Politico

How the Trump administration is reshaping health care — without Congress

Written by Lisa

While Congress tussles over Obamacare, the Trump administration is quietly pressing ahead with plans to gut major Obama-era rules and relax federal oversight of swaths of the health care industry.

Top health officials have already signaled their intention to end mandatory programs making hospitals more accountable for their patients’ health, slowed the transition to a system that pays doctors based on quality rather than quantity, and indicated they will reverse a high-profile rule blocking nursing homes from forcing residents to sign away their right to sue.

Once envisioned as a companion to the GOP’s now-stalled effort to repeal Obamacare, the regulatory rollback has fast become the Trump administration’s chief weapon against former President Barack Obama’s health care legacy — and sets the stage for an industry-friendly reshaping of the health system.

The sheer scale of that effort has surprised and thrilled health care lobbyists, some of whom described feeling inundated by HHS leadership’s appeals for recommendations on any and all federal rules they would like to see trimmed.

“We have been shooting for the moon, just bringing up every possible issue we think they have the ability to change,” said Vinita Ollapally, manager of regulatory affairs for the American College of Surgeons. “This is the first time that any administration has seemed to be so focused on regulatory relief.”

However, the effort has raised alarms among patient advocates and policy experts, who fear it could erase several years of gains aimed at modernizing the health care system and tipping the balance of power away from providers and toward patients.

“It’s consistent with a general orientation to try to find significant accomplishments of the Obama administration and to undo them,” said Eliot Fishman, who spent nearly four years at CMS’ Center for Medicaid and CHIP Services before leaving the agency in April. “It’s disappointing, but not surprising.”

Led by Health and Human Services Secretary Tom Price and CMS Administrator Seema Verma, the initiative appears aimed at rewriting or outright eliminating a slew of regulations imposed on doctors, hospitals and other providers.

Price, an orthopedic surgeon who has long criticized health care regulation as too heavy-handed, has in some cases dispatched top staffers to work closely with doctors’ groups on changes further easing regulatory scrutiny of physicians.

Verma, formerly a Medicaid consultant who worked primarily with red states, has wasted little time targeting a pair of far-reaching Medicaid rules that tightened supervision of insurers and home health care facilities, multiple sources familiar with the process said. The agency has spent months reviewing those regulations as part of a much larger effort seen as laying the groundwork for a policy shift that hands more regulatory power over Medicaid back to states.

The work fits with an administration-wide mission to reverse scores of Obama-era rules, and Price and Verma’s vow early on to re-examine every single federal health care rule in search of waste.

“The Trump administration is working tirelessly to get Washington out of the way, bring down the cost of coverage, expand healthcare choices and improve quality,” an HHS spokesperson said in response to a series of questions for this article, highlighting the agency’s emphasis on abolishing rules it deems “burdensome across all spectrums of the healthcare system.”

The effort has also given rise to an apparatus within President Donald Trump’s health department dedicated to the so-called burden reduction initiative — one that multiple staffers characterized as a massive effort to solicit, evaluate and implement industry-backed ideas for slashing regulations.

“It’s not really a reducing-burden issue,” one CMS staffer said. “It is a deregulation issue. It’s a deregulation intent.”

In the process, CMS’ tiny but influential Office of Health Reform — originally created to aid Obamacare’s implementation — has been transformed into one of the agency’s central deregulatory hubs, meeting with industry groups and developing its own recommendations, multiple current and former CMS staffers said.

The office at one point maintained a spreadsheet listing roughly 200 potential regulatory changes, according to one staffer.

Exactly what those ideas are and how they’ll be implemented remains closely held among HHS’ and CMS’ top political appointees and their aides — a point of frustration for career employees who have spent months gathering recommendations.

“When you ask, ‘What is the organizing principle here? How are we prioritizing?’ And try to put some structure around this, nobody has an answer. The only answer people give is, ‘Reduce burden,’” another CMS staffer said. “There’s got to be more to this than that.”

But officials have laid out a two-track strategy in meetings with industry groups and lobbyists: quickly overhauling smaller rules to make life easier for providers, while developing longer-term projects aimed at fundamentally changing the way the federal government regulates health care.

In practice, that’s translated into a series of industry-friendly moves targeting Obama-era rules and protecting companies’ bottom lines. HHS plans to restore nursing homes’ ability to require that patients pre-emptively give up their right to sue for negligence — reversing a major win for consumer advocates — after saying that a 2016 ban on mandatory arbitration agreements “underestimated the financial burdens placed on providers” forced to defend themselves against lawsuits.

Medical equipment companies will get a boost from a pending rule likely to halt Medicare’s move to a new bidding program that would cut government payments to the industry. Prior to taking the helm at HHS, Price, as a Georgia congressman, had sponsored legislation delaying the competitive bidding program, which aimed to bring Medicare’s spending on medical equipment more in line with the private sector.

As for the shift in the way Medicare pays doctors to focus on the quality, rather than the quantity, of services they provide — a broadly bipartisan goal that Price supported during his time in Congress — HHS has repeatedly slowed the process to accommodate small and rural providers. That includes plans to kill off a pair of Obama-era experiments making hospitals more financially responsible for patients’ care during and after certain joint-replacement surgeries and cardiac procedures.

“They recognize that there’s some complexity, and that’s why they’ve turned to physician groups,” said American Association of Hip and Knee Surgeons President Mark Froimson, who said his group is working with CMS to simplify the metrics used to measure the quality of physicians’ care. “We believe we have a good partner and set of partners in the administration.”

Two of the the agencies’ most ambitious projects are still in the works: a rewrite of a 2016 rule that updated federal requirements for Medicaid managed care plans for the first time in over a decade, and a similarly sweeping 2014 rule tightening oversight of residential care facilities, including those for adults with disabilities.

Two red state Medicaid experts — former Tennessee Medicaid Director Darin Gordon and former Ohio Medicaid Director John McCarthy — have consulted on the policy work, according to two people familiar with their involvement.

In an email, McCarthy said the two are subcontracted to the Mitre Corporation. Mitre declined to comment on its work with CMS.

Early discussions within CMS about the Medicaid managed care rule centered on giving states more leeway in how they direct federal funding — a shift consistent with Republicans’ attempts to give states more control over the entitlement, including imposing conditions like work requirements on beneficiaries.

Changes to the regulation regarding residential care facilities, known as the Home and Community-Based Services rule, could potentially have ripple effects, according to people familiar with the agency’s discussions. A rewrite is likely to focus on easing the federal standards for facilities that care for disabled adults, and shifting more oversight responsibility back to the states.

That would represent a sharp reversal from the Obama era, which sought to toughen federal regulation over concerns about abuse and subpar living conditions in home-like facilities for the disabled.

That could take years to accomplish — CMS has already spent months just sifting through the regulations to determine what elements it can change and how to do it, said multiple people familiar with the process.

But the intent is plain: to loosen federal control over Medicaid and give states more flexibility to run their own programs.

“There is clearly a new discomfort with federal regulatory power in Medicaid, and an assumption that state concerns about, particularly, Obama-era regulations have a presumption of being valid,” Fishman said.

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