3.25.19 – 3.29.19 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.
BUDGET AND APPROPRIATIONS
FY20 President’s Budget
Last week the White House released the remaining volumes of its FY 2020 budget proposal, including the Appendix, Analytical Perspectives, and Major Savings & Reforms documents. Information regarding
The NIH also released its FY 2020 Congressional Justification (CJ). The Overview Document includes an executive summary and supplementary tables, while CJs for individual institutes and centers are available via this site.
Several other agencies also released their budget materials, including the Centers for Disease Control and Prevention (CDC), the Health Resources and Services Administration (HRSA), the Substance Abuse and Mental Health Services Administration (SAMHSA), and the Centers for Medicare and Medicaid Services (CMS).
FY20 Budget Resolution
On March 22, Senate Budget Committee Chairman Mike Enzi (R-WY) released a draft FY20 budget resolution. The proposal includes a nine percent cut to non-defense discretionary spending, and caps defense spending at levels established in the Budget Control Act of 2011 but includes a mechanism to adjust these levels if a budget caps deal can be reached for FY20. The Senate Budget Committee advanced the budget resolution along party lines, 11-9, on Thursday.
The Senate’s budget resolution does not address the question of discretionary spending levels, however, and the House Budget Chairman John Yarmuth (D-KY) has not yet decided if he will produce his own resolution. If he decides to do one he said he hopes to mark up the budget and take it to the House floor a week later, because the Appropriations Committee wants to mark up its FY20 bills soon after the next congressional recess, which begins the week of April 15 and ends when lawmakers return April 29.
During committee consideration of the budget resolution, Senator Patty Murray (D-WA) unsuccessfully pushed for a measure calling for a roughly equal increase in defense and non-defense discretionary spending. The measure was rejected in a 9-11 vote.
Senators did agree to add 18 nonbinding measures adding deficit-neutral reserve funds into the budget resolution. Fourteen of those amendments had bipartisan support. These non-binding measures could make it easier to pass legislation, if the budget resolution is adopted, by exempting the bills from points of order on the floor. Lawmakers agreed to add deficit-neutral reserve funds calling for the following legislation:
- Health-care coverage for those with pre-existing conditions;
- Funds for Homeland Security to address an influx of families at the southern border;
- Prescription drugs cost reduction;
- A requirement for the Defense Department to pass an audit;
- An analysis of climate threats to military installations, among others;
- A block on the use of crime-victim grant money for unrelated purposes, a frequent budgeting maneuver;
- Establishment of a federal debt-to-GDP goal;
- Permission for senators to opt out of the pension plan while still using a Senate health-care plan;
- The promotion of affordable housing;
- Ensured access to safe and healthy housing for military service members and families;
- A requirement for more cooperation among agencies with state governments in responding to disasters, and a call for a greater focus on Missouri River flooding;
- Restoration of the Everglades, which Sen. Rick Scott (R-FL) said he hoped would lead to a bill to provide $200 million.
Affordable Care Act
The Affordable Care Act (ACA) was on center stage this week. On Monday, the Department of Justice (DOJ) filed a brief in support of the Texas federal judge’s ruling that declared the entire health care law unconstitutional. This was a shift in position as the Administration had previously argued that only elements of the ACA should be struck down but that other parts of the law could stand.
Democrats were quick to seize on the new Administration position with House Speaker Pelosi (D-CA) saying in a statement, “Tonight in federal court, the Trump Administration decided not only to try to destroy protections for Americans living with pre-existing conditions, but to declare all-out war on the health care of the American people.” And, on Wednesday, Senate Minority Leader Schumer (D-NY) announced he would push for a vote on a measure that would block DOJ from using funds for the litigation to overturn the law. Schumer said he plans to introduce the provision as an amendment to the disaster relief package the Senate is currently considering.
Reportedly, Republicans including House Minority Leader McCarthy (R-CA) advised the President against reigniting the health care debate and likely putting the issue front and center for the 2020 campaign cycle. Despite reservations among Republicans on Capitol Hill, on Thursday the President tweeted, “The Republican Party will become the Party of Great HealthCare! ObamaCare is a disaster, far too expensive and deductibility ridiculously high – virtually unusable! Moving forward in Courts and Legislatively!” The Administration has promised to present a plan to Congress if the Supreme Court strikes down the health care law and, on Thursday, Trump told reporters that he has asked Senators Barrasso (R-WY), Cassidy (R-LA), and Scott (R-FL) to develop an ACA replacement plan.
Democrats were eager to turn the spotlight back on health care, an issue which they consider key to their re-taking of the House. On Tuesday, House Democrats announced new ACA stabilization legislation. The announcement, which came on the heels of the DOJ’s filing in support of overturning the law, had been previously scheduled around the 9th anniversary of the ACA’s enactment. Bill materials are available at the below links:
On Wednesday, the House Energy and Commerce Committee Health Subcommittee approved several ACA stabilization bills, now sending them to the full Committee for consideration. A summary of the markup is below.
Last night, U.S. District Court Judge John Bates, a George W. Bush appointee, struck down the Administration’s regulations expanding the availability of association health plans. In his opinion, the judge wrote, “The Final Rule is clearly an end-run around the ACA” and “Indeed, as the President directed, and the Secretary of Labor confirmed, the Final Rule was designed to expand access to AHPs in order to avoid the most stringent requirements of the ACA.” It was not immediately clear if the Administration would appeal the ruling. A similar lawsuit challenging the Administration’s expansion of short-term plans, filed by consumer advocacy groups in September, is also pending in federal court.
Energy and Commerce Health Subcommittee Markup
On Wednesday, the House Energy and Commerce Committee Health Subcommittee held a lengthy markup of a slate of bills on drug pricing and ACA stabilization. The Subcommittee considered the following bills:
Drug Pricing Legislation
- H.R. 1781, the “Payment Commission Data Act of 2019,” introduced by Reps. Buddy Carter (R-GA), Tom O’Halleran (D-AZ), Tom Rice (R-SC), Jimmy Panetta (D-CA), Greg Gianforte (R-MT), and Peter Welch (D-VT), provides the Medicare Payment Advisory Commission (MedPAC) and the Medicaid and CHIP Payment and Access Commission (MACPAC) with access to drug pricing and rebate data in order for these independent, non-partisan commissions to help Congress better understand the true costs of prescription drugs to consumers and taxpayers. Passed by voice vote.
- H.R. 938, the “Bringing Low-cost Options and Competition while Keeping Incentives for New Generics (BLOCKING) Act of 2019,” introduced by Reps. Kurt Schrader (D-OR) and Buddy Carter (R-GA), would discourage parking of 180-day exclusivity by a first generic applicant that is blocking the approval of other generics. Passed by voice vote.
- H.R. 1520, the “Purple Book Continuity Act of 2019,” introduced by Subcommittee Chair Anna G. Eshoo (D-CA), would codify publication of the patents of approved biological products in the Purple Book in a similar format and with similar requirements to the Orange Book, specify that the Purple Book should be published electronically on FDA’s website and updated routinely, and direct FDA to consider the types of patents that should be listed in the Purple Book.Passed by voice vote as amended.
- H.R. 1503, the “Orange Book Transparency Act of 2019,” introduced by Rep. Robin Kelly (D-IL), would help to ensure that the Orange Book is accurate and up-to-date, by requiring manufacturers to share complete and timely information with FDA, as well as ensuring that patents listed in the Orange Book are relevant to the approved drug product. Patents found to be invalid through a court decision or a decision by the Patent Trial and Appeal Board would be required to be removed promptly. Passed by voice vote as amended.
- H.R. 1499, the “Protecting Consumer Access to Generic Drugs Act of 2019,” introduced by Rep. Bobby Rush (D-IL), would make it illegal for brand-name and generic drug manufacturers to enter into agreements in which the brand-name drug manufacturer pays the generic manufacturer to keep a generic equivalent off the market. Passed as amended by voice vote.
- H.R. 965, the “Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act of 2019,” introduced by Reps. David Cicilline (D-RI), Jim Sensenbrenner (R-WI), Jerrold Nadler (D-NY), Doug Collins (R-GA), Peter Welch (D-VT), and David McKinley (R-WV), would establish a process by which generic manufacturers could obtain sufficient quantities of brand drug samples for testing thereby deterring gaming of safety protocols that brand manufacturers use to delay or impede generic entry. Passed as amended by voice vote.
ACA Stabilization Legislation
- H.R.1385, the “State Allowance for a Variety of Exchanges (SAVE) Act”, introduced by Rep. Andy Kim (D-NJ) and Rep. Brian Fitzpatrick (R-PA), would provide states with $200 million in federal funds to establish state-based Marketplaces. Under current law, federal funds are no longer available for states to set up state-based Marketplaces. Passed by voice vote.
- H.R.1386, the “Expand Navigators’ Resources for Outreach, Learning, and Longevity (ENROLL) Act”, introduced by Rep. Kathy Castor (D-FL), would provide $100 million annually for the Federally-Facilitated Marketplace (FFM) navigator program. The bill would reinstate the requirement that there be at least two navigator entities in each state and would require HHS to ensure that navigator grants are awarded to entities with demonstrated capacity to carry out the duties specified in the Affordable Care Act. The bill would also prohibit HHS from considering whether a navigator entity has demonstrated how it will provide information to individuals relating to association health plans or short-term, limited-duration insurance plans. Passed by voice vote.
- H.R. 1425, the “State Health Care Premium Reduction Act”, introduced by Reps. Angie Craig (D-MN) and Scott Peters (D-CA), would provide $10 billion annually to states to establish a state reinsurance program or use the funds to provide financial assistance to reduce out-of-pocket costs for individuals enrolled in qualified health plans. The bill also requires CMS to establish and implement a reinsurance program in states that do not apply for federal funding under the bill. Passed by a vote of 17 – 12.
- H.R. 987, the “Marketing and Outreach Restoration to Empower Health Education Act of 2019” or the “MORE Health Education Act”, introduced by Rep. Lisa Blunt Rochester (D-DE), would restore outreach and enrollment funding to assist consumers in signing up for health care. Passed by voice vote.
- H.R. 986, the “Protecting Americans with Preexisting Conditions Act of 2019”, introduced by Rep. Ann M. Kuster (D-NH), would require the Trump Administration to rescind the Section 1332 guidance of the ACA promulgated in October of 2018 that would undermine the law’s consumer protections. Passed by a vote of 19 – 13.
- H.R. 1010, To provide that the rule entitled “Short-Term, Limited Duration Insurance” shall have no force or effect, introduced by Rep. Kathy Castor (D-FL), would reverse the Trump Administration’s expansion short-term, limited-duration insurance plans. Passed by a vote of 19 – 13.
While most of the bills were advanced by voice vote, Republicans raised concerns with several of the pieces of legislation and the Senate is less likely to take up at least the ACA stabilization bills and the more controversial of the ACA drug pricing bills. As of press time, a full Committee markup has not been noticed. We understand House leadership may bring up net neutrality legislation before the Easter recess and defer Floor consideration of drug pricing and/or other health care legislation until after the break, but nothing official has been announced.
Medical Marijuana Access
Currently, 47 states and the District of Columbia have passed laws allowing for some form of cultivation, sale, distribution, or possession of cannabis for medicinal purpose—all of which are contrary to the federal Controlled Substances Act (CSA). Because of this, marijuana businesses which are legal under state law cannot access the banking system, which prohibits providing banking services to businesses which violate federal law. As such, marijuana businesses must operate entirely on a cash basis. On Thursday, the House Financial Services Committee passed HR 1595, the “Secure And Fair Enforcement Banking Act” or “SAFE Banking Act” which clarifying that state-authorized and regulated cannabis businesses have access to the banking system, in part by creating a safe harbor clarifying banks and credit unions may provide such services to these businesses. With access to banking services, cannabis businesses would no longer need to operate as a cash only business, which could improve the ability of patients who are prescribed marijuana or cannabis to more easily obtain it.
UPCOMING HEARINGS AND EVENTS
The following upcoming health care hearings of note have been announced as of press time:
- House Education and Labor Committee Subcommittee on Health, Employment, Labor and Pensions Hearing on “Examining Surprise Billing: Protecting Patients from Financial Pain”
- House Appropriations Committee Subcommittee on Labor-HHS Hearing on the FY 20 NIH budget request
- House Committee on Energy and Commerce Oversight and Investigations Subcommittee hearing entitled, “Priced Out of A Lifesaving Drug: The Human Impact of Rising Insulin Costs”
- Senate Appropriations Committee Subcommittee on Defense Hearing on the FY 20 Defense Health Program budget
- House Appropriations Committee Subcommittee on Agriculture, Rural Development, FDA, and Related Agencies Hearing on the FY 20 FDA budget request
- House Appropriations Committee Subcommittee on Defense Hearing on the FY 20 Defense Health Program budget
- Senate Appropriations Committee Subcommittee on Labor-HHS Hearing on the FY 20 HHS budget request
Artificial Intelligence Challenge
On Wednesday, CMS announced its “Artificial Intelligence Health Outcomes Challenge.” The challenge is a three-stage competition to “accelerate artificial intelligence solutions to better predict health outcomes.” CMS and its partner organizations are prepared to award up to $1.65 million to winning participants. According to CMS, “the Challenge prioritizes explainable artificial intelligence solutions to help front-line clinicians understand and trust artificial intelligence-driven data feedback to target scarce resources and improve the quality of care.” The challenge will involve participants acquiring a certain amount of Medicare claims data. The AI platform would examine the data and make predictions which cases are most likely to result in a readmission or other adverse events.
If successful, it is likely to open a Pandora’s Box of medical questions. Winning participants must outperform predictions based on the current practice of medicine. Once that happens, some experts might expect CMS and HHS would eventually change payment policy based on determinations made by a successful AI platform. Moreover, this could lead to the federal government becoming more prescriptive in the practice of medicine. More information about the AI Challenge can be found HERE.
|Katie Weyforth Vanlandingham
Van Scoyoc Associates
800 Maine Ave SW
Washington, DC 20024