3.4.19 – 3.8.19 Health Wrap Up – Prepared by Van Scoyoc Associates

3.4.19 – 3.8.19 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

Earmarks

House Appropriations Chairwoman Nita Lowey (D-NY) announced in a letter late last week that the House wouldn’t bring back earmarks for fiscal 2020 saying there isn’t a “bipartisan, bicameral agreement” to restore the practice. The Senate followed suit this week with Senator Roy Blunt (R-MO) saying that while the Senate would have considered making a change if the House had done so, the Senate GOP isn’t going to take the lead.

Earmarks have been banned in the House since 2011, when Republicans wrote a prohibition into their rules package. House Democrats have continued the practice since regaining control in January. Earmarks have also been banned in the Senate since 2011 when then-Appropriations Chairman Daniel Inouye (D-HI) put a committee ban in place. When Republicans took the majority, they continued to prevent new earmarks from going into spending bills.

FY20 Appropriations

On Wednesday, House Majority Leader Steny Hoyer (D-MD) urged the House Budget Committee to tackle the year’s upcoming fiscal challenges as soon as possible.  During a hearing to gather input from members on the FY20 budget, Hoyer said if necessary he is willing to clear the floor of all other business for the month of June to pass all 12 appropriations bills.  He also underscored the importance of negotiating a deal to raise the spending caps “as soon as possible” to avoid $126 billion in sequester cuts next fiscal year and so appropriators will have top-line spending figures to guide their work.

Also on Wednesday, Hoyer said if lawmakers cannot agree on a plan to raise the FY20 spending caps quickly, he hopes to strike an agreement with the Senate allowing appropriators in both chambers to begin marking up spending bills with agreed upon defense and nondefense allocations. He said he has discussed the joint effort with Senate Republican leaders and Senate Appropriations Committee Chairman Richard Shelby (R-AL) on Wednesday confirmed that talks with Hoyer were underway about deeming topline numbers so appropriators can start writing their fiscal 2020 bills.  However, even with an agreement between the chambers on overall appropriations allocations, lawmakers will still need President Trump to sign an increase in the statutory caps into law to avoid exceeding the current defense and nondefense caps leading to across-the-board cuts to bring spending levels back down.

Leaders in both parties and chambers have agreed that a budget cap agreement is necessary, but it is unclear if President Trump will support such a deal. It doesn’t appear everyone is currently on the same page, however, given that the White House will send Congress a fiscal 2020 budget request on Monday that is expected to call for steep cuts to nondefense discretionary spending. On the Defense side, the proposal is expected to call for base funds to stay within the budget cap, relying on the cap-exempt Overseas Contingency Operations funds to provide an increase in military spending.

HHS Transfer for Unaccompanied Migrant Children

This week HHS Secretary Alex Azar told congressional appropriators that he plans to shift $385 million from health programs so the department can continue to house unaccompanied migrant children, according to a letter released by House Labor HHS Appropriations Subcommittee Chairwoman Rep. Rosa DeLauro (D-CT). In the letter Azar specified that he would use his authority to transfer as much as $286 million in fiscal 2019 funding from other parts of HHS and reprogram as much as $99 million in current refugee funding. Details of Azar’s funding strategy are attached.

HEALTH POLICY

Energy and Commerce Hearing on Health Care Bills

On Wednesday, the House Energy and Commerce Committee Health Subcommittee held a second legislative hearing on legislation intended to shore up the Affordable Care Act (ACA).  Legislation considered at the hearing included:

  • State Health Care Premium Reduction Act (HR 1425), sponsored by Reps. Craig (D-MN) and Peters (D-CA), the legislation 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 the Centers for Medicare and Medicaid Services (CMS) to establish and implement a reinsurance program in states that do not apply for federal funding under the bill.
  • Expand Navigators’ Resources for Outreach, Learning and Longevity (ENROLL) Act (HR 1386), sponsored by Rep. Castor (D-FL) the bill 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 the Department of Health and Human Services (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.
  • State Allowance for a Variety of Exchanges (SAVE) Act (HR 1385), sponsored by Reps. Kim (D-NJ) and Fitzpatrick (R-PA), the legislation 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. 

Similar to other hearings at the Committee related to the ACA, bipartisan consensus appeared elusive.  In particular, there were partisan differences over whether the re-insurance legislation (HR 1425) should include the so-called Hyde amendment, which restricts the use of federal funds to pay for abortions.

Senate Finance Committee Hearing on Nursing Home Safety

On Wednesday, the Senate Finance Committee held a hearing entitled, “Not Forgotten: Protecting Americans from Abuse and Neglect in Nursing Homes.”

At the hearing, two family members provided heartbreaking testimony on the abuses their loved ones suffered at long term care facilities; one of the patients, who had severe Alzheimer’s disease, was raped by a facility employee and the other suffered a stroke and then been without water for at least several days.

While no specific next steps were announced at the hearing, Chairman Grassley (R-IA) pledged to continue to make nursing home safety a top priority.  Some of the specific concerns he referenced included lack of reporting to law enforcement of abuse and neglect as required by law, the weaknesses in the 5-star rating program and social media abuse.

Dr. David Grabowski, a professor with Harvard Medical School, outlined some of the key problems at nursing home facilities.  Grabowski testified that staffing is a serious issue, that nursing homes tend to have high turnover rates and that, “primary care physicians have been termed ‘missing in action’ in the nursing home setting.”  He added that, given the staffing shortages, nursing homes tend to use “labor-saving practices” and provided the example of the use of catheters instead of managing incontinence, which may be highly labor intensive; he said the catheters put patients at greater risk of infection and long-term complications.  Other problems he outlined included safety issues, lack of emergency preparedness and lack of maintaining the dignity of patients.  Grabowski attributed many of these issues to low reimbursement rates under Medicaid, payment incentives which incentivize nursing homes to transfer sicker patients to the hospital where Medicare will pay for their care, lack of consistent oversight, and certificate-of-need rules which limit innovation.

House Judiciary Hearing on Consolidation and Anti-Competitive Conduct in Health Care Markets

On Thursday, the House Judiciary Committee Subcommittee on Antitrust, Commercial and Administrative Law held a hearing entitled, “Diagnosing the Problem: Exploring the Effects of Consolidation and Anticompetitive Conduct in Health Care Markets.”  Full witness testimony and a webcast of the hearing is available here.

At the hearing, two academic and one thinktank witness testified about the various effects of consolidation and anti-competitive conduct in health care marketplaces.  While some of the focus was on pharmaceutical companies and Chairman Cicilline (D-RI) and Ranking Member Sensenbrenner (R-WI) both touted the CREATES Act, which they introduced, much of the testimony was on hospital consolidation.  In particular, there was discussion about mergers in rural areas.  Dr. Martin Gaynor, an economics and health policy professor at Carnegie Mellon University, testified that rural mergers can be particularly problematic because such mergers can drive up prices and, if facilities close, force patients to travel great distances for care.  Dr. Gaynor also said that with less competition, hospitals have less pressure to be “better” in terms of quality and community benefit.

There was also discussion at the hearing on executive compensation at not-for-profit hospitals.  Rep. Neguse (D-CO) raised executive compensation and Dr. Gaynor said that he believes the Federal Trade Commission (FTC) should have greater authority to intervene because while most hospitals are “technically” non-profits, they are now a “big business.”  Gaynor described the days when hospitals acted as charities as “a long time ago.”

House Oversight and Reform Committee hearing on the Administration’s drug strategy

On Thursday, the House Oversight and Reform Committee held a hearing on the Administration’s drug strategy.  A detailed summary of the hearing is attached.

At the hearing, Chairman Cummings (D-MD) was highly critical of the Administration’s release of a relatively short 23-page drug strategy.  The Government Accountability Office (GAO) testified that the strategy as released at the end of January does not comply with statutory requirements such as the inclusion of measures of success for the objectives, a timeline for those objectives, a performance measurement system for the agency, and a five-year projection for program and budget priorities.

Office of National Drug Control Policy (ONDCP) Director Carroll said that additional plan documents will be available within 60 days and said that a data supplement will be released this month.  Chairman Cummings told Carroll that the Committee expects him to testify on ONDCP’s progress the week of May 6.

Gun violence

On Thursday, the House Appropriations Committee Labor-HHS Subcommittee held a hearing on gun violence.  The hearing was part of a push by House Democrats to permit and fund research at the Centers for Disease Control and Prevention (CDC) on gun violence and ways to prevent firearm deaths.

As noted below, the Senate Judiciary Committee and House Appropriations Committee Commerce-Justice-Science Subcommittee will be holding hearings on gun violence.

Drug Prices

This week, the Senate Aging Committee and House Ways and Means Committee Subcommittee on Health held hearings on prescription drug pricing.  Much of the focus continues to be on drug pricing transparency.

At the House Ways and Means Committee, Health Subcommittee Chair Doggett (D-TX) said his Subcommittee will begin looking at the tax advantages drug companies get through charitable donations to patient assistance programs.  Doggett did not give a timeline for the Subcommittee’s review.

Aging Committee Chair Senator Collins (R-ME) and Sen. Kaine (D-VA) introduced legislation this week, the Biologic Patent Transparency Act (S 659), that would require companies to publicly disclose online patents that protect their biologics; the intent of the online database is to make it easier for competitors to evaluate and plan for the development of generic versions of these drugs.

Collins and Aging Committee Ranking Member Casey (D-PA) will also introduce legislation to ensure that federal drug websites are updated annually to reflect changes in prices.

  • Testimony from Wednesday’s Senate Aging Committee hearing is available here.
  • Testimony from Thursday’s Aging Committee hearing is available here.
  • Testimony from the Ways and Means Committee Health Subcommittee hearing is available here.

As noted below, the House Energy and Commerce Committee Health Subcommittee will be holding a legislative hearing next week on proposals to reduce drug prices.  As of press time, a list of bills to be considered has not been released.   The Aging Committee also plans to hold a third hearing on drug pricing with witnesses from the Trump Administration; a date for the hearing has not yet been announced.

  UPCOMING HEARINGS AND EVENTS

Congressional Hearings

The following upcoming health care hearings of note have been announced as of press time:

March 12

  • HHS Secretary Azar testifying on the Administration’s FY 2020 budget request at the House Energy and Commerce Committee Health Subcommittee

March 13

  • HHS Secretary Azar testifying on the Administration’s FY 2020 budget request at the House Appropriations Committee Labor-HHS Subcommittee
  • House Energy and Commerce Committee Health Subcommittee legislative hearing on proposals to lower the costs of prescription drugs
  • House Appropriations Committee Commerce-Justice-Science Subcommittee hearing on gun violence

March 14

  • HHS Secretary Azar testifying on the Administration’s FY 2020 budget request at the Senate Finance Committee
  • House Energy and Commerce Committee Consumer Protection and Commerce Subcommittee hearing on “Enhancing Vehicle Technology to Prevent Drunk Driving”

March 26

  • Senate Judiciary Committee hearing on gun violence

TRUMP ADMINISTRATION

CMS State-Line Insurance Plan

On Wednesday, the Centers for Medicare and Medicaid Services (CMS) released a request for information (RFI) from stakeholders about allowing Americans to purchase health insurance across state lines.  The RFI asks for comments on how to eliminate regulatory, operational, and financial barriers.  In particular, CMS wants to hear how states could use section 1333 of the Affordable Care Act, which allows two or more states to develop health care choice compacts.  CMS Administrator Seema Verma said the plan will “create a more dynamic health insurance market” and reduce the costs of care for Americans.

Some health advocacy groups which support the Affordable Care Act fear interstate health insurance sales would necessarily have to strip essential health benefits in order to provide the cost savings the Administration describes.  The ACA defenders fear the CMS announcement will water down the health care protections established by the ACA.

The RFI can be found here.  The comment period will last 60 days from the announcement.

HHS Hospital Pricing Report

On Thursday, the Wall Street Journal reported that the Trump Administration’s rule on hospital standard charge transparency could be expanded to also include requiring hospitals to publish the prices they negotiate with commercial payers. Price arrangements have generally been treated as confidential information subject to nondisclosure.  Critics of hospital billing claim the existing chargemaster rule does not have the teeth, and claim hospital participation in the disclosure has been tepid.   In addition to expanding the scope of the rule to cover commercial coverage, the revised rule would give CMS the authority to levy penalties against hospitals which do not share such price arrangement data.  This rule is part of the underlying effort by the Trump Administration to increase transparency in all elements of health care, including agreements between, providers, payers, device makers, and prescription drug makers.  CMS Administrator Seema Verma, at a conference earlier this week, generally said transparency empowers patients and drives down costs.

FDA Administrator

Food and Drug Administration (FDA) Administrator Scott Gottlieb submitted his resignation this week and will leave the Agency in a month. Following the news about his resignation, Gottlieb received bipartisan praise for his tenure.  While there had been rumors a couple months ago, which Gottlieb denied, that he was about to leave the Agency, Gottlieb’s departure surprised Washington insiders.  Gottlieb left the door open to returning to the FDA in the future, but said that having his family in Connecticut as he commuted weekly to DC was too much of a burden.

Already, there has been speculation about Gottlieb’s potential replacement.  FDA Acting Administrator Amy Abernathy, National Cancer Institute Director Ned Sharpless, and HHS Assistant Secretary for Health Admiral Brett Giroir have all received varying degrees of support.  Among conservative groups, there is a push to appoint someone who is “more conservative”.  Given the pro-innovation approach Gottlieb has developed, some speculate “more conservative” means less aggressive on tobacco and smoking related issues.

House Oversight

FY19 Chart

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2019-03-15T10:43:28-04:00