Health Policy Report

The Week in Review

With the House in a week-long district work period, floor action was overshadowed by the shock announcement on Tuesday night that President Trump fired Federal Bureau of Investigation (FBI) Director James Comey.  The news set off a firestorm in Washington as lawmakers from both parties were concerned over the timing and reasoning of the firing, and whether it would impact the ongoing investigation of ties between Russia and the Trump Administration. However, most Republicans rejected calls for a special prosecutor, and beyond headlines, it is unclear whether Comey’s dismissal will have any tangible impact on Capitol Hill.

The Senate this week confirmed nominees for Trade Representative, Food and Drugs Administration (FDA) Commissioner (see below), and Secretary of the Air Force. Senators also attempted to pass a final resolution under the rules of the Congressional Review Act (CRA), specifically a measure (H.J. Res. 36) to undo methane emissions regulations promulgated by the Interior Department. Surprisingly, that resolution failed on the Senate floor 49-51 after Sen. John McCain (R-AZ) joined with two other Republican defectors in voting against the measure. 

The Week Ahead

The Senate will start the week by considering two sub-Cabinet level nominations, namely Jeffrey Rosen to be Deputy Secretary of Transportation and Rachel Bland to be Associate Attorney General. Roll call votes on those nominations could come as early as this evening. Watch to see if Democrats object to Bland’s nomination over the firing of Federal Bureau of Investigation Director James Comey last week. President Trump has also interviewed candidates to replace Comey at the FBI, and a formal nomination could come this week, setting up what is sure to be an extraordinary confirmation hearing.

The House will return from its brief district work period on Tuesday, with two criminal justice measures scheduled to be considered pursuant to a rule. One measure (H.R. 1039) would allow probation officers to arrest individuals without a warrant if there is probable cause to believe that the individual forcibly assaulted or obstructed a probation officer in the performance of their duties. Another bill (H.R. 115) to hit the House floor would expand federal statute on death penalty determinations to include the killing or attempted killing of law enforcement and public safety officers. Both measures passed with some bipartisan support out of the House Judiciary Committee last month.   

In the health policy world, two significant Medicare hearings are scheduled this week. The Senate Finance Committee will discuss bipartisan Medicare chronic care policies tomorrow, while the House Ways and Means Health Subcommittee will hold a hearing on Medicare payment systems and a possible extenders package.

Senate Gets to Work on Healthcare Reform

The House’s passage of legislation to repeal and replace the Affordable Care Act moved the issue to the Senate this past week, where its future is far from certain. GOP senators have said they will overhaul the House bill, and that legislation won’t reach the floor until it has 51 votes. Senate Majority Leader Mitch McConnell (R-KY) is leading a group of lawmakers who will prepare the upper chamber's version of health reform legislation for a floor vote. A Senate Democratic aide blasted the move as a signal GOP Senate leadership intends to release a bill closely resembling the exclusively Republican-supported bill that was passed by the House, although the Senate Majority leader has signaled the process will not be “quick, simple, or easy.”

The healthcare panel includes four members of Senate leadership – McConnell, Majority Whip John Cornyn (R-TX), GOP Conference Chair John Barrasso (R-WY), and GOP Policy Committee Chair John Thune (R-SD). Finance Chair Orrin Hatch (R-UT), Budget Chair Mike Enzi (R-WY), and HELP committee Chair Sen. Lamar Alexander (R-TN) represent the committees of jurisdiction. Sens. Ted Cruz (R-TX) and Mike Lee (R-UT) represent the far right of the GOP conference. Sens. Rob Portman (R-OH) and Cory Gardner (R-CO) – both of whom have voiced concern about the Medicaid expansion phase-out in the House-passed American Health Care Act – are also on the panel. Sens. Tom Cotton (R-AR) and Pat Toomey (R-PA), who both hail from Medicaid expansion states, are also part of the group. GOP leaders played defense over their decision to not include any women in the 13-member working group.

Sen. McConnell has reportedly asked Sens. Pat Toomey (R-PA) and Rob Portman (R-OH) to discuss a way forward on the issue of Medicaid. Portman and Toomey are tasked with discussing how quickly to wind down the Affordable Care Act’s Medicaid expansion and how quickly a cap on Medicaid payments should grow. While both senators represent states that accepted the expansion of Medicaid under the healthcare law, they have different positions. Portman is more protective of Medicaid expansion, while Toomey is opposed to the expansion. The decision came after the Senate healthcare working group’s meeting last Tuesday. A Senate aid stated that the three main issues being discussed are: (1) how quickly to wind down the ACA’s expansion of the program, (2) what flexibility to grant states on areas like work requirements, and (3) how quickly a new cap on overall Medicaid payments should grow.

The Congressional Budget Office last Wednesday said it would not release its analysis of the House-passed healthcare bill until the week of May 22, leaving Republican senators with their hands tied in the meantime. Assuming they decide to work off the House-passed bill, the Senate bill must achieve the same deficit savings as the measure the House approved last week, according to the budget resolution rules, meaning senators will likely have to wait several weeks to make final decisions on their bill to repeal and replace the ACA.

Senate HELP Advances FDA User Fee Reauthorization to Senate Floor

Last Thursday, the Senate Health, Education, Labor, and Pensions (HELP) Committee advanced an amended version of the Food and Drug Administration Reauthorization Act (FDARA) (S. 934) to the Senate floor by a 21-2 vote during an executive session. Seventeen amendments were filed in advance of the hearing, but most were not offered, including Democratic amendments that would have tried to preserve key parts of the Affordable Care Act (ACA).

In addition to the manager’s amendment, two additional amendments were added by voice vote, including one from Sens. Susan Collins (R-ME) and Al Franken (R-MN) that would expedite the review of some generic drug applications, and another led by Sen. Orrin Hatch (R-UT) that would expand clinical trial criteria to allow sicker patients to participate. Additionally, the committee voted 13-10 to table an importation amendment by Sen. Bernie Sanders (I-VT) that would have allowed for prescription drug importation from Canada. Committee Chairman Lamar Alexander described the amendment as controversial and asked to delay a vote on it until the bill reaches the floor to keep the committee process bipartisan.

Many Democrats used the hearing to protest the Senate process for developing a counterpart to the House-passed ACA repeal bill, calling on committee Republicans to hold hearings. The committee also advanced the RAISE Family Caregivers Act (S. 1028) out of committee by voice vote. The legislation would direct the Secretary of Health and Human Services (HHS) to develop a national strategy to support family caregivers.

Senate Confirms Scott Gottlieb to FDA 

The Senate voted 57-42 Tuesday to confirm Dr. Scott Gottlieb as the next commissioner of the U.S. Food and Drug Administration. Republican lawmakers argued that Gottlieb's extensive ties to  interests the pharmaceutical industry is what made him a good candidate. Gottlieb is expected to look to speed up the approval of new drugs and devices, a process he has called too slow and burdensome. He has also advocated for greater physician autonomy to decide to administer experimental drugs for patients. He will replace Robert Califf, the acting FDA chief who was appointed last year by former President Barack Obama.

In a 2012 issue of the magazine National Affairs, Gottlieb wrote the FDA review "culture" should be changed, adding the agency is "poorly suited to serving the needs of the sickest patients." Additionally, during his confirmation hearing, Gottlieb vowed to make the opioid epidemic the FDA's top priority, calling it "the biggest crisis facing the agency.” He also wants to prioritize streamlining approvals of generic drugs in order to help bring down drug costs.

But his deep ties to the pharmaceutical industry raised red flags for some Democrats concerned it will cause a conflict of interest. Gottlieb has had advisory or financial connections to about 30 drug, diagnostic and device companies, according to a conflict of interest notice released by the Trump administration. He has also worked for companies that have interest in over 120 drugs that are currently being tested. Gottlieb has agreed to remove himself from agency decisions that involve healthcare companies he previously worked with. Gottlieb's comments earlier this month during his confirmation hearing also raised alarms. Gottlieb suggested the FDA should consider new clinical trial standards to bring innovative products to the market. This position was panned by researchers concerned new approaches would be dangerous for patients.

Trump May Seek Executive Action on Drug Pricing

At a panel discussion at the LIGHT Forum at Stanford University last week, Office of Management and Budget Director Mick Mulvaney made a statement alluding to the fact that President Trump is exploring possible executive action to lower drug prices. He stated that one idea currently being floated involves “ending the tremendous giveaway to pharmaceutical companies” and requiring rebates in Medicare Part D that would be similar to Medicaid. The OMD director clarified that the president has asked him “again and again” what action the executive branch can take on the issue without the help of Congress. Secretary Price is currently holding a number of listening sessions on drug prices, which could also portend intentions to undertake executive actions in the months ahead.

CMS Gives States Until 2022 to Meet Medicaid Standards of Care

The Trump administration has given states three extra years to carry out plans for helping elderly and disabled people receive Medicaid services without being forced to go into nursing homes. Federal standards requiring states find ways of delivering care to Medicaid enrollees in home and community-based settings will take effect in 2022 instead of 2019, the Centers for Medicare & Medicaid Services announced last week. The standards were set by an Obama administration rule adopted in 2014 that governs where more than 3 million Medicaid enrollees get care, and states would have had until March 17, 2019, to implement a federally approved plan that would meet the new setting requirements. After that, Medicaid could deny payments for ineligible settings.

Among other things, the rule requires states to provide opportunities for enrollees to engage in community life, control their own money and seek employment in competitive settings. It also ensures that enrollees in group homes and other residential settings get more privacy and housing choices that include places where non-disabled people live. The Obama administration’s 2014 rule was an effort to create a federal standard to improve the quality of care that the disabled receive outside institutions. The new rule also directs states and providers to reconfigure existing community settings such as group homes to ensure that people will have more privacy.

Some states had tried ― and struggled ― to make changes on their own, partly due to a lack of funding and political difficulties of changing deeply-entrenched relationships with providers. Some had, for instance, forced providers to change longstanding operations at group homes and so-called sheltered workshops.

RAND Estimates 20M Increase in Uninsured Under AHCA by 2026, Slightly Lower Than CBO's 24M

The RAND Corporation released a new report last week analyzing the effects of the American Health Care Act (AHCA) on health insurance coverage and federal spending, concluding that the bill would result in a reduction in health insurance enrollment of 14.2 million in 2020 and a reduction in health insurance enrollment of 19.7 million by 2026 – slightly less than the 24 million estimated by the Congressional Budget Office (CBO). The report also estimates that the AHCA could generate significantly less deficit reduction than estimated by CBO, the official budget scorekeeper, which concludes that an earlier version of the House bill would save $150 billion over 10 years.

Among their key findings, RAND concludes that while the magnitude of the estimated coverage reductions is smaller than those of the CBO, the authors confirms CBO’s general finding that the AHCA would have substantially reduced insurance enrollment relative to current law. According to the report, those without insurance under the AHCA would have tended to be older, sicker, and poorer than those currently uninsured, and most adults ages 50 to 64 and most people with incomes under 200 percent of the federal poverty level (FPL) would have paid more for individual-market insurance under the AHCA than under current law. The higher costs for older adults partly reflect that the AHCA’s tax credits did not increase as steeply with age as premiums did.

Notably, the RAND analysis does not reflect changes to the legislation since March. CBO recently announced that its cost estimate of the House-passed version of the AHCA will be ready “early in the week of May 22.”