Health Policy Report

The Week in Review

Congress convened last week and began the process of reconciling their respective FY 2019 appropriations bills. The House passed motions to go conference with the Senate on a federal spending package for the Defense, Labor, HHS & Education Departments, as well as an appropriations package (H.R. 6147) that includes spending allocations for: (1) Financial Services and General Government; (2) Agriculture and Rural Development; (3) Interior, Environment, and Related Agencies; and (4) Transportation, Housing, Urban Development, and Related Agencies. Both chambers will now hammer out final spending details off the floor in hopes of passing as many spending bills as they can prior to the September 30 government funding deadline

In addition to the appropriations work, the House passed three pieces of legislation, including: (1) a bill (H.R. 1635) that would amend the loan counseling requirements under the Higher Education Act; (2) a bill (H.R. 4606) to provide that applications under the Natural Gas Act for the importation or exportation of small volumes of natural gas be granted without modification or delay; and (3) a bill (H.R. 6691) that clarifies the definition of "crime of violence."

Meanwhile, the House Democratic establishment was dealt a blow last week as Rep. Michael Capuano (D-MA) was defeated in Tuesday's primary election by Boston City Councilor Ayanna Pressley, the first black woman ever elected to the Boston City Council. Pressley is now set to become the first woman of color to represent Massachusetts in the House, as the race for Massachusetts 7th Congressional district boasts a partisan voter index (PVI) of D+34 and is rated “Safe D” by numerous election forecasters.

In the Senate, the chamber cleared eight additional presidential nominations per Senate Majority Leader Mitch McConnell’s nominations deal, including Elad Roisman to be a member of the Securities and Exchange Commission (SEC). Leader McConnell (R-KY) also swore in former Sen. Jon Kyl (R-AZ) as the replacement for late Sen. John McCain (R-AZ). According to Arizona Gov. Doug Ducey, Sen. Kyl has agreed to serve at least through the end of the year, but he hasn’t committed to serving past the end of this Congress and will not run for re-election in 2020. Still, a short-term appointment of Sen. Kyl bolsters the chances for confirmation of Supreme Court nominee Brett Kavanaugh

The Week Ahead

In observance of Rosh Hashanah, Congress will be out of session Monday and Tuesday and will resume legislative business on Wednesday. In the Senate, lawmakers have reached an agreement to bring a package of bills (section-by-section) to address the nation's opioid crisis to the Senate floor in the coming days. The lower chamber is also expected to resume consideration of Charles Rettig to be Commissioner of the Internal Revenue Service (IRS). Meanwhile, when the House reconvenes, lawmakers are expected to consider a bill (H.R. 3798) that would amend the Affordable Care Act’s (ACA) employer mandate to adjust the definition of “full-time employees” from a 30-hour threshold up to a 40-hour threshold.

Senate Unanimously Votes to Ban Pharmacy 'Gag Clauses'

The Senate unanimously approved a bill (S. 2553) last week that prohibits “gag clauses” that prevent pharmacists from telling customers that they could save money by paying cash out-of-pocket rather than using their insurance benefit. While contracts between pharmacists and pharmacy benefit managers (PBMs) are confidential, there have been allegations that they sometimes contain clauses that prevent pharmacists from telling consumers that paying cash for a prescription might actually cost less than their health insurance copayment. The leading PBM trade association, PCMA, recently said that none of their members use gag clauses, and others say the practice is confined to the commercial market, where the orders are rarely used. The measure — sponsored by Sens. Susan Collins (R-ME), Bill Cassidy (R-LA), John Barrasso (R-WY), Debbie Stabenow (D-MI), Ron Wyden (D-OR) and Claire McCaskill (D-MO) — would apply to patients in Medicare Advantage (MA) and Medicare Part D plans. 

A similar bill (S. 2554) that would apply to patients on the Exchanges and in private health plans cleared the Senate HELP Committee in late July but has not received a vote from the full chamber. Meanwhile, the House Energy and Commerce (E&C) Health Subcommittee advanced a similar bill (discussion draft) during a markup on Friday that would broadly apply to private health plans, Part D plans, and MA plans. Lawmakers on both sides of the aisle were overwhelmingly supportive of the discussion draft, as well as several stakeholders represented on the panel. With broad bipartisan support and scant opposition from industry stakeholders, it is increasingly likely that a ban on gag clauses will be enacted this year.

Senate Expected to Vote This Week on Opioid Legislation

Senate leaders have reached an agreement to bring a package of bills to address the nation's opioid crisis to the Senate floor in the coming days. In terms of procedure, the Senate will consider a substitute amendment to the opioids package (H.R. 6) the House passed in June. The amendment (#4013) merges wide-ranging, prevention-focused measures advanced by the Finance, Judiciary, Commerce, and Health, Education, Labor and Pensions (HELP) committees earlier this year.

Unlike the House, the Senate committees have not considered controversial language addressing the “Part 2” privacy rules pertaining to substance use disorder records and this remains excluded from the current proposal. The Senate's package does, however, expand transparency requirements, provide support for treatment services, advance safe electronic prescribing of prescriptions, facilitate telehealth services, and codify some limited changes to Medicaid's restrictions on paying for services in an Institution for Mental Disease (IMD). 

The Senate is expected to pass its opioids package later this week, but both chambers still need to agree on a reconciled version of the legislation. Over the summer, House and Senate staff have been working to iron out differences between their respective packages. With the announcement of a deal in the Senate, it is possible Congress could clear a compromise package to send to the President before the midterm elections. 

House Sets Vote to Amend ACA's Full-Time Employee Threshold

The House Rules Committee will meet on Wednesday to consider a bill that would change the Affordable Care Act’s (ACA) employer mandate with respect to the full-time employee threshold — a signal that the bill is likely headed to the House floor for a vote later this week. Sponsored by Rep. Jackie Walorski (R-IN), the Save American Workers Act (H.R. 3798) would repeal the 30-hour threshold for classification as a full-time employee for the purposes of the employer mandate in the ACA and replace it with a 40-hour threshold.

Under the ACA, employers with more than 50 full-time equivalent workers must offer health insurance to their employees or face a penalty. The law defined the threshold for full-time status at 30 hours of work per-week to the dismay of congressional Republicans, who have been pushing for a 40-hour threshold. Rep. Walorski argues that hourly or part-time employees working between 30 and 40 hours per week have seen their hours reduced as a result of companies choosing between “unaffordable new costs” or “ACA’s substantial fines.” The bill has stalled in the House during the 113th and 114th Congresses, however, the GOP-controlled 115th Congress could provide a more straightforward path to President Trump’s desk. 

Key House Panel Advances Local Coverage Determination Reforms

The House Ways & Means Committee passed a bill last week that would make Medicare’s local coverage determination (LCD) process more transparent. The Local Coverage Determination Act of 2017 (H.R. 3635), introduced by Reps. Jenkins (R-KS) and Kind (D-WI), would require that Medicare Administrative Contractors (MACs) publish drafts of LCDs on their website, hold open and public meetings to review the drafts, and publish the rationale for LCDs for public examination. The bill would also establish an appeal and redetermination process by which stakeholders can dispute LCDs. The bill was passed by the Committee as part of a larger package of Medicare measures last Wednesday.

An amendment from Committee Chairman Kevin Brady (R-TX) removed a provision that would have prohibited MACs from adopting LCDs that were developed for another geographic area without independently considering the evidence. Chairman Brady stated that the latter change was made due to concerns that the prohibition would slow the LCD process and be a burden on MACs. However, the bill’s co-author, Democrat Ron Kind, raised concerns that allowing one MAC to adopt another's coverage policy without a separate evaluation essentially allows LCDs to become national coverage policy and said he hopes the bill can be improved before a floor vote. Chairman Brady’s amendment also removed a provision establishing an ombudsman for MACs, as a similar position was already created as part of the 21st Century Cures Act.

Judge Rules Trump Administration Must Pay CSRs

A federal Court of Claims judge ruled that the Trump administration was wrong to withhold $5 million in cost-sharing reduction payments from Montana Health Co-Op, a decision that could have implications for insurers across the nation. Judge Elaine Kaplan said the Trump administration‘s arguments that the Affordable Care Act required these payments to insurers but did not fund them do not “withstand scrutiny.”

The administration ended cost-sharing reduction payments at the end of 2017, setting the stage for several lawsuits from insurers. By 2018, many insurance companies had found a workaround, increasing the cost of silver plans to claim more subsidies from the federal government. Still, there are many outstanding claims for payments that were not made in 2017, though judges on the Court of Federal Claims are not bound by the decisions of their peers.