12.17.18 – 12.21.18 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.
Scheduling note: we will send the next wrap up when the 116th Congress convenes in January. We wish you a happy holidays and happy New Year.
BUDGET AND APPROPRIATIONS
With just hours to go before the government partially shuts down, as of press time, Congress remains at an impasse over funding President Trump’s border wall. On Thursday night, Republicans in the House sought to meet Trump’s demands by adding $5 billion for border wall construction to the Senate’s version of a stopgap spending measure passed on Wednesday. The House passed the Continuing Resolution (CR) with the additional funds by a vote of 217-185.
President Trump had indicated on Wednesday that he would sign the CR passed by the Senate even though it didn’t have funding for the border wall attached to it and said the Administration would find alternative sources of funding. However, as the deadline to fund the government grew closer, members of the House Freedom Caucus mounted a final push to fund the president’s signature campaign promise before Democrats take control of the House in the next Congress and convinced the president to continue to fight for the wall rather than sign the CR passed by the Senate earlier in the week.
Today, the Senate held open a vote on proceeding to the CR as passed by the House last night for over 5 hours while negotiations continued. Ultimately, the vote passed by 48 to 47 with Vice President Pence breaking a tie. Following the vote, Leader McConnell (R-KY) noted that final passage requires 60 votes, which entails Democratic support, and enactment requires a Presidential signature. McConnell urged Democrats to keep negotiating with the President and said that when an agreement is reached that would garner enough Democratic support and be signed by the President, the Senate will vote on the agreement.
Without a funding bill, nine federal departments and several agencies will shut down after midnight. The remaining three-quarters of the government, including the Defense, Labor and Health and Human Services departments, were already funded and won’t be affected by the shutdown.
Farm Bill Hemp Provision
President Trump signed the Farm bill into law on Thursday, including a provision striking hemp from a list of federally controlled substances and making it legal in the United States. In response to this, on Thursday the FDA said it plans to figure out how it will oversee an expected explosion in products containing the compound CBD. The FDA put out a statement on the agency’s regulation of products containing cannabis and cannabis-derived compounds.
HEALTH POLICY LEGISLATION
As negotiations continue on the aforementioned CR to keep the federal government fully open, as of press time, tax and health policy provisions are not part of the CR and likely punted to next year.
Looking forward to the 116th Congress, we anticipate that next year will be filled with many oversight hearings on the House side. Incoming House Oversight Committee Chairman Cummings (D-MD) got a jumpstart this week with over 51 requests to the Administration on issues ranging from the lead in the water in Flint, MI to hurricane response to immigrant child separations. He requested responses from the Administration by January 11, 2019.
While it does not currently seem likely that Congress will consider another large package to address the opioid misuse and overdose epidemic next year, we do anticipate that some smaller bills could be considered and that the Committees will be overseeing the funding and implementation of programs authorized in HR 6. Additionally, as last minute negotiations to reach an agreement this year on modifications to 42 CFR Part 2 addiction treatment privacy protections do not appear to have been fruitful, the privacy issue may also be in the mix.
Efforts to raise the debt limit and/or spending caps could put entitlement reforms on the table next year. The debt limit will come back into effect on March 1, although the Treasure may be able to push back the deadline until the second half of 2019. At the same time, as we have previously reported, the budget deal which raised the caps for FY 2018 and FY 2019 will not apply for FY 2020. If Congress cannot reach a deal to raise the caps, federal spending would be cut by $126 billion in FY2020.
A preliminary list of House office assignments for next year was released this week and is attached.
ACO Final Rule
This morning the Centers for Medicare and Medicaid Services (CMS) released a final rule reforming Accountable Care Organizations (ACOs). In a blog post by CMS Administrator Seema Verma she said the rule is expected to save $2.9 billion over 10 years. Per a press release, some of the key reforms in the rule include:
- Reducing the amount of time that an ACO can remain in the program without taking accountability for healthcare spending from six years to two years for new ACOs and three years for new “low revenue” (physician-led) ACOs, including some rural ACOs. The rule also provides higher shared savings rates as ACOs transition and accept greater levels of risk.
- Expanding access to telehealth services, including telehealth services provided at a patient’s place of residence.
- Allowing ACOs to offer new incentive payments to beneficiaries for taking steps to achieve good health, such as obtaining primary care services and necessary follow-up care. In addition, the rule requires ACOs to provide beneficiaries with a written explanation in person or via email or patient portal of what it means to be in an ACO to put patients in the driver seat.
- Establishing benchmarks by incorporating factors from regional Medicare spending to establish an ACO’s benchmark during all agreement periods, providing a more accurate point of comparison for evaluating ACO performance. In addition, ACOs that terminate their participation will be accountable for prorated shared losses.
On December 15th, open enrollment for 2019 individual market insurance plans closed. This year, nearly 8.5 million Americans enrolled in healthcare.gov, which provides policies for 39 states which do not operate their own exchange. This year’s enrollment was the first year to operate without the individual mandate imposed by the ACA in 2010 which effectively repealed in 2017 as part of the Tax Cuts and Jobs Act. It was unclear how the repeal of the mandate would impact enrollment, which is closely tied to stabilizing the market. Final numbers of 2019 indicate enrollment is down 4% this year. CMS officials believe the reduction is due to Virginia expanding Medicaid for 2019. This figure indicates that the initial estimates by the Congressional Budget Office estimating three million fewer enrolled were overstated and will certainly play a part in future health care negotiations.
COURT DECISION ON THE AFFORDABLE CARE ACT
Late Friday evening, a federal judge in Texas ruled that the entire Affordable Care Act (ACA) is unconstitutional. The ruling will be appealed and the law remains in effect as the legal case continues. In a statement issued on Monday, HHS Secretary Azar said that “HHS will continue administering and enforcing all aspects of the ACA as it had before the court issued its decision. This decision does not require that HHS make any changes to any of the ACA programs it administers or its enforcement of any portion of the ACA at this time.”
This week 17 democratic state attorney generals, led by California Attorney General and former congressman Xavier Becerra, filed a motion seeking either an order explicitly stating that federal and state governments must continuing enforcing the ACA while litigation continues, or a stay putting the Texas judge’s ruling on hold.
As Democrats prepare to take over the House, they have pledged to quickly take up legislation next year to authorize the chamber to get involved in the legal battle. The exact timing of the vote is not clear, but such a vote could take place soon after they take control on January 3.
Republican Senators seemed less inclined to take immediate legislative action. While incoming Senate Finance Committee Chairman Grassley (R-IA) tweeted that his Committee will hold oversight hearings over the implementation of the ACA, regarding the suit, he told reporters, “I won’t be concerned about it until the Supreme Court rules.” In response to calls from Senate Minority Leader Schumer (D-NY) for the Senate to take a vote on intervening similar to the expected action in the House, Senator Blunt (R-MO) told reporters, “that’s not going to happen.” This week, Sen. Barrasso (R-WY) blocked an effort led by Sen. Manchin (D-WV) to authorize the Senate’s legal counsel to defend the ACA in the court case and to clarify Congress is opposed overturning the law.
Should the case reach the Supreme Court, action might not take place there until 2020.
|Katie Weyforth Vanlandingham
Van Scoyoc Associates
800 Maine Ave SW
Washington, DC 20024