Jessica Waltman – Principal of Forward Health Consulting
Since nothing is normal in 2020, Election Day decided to stretch itself out over two seasons this year. We won’t know which political party will control the United States Senate until January. Still, as states move to certify their election results, it is clear that former Vice President Joseph R. Biden is the President-Elect of the United States, and that Senator Kamala Harris is the Vice President-Elect.
Whether the Democratic party controls Congress, or if we continue to have a divided government, will be a crucial consideration for the incoming Biden Administration. It will help drive the legislative agenda over the next two years. However, as I’ve said before, one of the executive branch’s most significant powers is crafting, implementing, and enforcing regulations. Federal rules are where the details live – you know, the little things that make all the difference in health insurance benefits compliance. So, as the Trump Administration begins the process of wrapping up its work, and the Biden Administration starts its transition, it’s a good idea to review the regulatory agenda.
Items That Could Be Finalized by The Trump Administration
Every President rushes to get as many pieces of regulatory guidance out the door as possible before they pack up and leave 1600 Pennsylvania Avenue. President Trump is no exception. A few weeks ago, he finalized health plan transparency rules that will have an enormous impact on our industry for years to come. Some additional regulations waiting for release are new requirements for grandfathered health plans and two rules to create safe harbors for employer-sponsored wellness programs. Another measure that could be finalized, and would be very significant for NAHU members and their clients, is a proposed rule to add direct primary care and health care sharing ministry membership as IRC 213(d) qualified medical expenses. If the Trump Administration acts on any of these measures over the next few weeks, they will have the force of law right away. For each one finalized, there will be many compliance details to consider for the year ahead.
President Trump also seems geared to release significant new health care regulatory proposals over the next few weeks. One would tie Medicare Part B prescription drug prices to the international drug price index. The other two are the most significant annual catch-all rules outlining requirements for Medicare and all private health insurance plans for the 2022 plan year. If any of these measures are published soon, then the Trump Administration will need to allow for a public comment period. Comment periods are generally at least 30 days long, and anything shorter needs legal justification. After that, they need to review all comments received and publish a final revised measure in the Federal Register. It would be a tough job to turn any one of these significant regulations around in the next 60 days, let alone all three. Still, it could be a way for President Trump to leave his final mark on our country’s health care policy.
A valid question about regulations issued by any outgoing administration is how easily can a new President undo the work of the old? It’s possible, but it’s not like the Chief Justice gives the new President a magic eraser during the inauguration. Any President can act to revise or rescind existing regulations, but they have to go through formal regulatory channels first. The process includes conducting and legal research to justify the need for changing current rules, proposing a new measure, exposing it for public comment and possibly public hearing, reviewing those comments, and finally releasing a final rule. This process typically takes months, if not a year or more to complete.
Another way to strike down a rule is through legislative action. Congressional Review Act gives Congress the power to nullify a regulation once finalized, provided they act within legislative 60 days of its release. If Congress completes less than 60 days of work before adjourning, the regulation’s time clock resets, and the new Congress gets 60 more business days to review and vote. Since the CRA only allows Congress to strike a rule entirely and not revise it, they rarely use this power. There is no reason to believe that the 117th Congress will act differently from its predecessors when it comes to axing federal regulations.
Regulatory Priorities of The Biden Administration
President-elect Biden’s team has intimated that he, like his predecessor, plans to issue many Executive Orders on his first day of office. The list seems to include a few health care issues, particularly those related to COVID-19 and public health response and resources. It’s essential to keep in mind that executive orders do not generally have the force of law. Instead, they operate as a to-do list of sorts for the federal agencies under the President’s control. They typically instruct an agency or department to take action on a particular topic by a specific deadline, either through the formal regulatory process (which does result in requirements with the force of law) or through the development of sub-regulatory guidance, programs, or resources.
Expect the Biden Administration to take quick and direct regulatory action to change the Trump Administration’s regulations regarding the Section 1557 nondiscrimination requirements of the Affordable Care Act (ACA). These rules were affected by the Supreme Court of the United States’ decision in Bostock v. Clayton County, and several federal court orders are currently blocking their full implementation. Also, Trump Administration rules requiring separate billing for the portion of individual market premiums attributable to coverage of abortion services, which is causing an administrative nightmare for many carriers and enrollees are likely to go by the wayside. Other potential targets include the Trump Administration rules on short-term limited duration health insurance and association health plans. Biden Administration will also probably take steps to improve the promotion of the ACA health insurance marketplace-based coverage, perhaps by restoring funding for marketing efforts and lengthening or changing the open enrollment window. Another priority will be prescription drug price reduction measures, mainly through Medicare.
The Biden Administration will probably keep up the Trump Administration’s efforts to promote value-based care and access to telehealth services. Both Administrations also oppose the practice of surprise balance billing. While the Trump Administration’s recent regulations related to health plan and hospital pricing transparency may see some tweaks and implementation delays, it’s unlikely they will go away for good. The next few months promise to be exciting from a health policy and compliance perspective. As soon as any of these measures are finalized, check back to this space for details and analysis.