United States: Capitol Hill Healthcare Update - July 10, 2017

Senate Reconvenes but No Health Votes Expected This Week

The Senate reconvenes today following the Fourth of July recess, but senators are at least a week away – and perhaps even longer – from voting on legislation to replace the Affordable Care Act (ACA).

Familiar divisions continue to frustrate Republicans: how to deal with states that expanded their Medicaid programs (20 GOP senators represent states that did) and how to bring down costs for individual health plans while still covering pre-existing conditions. Majority Leader Mitch McConnell and other GOP leaders personally called rank-and-file senators during the recess, but it doesn't appear Republicans are closer to resolving thorny policy differences.

Rather than allowing lawmakers to return to the Capitol with renewed optimism for overturning the ACA, the holiday recess appeared to provoke only more intra-party division. Several Republicans announced last week that they opposed the draft legislation McConnell released in June, and at least three other senators refused to publicly back the bill or even its framework. And Sen. John McCain (R-Ariz.) pronounced the current healthcare bill "dead."

All that leaves McConnell in virtually the same place he was in June: facing a grim needle-threading exercise to bring enough moderates and conservatives together to muster 50 votes, allowing Vice President Mike Pence to cast the tiebreaking vote. Republicans hold 52 seats, and McConnell's home-state colleague, Sen. Rand Paul (R­Ky.), is considered likely to oppose any legislation – leaving McConnell with a wafer-thin margin for error.

Conservatives are talking up a proposal by Sen. Ted Cruz (R-Texas) that would allow insurers to offer plans that both meet and don't meet the ACA coverage requirements, including on pre-existing conditions. The idea is that plans free from ACA regulations and coverage mandates would be significantly less expensive, meeting conservatives' goal of driving down costs for insurance coverage.

But Cruz's plan lacks deep support among Senate Republicans, the majority of whom say it would effectively undermine the insurance marketplace as younger, healthier people buy the non-compliant plans, causing costs to mushroom for the ACA plans needed by older and sicker consumers.

During the recess, President Trump tweeted that if Congress couldn't pass its ACA overhaul, lawmakers should just repeal the ACA now and draft replacement language later. Not for the first time, the president's suggestion left many Republicans on Capitol Hill shaking their heads – the GOP lacks the votes in both the House and the Senate to immediately scrap the ACA without a plan to replace it.

Next steps for McConnell might become clearer after a Republican leadership meeting today and the regular Tuesday lunch attended by all GOP senators. Also, the Congressional Budget Office will release a detailed analysis of different proposals submitted last month by GOP leaders. That economic score is expected to be released as soon as the end of this week. But any delays in releasing the score would also push back the Senate parliamentarian's rulings on potentially non-germane provisions and likely push back votes even deeper into July.

After weeks of legislative stalemate, Republicans this month will be confronting the increasing possibility that they might not be able to agree among themselves to repeal the ACA – despite pledging for the last seven years that if given control of Congress and the White House they would do just that.

McConnell last week said failure to scrap the ACA would mean Republicans would have to work with Democrats to approve measures to stabilize the insurance marketplace and attract insurers back to states they've abandoned. McConnell's statement drew immediate criticism from conservative political groups, underscoring the political tightrope McConnell is walking during these next crucial weeks for Republicans before the start of the month-long August recess.

Timing on FDA User Fee Bill Unclear As Deadline Nears

House and Senate committees with jurisdiction over healthcare policy worked on reconciling differences between the two chambers' legislation to renew expiring FDA user fees, but it's not clear that Congress will act before the agency is forced to begin the process of furloughing thousands of employees.

House and Senate committees have approved a five-year renewal of user fees for pharmaceutical and medical device manufacturers, but neither chamber has voted on its bills. The bills also contain different policy positions, and congressional leaders are seeking to avoid a conference committee by harmonizing the legislation before it passes the House and Senate.

The House is expected to vote first – perhaps as soon as this week – but timing in the Senate is complicated both by procedural hurdles and the ongoing debate about legislation to replace the Affordable Care Act.

Current user fees expire September 30. Without congressional action by August 1, mandatory notices will be sent to FDA staff whose jobs are tied to user fee funding, warning of potential layoffs if Congress fails to renew the program. Lawmakers in both parties say they want to avoid triggering those notices.

Providers Call on Congress to Repeal IPAB

A coalition representing healthcare executives is calling on Congress to use the Affordable Care Act's own fast-track mechanism to repeal the Independent Payment Advisory Board.

Eliminating IPAB and its sweeping authority to change Medicare spending has long been a goal of providers and many lawmakers, both Republicans and Democrats. The Healthcare Leadership Council, comprising pharmaceutical, medical device, hospital and insurance executives, says Congress should act this month to repeal IPAB.

Under the ACA, Congress has until August 15 to repeal IPAB using special fast-track procedures – limiting debate and prohibiting a filibuster in the Senate. Repealing IPAB with traditional legislation would subject it to a Senate filibuster, which would require 60 votes to stop. (Republicans didn't include IPAB repeal language in their ACA overhaul bill because procedurally it doesn't qualify to be included in the budget reconciliation legislation GOP leaders are using to overturn the health law.)

IPAB has never been fully constituted; neither President Obama nor President Trump nominated members to the board. Even without a functioning board, under the law, if Medicare spending rises above a threshold level, the HHS secretary is required to advance commensurate Medicare spending cuts to Congress. Lawmakers can only block those recommendations with super-majority votes in the House and Senate.

Congressional aides last week said lawmakers were more likely to act on IPAB after July in part because they're confident bipartisan opposition to IPAB will allow leaders to secure the Senate votes needed to end a filibuster.

House to Vote on FDA Spending Bill This Week

The House Appropriations Committee this week is scheduled to vote on legislation that includes congressional spending for FDA to go along with the agency's revenue from industry user fees.

President Trump's fiscal 2018 budget had requested zeroing out government appropriations for FDA and instead boosting user fees by $1.3 billion to make up the difference. House and Senate leaders have rejected that effort, mostly because of the limited time to negotiate a new industry agreement before the September 30 expiration of the current user fee agreement.

Under the House bill, the FDA receives a total of $2.8 billion in discretionary funding, which equals current funding levels. Total funding for the FDA in the bill, including revenue from user fees, is $5.2 billion.

The bill also appropriates $60 million linked to the 21st Century Cures Act, a 2016 law to speed new drugs and devices to market. The legislation also includes language that allows the FDA to receive transfers from the National Institutes of Health for support of the FDA's Oncology Center of Excellence. The center, established as part of the National Cancer "Moonshot" Initiative, leverages the combined skills of regulatory scientists and reviewers with expertise in drugs, biologics and devices to help expedite the development of oncology-related medical products.

Congress isn't likely to approve an FDA spending bill before the start of the new fiscal year on October 1, necessitating passage of a stopgap budget carrying over spending levels from the current fiscal year.

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