Health Policy Report (11/28)

November 28, 2022

Congress will return for votes this week, with the Senate in first later today followed by the House tomorrow. As the December 16 government funding deadline draws nearer, appropriators are pushing to reach an agreement on topline funding levels for fiscal year (FY) 2023 — a key precursor to a year-end spending package. With divided government on the horizon, lawmakers appear motivated to tie up loose ends on several bipartisan legislative efforts prior to the start of the 118th Congress. However, cooperation between Democratic and Republican leadership will be crucial, especially in the evenly divided Senate. Any extraneous policy riders that imperil the omnibus’s chances of reaching 60 votes will likely fall by the wayside to ensure that the government remains funded past the December 16 deadline.  

PAYGO, PFS Cuts Expected to be Mitigated in End-of-Year Package  

As Congress pivots towards crafting an end-of-year legislative package, stakeholders and lobbyists focused on physician payments are optimistic that lawmakers will waive pay-as-you-go (PAYGO) statutory requirements that would cut physician pay by four percent starting in 2023. However, the extent to which various physician pay cuts will be curtailed is still unclear. In addition to the four percent PAYGO, Medicare Part B providers can expect to see a 4.5 percent pay cut via the Medicare Physician Fee Schedule (MPFS) — three percent of which is due to the expiration of a three percent COVID-19 pandemic-related payment boost — and home health, laboratory services, and Alternative Payment Model (APM) providers would also see additional cuts if Congress does not act.  

On top of waiving PAYGO, policy insiders suggest that Congress is likely to mitigate the 4.5 percent MPFS cut, though the extent to which lawmakers reduce the cut is still uncertain. Additionally, groups like the United Specialists for Patient Access and the Clinical Labor Coalition are working with legislators to lessen the blow of potential laboratory payment cuts, as well.   

USTR Extends No Tariff Policy on Medical Imports from China  

On Wednesday, the U.S. Trade Representative (USTR) announced it would renew duty-free treatment of medical imports of COVID-19 supplies from China. The extension of this policy provides importers an additional 90 days to import 81 specific products ranging from medical devices and personal protective equipment (PPE) without tariffs. USTR’s decision comes on the heels of consultation with public comments, the White House, and other agencies. Notably, over 170 U.S.-based industrial stakeholders called for the extension, as well as other exemptions under Section 301 tariffs imposed on China under the Trump administration. USTR did not address other Section 301 exemptions, but the agency is soliciting comments on the topic until January 17, 2023.  

CBO Scores House Mental and Behavioral Health Provisions 

Last Monday, the Congressional Budget Office scored various mental and behavioral health care policies put forth by the House Ways and Means Committee. Altogether, the bills would increase federal spending by just over $1.8 billion over ten years. While these pieces of legislation were scored in one report, lawmakers may select certain policies to include in an end-of-year spending package. Specifically, some speculate that Congress could add provisions that would expand Medicare billing to marriage therapists, family therapists, and mental health counselors. This provision would cost $902 million over ten years.  

The CBO report adds detail as to which priorities would require larger offsets. Additionally, policy experts inside the beltway predict that the House Energy and Commerce Committee’s 30-program reauthorization bill — the Restoring Hope for Mental Health and Well-Being Act of 2022 (TRP analysis) — will make its way into a final package.  

Bipartisan Group of Senators Look to Lower Costs for Dually Eligible Beneficiaries

Last week, a bipartisan group of Senators penned a letter aimed at collecting information about dually eligible beneficiaries, the population of U.S. residents eligible for both Medicare and Medicaid. The letter notes that over 12 million people are duals, and it describes the care coordination for this medically complex population as “disjointed.” For these reasons and others, Sen. Bill Cassidy (R-LA), Tim Scott (R-SC), Tom Carper (D-DE), Bob Menendez (D-NJ), John Cornyn (R-TX), and Mark Warner (D-VA) warn that Medicare and Medicaid do not effectively serve duals. Their 11 questions range from inquiries around policy recommendations, the role of geography in providing adequate care, and preventative measures to avoid worsening chronic conditions for patients. Comments are due by January 13, 2023. Notably, Sen. Cassidy — who spearheaded the letter — will be the Senate Health, Education, Labor, and Pensions (HELP) Committee’s Ranking Member in the 118th Congress.  

Republican-Led Global Health Subcommittee to Focus on Neurological Disease, Vaccine Policy 

Rep. Chris Smith (R-NJ) is expected to head the House Foreign Affairs Subcommittee on Africa, Global Health and Human Rights Subcommittee in the 118th Congress. In recent remarks, Congressman Smith elaborated on his goals for the upcoming Congressional session, noting that developing countries lack the knowledge necessary to conduct early interventions for autism and a host of other medical interventions related to neurological conditions. Specifically, Smith promoted grants to help other countries access research and lessons learned from the National Institutes of Health (NIH) and Centers for Disease Control and Prevention (CDC). Smith also hopes to pass the Global Brain Health Act (H.R. 2077), which would: (1) create a Global Autism Assistance Program; (2) provide assistance to treat hydrocephalus and train surgeons; and (3) stand up a Global Alzheimer’s Disease and Dementia Action Plan. He also aims to promote child vaccinations and reauthorize the President’s Emergency Plan for AIDS Relief.  

Look Ahead: Congress Eyes Rare Disease, Orphan Drug Protections in 2023 

Rare disease stakeholders and advocacy groups are expressing hope that Congress will prioritize rare disease issues in the upcoming 118th Congress. Specifically, the Better Empowerment Now to Enhance Framework and Improve Treatments (BENEFIT) Act (H.R. 4472/ S. 373) and the Helping Experts Accelerate Rare Treatments (HEART) Act (H.R. 1184) have garnered bipartisan support. The BENEFIT Act would address patient experiences and include patient focused-development in the Food and Drug Administration’s (FDA) risk-benefit assessment. The HEART Act would focus more on oversight by requiring FDA to utilize external consultants and provide reports on how the Administration handles rare disease drug applications.  

Additionally, Cameron’s Law (H.R. 2623) would increase tax credits under the Orphan Drug Act. These tax credits for clinical testing were cut in the Tax Cuts and Jobs Act in 2017, though the legislation has bipartisan cosponsorship. The HEART and BENEFIT Acts were included in Congress’ FDA user fee reauthorization bills that ultimately passed without these policy riders, and they could be on the table in 2023 if they fail to pass as part of a 2022 end-of-year package.  

The Retaining Access and Restoring Exclusivity (RARE) Act (S. 4185) is also a significant piece of legislation in this space. Sponsored by Sens. Tammy Baldwin (D-WI) and Bill Cassidy (R-LA), the legislation would underscore the seven-year exclusivity period for rare disease drugs.