TRP Health Policy Report

Last week, attention in Washington centered on President Obama’s State of the Union address. The President made economic growth a central theme of his remarks to Congress, highlighting proposals to make community colleges tuition-free, increase the minimum wage and guarantee paid sick leave. The President also proposed new tax breaks aimed at working families, which would be offset through an increase on top capital-gains tax rates and new taxes on many inheritances. While Congressional Democrats said they were invigorated by the President’s approach, top Republicans criticized his policies and his pledge to veto bills that could roll back healthcare, immigration and financial reforms.

In legislative activity, the House on Thursday passed a bill (H.R. 7) to further restrict federal funding for abortions after a Republican rift scuttled a vote on a 20-week abortion ban. Passage fell largely along party lines by a vote of 242-179. The day before, House members voted 253-169 for a measure (H.R. 161) to speed natural gas pipeline permitting. In the Senate, lawmakers spent much of the week working through amendments on legislation (S. 1) to approve the Keystone XL pipeline. A final passage vote on the bill is expected this week.
 
The Week Ahead
 
This week, the House will focus on GOP legislation (H.R. 399) to enhance security along the southern U.S. border. Members will also debate a bill (H.R. 351) to expedite liquefied natural gas exports and several measures to restrict human trafficking. The House is only in session from Monday to Wednesday to accommodate the Democratic retreat in Philadelphia on Thursday and Friday. In the Senate, lawmakers will hold a final passage vote on legislation (S. 1) to approve the Keystone XL pipeline. Proponents say 63 Senators back the bill, giving them more than the 60 needed for a filibuster-proof majority. But President Obama has threatened to veto the legislation, saying the State Department needs to complete its review of the Keystone project. Off the floor, the House Energy and Commerce Health Subcommittee meets Tuesday to mark-up public health-related legislation, including a bill addressing the timeliness of Drug Enforcement Administration scheduling of new drugs and legislation reauthorizing trauma care funding. The Senate HELP Committee convenes Thursday for a hearing on employer wellness programs.
 
President Touts ACA in State of the Union Address
 
In his State of the Union address last Tuesday, President Obama touted coverage gains under the Affordable Care Act (ACA) and vowed to veto legislation that would derail the health law. Specifically, he noted that “about 10 million uninsured Americans finally gained the security of health coverage.” In addition, the President said that healthcare inflation was at its lowest rate in 50 years. The President's praise for the health law comes at a key time. The newly GOP-controlled Congress has already introduced multiple bills to repeal the law, which the White House has repeatedly threatened to veto. President Obama has refused to entertain most attacks on the healthcare reform law and repeated his stance in a defiant tone last Tuesday night. Newly-elected Sen. Joni Ernst (R-IA), gave the GOP response, during which she criticized the ACA for canceling healthcare plans and claimed it has raised premiums and “hurt … hardworking families.” Republicans have yet to rally around a replacement plan for the health law, focusing instead on full and partial repeal efforts.
 
In addition to his comments on the ACA, President Obama highlighted various other health-related initiatives in his address. For instance, the President also called for increasing funding for its Brain Initiative, and said that he wants the U.S. “…to lead a new era of medicine — one that delivers the right treatment at the right time.” To that end, he announced the Precision Medicine Initiative, which would double funding for antibiotic development while continuing investment in Alzheimer's and brain research. The precision medicine initiative is viewed by key stakeholders as complementary to the House Energy and Commerce panel's emerging 21st Century Cures Initiative. In a statement, the committee said that the President's remarks signal support for “exploring policies that encourage and embrace the advancements made in science and healthcare over the past several years.” Last Tuesday, E&C chair Fred Upton (R-MI) called on the President to support of the panel's upcoming bill, expected to be unveiled by the end of the month. Though the President didn't mention the Congressional effort in his Tuesday remarks, senior aides say the White House plan shares the goal of advancing medical research.
 
House Panel Holds Hearing on SGR Reform 
 
Last week, The House Energy and Commerce health subcommittee held a two-day hearing on proposals to replace the Sustainable Growth Rate (SGR). The hearing was held in response to the looming March 31st cutoff date to avert an anticipated 21 percent cut in Medicare payments to physicians under the flawed SGR formula. Panelists at the hearing discussed some of the adverse implications to Medicare providers and beneficiaries alike should Congress fail to act prior to the deadline. Committee members and invited panelists agreed that the patchwork series of temporary payment updates is less than ideal and that a more thoughtful way forward to permanently replace the SGR is imperative.
 
While SGR reform has bipartisan support of the House and Senate committees that oversee healthcare, lawmakers remain at odds over how to pay for it. According to Health Subcommittee Chairman Joe Pitts (R-PA), House Republican leaders won’t bring an SGR replacement to the floor unless it is paid for, the strongest statement yet that an unpaid-for SGR bill is a non-starter. Democrats have long-supported using war savings to offset the estimated $144 billion cost of SGR reform. While Republicans once opposed this approach as a budgetary gimmick, that position appeared to be softening in some corners of the party. One idea under consideration is using war-savings to pay for only some of the package, which Rep. Michael Burgess (R-TX) raised as a possibility during last week’s hearing.
 
Lacking a clear offset, Rep. Larry Bucshon (R-IN), called out the American Medical Association for a lack of ideas on how to pay for SGR repeal. While an AMA witness said the group is reluctant to offer specifics, both AARP and the American Hospital Association offered several proposals that could be used to pay for SGR repeal. Republicans favor paying for the SGR in part by having high-income seniors pay a bigger share of their Medicare premiums. The White House has proposed similar policies in its budgets, but many Congressional Democrats are skeptical, concerned that Medicare will turn into a need-based program if wealthier seniors find cheaper deals elsewhere.
 
Hatch Outlines Finance Panel’s Health Priorities
 
Last Tuesday, Senate Finance Committee Chairman Orrin Hatch (R-UT) said ACA changes, Medicare physician payment reform, CHIP extension and cost-saving changes to entitlement programs would be among his panel’s priorities in the coming months. In a speech to the U.S. Chamber of Commerce last Tuesday, Hatch said Senate Finance will keep all procedural options open when it comes to passing “high-profile” bills on healthcare and tax reform through both chambers, including the often-contentious budget reconciliation process that allows some legislation to be passed with 51 votes instead of the 60 needed to overcome a filibuster. Democrats last used reconciliation to secure passage of the ACA in 2010. Hatch also said he hopes that Republicans will unite behind his healthcare replacement bill as the Supreme Court prepares to rule on the pivotal King vs. Burwell case.
 
While Hatch has long opposed the 2010 health law, he said he is realistic about the GOP's chances of overturning it. As long as President Obama is in the White House, he said, Congress will never get a full repeal enacted into law. Instead, he said, GOP members will continue to “strike away at it piece by piece if we have to.” Senator Hatch said that another top Senate Finance priority is replacing the Medicare physician payment formula. He called the current SGR formula “broken” and said he hopes to replace it with another payment system that he believes “rewards quality, efficiency and innovation.” Hatch also hopes his ideas for reforming Medicare and Medicaid will gain more traction this session. He introduced five reform bills last year that included raising the Medicare eligibility age, reforming the supplemental insurance system, simplifying cost-sharing and introducing competitive bidding, as well as setting per-capita limits on federal Medicaid spending.
 
Sen. Warren to File Bill Targeting Top Drug Companies
 
Sen. Elizabeth Warren (D-MA) plans to introduce legislation this week that would require drugmakers that break the law to send some of their profits to the National Institutes of Health to help fund basic medical research. Warren's bill would require that whenever drug companies enter into a settlement with the government over alleged wrongdoing, they must pay a portion of their annual profits over five years to support research at the NIH and the FDA. The Massachusetts Democrat argues that if her Medical Innovation Act had been in place over the past five years, the NIH would have had an extra $6 billion annually to fund research grants, which she claimed would have represented a 20% increase in NIH funding. To capture research funding, she wants to create the equivalent of a pharmaceutical ‘swear jar.’
 
Warren said budget cuts to the NIH and FDA have choked off support for research that could lead to breakthrough treatments against cancer, heart disease, Alzheimer's disease, autism and other conditions that effect millions in the U.S. and around the world. She said many of the biggest pharmaceutical companies have relied on taxpayer-funded basic research to help develop what she described as blockbuster drugs. “Drug companies make great contributions, but so do taxpayers. In other words, we built those medical innovations together,” Warren said last Thursday at a Washington, D.C., conference sponsored by Families USA, a healthcare advocacy group. 
 
To what extent her Medical Innovation Act will gain traction is unclear, but Warren’s plan received swift and negative feedback from the lead trade group for the pharmaceutical industry, the Pharmaceutical Research and Manufacturers of America (PhRMA). A spokesperson for the trade group said that in 2013, drug companies invested $50 billion into research and development, and more than $500 billion since 2000. Other drug industry analysts questioned the lack of stability associated with the funding in Warren’s bill. While it stands little chance of approval in the current GOP-led Congress, observers say Warren’s proposal could be a sign that pharmaceutical regulation will be an issue in the 2016 elections.
 
Rep. Murphy Criticizes President for Ignoring Mental Health Promise
 
Last week, Rep. Tim Murphy (R-PA) criticized President Obama for failing to focus on mental health reform more than two years after the elementary school shooting in Newtown, Connecticut. A longtime advocate for mental health reform, Murphy said he was “astonished” that the President pushed for a tax hike during his State of the Union at a time when thousands of families faced mental health crises and millions more were struggling to pay for coverage under the Affordable Care Act.
 
“While the President has repeatedly claims a desire for cooperation, more than two years have passed since the tragedy at Sandy Hook Elementary School and he hasn't moved forward as promised on working with my bipartisan team in Congress to fix our country's broken mental health system,” Murphy wrote in a statement. The President briefly mentioned Newtown – and the mass shooting in Tucson, Arizona – during a portion of his State of the Union address when he praised the unity of the American people. It was his first mention of Newtown in the State of the Union since 2013, when he made an impassioned case against gun violence. He also specifically mentioned mental health when he described the country as a “people who value the dignity and worth of every citizen.”
 
Murphy, who leads the House Energy and Commerce Subcommittee on Oversight, recently announced plans to reintroduce his bill, ‘Helping Families In Mental Health Crisis Act’ and urged President Obama to renew his commitment to mental health reform. While the Energy and Commerce Health Subcommittee held a hearing on Murphy’s bill last April, the measure stalled after it attracted pushback from some Democrats and mental health stakeholders. Murphy has emphasized that he’ll actively seek broader support for his reform measure in the 114th Congress.