FDA Issues Final Regulations Easing the Path for Direct-to-Consumer Genetic Testing

New regulations issued on November 7, 2017 by FDA will make it easier for companies to offer certain types of genetic tests directly-to-consumers, without a health-care provider intermediary.

The first regulation finalizes a new medical device classification for “autosomal recessive carrier screening gene mutation detection systems.”  This regulation essentially codifies classification already established by FDA in response to a request by 23andMe, and  enables other laboratories to offer their DTC tests according to the criteria specified in the classification regulation.  These tests may be offered without the need for FDA premarket review.

Similarly, the second regulation finalizes a new medical device classification for  DTC “genetic health risk assessment” (GHR)  (i.e., predictive) tests.  The classification specifies the conditions under which these tests may be marketed, and includes the requirement for a 510(k) premarket notification to FDA. However, in a Federal Register Notice, also issued yesterday, FDA proposes to exempt GHR tests from the 510(k) premarket submission requirement after a lab has successfully obtained FDA clearance of its first GHR assay.  Comments to this proposed exemption are being accepted by FDA until January 8. 

This post was written by Gail H. Javitt of Epstein Becker & Green, P.C. All rights reserved., ©2017
For more Health Care legal analysis, go to The National Law Review

Telemedicine – Are There Increased Risks With Virtual Doctor Visits?

“Telemedicine” or “Telehealth” are the terms most often used when referring to clinical diagnosis and monitoring that is delivered by technology. Telemedicine encompasses healthcare provided via real time two-way video conferencing; file sharing, including transmission of health history, x-rays, films, or photos; remote patient monitoring; and consumer mobile health apps on smart phones, tablets, and devices that collect data and transmit it to a healthcare provider. Telemedicine is increasingly being used for everything from diagnosing common viruses to monitoring patients with serious long-term health issues.

The American Telemedicine Association reports that majority of hospitals now use some form of telemedicine. Two years ago, there were approximately 20 million telemedicine video consultations; that number is expected to increase to about 160 million by 2020. An estimated one-third of employer group plans already cover some type of telehealth.

Telemedicine implicates legal and regulatory issues as licensing, prescribing, credentialing, and cybersecurity. Pennsylvania recently passed legislation joining the Interstate Medical Licensing Compact, an agreement whereby licensed physicians can qualify to practice medicine across state lines within the Compact if they meet the eligibility requirements. The Compact enables physicians to obtain licenses to practice in multiple states, while strengthening public protection through the sharing of investigative and disciplinary information.

Federal and state laws and regulations may differ in their definitions and regulation of telemedicine. New Jersey recently passed legislation authorizing health care providers to engage in telemedicine and telehealth. The law establishes telemedicine practice standards, requirements for health care providers, and telehealth coverage requirements for various types of health insurance plans. Earlier this year, Texas became the last state to abolish the requirement that patient-physician relationships must first be established during an in-person patient/doctor visit before a telemedicine visit.

As telemedicine use increases, there will likely be an increase in related professional liability claims. One legal issue that arises in the context of telemedicine involves the standard of care that applies. The New Jersey statute states that the doctor is held to the same standard of care as applies to in-person settings. If that is not possible, the health care provider is required direct the patient to seek in-person care. However, the standard of care for telemedicine is neither clear nor uniform across the states.

Another issue that arises in the context of telemedicine is informed consent, especially in terms of communication, and keeping in mind that the Pennsylvania Supreme Court recently held that only the doctor, and not staff members, can obtain informed consent from patients. Miscommunication between a healthcare provider and patient is often an underlying cause of medical malpractice allegations in terms of whether informed consent was obtained.

In addition, equipment deficiencies or malfunctions can mask symptoms that would be evident during an in-person examination or result in the failure to transmit data accurately or timely, affecting the diagnosis or treatment of the patient.

Some of these issues will likely ultimately be addressed by legislative or regulatory bodies but others may end up in the courts. According to one medical malpractice insurer, claims relating to telemedicine have resulted from situations involving the remote reading of x-rays and fetal monitor strips by physicians, attempts to diagnose a patient via telemedicine, delays in treatment, and failure to order medication.

recent Pennsylvania case illustrates how telemedicine may also impact the way medical malpractice claims are treated in the courts. In Pennsylvania, a medical malpractice lawsuit must be filed in the county where the alleged malpractice occurred. Transferring venue back to Philadelphia County, the Superior Court in Pennsylvania found that alleged medical malpractice occurred in Philadelphia — where the physician and staff failed to timely transmit the physician’s interpretation of an infant’s echocardiogram to the hospital in another county where the infant was being treated.

The use of telemedicine will likely have wide-reaching implications for health care and health care law, including medical malpractice.

This post was written by Michael C. Ksiazek of STARK & STARK, COPYRIGHT ©
2017
For more Health Care legal analysis, go to The National Law Review 

Trump Administration Limits Affordable Care Act’s Contraceptive Coverage Mandate

On Friday October 6, 2017, the Trump administration released two interim final rules expanding the exemptions allowed under the Patient Protection and Affordable Care Act’s (the “ACA’s”) contraceptive coverage mandate. Under the ACA, employer group health plans generally are required to cover contraceptives, sterilization, and related patient education and counseling, with exemptions provided for religious houses of worship. The exemption was expanded by the Department of Health and Human Services (HHS) as a result of the Supreme Court’s decision in Burwell v. Hobby Lobby 34 S. Ct. 2751 (2014), which held health plans of closely held for-profit corporations are not required to cover contraceptives if doing so would contradict the owner’s religious beliefs under the Religious Freedom Restoration Act.

The interim final rules, released by the Treasury Department, Department of Labor (DOL), and HHS, are effective immediately and provide exemptions from the contraceptive coverage mandate to many employers with “sincerely held religious beliefs” or “sincerely held moral convictions”. The interim final rules limit the exemption for “sincerely held moral convictions” to houses of worship, tax-exempt entities, and closely held for-profit corporations, but permit publicly traded for-profit entities to use the exemption for “sincerely held religious beliefs.” According to the Trump administration, the United States has had a long history of providing protections in the regulation of health care for individuals and entities with objections based on religious beliefs or moral convictions. To take advantage of the new exemption, eligible employers must notify employees that they will no longer provide contraceptive coverage but need not inform the federal government. The Employee Retirement Income Security Act of 1974, as amended (ERISA) requires that a Summary of Material Modification (SMM) is provided within 60 days of a “material reduction” in covered services or benefits provided under a group health plan. A material reduction includes the elimination of benefits payable under a group health plan. According to an Obama administration report released last year, 55 million women have gained access to no-cost birth control as a result of the contraceptive coverage mandate. It is not clear how many entities may claim the exemptions, but HHS has predicted about 200 entities (affecting 120,000 women) may do so based on the number of entities that filed lawsuits.  Written comments on the interim final rules are due December 5, 2017.

This post was written by Cassandra Labbees of Epstein Becker & Green, P.C. All rights reserved., ©2017
For more legal analysis go to The National Law Review

Effects of Insurance Marketplace Uncertainty

Even as Senators continue to consider “Graham-Cassidy,” the latest Affordable Care Act (ACA) repeal legislation, insurance markets are already reacting to uncertainty and instability brought about by persistent GOP efforts to upend the post-ACA insurance landscape. Between the Trump Administration’s ongoing refusal to commit to long-term funding of the ACA’s cost-sharing reductions (CSRs) and legislative overtures to repeal key portions of the ACA, premiums have increased, insurers have exited state exchanges, and access to health care coverage has been compromised.

As the Congressional Budget Office (CBO) recently estimated, insurers are expected to “raise premiums for marketplace plans in 2018 by an average of roughly 15 percent, largely because of uncertainty about whether the federal government will continue to fund CSR payments and because of an increase in the percentage of the population living in areas with only one insurer.” Speaking to the latter factor, CBO notes that a number of insurers have withdrawn from healthcare exchanges established under the ACA, spurred, at least in part, by “uncertainty about the enforcement of the individual mandate, and uncertainty about the federal government’s future payments for [CSRs].” Although ACA proponents’ (and critics’) most dire predictions were narrowly avoided – that some counties would have no insurers offering marketplace plans – there is little doubt that insurer participation has been adversely impacted by market uncertainty, with pocketbook repercussions for policy-holders.

The turbulent political climate is also likely to reduce the number of insured individuals in 2018. CBO and the Joint Committee on Taxation anticipate lower insurance enrollment as a result of reductions in federal-sponsored advertising and outreach. Department of Health and Human Services officials recently indicated that the advertising budget for the open enrollment period commencing in November would be reduced to $10 million, amounting to a 90% reduction when compared to spending in the last year of the Obama Administration. Grants to “navigators” – nonprofit groups that assist people with marketplace insurance plan enrollment – will be reduced from approximately $63 million to $36 million.

Whether or not the worst is yet to come will hinge on the fate of Graham-Cassidy and the presently-stalled efforts to reach consensus on a bipartisan ACA stabilization bill. In what is turning out to be a recurring theme in 2017, we may have to wait several weeks for the dust to settle and reasoned prognostication to be possible.

This post was written by Matthew J. Goldman & Jordan E. Grushkin of Sheppard Mullin Richter & Hampton LLP., Copyright © 2017
For more legal analysis go to The National Law Review 

Nursing Home Residents Deprived of Right to Sue for Abuse and Neglect

The current administration has set its sights on another federal rule, seeking to eliminate the ban on pre-dispute arbitration agreements for nursing home residents. Pre-dispute arbitration agreements require elderly adults and individuals with disabilities, as well as their families, to waive their right to file a lawsuit in the courts – before admission to a nursing home. As a condition to entering the nursing home, the prospective resident and his or her representative would be required to submit any dispute, including claims of egregious abuse or neglect, to mandatory arbitration proceedings.

The Current Rule

As the rule currently stands, a nursing home resident cannot be required to waive his or her right to access to the court system. This rule preserves the right of vulnerable nursing home residents to sue for injuries caused by nursing home negligence, abuse, and neglect, including pressure sore infections, suffocation caused by restraints, choking, dehydration-related conditions, gangrene, and even sexual assault.

Decision-making at the Nursing Home Door

Nursing home admission is a stressful and emotional time for the prospective resident and his or her family. Requiring a waiver of rights as a condition of admission, as occurs with pre-admission arbitration agreements, puts the person and his or her family in a time-sensitive quandary, literally at the nursing home door. Under the new amendments, if they refuse to sign away their right to go to court, they can be denied admission to the facility.

Imagine after months of discussions, the decision is finally reached to admit an elderly or disabled individual to a nursing home. This decision often involves the heartache of giving up one’s home and freedom, many possessions, and even treasured pets. The decision is often motivated by a desire to keep the individual safe and ensure that he or she receives required medical care.

But, are nursing home residents safe when they are required to sign away any right to legal accountability for mistreatment or harm in the facility?

How Arbitration is Different than a Lawsuit

Arbitrations take place in private meetings and are confidential. Because arbitrations are not public proceedings like lawsuits and trials, nursing homes have little to fear in terms of lost business or reputation, even if the arbitrator rules against them. To make matters worse, usually the pre-admission arbitration agreements give all the decision-making about the process to the nursing home, including selecting the arbitrator, location, and rules that will govern the proceedings. That removes other safeguards provided by the original rule such as choosing a neutral arbitrator.

Background on the Rule and Proposed Amendment

On October 4, 2016, the Centers for Medicare & Medicaid Service (CMS) published a final rule entitled “Reform of Requirements for Long-Term Care Facilities.” The 2016 final rule amended 42 CFR 483.70(n), prohibiting long-term care (LTC) facilities from entering into pre-dispute arbitration agreements with residents or their representatives. The final rule also prohibited any requirement that a resident sign an arbitration agreement as a condition of admission to a LTC facility.

That final rule sought to preserve the right of vulnerable nursing home residents to sue in court if they suffered injury or abuse.

The American Health Care Association and a group of nursing homes sued for preliminary and permanent injunction to stop CMS from enforcing that requirement. The court granted a preliminary injunction on November 7, 2016. Thereafter, CMS reviewed and reconsidered the arbitration requirements in the 2016 final rule.

In proposed amendments to the rule under the current administration, CMS now seeks to strip nursing home residents of that right by removing the provisions prohibiting binding pre-dispute arbitration in LTC facilities. CMS provides as a reason for this action that a ban on pre-dispute arbitration agreements would “likely impose unnecessary or excessive costs on providers.”

CMS’s Proposed Revisions to Arbitration Requirements

This proposed rule focuses on the transparency surrounding the arbitration process and includes proposes that:

  • The prohibition on pre-dispute binding arbitration agreements is removed.

  • All agreements for binding arbitration must be in plain language.

  • If signing the agreement for binding arbitration is a condition of admission into the facility, the language of the agreement must be in plain writing and in the admissions contract.

  • The agreement must be explained to the resident and his or her representative in a form and manner they understand, including that it must be in a language they understand.

  • The resident must acknowledge that he or she understands the agreement.

  • The agreement must not contain any language that prohibits or discourages the resident or anyone else from communicating with federal, state, or local officials, including federal and state surveyors, other federal or state health department employees, or representatives of the State Long-Term Care Ombudsman.

  • If a facility resolves a dispute with a resident through arbitration, it must retain a copy of the signed agreement for binding arbitration and the arbitrator’s final decision so it can be inspected by CMS or its designee.

  • The facility must post a notice regarding its use of binding arbitration in an area that is visible to both residents and visitors.

This post was written by Denise Mariani of  Stark & Stark.

Rethinking Transparency – Inpatient Prospective Payment System Final Rule Rescinds Proposed Survey Disclosure Rule

The 2018 Inpatient Prospective Payment System (IPPS)/Long-Term Care Hospital (LTCH) Prospective Payment System (PPS) proposed rule, published in April 2017, contained a controversial provision that would have required accrediting organizations (AOs) that confer deemed status (such as The Joint Commission and DNV) to make all survey reports and acceptable plans of correction publicly available on their websites within 90 days of issuance (Proposed Transparency Rule). While the proposed rule cited the goal of improved transparency and enhancing patient health and safety, hospitals and other health care facilities that rely on AOs for deemed status voiced significant concerns about the unintended consequences of such disclosures, including providing an AO-slanted view of events, placing health care facilities on the defensive regarding corrective actions, the inability to correct misstatements in survey reports, and the risk that the public would not understand the survey process and become unreasonably biased against certain facilities. The Proposed Transparency Rule also garnered comment as Centers for Medicare and Medicaid Services (CMS) does not require itself to make all of its survey reports publicly available in such a short time frame, and does not presently make full plans of correction for all health care facilities readily available to the public.

To the surprise of some in the industry, the 2018 IPPS/LTCH PPS final rule (Final Rule) released on August 2, 2017, withdrew the Proposed Transparency Rule in its entirety, for a reason entirely unrelated to the main arguments that had been raised: potential conflict with Section 1865(b) of the Social Security Act (Act). Section 1865(b) of the Act provides that:

The Secretary may not disclose any accreditation survey (other than a survey with respect to a home health agency) made and released to the Secretary by the American Osteopathic Association or any other national accreditation body, of an entity accredited by such body, except that the Secretary may disclose such a survey and information related to such a survey to the extent such survey and information relate to an enforcement action taken by the Secretary. See 42 USC 1395bb.

CMS indicated in the Final Rule that it was concerned that implementing the Proposed Transparency Rule would “appear as if CMS was attempting to circumvent” the Act by requiring the AOs to release their own survey reports—a concern that was sufficient for the Proposed Transparency Rule to be withdrawn.

Whatever the basis of the decision, AOs, hospitals and health care facilities must prepare for the next effort to make AO and CMS survey and plan of correction information readily available on-line—transparency may have been delayed by the withdrawal of the Proposed Transparency Rule—but it is on the way, like it or not.

This post was written bySandra M. DiVarco  of McDermott Will & Emery.
More legal analysis available at the National Law Review.

Can Congress Get to “Yes” on Replacing the Affordable Care Act?

Senate Majority Leader Mitch McConnell recently gave a candid assessment of the chances of getting an Affordable Care Act (ACA) replacement bill through the Senate, saying “I don’t know how we get to 50 (votes) at the moment.” That succinctly captures the political dilemma. There has long been broad bipartisan agreement that the nation’s health care system was in need of repair. Something had to be done to contain rapidly rising health care costs, increase the quality of medical outcomes, and to expand coverage. But there was little or no bipartisan agreement on how to do it. Indeed, no major health care initiative since Medicare was enacted in 1965 has enjoyed true bipartisan support.

The most recent effort to overhaul the health care system was no exception. The ACA passed in March 2010 with no Republican votes. That wholly partisan effort, in turn, set off a determined, seven-year-long effort by Republicans to repeal the law. The most recent step on this tortuous journey occurred on May 4, 2017 when the House passed the American Health Care Act (AHCA) by a vote of 217-213. In this case, no Democrats voted for the bill. Twenty Republicans also voted no and the bill passed with just one GOP vote more than the 216 needed to pass.

As we explain below, the ACA and AHCA are “apples and oranges” in their approaches to reforming the healthcare system. Because each proceeds from different philosophical premises, this post briefly examines their key components and primary goals without opining on the merits. Our primary focus is on the political and policy challenges faced by Senate Republicans in getting a bill passed (which remains highly uncertain) and whether such a bill will differ greatly from the House product. In our view, to achieve the GOP’s publicly stated policy objectives, and faced with the constraints imposed by the budget reconciliation rules (explained below), Senate Republicans will be forced to address essentially the same questions as their colleagues in the House—and their solutions likely will differ from those of the House mostly in degree.

What the AHCA Does

In the AHCA, House Republicans singled out a few ACA provisions they had publicly campaigned against—most of which are contained in Title I of the law. These include the mandate that individuals purchase coverage; the narrow, 3:1 modified community-rating corridor that Republicans asserted made coverage prohibitively expensive for younger individuals; and the requirement that plans sold in the individual and small-group market include a comprehensive set of covered medical and related services known as “essential health benefits” (EHBs) The AHCA also would make major changes to Medicaid that go well beyond rolling back the program expansion authorized by the ACA.

The AHCA’s primary purpose is to reduce premium costs and reduce the federal government’s role in health care by giving more authority and flexibility to the states. The ACA’s primary goal, in contrast, was to expand insurance coverage in the individual markets—and it did that, although not as much as had been predicted. Another ACA goal was to make coverage more affordable, at least for low- and moderate-income individuals—and it did that too. But the ACA did little to lower medical costs, and from the available evidence had only a marginal effect on healthcare outcomes. Neither does the AHCA address those issues. It instead focuses mainly on reducing federal expenditures, shifting costs to the states, and constraining the growth of Medicaid. The recently issued report by the Congressional Budget Office and the staff of the Joint Committee on Taxation indicates that the AHCA would achieve significant success in this regard, estimating that the bill would reduce the cumulative federal deficit over the 2017-2026 period by $119 billion.

The GOP Challenge

With their slim 52-48 majority, Republican lawmakers don’t have the votes to repeal the ACA outright. That would require 60 votes to overcome a filibuster. Instead, they must rely on a special budget strategy called “reconciliation.” Created by the Congressional Budget Act of 1974, reconciliation allows certain bills that directly impact federal spending to be passed by a simple majority. For example, reconciliation rules would allow repeal of the ACA’s individual and employer mandates by a simple 51-vote majority because those mandates directly affect revenue; but reconciliation could not be used to repeal the employer reporting rules because those provisions do not directly affect spending. These restrictions severely limit which provisions of the ACA Republicans in the Senate (and by extension the House) can replace without Democratic support. We discuss those provisions below.

The individual mandate

The ACA included an “individual mandate” that requires most U.S. citizens to buy health insurance. The purpose was to ensure broad participation in the individual markets so that there would be enough healthy individuals in the risk pool to subsidize the cost of covering those who are less healthy. Most agree that the ACA penalty for not maintaining coverage was insufficient to induce enough healthy people into the pool. The result has been steep underwriting losses which have prompted major carriers to exit the public exchanges. The AHCA would eliminate the penalty retroactively, to the beginning of 2016. In its place, the bill would impose a “continuous coverage” requirement to induce people to buy coverage and stay covered rather than buying it only when they need it, which drives up costs in the exchanges. Health carriers could assess a 30 percent penalty on individuals who have a gap in coverage of more than 63 days in the prior 12 months. The Health Insurance Portability and Accountability Act (HIPAA) has provided a similar rule for employer-provided group coverage since 1996.

Community rating

Under community rating, premiums can vary by age, among other things. In the case of age rating, actuarial principles dictate that the premiums paid by the oldest subscribers should be about five times what younger subscribers pay. To mitigate the impact on older citizens, the ACA limited the rating range to 3:1. The AHCA allows a ratio of up to 5:1 which actuaries say more closely aligns premiums with the costs associated with age. AHCA proponents assert that the maximum 3:1 ratio dictated by the ACA unfairly penalizes younger, healthier individuals, discouraging them from participating in the individual markets and contributing to the underwriting losses in the ACA exchanges. They also assert that individuals 65 and older are eligible for Medicare and that the workers affected by the 5:1 ratio would be primarily those 54 to 65 years old—generally the highest earning years.

Premium tax credits

The AHCA scraps the ACA’s cost-sharing subsidies, and replaces its premium tax credits. Beginning in 2020, the AHCA would offer credits for U.S. citizens and qualified aliens enrolled in qualified health plans who are not eligible for other sources of coverage. The credit amounts are based on age and adjusted by a formula that takes income into account. Credits would be capped according to a maximum dollar amount and family size. In general, the AHCA subsidies are less generous than those provided by the ACA. According to the CBO report, repeal of the ACA’s tax credits saves some $665 billion while the cost of the AHCA’s tax credits is $375 billion—a net savings of $290 billion.

Medicaid

Medicaid is a health insurance program with shared federal/state authority and financing. Historically, coverage generally was limited to low-income families with children, the elderly, and people with disabilities. The ACA offers states generous federal funding designed to encourage expansion of their programs to cover all Americans under age 65 whose family income is effectively at or below 138 percent percent of federal poverty guidelines ($16,394 for an individual in 2016). Currently, 31 states plus the District of Columbia have expanded their programs.

The AHCA would change the current system of federal funding of Medicaid by placing per capita caps on federal payments to states. Under that approach, each state’s Medicaid spending, beginning in 2020, would be limited based on enrollee categories (i.e., children, disabled, etc.). States that exceed the limits would get less money the following year. Alternatively, states could opt to receive federal block grants (i.e., predetermined fixed amounts) to cover their Medicaid-eligible populations.

The Medicaid changes account for the single largest item of budgetary savings under the AHCA—some $843 billion over 10 years according to the CBO. The savings are important to achieving other GOP objectives such as tax reform, but many of the 16 GOP governors who expanded Medicaid have expressed concerns about the scope and timing of the changes and the impact on their citizens.

States’ ability to opt out

In an effort to persuade House conservatives to support the AHCA, Rep. Tom MacArthur (R-NJ) offered an amendment that would allow states to seek waivers of certain AHCA provisions. The idea was to devolve to those states flexibility to modify their coverage rules to best meet the needs of their constituencies. Under the amendment, states that are granted waivers may:

  • Adopt age-rated premium ratios higher than 5:1 for older individuals buying coverage in the individual and small group markets;

  • Define their own, less generous, “essential health benefits” (EHBs) for plans purchased in the individual and small-group markets instead of the 10 EHBs mandated by the ACA (and which the AHCA otherwise would leave in place); and/or

  • Bypass the 30 percent penalty for individuals who do not maintain continuous health coverage, and instead apply medical underwriting to the pricing of plans in such cases; but states seeking such waivers must have a high-risk pool or participate in the Federal “Invisible Risk Sharing Program” (explained below).

High-risk pools

High-risk pools are state programs that provide funding to cover the health care costs of individuals with catastrophic or pre-existing medical conditions and who are unable to purchase affordable coverage in the individual market. The AHCA embraces state high-risk pools as a way to contain the cost of medical premiums for healthy individuals. It does this by creating two risk pools: one for healthy individuals or those with continuous coverage, and the other for those with high-cost or pre-existing conditions. The idea is to lower premiums for healthy people while at the same time providing coverage for those with serious health conditions using a separate funding mechanism.

To fund coverage for high-risk individuals, the AHCA provides a total of $138 billion over 10 years through various mechanisms as follows:

  • A State Stability Fund in the amounts of $15 billion in 2018 and 2019, and $10 billion each year thereafter through 2026;

  • An additional $15 billion in 2020 that states could use for maternity coverage and newborn and prevention, treatment, or recovery support services for mental or substance use disorders;

  • An additional $8 billion for the period 2018-2023 to states with a “MacArthur waiver” (previously discussed); and

  • A Federal Invisible Risk Sharing Program to help with high-cost medical claims of certain individuals who buy coverage in the individual market.

The MacArthur waivers are not without controversy. The two biggest issues are the potentially large cost increases to older citizens and whether individuals with pre-existing health conditions will be adequately protected. Another question is how many states actually will seek waivers and assume the financial (and political) responsibility for protecting older and sicker workers if the federal dollars under the AHCA prove insufficient. The CBO makes an educated guess as to how many people might be affected by states getting waivers, but they are guesses nonetheless.

Ways to get to Yes

The CBO report estimates that from 2017 to 2026, the AHCA would reduce direct spending by $1.111 trillion and revenues by $0.992 trillion (resulting in a net deficit reduction of $119 billion—and that 23 million fewer people would have health coverage (CBO does not count as health coverage limited benefit plans, including so-called “mini-med” plans and fixed-dollar indemnity plans). These numbers are a direct consequence of the AHCA’s stated goals—to reduce the role of the federal government in regulating and financing health care, specifically in the individual market, Medicaid, and the uninsured.

Senate Republicans broadly share those goals, but they differ on how to achieve them, as did many of their House colleagues. To further mitigate the impact on individuals, the Senate could adjust the AHCA’s spending and revenue levels, as well as the timing of certain provisions—for example, they could push back the phase-out of the ACA’s Medicaid expansion provisions from 2020 to a later date. Similarly, the AHCA’s per-capita caps and block grant provisions could be adjusted to provide more money to the states. The trade-off would be higher spending levels than the House bill, but this could be offset by modifying the AHCA’s tax repeal provisions. For example, the ACA’s so-called “Cadillac” tax on high-cost employer plans, which the House bill delayed until 2026, could be allowed to go into effect earlier, thus generating more revenue. To the same effect, the Senate could push back repeal of the ACA’s Medicare payroll tax on high income individuals. Another step might be to provide additional subsidies for those aged 50 to 64 to mitigate any adverse effect of the increase in the premium age-rating ratio proposed by the House.

We are under no illusions that the policy differences among Senate Republicans can be reconciled—and if they can, that the House and Senate can reach agreement when they go to conference. All we know now is that the GOP is stuck with its seven-year public commitment to creating a better system with still no clear path forward. Democrats may be enjoying the Republicans’ predicament, but neither party is likely to be viewed favorably if the current system continues to falter and ultimately fails. If that happens, the price of our polarized political environment could be steep for both sides.

The sheer magnitude of the dollars at stake should compel policymakers to find a breakthrough. The Centers for Medicare and Medicaid Services reports that national spending on health care grew 5.8 percent to $3.2 trillion in 2015, accounting for 17.8 percent of GDP. Medicare spending alone was $646.2 billion, 20 percent of the total. Medicaid another $545.1 billion, or 17 percent. Thus, the most urgent practical question may not be whose theory of government is more correct, but whether the current rate of health care spending is sustainable. We can’t think of a better answer than economist Herbert Stein’s wry observation that, “if something cannot go on forever, it will stop.”

This post was written by Alden J. Bianchi andEdward A. Lenz of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.