OPINIION -- The undersigned are former Chairs of the American Bar Association Health Law Section, an organization whose membership includes approximately 10,000 lawyers, associate members and law students. The lawyer members advise a wide range of clients on the laws of this country that govern the payment and delivery of health care to all Americans. We are writing as private citizens on the urgent national issues of healthcare reform legislation. Our views do not represent the position of the American Bar Association, the Health Law Section or any of our law firms or employers.
Professionally, we represent hospitals, physicians, long term care providers, health plans, pharmaceutical companies, medical device manufacturers and many other participants in the greater health care industry. Our backgrounds include work in both the government and private sectors, and collectively we have over 200 years of practical experience in providing advice and analysis of health care laws and regulations in transactions, compliance activities and litigation.
You and the Republican leadership in the Senate and House of Representatives have begun a process by which you intend to “repeal and replace” the Patient Protection and Affordable Care Act of 2010 (“ACA”), with the introduction on March 6, 2017 of the American Health Care Act by the Republican leadership in the House of Representatives. Given the limitations on this legislation imposed by the use of the budget reconciliation process, we expect that there will be additional legislation introduced in the current Congressional session to address other provisions in the ACA which cannot be modified by the American Health Care Act. We are writing to express our views about important concepts that we believe should guide legislative efforts to address the health care needs of the Nation. The signatories of this letter include independent voters and members of both major parties, and this letter is intended to reflect a non-partisan approach.
Public debate and commentary on these issues has been relatively narrowly focused on just a few aspects of the ACA, such as Medicaid expansion, employer and individual mandates to purchase coverage, and the operation of federal and state insurance exchanges through which individuals purchase health coverage. We believe that these issues are of great importance, but we also
recognize that there is considerable substance in the ACA which should be retained to best promote the health of individuals and the viability of health care providers and institutions. To simply repeal the law, as some have proposed, would eliminate many provisions that drive improvements in access to care, encourage the application of new technologies to improve health care delivery, promote quality and efficiency in health care delivery, increase transparency of markets, provide resources for the enforcement of laws that protect the integrity of federal and state programs and address the needs of the growing healthcare workforce, which is a major source of job creation in this country. In addition, abrupt repeal would disrupt substantial investments of both capital and human resources that have been made in reliance on the ACA over the past several years and profoundly affect private sector market decisions which are rooted in the economic and legal incentives built into the law.
Accordingly, we favor a legislative approach that addresses the key issues of insurance coverage and access for all Americans, while retaining certain provisions of the ACA which have served the Nation well and should be continued. We have identified sixteen principles that we believe should guide the crafting of new legislation, and which we believe, based on our experience as well as our review of proposals which have been advanced by many interested parties, may form the basis for a bi-partisan path forward.
1. Any legislation should respect the substantial investment by the public and private sectors in reliance on the provisions of the ACA, including the development of insurance exchanges, investment in Accountable Care Organizations, medical homes and other value-based health care delivery models, and investment in electronic medical records and similar technology. Changes which affect these investments should be carefully developed and incremental in nature to avoid leaving health care providers, insurers and governmental agencies with billions of dollars of stranded assets.
2. Reform legislation should emphasize the use of incentives, rather than penalties, in order to encourage constructive behavior that promotes the dual objectives of improving quality and lowering the costs of delivering care.
3. Insurance coverage purchased by individuals through exchanges (federal or state) should be maintained throughout 2019, with applicable subsidies. In addition, sufficient notice of changes for future years should be given to permit individuals to make informed decisions about continuing coverage and options. For subsequent years, refundable tax credits or continuation of direct financial support should be provided to encourage individuals who have acquired coverage to continue to be insured, but such credits should be means tested as well as based on age and of a meaningful size to ensure that individuals who are not eligible for Medicaid coverage will be able to secure coverage.
4. Since the healthcare payment system still relies substantially on private sector insurance to cover the majority of Americans, it is important to improve the functioning of insurance markets and ensure that insurance products will be available for individuals as well as employers. We support reforms which will permit the creation of insurance products providing more choice in benefit design and affordability, but also recognize the need for protections for businesses and
consumers to assure that provider networks are adequate to ensure access to care and that benefit choices are clearly understood.
5. If employer and individual mandates with respect to benefit design and coverage are eliminated, they could be replaced with tax and other incentives reasonably expected to encourage individuals and employers to maintain coverage. Changes in rules governing employer-based coverage that enhance employee choice and provide greater employee control over the expenditure of benefit dollars should be encouraged.
6. States which have insurance exchanges that are functioning well should be permitted to maintain them. States which have not organized exchanges should be encourage to create them, in concert with reforms in the insurance markets to ensure that choice in plans will be available. Federal exchanges should continue to exist until there is a determination that an adequate private insurance market for individuals (i.e., one that would afford coverage for at least that proportion of the population which has been purchasing insurance through the applicable exchange) exists in a State or the State creates an exchange. Creation of high-risk pools that provide affordable coverage to individuals with certain chronic diseases should be encouraged.
7. Insurance underwriting and coverage reforms, such as elimination of pre-existing condition exclusions, elimination of caps on lifetime benefits, and coverage for dependents through age 26, should be preserved as requirements for actuarially sound products, with appropriate funding sources identified.
8. States that have chosen to expand their Medicaid programs should continue to receive the promised levels of federal support in accordance with the current terms of the ACA. If changes are made in the means by which the federal government provides Medicaid funding, such as shifting to block grants, the amounts provided by the federal government should ensure levels of support that permit continuation of State programs that are working and not penalize states that have expanded coverage through per capita formulas for federal aid. Innovation in Medicaid delivery and payment systems, including increased use of managed care and enhanced Section 1115 waivers to permit states to modify local programs, should be encouraged. Incentives should be provided for States that did not expand Medicaid to develop alternative programs to make coverage available to a broader population of financially needy residents.
9. To the extent that Medicaid reforms result in reduced reimbursement to hospitals, then cuts in Medicare payments to hospitals made by the ACA, to offset increased Medicaid funding, should be restored.
10. Those provisions of the ACA that reform the Medicare payment system to enhance quality and efficiency, such as value-based payments and bundled payments, as well as penalties for hospital-acquired infections and preventable readmissions, should be continued.
11. The law and regulations concerning Accountable Care Organizations should be revised to encourage additional participation in the Medicare Shared Savings Program. For example reforms could include changes in the beneficiary assignment process, elimination of rules
concerning organizational structure which are redundant or inconsistent with State laws, and the broadening of exemptions from anti-fraud, tax and antitrust laws to accommodate bundled payments, capitation arrangements and similar payment models. Organizations created under the ACA that manage population health and promote wellness programs should be promoted and encouraged.
12. Taxes and penalties imposed by the ACA should be repealed only in the context of broader tax reform legislation that will ensure sufficient revenues to continue the funding of programs which are continued in reform legislation.
13. Tax legislation should include expanded use of tax-free health savings accounts or similar employee benefits to provide individuals with more flexible options for paying for their care, with the funds in the accounts available to bridge gaps in coverage or deductibles.
14. Provisions in the ACA which provide for transparency, such as disclosure of payments by pharmaceutical companies to hospitals and physicians, as well as disclosures by pharmacy benefit managers, should be preserved.
15. Assuming that the provisions in the ACA aimed at enforcement of the anti-fraud laws and the development of compliance programs are preserved, the anti-kickback, civil monetary penalties and self-referral laws should be reviewed and revised to recognize dramatic changes in reimbursement methodologies, the evolution of healthcare organizations and changes in financial relationships among healthcare providers and other constituents in the healthcare environment. It is vitally important that an appropriate balance be struck between the measures necessary to protect federal health care programs from unnecessary expenditures and the flexibility necessary to allow healthcare providers to make care available on a basis that is both clinically appropriate and cost-effective.
16. Legal requirements for parity in benefits for mental health and substance abuse care should be preserved and enforced.
We appreciate the challenges involved in developing legislation to address this important national priority and understand that the outcome of the legislative process will be the result of healthy and open debate and compromise on key values. As you have recently noted, the issues around reform to the laws which govern healthcare delivery are “unbelievably complex,” but they are well understood by the signatories of this letter and other individuals with whom we work on a daily basis.
We stand ready to help you, the members of Congress and the leaders of federal and state governmental agencies in achieving meaningful health care reform while protecting the interests of all Americans in access to appropriate and affordable care. Please contact Andrew J. Demetriou at [email protected], (213) 630-5585 for further information about our recommendations or to enlist our views on emerging legislative proposals.
Very truly yours,
Andrew J. Demetriou, David Hilgers, Linda A. Baumann, William W. Horton, Bonnie Brier, David H. Johnson, Paul R. Demuro, Gregory Pemberton, David Douglass, and Howard T. Wall, III
