In this update:
- Legislative Updates
- Congress Continues Work on Government Funding and Lame Duck Package
- Warren and Hawley Introduce PBM Breakup Act
- Administration Update
- Trump Chooses David Sacks as AI Leader
- Nobel Laureates Urge Senators Not to Confirm RFK Jr.
- Trump Chooses Andrew Ferguson for FTC Chair
- Federal Agencies
- CMMI Releases Seventh Report to Congress
- CBO Releases Report on ACA Subsidies Expiration
- Other Updates
- Commonwealth Fund Publishes Report on Health Care Affordability for Seniors
- Federal Judge Halts Access to ACA for Dreamers
- Urban Institute Estimates National, State Consumer Premium Cost Increases Without Enhanced Subsidies
- New York State Updates
- DOH Issues Guidance to Medicaid Managed Care Plans Regarding CDPAP Statewide Fiscal Intermediary Transition
- DOH Issues Revised Proposed Regulations on Behavioral Health Network Adequacy and Access
- DOH to Host 1115 Waiver SCN Informational Webinar for Social Care Service Providers
Legislative Update
Congress Continues Work on Government Funding and Lame Duck Package
The House and Senate Appropriations Committees continued their negotiations this week to fund the government past the current deadline of December 20th. The eventual package is likely to be a short-term Continuing Resolution (CR) to fund the government into March 2025, punting many major policy decisions into the Trump Administration and to a Republican-controlled House and Senate. Draft text of a CR is expected to be released this weekend, with votes on Tuesday or Wednesday of next week.
Congress is also likely to take up a limited health care extenders package before the end of the year. While negotiations are ongoing, likely elements include:
- Extension of telehealth flexibilities;
- Funding for the Federally Qualified Health Center (FQHC) program;
- Delay to Medicaid Disproportionate Hospital Share (DSH) cuts;
- Partial or full restoration of the scheduled cut to Medicare physician payments.
Warren and Hawley Introduce PBM Breakup Act
On December 11th, Senators Elizabeth Warren (D-MA) and Josh Hawley (R-MO) introduced the Patients Before Monopolies (PBM) Act, with a House companion. The bill would prohibit companies that own pharmacy benefit managers (PBM), as well as health insurers, from owning retail or mail-order pharmacies. The three largest PBMs—CVS Health’s Caremark, Cigna’s Express Scripts and UnitedHealth’s Optum Rx—are all closely affiliated with an insurer and a pharmacy business. If enacted, the bill would require them to divest their pharmacy businesses within three years. There are a number of bills in circulation to tighten regulations on the industry, but all have stalled. The bill’s backers are hoping to lay the groundwork now for passage in the next Congress.
The bill is available here.
Administration Update
Trump Chooses David Sacks as AI Leader
On December 6th, President-elect Donald Trump announced his intention to appoint David Sacks as White House AI and Crypto Czar. Sacks is a venture capitalist and lawyer with ties to Elon Musk. Before founding his own venture capital firm in 2017, he was involved in PayPal’s early development with Peter Thiel. Trump expects Sacks to use his appointment to steer government regulation away from “big tech bias,” protect free speech, and develop a legal framework for the crypto industry. Sacks co-hosts the “All-In” podcast, discussing current events, tech, and the economy.
Given the nature of his extensive investments in AI and crypto, it is possible that Sacks will need to divest before assuming his position, unless he receives a waiver from the president, according to ethics experts. This position does not require confirmation by the U.S. Senate.
Nobel Laureates Urge Senators Not to Confirm RFK Jr.
On December 9th, more than 75 Nobel Laureates sent a letter to the U.S. Senate urging Senators not to confirm Robert F. Kennedy Jr. as Secretary of Health and Human Services (HHS). While the group tends to be apolitical, the Laureates felt compelled to speak out against RFK Jr.’s views on mainstream science. The Laureates—in medicine, chemistry, economics, and physics—warned that confirming RFK Jr. would place “the public’s health in jeopardy and undermine America’s global leadership in the health sciences.”
The letter is available here.
Trump Chooses Andrew Ferguson for FTC Chair
On December 10th, President-elect Trump announced his selection of Andrew Ferguson to serve as the Federal Trade Commission (FTC) Chair. Ferguson currently sits on the Commission and is a lawyer by training, having worked in the offices of Senate Minority Leader Mitch McConnell (R-KY), Senator Lindsey Graham (R-SC), and Senate Judiciary Chair Chuck Grassley (R-IA). Off Capitol Hill, Ferguson served as the former solicitor general for Virginia.
Ferguson is expected to abandon current Chair Lina Khan’s critical approach to mergers and acquisitions (M&A). With an activist strategy, Khan opposed more mergers than many of her predecessors, slowing the pace of M&A. Wall Street welcomes the news with some expecting that deal volume next year could exceed the 10-year average. Since Ferguson already serves on the Commission, he will not require Senate confirmation. President-elect Trump also announced his intention to fill a vacant Commissioner seat with Mark Meador, a former staffer to Senator Mike Lee (R-UT) who “is seen as a pro-enforcement, populist Republican,” according to Bloomberg.
Federal Agencies
CMMI Releases Seventh Report to Congress
On December 11th, the Centers for Medicare & Medicaid Innovation Center (CMMI) released its 2024 Report to Congress. The report makes the case for continued funding to CMMI in a potentially contentious environment, with updates on actions since 2022. Over the past two years, CMMI has introduced nine new models, bringing the total active model count to 37, with over 57 million beneficiaries served. Many of the models are building towards the goal of having every Medicare beneficiary in a care relationship, like an Accountable Care Organization (ACO), by 2030. Primary care and integration continues to be a priority, but CMMI has also taken targeted steps to address affordability, including with cell and gene therapy and oncology care.
The report is available here.
CBO Releases Report on ACA Subsidies Expiration
On December 5th, the Congressional Budget Office (CBO) issued a report estimating the effects on health insurance coverage and premiums of not extending the enhanced premium tax credits that were included in the American Rescue Plan (ARP) beyond the currently scheduled December 31, 2025, expiration. Without an extension, CBO estimates that the number of uninsured will increase by 2.2 million in 2026, 3.7 million in 2027, and 3.8 million per year, on average, over the 2026-2034 period. CBO further estimates that gross benchmark premiums will also increase if the enhanced premium tax credits are not extended, as healthier enrollees leave the marketplace and insurers respond by increasing premiums. CBO estimates that gross benchmark premiums will increase by 4.3% in 2026, 7.7% in 2027, and 7.9%, on average, over the 2026-2034 period. The report was requested by Congressional Democrats as Congress continues negotiations for an end-of-year government funding package.
The report is available here.
Other
Commonwealth Fund Publishes Report on Health Care Affordability for Seniors
On December 4th, the Commonwealth Fund released a report titled “Health Care Affordability for Older Adults: How the U.S. Compares to Other Countries.” Researchers at the Commonwealth Fund found that, despite Medicare coverage, older Americans still have difficulty affording care. According to the survey, nearly one in four older adults in the U.S. spent at least $2,000 out-of-pocket on health care last year. Among the same demographic in France and the Netherlands, fewer than 5% of those surveyed spent an equivalent amount. Dental care is particularly inaccessible, with one in five older adults in the U.S. reporting skipping needed care due to cost.
The report is available here.
Federal Judge Halts Access to ACA for Dreamers
On December 10th, a federal judge in North Dakota ruled in favor of the 19 states challenging a Biden Administration rule allowing people in the Deferred Action for Childhood Arrivals (DACA) program, known as Dreamers, to enroll in Affordable Care Act (ACA) coverage. DACA recipients are undocumented immigrants who were brought to the U.S. as children. This decision effectively bars any Dreamers from enrolling for coverage in those states, either in their marketplaces or through HealthCare.gov moving forward. The decision does not say it is retroactive, but nonetheless, it is unclear if coverage will continue as planned for Dreamers already enrolled in plans. The Biden Administration is expected to appeal this decision, but the final decision could be delayed by the incoming Trump Administration.
The ruling is available here.
Urban Institute Estimates National, State Consumer Premium Cost Increases Without Enhanced Subsidies
On December 9th, the Urban Institute released a report estimating national and state-level increases in consumer spending on premiums if the ARP enhanced premium tax credits expire. Researchers estimated the 2025 effects of premiums with and without the enhanced premium tax credits, using actual premium data from insurers, rather than estimating the 2026 effects (which is when the enhanced help currently expires). Researchers estimate the following annual, per member premium spending increases, by income level:
- Less than 150% of the federal poverty line (FPL): $387 (previously $0)
- 150-200% FPL: 402%, $725
- 200-250% FPL: 114%, $573
- 250-300% FPL: 99%, $848
- 300-400% FPL: 29%, $516
- Greater than 400% FPL: 82%, $2,914
The report also provides state-level estimates for more general categories. For New York, the Institute estimates that costs will increase by $877 per month for people with incomes above 250% FPL. Because of the Essential Plan, it did not provide an estimate for people with incomes below this level.
The report is available here.
Other Updates
RAND Publishes Report on Hospital Pricing
On May 13th, RAND published a report on hospital prices paid by employers and private insurers from 2020-2022. Using medical claims data, RAND found that in 2022, across all hospital services (inpatient and outpatient), employers and private insurers paid, on average, 254 percent of Medicare payments for the same services, at the same facilities. In some states, including New York, California, and Florida, these payers paid over 300 percent of Medicare. These findings do not deviate from historical trends. Researchers conclude that “very little” price variation is explained by a hospital’s share of Medicare or Medicaid patients. Rather, price variation is more a function of market power.
The report is available here.
New York State Updates
DOH Issues Guidance to Medicaid Managed Care Plans Regarding CDPAP Statewide Fiscal Intermediary Transition
On December 6th, the New York State (NYS) Department of Health (DOH) issued a new policy and guidance document for Medicaid managed care plans (MMCPs) related to the Consumer Directed Personal Assistance Program (CDPAP) Statewide Fiscal Intermediary (SFI) transition. In accordance with the 2024-25 Enacted NYS Budget, the State has contracted with a single statewide entity, Public Partnerships LLC (PPL), that will be responsible for overseeing the delivery of FI services for CDPAP. Effective April 1, 2025, PPL will be the only entity authorized to provide FI services for CDPAP.
The document includes requirements for MMCPs on transitioning services from organizations currently providing fiscal intermediary services to the SFI. To support the transition, MMCPs are expected to:
- Contract with PPL;
- Support their members through the transition;
- Send the CDPAP SFI Transition Policy (here) to current fiscal intermediaries with which they have contracts and facilitate the data transfer to DOH; and
- Monitor compliance with the transition requirements.
The guidance document is available here. Questions may be submitted to StatewideFI@health.ny.gov. DOH will facilitate weekly meetings with MMCPs and PPL throughout the transition process.
DOH Issues Revised Proposed Regulations on Behavioral Health Network Adequacy and Access
On December 11th, DOH issued revised proposed regulations that would establish network adequacy standards for behavioral health services for Medicaid Managed Care Organizations (MCOs). The Fiscal Year 2023-24 Enacted Budget required DOH, in consultation with the Department of Financial Services (DFS), the Office of Mental Health (OMH), and the Office of Addiction Services and Supports (OASAS) to develop regulations by the end of last year on this topic. DFS has issued identical network adequacy proposed regulations, which are applicable to regulated commercial insurance plans (SPG’s summary is available here).
As with the DFS proposed regulations, the DOH regulations would require MCOs to ensure that its network has adequate capacity and availability to offer behavioral health services appointments within specified timeframes (i.e., within 10 business days for initial outpatient visits, and within 7 calendar days following a hospital discharge or emergency room visit). If the MCO is not able to locate a participating provider within 3 business days of receipt of an access complaint, the MCO must allow the member to receive services from an out-of-network provider and may not impose additional cost-sharing.
The regulations would allow MCOs to meet appointment wait time requirements using telehealth appointments, unless the patient specifically requests an in-person appointment. The proposed regulations also include provider directory requirements, reporting requirements, requirements for responding to complaints, and additional plan responsibilities regarding network adequacy and access.
The revised proposed regulations are available here. Compared to the initial proposed regulations, the revised regulations provide clarifying language and other changes to address many of the comments received by stakeholders. Public comment on the revised regulations may be submitted to regsqna@health.ny.gov through January 27, 2025.
DOH to Host 1115 Waiver SCN Informational Webinar for Social Care Service Providers
On December 19th from 1pm-2pm, DOH will host a webinar for social care service providers on the State’s 1115 Waiver Social Care Networks (SCNs). The webinar will provide an overview of SCNs and share opportunities for providers on how they can participate in the program and what resources are available to support participation. The webinar is intended for community-based organizations and other entities that provide social care services, including:
- Housing support service providers;
- Food and nutrition service providers;
- Transportation service providers; and
- Care managers, including community health workers.
Registration is available here. Questions may be submitted to NYHER@health.ny.gov.