United States: Capitol Hill Healthcare Update - March 2017

House Sets Thursday Vote on ACA Repeal

House Republicans are scheduled to vote Thursday night on legislation to repeal most of the Affordable Care Act (ACA) even as GOP leaders scramble to secure the final votes needed to pass the bill.

House leaders said publicly this weekend that they are confident the needed 216 lawmakers will vote for the bill, but leadership aides cautioned Monday that the votes aren't there yet and more changes to the underlying legislation are likely as the internal lobbying continues.

No Democrat will vote to overturn the ACA, so it's up to GOP leaders to muster support among rank-and-file Republicans. But the party has been split since last November's election awarded them unified control of Washington and presented a pathway to upend the health law most Republicans have campaigned against since 2010.

Moderate House Republicans are concerned about ending the Medicaid expansion, especially in states that have already extended that coverage – including in some states led by GOP governors. Conservatives want a quicker Medicaid phase down, and they also oppose the refundable tax credit to incentivize individuals to purchase coverage, saying it's effectively a new entitlement program.

So far in the House, it's conservatives who are prevailing as leaders make concessions to woo votes. President Donald Trump, in a meeting last week with a group of conservative lawmakers, said the House bill would be changed to allow states to impose work requirements for Medicaid beneficiaries and allow states to choose block grants instead of the per-capita payment structure that's currently in the bill.

Those changes, which Trump touted in an Oval Office meeting, were enough to persuade several conservatives to publicly back the bill. But other conservatives, including members of the House Freedom Caucus, remain either opposed or undecided.

That caucus includes about 30 conservatives, more than enough to sink the bill if the group votes as a bloc. The Freedom Caucus is scheduled to vote tonight on the group's position on the bill. Under the caucus' rules, if 80 percent of the group votes to support or oppose a bill, it becomes binding and the caucus votes as a bloc.

But if the vote is below that 80 percent threshold, caucus members would become free agents and could vote however they chose – giving GOP leaders a fresh opportunity to seek their support.

But efforts to gain conservative votes in the House only complicate passage in the Senate, where leaders face opposition from conservatives but also from a larger group of moderate senators concerned about Medicaid changes.

Even though House GOP leaders don't yet have the votes to approve the bill, it's not uncommon to schedule votes on controversial bills even without knowing whether they would pass. Scheduling the vote forces undecided lawmakers into final negotiating positions – and ultimately forces them to make a choice.

The timing of the vote – likely Thursday night – is a function of House procedure, politics and also planning. Thursday is the seventh anniversary of President Barack Obama's signing the ACA into law.

Thursday also is the last scheduled voting day in the House this week. A nighttime vote, after most of the last flights out of Washington have already gone, effectively prevents lawmakers from voting on the bill and then heading to the airport. Leaders want rank-and-file members to remain in the chamber in case they need to extend the time for voting to allow for last-minute arm twisting.

House to Vote On 'Phase III' Health Bills

The House this week will consider legislation that would allow small businesses to pool together to offer insurance coverage and a bill that would remove antitrust protection for insurers.

The bills are part of Republicans' three-phase plan to replace the ACA. Because of Senate rules, these bills can't be included in ACA repeal legislation the House is scheduled to consider Thursday.

That means policy changes like the association health plans or allowing insurers to sell policies across state lines can be filibustered in the Senate and Republicans will need Democrats' support to enact them.

Other elements of the three-phase plan include an early April hearing by the House Energy and Commerce Committee on legislation allowing insurers to sell plans nationally as well as House votes this month on medical malpractice reform and on creating a self-insurance catastrophic-loss backstop.

Trump's HHS Budget Faces Bipartisan Opposition on Capitol Hill

Key lawmakers in both parties criticized President Trump's fiscal 2018 budget proposal for its deep spending cuts in many health and medical research programs.

Trump's first budget would reduce HHS spending by 18 percent, or about $15 billion from the current fiscal 2017 spending level. For NIH, Trump wants to reduce funding by $5.8 billion, even as Congress in December added $2 billion in new NIH funding.

The White House also wants to realign spending for FDA. About 60 percent of the agency's budget is appropriated annually by Congress, and the balance is funded by industry user fees. Trump wants to boost the industry's obligation and reduce what Congress approves.

Rep. Fred Upton (R-Mich.), whose "21st Century Cures" medical innovation bill last year boosted NIH funding, criticized the president's budget. Key House and Senate leaders on health spending – Rep. Tom Cole (R-Okla.) and Sen. Roy Blunt (R-Mo.) – also expressed concern about the proposed cuts. One lawmaker – Rep. Leonard Lance (R-N.J.) – called the proposed cuts "penny wise but pound foolish."

Congressional Democrats in both the House and Senate also criticized Trump's spending plan.

Trump's budget request is just that – a request. Congress isn't obligated to enact the White House's plan and in fact rarely does in total. A president's budget can directionally influence congressional spending, but in the case of NIH there's a bloc of bipartisan support for maintaining current funding levels.

User Fee Hearings This Week As Industry Opposes Trump Plan

House and Senate committees will hold hearings this week on the FDA user fee agreements, even as some industry stakeholders are calling for no changes to the negotiated terms.

The Senate HELP Committee on Tuesday will consider the user fee agreements for branded and generic pharmaceuticals, biologics and medical devices. FDA witnesses include Dr. Janet Woodcock, director of the branded pharmaceutical center; Dr. Peter Marks, director of the biologics center; and Dr. Jeff Shuren, director of the medical device center.

A hearing by the House Energy and Commerce Committee on Wednesday will focus on the branded pharmaceutical agreement. Witnesses include Woodcock, and officials of PhRMA, the Biotechnology Innovative Organization and Friends of Cancer Research.

Lawmakers are likely to use the hearings to speak out on President Trump's proposal to boost industry user fees and reduce congressionally appropriated funding. Several industry stakeholders, including AdvaMed and BIO, have issued statements saying they oppose Trump's position and instead want to preserve the already negotiated deals.

While policy changes can be added to the user fee agreements by Congress, it's unlikely that lawmakers will ultimately toss the agreements and seek to recalculate the industry fees.

Current user fee laws expire Sept. 30.

Gottlieb Hearings Not Yet Scheduled

With Congress scheduled to be on a more than two-week recess next month for Easter and Passover, the Senate HELP Committee's confirmation hearing and vote on Dr. Scott Gottlieb to lead FDA could slip into May.

President Trump last week nominated Gottlieb for FDA commissioner. Gottlieb is a former FDA deputy commissioner under President George W. Bush, and he also held a series of senior staff positions at the agency.

In addition to the planned congressional recess, the Senate calendar will be crowded in April and May, including a vote on Judge Neil Gorsuch's confirmation to the Supreme Court.

Senate Confirms Verma For CMS

President Trump's nominee to head CMS won confirmation in the Senate on a largely party-line vote.

Seema Verma won approval 55-42 to lead the agency that oversees $1 trillion in Medicare and Medicaid spending.

A former healthcare consultant, Verma has extensive experience with Medicaid – including expanding Indiana's program when Vice President Pence was that state's governor – but has less experience with Medicare.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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