Advocacy News: June 2024

Capitol rooftoop

Word from Washington

Federal Courts

Unanimous Supreme Court dismisses challenge to FDA approval for mifepristone

In a case that threatened to restrict access to hormonal therapies for women with bleeding disorders, the U.S. Supreme Court unanimously reversed lower court decisions that effectively invalidated the 2000 approval by the Food and Drug Administration (FDA) of the commonly prescribed abortion medication (following the Supreme Court’s 2022 reversal of the landmark Roe v. Wade decision).

The Biden Administration and the manufacturer of the drug mifepristone challenged the decisions by the Northern District of Texas and Fifth Circuit Court of Appeals. However, it was clear from oral arguments last spring that the physician plaintiffs in Alliance for Hippocratic Medicine v. FDA lacked “standing” to bring the case as they did not even prescribe the medication (see Word From Washington, March 2024).

Because the case was dismissed on procedural grounds, it could be brought again in the future by a different set of plaintiffs. The conservative majority suggested during oral arguments that states may have “standing” to do so.

HFA signed onto an amicus curiae (or “friend of the court” brief) filed by patient and provider groups supporting the dismissal of the case, given that mifepristone has several other uses, including as a safe and effective first-line hormonal therapy for menstruating women with bleeding disorders. HFA also joined the coalition statement supporting the Court’s dismissal of the case.

Supreme Court removes federal agency power to interpret to ambiguous laws

In a case that could substantially weaken the authority of federal regulatory agencies, the U.S Supreme Court overturned the long-standing “Chevron” doctrine that has required courts defer to an agency’s reasonable interpretation of ambiguous federal statutes. 

The strictly partisan decision in Loper Bright Enterprises v. Raimondo and Relentless v. Dept. of Commerce means that federal judges and not regulatory experts will determine complex issues like Medicare and Medicaid reimbursement, safety and effectiveness of drugs and devices, and whether certain medical conditions are disabling enough to warrant federal assistance. The majority opinion written by Chief Justice Roberts insisted that only the judicial branch is competent to resolve statutory ambiguities. However, the dissenting opinion by Justice Kagan noted that the majority “gives itself exclusive power over every open issue — no matter how expertise-driven or policy-laden — involving the meaning of regulatory law” contrary to the intent of Congress which knows regulatory agencies have the expertise needed to implement their wishes. The minority opinion argued that it was up to Congress to pass legislation overturning “Chevron” if it was unhappy with how agencies have applied the doctrine.

Even though the majority insisted that the Supreme Court will not consider its reversal a justification to overturn the multitude of cases previously decided based on the “Chevron” doctrine (which has been consistently applied since early in the Reagan Administration), the court’s concurrent decisions this term suggest otherwise. For example, in Corner Post v. Federal Reserve the court held on strictly partisan lines that agency actions are no longer considered final (pursuant to the Administrative Procedures Act).  The minority opinion warned that this decision will literally lead to a “tsunami of lawsuits” against decades-old cases (including drug approvals) that “has the potential to devastate the functioning of the Federal Government.”  Similarly, in Securities and Exchange Commission v. Jarkesy the court held on strictly partisan lines that the SEC could not rely on internal processes to impose fines on fraudulent actors without affording them a right to jury trial—a decision the dissenters warned could extend to all federal agencies that rely heavily on administrative process to levy civil penalties for fraud (such as the HHS Inspector General, the FDA, and the Social Security Administration.)

In addition, the court’s invalidation of “Chevron” could make it far easier for litigants to legally challenge ACA mandates that certain preventive services be covered free of cost-sharing (see article below) or long-standing FDA drug approvals for mifepristone or other drugs with which they disagree on religious or philosophical grounds (see article above).

Patient groups including the American Cancer Society, American Heart Association, and American Lung Association quickly condemned the landmark decision, maintaining that eliminating the “Chevron” doctrine “will cause significant disruption to publicly funded health insurance programs, to the stability of this country’s healthcare and food and drug review systems, and to the health and well-being of the patients and consumers we serve.”

Fifth Circuit decides most Americans can receive free preventive services under the ACA, for now

The U.S. Court of Appeals for the Fifth Circuit has partially reversed a lower court decision that invalidated key provisions of the Affordable Care Act (ACA) relating to preventive services provided to more than 150 million Americans.

The initial decision from Judge Reed O’Connor (appointed by President George W. Bush) in the Northern District of Texas declared that the ACA mandate that insurers cover certain preventive services for free (i.e. without any patient cost-sharing) to be unenforceable nationwide for those services recommended by the U.S. Preventive Services Task Force (which he declared unconstitutional because its members were not nominated by the President and confirmed by the Senate). This included screenings for cancer, heart disease, and sexually transmitted diseases, as well as pre-exposure prophylaxis (PrEP) medications taken to reduce the risk of HIV/AIDS infection. 

The Fifth Circuit issued a “mixed” ruling that agreed the USPSTF appointments were constitutionally flawed but struck down Judge O’Connor’s nationwide remedy.  Instead, the court ruled that cost-free preventive services should remain in place for all but the specific plaintiffs in Braidwood Management v. Becerra (Christian-owned businesses and six individuals in Texas).

However, the Fifth Circuit remanded much of the case back to Judge O’Connor to consider additional legal arguments as to why coverage for other cost-free preventive services should not be mandated, leaving the door open for a broader adverse decision in the future.  As a result, HFA joined with 15 other consumer groups (including the American Cancer Society and The AIDS Institute) in applauding the Fifth Circuit’s partial reversal but expressing concern about the long-term ramifications of its decision. HFA also joined with these groups in their amicus brief supporting the right of patients to receive cost-free and evidence-based preventive services under the ACA (See Word from Washington, February 2024).

Federal court strikes down unprecedented ten-year waiver for Indiana Medicaid

The U.S. District Court for the District of Columbia has vacated Section 1115 demonstration waivers that the Trump Administration approved for Indiana Medicaid for an unprecedented ten-year period (and the Biden Administration elected not to reverse). The waivers allowed Indiana to restrict coverage by charging monthly income-based premiums, offering no retroactive coverage, and providing no assurance of non-emergency medical transportation. 

Judge James Boasberg (appointed by President Obama) had previously invalidated federal waivers that allowed Medicaid work reporting requirements to be imposed in Kentucky, New Hampshire, and Arkansas, concluding that the HHS Secretary failed to adequately consider the adverse impact on Medicaid enrollees who may be terminated. The judge ruled that the Indiana waivers contain the same fatal flaw, noting that “although the Secretary sprinkled the word ‘coverage’ into his approval letter this time, he did not adequately consider whether the program ‘would in fact help the state furnish medical assistance to its citizens, a central objective of Medicaid’.”

The decision effectively remands the waivers back to HHS for further review.

Federal Agencies

Consumer Financial Protection Bureau proposes to eliminate medical debt from credit reports

The Consumer Financial Protection Bureau (CFPB) proposed new regulations last month that would ban information on medical debt from being reported on all consumer credit reports nationwide.

The bureau had announced its intent to issue such regulations last fall, citing a 2022 study showing that at least 20 percent of Americans had more than $88 billion in medical debt on their credit reports, greatly hampering their ability to own a home, buy a car, or secure loans to start a business (see Word from Washington, September 2023).  Since that time, credit reporting agencies had voluntarily agreed to no longer report certain medical debt in collections (and give consumers up to one year before medical debt appeared on credit reports.)  However, the bureau noted earlier this year that despite these actions more than 15 million Americans still had $49 million in medical debt on credit reports. 

The new rulemaking will be effective early next year and immediately benefit more than 22 million Americans. It specifically prohibits information on medical debt from factoring into loan applications. 

The U.S. Supreme Court recently upheld the authority of the CFPB in a 7-2 decision, overruling a Fifth Circuit Court of Appeals decision in a challenge to its funding structure brought by payday lenders. The case had threatened not only to restrict the power of the Bureau (which was created in 2011) but “disrupt financial markets by casting doubt on the functions of other independently funded regulators across the government.”

Colorado and New York already passed laws last year limiting medical debt on consumer credit reports (see State of the States: Winter 2023) while Minnesota did so last month. The North Carolina governor is currently seeking federal approval for an alternative approach that offer hospitals higher Medicaid reimbursement if they agree to eliminate roughly $4 billion in medical debt for two million low-to-middle income state residents (whether or not they are enrolled in Medicaid).

Inflation rebates will lower out-of-pocket costs for 64 drugs under Medicare Part B

The Centers for Medicare and Medicaid Services (CMS) released a list last month of 64 drugs for which Medicare enrollees will pay less this quarter under Part B since prices exceeded the rate of inflation (up from 47 drugs during the second quarter of 2024).

The Medicare Prescription Drug Inflation Rebate Program has allowed Medicare enrollees to save up to $4,593 per day in lower coinsurance obligations since 2023. It applies to single-source drugs and biological products covered under Part B. The current list of 64 drugs includes treatments for cancer, osteoporosis, and certain infections.

CMS emphasized that the rebate program is just one of several measures in the Inflation Reduction Act of 2021 that will substantially reduce out-of-pocket costs for Medicare enrollees. In addition to expanding eligibility for full benefits under the Low-Income Subsidy program for the Part D prescription drug benefit, the IRA caps annual OOP costs at $2,000 for all Part D enrollees starting in 2025.

CMS approves Oregon Basic Health Plan blueprint with coverage to begin in July

The Centers for Medicare and Medicaid Services (CMS) has made Oregon the third state to exercise the Basic Health Plan option under the Affordable Care Act (ACA).

Minnesota and New York had been the only states to use federal premium tax credit dollars under the ACA to fund the state coverage program for those earning up to 200 percent of the federal poverty level (New York received federal approval to expand to 250 percent effective April 1st). The Basic Health Program option allows states to provide this population with more generous benefits at lower premiums than in the ACA Marketplace.

Under Oregon’s BHP Blueprint, the state will start July 1st to transition Medicaid enrollees from the Oregon Health Plan into the BHP if they earn 138-200 percent of FPL and accept applications for the BHP from those enrolled in the federally-facilitated ACA Marketplace in Oregon.

The Kentucky Legislature had authorized and appropriated funds to pursue a BHP in 2022 but that effort was subsequently halted.  Proposed legislation to study creation of a BHP failed to advance in 2024.

Only ten states have yet to complete Medicaid “unwinding” redeterminations

According to the latest KFF Medicaid Unwinding Enrollment Tracker,  nearly 24 million Americans have lost Medicaid coverage since states were allowed to resume eligibility verifications following the COVID-19 public health emergency.  Overall, 30 percent of all Medicaid redeterminations resulted in coverage termination. However, this rate continues to range widely with Utah disenrolling 56 percent of enrollees (and Texas disenrolling nearly 50 percent) compared to only 13 percent in Maine and North Carolina.

Nearly 70 percent of Medicaid terminations continue to be for procedural reasons (such as not returning forms on time) and could still be otherwise Medicaid-eligible (only four states are below 50 percent). HFA remains focused on mitigating erroneous coverage losses as both figures far exceed initial projections by KFF, the Urban Institute, and the Congressional Budget Office.

The “unwinding” process has resulted in a significant drop in net Medicaid enrollment for states like Utah (35 percent), Colorado (34 percent), and Texas (29 percent). By contrast, states like North Carolina, Hawaii, and Maine had barely noticeable changes in net enrollment (less than three percent). 

The most worrisome trend for consumer advocates continues to be the “perplexing” rate of coverage losses among children. For example, in Missouri well over half (56 percent) of terminations were for children, even though Medicaid eligibility for children is much higher than for adults. (Federal regulators are already investigating whether the state’s worst-in-the-nation delays in processing Medicaid applications is contributing to this trend).

The Centers for Medicaid and Medicaid Services recently gave states extra time to conclude “unwinding” redeterminations (see Word from Washington, May 2024) and they continue in 11 states. Five of those states (Illinois, Kentucky, Michigan, New Jersey, and Wisconsin) are expected to conclude in July, Hawaii and South Carolina will follow in August, and North Carolina will finish in November (Alaska and DC will not wrap up until 2025 while New York’s end date is still unknown).

Congress

Reintroduced Medicare public option bill would make enhanced premium subsidies permanent

Senators Michael Bennet (D-CO) and Tim Kaine (D-VA) introduced legislation last month that could create a public health insurance option within the Affordable Care Act (ACA) Marketplaces.

The Medicare-X Choice Act of 2024 is similar to legislation the Senators sponsored last Congress that failed to advance. The Medicare-X option would initially be available in the ACA Marketplace for individuals in areas where there is a shortage of insurers or higher health care costs due to less competition. It would expand to every ZIP code in the country by 2029 and be added as another option on the Small Business Health Options Program Marketplace.

The sponsors state that their bill would “expand Medicare’s network of doctors and providers” and would not only “guarantee the essential health benefits established in the ACA” but expand benefits and provide all primary care services without cost-sharing requirements for plan holders.  It would also make permanent the enhanced premium subsidies provided to all Marketplace consumers by the American Rescue Plan Act of 2021 and extended through 2025 by the Inflation Reduction Act. The enhanced subsidies are largely credited with reducing average Marketplace premiums by 32 percent and driving record Marketplace enrollment totals over the past two open enrollment periods. 

State of the States

  • Governor Jared Polis (D) signed S.B. 203 into law last month, requiring Colorado’s prescription drug affordability board (PDAB) to consider input from the Colorado rare disease advisory council in determining upper payment limits for drugs the board deems unaffordable. The new law followed a failed effort to prevent the board from considering orphan drugs all together after it ruled that Trikafta (a $200,000 per patient orphan drug for cystic fibrosis) was “not unaffordable” because patients received financial assistance from the manufacturer. The Colorado PDAB has already set upper payment limits for two drugs (Enbrel and Stelara) becoming the first in the nation to do so (see State of the States, February 2024).
  • The Oregon Prescription Drug Affordability Board (PDAB) voted last month to pause all drug affordability reviews until 2025 so that it can “review, assess and possibly improve the criteria and methods used to assess and select drugs for potential affordability reviews…using a refreshed data set.”  The nine scheduled drugs for 2024 review had included infusion drugs such as Inflectra (an FDA-approved biosimilar for rheumatoid arthritis and related conditions) but no medications specific to bleeding disorders.
  • Rhode Island Governor Daniel McKee (D) signed unanimously-passed legislation (H.7365) last month to protect patients from “white-bagging” where insurers require patients to get their medication only from insurer-affiliated pharmacies. Starting in 2025, state-regulated health plans cannot refuse to pay a clinician for administering a drug in a clinical setting from the provider’s chosen pharmacy.  (The new law does not change how specialty drugs taken at home are dispensed; the payer can still stipulate which specialty pharmacy fills those prescriptions). At least eight other states (led by Arkansas and Louisiana in 2021) have enacted laws providing consumers with some protections from this practice.
en_USEnglish