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President Issues Executive Order on Medicare; Orders HHS to Study Market-Based Pricing in Medicare Fee-for-Service; Continues to Seek Opportunities for Burden Reduction

This week, President Trump issued a wide-ranging executive order—Protecting and Improving Medicare of Our Nation’s Seniors—that directs the secretary of Health and Human Services (HHS) to issue a study within 180 days that would “recommend approaches to transition toward true market-based pricing in the fee-for-service (FFS) Medicare program.” The order states that approaches to the study shall include:

  • Shared savings and competitive bidding in FFS Medicare;
  • Use of Medicare Advantage (MA)-negotiated rates to set FFS Medicare rates; and
  • Novel approaches to information development and sharing that may enable markets to lower cost and improve quality for FFS Medicare beneficiaries.

The order also directs HHS, in consultation with the Council of Economic Advisors, to submit a report within 180 days that “identifies approaches to modify Medicare FFS payments to more closely reflect the prices paid for services in MA and the commercial insurance market, to encourage more robust price competition, and otherwise to inject market pricing into Medicare FFS reimbursement.”

In addition, the executive order directs HHS to take several other actions to improve Medicare, including:

  • Modifying MA Plan Structure and Benefits: HHS is directed to enable beneficiaries with more diverse and affordable plan choices. The order encourages innovative benefit structure, such as Medicare medical savings accounts, promoting innovations in supplemental benefits, telehealth, and permitting beneficiaries to share in cost savings.
  • Improving Network Adequacy: The order directs HHS to propose regulations within 1 year to improve access by adjusting MA plan network adequacy requirements to account for market competitiveness in certain states due to certificate of public need laws and other anti-competitive regulations.
  • Continued Burden Reduction: The order directs HHS to propose regulations within 1 year that eliminate burdensome regulatory billing requirements, conditions of participation, supervision requirements, and all other licensure requirements of the Medicare program that are more stringent than applicable federal or state laws and that limit professionals from practicing at the top of their profession.
  • Medicare Payment for Time Spent with Patients: HHS is directed to propose within 1 year a regulation that would “ensure appropriate reimbursement by Medicare for time spent with patients by both primary and specialist health providers practicing in all types of health professions.”
  • Facilitate Access to Innovative Treatments: The order directs HHS to propose regulatory or sub-regulatory changes to streamline the approval, coverage, and coding process so that innovative products are covered and reimbursed appropriately.  

As a reminder, executive orders direct agencies to act within existing law. Any recommendations developed from the reports mandated by this order that require statutory changes must be enacted by Congress. We will keep you updated.

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