Trump’s HHS Pick Offers Hope to Embattled Skilled Nursing Sector

President-elect Donald Trump has chosen Rep. Tom Price (R-GA), M.D.—an outspoken critic of the Affordable Care Act (ACA)—to head up the Department of Health and Human Services (HHS) in the new administration. Price’s appointment could be good news for the struggling skilled nursing sector, as he appears likely to roll back regulations and some ACA programs that have diverted business from skilled nursing facilities (SNFs).

“We’re excited about the new announcement Trump has made for HHS,” Clifton J. Porter II, Government Relations Senior Vice President at the American Health Care Association/National Center for Assisted Living, said Tuesday on a call with reporters. “Price’s role as an orthopedic surgeon, [his] understanding the rehab process, will add some insight and uniqueness in that role we haven’t have the opportunity to experience in the past.”

AHCA/NCAL, the largest national trade association of skilled nursing and post-acute providers, has had a “long and productive working relationship with Mr. Price,” Porter added.

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It is widely expected that Price will execute on Trump’s campaign pledge to repeal and replace the ACA. Price has in the past proposed the Empowering Patients First Act, which would have repealed the ACA and put different policies in place, such as age-adjusted tax credits for the purchase of health insurance policies, grants to subsidize insurance for “high-risk pools,” and relaxed rules over where insurance companies can sell policies.

Price also has zeroed in on Affordable Care Act programs that specifically affect skilled nursing and post-acute providers, such as the Comprehensive Care for Joint Replacement (CJR) program.

Under this mandatory bundled payment initiative, hospitals see their Medicare payments tied to the costs and outcomes for a full 90-day episode of care for orthopedic patients. The concept is that the hospital will be incentivized to coordinate care with post-acute providers to control spending and keep quality high.

Some early results have been promising, and the program has led to some productive partnerships across the care continuum, Porter said Tuesday. But it also has led in some cases to patients bypassing SNFs entirely, as they are sent directly to the lower-cost home setting.

“That’s a real concern,” Porter said.

In late September, Price harshly criticized the CJR program in a letter to Andy Slavitt, acting administrator of the Centers for Medicare & Medicaid Services (CMS). CMS overstepped its authority in rolling out these large-scale, mandatory programs through the Center for Medicare and Medicaid Innovation (CMMI), Price wrote. CMMI was created under the ACA to test new care and payment frameworks on a limited, voluntary basis, and pushing too far and too fast with these initiatives comes with great risks, he argued.

“These mandatory models overhaul major payment systems, commandeer clinical decision-making, and dramatically alter the delivery of care,” the letter states.

Price and other co-signers of the letter urged CMS to cease all current and planned mandatory initiatives. As head of HHS, Price soon will be in a position to make sure this occurs.

“We’re excited about him leading HHS for a myriad of reasons, but that particular reason is important,” Porter said. “I would anticipate that the mandatory nature of these bundles will likely, or hopefully, go away.”

Calming Headwinds

Major skilled nursing providers have thoroughly revamped their strategies in recent years, largely in response to the shifting health care landscape under the ACA. While it remains to be seen how they would be positioned after a repeal, providers almost certainly would welcome policy shifts that would keep patients coming through the door, given that they are trying to cope with multiple challenges at the moment, including loss of census.

Headwinds in the sector have become so great that one prominent SNF owner and operator, Kindred Healthcare (NYSE: KND), has opted to exit entirely.

A Trump administration might help calm these headwinds beyond slowing or nixing CJR, Porter said.

For instance, there is a possibility that regulations—even the massive new Medicare and Medicaid Conditions of Participation—could be rolled back. The new Department of Labor should be more business friendly, and a national minimum wage increase appears to be off the table. AHCA/NCAL has filed a lawsuit challenging CMS’ ban on arbitration agreements in long-term care, and the association is optimistic that the Trump White House would be in line with the GOP-led House and Senate, where Republican lawmakers have been in providers’ corner on this issue, Porter said.

Trump also has named Seema Verma as his choice for CMS administrator. President of a consulting firm, Verma helped shape the Medicaid expansion in Indiana, working closely with Gov. Mike Pence, the incoming vice president. AHCA/NCAL voiced its support for this choice, as well.

“Seema’s experience and extensive knowledge of Medicare and Medicaid policy makes her an ideal selection to lead CMS,” AHCA/NCAL President and CEO Mark Parkinson stated in a press release.

While private pay senior housing is less directly affected by HHS policy than skilled nursing, provider association Argentum also expressed its willingness to work with Price and Verma.

“As an orthopedic surgeon and chairman of the House Budget Committee, Rep. Tom Price of Georgia brings expertise and familiarity with issues facing America’s seniors and their families,” stated Maribeth Bersani, Argentum’s COO and senior vice president of public policy. “Seema Verma, the nominee to lead CMS, also has experience working with vulnerable populations and a deep familiarity with challenges and opportunities surrounding Medicaid, home and community based services and our nation’s aging seniors.”

Although skilled nursing and senior housing interests applauded these appointments, they did provoke pushback from other groups.

Planned Parenthood warned that Price could present a “grave threat to women’s health,” given his position on issues such as abortion and birth control. And the president of the Gay and Lesbian Alliance Against Defamation (GLAAD), Sarah Kate Ellis, blasted Price as “completely unfit” for the job of HHS secretary. Price called it a “sad day for America” when the Supreme Court ruled in favor of same-sex marriage in 2015.

Written by Tim Mullaney

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