11.26.18 – 11.30.18 Health Wrap Up

Please find below a summary of the latest major health policy developments in Washington this week. Please let us know if you have any questions.


FY19 Appropriations

With the current continuing resolution expiring on December 7th, Congressional leaders have yet to spell out a plan for passing the remaining seven FY19 appropriations bills and avoiding a partial government shutdown of departments and agencies without a full-year bill in place. Congress already passed full-year funding for many other federal agencies, including HHS, meaning they would remain open during any government shutdown.

Securing a deal on the remaining FY19 bills is contingent on reaching a deal to fund President Trump’s proposed wall along the U.S.-Mexico border. According to Senate Appropriations Committee Chairman Richard Shelby (R-AL) the portions of the federal government running on a stopgap spending bill could be facing a full-year continuing resolution if negotiators aren't close to a deal on border wall funding by the end of next week, however, if negotiators are close to an agreement a short-term CR could provide a temporary funding extension until a deal is reached. Negotiations on the Agriculture, Commerce-Justice-Science, Financial Services, Interior-Environment, State-Foreign Operations and Transportation-HUD bills are mostly complete and those bills could likely receive the support needed to pass the House and Senate before the current CR expires at midnight next Friday. The Homeland Security bill, and whether it should provide the $1.6 billion included in the Senate bill for border barriers or the $5 billion included in the House bill, is the issue likely to hold up movement on any FY19 package. President Donald Trump has indicated he will only accept $5 billion for barriers during fiscal 2019, but Democrats are holding firm at $1.6 billion as the only amount they are willing to support.

Appropriations Committee Leadership

Rep. Kay Granger (R-TX) will be the next House Appropriations Committee ranking member after securing a majority vote from the House Republican Steering Committee and the House Republican Conference this week. Granger beat out Reps. Tom Graves (R-GA), Tom Cole (R-OK) and Robert Aderholt (R-AL) for the slot. She will take the place of Rep. Rodney Frelinghuysen (R-NJ) who is retiring at the end of the 115th Congress. For the first time, the House Appropriations Committee will be led by two women, with Rep. Nita Lowey (D-NY) expected to become chairman of the committee in January.

Budget Process Committee

On Thursday, the Joint Select Committee on Budget and Appropriations Process Reform rejected its own set of proposals, including a recommendation to switch Congress to two-year budget resolutions. The panel was created in February under the Bipartisan Budget Act of 2018 and was tasked with considering changes to the congressional budget process. The failed vote follows months of amicable work toward a bipartisan deal, including three days of markups, five hearings and three dozen amendments. Five Republicans supported the measure while three opposed it. Two Democrats voted in favor, two voted against, and four voted present. The measure needed at least five votes in favor from members of each party.

Prior to the Thanksgiving recess, the panel started marking up the legislation, but three hours into a markup co-leaders of the committee, Reps. Steve Womack (R-AR) and Nita Lowey (D-NY), announced that they were pushing any further debate until after the recess because Senate leaders had yet to reach an understanding on how the committee's final bill could reach the floor. Ultimately, Democrats opposed the legislation over the concerns that Senate Majority Leader Mitch McConnell (R-KY) would allow senators to offer partisan amendments on the floor that would undermine its bipartisan support. While Congress could still consider a measure imposing biennial budget resolutions, the rejection ends the joint select committee’s efforts. Recommendations were due today as ordered by the February budget deal that created the panel.


Tax/Health Policy Bills in Omnibus

While the date could slip, Congress is scheduled to recess for the year in two weeks and it is unclear how many health care policy bills, if any, will be resolved before the 115th Congress comes to a close. As we previously reported, there are a variety of provisions possibly on the table including 42 CFR Part 2 privacy legislation, maternal health, the Medicare Part D doughnut hole, pandemic preparedness and Affordable Care Act (ACA) taxes. However, the prospects for moving significant health and/or tax legislation may be dimming. For example, reportedly, over the Thanksgiving break there were leadership discussions about addressing the Medicare Part D doughnut hole, but they may not have been particularly fruitful.

Additionally, in another hiccup, two senior Republican senators have holds on each other’s bills – Sen. Isakson (R-GA) has a hold on Sen. Burr’s (R-NC) Pandemic and All-Hazards Preparedness Act (S. 2852) and Sen. Burr has a hold on Isakson’s Over-the-Counter Drug Safety, Innovation and Reform Act (S 2315). Burr reportedly put the hold on Isakson’s bill because of concerns about the Food and Drug Administration’s (FDA) proposed regulation to ban most electronic cigarette flavors; Isakson told reporters he in turn put the hold on Burr’s bill as a tactic to get the Senator to talk to him. Senate Health, Education, Labor and Pensions (HELP) Committee Chair Alexander (R-TN) said he is still hopeful that an agreement can be reached to allow the bills to move forward this year.

On Tuesday, Ways and Means Committee Chairman Brady (R-TX) released a package of tax extenders and other fixes. Of note, the package did not contain any of the ACA tax modifications sought by Republicans such as addressing the Cadillac tax, employer mandate and/or medical device tax. The bill, which has not received a particularly positive reaction in the Senate, had been on deck for a possible House floor vote today, but was not put on the schedule.

Should agreement be reached to move any policy legislation, at this point, it is very likely that bills would be included with the final appropriations package of the year rather than considered as stand-alone measures.

Senate HELP Committee Hearing and Markup

On Wednesday, the Senate HELP Committee held a hearing on reducing costs and improving affordability. A summary of the hearing is attached.

Additionally, the Committee marked up several health bills and nominations on Thursday. At the markup, Chairman Alexander noted that the markup will be the Committee’s last one for the year. Alexander’s full opening statement is available here. The health bills that were approved by voice vote and now head to the full Senate include:

BOLD Infrastructure for Alzheimer’s Act (S. 2076)
Improving Access to Maternity Care (HR 315)
Emergency Medical Services for Children Program Reauthorization Act (S. 3482)
A bill to reauthorize the Traumatic Brain Injury program (S. 3657)


House Democratic Leadership

This week, House Democrats chose their leaders for the 116th Congress. Nancy Pelosi received the Democratic nomination to run for speaker in an election on the House floor on January 3rd. The 203-32 vote is short of the 218 she needs to win if all House members are present and cast a valid vote. A vocal group of Democratic critics have vowed to defeat her on the floor, so at this time it is uncertain if she will have enough support within her party to win. However, it is possible that some Democrats will change their votes to support her if the alternative is a Republican.

Other House leaders include, Steny Hoyer (D-MD), who ran unopposed for majority leader, Jim Clyburn (D-SC), who was unopposed to be majority whip, and Ben Ray Lujan (D-NM) who ran unopposed for assistant Democratic leader. Hakeem Jeffries (D-NY) defeated Barbara Lee (D-CA) to chair the Democratic Caucus and Rep. Cheri Bustos (D-IL) defeated a handful of challengers to chair the Democratic Congressional Campaign Committee.


On Thursday, incoming House Majority Leader Hoyer (D-MD) released the House’s 2019 schedule. It is available here. The first votes of the year are scheduled for January 3 and 4.

Senate leadership has not yet released their 2019 calendar.

Republican Committee Leadership

This morning, the full House Republican Conference ratified recommendations from the House Republican Steering Committee for committee ranking members in the 116th Congress. As expected, Rep. Greg Walden (R-OR) will be Ranking Member of the Energy and Commerce Committee and Rep. Kevin Brady (R-TX) will be Ranking Member of the Ways and Means Committee. A full list can be found here.



On Thursday, the Trump administration finalized a long-delayed Obama-era rule that will penalize drug makers for overcharging providers in the 340B drug discount program, effective January 1. Originally required under the Affordable Care Act of 2010, the rule was intended to prevent drug companies from overcharging hospitals for drugs under the 340B program. The rule establishes a database for 340B participating hospitals and clinics to see drug ceiling prices being offered. Further, the rule authorizes HHS to impose civil monetary penalties for instances when drug companies exceed ceiling prices under 340B, as much as $5000 per incident. This rule was delayed five times, the most recent delay was in May of this year. However, following a lawsuit by many hospital advocacy organizations, HHS announced in October that it would rescind its delay and begin implementation on January 1, 2019.

Medicare Parts C and D

On Monday, the Centers for Medicare and Medicaid Services (CMS) released a proposed rule to give Medicare Part D and Medicare Advantage plans greater flexibility in their prescription drug plans.

Most significantly, the proposed rule gives plans the option to limit coverage of drugs in the 6 “protected classes.” Currently, Part D plans must cover all drugs in the six protected classes: antidepressants, antipsychotics, anticonvulsants, immunosupressants for treatment of transplant rejection, antiretrovirals and cancer drugs.

Under the rule, plans would have the option to exclude protected class drugs from their formularies in certain situations where the price rises more than inflation or only minor changes are made to older products. The plans would also have greater ability to use step-therapy and prior authorization. Combined, the proposal is estimated to save the federal government nearly $2 billion over 10 years and save Medicare beneficiaries nearly $692 million in cost sharing.

A fact sheet on the proposed rule is available here. Comments may be submitted until January 25, 2019.

Health IT

On Wednesday, HHS released its draft “Strategy on Reducing Regulatory and Administrative Burden Relating to the Use of Health IT and EHRs”. The purpose of the strategy is to improve interoperability and reduce the time and energy clinicians spend performing health IT related functions, as well as enhancing patient health outcomes. In putting this strategy together, HHS held listening sessions, written input, and stakeholder outreach. According to HHS, their strategy focuses on three overarching themes:

Reduce the effort and time required to record health information in EHRs for clinicians;
Reduce the effort and time required to meet regulatory reporting requirements for clinicians, hospitals, and healthcare organizations; and
Improve the functionality and intuitiveness (ease of use) of EHRs.
The report provides dozens of recommendations to address challenges of required clinician documentation and reporting, workflow functionality, and patient history limitations. The strategy further advocates for the reduction of reporting requirements in many forms. Interested parties have until January 28th to comment on this report.

State Health Exchange Waivers

On Thursday, CMS Administrator Seema Verma announced new efforts under the agency to spur innovation in the state health insurance exchanges. Earlier in the month, CMS issued new guidelines regarding 1332 waivers intending to enhance state flexibility, promote consumer engagement, additional choices, portability, and price transparency. This week’s draft report provides four Waiver Concepts:

States can develop personal accounts for consumers to allocate toward premiums or out of pocket expenses;
States can develop a new state premium subsidy structure and decide how premium subsidies should be targeted;
States can set the rules for what type of health plan is eligible for state premium subsidies to give people access to more health plan options; and
States can implement various risk stabilization strategies to address the costs of high-risk individuals to reduce premiums in the market for everyone.
The report provides guardrails to ensure the new plans states may be considering are actuarially sound and have approval from their governor and state legislature. However, it is unclear how the new concepts will dovetail with statutory protections like covered services.

Katie Weyforth Vanlandingham

Van Scoyoc Associates
800 Maine Ave SW
Suite 800
Washington, DC 20024