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Shifting Regulatory Action to States: Implications for Patient Access to High-Quality Cancer Care

Jaime Rosenberg

Since taking office, the Trump administration has been granting states greater flexibility in how it addresses healthcare for its populations, including through Medicaid work requirements, block grants, and short-term limited duration health plans.

Last week, a panel of diverse stakeholders took the stage at the National Comprehensive Cancer Network Policy Summit in Washington, DC, to discuss how shifting regulatory action from the federal to the state level poses implications for patient access to high-quality cancer care.

The panel kicked off the discussion by outlining how Medicaid Section 1115 waivers have been leveraged by states to initiate different types of demonstration and research projects, such as Medicaid expansion and, more recently, Medicaid work requirements for certain populations.

“I think it’s a larger trend of states looking at really beginning to diversify the Medicaid population more and to say, ‘We want to look at populations differently,’” said Nina Owcharenko Schaefer, senior research fellow at The Heritage Foundation. “Rather than having Medicaid as one program where we deliver [healthcare] to everyone, I think what we’re seeing is states taking a very active role in understanding the needs of the patients in Medicaid are very different from one another, and that not every one Medicaid patient is the same as another Medicaid patient.”

A number of states have looked at different ways to diversify their programs, including by looking at cost-sharing for some of the higher income levels in Medicaid, addressing behavioral health, and looking beyond the medical scope to alternative services.

“From the patient perspective, flexibility is important and innovation is important; however, the concern, and we try to make sure there’s a clear balance, is the fact that you have to have flexibility but also make sure that patient access and access to quality care is not harmed,” said Keysha Brooks-Coley, MA, vice president of Federal Advocacy and Strategic Alliances American Cancer Society Cancer Action Network, who noted that Medicaid work requirements, in particular, could hinder access for patients with cancer.

The panel also discussed block grants, which have not yet seen as much uptake as work requirements. In March, President Trump released his budget for fiscal year 2020, which called for converting Medicaid to a system of block grants. On July 1, a law went into effect in Tennessee that directed the governor to submit a waiver to CMS to turn the state’s Medicaid program into a block grant. If approved, Tennessee would become the first state to make the transition.

Block grants represent the conclusion that states should figure out what best serves the needs of their populations, said Ronald S. Walters, MD, MBA, MHA, Department of Breast Medical Oncology, Division of Cancer Medicine, MD Anderson Cancer Center, who added that the idea makes sense as long as there are some guardrails built around it to make sure essential health benefits, among other things, are protected.

“States balance their budgets, so they are squeezed in figuring out how to take that dollar and make it spread everywhere,” said Schaefer. “You know where they don’t balance their budget? Here in Washington.”

Consequently, she said, states shift additional costs to the federal government. Block grants are one way that will put the federal government on a more reliable and consistent budget cycle. Some states are also in favor of block grants because they like the idea of having the freedom to use funding how they see fit, even if it means a different style of funding, she said.

Brooks-Coley pushed back, arguing that there are a lot of concerns from the patient perspective. She posed the question of what happens when states run out of money or don’t have enough money to provide certain care for their populations?  

The panel also discussed Section 1332 waivers, which waive certain requirements of the Affordable Care Act (ACA) and allow states to pursue alternative coverage approaches in the exchanges and small group markets that are consistent with the goals of the ACA.

The Trump administration has fostered a broader interpretation of these waivers, providing states more leeway in developing initiatives. According to Schaefer, there are multiple states that have now used 1332 waivers to do risk adjustment, including by using funding that goes to the subsidies within the exchanges and target them to insurance plans that have high-risk and high-cost populations.

How often and in which ways these waivers are used going forward will likely depend on the result of ongoing litigation involving the ACA, explained Walters. In December, a federal judge in Texas ruled that the ACA’s individual mandate is unconstitutional and that the rest of the law must also fall. In March, the Department of Justice backed the ruling.

However, even if the entire legislation is struck down, innovation waivers like 1332 waivers will continue, argued Walters.

“They may not have the strength of the ACA, but this is an ongoing effort to give states much more authority and leeway to design what’s important for that particular state,” he said.

Bob Donnelly, MPP, senior director of Health Policy, Johnson & Johnson, also commented, noting that ongoing efforts to erode the ACA are important as we now have a system that offers broader access to short-term limited duration health plans outside of what the ACA envisioned, which can create issues when it comes to benefits and the impact on risk pools.

Sticking with the subject, Schaefer argued that these plans offer opportunities for those getting “squeezed out of the current system,” including many middle-class families who don’t receive subsidies and are leaving the market altogether as healthcare costs and premiums continue to rise. States have been on the frontline of this, seeing firsthand how people in their state can’t afford coverage, said Schaefer, who added that short-term limited duration plans provide immediate relief to these types of consumers. However, she predicted that associated health plans and health reimbursement accounts will be more popular than these plans because of how limited they are.

While beneficial for some consumers, these plans are offered to everyone, said Brooks-Coley, arguing that consumers will often times buy into these plans not truly understanding what they are and what they offer. Consumers will buy plans thinking they will be cheaper and then get stuck with high out-of-pocket costs after getting sick with cancer, she said.

Rounding up the conversation, the panel touched briefly on value-based contracts, which have been touted as a way to address the high costs of cancer drugs, among others.

“There are still a lot of nuances to value-based contracting that people have to get experience in exactly how to do it. Intuitively, it seems very easy to do until you get into all the details and it gets complicated very quickly,” said Walters.

Donnelly agreed, adding that it is early in the playing field and that evaluation of these contracts is just as important as actually doing them so that states can learn what works and what doesn’t.
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