United States: Capitol Hill Healthcare Update - February 24th, 2017

GOP still adrift on ACA repeal-replace plans

Meeting privately with Senate Republicans to discuss next steps on the ACA was among the first actions taken last week by the new Secretary of the U.S. Department of Health and Human Services Tom Price. But GOP senators left the meeting disappointed that President Trump's point man on healthcare didn't offer a detailed plan on how to either repeal or replace the law.  Also last week, on the other side of the Capitol, House committee leaders held a closed-door meeting with restless rank-and-file Republicans. Energy and Commerce Committee Chairman Greg Walden (R-Ore.) and Ways and Means Committee Chairman Kevin Brady (R-Texas) sketched an outline for replacing the ACA, offered a menu of policy options to replace it, and distributed a 19-page issue backgrounder and talking points for GOP lawmakers.

But underscoring Republicans' disunity over how to end a law they have singularly campaigned against for six years, several GOP lawmakers publicly dismissed the House outline to replace the ACA. Sen. Rand Paul (R-Ky.) called it "Obamacare lite." Sen. Bill Cassidy (R-La.), himself a physician, said the House effort could leave more people uninsured than under the existing law. A separate proposal floated by Brady during the meeting – allowing Americans who lack insurance to buy coverage with refundable tax credits – drew fire from other conservatives who oppose tax credits that exceed what taxpayers owe to the IRS.

Republican leaders' challenge is multi-dimensional: Work with an unpredictable White House to repeal the ACA and replace it with policies that can win majority support in Congress – and in some cases a super-majority in the Senate – all while avoiding the political pitfalls of taking away health coverage for more than 20 million Americans. One example of the policy and political problem facing GOP leaders is Medicaid. Some conservatives in Congress want to immediately dial back federal subsidies for states that expanded Medicaid. But those include 16 states led by Republican governors, most of whom have warned Congress that repealing coverage without a seamless transition to new coverage would burden millions of families and states' budgets.

House Speaker Paul Ryan (R-Wis.) said Republicans would introduce ACA repeal legislation later this month when Congress reconvenes after the Presidents Day recess. Key staff have been working for weeks compiling policy options, including negotiating with the Senate parliamentarian on what ACA replace language could qualify to be included in the filibuster-proof reconciliation bill. Staff also have been working with the Congressional Budget Office, which calculates how legislation impacts federal spending and deficits.

The next inflection point could be February 28, when Trump makes a primetime address to a joint session of Congress. Republicans don't know what Trump will say, but its clear Congress needs presidential leadership for lawmakers to coalesce around a policy and path forward.

Republicans plan to go it alone on ACA replace

After last year's surprising election results gave Republicans control of Washington, GOP leaders predicted that once they repealed the ACA, Democrats would partner with them to design replacement provisions. GOP leaders in particular were targeting the 10 Senate Democrats running for re-election next year in states that President Trump won. Those senators would likely be looking for opportunities to burnish their bipartisan credentials, and Republicans would need them to stop Senate filibusters.

However, last week, Senate Majority Leader Mitch McConnell (R-KY) acknowledged what's been long known: Republicans aren't counting on any Democratic cooperation for ACA replacement plans. McConnell, when asked by reporters, declined to say how Republicans intend now to attract the Democrats they need to meet the 60-vote threshold to advance legislation in the Senate.

Few bumps for Verma in confirmation hearing

Seema Verma, President Trump's nominee to lead CMS, emerged from her Senate Finance Committee hearing last week largely unscathed and poised for likely confirmation next month. Republicans praised the former healthcare consultant who oversaw Indiana's Medicaid expansion under the ACA. Democrats pressed her on GOP-driven changes to Medicare and Medicaid as well as her position on drug prices, and some Democrats said she failed to adequately address their questions.

Verma said she opposed transforming Medicare into a voucher program but did support giving seniors more choices while also seeking to bolster Medicare's sustainability. She demurred on questions about whether to allow Medicare to negotiate with pharmaceutical manufacturers over drug costs – a position advocated by Trump – or requiring drug companies to pay drug rebates to Medicare for so-called dual-eligibles.

Committee Chairman Orrin Hatch (R-Utah) asked about testing different payment models within Medicare. Verma said that while it's important to test new ideas, it's equally important that patients and providers aren't mandated to participate in what she called "experiments."

Senators reintroduce bill to coordinate kids' care

Bipartisan legislation reintroduced in the Senate last week aims to improve health outcomes by coordinating care under Medicaid for children with complex medical conditions. Led by Sens. Charles Grassley (R-Iowa) and Michael Bennet (D-Colo.), the legislation would allow states to participate in national children's hospital networks, effectively allowing kids living in one state to be treated by pediatric providers in other states. The bill wouldn't mandate that states participate but would allow them to opt-in to the networks, which could coordinate services among home, primary, ambulatory, acute and post-acute care providers. A version of the legislation was introduced in Congress last year and gained significant bipartisan support in both the House and Senate. Advocates this year hope Congress' focus on changes to Medicaid and reauthorization of the Children's Health Insurance Program could spur passage of the bill, known as the ACE Kids Act.

Senate bill would update FDA device inspections

Bipartisan legislation introduced in the Senate seeks to streamline FDA inspections of medical device manufacturers by creating a more transparent and predictable system. Introduced by Sens. Johnny Isakson (R-Ga.) and Michael Bennet (D-Colo.), the bill calls on the FDA to establish uniform processes and standards for inspecting domestic and foreign device facilities. The legislation won support from AdvaMed, the medical device industry trade group, which said the legislation would modernize the FDA's inspections process by applying a risk-based approach and allowing the agency to target limited resources on facilities that have the most potential to impact public health.

Bipartisan bill targets Part D transparency

New Senate legislation would prohibit Medicare Part D plans and pharmacy benefit managers from retroactively reducing payments on accurate reimbursement claims submitted by pharmacies. Introduced by Sens. Shelley Moore Capito (R-W.Va.) and Jon Tester (D-Mont.), the legislation aims to benefit community pharmacies by blocking direct and indirect remuneration fees charged by pharmacy benefit managers. Pharmacy benefit managers have come under criticism for increasing those fees, while they say the fees paid by pharmacists help to hold down costs for consumers. Companion legislation also was introduced in the House by Reps. Morgan Griffith (R-Va.) and Peter Welch (D-Vt.).

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