4 Key Areas As Biden Sets New Health Policy Path In 2021

By Jeff Overley
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Law360 (January 3, 2021, 12:02 PM EST) -- The year ahead will see a new president chart a new health care course that departs from his predecessor's route without veering off in an entirely different direction on every issue.

Although President-elect Joe Biden and President Donald Trump are worlds apart on major aspects of health policy — the incoming Democratic head of state wants to expand the Affordable Care Act and the outgoing Republican leader wants to terminate it — they're fairly close when it comes to innovative models of health care delivery and aggressive action on drug prices, among other things.

Here, Law360 explores how Biden in 2021 will follow or abandon Trump's health policy path in four key areas.

Trump's Pandemic Policies Under Biden

At the Democratic National Convention in August, Biden said the U.S. under Trump's leadership had "by far the worst performance of any nation on Earth" in protecting people from the novel coronavirus. It's likely that the incoming administration will seek to strengthen the federal role in developing and allocating tests, vaccines, supplies and therapeutics.

"I expect them to hit the ground running, just given the nature of the public health emergency that we are in," Meena Datta, global co-leader of Sidley Austin LLP's health practice, told Law360. "This will be the top priority from a health standpoint."

At the same time, Biden's ascent to the White House might not mean much for pandemic-prompted regulatory actions that are already being implemented or developed at the Centers for Medicare & Medicaid Services and the U.S. Food and Drug Administration.

CMS, for example, responded to COVID-19 by massively expanding payment eligibility for telehealth services. Trump ordered the agency to make many of its changes permanent, and there's no sign that Biden would take a dramatically different tack.

"There seems to be broad support for continuing the expansion of telemedicine coverage; it doesn't seem to be a strictly partisan issue," Joseph Willey, health litigation chair at Katten Muchin Rosenman LLP, told Law360.

To free up capacity for COVID-19 patients, CMS also expanded its Hospitals Without Walls program to allow at-home inpatient care and wider use of outpatient surgery centers as temporary hospitals. 

It remains to be seen which of CMS' emergency actions endure after the crisis, partly because congressional approval will be needed to continue certain expansions of Medicare and Medicaid reimbursement. But it's generally believed that the pandemic ushered in positive changes that will stick around under Biden just as they would have under a second Trump term.

"Significant reforms to health care delivery resulting from the [pandemic] ... will stay because they largely represent an improvement in patient care and access," Foley & Lardner LLP partner Judith Waltz told Law360.

The urgent need to discover better tests and treatments for COVID-19 has also driven the FDA to be more flexible. The agency has made greater use of "real world evidence" gathered outside of clinical trials, and it has been more open to clinical trials that don't use centralized locations to administer drugs and assess outcomes — changes that seem unlikely to be affected by a Democrat moving into the White House.

"COVID has been a catalyst for a lot of change at FDA," Sidley Austin partner Becky Wood, who was the FDA's chief counsel from mid-2017 to mid-2018, told Law360. "You're going to see a continued focus on those sorts of policy initiatives that I think transcend the movement between administrations."

'A Lot' of Current Initiatives Staying on Track 

The Trump administration has also advanced a number of important health policy initiatives — some of them outgrowths of Obama administration initiatives — that aren't connected to COVID-19 and seem likely to keep chugging along during the Biden administration.

Examples include efforts to base Medicare reimbursement on the quality and efficiency of health care services; to help consumers more easily access the prices of hospital services before receiving them; and to broaden the use of "site-neutral" payments so that off-campus hospital departments aren't paid far more money than nonhospital surgery centers for identical services.

"What will stay in the new administration? A lot!" Waltz said by email. "CMS implemented a lot of nonpolitically motivated — albeit probably politically influenced — improvements to Medicare in the past four years."

In one of its most recent regulatory overhauls, CMS finalized new exceptions to the Stark Law, which prohibits physicians from making certain referrals that could benefit them financially. While a Democratic administration might not have been so generous with Stark Law exceptions, the new regulations are meant to serve bipartisan goals of value-based reimbursement and care coordination among doctors, and they're expected to survive under the next president.

"There was tremendous pressure from the Trump administration to make sure that these regs came out while he was still in office," Laura Keidan Martin, health practice co-leader at Katten, told Law360. "I can't imagine the Biden administration walking back these regs."

Delphine O'Rourke, a partner at Goodwin Procter LLP, suggested that Biden might also build on the U.S. Department of Health and Human Services' newly unveiled "action plan" for reducing maternal deaths. Pregnant women die in the U.S. at high rates relative to other wealthy countries, and Biden is vowing on his campaign website to "reduce our unacceptably high maternal mortality rate."

The move would make political sense for Biden, whose running mate, California Sen. Kamala Harris, will be the nation's first female vice president. Women tend to modestly favor Democrats at the ballot box, and female Black voters in particular rescued Biden's presidential campaign in 2019 by leading him to victory in the Democratic primary in South Carolina.

"It's a great area to push on as a first win," O'Rourke said, adding that Biden may focus on women's health well beyond maternity care. "You start focusing on ovarian care, you start focusing on menopause, you're going to have a lot of happy voters."

In other areas, Biden will seek to to undo HHS' work under Trump. One example is an HHS regulation prohibiting doctors who receive Title X family planning funds from referring patients to abortion providers.

The regulation has produced a split between the Ninth Circuit, which upheld the policy, and the Fourth Circuit, which said that the rule "failed to recognize and address the ethical concerns of literally every major medical organization in the country."

Ropes & Gray LLP partner Thomas Bulleit told Law360 that "the regulations restricting discussion of abortion at federally funded family planning clinics" are "likely to get walked back" after Biden takes office.

But that walk-back could take many months, given the procedural requirements of federal rulemaking. Meanwhile, the Trump administration, the American Medical Association and other groups are urging the U.S. Supreme Court to resolve the dispute.

ACA Rollbacks Face 'Tricky' Future

The Affordable Care Act is another area where the new administration will make 180-degree policy turns. As an initial matter, Biden opposes the Trump-supported legal challenge aimed at invalidating the ACA; the Supreme Court heard arguments in November, and the law appears likely to survive mostly intact.

More narrowly, Biden appears certain to reverse a number of ACA regulations issued during Trump's four years in office.

"Assuming the Supreme Court upholds the ACA, we can anticipate a rollback of Trump administration policies that have been described as undermining the ACA," Bulleit said.

The president-elect is, for example, promising to curtail exemptions for religious or moral objections to the ACA's contraception mandate, which requires employee benefit plans to cover birth control at no extra cost.

In addition, Biden will probably ditch the Trump administration's elimination of ACA anti-discrimination protections for transgender patients. His campaign's LGBTQ+ plan contends that the Trump administration has "deliberately and systematically attempted to gut protections for the LGBTQ+ community by carving out broad religious exemptions to existing nondiscrimination laws."

The list goes on. Bulleit said that he's expecting the demise of a Trump administration policy that allows "short-term, limited duration" health insurance policies — which are inexpensive because they lack ACA benefits — to be purchased for 12-month terms and renewed for up to three years.

And Foley & Lardner's Waltz predicted that Biden will scrap "policies that limit access to coverage for Medicaid and Obamacare, e.g., work requirements for Medicaid." Those work requirements are the subject of a pending Supreme Court case, and it's not clear whether Biden will try to moot the matter.

With any regulatory rollbacks, Biden will have to tread carefully in the rulemaking process, since legal challenges frequently succeed for technical reasons, such as failures to fully explain new positions or respond in good faith to public comments.

"Reversing some Trump regulations in this area could be tricky legally and politically, which might explain Biden's choice of an HHS nominee with more legal than health care expertise in [California Attorney General] Xavier Becerra," BakerHostetler senior adviser Adam Higgins told Law360.

Drug Pricing Action Hinges on Senate Elections

Before taking office, Trump famously accused Big Pharma of "getting away with murder" on drug prices, and Biden has adopted similarly heated rhetoric, asserting on his website that "prescription drug corporations are profiteering off of the pocketbooks of sick individuals."

But the current and soon-to-be president have different visions for making medicines less expensive. Biden, for example, wants to repeal the ban on Medicare negotiation of drug prices — something Trump repeatedly claimed to support but failed to follow through on.

If Democrats win a narrow U.S. Senate majority by triumphing in the Jan. 5 elections for Georgia's two Senate seats, they'll have a plausible shot at enacting ambitious legislation on drug prices. If the Senate stays in GOP hands, "Biden would undoubtedly continue drug pricing as an area of executive action [via regulation], but probably with a shift in approach" from Trump, Higgins said.

Some of the biggest shifts would probably affect two regulations that Trump issued in November: a "most-favored nation" policy guaranteeing the U.S. a relatively great deal on certain prescription drugs in Medicare, and a ban on drugmaker rebates to pharmacy benefit managers.

The most-favored nation rule is facing at least four legal challenges and has already been blocked at least temporarily; Biden may "let that play out, rather than move to undo the rule," Bulleit said.

The rebate rule doesn't take effect until 2022, and pharmacy benefit managers might first lobby Biden to withdraw the rule before resorting to litigation.

"They could possibly see what the new administration thinks about it. And if the new administration might be willing to revisit it, [it] certainly can do so," Kelly M. Cleary, a partner at Akin Gump Strauss Hauer & Feld LLP, told Law360.

New policies that Biden could enact via regulation include his proposal to prohibit drug price increases that outpace the general inflation rate.

"That probably has significant chances" of becoming reality, O'Rourke said.

The president-elect is also calling for an independent board that would recommend a "reasonable price" that Medicare will pay for certain new drugs that lack competition. That's viewed as a far-reaching policy to pursue through regulation, and multiple experts told Law360 that it could fall into the category of lofty campaign commitments that prove difficult to actually deliver.

"It's sort of hard, what you campaign on and what you prioritize for your administration. [Biden] talked about setting up an independent board to set up new launch prices for drugs that are not subject to competition," Sidley Austin's Datta said. "That sounds very aggressive to me. There would probably be a variety of legal issues associated with that."

--Additional reporting by Adam Lidgett and Rebecca Flanagan.

For a reprint of this article, please contact reprints@law360.com.

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