National, Federal and State Policy Updates: June 22, 2022
National Policy Update
Spotlight on LGBT Health
In June, the Medicaid and CHIP Payment and Access Commission (MACPAC) released an issue brief on the experiences of LGBT Medicaid beneficiaries in accessing care compared to heterosexual and cisgender individuals. They found that lesbian, gay, and bisexual (LGB) populations had a usual source of care similar to that of heterosexual adults but were more likely to report a mental illness and to not receive treatment. Additionally, 23.2% of LGB adults reported that they delayed medical care due access barriers such as transportation issues compared to 14.7% of heterosexual adults. They were also more likely to report higher rates of substance use disorder and more likely to have received treatment in the last 12 month. For transgendered and gender diverse (genderqueer or non-binary) individuals covered by Medicaid, the study found that they had similar outcomes to those who were uninsured and reported difficulties in finding in-network providers to provide gender-affirming care as well as negative experiences with providers (e.g., being refused gender-affirming care).
Federal Policy Updates
SCOTUS Rules Against HHS in 340B Pricing Dispute
On June 15, the Supreme Court unanimously ruled against a Trump-era decision that set outpatient drug reimbursement rates for 340B hospitals lower than other hospitals. A 2018 final rule had set rates at 77.5% of the average sales price for each drug. 340B groups receive large discounts on drugs which they use to fund care to uninsured, low-income, rural, and disadvantaged populations. The ruling cited that HHS did not conduct a survey of hospitals average drug acquisition costs which would have allowed them to vary reimbursement rates by hospital group in 2018 and 2019. This opinion reverses a District Court decision that the statute precluded judicial review. HHS previously estimated that the rate cut would cost 340B hospitals (and save the government) $1.6 billion each year.
Medicare Trustees Report Projects Financial Outlook for Parts A, B, and D
On June 2, the 2022 Medicare Trustees 2022 report outlined the most recent actuarial estimates of Medicare program funding and estimated that the Part A hospital insurance fund will become insolvent in 2028. Although this prediction is 2 years later than in last year’s report reflecting lower than expected costs in 2021, the report warns that the short and long-term health of each program require immediate policy solutions to address Medicare’s financial challenges. The organization predicts that over the next 5 years the average annual growth rates for Part A spending will grow by 9.2%, outpacing the growth of incomes of 7.2%.
House Passes FDA User Fee Amendment Act
On June 8, the US House of Representatives passed the Food and Drug Amendments Act of 2022 which would reauthorize the agency’s funding for another 5 years through 2027 and is considered must-pass legislation. The bill sets user fee programs that fund the FDA’s work, would require drug developers to create action plans for increasing diversity of clinical trials, inform generic drug applicants of the quality of their product compared to a brand name drug, and establishes requirements for various programs, inspections, and post-approval studies using real world evidence data. The final legislation is likely to contain other bill riders, such as reforms to the accelerated approval program.
FDA Recommends Approval of High-Cost Novel Gene Therapy
On June 10, an FDA committee recommended approval for 2 gene therapy treatments to treat cerebral adrenoleukodystrophy and beta-thalessemia, rare genetic diseases. Despite some instances of serious side effects, treatments were able to eliminate the need for regular blood transfusions in 90% of Phase 3 patients for beti-cel. There are only a small number of approved gene therapies currently on market and can cost over $2 million for a course of treatment, but so far have promising results for durable and long-lasting cures for serious genetic disorders in pediatric patients. Insurers have responded by setting strict prior authorization limits, requiring administration at a center of excellence, and exploring novel financing mechanisms such as outcomes-based contracts, reinsurance pools, and stop-loss programs.
State Policy Updates
NM Governor Creates Prescription Drug Pricing Task Force
On June 9, NM Gov. Lujan Grisham signed an executive order creating a task force to identify ways to expand access and increase the affordability of medications. The group will be composed of an insurance commissioner, a licensed physician, a pharmacist, a patient advocate, and a health insurance professional who will advise the governor on addressing drug prices. NM is one of handful of growing states with a proposal for drug importation from Canada and has also passed legislation capping out-of-pocket costs for insulin.
NC Considers Medicaid Expansion and Related Policy Proposals
NC is considering multiple bills related to healthcare after the House passed HB 470 to expand the state’s Medicaid program in April. The expansion would be funded through assessments on hospitals who benefit from reducing the number of uninsured individuals receiving care. However, another bill, “Expanding Access to Healthcare in North Carolina” HB 149, would require additional healthcare reforms for Medicaid expansion including controversial work requirements, broadening the scope of practice of advanced practice register nurses, as well as certain surprise billing reforms. This more extensive bill recently passed the state Senate on June 1 and now requires reconciliation with the House version.
Two polls on consumer experiences of healthcare show difficulties with foregoing treatment due to costs and the affordability of insurance coverage.
The first poll from Gallup asked Americans about their views of the American healthcare system. Highlights of the report include that 48% of Americans say their view of the healthcare system worsened because of the COVID-19 pandemic, 30% didn’t seek treatment in the past 3 months, and 71% reported that they pay too much for the quality of the care that they receive. Gallup estimates that 12.7 million Americans know a friend or family member who died because they could not afford treatment.
Another poll from Consumers for Quality Care asked Americans about their healthcare cost concerns in 2022. Respondents ranked out-of-pocket costs as the biggest issue in healthcare today (45%), with a lack of coverage in second (18%). The majority of respondents also said that the amount of healthcare costs seems to be increasing each year (80%), while 60% said that they have skipped or delayed treatment because of concerns about out-of-pocket costs.
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