Medicare Drug Plan Abuses Obamacare Authority

News of Health and Human Services Secretary Alex Azar’s proposal to link the reimbursement rates for Medicare Part B drugs to the amount paid by European countries has been understandably consumed by the debate of its merits and the politics of attempting its implementation.

But this discussion has thus far ignored an important concern about whether the Center for Medicare and Medicaid Innovation, a “pilot-study” office established by the Affordable Care Act, is the proper means to achieve what is arguably the Trump administration’s most far-reaching change to drug payment policy.

CMMI’s mission, as articulated by the ACA, was to do what was beyond the reach of the executive branch and Congress. That is, to develop and test new approaches to delivering high-quality and less-costly means of providing the care and services to which Medicare and Medicaid beneficiaries are entitled. The CMMI mission was in its name: “Innovation.” Through innovation, CMMI can explore, refine, test, assess both success and failure, and, when ready, propose programmatic reforms to the secretary.

But CMMI’s purpose and structure to facilitate innovation has become a smoke screen for programmatic policymaking unencumbered by congressional or judicial oversight and accountability. Although CMMI’s authority is to conduct studies to evaluate the efficacy of different policy approaches, that authority has often been used to effectuate nationwide policies with mandatory participation — shortcutting the balancing of interests, benefits and costs afforded by traditional administrative and legislative policymaking.

The administration’s new Medicare Part B drug-pricing proposal is further confirmation that CMMI’s innovation authority is being used to subvert the important role of public debate in policymaking. In this instance, CMMI is not being used to experiment in small-scale, low-impact ways to gather data on possible new approaches to reducing the costs of Part B drugs.

Instead, CMMI’s innovation authority is being used to implement policies that are untested and lack a sufficient political mandate to become law otherwise.

The fact that the Trump administration, which has made every effort to repeal the law under which CMMI’s authority rests, would turn to it now is also evidence of the administration’s willingness to make use of a law it disavows to accomplish a political objective that is otherwise unattainable.

Anyone in the health care policy arena can understand the desire to enact change without the complications of politics. But such debates are the time-tested means of resolving the competing interests inherent in an issue like this.

Fostering policy innovation is critically important as the nation confronts the reality of demographic needs and its economic limitations. But transitioning from innovation to programmatic change must be accomplished by careful deliberation and vigorous debate, not by their avoidance.


Bruce Merlin Fried is a partner at Dentons and the former director of the Center for Health Plans and Providers at the Health Care Financing Administration (now the Centers for Medicare and Medicaid Services).

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