From Medicaid to price transparency, here are the 5 biggest health policy controversies in 2019

U.S. Capitol building
Congress appeared poised to pass legislation to outlaw surprise billing but didn't at the last minute, providing one of the biggest controversies in 2019. Image: Pixabay

Washington provided a lot of drama for the payer and provider industries in 2019 with unexpected transparency requirements, payment cuts and major uncertainty over the Affordable Care Act (ACA).

There was also no shortage of Medicaid news or tough talk on surprise medical billing.

Here are five of the biggest healthcare policy controversies to erupt this year:

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Surprising inaction on surprise billing

At the beginning of the year, it seemed an afterthought that Congress would pass legislation to end surprise medical bills. The issue was a priority for voters who have been enraged by news articles of outrageous bills for thousands of dollars heaped on unsuspecting patients.

House and Senate committees even passed legislation to address the issue in the spring. But, over the summer, momentum stalled amid a massive lobbying campaign led by providers and dark money groups backed by private equity firms who had a stake in healthcare staffing companies.

Payers and providers are at odds over how to handle out-of-network charges. Payers want to use a benchmark rate for such charges while providers favor an independent arbiter. To quell the dispute, a House and Senate compromise was reached a few weeks ago that would use a benchmark rate but add an arbitration backstop for charges above $750. The compromise didn’t help as both sides continued to lob attacks.

RELATED: Providers get win in surprise billing compromise, but they're not happy

An end-of-the-year government spending package, which once seemed like a suitable vehicle to add the legislation to, was released without anything on surprise billing.

Lawmakers say they are pressing forward to take up the issue in 2020, but time may not be on their side in a presidential election year when Congress traditionally doesn’t get much done.

The price of transparency

It wasn’t a surprise that the Trump administration wanted to take on price transparency in the healthcare industry. But what was a surprise is how they decided to do it.

The Centers for Medicare & Medicaid Services (CMS) released in June its annual proposed hospital payment rule with a proposal to make hospitals share online their payer-negotiated rate for 350 “shoppable” services.

The proposal, which would have been finalized in November and went into effect in January, drew condemnation from both insurers and hospitals.

Insurers were worried about whether the rule violated antitrust law and would hurt competition with everyone knowing the rate they negotiate with a hospital. Meanwhile, hospitals were concerned about the short time frame and cost of posting the prices online in a searchable format.

CMS released a final rule last month that kept much of the proposal, but gave hospitals and insurers until 2021 to implement it. Hospital groups have already filed a lawsuit seeking to turn down the rule.

Speaking of lawsuits …

CMS gives providers déjà vu

Hospitals earned major wins this year and in 2018 with court rulings striking down Medicare cuts to off-campus hospital outpatient departments and to the 340B drug discount program.

But when CMS released its proposed hospital payment rule, it decided to continue the cuts to 340B and off-campus departments going into 2020.

Hospital groups cried foul that the agency was blatantly ignoring the court rulings. CMS eventually decided to keep the cuts when it released the final rule in November.

The groups pleaded with a federal judge to get rid of the off-campus cuts, which CMS instituted to bring Medicare payments in line with standalone physician clinics. But a federal judge said that since CMS put the cuts into a new rule then their hands were tied.

More Medicaid mayhem

2019 saw more defeats for CMS in its effort to encourage states to adopt work requirements for certain Medicaid expansions participants.

Federal courts have struck down the work requirement programs for Arkansas, New Hampshire and Kentucky this year. Indiana decided to delay implementation of its work requirements because of a similar legal challenge.

RELATED: Legal group charges Tennessee block grant proposal vague, asks CMS to punt back to state

Elections also appear to have an impact on the work requirement waivers.

Kentucky’s new Democratic Gov. Andy Beshear announced Dec. 16 that he was pulling the waiver for the state’s work requirements. Virginia Democratic Gov. Ralph Northam, emboldened after Democrats took over the state legislature, announced he too may get rid of work requirement waiver that is still pending before CMS.

But CMS has another chance to make significant changes to Medicaid. Tennessee applied for a waiver to convert federal funding for Medicaid into a fixed block grant.

If CMS approves Tennessee’s waiver, a legal challenge will likely follow.

The ACA's fate remains in doubt

The end of 2018 saw a Texas federal judge uphold a lawsuit from Texas and 16 other red states challenging the legality of the ACA, and 2019 ended in a similar fashion as an appeals court agreed that the law's individual mandate is unconstitutional.

At the core of the court battle is whether the entire act should be struck down because of the repeal of the ACA’s individual mandate as part of tax reform in 2017. The red states have argued that the mandate cannot be severed from the entire law and therefore is unconstitutional.

But a collection of 18 blue states argues that if Congress intended to get rid of the ACA it would have done so when it passed tax reform, and it didn’t.

Meanwhile, the Department of Justice (DOJ) has continued to support the lawsuit. When the lawsuit was first proposed back in 2018, DOJ just wanted Congress to nix the law’s preexisting condition coverage. Now it agrees with the lawsuit to get rid of the entire law.

A decision from the three-judge panel, which heard oral arguments over the summer, agreed that the individual mandate is unconstitutional but sent the case back to the lower court to take a closer look at what may or may not be severable from the mandate in the broader law.

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