Health Policy Report

July 18, 2016

Week in Review

Congress worked through a packed agenda in their final week before the national party conventions and the traditional summer break. While lawmakers were able to reach important agreements on opioid funding and a reauthorization of the Federal Aviation Administration (FAA), they left other important issues – including funding for combatting the Zika virus, responding to recent mass shooting and terror incidents, and appropriations for the Department of Defense (DoD) –unfinished.

The biggest success of the week was final passage in the Senate of a conference report to legislation (S. 524) addressing the nation’s emerging opioid crisis, which is expected to be signed into law by President Obama this week. The bill – which would make a series of policy changes in opioid prescription policies and provide grants to state programs dedicated to battling addiction – was passed by the upper chamber on a nearly unanimous vote, 92-2. A full breakdown of the bill is included in our policy roundup below. Senate lawmakers also approved a FAA reauthorization bill (H.R. 636) on a 90-4 vote that keeps funding levels steady through the end of the 2017 fiscal year. House lawmakers approved the measure on a voice vote earlier in the week, and it is due to be signed President Obama this week.

The Senate was less successful in its pursuit of an agreement on defense appropriations as Democrats held firm in their demands for Republicans to uphold a budget deal reached last year without inserting any “poison pill” riders. For the second time in as many weeks, a cloture vote on the defense appropriations bill (S. 3000) failed to garner 60 votes in the upper chamber. In their effort on appropriations, House lawmakers passed the Interior-Environment spending bill (H.R. 5538), albeit by a 231-196 party-line vote. The $32.2 billion spending measure includes controversial policy riders on several of the Administration’s environmental and labor regulations, leading the White house to issue a veto threat. The partisan standoff over appropriations means that a continuing resolution (CR) will likely prove necessary to fund the government past the end of the fiscal year at the end of September.

The House also approved a trio of bills designed to prevent the White House from further loosening restrictions on Iran after last year’s nuclear deal. Specifically, the three bills – which the White House has already threatened to veto – would prevent the U.S. from buying heavy water from Iran (H.R. 5119), bar the Administration from allowing Iran to access financial transactions involving the U.S. dollar (H.R. 4992), and hold Iran responsible for state sponsored terror and human rights violations (H.R. 5631). Other action in the House included the passage of a Senate-passed bill (S. 764) that would establish federal guidelines for disclosing the presence of genetically modified organisms (GMOs) in most groceries. President Obama has indicated he will sign the bill despite opposition from some consumer groups.  

Finally, both chambers failed to reach an agreement on providing more money to combat the Zika virus, which was included in the Military Construction-VA spending bill (H.R. 2577). Democrats have successfully blocked the measure over what they consider to be insufficient funding, budgetary offsets, and policy riders that would restrict access to birth control.

The Week Ahead

The House and Senate have both adjourned for a seven-week recess. Some lawmakers plan to head to the national political conventions, with the Republican convention set to begin in Cleveland today, and Democrats heading to Philadelphia the week of July 25. Both chambers are scheduled to return to Washington on Tuesday, September 6, when they will conduct a short session before adjourning again until the November elections.

Obama Joins Clinton And Sanders in Expressing Support for ‘Public Option’

Writing in the Journal of the American Medical Association (JAMA) last week, President Obama joined presumptive Democratic nominee Hillary Clinton and Senator Bernie Sanders (I-VT) in arguing that a government-run health plan, the so-called “public option,” could help improve access to coverage in areas of the country with low levels of insurance plan competition and high premiums. “Congress should revisit a public plan to compete alongside insurers in areas of the country where competition is limited,” Obama wrote just days after Clinton reaffirmed her support for the policy.

Although the President did not provide a specific proposal for Congress, his endorsement of a public option pushed his party leftward symbolically as Clinton looks to win over Bernie Sanders supporters. The article, entitled “United States Health Care Reform: Progress to Date and Next Steps,” is the first by a sitting president published by the prestigious medical journal.

Republicans are highly unlikely to support adding a government-run plan to the individual insurance market, but even if Clinton wins and the Democrats take back control of Congress in November, a true public option remains a political longshot.

The public option is not a new idea. Both Obama and Clinton supported it in 2008, and it was originally included in the Affordable Care Act (ACA). The provision was removed from the ACA, however, after moderate Democrats opposed it. In its place, Congress added a nonprofit co-op program, also designed to facilitate competition on the exchanges. But most of the co-ops created under the law have failed, citing heavy losses. This has resulted in less competition, a phenomenon worsened by the exit of several private insurers from exchanges.

Congress Sends Opioid Bill to President Obama’s Desk

On Wednesday, the Senate passed 92-2 the conference report of the Comprehensive Addiction and Recover Act (S. 524), despite concerns by Democrats, the Obama administration, and advocates that the bill lacks funding. The legislation now heads to President Obama’s desk after nearly a year of negotiations. The legislation, among other things, authorizes grant programs and a task force on pain management, expands prescription drug take-back programs and access to medication-assisted treatments, and includes a “lock in” provision that lets plans limit at-risk beneficiaries' access to “frequently abused drugs” by locking those beneficiaries into one or more prescribers and pharmacies. The bill’s fate had been uncertain until almost its final hour as Democrats pushed to try to secure more treatment funding. Only the day before the vote did top Senate Democrats announce that they would support the bipartisan bill without the approximately $900 million they said was needed to expand treatment nationally.

Meanwhile, Democrats are still airing their concerns over the lack of funding in the legislation, despite voting overwhelmingly to approve the legislation. "This has a few good things, but it is not close enough," said Sen. Charles Schumer (D-NY) on the floor Wednesday. Sen. Richard Blumenthal (D-CT) also called the bill “barely a symbolic step” and stated, “Until we commit resources, our words will be a glass half empty.”  The White House said that the president will sign the bill even though it "falls far short" of the resources needed. Senators Ben Sasse (R-NE) and Mike Lee (R-UT) were the only senators to vote against the legislation.

House Appropriators Advance Healthcare Spending Bill Including Controversial Riders

Thursday, the House Appropriations Committee approved a $161.6 billion fiscal year (FY) 2017 Labor-Health and Human Services (HHS) appropriations bill. In doing so, the committee cleared its 12th and final annual appropriations package on the last day before departing for a seven-week recess. The bill passed on a near-party line vote of 31-19, with Rep. Henry Cuellar (D-TX) as the only Democrat to join committee Republicans in supporting the bill. Democrats introduced over two dozen amendments during the markup, many of which had already failed once during the previous week’s Subcommittee markup. All but two failed along party lines – one related to algal blooms and another on the impact of segregation among schools, which were both advanced by voice vote. Among the rejected amendments included provisions that would have reversed the appropriation bill’s funding cuts to maintain current spending levels, restore $300 million in Title X family planning funds, designate $125 million to combat the spread of the Zika virus, eliminate a host of policy riders attached to the bill, and allow the Centers for Disease Control (CDC) to conduct gun violence prevention research.

The appropriations bill is about a half-billion dollars shy of last year’s total, and nearly $3 billion below the levels requested by President Obama. The bill, among other things, provides a $1.25 billion increase for the National Institutes of Health (NIH), which would bring the agency’s budget to $33.3 billion. The increase is short of the $2 billion increase approved by Senate appropriators last month, however. The bill also provides $7.8 billion for the CDC – roughly $605 million over current levels. The agency would receive $390 million to fight Zika and $300 million to create a new Infectious Diseases Rapid Response Reserve Fund that could be used for emergencies such as Ebola or Zika. Moreover, the bill provides funding to combat the opioid abuse crisis, including $581 million to the Substance Abuse and Mental Health Services Administration (SAMHSA) and $90 million for the CDC to address the epidemic.

This is the second time in two years that the full committee has advanced a Labor-HHS appropriations bill, although a bill has not reached the House floor for debate since 2009 due to its controversial subject matter. This year’s measure is likely to face the same fate as last year's, which was merged into a larger last-minute spending measure. Committee Chairman Hal Rogers (R-KY), who prided himself on the second year of “regular order” in his committee, joked about the bill’s future shortly after it passed. “We’ll come back and pass all these bills on the floor when we come back in town in September,” he said to laughter in the room. Just five out of 12 appropriations bills have made it to the House floor so far this year.

The deadline for the spending bills is Sept. 30, leaving little time to act when Congress returns from its recess. The Chairman took a jab at the Senate, where House-passed appropriations bills have stalled in the past. “We’ll pass them on the floor and send them to the other body for them to do with it as they usually do, unfortunately,” he said to more laughter. He added that he believed the GOP-led House could have been able to approve all 12 bills on the floor “but for the truncated year that we are in, and also, the truncated Senate.”

CMS Considers Delaying MACRA

Acting Administrator of the Centers for Medicare and Medicaid (CMS), Andy Slavitt, told members of the Senate Finance Committee last week that the agency is considering delaying the start date for Medicare payment reform, which is set to go into effect January 1, 2017. Slavitt told lawmakers at a hearing Wednesday that CMS is concerned some physicians, particularly at small practices, may not be ready for the changes under Medicare Access and CHIP Reauthorization Act (MACRA) that replaced the sustainable growth rate formula. He noted that CMS is open to alternative measures to achieve many of the agency's objectives, which include patient participation and reducing reporting burdens for practices.

The acting administrator also addressed lawmakers’ concerns that MACRA could be harmful for small and rural practices and could force them to join hospitals or larger practices because of the paperwork and payment changes required. He explained that the agency is aware of these potential conflicts and is focusing on the effects of MACRA on small independent practices and their ability to continue practicing independently. In addition to alternative start dates, he mentioned the possibility of shorter reporting periods or allowing doctors to get experience with the new methods before the “impact really hits them.” Slavitt also said methods of gathering data other than provider reports could help doctors focus on patient care. When asked about methods for reimbursing chronic care patients and those seeking advanced care directives, Slavitt told Members that CMS is looking to expand methods for reimbursing providers at higher rates for chronic patients, as was recently implemented with Medicare Advantage. He also suggested further encouraging alternative payment models like bundling, medical homes and team-based and prevention models.

Meanwhile, leading physician groups are in disagreement over whether the delay is needed. While most large organizations have encouraged CMS to delay MACRA, including the American Medical Association (AMA), the American Academy of Family Physicians and the Medical Group Management Association, others are hoping that the agency will stay on track with their timeline. For example, CAPG – an organization that represents more than 250 multispecialty medical groups and independent practice associations – urged CMS to stay on course and tweak the system later if needed. The organization argued that pushing back the new physician pay system would disadvantage physicians who have been preparing for the new approach and expressed concerns about the implications of a delay in an election year. On the other hand, AMA has called for a six-month transitional reporting period that wouldn't start until July 2017, citing worries that sticking with the Jan. 1 date would leave doctors fewer alternative payment models from which to choose, among other concerns.

Alexander Eyes September Vote on ‘Cures,’ Says McConnell Wants to Pass Bill ‘This Year’

Congress was unable to finish its work on 21st Century Cures – a bill aimed at speeding the development of new medical cures – before they left town for recess Friday. However, Senate Health, Education, Labor and Pensions (HELP) Committee Chair Lamar Alexander (R-TN) stated Monday that “there is no excuse for not passing our work in September” after Congress gets back from its recess, noting sentiments by Senate Majority Leader Mitch McConnell (R-KY) that he wants to pass the bill by the end of the year. The House passed the legislation a year ago, and the Senate passed 19 separate bills as part of its complementary legislative effort. But work in the Senate has stalled due to disagreements over mandatory funding for the National Institutes of Health. Meanwhile, Senate Democrats appear to be unconvinced that much progress can be made in September, since it will be the height of election season and there won’t be much incentive for the Republicans who run the Senate to work with Democrats on bipartisan legislation. If the legislation isn’t brought to the Senate floor before the election, the other option would be to try to finish the work in a “lame duck” session of Congress – when lawmakers could try to pass a series of stalled bills in a sudden rush of last-minute work.