Democrats are facing a daunting stretch as the party struggles to get beyond internal battles to win approval of President Biden’s agenda — and deal with other crises that have effectively been punted to the Christmas season.

Democrats are entering the home stretch of the year with four big priorities: funding the government, raising the debt ceiling and passing both the bipartisan infrastructure bill and a sweeping social spending measure.

It’s a stretch that could make or break Biden’s agenda and will surely set up battles for next year’s midterm elections.

“There’s a lot of stress being felt, or a lot of things at stake in terms of causes that many of us fought for, for a lifetime,” Sen. Dick Durbin (Ill.), the No. 2 Senate Democrat, said about the current dynamic within the caucus.

The tensions between Democrats — including moderates versus progressives, the Senate versus the House and moderates versus leadership — are increasingly boiling over. That includes a days-long shadowboxing match between Senate Budget Committee Chairman Bernie Sanders (I-Vt.) and centrist Sen. Joe Manchin (D-W.Va.) over Biden’s social spending measure.

Manchin and Sanders have spent days trading criticisms through the press, but Sanders brushed off a question about if they or Sen. Kyrsten Sinema (D-Ariz.), another moderate Sanders has urged to be more specific, should get in the room together to hash things out.

“This is not a movie,” Sanders said. “When you’ve got 48 people on one side … it is simply not fair, not right, that one or two people say my way or the highway.”

Sanders and progressives disagree with Manchin, Sinema and House centrists over the measure’s policy details and size.

Sanders is refusing to acknowledge a price tag below $3.5 trillion, while Congressional Progressive Caucus Chairwoman Pramila Jayapal (D-Wash.) is pushing for a bill around $3 trillion. That’s significantly higher than Manchin’s top line of $1.5 trillion or the roughly $2 trillion range floated by the White House.

The bipartisan infrastructure bill already passed by the Senate, progressives say, won’t move through the House without passage of the larger spending bill. But that’s left moderates fuming.

Moderate Rep. Jared Golden (D-Maine) said some of his constituents are “sick of the bickering” and want Congress to “stop fighting and sort it out.”

“I strongly support the bipartisan infrastructure bill and think the House should pass and send it to the president immediately. As for the separate $3.5 trillion draft reconciliation proposal in the House … I cannot support it in its current form, nor does it currently have the votes to pass in Congress,” Golden wrote in a Portland Press Herald op-ed.

Democrats face tough choices if they have to lower the size of the bill, as is likely.

Durbin, acknowledging that reality, urged Democrats to settle on a number, adding that “the sooner we get this done, the better. Everyone’s not going to win at the end of the day.”

They had hoped to fund everything from combating climate change to immigration reform as well as housing, child care, education assistance and a health care expansion.

But as the top line slips, they’ll need to think about investing heavily in a smaller number of programs or keeping their expansive wish list but taking more incremental approaches across the board.

While Democratic leadership is aiming to have the bill to Biden by the end of October, senators acknowledge they aren’t married to a timeline.

“Obviously we want to get it done as quickly as possible. But obviously this is an enormously complicated and consequential bill. … This is not a baseball game,” Sanders said, asked if the deal to put the debt ceiling put pressure on Democrats to get the social spending bill done quickly.

But they also can’t risk it dragging too far into fall. If they can’t pass the bipartisan infrastructure bill by the end of October, they’ll need to pass another short-term highways extension, and the scheduling of other must-pass bills, including an annual defense policy bill, have also been in limbo as Democrats try to figure out when they’ll bring their two-part spending package to the floor.

They also risk running directly into round two of their fight over the debt ceiling and funding the government.

Government funding is set to run out on Dec. 3, setting a hard deadline for lawmakers to prevent a shutdown heading into the holidays. And the Treasury estimates that the $480 billion debt hike — which is expected to pass the House on Tuesday — will extend the nation’s borrowing limit until roughly the same time.

When exactly the debt ceiling will hit is unclear. The Bipartisan Policy Center’s Shai Akabas noted that analysts are trying to estimate how much money is going into and out of the government and that the “uncertainty comes on the back end” of the Dec. 3 timeline.

Both sides are already digging in.

Senate Majority Leader Charles Schumer (D-N.Y.) is doubling down on his pledge that Democrats won’t use reconciliation — a budget process that lets them bypass the 60-vote legislative filibuster — to pass a long-term debt hike later this year. The votes are tough politically for Democrats because they have to raise the debt ceiling to a number instead of suspending it to a date.

“The solution is for Republicans to either join us in raising the debt limit or stay out of the way and let Democrats address the debt limit ourselves,” Schumer said. “Senate Democrats want a long-term solution. … I hope my Republican colleagues relent from trying to make it one when we revisit this issue soon.”

While 11 Republicans helped Senate Democrats overcome a key procedural hurdle on the debt ceiling last week, they are vowing they won’t do so again.

The move, GOP senators argue, was designed to take pressure off changes to the filibuster and prove Democrats had time to raise the debt ceiling on their own under the budget rules. Schumer also rankled the GOP senators he’ll need in December with a fiery speech he gave just before the Senate passed the short-term debt hike.

Senate Minority Leader Mitch McConnell (R-Ky.) — who has faced criticism from his own members for proposing the short-term debt hike — vowed in a phone call and letter to Biden that Republicans will not help raise the debt ceiling in December. He also railed against Schumer’s speech, saying the Democratic senator’s “tantrum” had “poisoned the well” with GOP senators.

“Your lieutenants on Capitol Hill now have the time they claimed they lacked to address the debt ceiling through standalone reconciliation. … They cannot invent another crisis and ask for my help,” McConnell wrote.

If Republicans don’t blink, congressional Democrats will have limited options, and it could lead to pressure on Manchin and Sinema to create a carveout from the legislative filibuster.

But asked about the looming end-of-year showdown, Manchin said that creating a carveout from the filibuster is already off the table for him.

“The filibuster is the only thread that we have to keep democracy alive and well in America. It keeps us the body that we are,” Manchin said. “If we didn’t have the filibuster to where it would keep us keeping back to civility from time to time, then you would see total chaos.”

Whether a provider can practice telehealth across state lines depends on both federal and state policies, according to the Health Resources and Services Administration, part of the U.S. Department of Health and Human Services. 

Some states have agreements that allow for an expedited process for physicians to practice using a single license. Other states require providers to get a new license, which can be a time-consuming and expensive process, Mei Kwong, executive director of the Center for Connected Health Policy, said in an interview.

“Licensing is really a barrier,” and makes it harder for people in rural areas to see specialists like dermatologists, Larson said. Some states require physicians to be fingerprinted on site, which can be difficult for a busy physician.

Physicians could be likely to get multiple licenses if they live close to a border, Kwong said. But, for “one patient who lives in Florida,” it’s less likely a provider would “go through that entire process,” Kwong said.

While many states eased restrictions during the pandemic, those accommodations are beginning to peel back, Zebley said. Practicing across state lines is a polarizing issue, and raises questions about how physicians should enforce “contentious practice of medicine issues like abortion, birth control, euthanasia, or prescription of marijuana,” Zebley said.

‘Telehealth Cliff’

Being able to access health-care remotely “is a matter of life and death,” Sen. Brian Schatz (D-Hawaii), said at the hearing. 

Schatz is part of a group of 50 senators advocating for the CONNECT for Health Act (S. 1512), which would make permanent several of the telehealth flexibilities granted during the public health emergency, including removing geographic restrictions. The bill has bipartisan support.

The passage of the CARES Act last year enabled doctors and other medical providers to initiate telehealth care with a patient in their home. The Social Security Act generally keeps Medicare from reimbursing those visits unless they’re for patients in rural areas, or if they originate at a qualifying site like a hospital or nursing home. 

Those exceptions will end when the public health emergency ends unless Congress takes action, leading to an approaching “telehealth cliff,” Schatz said. 

If a patient still has to “get a ride and schlep some place, it defeats the purpose, at least partially, of telehealth in the first place,” Schatz said.

Telehealth also helps keep patients’ illnesses from escalating, Larson said. 

“If we can’t immediately see an individual when they start to feel ill or have a situation going on, if we’re waiting, now that individual is probably going to be seen in an emergency department,” Larson said. “We can prevent much of that.”

The $24 billion, according to data released Wednesday from health-care improvement company Premier Inc., represents an 8% increase in clinical labor costs per patient day compared with 2019.

Hospitals have had to pay nurses and other staff members inflated wages to keep their doors open amid nationwide staffing shortages, driven by burnout from an unrelenting virus, firings and resignations over vaccine mandates, and sickness and quarantine. Some states have even called in the National Guard to help meet patient demand during the delta variant’s surge.

Health-care providers are “just really at their wits end in terms of dealing with the pandemic,” said Doug Miller, vice president of workforce management operations at Premier.

The government issued funding to hospitals coping with lost revenues and pandemic-related expenses, but the health-care industry has said the more than $120 billion distributed isn’t enough to meet its needs. 

Beyond increased staffing prices, hospitals are facing higher costs for drugs, supplies, preparation for more Covid-19 patients and their treatment, and the lost revenue from elective surgeries, American Hospital Association Executive Vice President Stacey Hughes wrote in a Wednesday letter to congressional leadership asking for legislative provisions that would provide financial relief.

The industry is also facing various regulatory burdens, from the reporting required of those that received pandemic assistance funds to demands that they list their prices for common services online.

“The COVID-19 pandemic has resulted in historic challenges for hospitals and health systems and the communities they serve, placing unprecedented stress on the entire health care system and its financing,” the letter said. The AHA is advocating against reducing Medicare payments so that providers can stay afloat.

The financial stress has led to a breaking point for some hospitals less able to weather the storm, with more than 40% of rural hospitals in the U.S. at immediate or high risk of closing in July 2021, according to a Center for Healthcare Quality and Payment Reform report.

High Demand

The nursing industry was already facing labor shortages before the pandemic, said Beth Cloyd, principal consultant at Premier. The pandemic has tested nurses, who have worked longer hours in harder conditions, “but that resiliency and effort over time takes a toll on the workforce,” Cloyd said.

Hospitals may not be able to fill their vacancies any time soon, and the recent vaccine mandates could keep costs for labor high. So hospitals should look at bringing in international workers or consider how technology can help providers meet patient demand, Cloyd said. The Biden administration will speed up the visa process for health-care workers coming to the U.S. to aid in pandemic response.

Most of the evidence about how vaccine mandates will affect the workforce is anecdotal, Miller said, since many hospitals have not completed their vaccine mandate timelines. “I don’t know that anybody has a crystal ball to fully know how the data plays out,” Miller said, but Premier is working on another study to capture some of that evidence.

Other Findings

Premier used artificial intelligence to examine a workforce database and compare trends from October 2019 to August 2021. The study examines clinical employees who work in the emergency department, intensive care units, or nursing.

Among the survey’s other findings:

• Larger hospitals with 500 or more beds have been paying $17 million extra for labor each year since the beginning of the pandemic.
• Overtime hours as of September 2021 have risen 52% compared with before the pandemic.
• Almost a third of emergency, ICU, and nursing employees turn over each year, up from 18 percent pre-pandemic.

Long-term care facilities must fully explain predispute arbitration agreements to their residents if they want to continue getting paid by Medicare and Medicaid, as the requirement doesn’t conflict with federal arbitration laws, the Eighth Circuit said.

A U.S. Health and Human Services Department rule placing conditions on payments when nursing homes use such agreements isn’t preempted by the Federal Arbitration Act, is a valid exercise of the agency’s authority, and was adopted in compliance with federal administrative rules, the U.S. Court of Appeals for the Eighth Circuit said.

The rule doesn’t prohibit nursing homes from including predispute arbitration clauses in their residents’ contracts, the court said. This distinguishes it from a 2016 rule—blocked by a federal district court in Mississippi—that expressly banned facilities from requiring patients or their representatives to agree to arbitrate any disputes that arose while the patient was being treated there.

The district court in the Mississippi case found the 2016 rule inconsistent with the FAA. 

Under the newer rule, nursing homes can continue to insist on such clauses, the court said. But they must fully explain what the arbitration clause means in the patient’s or representative’s language and make clear that admission and ongoing care aren’t dependent on their agreement in order to participate in the Medicare and Medicaid programs, it said.

HHS reasonably interpreted the Medicare and Medicaid laws to allow conditioning payments on the arbitration rule, the court said. The agency could reasonably conclude that predispute arbitration clauses could frustrate residents’ access to care “or jeopardize their health and well-being,” it said. 

The rule is “a reasonable exercise” of the Centers for Medicare and Medicaid Services’ authority to protect residents’ rights, the court said.

The agency relied on sufficient evidence when adopting the rule, including “academic literature and court opinions” suggesting that predispute arbitration clauses are detrimental to residents’ health and safety, it said Oct. 1 in an opinion by Judge Jane Kelly.

The court affirmed summary judgment for HHS and CMS.

Chief Judge Lavenski R. Smith and Judge Ralph R. Erickson joined.

Kirkland & Ellis LLP and Hardin, Jesson and Terry PLC represent the nursing homes. The U.S. Department of Justice represents the government.

The case is Northport Health Servs. of Ark. v. U.S. Dep’t of Health & Human Servs., 2021 BL 375572, 8th Cir., No. 20-1799, 10/1/21.

The Biden administration released a rule Thursday that addresses one of the most fought-over provisions of a coming ban on surprise medical bills.

The rule details how a new class of medical billing arbiters will decide the fair price for emergency medical care, one of the largest sources of surprise bills. The rule received a positive reaction from consumer advocates and some legislators who drafted the law, but it “disappointed” emergency physicians, who fear it will lead to unreasonably low rates.

The ban on surprise medical bills was passed by Congress and signed into law by President Donald J. Trump last winter, but it is the Biden administration that has been fine-tuning the policy — amid intense lobbying from insurers, medical providers and advocates.

In a dispute between an insurer and a provider over an out-of-network bill, the rule directs the arbiters to focus first on the median price that other doctors and hospitals in the area have negotiated for that service.

This was the second major rule the Biden administration released on surprise billing this year, before the law takes effect in 2022. Taken together, the two regulations detail how the federal government will end what patients, academics and legislators often describe as one of the most exasperating practices in American medicine.

“We’re taking patients out of the middle of the food fight, and we’re also providing a clear road map on how you can resolve that food fight between the provider and the insurer,” said Xavier Becerra, secretary of Health and Human Services, in an interview.

Surprise medical bills happen when a doctor or other provider who isn’t in a patient’s insurance network is unexpectedly involved in a patient’s care. Patients may go to a hospital that accepts their insurance, for example, but get treatment from emergency room physicians or anesthesiologists who don’t — and who then send patients big bills directly.

Millions of Americans receive these type of bills each year. As many as one in five emergency room visits result in such a charge, and the rate of surprise billing is similar for women giving birth. Some coronavirus patients have received exceptionally high surprise bills. That includes a Pennsylvania woman who was unconscious and intubated when an out-of-network air ambulance transported her between hospitals. She was billed over $50,000 for the service.

Patients like that are essentially caught in the middle of a dispute between a doctor and an insurer, who disagree on the fair price for a given medical service. The new rule released Thursday lays out how newly hired billing arbiters will decide who, in those fights, is right.

Under the federal law, both the insurer and the doctor will tell an arbiter what they believe the appropriate price for the service should be. The arbiter will then look at a variety of factors to decide which of the two rates to pick.

The law that Congress passed has six factors the arbiters can consider. The rule released Thursday, however, directs the arbiters to focus on one of those factors as their starting point: the median prices that have been negotiated in the area for the same medical service.

The arbiter “must begin with the presumption” that this is “the appropriate out-of-network rate,” the rule states. They may consider other factors listed in the law, such as how sick the patient was or whether the hospital or doctor had made good faith efforts to join insurance networks, if they receive “credible information” from either party involved in the dispute on those subjects.

The administration on Thursday also opened applications for organizations to become arbiters. Applicants must have experience in “billing and coding” and “arbitration and claims management.”

The rules on how arbiters settle billing disputes are seen as especially important because they will determine whether the ban on surprise billing ultimately saves money for consumers, insurers and the federal government. The Congressional Budget Office estimated last year that the surprise billing ban would save the federal government $17 billion and reduce private insurance premiums 0.5 percent to 1 percent.

Most experts expect that starting from the in-network prices will ultimately lead to lower reimbursement rates. The Biden administration stated in the rule that the decision “will aid in reducing prices that may have been inflated due to the practice of surprise billing prior to the No Surprises Act.”

Trade groups representing health care providers, including emergency room physicians and hospitals, had generally urged the Biden administration to do something different: ensure that arbiters use all six of the factors listed in the law when they make up their minds. They argue that Congress intended for arbiters to have that broader deliberation, and that focusing on median in-network rates will lead to lower prices that are untenable.

“We’re pretty disappointed because this is entirely against congressional intent,” said Laura Wooster, senior vice president for advocacy at the American College of Emergency Physicians. “I’m not seeing how small physician groups will be able to work with this, and keep their doors open. Now is not the time to take away resources from emergency physicians.”

Congressional Democrats quickly applauded the new rule.

“Today’s rule implements the No Surprises Act just as we intended,” Senator Patty Murray of Washington and Representative Frank Pallone of New Jersey, who lead health committees in each of their chambers, said in a joint statement. “It establishes a fair payment resolution process between providers and insurers while finally taking patients out of the middle.”

Secretary Becerra said he expected the rule to generate “a lot of animated discussion on the part of the stakeholders in the industries” but felt the Biden administration had created a way to settle billing disputes that was straightforward and fair. “It will give patients some peace of mind that they don’t have to stand the chance of going bankrupt just because they had to go out of network,” he said.

Republican reaction to the rule wasn’t immediately available. Stakeholders are still reviewing the 521-page rule, and the administration will accept comments on it for the next 60 days. Given the relatively short timeline — the surprise billing ban is set to start in three months — major changes are not expected.

Hospitals reacted sharply toward a Biden administration regulation implementing legislation barring “surprise billing” of patients while health insurers and employers’ groups praised it for guarding against health-care price inflation.

The rule is a “windfall for insurers,” Stacey Hughes, executive vice president of the American Hospital Association, said. “The rule unfairly favors insurers to the detriment of hospitals and physicians who actually care for patients.”

Hughes made her remarks in a statement after four agencies on Thursday released an interim final rule (RIN 0938-AU62) that details the process for settling billing disputes between health-care providers and entities that pay the bills—health insurers and employers that sponsor employee health plans.

This is the most important regulation implementing the No Surprises Act that was enacted in 2020 as part of budget legislation (H.R. 133). It stipulates that arbitration awards in disputes must primarily be based on median in-network rates rather than giving providers more ammunition to argue that exceptional circumstances demand higher payments.

Under the law, patients can’t be billed by hospitals or medical providers for more than they would owe for in-network treatment in emergencies or in situations where an out-of-network clinician treats them during procedures performed at facilities that are in their networks. Such out-of-network treatment has often resulted in patients being billed for large amounts, sometimes in the tens of thousands of dollars.

‘Good for Consumers’

“It’ll definitely be good for consumers,” Katie Keith, an associate research professor at Georgetown University, said in an interview. Keith co-authored an analysis of earlier surprise billing regulations.

“The Biden administration really made a strong statement about how it wants the federal IDR process to be used,” Keith said, referring to the independent dispute resolution process. “It does not want this to be a way for providers and facilities and air ambulances to stay out-of-network and think they’re going to be able to leverage this process for higher rates.”

The rule could result in more providers entering into network contracts with insurers, Keith said. “You could have consumers having increased access to in-network providers,” she said.

In addition, the rule will help prevent out-of-network care from inflating health-care costs, which could have an impact on premiums, Keith said.

In January, the Congressional Budget Office estimated that in most affected markets in most years, “smaller payments to some providers would reduce premiums by between 0.5 percent and 1 percent.”

‘A Fair Payment’

“The biggest thing by far, when they talked about how the arbitration itself is going to work, the presumption is going to be the market-based qualified payment amount is a fair payment,” James Gelfand, executive vice president, public affairs, at the ERISA Industry Committee, said in an interview. ERIC represents large employers that provide health benefits.

The qualifying payment amount is the primary measure that will be used to determine rates in disputes under the rule. It’s based on a health plan’s historic median contract rate for similar services in a geographic area.

“There’s nothing more important than that that they could possibly have done,” Gelfand said. “It puts market dynamics at the center of this arbitration.”

In addition to setting the basis for deciding disputes rates, the rule also sets limits on the cost of arbitration, which has been worrisome, Gelfand said. Arbitration entities that must be certified by the federal government have to agree to reasonable fees, he said.

Hospital Objections

Hospitals and providers had wanted arbitration regulations not to be as dependent on the qualifying payment amount, which limits their payments.

They pointed to other factors that the No Surprises Act allows arbitrators to consider in billing disputes, such as the severity of a patient’s case and the experience of the provider.

“These consumer protections need to be implemented in the right way, and this misses the mark,” Hughes said.

The American Medical Association also objected strongly to the regulation. 

“The interim final regulation issued late yesterday to implement the No Surprises Act ignores congressional intent and flies in the face of the Biden Administration’s stated concerns about consolidation in the health care marketplace,” AMA President Gerald Harmon said in a statement.

The AMA cited its study that found 73% of the nation’s insurer markets are “highly concentrated.” The result is higher premiums and narrower provider networks, which are a root cause of the surprise medical billing problem. it said.

The AMA urged the Biden administration to delay implementation of the rule.

America’s Health Insurance Plans President and CEO Matt Eyles said in a statement that “The Administration’s approach signals a strong commitment to consumer affordability and lower health care spending through an independent dispute resolution process that should encourage more providers to join health plan networks.”

“The parties then may jointly select a certified independent dispute resolution entity to resolve the disputes,” according to a fact sheet on the rule.

After an arbiter is selected, both the payer and provider will submit the amount they believe the service should cost. The arbiter will then select one of the amounts as the out-of-network charge. The arbiter must begin with the presumption that the qualified payment amount, which is the insurance plan’s median contracted rate for the same or similar service in an area, is the appropriate out-of-network charge. 

Other consumer protections in the rule include a payment dispute resolution process for uninsured or self-pay individuals. It also adds protections in the external review process so that individuals with job-based or individual health plans can dispute denied payment for certain claims.

We are currently analyzing the rule and will follow up with a full breakdown of the provisions.

Last year, 192 accountable care organizations took “downside” financial risk for cost increases, meaning they would lose revenue and have to reimburse Medicare if their cost of care exceeded agreed-upon thresholds.

Blum’s remarks signal a significant change of direction for the CMS as it moves to reverse or scrap policy directives championed by former CMS Administrator Seema Verma, who served under President Donald Trump. The announcement follows a strategic review of Medicare payment models by the Centers for Medicare and Medicaid Innovation. 

Verma had made made a priority of requiring providers to take more financial risk in order to improve the performance of alternative payment models in traditional Medicare. Alternative payment models provide incentive payments to providers for high-quality, cost-efficient care. They’re designed to move fee-for-service Medicare more toward value-based care, in which payments are determined by patient outcomes and cost savings rather than volume of services provided.

‘Skin in the Game’

Verma argued in 2020 that payment models that provide only incentive payments without the downside “risk” of reduced payment for poor-quality care don’t go far enough to avoid losses for taxpayers.

“Models must incorporate design elements that require participants to have skin in the game,” Verma told the Health Care Payment Learning & Action Network Virtual Summit. 

But Blum said “having more beneficiaries in total cost-of-care, fully risk-based models, to us, should not be the end goal. The end goal should be better care, better experience, better life and better overall care system.”

As the CMS focused more on risk-based payment models, quality measures and providing “accountable care,” over the years, it had “collectively lost sight” of its broader purpose of improving patient care, Blum said.

Accountable care organizations, the groups of doctors and hospitals that provide coordinated care through traditional fee-for-service Medicare, saved Medicare nearly $1.9 billion in 2020, the Biden administration reported. ACOs are a major component of traditional Medicare’s move to value-based care. 

More than 12.1 million fee-for-service Medicare beneficiaries are now served by providers in ACOs. That’s up from 11.2 million in 2020, according to the CMS, part of the Department of Health and Human Services.

The Centers for Medicare and Medicaid Innovation, which develops Medicare payment models, has told agency leadership that the current roster of alternative payment models “tend to involve those communities that are higher income” and “disproportionately white,” Blum said Thursday.

Liz Fowler, director of the innovation center, has already moved to eliminate some ineffective and overlapping payment models. 

Blum said Fowler and her team are working to make sure that future payment models “reflect and better serve, not just those parts of the country that have more resources, that can afford to put in place risk models,” but also those areas that “don’t necessarily have access to the care and support that all of us here today have.”

Addressing Disparities

Current CMS Administrator Chiquita Brooks-LaSure has challenged the agency to reduce health inequities among Medicare and Medicaid populations by expanding opportunities for quality care regardless of personal characteristics like ethnicity, race, gender, geographic location, and economic status. Covid-19 took a disproportionate toll on minority groups, and that experience is helping to guide the Biden administration’s efforts to ensure that those disparities are addressed.

While some research has shown that more provider risk can lead to better patient outcomes, Blum said the increased financial stake also has downsides, like leading to more exaggerated patient diagnoses, or “upcoding.” 

He said the risk-based payment models also favor “better capitalized” providers who can afford more risk. That takes away from the agency’s goal of “better serving all beneficiaries equally,” Blum said.

“For models that have more risk, where we truly get better experience, better value, more equity, we’ll celebrate that,” he said. “But where we see risk that brings in some of the downsides of harm, payments that are inappropriate, of skewing the participation towards those that can afford it, that’s a challenge for us.” 

“And so I don’t think that CMS will be promoting models that have more risk just for the sake of really having more risk,” he said.

A smattering of members in both chambers have concerns with key issues ranging from drug pricing to Medicare spending, while Democratic holdouts like Sen. Joe Manchin III of West Virginia and Sen. Kyrsten Sinema of Arizona oppose the legislation’s overall price tag.

House Speaker Nancy Pelosi recently acknowledged that the $3.5 trillion number must come down. The Senate has yet to unveil companion text.

Democrats could try to shorten the duration of programs or focus on certain policies instead of others if the total amount falls. But some Democrats view adding end dates for programs as risky, since it would require lawmakers to extend them in the future.

“We have a tremendous opportunity right now with Democratic majorities in the House and Senate and a Democratic president,” Rep. Lauren Underwood, D-Ill., said on a Wednesday press call with the advocacy group Protect Our Care. “While we have the opportunity to do this work, I think we should take advantage of it because it is an assumption that is made that several years down the line we will have the opportunity to extend.”

Here are the biggest health care issues under consideration.

Drug pricing

Letting Medicare negotiate drug prices directly with manufacturers is a white whale for Democrats, who are gunning for the political victory as much as for the $700 billion in potential savings it would offer to fund their remaining health care agenda. But the party is dealing with several defections among members in both chambers that could derail or change the proposals, given Democrats’ slim majorities.

The House bill would set maximum prices for the most expensive drugs under the Medicare Part D prescription drug program and Part B outpatient program at 120 percent of the average paid by other wealthy countries. The bill would also levy an excise tax of up to 95 percent on manufacturers that don’t comply and require drugmakers to pay rebates when they raise prices faster than inflation.

Forecast: Tossup. The outcome depends on how the party wants to define success. House Democrats’ sweeping drug pricing bill is the foundation of discussions, but a recent bill from Rep. Scott Peters, D-Calif., demonstrated the possibility of designing a much narrower law that still achieves some negotiation. Holdout Sinema has also reportedly signaled opposition to negotiation as currently constructed.

The provision is central to the rest of Democrats’ health care agenda, since other spending largely depends on how far lawmakers are willing to go to generate savings from drug pricing measures.

Expanded insurance premium assistance

Democrats temporarily expanded tax credits for insurance premiums under the 2010 health care overhaul law as part of the $1.9 trillion COVID-19 aid law in March. The party now wants to extend the more generous credits permanently through the 10-year budget window at a rough cost of around $200 billion.

Households making up to 150 percent of the federal poverty level would receive fully covered insurance on the health law’s exchanges. The legislation would permanently eliminate a cap on subsidy assistance to households making more than 400 percent of the poverty level. Premiums would also be limited to 8.5 percent of a household’s income, making the insurance more affordable for people across the income spectrum.

Forecast: Best bet. Democrats have campaigned on the 2010 law for more than a decade, and retook the House in 2018 amid Republican attempts to repeal it. The provision has the broadest support within the caucus and the most manageable price tag. The expanded coverage would also help reach higher earners who want insurance in the individual market, and who suffer the brunt of the law’s infamous premium increases since they don’t qualify for subsidies.

Plugging the Medicaid coverage gap

All but 12 states expanded Medicaid under the 2010 health care law to cover households making up to 138 percent of the poverty level, despite Democrats’ attempts to sway the remaining Republican governors with additional financial incentives. Democrats are now attempting to close the gulf with a lookalike Medicaid program that would be run on the federal level, while covering eligible individuals on the exchanges until the new program is stood up.

House Majority Whip James E. Clyburn, D-S.C., said during a call with the left-leaning Center for American Progress last week that he would be open to a five-year authorization to expand Medicaid to start.

He argued on a separate press call Wednesday that it would be “un-American” for lawmakers to expand other benefits while leaving behind the vulnerable populations in those dozen states.

Forecast: Better odds. The Medicaid expansion is another piece of the 2010 law and important to Democrats’ platform. But questions over drug pricing savings and the slate of competing priorities is throwing the scope and duration of the program into doubt.

Democrats’ short-term solution to include would-be Medicaid recipients on the exchanges is a more expensive way to provide care, since Medicaid is a lower-cost program that pays providers lower rates. The cost is expected to total around $250 billion to $300 billion over 10 years.

Medicare dental, hearing and vision benefits

The traditional Medicare benefit has gaps, leaving many seniors without services like dental, hearing or vision care. Private Medicare Advantage or Medigap supplemental insurance plans help fill the gap, but lawmakers like Sen. Bernie Sanders, I-Vt., are pushing to cover them under the traditional benefit to ensure broader access.

But spending concerns are at the forefront of the discussion. The Congressional Budget Office previously estimated that adding the benefits would cost as much as $358 billion over 10 years.

Forecast: Longer odds. Spending constraints and the time needed for the Centers for Medicaid and Medicare Services to set up a new benefit forced the House to delay dental coverage under its bill until 2028, with patients responsible for more cost-sharing than under Medicare’s traditional Part B outpatient benefit. Democrats are debating ways to cram the provision into a final package, but further cuts to the scope and duration may be necessary.

The American Dental Association — which opposes a broad Medicare benefit — has also made headway with some skeptical Democrats. Rep. Kurt Schrader, D-Ore., plans to introduce an ADA-backed measure that would tailor dental benefits to low-income enrollees instead.

Home health

President Joe Biden is asking Congress for $400 billion over eight years to boost home- and community-based health services. The money would fund historically underpaid care workers’ salaries and boost Medicaid funding for states that take steps to improve home health programs.

Forecast: Tossup. Heavyweights like the Service Employees International Union back the full amount, but the House language only includes $190 billion over 10 years. Some senators are pushing for more, though. And although treating people at home is less expensive than treating them in an institution, the upfront investment is still a major debit on Democrats’ $3.5 trillion scorecard.

The provision is also less flashy than other priorities like expanding insurance, Medicare or Medicaid coverage, where many Democrats are directing the bulk of their efforts. Senate Finance Committee Chair Ron Wyden, D-Ore., a former advocate for the elderly, said he favors shortening the number of years to provide increased funding rather than cutting the topline number.

“If there are changes in the number, topline, I personally — and the caucus will talk about it — I personally would favor a shorter number of years,” Wyden said. “If you have 10,000 people turning 65 every day for years to come, and you have two options — good quality home- and community-based services versus institutional care. That’s not a close call in my book.”

The Health and Human Service Department would be able to keep a higher percentage of staff compared with 2018, when the last shutdown happened. In 2018, the department furloughed about half its staff—40,845 employees. This year it would furlough about 43%, or about 36,536 people. The HHS has about 3,000 more employees than it did three years ago.

The HHS’ contingency plan is unclear on what types of workers will be furloughed, however, and instead focuses on what work will continue. Here’s a rundown:

• The Food and Drug Administration would continue to authorize vaccines, therapeutics, and diagnostics, including Covid-19 vaccines for school-age children. The agency also would be able to continue any work that is funded by user fees, including the regulation and review of drugs, biologics, and medical devices. However, if the shutdown is prolonged, the agency could run out of the user fees that fund that work.
• The Centers for Disease Control and Prevention would continue addressing immediate ongoing disease outbreaks, including the Ebola outbreak in the Democratic Republic of Congo. The agency would also collect and report out data used to track, prevent, and treat diseases. The CDC’s labs and 24/7 emergency operations center would stay open.
• The National Institutes of Health would sustain its support for priority Covid-19 research and development. Supplemental funding from Covid-19 bills previously passed by Congress can be used to fund some of this work. The NIH would keep lean operations—about 25% of its staff or 4,500 personnel—to care for patients in its clinical center and to take care of animals and cell lines.
• The Centers for Medicare & Medicaid Services operations related to the pandemic were funded by the Coronavirus Aid, Relief, and Economic Security Act and won’t be affected by a shutdown. The agency will continue supporting the Medicare program and has enough money to fund Medicaid through the first quarter of fiscal 2022. The agency would also continue efforts to prevent fraud and abuse and the activities of the Center for Medicare & Medicaid Innovation. Some work maintaining the federal insurance exchange, including verifying eligibility, would be funded by user fees.

Here’s what work would stop if there is a lapse in government funding:

• High stakes work from the FDA, including policy-making functions and most surveillance inspections around compliance and safety, would stop in the event of a shutdown.
• Any less immediate surveillance from the CDC could be suspended, potentially slowing responses to emerging diseases.
• The NIH would have to furlough roughly 75% of its staff, a blowback that would exacerbate existing setbacks. The NIH already has lost or delayed at least $16 billion worth of research due to the pandemic. Work to enroll new patients in clinical trials, laboratories, and plans to build President Joe Biden’s proposed $6.5 billion biomedical incubator, dubbed the Advanced Research Projects Agency for Health, would be put on hold.
• The shutdown could delay the CMS’s release of several important regulations, including the 2022 Medicare physician fee schedule final rule, which determines how much doctors, surgeons, and other specialists are paid.

Over 95,000 people died from drug overdoses in the 12-month period ending in February 2021, the highest ever recorded in a year, according to preliminary Centers for Disease Control and Prevention data. A separate study released last week by the National Institute on Drug Abuse showed that methamphetamine-involved overdose deaths almost tripled from 2015 to 2019.

It also comes as the pandemic has highlighted a number of health disparities in various communities. A National Institutes of Health-supported study published this month showed a 38 percent increase in opioid overdose deaths among non-Hispanic Black individuals in four states from 2018 to 2019. The study of deaths in New York, Massachusetts, Kentucky and Ohio saw opioid overdose deaths for other racial and ethnic groups stay flat or decrease during this time.

An aide for House Majority Leader Steny H. Hoyer declined to make any calendar announcements on when a package would move but said leaders support the work on mental health and addiction.

The bipartisan agenda is spearheaded by the Bipartisan Addiction and Mental Health Task Force formed this year by Reps. Ann McLane Kuster, D-N.H., Brian Fitzpatrick, R-Pa., David Trone, D-Md., and Jaime Herrera Beutler, R-Wash.

The four lawmakers formed the task force by combining and expanding two narrower caucuses focused on opioid addiction to encompass mental health and other drug threats.

Series of bipartisan efforts

Congress has enacted multiple laws to fund prevention and expand treatment of substance use and mental health disorders in recent years.

Previous iterations of the former groups’ agenda formed a basis for material in a 2016 law known as the Comprehensive Addiction and Recovery Act, or CARA, and a 2018 opioid law.

Meanwhile, the Substance Abuse and Mental Health Services Administration announced Tuesday that it would distribute $825 million from the fiscal 2021 omnibus appropriations law to 231 community mental health centers across the country.

The swath of legislation falls under the jurisdiction of multiple committees, though most of the legislation is overseen by the Energy and Commerce or the Judiciary committees. But the agenda also touches on policies under the Ways and Means; Education and Labor; Armed Services; Veterans Affairs; and Oversight and Reform committees.

Details

The bills in the new bipartisan agenda are in different stages of the legislative process and have varying numbers of co-sponsors.

Among the bills is one from Trone and Rep. Steve Womack, R-Ark., that would create a task force to help prevent mental health crises caused by public health emergencies and craft a national strategy based on the impact of the pandemic.

Another by Reps. Mike Thompson, D-Calif., and John Katko, R-N.Y., would ensure Medicare coverage of marriage and family therapists and mental health counselors. The bill would not apply to the skilled nursing facility’s prospective payment system. It has 42 co-sponsors.

Legislation by Rep. Lisa Blunt Rochester, D-Del., would establish two grant programs related to maternal mental health and substance use with a focus on minority groups. It has 50 co-sponsors.

Another bill from Reps. Chrissy Houlahan, D-Pa., and Guy Reschenthaler, R-Pa., would limit copayments for mental health outpatient visits under TRICARE, the military’s health care program. It has four co-sponsors.

Legislation by Reps. Scott Peters, D-Calif., and John Curtis, R-Utah, would designate methamphetamine as an emerging drug threat and would direct the Office of National Drug Control Policy to implement a plan to address the issue. It is already awaiting floor action.

Another bill would authorize grants for law enforcement and corrections agencies to receive mental health crisis training. It is awaiting action from the House Judiciary Committee.

And a bill from Reps. Abigail Spanberger, D-Va., and David B. McKinley, R-W.Va., would authorize a 10 percent set-aside for recovery support within the Substance Abuse Prevention and Treatment Block Grant program. It has four co-sponsors and mirrors language in the president’s budget and House Labor-HHS-Education spending bill.

The agenda also includes legislation that has passed at least one chamber.

That includes a House-passed bill from Reps. Scott Peters, D-Calif., Gus Bilirakis, R-Fla., Ted Deutch, D-Fla., and Fitzpatrick that would fund grants to establish and implement evidence-based suicide awareness and prevention training policies. Another House-passed bill by Rep. Bonnie Watson Coleman, D-N.J., and Katko would establish programs to address racial inequalities in mental health.

The agenda also includes a bill by Reps. Susan Wild, D-Pa., Raja Krishnamoorthi, D-Ill., Judy Chu, D-Calif., and McKinley that has 126 co-sponsors. It would help prevent and reduce mental health conditions and suicide among health care workers. A similar version of the bill passed the Senate by voice vote.

The Senate Finance Committee has also been making inroads into a bipartisan mental health package.

Last week, Finance Chair Ron Wyden, D-Ore., and ranking member Richard M. Burr, R-N.C., sent a letter to stakeholders seeking input for policies related to access to care, behavioral workforce, telehealth, health parity and children’s mental health.

A Senate Democratic aide said the goal is to develop the proposal by year’s end with the hopes of realistically passing legislation next year.