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4.1.19 – 4.5.19 Health Wrap Up

4.1.19 – 4.5.19 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.


House Budget Cap Bill

On Tuesday, House Budget Chairman John Yarmuth (D-KY) and Appropriations Chairwoman Nita Lowey (D-NY) introduced a bill (H.R. 2021) that would raise spending caps for defense and nondefense discretionary spending under the Budget Control Act in fiscal 2020 and 2021. The bill does not include spending cuts or revenue increases to offset the cost of the higher caps.

The legislation would increase discretionary spending caps for FY2020 and FY2021 as follows:

Current Law H.R. 2021 Increase
FY2020 Defense $576.2B $664.0B $87.8B
FY2020 Non-Defense $542.1B $631.0B $88.9B
FY2020 Subtotal $1,118.3T $1,295.0T $176.7B
FY2021 Defense $590.2B $680.1B $89.9B
FY2021 Non-Defense $554.6B $646.1B $91.5B
FY2021 Subtotal $1,144.8T $1,326.2T $181.4B

The proposed increase in defense spending has angered some progressives within the Democratic Caucus with them complaining that defense spending is still greater than the domestic spending level. During committee consideration, six Democrats and one Republican supported an amendment sponsored by Rep. Ro Khanna (D-CA) that would freeze defense spending at its FY19 level. The amendment failed 7-26.

On Wednesday, the House Budget Committee advanced the measure 19-17 and Yarmuth expects the House to pass the proposal next week. House progressives are discussing amendments that would highlight the House Democrats’ division on defense spending, but Yarmuth said today that he is discussing a manager’s amendment that would allow more nondefense funds to be exempt from Budget Control Act caps.

Senate HHS Hearing

On Thursday, the Senate Appropriations Committee Subcommittee on Labor, HHS, and Education held a hearing to examine the Department of Health and Human Services’ (HHS) FY2020 budget. A summary of the hearing is attached.

The sole witness was HHS Secretary Alex Azar.  Secretary Azar promoted HHS’s achievements over the past year, including a record number of generic drug approvals, a cresting of drug overdose deaths, and plans to reform Medicare Part D.  However, there was bipartisan opposition to the FY2020 HHS budget and leaders from both parties claimed it includes unrealistic cuts to key programs.  Senators said the subcommittee remains proud of its continued record funding for medical research and development.

Subcommittee Republicans focused on the following issues.  Many supported the Administration’s efforts on opioid treatment and prevention, describing the harm it has caused their states.  They also expressed concerns about the challenges facing rural hospitals and the risk of closure.  Secretary Azar and Committee members wanted to enhance use of telehealth and improve telehealth payment policy to address this challenge.  There was also a lot of attention paid to a recent liver allocation policy change which seems to have created a geographic wedge in the Senate.

In the hearing, Committee Democrats focused primarily on the Trump Administration’s support of a district court ruling overturning the entirety of the Affordable Care Act (ACA).  The Democrats said overturning the ACA would take away health insurance from tens of millions of Americans and leave people with preexisting conditions in a very dangerous place.  Azar said that the President would work with Congress to write a better replacement bill, which Ranking Member Patty Murray (D-WA) found to be inadequate since so many lives are at stake.  Committee Democrats also focused a great deal of energy on HHS’s treatment of unaccompanied minors detained at the US-Mexico border.

House NIH Hearing

On Tuesday, the House Labor HHS Appropriations Subcommittee held a hearing on the FY20 NIH budget request. NIH Director Dr. Francis Collins’ opening statement and a webcast of the hearing can be found here. Witnesses included:

  • Dr. Francis Collins, Director NIH
  • Dr. Diana W. Bianchi, Director, Eunice Kennedy Shriver National Institute of Child Health and Human Development
  • Dr. Anthony S. Fauci, Director, National Institute of Allergy and Infectious Diseases
  • Dr. Gary Gibbons, Director, National Heart Lung and Blood Institute
  • Dr. Doug Lowy, Deputy Director, National Cancer Institute
  • Dr. Nora Volkow, Director, National Institute on Drug Abuse

At the beginning of the hearing Chairwoman Rosa DeLauro (D-CT) said she intends to hold hearings with other NIH institutes not represented at the hearing later this year.

She also said that Congress will reject the Trump administration’s proposed cuts to NIH. She noted that the budget would slash funding for research on Alzheimer’s, cancer and infectious diseases like HIV/AIDS. She made it clear that the committee will continue to invest in NIH research despite the administration’s “shortsighted and misguided budget.” Ranking member Tom Cole (R-OK) concurred and said that NIH will “do pretty well” as Congress works through the FY20 appropriations process. A summary of the hearing is attached.


Energy and Commerce Markup

On Wednesday, the House Energy and Commerce Committee held a marathon markup of bills on net neutrality, prescription drug pricing, stabilization of the Affordable Care Act (ACA) and the Paris climate agreement. Healthcare bills considered at the markup included:

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. Approved as amended 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), discourages parking of 180-day exclusivity by a first generic applicant that is blocking the approval of other generics.  Approved by voice vote.

  • H.R. 1520, the “Purple Book Continuity Act of 2019,” introduced by Rep. Anna G. Eshoo (D-CA), codifies 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.  Approved as amended by voice vote.

  • H.R. 1503, the “Orange Book Transparency Act of 2019,” introduced by Rep. Robin Kelly (D-IL), helps 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. Approved as amended by voice vote.

  • H.R. 1499, the “Protecting Consumer Access to Generic Drugs Act of 2019,” introduced by Rep. Bobby Rush (D-IL), makes 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. Approved 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), establishes 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. Approved as amended by a vote of 51 – 0.


Affordable Care Act Stabilization Legislation

  • H.R.1385, the “State Allowance for a Variety of Exchanges (SAVE) Act,” introduced by Reps. Andy Kim (D-NJ) and Brian Fitzpatrick (R-PA), provides 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.  Approved as amended by a vote of 28 – 22.

  • H.R.1386, the “Expand Navigators’ Resources for Outreach, Learning, and Longevity (ENROLL) Act,” introduced by Rep. Kathy Castor (D-FL), provides $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. Approved as amended by a vote of 30 – 22.

  • H.R. 987, the “Marketing and Outreach Restoration to Empower (MORE) Health Education Act of 2019,” introduced by Rep. Lisa Blunt Rochester (D-DE), restores outreach and enrollment funding to assist consumers in signing up for health care, which has been slashed by the Trump Administration. Approved as amended by a vote of 30 – 22.

  • H.R. 1010, a bill to provide that the rule entitled “Short-Term, Limited Duration Insurance” shall have no force or effect, introduced by Rep. Kathy Castor (D-FL), reverses the Trump Administration’s expansion of short-term, limited-duration insurance plans.Approved by a vote of 30 – 22.


  • H.R. 986, the “Protecting Americans with Preexisting Conditions Act of 2019,” introduced by Rep. Ann M. Kuster (D-NH), requires 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. Approved 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), provides $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.  Approved as amended by a vote of 30 – 22.


Bill and amendment text is available here. As evidenced by the votes, while the bills addressing prescription drug pricing had bipartisan support, nearly all of the bills on stabilizing the ACA were passed on party-line votes.  As such, assuming the bills pass the House, the stabilization bills may be unlikely to gain traction in the Senate.  The House is expected to consider net neutrality legislation next week before the start of the spring recess, which likely means the health care bills will not be considered until after the break

Surprise Medical Billing

The House Education and Labor Committee Subcommittee on Health, Employment, Labor, and Pensions held a hearing on Tuesday on surprise medical billing. Witnesses representing the Brookings Institution, American Benefits Council, Families USA, and Georgetown University Health Policy Institute testified at the hearing. In testimony, the witnesses explained that patients usually receive a surprise bill in one of three scenarios:

  1. Emergency treatment at out-of-network facilities;
  2. Ambulance and air ambulance services provided by out-of-network providers; and
  3. Treatments provided by out-of-network providers working at an in-network facility.

The witnesses emphasized that in those cases, the patient generally lacked full information and a real choice that would help them avoid such an outcome.

There was bipartisan consensus among Members that this is a problem Congress should address.  However, there is less consensus among Members about what steps Congress should take. In her testimony, Ilyse Schuman with the American Benefits Council noted that 60% of employer-sponsored insurance is offered to employees through self-funded group health plans, which are exempt from state regulations.  She urged Congress to address the issue of surprise medical billing under ERISA so that it’s not just a state-by-state remedy.

Christen Young with Brookings said that once working in a hospital, a specialist has little incentive to join a payer’s network.  She said that conditions need to be created that disincentivize providers from staying out-of-network.  She explained that currently, “Whereas the in-network payment rate across many similar specialties averages around 125 percent of the Medicare rate for the service, the available data suggest that the average in-network rate for anesthesiologists is roughly 350 percent the Medicare rate. For emergency medicine physicians it is roughly 300 percent the Medicare rate.”  She proposed two ways to address the situation:

  1. Establish an amount that these physicians will be paid when they deliver care out-of-network.  Under this option she said that “Policymakers should establish the out-of-network price for the relevant service, either directly or through arbitration; prohibit balance billing above this amount; and require the insurer treat this amount as in-network. The goal is not to establish the exactly “correct” commercial payment rate, but rather to establish conditions that diminish the attractiveness of the out-of-network option and lead these providers to go in-network or work with hospitals to get paid a normal rate.”
  2. Get providers out of the business of billing directly to patients and insurers and instead they would be reimbursed by the hospital or facility in which they practice.  She explained that, “Hospitals would negotiate with insurance companies for a rate that includes the services, and the hospitals would pay the anesthesiologists and other-facility based providers. An alternative version would require that facility-based providers establish contracts with all insurers that are in-network for the facility at which they practice.”

No future activity was announced at the Committee but Subcommittee Chair Wilson (D-FL) said she hoped the hearing was the start of many productive conversations.  Witness testimony and a webcast of the hearing is available here.


Congressional Hearings

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

  • April 9
    • Senate Finance Committee hearing on, “Drug Pricing in America: A Prescription for Change, Part III.”
    • House Ways and Means Committee markup of prescription drug pricing legislation (has not been noticed as of press time)
  • April 10
    • Senate Veterans Affairs Committee hearing on, “VA Mission Act: Implementing the Veterans Community Care Program”
    • House Energy and Commerce Committee Oversight and Investigations Subcommittee hearing on, “Priced Out of a Lifesaving Drug: Getting Answers on the Rising Cost of Insulin.”
  • April 11
    • Senate Appropriations Committee hearing on the NIH FY 2020 budget request


FDA Drug Compounding

On Wednesday, the Food and Drug Administration (FDA) announced the formation of the Center of Excellence for Compounding for Outsourcing Facilities.  Because compounded drugs are not evaluated for safety and efficacy, compounded drugs have been the subject of concern by some provider organizations.  As a result, FDA has taken initial steps to improve compounding quality. It will promote the use of good manufacturing practice (“GMP”) in non-certified facilities.  They also are encouraging greater self-assessments of facilities and identifying insanitary conditions.  Further, FDA is compiling a list of bulk drug substances which are eligible as compound drug precursors.  FDA will also be updating its previous draft guidance regarding hospital compounding.  The new guidance will encourage additional registration of hospitals as outsourcing facilities under 503B.  More information can be found here.

4-4-19 Senate Approps           House NIH hearing April 2

Katie Weyforth Vanlandingham

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