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Six 2021 State Healthcare Priorities that Address Life After the Pandemic

by John Haughey, FiscalNote

The hottest topics in healthcare policy for 2021 and beyond and how you can get these insights directly in FiscalNote.

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All but two of the nation’s 50 state legislatures were in session in mid-February dealing with “normal” policy issues — budget, education, healthcare, environmental regulation — but doing so through an anything-but-normal, all-encompassing “COVID-19 lens.” Medicaid expansion and innovation, prescription drug pricing, healthcare cost transparency, scale-of-practice expansions, and building telehealth capacities were all pre-pandemic trends that gained traction in 2020 sessions and will continue to do so in 2021, with the added urgency in many states of adopting COVID-19 liability protections for healthcare providers and practitioners.

But first-things-first: State lawmakers are still contending with combating the coronavirus’s spread while now orchestrating plans to distribute, allocate, store, and administer vaccines (akin to building the water lines while fighting the fire) while also sifting through buckets of bills to drive economic recovery and restore stability, most prominently for school districts.

Much of the actions state lawmakers are considering in underway 2021 sessions regarding virus mitigation, vaccine distribution, and economic recovery are contingent on how President Joe Biden’s $1.9 trillion assistance package is ultimately adopted and distributed to the states. 

Below are six healthcare-related issues state lawmakers across the nation are considering right now in state legislatures.

1. Medicaid

Medicaid covers one in five Americans. But now, as tens of millions lost employer-sponsored insurance during the pandemic, state lawmakers are wrestling with myriad proposals in every state legislature to better leverage federal dollars.

The legislative emphasis is multi-pronged: in addition to addressing the COVID-19 emergency, the raft of Medicaid bills before state legislatures also propose provisions to mitigate the pandemic’s accompanying economic fallout and advance innovations trending before the coronavirus emerged as an all-encompassing issue.

FMAP Expansion and Extension

The Families First Coronavirus Response Act Congress adopted in March provided a temporary 6.2-percent increase to Federal Medical Assistance Percentage (FMAP) rates, the portion of federal funding provided for Medicaid to states, allowing states to defer 100 percent of COVID-19 testing for uninsured individuals. 

36
states

and the District of Columbia have adopted Medicaid expansion under the ACA. Of the 14 states that have not, two (Oklahoma and Missouri) must do so by July 1 after voters approved ballot measures proposing expansion in 2020.

President Joe Biden’s proposed $1.9 trillion COVID-19 aid package extends that FMAP increase through its April sunset, provides more money for purchasing private coverage in Affordable Care Act (ACA) marketplaces, extends a 20-percent add-on for treating COVID-19 patients, and includes incentives for states that have not expanded Medicaid under the ACA to do so.

The District of Columbia and 36 states have adopted Medicaid expansion under the ACA. Of the 14 states that have not, two (Oklahoma and Missouri) must do so by July 1 after voters approved ballot measures proposing expansion in 2020. 

Public Option

The biggest 2021 innovation in Medicaid funding is in emerging proposals to create a “public option,” generally defined as a coverage option that “leverages government bargaining power to offer a more affordable coverage plan for consumers.” Colorado, Oregon, and Nevada lawmakers are among those set to consider public option bills in 2021.

Nearly a dozen states have considered or passed bills to study or implement a state-based public option program in the last four years with Nevada the first to adopt one in 2017. Then Gov. Brian Sandoval vetoed the bill, calling for further study. 

In 2019, Washington state lawmakers became the first in the nation to adopt a public option buy-in in its “Cascade Care” program and the first to implement one with it going into effect in 19 of the state’s 39 counties on Jan. 1, 2021.

In Colorado, lawmakers introduced a Colorado Healthcare Option in 2020 after studying potential public option models. The measure failed but several similar bills are set to be discussed during the 2021 session.

Nevada lawmakers are also poised to ponder a bill offering a public option to all residents through the state’s Public Employees’ Benefits Program following the January 2021 completion of a two-year study ordered by Sandoval.

But the public option measure generating the most attention in mid-February is an Oregon bill that would allow residents to choose a public insurance plan instead of a private one. The bill is the result of 2019 legislation that authorized a study in developing a public option or Medicaid buy-in model for Oregon.

Waver Innovation

In addition to FMAP expansion and extension, and various Medicaid innovations, including public option proposals, state lawmakers are also expected to develop various waiver opportunities to ease certain Medicaid requirements and expand access to vital services. 

All 50 states and territories received approval for emergency Section 1135 Waivers to relax requirements such as prior authorizations for services and provider credentialing. Forty-nine states received approval for amending home and community-based services, long-term care for the elderly and people with disabilities, and people who are particularly vulnerable to COVID-19.

Medicaid 1915(c) or 1115 waivers that address reinsurance regulations will continue to spur “waiver innovation” in fighting the pandemic, targeting services to specific populations, adopting performance-based reimbursements, developing bundled or “episodes of care” (EOC) programs and policies dealing with high-need, high-cost patients.

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Among pandemic-stymied trends that could resurface as legislation during 2021 legislative sessions are bills related from volume-based to value-based care and plans that blend Medicare Shared Savings programs with Medicare Advantage’s risk-sharing models. 

2. COVID-19 Liability Shields for Healthcare Providers

At least 27 states, the District of Columbia, and Puerto Rico have enhanced liability protections for healthcare providers and medical facilities through legislation or via emergency executive orders since the COVID-19 pandemic emerged last March. With 48 state legislatures across the nation now in session, adopting general COVID-19 liability protections is a necessity as some lawmakers are considering broad immunity from COVID-19 lawsuits for all businesses, while others are breaking out separate bills specifically addressing healthcare-related practices and practitioners.

Liability Protections

Among those pondering broad COVID-19 liability protections for all businesses in underway sessions are lawmakers in Missouri, Nebraska, Montana, New Hampshire, and North Dakota. Indiana lawmakers in January sent a broad business liability package to Gov. Eric Holcomb for signing.

Meanwhile, lawmakers in Washington, Idaho, New Jersey, and Pennsylvania are among those reviewing COVID-19 liability bills that categorically apply to healthcare practitioners, providers, hospitals, nursing homes, and assisted living facilities (ALFs). Alabama lawmakers have already adopted a 2021 bill signed by Gov. Kay Ivey implementing COVID-19 immunity measures for ALFs and other healthcare facilities. Florida lawmakers are trying to do both in their 60-day session, which begins March 2. Only Florida and Louisiana legislatures were not in session in February.

Federal Moves

A broad liability package, House Bill 7, drafted by the conservative American Legislative Exchange Council (ALEC), has already passed three House hearings and is poised for adoption in March when the session formally convenes. Its Senate companion, Senate Bill 72, is two hearings away from the Senate floor.

HB 7/SB 72 would extend COVID-19 protections to businesses, schools, nonprofits, and religious institutions that make a “good-faith effort” to follow government health guidelines.

While HB 7/SB 72 exclude healthcare providers, separate Senate and House bills propose liability shields for those that “substantially” follow government-issued standards and guidance. The bills, SB 74 and PCB HHS 21-01, proposed by the House Health & Human Services Committee, would extend protections to healthcare providers and allow plaintiffs one year to bring COVID-19-related claims after a death, hospitalization, or diagnosis. The House proposal varies in increasing liability standards for filing lawsuits from “negligence” to “gross negligence,” and from “a preponderance of evidence” to “clear and convincing.” 

State Business Interests

The Florida Justice Reform Institute and LeadingAge Florida, which represents more than 500 ALFs and 140 businesses in the state, are among prominent proponents of the broader liability protection bills and the measure specifically applying to healthcare providers. The Florida Justice Association, Florida AFL-CIO, Florida National Organization for Women, Florida League of Women Voters, and the AARP all oppose both measures, especially the healthcare-related bills, and are certain to clash in hearings that will reflect similar debates in statehouses this winter and spring nationwide.

3. Comparative Pricing Transparency

Although the United States spends more on healthcare than any other country in the world, Americans pay more for out-of-pocket medical services on average than everyone on Earth but the Swiss. State lawmakers have been under pressure to find ways to reduce constituents’ healthcare costs for decades. The emergence of the COVID-19 pandemic during their 2020 sessions only raised the heat.

A relatively recent strategy showing promise in lowering costs and enhancing access are measures imposing price transparency that allows consumers to see and compare prices for healthcare services and prescription drugs. At least 18 states in 2020 passed healthcare pricing transparency bills. Dozens more are proposed in 2021. They include:

All-Payer Claims Databases

All-Payer Claims Databases (APCDs) collect claims data from Medicare, Medicaid, state employee health plans, and state-regulated private insurers to identify price variations, market trends, and quantify spending.

23
states

have full APCDs, five have partial databases exclusively focused on prescription drug pricing and as many as a dozen state legislatures have authorized studies on APCDs.

While their scope and use vary, 23 states have full APCDs, five have partial databases exclusively focused on prescription drug pricing and as many as a dozen state legislatures have authorized studies on APCDs. Kentucky, Nevada, and West Virginia lawmakers are among state legislators reviewing 2021 bills to create APCDs. North Carolina officials tapped the North Carolina Institute of Medicine in January to assess the value of an APCD for the state.

Publicly-accessible price comparison tools

At least nine states use APCD, hospital, and government health department data to maintain “consumer-facing” price comparison websites that allow consumers to ensure accurate price information and induce competition among providers where possible.

As of Jan. 1, the federal government requires all hospitals to provide “clear, accessible pricing information online about the items and services they provide” in “comprehensive, machine-readable” files with all items and services “in a display of ‘shoppable services’ in a consumer-friendly format.”

Among 2021 bills establishing a price-comparison website matriculating through legislatures is Virginia’s HB 2007, which would direct the state’s Department of Health to bulk as a website providing prescription drug prices from every carrier, pharmacy benefits manager, and drug manufacturer in the state.

Right to Shop

New Hampshire, Kentucky, and Utah established “Right to Shop” programs as part of their state employee health plans to curb growing healthcare costs to state budgets. Florida, Maine, Nebraska, Tennessee, Utah, and Virginia have since enacted legislation requiring or encouraging state-regulated private health plans to initiate “Right to Shop” programs for enrollees. 

Expanding “Right to Shop” to require private insurers either participate or establish their own programs is among initiatives being proposed in state legislatures. During 2021 sessions, lawmakers in New Jersey, Louisiana, Massachusetts, Illinois, and South Carolina will see revived 2020 “Right to Shop” bills and Oklahoma legislators will deliberate SB 462, the Oklahoma Right to Shop Act.

Among other transparency and price-curbing proposals before state lawmakers nationwide is balanced billing protections — after nearly banning the practice in 2020 — and reducing prior authorization “red tape.”

4. Prescription Drugs

The high cost of pharmaceuticals will remain a priority political discussion on the federal and state levels. As they have the last decade, state lawmakers in 2021 will address prescription drug costs in, literally, thousands of bills. Proposed prescription drug import plans and regulating how Pharmacy Benefit Managers (PBMs) operate will remain among the most common themes. 

Prescription Drug Import Plans

Vermont lawmakers were the first to adopt a state program to import prescription drugs from Canada in 2018. Colorado Gov. Jared Polis and Florida Gov. Ron DeSantis in 2019 initiated efforts approved by lawmakers to implement similar wholesale prescription drug import programs in their states. 

Although all still await federal — and Canadian — approval, New York, New Hampshire, and New Mexico lawmakers were among state lawmakers who pondered similar programs in 2020. At least 11 2021 bills, including three in North Dakota, propose creating state drug importation programs in at least nine states, including Arizona, Connecticut, Hawaii, Minnesota, New Jersey, New York, Oklahoma, and Rhode Island.

Pharmacy Benefit Managers (PBMs)

As of mid-February, there were 46 bills filed in 22 state legislatures related to PBMs role as the “middleman” between providers and retailers, and practices such as “gag clauses,” “clawbacks” and “spread pricing.” Proposed 2021 bills in Arizona, Hawaii, Kentucky, Maryland, Nebraska, New Jersey, and Wisconsin are among those that amend state laws regulating how PBMs can operate. There are nine New Jersey bills relating to PBMs.

Going into 2020 sessions, at least 33 states had enacted laws prohibiting “gag clauses” in contracts with PBMs that restrict pharmacists from telling customers about a lower-priced generic alternative to brand-name drugs

Lawmakers in Minnesota, Nebraska, and Oklahoma are among legislators deliberating proposed 2021 bills that specifically outlaw the use of “gag orders” by PBMs that prohibit pharmacists from directing customers to lower-cost prescription drugs.

“Spread pricing,” in which PBMs are compensated by retaining the difference, or “spread,” between the amount they charge a plan sponsor and the amount they reimburse a pharmacy is targeted in bills filed in at least 11 state legislatures — Connecticut, Florida, Hawaii, Indiana, Kentucky, Maryland, Missouri, New Mexico, New York, Oklahoma, and Oregon.

5. Telehealth

All 50 states and territories, particularly the District of Columbia, revised telehealth policies in 2020 under emergency orders to increase access to healthcare services that can be delivered remotely and minimize potential exposure to the coronavirus. The discussion in state legislatures in 2021 and beyond is how many of those emergency provisions should be permanently encoded and how they should be paid for under Medicaid and private insurance.

27
Percent

The increase in states with laws addressing reimbursement of telehealth services. From 16 states in 2019 to 22 states in 2020.

Overall, lawmakers want to increase the viability of telehealth by increasing the number of services that can be delivered and paid for through Medicaid and private insurers. Measures filed in 2020 and 2021 encompass a wide scope of telehealth practices and policies relating to provider licensure, patient/provider relationship standards, site criteria, and payment authorities. 

The number of states with laws addressing reimbursement of telehealth services increased from 16 states in 2019 to 22 states in 2020. All but seven states now require some parity in telehealth payments with services delivered through other modalities, and 14 states now require insurers to pay the same amount for telehealth visits as in-person visits.

West Virginia, which had no laws regulating telehealth, was among states that passed 2020 bills mandating insurers cover the same services via telehealth they would cover for in-person modalities.

This will be a continuing theme in 2021 with New York Gov. Andrew Cuomo and Texas Gov. Glenn Abbot among governors calling telehealth expansion a 2021 priority in their state-of-the-state addresses. Lawmakers have responded with a bevy of bills to implement their governors’ call.

The slate of legislation Cuomo proposed for New York state lawmakers to consider in 2021 will “permanently adopt COVID-19-era innovations” in telehealth adopted in July under SB 8416, which expanded the definition of telehealth to include “audio-only telephone communication.”

A Florida bill that would allow for telehealth providers to prescribe certain controlled substances and allow out-of-state providers to work with in-state physicians is matriculating through committees and could be ready for floor debates shortly after the state legislature convenes March 2.

On Jan. 14, the New Jersey Senate Committee approved SB 2559, which would amend New Jersey’s existing telehealth law and expand reimbursement for covered services provided via telehealth.

In addition to deliberating telehealth reimbursement proposals for an expanding range of services, bills addressing remote patient monitoring are emerging. Other realms of telehealth regulation now being explored include licensing, privacy, enforcement of standards, and modalities — the American Telemedicine Association (ATA) has published model policy language lawmakers are reviewing in various states.

6. Scope of Practice Expansions

In contending with the COVID-19 pandemic, many states adopted scope-of-practice (SOP) waivers and expansions to bolster healthcare workforce capacity in responding to the crisis. Leading into 2020 legislative sessions that would be disrupted by the coronavirus outbreak, SOP expansions for nurse practitioners, pharmacists, dental professionals, and specialists, such as optometrists and behavioral health professionals, were an established trend with more than 40 states pondering SOP bills in 2019.

During the COVID-19-dominated 2020 sessions, more than 40 states, including Ohio, Kansas, and Vermont, enhanced SOP for various medical professions via legislation or executive action to accelerate delivery of services, provide more access for treatments, lower costs, and beef up testing and vaccine administration capacities. Examples include Arizona Gov. Doug Ducey’s April 2020 executive order allowing pharmacists to refill prescriptions up to 180 days. 

NPs/APRNs

An advanced practice registered nurse (APRN) is a nurse who has obtained at least a master’s degree in nursing. Nurse Practitioners (NPs) are APRNs who are independent and work as primary care providers or specialists.

State SOP laws and regulations regarding APRNs and NPs vary considerably. Thirty-nine states, including Florida and Colorado as of 2020, recognize APRNs/NPs as “primary care providers.” Thirty states allow independent practice by APRNs/NPs. And 23 states plus D.C., Guam, and the Northern Mariana Islands grant them full authority to prescribe controlled substances without physician supervision. Most states require APRNs/NPs to enter into collaboration agreements with a physician to prescribe controlled substances.

Eleven 2021 bills in seven states address SOP expansions for APRNs and NPs. Five bills in six states seek to broaden practice authority for NPs/APRNs, such as Arizona HB 1258, which would provide NPs full independent practice authority, and Mississippi’s HB 1303, which would allow near-full practice authority to APRNs.

Arizona, Illinois, Oklahoma, and Missouri are among states considering bills proposing relaxations of mandated collaborative practice agreements to allow NPs/APRNs to independently provide certain types of care.

31
States

allow pharmacists to order and interpret lab tests for chronic conditions.

Pharmacists/pharmacies

Pharmacists and pharmacy SOP expansions had been a sustained trend before the pandemic as a cost-cutting strategy. However, their role has broadened during the emergency with more patients seeking care from pharmacists and more pharmacies anticipating increased point-of-care testing and expanded immunization services.

In 47 states and D.C., pharmacists are authorized to enter into collaborative practice agreements (CPAs) with a physician or another prescriber. CPAs vary from state to state with 31 states allowing pharmacists to order and interpret lab tests for chronic conditions, playing a consulting and direct role in patient care.

In 2020, more than 100 bills were filed in 34 states related to pharmacist SOPs and CPAs. At least that many are being pondered by lawmakers nationwide this year, especially with pharmacists and pharmacies playing a pivotal role in administering vaccines to nursing homes and ALFs in many states. Among them are bills to allow pharmacists to prescribe hormonal contraceptives in Arizona, Iowa, and South Carolina; proposals in Indiana and Wisconsin to allow pharmacists to prescribe oral hormonal contraceptives and patches; and to write prescriptions for smoking-cessation products in Illinois and Rhode Island.

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