Senate, House of Representatives Pass 21st Century Cures Act

December 15, 2016 - This week, Congress passed the 21st Century Cures Act. President Obama signed the legislation into law on Tuesday, December 13. The 21st Century Cures Act passed with bipartisan support 94-5 in the Senate and 392-26 in the House of Representatives.

The 21st Century Cures Act establishes $4.8 billion in funding for the National Institutes of Health with $1.8 billion set aside for the “cancer moonshot” project Vice President Joe Biden began, National Public Radio reported.

"Premier Inc. strongly supports the 21st Century Cures Act, in particular the provisions for EHR interoperability, socio-economic factors in the hospital readmissions program and a speedier FDA approval process," Blair Childs, Senior Vice President of Public Affairs at Premier, said in a public statement.

"Setting interoperability standards, and requiring free and secure health IT exchange among disparate assets will improve patient care, reduce costs and unlock data silos in healthcare. We are also pleased to see that risk adjusting for socio-economic status in the Medicare hospital readmissions program is finally being addressed after a nearly decade-long effort to get this recognized."

The legislation allows smaller businesses to offer employees Health Reimbursement Arrangements (HRAs) if they don’t have group health plan benefits, according to The National Law Review.

Previously, these same businesses were unable to take part in Health Reimbursement Arrangements due to provisions under the Affordable Care Act. The 21st Century Cures Act changes these prohibitions. However, findings from the Internal Revenue Service and the Department of Labor regarding the ACA provisions will still hold true for large companies.

Employers should be aware that the Health Reimbursement Arrangements cannot be greater than $4,950 per year for individuals and $10,000 for family coverage. These funds can only be used to cover the costs of medical care under Internal Revenue Code §213(d).

According to a press release from benefit provider Gravie, the 21st Century Cures Act allows employers from small companies to reimburse employees for medical expenses through pre-tax funds. Employees can use these funds to directly purchase health insurance. Employees will be reimbursed for healthcare purchases including insurance premiums.

“Employers across the country are embracing the defined contribution model of health benefits,” Abir Sen, CEO of Gravie, stated. “They will now be able to give money to their employees without having to worry about tax consequences, putting the defined contribution model on more of an equal footing with traditional group insurance. For small businesses struggling to manage their healthcare costs, this law will be a huge boon.”

The way health payers can use the new legislation to their benefit is by targeting employees of small businesses and offering the best health plan options for these consumers. With reimbursement from their employers, these consumers who may have not previously had coverage will be looking for affordable health plan benefits.

For public payers, specifically, the Centers for Medicare & Medicaid Services (CMS) will also be affected by the 21st Century Cures Act. The Department of Health & Human Services will need to release to the public Medicare enrollment data such as beneficiary details of those covered under Medicare prescription drug plans, Medicare fee-for-service, and Medicare Advantage plans. Provisions in the 21st Century Cures Act also require CMS representatives to include all benefit plans in Medicare eligibility notification packets.

Even though the 21st Century Cures Act has bipartisan support, critics find certain issues with this legislation. According to Health Affairs, $2.8 billion set aside of the National Institute of Health and $430 million set aside for innovation at the Food and Drug Administration would need to be voted on every year by Congress to ensure the money moves to these agencies.

Also, the legislation changes some regulatory frameworks when it comes to assessing medical products. The law requires the establishment of a program where “real-world evidence” can be used to determine different conditions prescription drugs could be targeted for.

“Defined as information on drug outcomes that are derived from sources other than clinical trials, real-world data are less likely to have been uniformly collected and therefore risk being less reliable,” Health Affairs stated. “Attempted analysis of real world information is potentially further plagued by systematic differences between populations of interest that may not be captured and, thus, cannot be adequately controlled, which can distort the true benefits and risks of a drug.”

Private healthcare payers will likely need to act as a gatekeeper when it comes to medical products that did not go through rigorous clinical trials. Payers will need to determine which type of medical devices and prescription drugs should be reimbursed and which ones may lead to worse outcomes and costlier procedures.

However, the legislation does put forth more funding for the FDA to hire more scientists to analyze clinical data from medical experiments. The law also requires manufacturers to disclose information regarding how they open up experimental treatments for high-risk patients who don’t qualify for clinical trials.

The 21st Century Cures Act allows payers to increase their membership to employees of small businesses through Health Reimbursement Arrangements, but also requires greater scrutiny among payers when it comes to innovative products coming from the pharmaceutical industry.

Dig Deeper:

The Progress and Challenges of the Affordable Care Act

How the 21st Century Cures Act will Impact Healthcare Payers