Shutdown
As of midnight on October 1, the federal government officially shut down. While mandatory programs (e.g., Medicare/Medicaid/ACA payments) continue, non-essential activities (as turned by the White House) would cease. Additionally, Medicare telehealth flexibilities lapsed due to the lack of agreement. This means providers that provide certain telehealth services and home health services are at risk of nonpayment by Medicare (under current law they would not be reimbursed by Medicare). There is no timetable (or limit) for how long the shutdown will occur. The last shutdown lasted 35 days.
Prescription Drug Announcement
There were several prescription drug announcements this week so a quick rundown on where things sit
- Pfizer and the White House announced a deal in which certain Pfizer drugs would be sold at a lower price to Medicaid as well as direct consumers via a federal government website. The agreement said certain drugs would be sold at discounts of 50% to 85% although it’s unclear if those discounts are relative the list price or net price. Consequently, the exact effects of the announcement are unclear. The White House indicated similar agreements with other pharmaceutical companies would be forthcoming.
- One of the large questions is how this announcement as well as previous agreements interact with the White House’s announcement last week around 100% tariffs on brand. The agreement does specify that Pfizer is exempt from tariffs for three years. Especially if future agreements are forthcoming, it’s unclear the effect of the potential tariffs on prescription drugs.
Medical Device Tariffs
The Trump Administration announced it was looking into applying tariffs on medical devices via a Section 232 probe. Section 232 probes have been used by this Administration to apply large sector wide tariffs. The announcement said a recommendation would be forthcoming in the next 270 days.
EPTC Effects on Providers
The Urban Institute released state by state estimates on how the ending of enhanced premium tax credits in the Marketplace would have on spending. Overall, they estimate a reduction of about 1.3% on total spending (or about $32 billion). However, uncompensated care is expected to increase by about 12% (or about $7.7 billion). About half of the increase in uncompensated care costs would fall on providers.
