7.30.18 – 8.3.18 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: both chambers will be on recess next week. Unless activity warrants, we will send the next wrap up on August 17.
BUDGET AND APPROPRIATIONS
This week, we learned additional information about the outlook for two key health care spending bills: the Labor-HHS appropriations bill and the Defense appropriations bill. The two bills collectively encompass the lion's share of federal discretionary health spending in the federal budget. The HHS spending bill provides a record $39.1 billion for NIH, $3.7 billion for opioid abuse, and generally increases funding for most public health programs. The Defense bill provides $34.5 billion for Defense health programs, including $974 million for medical research. The Senate plans to proceed to a bill combining the two separate bills when it returns on August 13th.
By passing many separate spending bills, Congress is mitigating the threat of a potential shutdown. This is because President Trump has repeatedly claimed he will not sign another all-agency omnibus spending bill. As a result, Congress is working on passing individual spending bills or multi-bill "minibuses."
Though potential passage and enactment of the bill would ease tensions related to a potential government shutdown, both political parties worry coupling the two bills together could weaken their negotiating positions heading into the final months of the fiscal year. Republicans fear passing a Labor-HHS spending bill gives Democrats no reason to cooperate in further spending bills. Conversely, Democrats fear passing a Defense spending bill gives Republicans no reason to cooperate in further spending bills.
The successful appropriations process thus far is generally a product of new Senate Appropriations Chairman Richard Shelby (R-AL), who has tried to avoid loading his bills with controversial policy riders, and instead focus on dollar figures. This has made Senate consideration much smoother and more bipartisan. But this style has not been applauded by all. Conservatives, particularly members of the often cantankerous House Freedom Caucus, are urging Kevin McCarthy (R-CA) and Steve Scalise (R-LA), who are quietly battling to be Republican leader next year, to hold the line and keep policy riders which have broad support among Republican House members. With Freedom Caucus founder Rep. Jim Jordan (R-OH) now entering the race for Republican leader, potential Republicans leaders will fight to keep their conservative bona fides.
ADMINISTRATION
Short Term Health Plans
On Wednesday, the Administration released a final rule for “short-term” health insurance plans. The rule allows for the sale of these plans for an initial period of less than 12 months and, with extensions, up to 36 months in total. Previously, such plans could only cover a period of up to 3 months. These plans do not have to comply with the Affordable Care Act’s (ACA) requirements such as that health plans have to cover individuals with pre-existing conditions and the ten Essential Health Benefits (EHB) categories.
The Department of Health and Human Services (HHS) estimates that approximately 600,000 people will purchase a short term plan this year and the number of people in these plans may total 1.6 million by 2021. But, they estimate only 100,000 to 200,000 of those individuals would have otherwise been enrolled in an exchange plan in 2019.
Critics argue that these plans, combined with other actions taken by the Administration such as the expansion of association health plans which are also not required to comply with the ACA’s rules, will further undermine the stability of the exchange marketplaces because healthier individuals are more likely to enroll in these cheaper plans with less comprehensive benefits. America’s Health Insurance Plans (AHIP) stated, “We remain concerned that consumers who rely on short-term plans for an extended time period will face high medical bills when they need care that isn’t covered or exceed their coverage limits.”
Senate Democrats are planning to use the Congressional Review Act, which allows Congress to reverse federal regulations shortly after they are enacted, to force a vote on overturning the rule. Democrats used the same process, which requires them to pick up one or two Republican votes, to force a vote on overturning the Administration’s net neutrality rule. However, should the resolution pass the Senate, it would likely face long-odds for passage in the Republican-controlled House.
CMS Final Rules
The Centers for Medicare and Medicaid Services (CMS) released several final payment rules for FY 19 this week, including rules for:
- Inpatient rehabilitation facilities
- Skilled nursing facilities
- Inpatient psychiatric facilities
- Hospice benefit
- Inpatient prospective payment system and long-term care hospital prospective payment system (LTCH PPS)
Of note, the LTCH PPS final rule eliminates the LTCH 25% rule. In the fact sheet accompanying the release of the rule, CMS noted that to eliminate the 25% rule in a budget neutral manner they adopted a budget neutrality adjustment. In a statement, the American Hospital Association said they “commend CMS for revoking the long-term care hospital 25% Rule, a change long advocated for by the AHA, but remain opposed to reductions in payments to offset that change.”
| Katie Weyforth Vanlandingham
Van Scoyoc Associates 202-638-1950
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