Health Brief: Senate GOP Considers More Funding for States With Low Medicaid Costs

Washington Brief

  • Senate Republicans may provide higher federal funding to states with low Medicaid costs in their health care bill, as they mull how to equitably treat states that chose to expand the program under the Affordable Care Act and those that declined it. (Roll Call)
  • Letting states opt out of Obamacare’s essential health benefits requirement could prompt a return of annual and lifetime benefit limits, which are banned under the 2010 law. As many as 27 million Americans could face annual limits on their coverage, and 20 million could be hit with lifetime limits, according to an analysis by the liberal Center for American Progress. (Axios)
  • Liberal activists momentarily paused their fight against the GOP’s push to repeal Obamacare in the wake of the mass shooting that wounded House Majority Whip Steve Scalise, postponing events and limiting their social media presence. (Politico)

Business Brief

  • A bipartisan group of state attorneys general is probing how drug manufacturers market prescription pain killers and the causes of widespread opioid addiction. The investigation involves a majority of U.S. states, and is another sign of growing pressure on the pharmaceutical industry. (The Wall Street Journal)
  • Google and Swiss drugmaker Novartis are investing in a $300 million fund run by life sciences investment firm Medicxi. The fund will back European biotech companies that specialize in late-stage drug development. (Reuters)
  • China’s biotech industry is booming thanks to bountiful investments and loosening regulations. Investors and entrepreneurs say Chinese biotech business could one day rival its Western counterparts. (Stat News)

Chart Review

Events Calendar (All Times Local)

NIH research conference on best practices 8 a.m.
Bloomberg Law event on the ACA 8:30 a.m.
Senate Appropriations subcommittee hearing on HHS budget request 10 a.m.
No events scheduled



GOP Health Care Law Could Cost Nearly 1 Million Jobs, Report Finds
Maggie Fox, NBC News

The American Health Care Act, the GOP’s answer to Obamacare, could end up costing the U.S. economy close to 1 million jobs, researchers predicted Wednesday. The bill, if passed as written by the House of Representatives, would start out boosting jobs and increasing economic output because it would cut taxes, the team at George Washington and The Commonwealth Fund found.

In GOP health care struggle, it’s senator vs. senator
Paul Kane, The Washington Post

Here’s one unique, easy-to-grasp way to understand the continued gridlock among Senate Republicans on how to change the health-care industry: Each senator is trying to get the best deal for his or her state. It’s a somewhat obvious observation, because that’s what happens in most congressional debates.

Dems request review of whether Health Department tweets broke law
Peter Sullivan, The Hill

Congressional Democrats are requesting an investigation of whether the Department of Health and Human Services (HHS) under President Trump has been violating the law by advocating for the passage of legislation on its Twitter accounts. The Democrats, in a letter to the head of the nonpartisan Government Accountability Office, point to messages on the official HHS Twitter feed calling for the passage of the Republican bill to repeal and replace ObamaCare, known as the American Health Care Act.

Liberals ease up on health care fight — for a moment
Elana Schor, Politico

Liberal activists on Wednesday hit pause on their all-out battle to thwart Republicans trying to fast track an Obamacare repeal-and-replace plan through the Senate. But Democratic lawmakers and outside groups say the mass shooting that wounded House Majority Whip Steve Scalise can’t slow down the overall effort.

VA warns of surprise budget gap, insists no delays in care
Hope Yen, The Associated Press

In a surprising revelation, the Department of Veterans Affairs says a program that offers veterans private-sector health care will run out of money much sooner than expected. It is holding back on some services that lawmakers worry could cause delays in medical treatment.

U.S. Index Futures Signal Stock Losses Amid Trump Probe Concern
Lisa Pham, Bloomberg News

U.S. stock-index futures fell, signaling stock declines for a second session, after a report the probe into Russia’s interference in the 2016 election may include examining President Donald Trump’s conduct. S&P 500 contracts expiring in September dropped 0.6 percent at 6:11 a.m. in New York, while those on the Dow Jones Industrial Average declined 0.3 percent.


Republicans Weigh Higher Medicaid Growth Rate for Some States
Joe Williams and Kerry Young, CQ Roll Call

Senate Republicans may provide higher federal funding to states with low Medicaid costs in their health care bill. The proposal under consideration gets to the heart of a key sticking point in the ongoing GOP discussions to overhaul the U.S. health care system: how to equitably treat states with drastically different Medicaid spending levels.

Who could lose from state health benefit limits
David Nather, Axios

The Senate health care bill is expected to allow states to relax the Affordable Care Act rules only on benefits, not on pricing as the House bill does. But that change could impact people far beyond those states, according to a new analysis by the liberal Center for American Progress — because it could lead to a return of annual and lifetime benefit limits, and not just in the states with the waivers.

Gov’t report: Health care deductibles higher under GOP bill
Ricardo Alonso-Zaldivar, The Associated Press

President Donald Trump promised to make health care more affordable but a government report finds that out-of-pocket costs — deductibles and copayments — would average 61 percent higher under the House Republican bill. And even though the sticker price for premiums would be lower than under the Obama-era law, what consumers actually pay would edge up on average because government financial assistance would be curtailed.

Cigna leads $50 million round in Omada Health
Bob Herman, Axios

Omada Health has raised $50 million in a new funding round that was led by health insurer Cigna, the company said Wednesday. A handful of prior investors also participated, including Andreessen Horowitz and the venture capital arms of Humana, Kaiser Permanente and Providence Health & Services.

Democrats introduce bill to bring back reinsurance in individual market
Mara Lee, Modern Healthcare

Four Democratic senators have introduced a bill that would make reinsurance a permanent part of the Affordable Care Act’s individual exchanges. The bill, introduced Wednesday and led by Senators Tim Kaine of Virginia and Tom Carper of Delaware, would provide federal funding to cover 80% of claims from $50,000 to $500,000, starting next year, with the same level of support through 2020.

Lawsuit Filed Over Iowa’s Switch to Privately Run Medicaid
The Associated Press

A new lawsuit says Iowa’s privately run Medicaid program is violating federal laws and a U.S. Supreme Court decision declaring that disabled Americans have a right to live as independently as possible. The federal lawsuit filed Tuesday by six Iowans named Gov. Kim Reynolds and the state Human Services Department director.

Medicaid Cuts In Wisconsin Would Undermine Training For Adults With Disabilities
Alison Kodjak, NPR News

It’s morning meeting time at Our Place Day Services, a day center for adults with disabilities, housed in a small concrete and glass building on Lovers Lane in Slinger, Wis. About 30 people are gathered here, around a long table, reciting the pledge of allegiance.

The march of rising healthcare costs has slowed, but it’s still unsustainable
Alex Kacik, Modern Healthcare

While the era of double-digit growth in healthcare costs seems to have ended, the “new normal” pace of around 6% to 7% a year is still unsustainable, according to a new study. PricewaterhouseCoopers Health Research Institute projected that medical costs in 2018 will increase by 6.5% from 2017. Insurers use the annual cost growth rate as a benchmark to help set premiums.


Medicare clears Dana-Farber Cancer Institute
Bob Herman, Axios

The Centers for Medicare and Medicaid Services will not terminate Dana-Farber Cancer Institute from the Medicare program, according to a June 12 letter obtained by Axios. We reported in March that the federal agency threatened to cut off Medicare funding for the Boston-based cancer hospital after discovering Dana-Farber inappropriately relied on the adjacent Brigham and Women’s Hospital to handle many day-to-day functions.

Pharma, Biotech and Devices

States Launch Bipartisan Probe of Opioid Marketing and Addiction
Sara Randazzo and Jeanne Whalen, The Wall Street Journal

A bipartisan group of state attorneys general is jointly investigating the marketing of prescription painkillers and the causes of widespread opioid addiction, according to people familiar with the matter, in another sign of growing pressure on the pharmaceutical industry. The probe, which includes a majority of U.S. states, is expected to be publicly announced in the coming days, the people said.

Google bets on European biotech drugs, backs new fund
Ben Hirschler, Reuters

Google is betting on the potential of European biotech companies to deliver life-changing drugs by investing alongside Swiss company Novartis (NOVN.S) in a new $300 million fund run by leading life sciences investment firm Medicxi. The move shows Google casting an increasingly wide net as it pumps cash into global medical research, seeding what it believes will become a core long-term healthcare business.

China rises as a biotech powerhouse, developing drugs to treat the world
Damian Garde, Stat News

Biotech once looked to China for cheap labor. It may soon find mounting competition instead.

Widow Unleashes Court Fight Against Scope Maker Olympus Over Superbug Outbreak
Chad Terhune and JoNel Aleccia, Kaiser Health News

Three executives from Japan loom large in a cramped courtroom here — at least their photos do, mounted on a white poster board propped in front of the jury. “They were the key decision-makers,” one attorney said during opening arguments to a lawsuit brought by a local widow against a giant Tokyo-based medical device maker.

Lawmakers ask U.S. Army to hold a hearing on Zika vaccine licensing
Ed Silverman, Stat News

A group of Florida lawmakers is urging the U.S. Army to hold a hearing on its plan to give Sanofi an exclusive license to develop a Zika virus vaccine, a move that has raised concerns the product may be priced too high for many Americans, even though it was developed with taxpayer funds. In a June 13 letter, eight U.S. House Democrats and one Republican expressed concern about the “potential for monopolistic practices that would, effectively, keep this life-saving vaccine out of reach for far too many of our constituents.”

Health IT

Mistaken EHR incentive payments may have been unavoidable
Rachel Z. Arndt, Modern Healthcare

After it was announced that the CMS potentially made mistaken payments to providers for meaningful use, healthcare policy advisers questioned the agency’s oversight capabilities. But some wondered whether the overpayments, which totaled an estimated 12% of incentive payments, may have just been the price of doing business.

Hospitals overpay for health IT when systems don’t connect
Paige Minemyer, Fierce Healthcare

Healthcare organizations can end up significantly overpaying for new healthcare technologies when they don’t have integrated systems such as electronic health records, according to experts at Johns Hopkins. The U.S. spends more on health IT than many other countries.

A Message from PhRMA:

Investigation led by former FBI Director Louis Freeh concludes: “drug importation proposals would do nothing but shift the costs and burden to law enforcement and open up the U.S. drug supply to adulterated and counterfeit drugs.” Read the full report.

Opinions, Editorials and Perspectives

Once Upon a Time … Bipartisanship and Health Care Weren’t Dirty Words
Ipsita Smolinski, Morning Consult 

There was a time when lawmakers of opposing parties not only worked together, but also got along. They shared meals and got to know family members. And this was good for business.

ObamaCare’s ‘Secret’ History
The Editorial Board, The Wall Street Journal

Senate Republicans continue to negotiate the details of their health-care reform, and one measure of progress is that their opponents are more manic and disingenuous. Progressives who used to deride the GOP for incompetence are now panicked that they may really succeed, and thus the faux tantrums.

Medicare Could Learn a Thing or Two From the VA
Walid F. Gellad, The Wall Street Journal

Everyone agrees prescription drugs are too expensive, but what to do about it? One popular idea—supported in the past by President Trump, and by 80% of the public in some polls—is for Medicare to negotiate lower drug prices directly.

To Survive, Health Care Data Providers Need to Stop Selling Data
Harsha Madannavar, Harvard Business Review

Most data-driven healthcare IT (HCIT) providers aren’t going to survive. Their business models are at serious risk of failure in the next three to five years. To beat those odds, they need to evolve dramatically, and fast, to a point where they are not selling data at all.

The Senate’s secret health care talks are the latest slide away from transparency. I’m a witness
Julie Rovner, Kaiser Health News

Congress struggling to finish a huge budget reconciliation bill. A GOP president pushing a major overhaul of federal payments for health insurance that could transform the lives of sick patients.

A Message from PhRMA:

Did you know?  Importation is contrary to free market principles that drive American innovation. It would cede U.S. sovereignty to other countries and import harmful price controls. Get the facts.

Research Reports

The American Health Care Act: Economic and Employment Consequences for States
Leighton Ku et al., The Commonwealth Fund

The American Health Care Act (AHCA), passed by the U.S. House of Representatives, would repeal and replace the Affordable Care Act. The Congressional Budget Office indicates that the AHCA could increase the number of uninsured by 23 million by 2026.

The Emerging Senate Repeal Bill Eviscerates Protections for Millions in Employer Plans Nationwide
Topher Spiro and Emily Gee, The Center for American Progress

This week Axios reported that the emerging Senate bill to repeal the Affordable Care Act (ACA) will allow states to waive coverage of essential health benefits for small employer and individually purchased plans. In waiver states, this cut in benefits would be catastrophic for people who are sick or have a pre-existing condition and need prescription drugs, treatment for opioid addiction, or other services that could be excluded.

Medical Cost Trend
PwC’s Health Research Institute

PwC’s Health Research Institute (HRI) annually projects the growth of medical costs in the employer insurance market for the coming year and identifies the leading factors expected to impact the trend. Heading into 2018, the healthcare industry appears to be settling into a “new normal” marked by more moderate fluctuations in a single-digit medical cost trend.