Health Policy Report

July 29, 2019

The Week in Review

House lawmakers cleared (284-149) the sweeping budget package (textsummary) last week, addressing key fiscal deadlines prior to leaving for the six-week August recess. Struck by top negotiators early last week, the deal provides for a $321 billion boost in federal spending over the next two years, while also suspending the debt ceiling for two years. The bill is expected to pass the Senate this week and be signed by President Donald Trump despite opposition from some Congressional conservatives.

Other notable items that passed the House last week included a bill out of the Ways and Means Committee aimed at bolstering struggling union pensions; the Rehabilitation for Multiemployer Pensions Act would establish a new Pension Rehabilitation Administration and a related trust fund within the Treasury Department to make loans to multi-employer pension plans in critical and declining status. Meanwhile, the Senate approved two key presidential nominees last week, clearing the nominations of Mark Esper to be Secretary of Defense and Stephen Dickson to be Administrator of the Federal Aviation Administration (FAA).  

The Week Ahead

Senators will reconvene today and are expected to swiftly take up the House-passed budget deal, as the upper chamber will need to hit the ground running in September on the 2020 appropriations process. In addition to a vote on the budget deal, Senators are expected to consider a significant amount of presidential nominees prior to adjourning. A full list of nominations up for consideration this week can be accessed here. The House is in recess.

Senate Finance Advances Drug Pricing Bill

With support from only a minority of its GOP Members, the Senate Finance Committee last Thursday advanced legislation to restructure the Medicare Part D benefit, impose inflationary caps on drugs covered by Parts B and D, and more. Every Committee Democrat supported passage, although many called for allowing the Department of Health and Human Services (HHS) to directly negotiate drug prices in Part D. Committee Republicans who supported the legislation, notably Majority Whip John Cornyn (R-TX), said that the bill would need significant changes to garner their support should it reach the Senate floor in September.

Members on both sides of the aisle were enthusiastic about the preliminary Congressional Budget Office (CBO) score of the bill, which estimated more than $100 billion of savings to taxpayers over ten years. It also showed lower out-of-pocket costs and Part D premiums. However, several GOP members, including Sen. Cornyn, questioned the “preliminary” nature of the score, saying that it might not be reliable and voted in favor of amendments to curtail some of the biggest savers — the inflation caps — partially on that basis.

Following the adoption of initial modifications to the Chairman’s Mark, no further amendments were accepted during consideration. Amendments to strike inflation caps from the bill, to prohibit the Trump administration’s proposed International Pricing Index (IPI) demonstration, and to allow HHS to directly negotiate prices were all voted down. Members indicated, however, that they expect additional consideration of these and other ideas as the measure moves forward, and they used the markup to discuss a number of different ideas. Especially noteworthy, remarks from Sen. Cornyn and other Republicans indicated that the bill will face challenges as it moves to the floor, and Senate Majority Leader Mitch McConnell (R-KY) is not seen as being enthusiastic about bringing stand-alone health care legislation before the full Senate.

Executive Order Expected on Drug Pricing

It was reported last week that the White House is preparing an Executive Order to lower drug prices on almost all pharmaceuticals sold through Medicare and other government programs. Freedom Caucus Chair Mark Meadows (R-NC) confirmed that it is “very likely” the administration will take its own action to lower drug prices through Part D of the Medicare program, although details on how it would do so are still scarce. President Trump, House Minority Leader Kevin McCarthy (R-CA), and Rep. Meadows held a meeting with stakeholders from the pharmaceutical industry last Wednesday, and Minority Leader McCarthy explained he convened the meeting to “to undermine drug-pricing legislation of insufficient impact.” The rumors of potential White House action on drug pricing come as the President and Chairman Chuck Grassley (R-IA) attempt to rally support for the Senate Finance Committee’s drug pricing legislation, which some Republicans have objected to. Chairman Grassley warned last week that if President Trump “would join forces with Pelosi, look at what that would do to everything we Republicans stand for.” He lobbied for the Senate Finance bill, noting “the Grassley-Wyden approach is a very moderate approach [compared] to what could come out.”

Senate HELP Close to Deal on Surprise Billing

Sen. Bill Cassidy (R-LA) announced last week that he was nearing an agreement with Senate Health, Education, Labor, & Pensions Committee Chairman Lamar Alexander (R-TN) to add an arbitration backstop to the committee's surprise billing legislation. The addition would bring the Senate HELP bill in line with the House version of surprise billing legislation, and Sen. Cassidy expects they will finalize the deal over the August recess. Currently, the Senate’s version of the bill relies on a benchmark payment rate for out-of-network charges — but several lawmakers had been lobbying Chairman Alexander for months to add an arbitration backstop. The Chairman originally held concerns that Sen. Cassidy’s proposal wouldn’t prevent providers and insurers from staying out of network to gain a market advantage, but Sen. Cassidy confirmed they had worked together to ensure that insurers who are staying out of network as a business model would face a disadvantage in an independent dispute resolution process. On Wednesday, Chairman Alexander announced that the Senate would not consider the legislation until after the August recess in order to allow for additional discussion on remaining concerns in the bill.

Senate Extends Funding for Community Behavioral Health Clinics


Last Thursday, the Senate passed a two-month extension of funding for Certified Community Behavioral Health Clinics. An amendment to a larger Medicaid-focused bill from Sen. Roy Blunt (R-MO) would provide $60 million to the Medicaid demonstration through September 13, as talks to further extend the funding had faced opposition from Republicans over cost. Funding for the $1 billion Medicaid pilot had lapsed July 14, and Congress has already extended the funding twice. The mental health centers offer broad, coordinated services for serious mental illness and substance use disorders in eight states, and advocates applaud the demonstration project for playing a key role in responding to the opioid epidemic. House leaders have not yet signaled when they plan to take up the bipartisan bill.

House Bill Targets Social Determinants of Health Through Medicaid Interventions

A bipartisan bill was introduced in the House last week that attempts to tackle social determinants of health through the Medicaid program. The bill would authorize up to 25 grants for state and local governments to offer new services to Medicaid enrollees, such as food and housing. The bill was introduced by Reps. Cheri Bustos (D-IL), Jim McGovern (D-MA), Tom Cole (R-OK) and Cathy McMorris Rogers (R-WA), who explained that the bill would help improve health outcomes. The legislation would direct the Department of Health and Humans Services (HHS) to form a council of federal and state, local, and tribal government representatives to recommend criteria for the awards, identify how best to coordinate funding across federal programs, develop evaluation guidelines for intervention, report annually to Congress, and more. Twenty-five million dollars in grant funding would be authorized by the bill, of which each grantee could receive up to one million. Twenty percent of the grant money would be specifically allocated for rural populations.