Health Policy Report

June 15, 2015

The Week in Review
In a week dominated by discussion of trade, debate raged in Congress over whether or not to grant President Obama “fast track” authority on trade negotiations through a specific pair of measures known as Trade Adjustment Assistance (TAA) and Trade Promotion Authority (TPA). The debate boiled down to a highly anticipated vote on Friday, with the TAA measure—dedicated to helping workers displaced by trade deals—failing in the House by a vote of 126-302, with majorities of both parties voting against the measure in spite of a personal lobbying effort by President Obama on Friday morning. TPA was then passed by a vote of 219-211, but without TAA, it is likely to flounder in the Senate. Friday’s vote came as a massive blow for the White House, where they were hoping to add the Trans-Pacific Partnership (TPP) to President Obama’s emerging legacy.

In other action on the Hill, the Department of Defense (DOD), the Department of Transportation (DOT), and the Department of Housing and Urban Development (HUD) all faced appropriation debates in the House, leading to the passage of H.R. 2577 and H.R. 2685, for DOD and HUD respectively. The House also passed H.R. 2393, reauthorizing the Commodities Futures Trading Commission (CFTC). On the Senate side, amendments to H.R. 1735, the National Defense Authorization Act (NDAA) for Fiscal Year 2016, were considered and the bill is at the top of the schedule for the Senate next week. The bill provides $600 billion in discretionary budget authority for the DOD, including a sum of $89.2 billion in discretionary authority for the Overseas Contingency Operations (OCO) fund, more commonly known as the war budget, for military involvement in Iraq, Syria, and Afghanistan.
The Week Ahead
This week, the House will likely consider a series of bills aimed at rolling back provisions of President Obama’s signature Affordable Care Act (ACA) and bolstering Medicare Advantage. Among the bills are:

  • H.R. 160, which would repeal the 2.3 percent excise tax on medical device manufacturers.
  • H.R. 1190, which would repeal the Independent Payment Advisory Board, a 15-member panel created to identify ways to slow the growth of Medicare costs.
  • H.R. 2505, which would require the Centers for Medicare and Medicaid Services to report each year on enrollment data in Medicare Advantage plans.
  • H.R. 2506, which would delay the authority to terminate Medicare Advantage contracts for plans that fail to achieve minimum quality ratings under the Medicare Advantage STARS rating system.
  • H.R. 2507, which would expand an annual regulatory schedule for Medicare Advantage payment rates.
  • H.R 2579, which would require the CMS to re-evaluate and as appropriate change the Medicare Advantage risk adjustment model.

Although its consideration is likely to slip until after the July 4th recess, the House may bring H.R. 6, the 21st Century Cures Act, up for consideration, a measure that would reauthorize funding for the National Institutes of Health and speed the discovery and development of new medical treatments. The debate on all of these measures will occur with a Supreme Court ruling on King v. Burwell and the status of the health care law’s insurance subsidies expected by the end of the month.
Outside of the health care space, the House Ways and Means Committee plans a hearing Wednesday on the future of the Highway Trust Fund. The committee’s counterpart, the Senate Finance Committee, plans a hearing on the trust fund Thursday. Congressional authority for surface transportation programs is due to expire at the end of July. The Senate will also resume consideration of H.R. 1735, the House-passed defense authorization. 
Obama Administration Resistant to Republican ACA Contingency Plans
According to Department of Health and Human Services (HHS) Secretary Sylvia Mathews Burwell, President Obama is not impressed by any of the Republican proposals put forth as possible remedies for the potential Supreme Court decision invalidating subsidies for 6.4 million people later this month. Secretary Burwell characterized Sen. Ron Johnson’s (R-WI) plan to resolve the subsidy issue, but also eliminate the individual and employer mandate, as a full repeal of the President’s signature piece of health care legislation.
At a hearing held last week, House Ways and Means Chairman Paul Ryan (R-WI) pressed Burwell for details on White House contingency plans should King v. Burwell be decided adversely to the government. Burwell countered that there is not much the Obama administration can do at the moment, though she did refer to some planning efforts, such as a proposal that would provide states with federal help to set up their own exchanges, therefore allowing subsidies to continue. However, this would force states to work with HHS on the health care law, a proposition that would face severe resistance from Republican governors. Some Republicans have noted that they expect the President to veto any Republican plan, putting pressure on the states to establish exchanges, with or without the partnership of the Administration.
Also on Wednesday, HHS signaled that it had been cooperating with Pennsylvania and Delaware, two states that have already indicated they will seek to set up their own exchanges if the court rules against the Administration. However, it remains unclear whether the court’s ruling will address how much the federal government can help before the exchange would no longer be considered a state-based exchange.
A ruling against the subsidies could set off a pitched political battle in Washington, particularly after the President’s remarks this week suggesting Congress could use legislation to restore the subsidies and resolve any issues stemming from the court’s ruling.
Senate Republicans Consider ‘Meaningful Use’ Delay
Health care providers have serious reservations about moving to the third stage of the so-called meaningful use electronic health records program, Senator Lamar Alexander (R-TN) explained Wednesday at a hearing on health information technology. The Tennessee Senator added that it might be appropriate to push back certain provisions of the rule until meaningful use becomes an attainable—and desirable—objective for health care providers.
The Center for Medicare and Medicaid Services (CMS) proposed the rule setting up the third stage of the meaningful use program earlier this year, envisioning a 2018 deadline for providers to comply. However, some hospitals are worried they do not have the infrastructure necessary to meet the requirements on that timeline, and the American Medical Association has urged CMS not to finalize the rule.
The hearing is the first in a series of discussions on health information technology, and the Senate Health, Education, Labor, and Pensions (HELP) Committee has additionally formed a bipartisan group to work on the issue. The staffs of Sen. Alexander and Sen. Patty Murray (D-WA) have met with health IT industry leaders, with the Administration reportedly also involved.
Lawmakers in both parties largely agree the six-year-old meaningful use program needs significant adjustments. The effort was originally intended to incentivize doctors and hospitals to eliminate paper medical records in favor of electronic versions, hoping that this move would facilitate information sharing and improve patient care, but that result has proven difficult to achieve.
Rep. Murphy Gets Mixed Reception on Revamped Mental Health Bill
Rep. Tim Murphy (R-PA), along with co-sponsor Rep. Eddie Bernice Johnson (D-TX), introduced H.R. 2646, the Helping Families in Mental Health Crisis Act on Thursday. Having introduced a similar measure last Congress, Rep. Murphy has argued that the updated measure will break down barriers to care, clarify privacy standards, expand behavioral health parity and reform outdated programs.
The revised version includes a new leadership post in HHS for mental health and substance-abuse disorders, and establishes a national mental health policy laboratory to research new avenues for care and treatment. Other provisions include providing psychiatric hospitals with additional resources, increasing the availability of tele-psychiatry for underserved and rural areas, and creating an early intervention program to treat certain mental illnesses. It would also incentivize states to avoid institutionalization and encourage mental health providers to use computer systems for better coordination with primary care physicians.
Some industry leaders have touted the bill as a way to reform government policies that prevent adults from getting short-term acute care in psychiatric hospitals while also strengthening existing mental health and addiction programs. Others, however, have argued that the provisions would only reduce privacy and lead to less choices for mental health patients. Many Democrats who opposed the legislation in the last Congress remain skeptical of the bill’s more recent iteration, questioning how the bill would be implemented given a clause that ensures “no increased spending.” House Democrats may seek to wait on the anticipated introduction of a mental health bill in the Senate by Sens. Christopher Murphy (D-CT) and Bill Cassidy (R-LA).
New Study Suggests ACA Premium Rise of 5.8 percent
According to a study of seven states and the District of Columbia by researchers at Avalere Health, proposed rates for health insurance premiums on "silver" plans to be sold on ACA exchanges are up 5.8 percent from 2015 on average. Avalere, which advises insurers, found a range from an average decrease of 5.3 percent in Michigan to a 12 percent increase in Oregon. The news follows the government’s release of proposed rate increases of more than 10 percent in the 37 states that use the federal system to sell subsidized plans. ACA regulations require insurers to submit their proposals for extra scrutiny when rate hikes exceed the 10 percent threshold. Insurers must also submit all 2016 proposed rates, regardless of their increases or decreases, to state regulators, who conduct their own review and can question them before they are finalized.
Drug Exemption to PATENT Act Considered by Senate Judiciary Committee
The Senate Judiciary Committee is considering a proposal by branded drug makers to exempt drug and biologics patents from inter parties review (IPR) at the U.S. Patent and Trademark Office.  Current language in the PATENT ACT, passed by the Committee on June 4, may make it easier for generic drugs, and possibly biosimilars, to reach the market. Chairman Chuck Grassley (R-IA) and ranking member Patrick Leahy (D-VT) said they will discuss the requested exemption with their colleagues on the HELP Committee and make a final decision on whether or not to include the provision before it hits the Senate floor.
Advocates for the proposal say protecting certain drug patents from IPR would be a continuation of long-standing patent protections that support innovation in the industry. Some Judiciary committee members have noted, however, that the IPR process was not intended to be an avenue for generic drug makers to launch challenges at their brand name counterparts. According to the Biotechnology Industry Organization (BIO), however, generics have filed 95 IPR such cases since 2011. This has forced some brand drug makers to concede large payments in order to keep generic drug manufacturers off the market. BIO’s proposal has gained support among some committee members and Sen. Orrin Hatch (R-UT) has encouraged his colleagues to ensure the BIO proposal is worked out before the PATENT Act is considered by the Senate as a whole.