The 10 top health care stories of 2017—and what to expect next

Topics: Politics and Policy, Federal Government, Health Care Legislation, Regulatory, Patient Populations, Finance, Payments and Reimbursement, Insurance, Individual Mandate, Children's Health Insurance Program, Exchanges

From the Congressional debate over repealing and replacing the Affordable Care Act (ACA) to the ongoing implementation of the Medicare Access and CHIP Reauthorization Act (MACRA), American Health Line's coverage in 2017 focused on topics that most affect the health care industry.

What were the biggest stories of the year? American Health Line's editorial team rounds up the top 10 stories of 2017.

1) After health reform fumble, House and Senate vote to repeal ACA's individual mandate

After months of false starts and negotiations, the House on May 4 advanced legislation (HR 1628) that would repeal and replace large portions of the ACA and significantly cut Medicaid funding. Senate GOP leaders in July brought three different health reform bills to the floor—all of which were defeated. A fourth health reform bill—the Graham-Cassidy bill—also failed.

Without an agreement on health reform, GOP leaders shifted their attention to another priority: tax reform. Although the House initially advanced its tax reform bill without revisiting the ACA debate, the Senate on Dec. 2 passed a tax reform bill that would eliminate the ACA's individual mandate penalty. The Senate's individual mandate provision was included in a final bill negotiated between the House and Senate. On Dec. 20, Congress voted to approve that measure, sending it to Trump for his signature.

What to watch for in 2018: President Trump has indicated that the push for a bill to fully repeal and replace the ACA is not dead and that Republicans will pick up the torch in 2018. But industry experts note that the individual mandate was a driving force behind Republicans' campaign to repeal the law, so having eliminated the mandate's penalty, lawmakers may have little appetite to dive back in to health reform.

2) Congress lets CHIP funding expire and states take action

Federal funding for CHIP expired Oct. 1 and after months of inaction in Congress, several states—including Alabama, Connecticut, and Colorado—announced that they would either freeze or roll back coverage if Congress does not approve new funding by the end of the year. Industry experts have said a CHIP funding lapse of this length is unprecedented as the program, which covered about 9.2 million low-income U.S. children and pregnant women in fiscal year (FY) 2016, typically has had strong bipartisan support. But this year, negotiations appear to have been caught up in the GOP's quest to repeal the ACA. Further, House Republicans have continued to push funding offsets that Democrats strongly oppose.

What to watch for in 2018: More states are likely to begin warning enrollees about potential coverage disruptions if Congress fails to reauthorize CHIP funding before the end of the year. According to Kaiser Family Foundation, about one-third of states are at risk of depleting their reserves by the end of next month. Arizona enrollee's would be the first to feel the immediate effects, as the state said it will have to end CHIP coverage for about 7,000 children on Jan. 1, 2018, if Congress does not act before then. Connecticut and Colorado will close their programs effective Jan. 31, if Congress does not reauthorize funding.

3) Trump halts ACA's CSR payments

Insurers spent most of 2017 waiting to see if the Trump administration would make monthly federal cost-sharing reduction (CSR) payments to help insurers reduce out-of-pocket costs for low-income exchange plan enrollees. For the first nine months of 2017, the payments were delivered as scheduled, but on Oct. 12 the administration announced it would cut off the payments. Insurers and several industry observers had warned that cutting off the payments would lead to higher premiums and prompt more insurers to leave the exchanges. Several states took the administration to court to force the administration to resume making the payments, but a judge denied states' emergency request to reinstate the payments

What to watch for in 2018:  For all the uproar about how pulling the payments would wreak havoc on the exchange market, early data suggests for the majority of exchange enrollees, premiums have actually gone down. That's because insurers in many states responded by increasing their premiums in a way that also caused subsidies for eligible enrollees to rise. That said, not everyone is benefiting from the change: The Kaiser Family Foundation has projected that about 6.7 million exchange enrollees who do not qualify for subsidies could be stuck paying the full premium increases that result from discontinuing the payments.

4) The bare exchange market conundrum

The cancelation of CSR payments was not the only threat to the exchange market in 2017: Several major insurers either scaled back or fully withdrew from the exchange market, citing Republican efforts to repeal the law, uncertainty around CSRs, and disappointing past business performance. What followed was months of headlines warning that certain exchange markers could be left "bare," or without an insurer, for the 2018 open enrollment period, as well as widespread debate about the exchange market's stability. According to the Kaiser Family Foundation, more than 80 counties at various times in 2017 appeared at risk of having no exchange insurer for 2018, but by day one of the 2018 open enrollment period, every county in the United States had at least one insurer selling coverage.

What to watch for in 2018: Congress' recent action to invalidate the ACA's individual mandate could spur a resurgence of bare market counties ahead of the 2019 open enrollment period. Some insurers have said without a mandate to purchase insurance, young, healthy enrollees could drop coverage forcing insurers to raise premiums or leave the exchange marketplace.

5) CMS finalizes rule for MACRA in 2018

CMS on Nov. 2 unveiled a long-awaited final MACRA rule that details policy updates for the Quality Payment Program's second year—the 2018 reporting year—which will affect the payments providers will receive in 2020. The biggest updates included expanding the number of providers who are exempt from the program; assessing providers subject to the Merit-based Incentive Payment Program on cost measures (a significant change from the proposed rule, which initially delayed the cost measures until 2019); raising the performance bar that providers must meet to avoid payment penalties under MIPS; and creating new avenues for solo practitioners and small practices to participate under MIPS.

What to watch for in 2018: The policy changes included in the final rule take effect Jan. 1, 2018, and CMS has estimated that 621,700 clinicians will be subject to MIPS and that between 185,000 and 250,000 clinicians will be eligible for the Advanced APM track. Providers participating in the program for the 2017 reporting year must submit all data to CMS by March 31, 2018, and the agency will use those data to levy penalties or bonuses of up to 4% beginning in 2019.

6) The United States' opioid misuse epidemic rages on

Perhaps the biggest public health threat facing the country in recent years is the U.S. opioid misuse crisis, and on Oct. 27, HHS declared the epidemic a public health emergency. While public health officials have continued to fund new programs to crack down on opioid misuse and treat individuals with opioid use disorders, in 2017 local and state officials added a new tool to their arsenal: taking opioid manufacturers and distributors to court. At the same time, law enforcement and public health officials have shined a light on prescribers' and insurers' roles in the epidemic and sought to increase access to non-opioid pain medications, new medical devices, and medication-assisted treatment.

What to watch for in 2018: The Trump administration's emergency declaration opened up new resources to combat the epidemic, but experts generally agree that a surge of new funding and a coordinated, concentrated response will be needed to stem misuse. As such, we expect federal agencies to continue announcing and rolling out new initiatives to spur the development of new treatments and non-addictive pain medications, increase individuals' access to treatment, and crack down on drug trafficking.

7) CMS cancels 3 mandatory bundled payment models, scales back a 4th

In a widely anticipated final rule, CMS on Nov. 30 eliminated three mandatory bundled payment Episode Payment Models (EPMs) for heart attack treatment, bypass surgery, and hip and femur fracture treatment billed through Medicare, and significantly scaled back the Comprehensive Care for Joint Replacement (CJR) model. CMS said it plans to work with providers to find new opportunities for voluntary payment initiatives. Specifically, CMS in the final rule said its Center for Medicare and Medicaid Innovation expects to develop new voluntary bundled payment models for calendar year 2018 that would qualify as Advanced Alternative Payment Models under MACRA.

What to watch for in 2018: All signs suggest CMS will continue to advance value-based payment models—just on a voluntary basis. CMS said its Center for Medicare and Medicaid Innovation expects to develop new voluntary bundled payment models for calendar year 2018 that would qualify as Advanced Alternative Payment Models under MACRA.

8) FDA approves first-ever gene therapies to treat cancer in the US

Gene therapies, which rely on a patient's own cells to target and fight diseases, have been under development for several years, but this year, FDA approved the first two gene therapy drugs to treat cancer. Novartis' Kymriah in September became the first gene therapy drug to receive FDA approval; it treats B-cell acute lymphoblastic leukemia in children and adults up to age 25 for whom other treatments did not work. In October, Kite Pharma's Yescarta became the second approved gene therapy; it treats certain adults with aggressive forms of the blood cancer non-Hodgkin lymphoma.

What to watch for in 2018: FDA Commissioner Scott Gottlieb has signaled his intent to bring more gene and cell therapy drugs to the U.S. market. Gottlieb in September said the agency had about 626 active investigational applications for new drugs related to cell and gene therapy and that the agency is looking to streamline the process of evaluating applications for such drugs.

9) Health care's merger mania

Health care industry mergers and acquisitions have been on the upswing in recent years, and 2017 saw the rise and fall of key megamergers. Two proposed megamergers—the $54 billion Anthem-Cigna deal and the $48 billion Aetna-Humana deal—fell through over antitrust concerns, while Walgreens and Rite Aid abandoned a $9.4 billion merger proposal. However, new vertical merger proposals now have the potential to reshape health care delivery in the United States. Industry experts say two of the latest proposals—a $69 billion deal between CVS Health and Aetna and a $4.9 billion deal between UnitedHealth Group's Optum and DaVita's physician group—suggest health care stakeholders are looking for novel ideas to deliver high-quality care at a lower cost. Last month Optum also closed on a deal to purchase Advisory Board, which publishes American Health Line.

What to watch for in 2018: The CVS Health-Aetna deal and the Optum-DaVita deal are subject to regulatory approval and are not expected to close until 2018. However, industry experts expect these types of mergers and acquisitions to continue as providers and insurers look to lower spending, adopt new technologies, and implement alternative payment models.

10) In breakthrough study, scientists edit harmful mutation from genes of human embryos

Scientists in 2017 also made significant breakthroughs using the new gene-editing technology CRISPR. In August, a team of biologists in Oregon became the first researchers in the United States to successfully edit genes in human embryos to correct a heritable disease-causing mutation. Scientists said the approach could one day be used to avoid heritable diseases—such as breast and ovarian cancer, Huntington's, Tay-Sachs, and sickle cell anemia. Some observers have raised concerns, however, that the technique could lead to the creation of "designer babies. A separate team used CRISPR technology to edit piglets' genes to eradicate viruses that could cause disease in humans—a breakthrough that some experts said could one day make it possible to transplant organs from pigs into humans.

What to watch for in 2018: While both studies were touted in the medical industry as significant breakthroughs, it could be years before those findings result in a marketable procedure or treatment. Both studies require more vigorous research to verify their findings, as well as input from medical ethicists on the proper uses and applications for such treatments.