Medicare crunch time with Trump administration, Part II

Last month when I wrote about a Medicare crunch time, I had no idea how true that column would turn out to be.

I said then that the long-term care industry could expect intensified attention by Washington policymakers to the need to reign in avoidable hospital admissions from skilled nursing facilities. Today, however, that same headline could be used – except in a much broader, more sweeping context.

With the election of Donald Trump and continued GOP majorities in both the House and Senate, it is becoming clear that the Medicare program itself is in for major overhaul and that the impact on the long-term care industry will most certainly be felt. The only real question is: How will this play out?

Trump repeatedly stated during his campaign for presidency he would preserve Social Security, Medicare and Medicaid even as the Affordable Care Act (ACA) is “repealed and replaced.” However, Republican lawmakers are developing legislative language behind closed doors that would drastically change Medicare for future beneficiaries.

House Ways and Means Chairman Kevin Brady, R-Texas, told CQ Roll Call in a mid-November interview he and his staff were drafting legislative text to address Medicare changes in the next Congress. His comments came as House Budget Committee Chairman Tom Price, R-Ga., laid out a goal of restructuring Medicare in 2017. Trump has appointed Price to lead the U.S. Department of Health and Human Services.

A Better Way?

Brady says he will work to follow the Better Way plan announced last year by Speaker Paul D. Ryan, R-Wis., that maps out the Republican alternative to the ACA. The plan calls for changes to Medicare and Medicare long favored by GOP policymakers, including the so-called premium support. Under that scheme, seniors would receive a set amount of money to purchase coverage either from Medicare or a private plan. The eligibility age would also be increased from 65 to 67.

Two days after Election Day, Ryan was asked in an interview with Fox News about “entitlement reform.” His response:

“What people don’t realize is that Medicare is going broke, that Medicare is going to have price controls. Because of Obamacare, Medicaid is in fiscal straits. So you have to deal with those issues if you’re going to repeal and replace Obamacare. Medicare has got some serious problems because of Obamacare. Those things are part of our plan to replace Obamacare.”

In normal times, when you have a President-elect promising not to cut a popular program like Medicare and Congressional leaders determined to make those cuts, you would expect a battle royale in Washington. However, these are not normal times and the speculation is that Trump likely will go along with Ryan, Price and Brady and others in the GOP leadership and their Medicare “reform” plans.

Vice President-elect Mike Pence has said repeal of the 2010 health care law is Trump’s top priority. Insiders say language to do that will be ready for Congress to enact immediately after his swearing-in on January 20, 2017, perhaps with a two-year phase in to allow replacement legislation to be implemented.

“Decisions have been made, that, by the President-elect, that he wants to focus out of the gate on repealing Obamacare and beginning the process of replacing Obamacare with the kind of free-market solutions that he campaigned on,” Pence told Fox News Sunday on Nov. 20. If Ryan’s thesis that Medicare reform goes hand-in-hand with ACA repeal holds true, that action can certainly be expected during 2017.

One plan under discussion is to use the budget reconciliation process to handle both issues: an ACA repeal early in the year and Medicare reform later as the 2017 budget is moved through Congress by March and as the 2018 budget is considered, probably mid-year. By using budget reconciliation, Republicans can pass the legislation with a simple 51 vote Senate majority and avoid the need for 60 votes to pass the legislation over a probable Democrat-led filibuster. Republicans will hold 52 of the 100 Senate seats. The House of Representatives is no problem, as the GOP controls that chamber with plenty of votes to spare.

Medicare Innovation Center

Meanwhile, Republicans who have called for abolishing the Medicare Innovation Center, established by the ACA, are reportedly having second thoughts. Instead, they are considering using the center to implement changes they support.

The center’s original purpose was to support new models of care and payments under Medicare and Medicare. Ryan’s plan to repeal the ACA would wipe it out. Many Republicans opposed some of the center’s demonstration projects, especially a March 2016 proposal for reimbursing prescription drugs administered by physicians. The center’s proposal to modify payment for hip and knee replacements also met strong industry and GOP opposition.

“They are routinely overstepping their authority and forcing mandates in health care that are termed ‘demonstration projects’ that have serious long-term implications,” Brady told CQ.

Some in the health care industry want to make the center more accountable to Congress while still providing solutions to help improve outcomes and reduce federal health spending. On Nov. 17, a new coalition was launched by the Healthcare Leadership Council with the goal of limiting the scale of the center’s demonstration projects and ensuring that it establishes quality measurement tools to monitor its proposals. Known as the Healthcare Leaders for Accountable Innovation in Medicare, the coalition wants stricter congressional oversight and more active engagement with outside groups.

How all of this plays out, of course, remains to be seen. Price’s nomination as Secretary of Health and Human Services is a move that would certainly strengthen the coordination of Medicare reform between Capitol Hill and the White House.

Robert Gatty has more than 40 years of experience in journalism, politics and business communications and is the founder and president of G-Net Strategic Communications based in Myrtle Beach, South Carolina. He can be reached at bob@gattyedits.com.

Robert Gatty

Robert Gatty has more than 40 years of experience in journalism, politics and business communications and is the founder and president of G-Net Strategic Communications based in Myrtle Beach, South Carolina. He can be reached at bob@gattyedits.com.