Tuesday Night’s Primary Elections Were Huge. Here’s What They Mean for Our Industry.

June 12, 2014
|In Risk Adjustment, Compliance, Health Insurance Exchanges, Medicaid, Part D, Policy & Health Reform, Star Ratings, Strategy, Brain Food
|By GHG Advisors

House Majority Leader, Eric Cantor (R-VA) is toast.  Trounced in his Richmond district by a nobody Tea Bagger Tuesday night. Cantor gave up his leadership position yesterday. Depending on where you sit politically, either the unthinkable or the inevitable happened.  In fact, a Majority Leader hasn’t lost incumbency since the office was created in 1899.   “The defeat of the second-ranking Republican in the House by an ill-funded, little-known tea party-backed candidate ranks as the biggest congressional upset in modern memory and will immediately generate a series of political and policy-related shock waves in Washington,” wrote Chris Cilizza of WaPo.

What it means for our industry is that legislatively speaking, President Obama’s second term is already over.  The House will seize up like a bag of concrete in a toilet.  The most unproductive Congress in history is about to continue and worsen that record as an epic Republican leadership battle ensues.

That means Obama is left chasing his agenda through administrative action, Executive Orders, regulations and enforcement.  With brand-new and surprisingly popular HHS Secretary Sylvia Mathews Burwell on the job, expect her department to flex its muscles in ways we haven’t seen, especially given the number of oversight hearings she’s about to be subjected to:

  • There will be tough new rules for all government-sponsored health programs: Medicare, Medicaid and implementation of the Affordable Care Act.  The contentious new Part D rules are just the beginning.
  • There will be increasing activism in network adequacy and rate reviews of insurers in Medicare Advantage, Part D and the exchanges;
  • CMS will take a hard line on Medicare plans lagging in Star ratings and/or compliance records.  The second term of a Democratic administration is always when scores are settled; the renewed Congressional scrutiny on our favorite agency will make the paper tiger grow some claws;
  • CMS and the HHS Inspector General (IG) will finally put the pedal down on dreaded RADV audits with the promise of hundreds of millions in recoveries.
  • With wingnuts like House Oversight Chairman Darryl Issa (R-CA) salivating for domestic Benghazis, the HHS IG will likely deliver a few surprises of its own.

Every time there’s a major electoral event in Washington like this, elected and appointed officials alike will usually settle back on the motherhood and apple pie of health care politics: kicking the crap out of the insurance industry and other monied interests like pharmaceutical manufacturers and PBMs.  If you’re not wearing them already, it’s time to pull on the kevlar boxers and the asbestos Spanx.