Health Policy Report

September 12, 2016

The Week in Review

Following the Labor Day holiday on Monday, Congress made its long awaited return to Washington for a month-long legislative period before the body breaks again ahead of November’s elections. The Senate picked up exactly where it left off in July with a partisan impasse on both a defense spending bill (H.R. 5293) and the Military Construction-Veterans Affairs appropriations measure (H.R. 2577) that includes a $1.1 billion package to fight the Zika virus. As they did over the summer, Democrats blocked votes to proceed on the measures over objections to the use of war funds to pay for Pentagon weapons programs and budgetary offsets and policy riders included in the Zika package.

Senate Majority Leader Mitch McConnell (R-KY) shelved both measures after the failed vote and brought forward a more agreeable piece of legislation in the form of the Water Resources Development Act (WRDA) (S. 2848). The bill would authorize Army Corps of Engineers projects and other water infrastructure improvements, including providing additional federal resources to communities with tainted water systems such as Flint, Michigan. An initial vote to proceed to the bill passed the chamber and the Senate is expected to try and finish work on the measure next week.

In the House, the main action revolved around a bill aiming to adjust Justice Department procedures on financial settlements related to enforcement actions and a pair of financial services bills designed to alleviate the regulatory burden on small businesses seeking investment. The first bill (H.R. 5063) – which would restrict the ability of the Justice Department to require payments to third-party organizations as part of a settlement agreement – passed the House on a largely party line vote, 241-174. Of the two financial services bills, the first (H.R. 2357), which passed on another party line vote of 236-178, would scrap some registration requirements for small companies and help small businesses raise capital from investors. The second (H.R. 5424)  gained more Democratic support, passing 261-145, and would relax Securities and Exchange Commission (SEC) rules for advisers to private equity funds. The White House opposes all three measures.

On Friday, the House passed a bill (S. 2040) by voice vote that would allow families of victims of the Sept. 11 terror attacks to sue the Saudi Arabian government for liability in the attacks. Despite the widespread support in the legislature, the bill is opposed by the White House over concerns that countries would reciprocate with legal action against the United States for its military action abroad. With little Democratic opposition to the bill, President Obama faces a politically difficult veto that may even be overridden in Congress.

On the campaign trail, Republican nominee Donald Trump has made up significant ground on Democratic nominee Hillary Clinton in various national and state polls taken over the past two weeks. The deficit in many swing states is now well within the margin of error and some polls even show a slight lead for the controversial real estate mogul. Both candidates participated in a national security forum on Wednesday, with Clinton questioned heavily on her email practices while Trump made remarks suggesting he may reshuffle military leadership and that he has favorable impression of Russian President Vladimir Putin. 

The Week Ahead 

Congress continues to count down towards the end of the fiscal year on Sept. 30 and their scheduled election recess in October, with lawmakers still figuring out how to resolve disputes over a continuing resolution (CR) and funding efforts to combat the Zika virus. To that end, President Obama plans to hold a White House meeting this morning with congressional leaders House Speaker Paul Ryan (R-WI), Senate Majority Leader Mitch McConnell (R-KY), Senate Minority Leader Harry Reid (D-NV), and House Minority Leader Nancy Pelosi (D-CA) to discuss those two priorities. Leader McConnell announced last week that a CR keeping the government funded at current levels through Dec. 9 could come to the Senate floor as early as this week – if senators are able to come to agreement on the measure. That plan may help alleviate pressure on Republican leadership in the House, who are trying to avoid a fight with the party’s more conservative flank that want a continuing resolution to be extended into 2017.

Leader McConnell has teed up a cloture vote today on the manager’s amendment to WRDA, with the amendment specifying that states have primary oversight of coal waste management programs. Senate approval of the bill would send it to conference with the House, whose version does not include the funding for Flint.

The House docket for the week includes a bill (H.R. 3590) that would repeal the income threshold set in the 2010 Affordable Care Act (ACA) that is used to determine whether an individual is eligible for tax deductions for healthcare expenses. Currently, individual taxpayers under age 65 may only deduct medical expenses that exceed 10% of their adjusted gross income. This bill reduces that percentage to 7.5% and includes all taxpayers. Also on tap for the lower chamber is a bill (H.R. 5620) that would ease the process of terminating or demoting employees of the Department of Veterans’ Affairs (VA) based on poor performance or misconduct. The agency has been under fire for years over long wait times and poor service at its medical facilities across the country.

Other legislation (H.R. 5351) that could reach the House floor next week includes a bill to prohibit the transfer of any individual detained at the Guantanamo Bay prison to any other facility – targeting the Obama Administration’s attempts to shutter the controversial naval station. Finally, another bill (H.R. 5226) restricting the Administration’s use of executive regulation could reach the floor next week. Specifically, the measure requires greater disclosure and public communication of al regulations emanating from the executive branch.

House Lawmakers Target CMMI, Part B Demo

Members of Congress and the Obama administration sparred last week at a House Budget Committee hearing on the validity of proposed efforts to lower Medicare costs.  As the Congressional Budget Office (CBO) prepares to release its budgetary analysis of the Department of Health and Human Services’ Medicare Part B drug pricing demonstration, Republicans expressed concern that CBO has not provided adequate information for lawmakers to become comfortable with the Department’s proposed demonstrations. The proposed controversial Part B demonstration is currently under review by the HHS, and is one of a number of initiatives released by the Center for Medicare and Medicaid Innovations (CMMI) to explore avenues of lowering health care spending without decreasing quality of care. 

At last week’s hearing, Republicans indicated that they aren’t pleased the administration is charging ahead with the cost-saving experiments, and asked the CBO to review the proposal. The CBO oversees the projects which could reduce healthcare spending by an estimated $34 billion between 2017 and 2026, but some lawmakers contend that the number is based on dubious predictions.  Mark Hadley, CBO’s deputy director, expressed that it is difficult to determine the exact savings with precision because it is not immediately clear which projects will succeed and which won’t.  Although a CBO score for the Part B demo has not yet been released, he assured Congress that he would share the exact model the agency uses as soon as possible.

CMS Offers Flexibility to Providers on MACRA Requirements

On Thursday, the Centers for Medicare & Medicaid Services (CMS) announced its response to requests from lawmakers and stakeholders across the healthcare sector that they provide added flexibility to physicians in advance of new requirements imposed by the Medicare Access and CHIP Reauthorization Act (MACRA). MACRA was set to go into effect January 1, 2017 and is intended to promote quality patient care over volume.  In its announcement, CMS detailed a four-pronged approach aimed at providing greater flexibility to doctors – particularly those in smaller practices and others who are less prepared to meet the data reporting requirements early next year. “During 2017, eligible physicians and other clinicians will have multiple options for participation,” CMS acting administrator Andy Slavitt wrote in a blog post last week. “Choosing one of these options would ensure you do not receive a negative payment adjustment in 2019.” The American Medical Association (AMA) immediately praised the move by CMS.

Next year, eligible physicians will be given four options to comply with new payment schemes such as the Merit-based Incentive Payment System (MIPS) or an alternative payment model (APMs) such as accountable care organizations (ACOs). The first option offers the most flexibility: as long as physicians submit any data to the Quality Payment Program, they will avoid a negative payment adjustment in 2019. The goal is to ease providers into broader participation in the following two years. The second option allows providers to submit data for a reduced number of days, meaning their first performance period could begin later than next January and the practice could still qualify for a small payment increase. The third option is for practices that are ready to go in 2017, and requires full-year participation next year with the potential for larger payment increases in 2019. The last option was designed with providers who receive most of their Medicare revenue from alternative pay models in mind – these physicians would receive at five percent pay bump and are not subject to MIPS. CMS is expected to release a final rule in November, and has promised to continue to address concerns such as the impact on small and rural practices. 

Cancer Panel Approves ‘Moonshot’ Recommendations

Top cancer advisors approved recommendations put forth by President Obama’s cancer moonshot initiative on Wednesday – an ambitious project designed to harness the genomic information of cancer patients to create a national clinical trial network. The development comes in advance of an anticipated October release of a separate report from the Cancer Moonshot Task Force, a group of government officials chaired by Vice President Joe Biden, that will outline the activities federal agencies will engage in this year to advance the moonshot initiative, as well as provide recommendations for future administrations. The draft report approved by the National Cancer Advisory Board last week includes recommendations such as creating a national database of genetic information from cancer patients to more easily match them with pertinent clinical trials, linking patient registries, and developing the clinical trial network to better understand treatments designed to attack cancer using an individual’s own immune system. The recommendations received praise from lawmakers of both parties, although they are currently unfunded.

Upton: 21st Century Cures ‘Unlikely’ To Pass Before Elections

Rep. Fred Upton (R-MI), Chairman of the House Energy and Commerce Committee, acknowledged last week that it is “unlikely” the 21st Century Cures Act will be passed before the November election, but holds hope that a legislative package will make its way to the White House during a lame duck session. The bill was passed in the House more than a year ago, but has faced roadblocks in the Senate as lawmakers attempt to find money to fund new research at the National Institutes of Health (NIH). The original bill included offsets for the funding, but those have since been used to pay for other initiatives. Sens. Lamar Alexander (R-TN) and Patty Murray (D-WA) are attempting to find a compromise, as NIH funding remains a critical point for Democrats.  Even if the bill is unable to pass this Congress, however, it is likely that provisions related to drug and device development will be included in legislation next year to renew the FDA’s ability to collect “user fees” from the regulated industries. As the legislative clock runs down, lawmakers are also weighing a strategy that would let the two chambers send a scaled-back version of the bill to the White House without having to go through conference. While it may be improbably, under this plan, a new version of the bill would be voted on in the House and then sent to the Senate for a vote.