Health Policy Report (10/21)

October 21, 2019

The Week in Review

Congress reconvened last week following the two-week Columbus Day district work period. Despite resetting the government funding deadline to provide more time for negotiations, House and Senate appropriators indicated that fiscal year (FY) 2020 spending talks remain deadlocked. Senate Appropriations Chairman Richard Shelby (R-AL) stated last week that lawmakers may need to take up another stopgap funding measure to keep the government funded through the remainder of the year if an agreement isn’t reached before the Nov. 21 deadline. While Chairman Shelby and House Appropriations Chairwoman Nita Lowey (D-NY) have both expressed the desire to move spending bills through regular order, “poison pill” issues such as border security and family planning policies could stymie the appropriations process for the foreseeable future.

On the floor, the Senate took up two resolutions aimed at thwarting high-profile Trump administration policies. This included a measure that would have overturned the administration’s repeal of the Obama-era Clean Power Plan, as well as another attempt to override President Donald Trump’s veto of a resolution that would terminate his national emergency declaration on the U.S.-Mexico border. Neither resolution passed absent support from GOP Senators. Meanwhile, House lawmakers passed a pair of Securities and Exchange Commission-related measures, as well as a resolution aimed at rebuking President Trump’s withdrawal of U.S. forces from northern Syria.

The Week Ahead

Congress returns to action today as Senators gear up for their first fiscal year (FY) 2020 government funding votes on the floor. Prior to adjourning last week, Senate Majority Leader Mitch McConnell (R-KY) filed cloture on motions to proceed to two House-passed spending packages that will serve as “shell” legislative vehicles for spending bills that have cleared the Senate Appropriations Committee. While Senate Appropriations Chairman Richard Shelby (R-AL) indicated that first package could include the measures for Transportation-HUD and Agriculture, Leader McConnell stated that the second vehicle would be dedicated for defense funds, as well as "resources for other priorities such as the opioid epidemic."

In the lower chamber, lawmakers are poised to take up a sweeping corporate transparency measure.. Aimed at addressing concerns over "shell corporations," the Corporate Transparency Act would require persons forming corporations and limited liability companies to disclose the identities of those who control the entity to the federal government. The House will also consider a bill out of the Judiciary Committee that seeks to protect U.S. elections from foreign interference and disinformation campaigns.

E&C Advances Speaker Pelosi’s Drug Pricing Bill on Party Line Vote

Late last Thursday, the House Energy & Commerce Committee advanced Speaker Pelosi’s drug pricing bill (H.R. 3) on a party line vote (30-22). The markup manifested the frustration and “differences in ideologies” that have emerged between the parties since the introduction of the House Speaker’s bill, as many Republicans decried that Democrats abandoned months-long negotiations over a potential bipartisan drug pricing package in favor of their leadership’s legislation. Republicans stressed that Democrats’ insistence upon advancing progressive policies like government price negotiation would inhibit the passage of a bipartisan package that could pass the Senate and lowering prices and out-of-pocket costs for patients.

Only one amendment was agreed to during the markup — an amendment from Reps. Kurt Schrader (D-OR) and Greg Gianforte (R-MT) to incentivize lower cost biosimilars by raising the reimbursement for biosimilars in Part B to the Average Sales Price (ASP) plus eight percent for five years. Four bills aimed at expanding hearing, vision, dental, and low-income subsidies for Medicare beneficiaries using savings from the drug pricing bill were also advanced by voice vote, despite Republican criticism that Medicare did not have the resources to expand benefits.

The marathon markup showcased Republicans’ disdain for the inclusion of policies allowing the government to negotiate with drug makers based on international drug prices, and members of the minority party consistently urged Democrats to return to policies favored during bipartisan discussions earlier in the year. Republicans emphasized that the bill was dead on arrival in the Senate due to the inclusion of more progressive policies that they said would have a deleterious impact on the development of new therapies.

Over 300 amendments were submitted by Republicans in an attempt to demonstrate their opposition to the bill or to highlight the policies they preferred. Ranking Member Greg Walden (R-OR) introduced an ostensibly bipartisan amendment that would have advanced several bipartisan policies that have garnered overwhelming support in both Congress and the White House — including CREATES, the BLOCKING Act, legislation prohibiting “pay for delay,” and a Medicare Part D overhaul and out-of-pocket cap — but Democrats explained the legislation would not go far enough to lower drug prices and rejected the amendment on a party line vote (22-30).

W&M Surprise Billing Fix ‘Non-Starter’ for Republicans

House Ways & Means Committee Ranking Member Kevin Brady (R-TX) told reporters on Wednesday that the current committee proposal to fix surprise billing through negotiated rulemaking is a “non-starter.” He advocated for a policy proposal that includes both a benchmark payment rate and arbitration, in order to allow health care providers to “make the case for rates that focus on the quality for the care, the complexity of the case, maybe the geographic area in which they are.” The solution Ranking Member Brady prefers closely resembles the surprise billing fix passed by the House Energy & Commerce committee, which pegs out-of-network rates at the median rate for a geographic area and embraces arbitration in certain circumstances. Although Republicans have yet to nail down the specific details of their surprise billing plan, Ranking Member Brady noted that the committee has been examining the benefits and implications of state surprise billing fixes including arbitration. He clarified that regardless of their choice for arbitration policy, the final plan will likely be decided in conference between the House and Senate.

Over 110 major medical and physician groups also sent a letter to key House and Senate Committee last week. The groups, including the American Medical Association, asked the Senate to change its surprise billing solution to eliminate the proposed benchmark payment rate for providers and rely solely on an independent dispute resolution process. They argued that the benchmark payment rate could lead to market consolidation and artificially low payment rates. Additionally, a letter to the House Energy & Commerce Committee asked lawmakers to alter their proposed independent dispute resolution so that providers end up using the process more often. They proposed lowering the $1,250 threshold for an independent dispute resolution process and allowing providers to create batches of claims that would trigger the process.

CMS Administrator Verma to Testify Before Energy & Commerce

Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma will testify before the House Energy & Commerce Oversight Subcommittee this week for the first time since Democrats gained the majority in the lower chamber. A statement from Chairman Pallone and Oversight Subcommittee Chairwoman Diana DeGette (D-CO) noted that Administrator Verma has played a “key role” in the administration’s “ongoing efforts to sabotage Americans’ health care while flouting our Congressional oversight requests,” and that the lack of accountability will end on Wednesday.

The announcement that Verma would testify at the hearing focused on actions the administration has taken to “undermine” health care came shortly after Energy & Commerce Chairman Frank Pallone (D-NJ) sent a letter to CMS and the Department of Health and Human Services (HHS) threatening to subpoena several documents unless they were submitted to the committee by October 30. Chairman Pallone and others have been requesting access to the documents since mid-June, including an Office of the Actuary (OACT) analysis that Verma referred to in an August 2018 memo to Azar regarding several policy recommendations that the administration was considering at the time — such as ending silver-loading and auto-enrollment and changing the methodology used for adjusting premiums. The administration missed the initial deadline to provide the documents and sent a letter arguing that the document was the privileged since it was used as part of a deliberative process.

Health Care Remains Hot Issue During Democratic Debates

Although “Medicare for All” and other health care proposals remained front and center during the latest Democratic presidential debate last Tuesday, candidates also expounded on other policies in their platforms. Senator Bernie Sanders (I-VT) declared that those too afraid to “stand up to” the health care industry should be ashamed, and Sen. Elizabeth Warren (D-MA) said costs would only rise for the wealthy and “big corporations” under her plan. Other candidates took aim at Sens. Sanders’ and Warren’s health care proposals, such as South Bend Mayor Pete Buttigieg, who asked why the only option to deliver affordable health care was to “obliterate private plans.” Additionally, Sen. Amy Klobuchar (D-MN) went so far as to call Medicare for All a “pipe dream,” and former vice president Joe Biden pointed to the potential $30 trillion price tag associated with the plan.

Several of the candidates said the debate moderators should be focused on other health care issues that could make an immediate difference in people’s lives. Sen. Klobuchar reported that she had heard from many on the campaign trail about the continued need for quality long-term care options, as well as expanded addiction treatment to combat the ongoing opioid epidemic. Pivoting to women’s reproductive health, Sen. Kamala Harris (D-CA) criticized other candidates for not talking enough about the issue and emphasized the need for access to safe abortions. Sen. Cory Booker (D-NJ) also promised to create an office of reproductive freedom and reproductive rights in the White House.