the appointment of Seema Verma to CMS indicates to me that the two of them will now have much better understanding of the healthcare needs for the underserved population based on their background, and that this will lead to better opportunities for the field of telemedicine since those areas need the technology the most. We have some of the most prestigious medical centers in the world to act as centers of excellence and have the opportunity to bring the best level of care to every citizen regardless of their financial condition and/or where they live.”
4. Price knows how to deal with legislative processes.
According to a blog by John R. Graham, senior fellow at the National Center for Policy Analysis, Price was chairman of the House Budget Committee.
“Especially, he knows the ins and outs of ‘reconciliation,’ the parliamentary procedure which allowed Congress to get an Obamacare repeal bill (H.R. 3762) to President Obama’s desk last year,” Graham wrote. “Reconciliation is a procedure that allows a bill to bypass a Senate filibuster. In the current lame-duck session, Dr. Price has continued to champion reconciliation as the way to maintain momentum on repealing and replacing Obamacare.”
5. Both Price and Verma advocate pushing increased levels of autonomy and authority to the state, particularly as it relates to Medicaid.
“In addition to Price’s perspective, the naming of Seema Verma to lead CMS signals a likely affirmation of this,” Maddrey says. “In addition to Healthy Indiana, she has advised other states on Medicaid reform, including recent work with Kentucky.”
With the Supreme Court decision that made Medicaid expansion to 138% of the Federal Poverty Level (FPL) optional, Maddrey points out that we have already seen a variable experience between those states that expanded Medicaid and those that did not.
“We also have seen a lot of activity through waivers, particularly Section 1115 waivers which provide states with flexibility to design and modify their Medicaid programs granted they meet certain goals such as expanding eligibility, providing services not traditionally covered by Medicaid or using innovative mechanisms to improve value-which could include better quality, lower costs, or more efficient care,” he says. “These waivers must be approved by HHS and be budget neutral. While there are hundreds of waivers in place, some of particular note are the seven states that have opted to pursue Medicaid expansion under a waiver demonstration-including Indiana. Other states are using waivers to test value-based payment, for example DSRIP [Delivery System Reform Incentive Payment] programs.”
While there has been some state flexibility over the past several years, Maddrey believes that the current administration generally has set “guardrails” around who should be covered, what coverage must include (i.e., Essential Health Benefits), and what expectations are for beneficiaries to receive this coverage, including beneficiary cost-sharing and other eligibility requirements.
“For example, while the current administration approved some waiver applications in select states to put cost-sharing in place, for example limited copays in Arizona, the current administration has rejected other proposals such as a five-year coverage limit and work requirements also proposed in Arizona,” Maddrey says. “We anticipate that in the near term, the new administration will continue to use mechanisms such as waivers to support state flexibility-and will likely be more permissive than the current administration has been to allow states to decide who is covered, what is covered and what they require from beneficiaries. As a result, some waiver applications that are pending and may not have been approved under President Obama may go forward under President Trump. For instance, Governor [Matt] Bevin in Kentucky has stated that the election outcome increases the chance that his state’s pending Medicaid waiver application will be approved.”
Also likely to be on the table in the medium- to longer-term is a move to state block grants or per capita spending caps-both mechanisms that would fundamentally restructure how Medicaid is funded, and result in more flexibility, and responsibility, in the hands of states, according to Maddrey.
Reid believes that the nomination of Verma could raise healthcare access concerns.
“The provisions implemented by Verma in the Indiana Medicaid program currently require all recipients of healthcare coverage, including low-income families, to contribute monthly to the cost of healthcare,” he says.
“If payments are missed people are locked out of coverage for a 6-month period of time. These proposals could make it harder for people to receive healthcare when they need it. Funding of state Medicaid programs by the federal government would likely include changes, giving states more flexibility to how they can spend federal money. As the head of the CMS, Verma would also be responsible for Medicare and could likely lead to big changes with the Medicare program," Reid says.