United States: Capitol Hill Healthcare Update - February 12, 2018


The White House this morning is releasing President Trump's fiscal 2019 budget blueprint, which will include funding requests for HHS, FDA, CMS and dozens of other healthcare-related federal agencies.

The White House says the budget will call for $17 billion for opioid-related spending next year, including for HHS' efforts to combat the epidemic by expanding access to prevention, treatment and recovery support services as well as support for mental health.

Trump's budget is only a request of Congress; it doesn't carry the force of law. Many Democrats on Capitol Hill – and even some Republicans – say most of the budget's provisions are unlikely to gain traction in Congress.


The two-year budget agreement that President Trump signed into law last week not only resolves a series of thorny spending issues that had led to two partial government shutdowns this year, but also includes a series of healthcare provisions affecting programs, providers and beneficiaries.

Major healthcare provisions of the agreement include the following:

  • Doctors' 2019 Medicare fee schedule increase will be reduced by half – from 0.5 percent to .025 percent – cutting payments by $105 million next year and by $1.85 billion over a decade.
  • Pharmaceutical manufacturers will be required to contribute more toward closing the Medicare Part D donut hole – 70 percent, up from the current 50 percent. Although that change would save the government $10 billion because Part D insurance plans' federal subsidies will decrease, the hit to the drug industry could be tens of billions of dollars more. Not every manufacturer has Part D exposure, but one company alone estimated the change could cost $6 billion, while others may have to restate earnings.
  • Manufacturers of generic biologic drugs will join branded biologics in being required to offer Medicare Part D donut hole discounts.
  • A CMS policy linking physicians' quality payment adjustments to Part B drug costs starting in 2019 was repealed.
  • Caps on how much Medicare reimburses for outpatient therapy were permanently repealed.
  • The Children's Health Insurance Program was renewed for an additional four years – for a total of 10 years – up from the six years Congress approved in January.
  • NIH receives an additional $2 billion.
  • Community health centers receive $7 billion.
  • Federal efforts to combat the opioid crisis receive $6 billion.
  • The budget stops Medicaid Disproportionate Share cuts to hospitals for fiscal 2018 and 2019.
  • Wealthier Medicare beneficiaries will see premiums increase by as much as 85 percent.
  • The agreement repeals the Medicare payment cap for therapy services, extends the Special Needs Plans in Medicare Advantage, and authorizes the home health rural add-on payment and the ground ambulance add-on payment.
  • The Affordable Care Act's Independent Payment Advisory Board (IPAB) was repealed. Even though it was never constituted, IPAB was long feared by providers because of its sweeping power to make reimbursement changes with limited ability by Congress to stop them.
  • The underlying budget agreement also includes top-line numbers for how much Congress will spend on the Pentagon and nondefense programs for the next two years. Congress has until March 23 to fill in the details on how each department, agency and program will be funded.


Even though Alex Azar was confirmed as HHS secretary only late last month and barely had time to contribute to President Trump's fiscal 2019 budget for his department, he will be on Capitol Hill this week defending the budget before three committees.

Azar will testify Wednesday before the House Ways and Means Committee, which has jurisdiction over CMS and Medicare Part A and Part B. He will testify Thursday before the Senate Finance Committee, which has broad legislative jurisdiction over healthcare regulatory and reimbursement policies.

The secretary will testify Thursday before the House Energy and Commerce Health Subcommittee, which has jurisdiction over FDA and Medicare Part B and Part D.


Eighteen House lawmakers are urging FDA to impose strict standards on third-party entities that service medical devices.

FDA currently regulates servicing activities performed by the original equipment manufacturer. But the agency doesn't similarly oversee third parties for quality, safety or regulatory controls. The most recent medical device user fee law, enacted last year, required FDA to issue a report on third-party servicing of medical technology.

The lawmakers, led by Reps. Ryan Costello, R-Pa., and Scott Peters, D-Calif., called on FDA to require that all servicing entities register with FDA, report adverse events and establish a quality management system.


Sen. John McCain, R-Ariz., is calling on the White House to get behind his bipartisan legislation that would require pharmaceutical manufacturers to justify price increases.

The legislation, which is co-sponsored by Sen. Tammy Baldwin, R-Wis., would trigger disclosure for drugs whose prices increase more than 10 percent in one year or 25 percent over three years. It also would require companies to release research, manufacturing and marketing expenses related to each drug before any price increase.

The senators sent Trump a letter last week calling on him to support their bill, which was introduced last spring but hasn't attracted support. Companion legislation introduced in the House by Rep. Jan Schakowsky, D-Ill., has eight co-sponsors.


Harkening back to 1994, when tobacco company executives testified before Congress, Sen. Bernie Sanders, I-Vt., said top executives of pharmaceutical companies that manufacture opioids should testify on Capitol Hill.

Sanders sent a letter to Senate HELP Committee Chairman Lamar Alexander, R-Tenn., last week, saying Congress should "summon the courage" and "bring the executives of the pharmaceutical industry before our committee."

Alexander's panel last year held a number of hearings on the opioid epidemic. Last week the committee heard about the crisis' impact on children and families.

Sanders wrote that the committee should determine whether the pharmaceutical industry's marketing practices were complicit in creating the opioid crisis.

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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