Health Policy Snapshot: July 2023

Greg Chesmore
July 07, 2023

State Medicaid programs struggle with post-PHE redetermination process; Estimated 1.6M already disenrolled
With the end of the COVID-19 Public Health Emergency (PHE) in May, state Medicaid officials have begun the enormous task of redetermining who is eligible for Medicaid health coverage and who no longer qualifies. According to the Kaiser Family Foundation (KFF), more than 21 million Americans were added to the Medicaid rolls during the pandemic due in large part to the temporary continuous enrollment provision created by the Families First Coronavirus Response Act (FFCRA) in March of 2020. Under the continuous enrollment provision, states generally could not disenroll Medicaid enrollees while the provision was still in effect and in exchange, states received a temporary increase in the federal Medicaid match rate.  With the end of the PHE, the increased match rate began to be phased out in March, with an end date in December. States were allowed to begin disenrollments of ineligible recipients in April. The federal Centers for Medicare & Medicaid Services (CMS) is sounding the alarm that many Americans are losing Medicaid coverage during the state redetermination process, even though they are still eligible. Early estimates are that more than 1.6 million Americans have already lost Medicaid coverage through redetermination process, with about 140,000 losing coverage in Arkansas alone.  CMS and Medicaid advocates believe most current Medicaid enrollees are unaware that they may lose coverage, meaning notifications of the need to reapply for coverage are not reaching many recipients.  CMS is encouraging states to slow the process down and threatening enforcement actions if the numbers of inaccurate disenrollments continue to rise.  In addition to Arkansas, other states have also reported large numbers of disenrollments, including more than 100,000 in South Carolina and almost 250,000 in Florida.  The Kaiser Family Foundation launched a Medicaid Enrollment and Unwinding Tracker.  KFF claims about 70% of disenrollments reported thus far were for “procedural reasons”.

Taking them to Court: Four lawsuits filed against the Inflation Reduction Act (IRA) as pivotal September 1 date looms
The fight over implementation of the Biden Administration’s signature legislative accomplishment, which includes major changes in how the government will pay for prescription drugs, moved to the courts in June as four lawsuits were filed against the Department of Health & Human Services (HHS), seeking to delay or stop the law. The U.S. Chamber of Commerce, the biopharma industry trade association PhRMA and pharmaceutical companies Bristol Myers Squibb and Merck all filed separate lawsuits in different jurisdictions challenging various provisions within the IRA.  Generally, the plaintiffs argue that the statute includes no requirement for checks and balances through public feedback and cuts off administrative and judicial review, violating the Constitution’s separation of power and due process clauses. Additionally, they claim the IRA includes an extreme excise ‘tax’ to force manufacturer compliance with the government mandated price that is disproportionate to the purported offense making it an excessive fine prohibited by the Eighth Amendment. Taken together, PhRMA argued in a statement, “…these claims clearly demonstrate the price setting provisions should be declared unconstitutional.” The U.S. Chamber of Commerce launched a webpage explaining why it was challenging the government’s efforts at “price controls.” President Biden immediately fired back with a tweet, stating ““The Pharma lobby is upset that I’m forcing them to bring prices down. And to that I say: Bring it on.” None of the lawsuits ask for a preliminary injunction to delay implementation and CMS remains committed to publishing the list of 10 prescription drugs which will be the first batch for which the government plans to negotiate prices on September 1, 2023.  CMS seems to at least taken some of the complaints in the lawsuits seriously, as it published revised guidance on the Medicare Drug Price Negotiation program on June 30 (after all four lawsuits were filed).  In the revised guidance, the agency made small changes to its proposed guidance it issued several weeks ago.  PhRMA and other plaintiffs remained unmoved, saying CMS “doubled down on bad policy”. PhRMA’s statement on the revised guidance is found here.

…Meanwhile, Senate Democrats push for more prescription drug price controls
While the Biden Administration and the biopharmaceutical and business communities battle it out in court, Senate Democrats, led by Sens. Bernie Sanders (VT) and Amy Klobuchar (MN) introduced legislation to require Medicare to pay no more for prescription drugs than the U.S. Department of Veterans Affairs (VA), a move they claim will save Medicare more than $835 billion over the next 10 years.  Sanders, who also chairs the powerful Senate Health, Education, Labor & Pensions Committee (HELP), released a report in mid-June that claims Americans pay higher prices for drugs developed with research assistance from the National Institutes of Health (NIH) than people in other countries pay, calling for legislation to establish a “reasonable pricing clause” for any such drugs developed and commercialized.  He has also threatened the Biden Administration that he will not move any current or future health agency nominees forward for confirmation until the Administration develops a more “comprehensive” plan on lowering drug prices. In April, Senate Democrats, led by Klobuchar, Peter Welch (VT) and Tammy Baldwin (WI) introduced the Strengthening Medicare and Reducing Taxpayers (SMART) Prices Act, which would expand the authority HHS has to negotiate drugs in Medicare Part D, beyond what is included in the IRA, moving the timeline for implementation forward and expanding the number of drugs eligible for negotiation. Critics immediately pounced on the SMART Prices Act, including University of Chicago economist Tomas Philipson who called the proposal “deeply stupid” in an op-ed that appeared in The Hill.  Philipson said the SMART Prices Act would make even fewer therapies available for debilitating diseases and conditions, ultimately increasing the cost of health care in the United States.

The Great Vaccine Debate: Should I, how many and when?
With influenza season right around the corner, the federal government is debating whether to issue new guidelines to encourage vaccines and, hopefully, stop another “tripledemic” this winter.  The “tripledemic” refers to surges in COVID-19, influenza and RSV.  With newly approved RSV vaccines, officials are debating whether to encourage people to get a COVID-19 booster, a flu shot and a RSV vaccine, whether to get them all at the same time or stagger them and which vulnerable communities to prioritize.  Experts have a wide variety of viewpoints on the topic, as The New York Times discussed this week, but the bottom line: Talk to your physician to develop the best game plan to maximize protection. In other vaccine news, HHS issued guidance in late June requiring state Medicaid and Children’s Health Insurance Programs to cover adult vaccines recommended by the Advisory Committee on Immunization Practices and their administration without cost sharing beginning October 1, 2023.  HHS also issued a Fact Sheet outlining the new adult vaccine coverage requirement.

Learn more about Gridiron Public Affairs by listening to the “House Call” podcast sponsored by Affinity Strategies. Greg Chesmore, Gridiron’s CEO, discussed strategies for shaping health care policy with host Claire Vincent.