Health Policy Report

June 20, 2016

The Week in Review

After consideration of dozens of amendments, House lawmakers approved defense appropriations legislation (H.R. 5293) on Thursday by a vote of 282-138. The bill provides $517.1 billion of funding to defense programs, with another $58 billion allocated to the Overseas Contingency Operations account for combat operations against the Islamic State of Iraq and Syria (ISIS) and other terrorist organizations. House lawmakers also passed a measure that would expand public access to federal government records under the Freedom of Information Act (FOIA) (S. 337) and another that would prohibit the Internal Revenue Service (IRS) from requiring tax-exempt organizations to disclose their donors. In response to the Orlando attacks, the House also re-approved a legislative package (H.R. 5471) dedicated to combatting violent extremism by directing the Department of Homeland Security to improve coordination of intelligence. 

Defense issues also featured prominently in the Senate, with the upper chamber completing work on the fiscal 2017 National Defense Authorization Act (NDAA). The bill (S. 2943), which authorizes spending and sets Pentagon policy, differs from the House version by including a provision that would require women to register for the draft and lacks one that would prevent the Obama Administration from moving detainees at the Guantanamo Bay military prison to U.S. facilities.

The Senate then moved to the Commerce-Justice-Science spending bill (H.R. 2578), which has become embroiled in the gun control debate. Democrats, led by Sen. Chris Murphy, staged a 15-hour filibuster on the Senate floor to convince GOP leaders to hold votes on gun control proposals that would prevent individuals on terror watch lists from buying weapons, among other provisions.

The Week Ahead

Votes on gun control proposals in response to the mass shooting in Orlando will take center stage in the Senate after the Democratic filibuster on the subject last week. GOP leaders agreed to hold votes on measures to create tighter rules for gun purchases in a series of four amendments to the pending Commerce-Justice-Science spending legislation (H.R.2578), but it is unclear if any of the Republican or Democratic proposals will draw the necessary 60 votes to be included in the underlying spending bill. A separate proposal from Sen. Susan Collins (R-ME) would allow those on the terror suspect list to have a court review if they are denied the ability to purchase a gun, with the government paying legal fees if they lose.

In the House, the main item on the agenda is the fiscal 2017 Financial Services spending bill (H.R. 5485), which would shave funding from both the Internal Revenue Service (IRS) and the Securities and Exchange Commission (SEC). The bill also would also block certain requirements set out by the 2010 Dodd-Frank financial reform law, notably including rebukes of the Consumer Financial Protection Bureau’s (CFPB) payday lending rule and adjustments to the Financial Stability Oversight Council’s (FSOC) systemically important financial institution (SIFI) designation process. However, it remains to be seen whether those measures will be enough to generate support for the measure from the House Freedom Caucus, particularly if Republican leaders attempt to adopt a rule that would limit the amendment process on the House floor.

Other action in the House will include consideration of a bill (H.R. 4768) that would override previous judicial decisions and implement a new statutory approach to reviewing executive agency actions. Additionally, the House plans to take up an override vote of President Barack Obama’s veto of a resolution (H.J. Res. 88) that would nullify the Department of Labor’s rule on the fiduciary duties of investment advisers.

House E&C Advances Mental Health Bill; Floor Consideration May Come in the Fall

On Wednesday, the House Energy and Commerce (E&C) Committee unanimously advanced bipartisan legislation by a vote of 53-0 aimed at reforming the nation’s mental health system. The Helping Families in Mental Health Crisis Act (H.R. 2646) was first introduced by Rep. Tim Murphy (R-PA) in 2013 in the wake of the Sandy Hook tragedy in Newton, Conn., but had been long stalled. Wednesday’s markup comes months after the bill advanced out of Subcommittee in November 2015, but was delayed due to a number of contentious provisions within the bill. In recent months, Chairman Fred Upton (R-MI) worked to change the bill significantly to smooth over areas of objection, particularly from Democrats.

Only one amendment was adopted during Wednesday’s markup, which Democrats were particularly pleased with: A substitute amendment offered by Chairman Upton that would keep the Substance Abuse and Mental Health Services Administration (SAMHSA) intact but get rid of the SAMHSA administrator position. Instead, SAMHSA would be headed by a new Department of Health and Human Services (HHS) assistant secretary in charge of mental health and substance use, appointed by the president. Meanwhile, an amendment offered by Rep. Tony Cardenas (D-CA) to lift a ban on federal research on gun violence, a longtime Democratic goal, failed on a party line vote of 23-29. This signals that the gun debate will likely play a central role on the floor, as Sen. Chris Murphy (D-CT) led a 15-hour filibuster that same day.

Lawmakers on both sides of the aisle praised the bill, calling it a good first step but acknowledge that there is more work to be done. While Democrats applauded the bill for including many new provisions they had been asking for, they noted that more funding would be needed to truly address the nation’s mental health needs. Notably, the changes made to reach bipartisanship on the legislation led many of the more sweeping provisions to be scaled back. In particular, a provision to allow Medicaid to pay for more care at mental health facilities, which was projected to cost tens of billions of dollars, was scaled back to a simple codification of a new regulation covering stays only if they are less than 15 days long. Furthermore, changes to the Health Insurance Portability and Accountability Act (HIPAA) – meant to allow information about mentally ill persons to be shared with caregivers – were taken out, and instead the bill directs HHS to issue a regulation to clarify the privacy rules. The bill also creates a new assistant secretary role in HHS to oversee mental health and substance abuse programs in which the official is intended to be a doctor. In addition, the bill includes measures such as grants for innovative programs that are intended to make initiatives more effective, and authorizes grants in areas such as preventing suicide and early intervention for children with mental illness. The bill states that funding for the range of grants will depend on the appropriations process. Moreover, Rep. Murphy says he has talked to appropriators and is hopeful for funding beginning in 2018.

Rep. Murphy said he is hoping to get a vote in the full House before the August recess, though Chairman Upton said at the markup that the bill is likely to reach the floor in the “fall.” Rep. Murphy also told reporters after the markup that he wished more could have been included in the bill – such as new funding. He said that he's working with House appropriators to include more money for mental health in the future.

Senate Moves Forward to Conference With House on Opioid Bills

Last week, the Senate voted 95-1 to go to conference with the House on opioid legislation in an effort to send a final bill to the president’s desk before Congress goes to recess in mid-July. Among the senators who will serve on the conference committee alongside 35 House members include: Sens. Chuck Grassley (R-IA), Lamar Alexander (R-TN), Orrin Hatch (R-UT), Jeff Sessions (R-AL), Patrick Leahy (D-VT), Patty Murray (D-WA) and Ron Wyden (D-OR). Sen. Mike Lee (R-UT) was the only senator to vote against the motion. Notably, Sens. Sheldon Whitehouse (D-RI) and Rob Portman (R-OH), primary sponsors of the Senate-passed Comprehensive Addiction and Recovery Act (S. 524), were not among the Senate’s list of conferees as they are not members of the committee’s jurisdiction over the bill.

Meanwhile, Democrats in both chambers continue to push funding for the bill, which isn’t provided in either chamber’s packages. Republicans have responded that they will provide new funding to fight opioid abuse through the regular appropriations process. A final package on opioids has been viewed by some lawmakers as a way to advance mental health or medical innovation legislation if they are ready to move forward. However, Sen. Alexander – chair of the Senate HELP Committee which has been working on legislation regarding both issues – has said he would have to speak with other conference members about that. “I hope we can get done by mid-July,” he said. “Because it’s an issue that both Democrats and Republicans see as a crisis issue and one that we’d like to deal with.” Meanwhile, Sen. Hatch, chairman of the Senate Finance Committee, has projected that the bill would ultimately pass. “It will put some responsible money trying to resolve that problem, so hopefully it’ll be helpful,” he said.

MedPAC Releases June Report to Congress

On Wednesday, the Medicare Payment Advisory Commission (MedPAC) released its June 2016 Report to Congress on Medicare and the Healthcare Delivery System that recommends a wide range of changes to Medicare Part D in response to rising drug costs, including removing antidepressant and immunosuppressant medicines from the protected drug classes. According to the report, the proposals would: (1) sharply reduce or even eliminate the copayments that about 12 million low-income Medicare enrollees pay for generic drugs in order to encourage the use of the lower-cost medications; (2) create an annual out-of-pocket spending cap for higher-income enrollees that is similar to one already in place for low-income beneficiaries, and after enrollees hit the cap, Medicare would cover 100 percent of the cost of their medications; (3) make it harder to reach that annual cap by not allowing a drug discount given by manufacturers to count toward the enrollees’ out-of-pocket maximum; and (4) require insurers to pay 80 percent of drug costs, up from the current 20 percent, after patients hit the out-of-pocket maximum.

Stakeholders and patient groups displayed mixed reactions to MedPAC’s proposals. While patient groups were pleased with the idea of reducing generic copayments for low-income enrollees and setting an annual cap, they expressed concern that the proposal would mean patients will remain in what is called the coverage cap or “doughnut hole” for longer periods. MedPAC estimates that its proposal would mean about half of beneficiaries whose drug spending is enough to hit this gap would remain in it longer, paying about $1,000 more each as a result. Meanwhile, insurers are likely to be affected by the proposal as well, as MedPAC recommends insurers shoulder more of the cost of prescriptions after enrollees exit the doughnut hole. Commissioners reasoned that it would encourage insurers to try to keep enrollees from hitting the coverage gap’s upper limit by getting them to choose lower-cost drugs or by driving harder bargains with drug makers.

While MedPAC’s proposals drew mixed reviews, their recommendation to remove antidepressants and immunosuppresants from Medicare’s six “protected classes” policy drew especially sharp criticism from patient groups. A group of patient stakeholders under the Partnership for Part D Access quickly came out against the recommendation, calling it “ill-conceived” and warned that the proposal would “undermine a policy which guarantees access to life-saving treatments for patients with the most severe health conditions.” However, MedPAC says the proposals are needed because rising drug prices and other factors helped drive spending in the program to $73 billion in 2014 and warn that more high-cost drugs will hit the market soon. Without action, the rising costs could drive up program costs and probably premiums for enrollees, MedPAC said.

While MedPAC recommendations are considered influential, most experts don’t expect Congress to pursue those changes during an election year. However, the report could spark discussion under a new administration and Congress in 2017.

Kaiser: ACA Premiums to Rise Roughly 10 Percent in Major Markets Next Year

According to analysis by the Kaiser Family Foundation, premiums for benchmark silver plans in the Affordable Care Act (ACA) will rise by an average of 10 percent in 2017 in more than a dozen metropolitan areas. Even more, the study found that rate proposals vary widely from area to area. For example, it found that the average second-lowest cost silver plan premium for a 40-year old nonsmoker in Providence, Rhode Island will likely decrease by 13 percent, while the second-lowest cost silver plan premium in Portland, Oregon will increase by 18 percent for the same type of enrollee. Furthermore, Kaiser found that of the 14 cities studied, at least one insurer with one of the current two lowest cost silver plans will not be among those with the two lowest cost silver plans next year. The study also predicted that half of the 14 cities will see decreased marketplace participation by insurers in 2017, largely due to the withdrawal of UnitedHealth from the ACA marketplace exchanges. In the other seven cities, the number of insurers participating will either increase or stay the same, the report said.

While rates are not yet finalized, premiums will likely be a hot topic in the political trail. Final 2017 premium rates are expected to be announced right before the November election, and Republicans are already seizing the opportunity to rail against the possibility of double-digit premium spikes as evidence of the need to repeal and replace the healthcare law.