We look at what could be in store for HHS with President Trump’s proposal to reorganize federal government.

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June 22, 2018


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Honey, I Shrunk the Government: Proposed Agency Reorg


On Thursday, President Donald Trump revealed a massive proposal to reorganize the federal government. “Delivering Government Solutions in the 21st Century: Reform Plan and Reorganization Recommendations” contains many far-reaching recommendations, including the following affecting the Department of Health and Human Services (HHS):

  • Move the Supplemental Nutrition Assistance Program (SNAP) from the US Department of Agriculture (USDA) to HHS
  • Rename HHS to the “Department of Health and Public Welfare” due to the consolidation of safety-net programs and to raise the profile of non-health-related programs within the department
  • Move the food safety functions of the Food and Drug Administration (FDA) into a single agency within the USDA
  • Move 3 HHS research arms—the Agency for Healthcare Research and Quality, the National Institute for Occupational Safety and Health, and the National Institute on Disability, Independent Living, and Rehabilitation Research—to the National Institutes of Health

The plan is led by Office of Management and Budget Director Mick Mulvaney and is based on the agency-reorganization proposals he assigned government-wide in April 2017.

Many of these moves would require approval by Congress. Such reorganizational authority was sought by President Barack Obama in 2012 and 2013; he had hoped to merge 6 agencies into a Department of Business and Trade.

Mulvaney’s touting the reorganization plan as “drain[ing] the swamp” and how “[t]he federal government is bloated, opaque, bureaucratic, and inefficient” probably did little to sway those predisposed to be skeptical of the plan.


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The Neverending Story: 340B HELP Hearing


On Tuesday, the Senate Committee on Health, Education, Labor, and Pensions held a hearing on the Effective Administration of the 340B Drug Pricing Program, with the sole witness being Capt. Krista M. Pedley, Director of the Health Resources and Services Administration’s (HRSA’s) Office of Pharmacy Affairs.

Pedley informed the committee that the agency needs general rulemaking authority to define how stakeholders comply with 340B requirements, as HRSA has no data on how hospitals use their savings because the agency does not have the authority to collect this information. She also felt it was important to move toward defining how covered entities use 340B savings and require that they report it to HRSA.

Pedley encountered skepticism from senators of each party about HRSA’s request. Committee Chair Lamar Alexander (R-TN) was hesitant to grant authority to HRSA to be able to dictate how 340B hospitals could use the savings, and Sen. Chris Murphy (D- CT) was unclear whether there was a problem that additional reporting from 340B entities would solve.

The Senate has been conducting a series of hearings on the 340B program to determine if and how the program should have additional oversight. Tuesday’s hearing showed there are limits to how much control HRSA might expect to receive.


Legislative Byte


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Risky Business? Expanded Use of Association Health Plans


On Tuesday, the Department of Labor released finalized rules for expanding the availability of association health plans (AHPs), “skinny plans” designed to help small businesses and self-employed people obtain less-expensive health insurance. The plans cost less because they include fewer benefits and consumer protections. The final rules are part of the Administration’s effort to promote healthcare choice and competition, announced in October 2017.

The new rules enable plans to exclude coverage for “essential health benefits” (EHBs) that the Affordable Care Act (ACA) requires of insurance sold to individuals and small businesses. AHPs cannot restrict membership based on health status or charge sicker members higher premiums, and subsidies will be available for low- and medium-income individuals.

Critics of AHPs say the availability of less expensive, less-robust coverage will disadvantage some patients when they get sick and need the excluded EHBs. Critics also believe AHPs could disrupt the exchange market by attracting healthier consumers, driving up costs for the more-robust exchange plans that will be left with proportionally sicker patients.

In a call with reporters, the Secretary of Labor estimated as many as 4 million people will gain coverage under AHPs in the coming years, including 400,000 uninsured.

President Trump campaigned, in part, on a pledge to repeal the ACA. While Republicans have been unable to repeal or replace the ACA, the President has been busy accomplishing that goal through executive power.


Back to the Future: Commercial Leading the Way in Value-Based Care


A recent survey of 120 payers found that commercial lines of business are currently outpacing government lines of business (Medicare Advantage, managed Medicaid) in transitioning from fee-for-service (FFS) to value-based care models and strategies. The online survey, conducted by ORC International and commissioned by Change Healthcare, found that those in commercial lines of business reported higher use of value-based care models or payment strategies.

Of those surveyed, 61% of commercial plans reported adopting an accountable care organization model, compared to only 38% and 49% of managed Medicaid and Medicare Advantage programs, respectively. In addition, almost twice the proportion of commercial plans surveyed reported employing prospective bundled payment strategies compared to public programs (58% commercial, 29% managed Medicaid, and 33% Medicare Advantage).

Although commercial lines of business may be leading the way in implementing value-based care models and strategies, the survey also found that, across the board, pure FFS methodologies are phasing out more quickly than projections from previous surveys—FFS methodologies make up less than 38% of reimbursement and are projected to be under 26% by 2021.

However, transitioning from FFS to value-based care does not come without challenges: 43%–58% of payers reported difficulty enticing providers to engage in episodes-of-care programs, including struggles with participation and agreeing on program parameters and performance metrics. Some payers are also having issues with implementing programs in a timely manner. The survey reported that over two-thirds of payers need at least 6 months to implement an episode-of-care program. Notwithstanding these challenges, survey respondents recognize the benefits, as they reported that value-based strategies reduced unnecessary medical costs by an average of 5.6%.

The survey’s finding that commercial plans are outpacing government lines of business is perhaps not surprising, given the latter’s heavier restrictions and regulation. The Trump Administration’s decision to halt mandatory Medicare bundled programs may contribute to slower growth in the public market; however, the Administration’s drug-pricing blueprint seeks an overhaul of the federal healthcare program payment structure to move to value-based payment.


Information Buffet (AKA, Other Stuff That Caught Our Attention)


We kept running into stories we wanted to bring to your attention, so here’s a quick hit list of other news we thought you should know:

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Manufacturer Survey: Proactive Communication of HCEI


We want to hear from you.

We invite manufacturer partners to participate in a survey regarding policy impacts on proactive communication of healthcare economic information (HCEI). Participants will receive a copy of the survey results once available AND are eligible for a drawing for a pair of Apple AirPods!


“I’m thrilled to be named CEO of this healthcare initiative. I have devoted my public health career to building scalable solutions for better healthcare delivery that are saving lives, reducing suffering, and eliminating wasteful spending both in the US and across the world. Now I have the backing of these remarkable organizations to pursue this mission with even greater impact for more than a million people, and in doing so incubate better models of care for all. This work will take time but must be done. The system is broken, and better is possible.”

 – Atul Gawande, commenting Wednesday on being appointed CEO of Amazon, Berkshire Hathaway, and JPMorgan Chase’s newly formed company to address employee healthcare. The new company will operate independently from the 3 partners and will be based in Boston.





A survey shows a majority of those under age 35 are willing to trade privacy for lower health insurance premiums.

Source: “Most Under-35s OK With Insurers Digital Spying If It Cuts Prices,” Bloomberg, June 19


CBI Reimbursement and Access 2018

August 15–16  | Philadelphia, PA
Xcenda’s Corey Ford, MPH, Director of Reimbursement Strategy and Tactics, will team up with Lash Group’s Jim Dickey, Director of Product Experience, to present a session titled, “Emerging Trends in PBM Restrictions on Commercial Copay Assistance.” They will examine and discuss the emerging copay accumulator trends. Learn more


Count on Health Policy Weekly for an at-a-glance view of legislative and regulatory developments and news that impacts the healthcare industry.


Jennifer Snow
Senior Director,
Health Policy

Scott Shields
Associate Director,
Health Policy



Amy Grogg, PharmD
Senior Vice President | Commercialization Solutions | AmerisourceBergen Corporation

Kristine Flemister, PharmD
President | Xcenda

Tommy Bramley, PhD, RPh
President | Lash Group

Stacie Heller
Vice President | Government Policy | AmerisourceBergen Corporation

Rita Norton
Senior Vice President | Government and Public Policy | AmerisourceBergen Corporation

Ana Stojanovska
Vice President | Reimbursement & Policy Insights | Xcenda


Jennifer Le | Scott Shields


Laurie Kozbelt | Ellen Olson


June 22, 2018


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