United States: Capitol Hill Healthcare Update May 23, 2017

CBO Score of House Health Bill Set for This Week

Congress's official budget scorekeepers this week will release analysis of the House-approved bill repealing most of the Affordable Care Act (ACA), and that data will inform Senate Republicans on a path for passing their version of the legislation.

The Congressional Budget Office (CBO) and the Joint Tax Committee on Wednesday are scheduled to release analysis – known on Capitol Hill as a "score" – of the House bill, including how much the bill reduces government spending and revised projections of how many Americans could lose insurance coverage.

Under Senate budget rules, that chamber's bill must reduce spending by at least as much as the House's bill. That may create complications for senators who want to provide more generous tax subsidies for people who buy insurance or if the lawmakers want to keep the ACA's Medicaid expansion. Senate Republicans could get around increases in spending by phasing in changes or delaying the repeal of some of the ACA provider taxes and fees – though each of those decisions would provoke other political complications.

Senators met several times last week to discuss next steps on Medicaid, as well as helping insurers offer coverage for pre-existing conditions and creating a short-term fix to stabilize the individual insurance markets. But once they have the CBO score, the Senate GOP's pathway for what can be accomplished politically will become clearer.

Finance Committee Chairman Orrin Hatch (R-Utah) earlier this month wrote to trade associations representing patients, providers and employers seeking feedback on provider taxes, Medicaid, tax credits to purchase healthcare coverage, and funding to stabilize states' individual markets. Hatch asked for responses by Tuesday.

Several Senate Democrats last week said they have had discussions with Republicans about policies they could support in ACA legislation. Despite those attempts at bipartisanship, the healthcare overhaul is likely to remain an all-GOP exercise under the budget reconciliation process, which requires only a simple majority to win Senate approval.

While Democrats would vote for legislation that fixes some of the ACA's shortfalls, they will not support repealing the healthcare law, even in part. Moreover, giving Democrats an opportunity to shape the healthcare bill would run counter to the Senate GOP's political interests, even with President Trump's current political troubles. That's because 10 Democrats face re-election in 2018 in states Trump won, and GOP leaders don't want to give those Democrats bipartisan bona fides ahead of their races.

Some conservative senators – including Sens. Ted Cruz (R-Texas) and Rand Paul (R-Ky.) – said last week that the CBO score and budget reconciliation rules are effectively a legislative straitjacket on Congress. Both senators called for changing Senate rules to allow simple majorities to approve legislation and for overriding rulings from the Senate parliamentarian on what qualifies under a budget reconciliation bill – but GOP leaders said they have no intention of rewriting the chamber's rules.

House Re-Vote on Health Bill? Possible but Not Likely

Some Republican lawmakers were surprised to learn last week that House leaders had not formally transmitted their healthcare bill to the Senate even though the House approved it last month.

The reason for the delay has to do with the CBO's official score of the bill, which is due to be released Wednesday. Under budget rules, the House-approved bill must reduce government spending by at least $2 billion and also not increase the deficit after 10 years. If the CBO determines otherwise, Republicans couldn't use special budget procedures to pass their healthcare bill in the Senate with only 51 votes, rather than the usual 60 needed to approve legislation.

GOP leaders – including House Speaker Paul Ryan – said they are confident their bill will easily meet that $2 billion threshold. An earlier version was scored as saving more than $150 billion, and while GOP leaders did make some changes – like adding $8 billion to subsidize insurers that cover individuals with pre-existing conditions – they say their bill will net out as reducing government spending.

Others aren't so sure, saying the CBO could interpret the last-minute amendment to give states waivers from certain ACA rules as encouraging more people to buy insurance on the individual market and therefore boosting federal outlays. In a worst-case scenario for House Republicans – one that would come with significant political embarrassment – the GOP could act quickly to amend their bill and pass a new version, sending that legislation to the Senate.

Gottlieb to Testify Before House Panel

Dr. Scott Gottlieb will make his first post-confirmation appearance on Capitol Hill when he testifies Thursday before the House appropriations subcommittee that funds the Food and Drug Administration (FDA) budget.

Gottlieb will likely have to defend President Trump's fiscal 2018 budget request, which included a last-minute attempt to derail the user fee reauthorization by requiring drug and medical device companies to pay more than what was agreed to with FDA. He may need to defend proposed Trump budget cuts for the National Institutes of Health and other federal health programs.

Subcommittee Democrats also are likely to use the forum to question Gottlieb on a range of issues related to drug pricing, including importation.

House Panel Set to Approve FDA User Fee Bill

The House Energy and Commerce Committee this week is scheduled to vote on renewing user fees that drug and device companies pay in order to support FDA product reviews.

Last week the panel's health subcommittee endorsed the bill on a voice vote while also approving four amendments, including allowing hearing aids to be sold over the counter, improving access to generic drugs, protecting the U.S. supply chain from counterfeit and diverted drugs, and creating a risk-based process for FDA inspections of medical device facilities.

The Senate HELP Committee earlier this month approved that chamber's version of the user fee bill. Current user fees expire September 30, but congressional leaders want to approve a new five-year agreement in July to avoid disruptions at the FDA, including mandatory layoff notices sent to agency employees whose jobs are tied to user fees.

GOP Nixes Administration Effort to Overturn User Fees

Key House and Senate Republicans last week quickly rejected a last-minute push by the Trump administration to re-write the FDA user fee legislation to increase industry's payments.

The Secretary of the U.S. Department of Health and Human Services Tom Price wrote to congressional leaders last week saying drug and device companies should pay the full cost of product reviews – an idea first floated in President Trump's initial fiscal 2018 budget proposal.

As the House Energy and Commerce Health Subcommittee prepared to vote last week on the user fee agreement, the full committee chairman, Rep. Greg Walden (R-Ore.), ignored Price's pleas. Senate HELP Committee Chairman Lamar Alexander (R-Tenn.), in a one-page letter to Price, wrote that it was "way too late" to upend the delicate agreement struck between the FDA and manufacturers.

Democrats, GOP Urge Trump on Drug Prices

The Congressional Progressive Caucus last week called on President Trump to leverage reauthorization of FDA user fees to address the "skyrocketing costs of prescription drugs."

Rep. Jan Schakowsky (D-Ill.), in a letter to President Trump signed by 35 other liberal House Democrats, called for a series of proposals to address prescription drug costs, including requiring Medicare to negotiate drug prices and requiring drug manufacturers to offer Medicaid-like rebates to Medicare beneficiaries. Each of the group's proposals is a nonstarter with branded drug companies and many congressional Republicans.

Separately, a bipartisan group of senators called on Office of Management and Budget Director Mick Mulvaney to encourage executive action to reduce drug costs. Those senators – Sens. Amy Klobuchar (D-Minn.), John McCain (R-Ariz.) and Chuck Grassley (R-Iowa) – have worked together previously on bipartisan drug-pricing legislation, including bills to allow for importation of medications from Canada.

Mulvaney earlier this month suggested the government press drug companies to provide discounts within Medicare Part D similar to those offered to Medicaid.

Bills Would OK Third-Party Certifications for Devices

Bipartisan legislation introduced in the House and Senate would create a voluntary program under which medical device manufacturers could have their quality systems certified by an FDA-authorized third party, allowing the companies to self-certify certain low-risk changes to currently marketed devices.

Introduced by Sens. Cory Gardner (R-Colo.) and Joe Donnelly (D-Ind.), the Senate bill aims to create a two-year voluntary program under which manufacturers could self-certify certain low-risk changes to currently marketed medical devices approved under the so-called 510(k) pathway. Similar legislation was introduced in the House by Reps. Richard Hudson (R-N.C.) and Larry Bucshon (R-Ind.).

The senators said the change would allow the FDA to target agency resources toward more complex medical technologies and those that require more stringent reviews. Donnelly said the bill would "cut through the red tape at the FDA and safely speed up the approval process."

The legislation won an endorsement from the industry trade association AdvaMed. Some consumer groups object to the bill, saying it weakens FDA by outsourcing safety reviews. Similar language was included in a version of the 21st Century Cures medical innovation legislation that won House approval in 2015 but was dropped from that bill before it became law last year.

Bill Would Streamline FDA Approval for 510(k) Devices

New bipartisan House legislation would allow the FDA to grant 510(k) clearances for moderate-risk medical devices based on compliance with published criteria developed by the agency.

Introduced by Reps. Mimi Walters (R-Calif.) and Ami Bera (D-Calif.), the bill seeks to simplify what the lawmakers say are repetitive and burdensome FDA review requirements for certain low- to moderate-risk medical devices. Even when seeking modifications to certain existing devices, manufacturers must demonstrate to the FDA that their product complies with special controls and is substantially equivalent to the already marketed device.

Walters and Bera say that creates a burden on technology companies to provide duplicate information that also doesn't provide the FDA with meaningful data. Their bill would allow the FDA to identify Class II device types for which sponsors would have the option to seek 510(k) clearance by demonstrating compliance with the FDA's published criteria for that device type, rather than comparing the device to a predicate device already on the market.

Senators Press CMS on Opioid Prescribing Data

Six senators are asking the Centers for Medicare & Medicaid (CMS) for detailed information on how the agency tracks Medicare and Medicaid reimbursement data for opioid prescriptions in an effort to combat abuse of painkillers.

In a letter last week to CMS Administrator Seema Verma, the senators are asking if CMS is analyzing its own data to help curb what they wrote was an "overdose epidemic" with 91 Americans dying each day. The letter was written by Sens. Richard Durbin (D-Ill.), Sherrod Brown (D-Ohio), Angus King (I-Maine), Joe Manchin (D-W.V.), Amy Klobuchar (D-Minn.) and Tammy Duckworth (D-Wis.).

The senators wrote that Medicaid patients are more likely to receive treatment for opioid abuse and are more likely to overdose. They want to know if CMS is adequately using its own Medicare Part D Opioid Prescribing Mapping Tool to identify overprescribing trends. The tool aggregates Part D opioid claims based on geography, prescriber specialty and overall volume.

The letter asked Verma to respond to a series of questions, including whether CMS can establish a similar tracking tool for Medicaid reimbursements.

Senate Panel Approves Package of Chronic Care Measures

The Senate Finance Committee last week unanimously approved legislation expanding Medicare's coverage of telehealth services.

The telehealth provision was part of a package of changes that would overhaul Medicare's payment policies for chronic conditions or for those who have suffered strokes. The CHRONIC Care Act, which passed 26-0, would expand a current program for house calls for the elderly, allow for reimbursement of home dialysis treatment, allow accountable care organizations to offer telemedicine services, and allow Medicare and Medicare Advantage plans to reimburse for telemedicine services.

Led by Chairman Orrin Hatch (R-Utah) and the panel's top Democrat, Sen. Ron Wyden (D-Ore.), the committee has been examining how Medicare cares for Americans with chronic conditions and how it reimburses healthcare providers.

It's not clear when the legislation might be scheduled for a vote by the full Senate. House Budget Committee Chairwoman Diane Black (R-Tenn.) is likely to introduce her own chronic care bill in the House, but it's not clear if it will differ from the Senate legislation.

Trump Budget to Be Released This Week

The White House on Tuesday is scheduled to release its fiscal 2018 budget, and lawmakers say they're anticipating steep cuts in entitlement healthcare programs as President Trump seeks to balance the budget in 10 years.

Trump has said Medicare is off-limits to changes, but lawmakers say they're anticipating cuts to income-linked healthcare programs, including the Medicaid spending reductions that are part of the American Health Care Act and the Children's Health Insurance Program, which is facing a September 30 deadline for reauthorization.

Congress isn't obligated to enact Trump's budget; in fact, White House budgets are more about establishing presidential priorities. Still, the budget could set the baseline for spending discussions on Capitol Hill in the months to come before the start of fiscal 2018 on October 1.

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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