Medicare Payment Model Experimentation Under Biden Administration ‘Pretty Wide Open

BY CATHY KELLY

Executive Summary

Former CMS acting administrator Andy Slavitt says agency’s direction during Biden administration depends on nominee, but trust fund’s looming insolvency will be ‘an issue you can’t avoid.’ The president’s priorities around health equity, racial justice and mental health will make their way into CMS policy and demonstration models, Slavitt suggests. President-elect Joe Biden’s selections to head the Centers for Medicare and Medicaid Services and CMS’ Center for Medicare and Medicaid Innovation may have fairly wide latitude in selecting what Medicare payment demonstrations to advance, according to former CMS Acting Administrator Andy Slavitt.

“The White House will have a set of policy views and whatever they don’t have specific views on, those are the things that are left up to the department and the agency people,” Slavitt told the J.P. Morgan annual health care conference on 12 January. He is now general partner with the venture capital firm Town Hall Ventures.

“It’s not clear whether or not there will be particularly strong views emanating from Biden himself about bundled payments and so forth,” he pointed out. “What that implies to me is that we should watch closely who gets picked to run CMS, who gets picked to run

CMMI because if I’m correct, they will have a little more latitude in what actually the programs are.”

Slavitt said “there is no question” that the new Administration will be “supportive” of CMMI. Because of the narrow margins in the House and Senate, Biden is expected to rely on administrative and regulatory actions to advance his health care agenda, and demonstrations testing new payment models under the auspices of CMMI are a likely forum. (Also see “Biden’s Drug Pricing Administrative Actions Could Focus On Medicare Demos” - Pink Sheet, 23 Sep, 2020.)

But as to what models his Administration will pursue, the CMS and CMMI leadership, “if they’re doing it right, will do a bit of a listening tour and prioritization,” Slavitt predicted. Potentially, Biden’s priorities around health equity, racial justice and mental health may make their way into health care policies and different models, he suggested. Those “are areas I might look for. But it’s pretty wide open.”

CMS Administrator Nominee Unlikely To Bring ‘Major Agenda’

Biden’s selection of a new CMS administrator will probably come after the commissioner of the Food and Drug Administration is selected, he predicted. There is a “handful” of people being considered, Slavitt said, adding “there is no shortage of good choices.” There are “more health care [experts] on the Democratic side than you can possibly imagine. It’s almost like wading through the J.P. Morgan crowd in San Francisco.”

During a policy discussion hosted by national insurer Centene in mid-December, Slavitt suggested the CMS nominee will probably not be “someone who brings a major agenda. “I suspect it will be someone who brings a real love for these programs and the ability to run those programs and someone who’s smart and knows how to run the agency and hopefully has some experience with the agency.”

His co-panelist Cindy Mann, a former CMS deputy administrator and director of the Center for Medicaid, added that “traditionally, the CMS administrator has been Medicare focused but that was not necessarily the case with the Trump Administration, where the CMS administrator [Seems Verma] was very Medicaid focused.” Mann is now a partner with Manatt Health.

Nevertheless, “the two things that are going to be important right off the bat is whether they can be effective in helping on the COVID response,” she pointed out. “Everything at least in the short term is going to be COVID, COVID, COVID. The other thing [the Biden team] is really focused on is racial equity issues, so whether it’s a person of color running [CMS] or someone who is going to be sensitive to the issues of disparities will be high on their list.”

Medicare Parts B and D Price Reforms

Slavitt acknowledged that Biden will be left with two Trump-era drug pricing reform policies in Medicare – the “most favored nation” international reference pricing demonstration in Part B, and the rebate reform rule, which aims to lower drug prices in Medicare Part D. Drug pricing reforms in Parts B and D “will happen eventually,” Slavitt predicted. “Whether it happens now is hard to know.”

He also pointed out that the Medicare Trust Fund is projected to become insolvent in 2024, in part due to lost tax revenues as a result of the pandemic. “That’s an issue you can’t avoid,” he said. “If you have the Medicare Trust Fund expiring in your term, you’re going to have to do something.” But “whether they can do something without Congress or whether they need Congress will be interesting.”

Still, Biden is not coming to office with broad health care reform as a major priority, Slavitt emphasized. “For the first time in three presidencies we have someone who is not going to make major health care transformation a part of his goals.”

“Even if he had 58 votes in the Senate, heath care can suck the oxygen out of the first two years of any administration and Joe Biden has decided that’s not where he’s going to spend his chips in Congress….He ran on being a unifier. He did not run on creating difficult, lightening rod issues, which [health care coverage expansion] has been for the last two presidents.”

As far as the Affordable Care Act goes, Biden will “try to build back some of the things that help gird the ACA that Trump reversed,” mainly through administrative action, Slavitt suggested.