United States: Capitol Hill Healthcare Update - December 2018

Below is this week's "Capitol Hill Healthcare Update," which is posted on Mondays when Congress is in session. Highlights this week: Lawmakers renew efforts to avoid a partial government shutdown, which would affect FDA; key senators introduce legislation on Medicaid prescription drug rebates; the House votes this week on allowing states to coordinate care for children with complex medical conditions; and more.


Congress reconvenes this week with a fresh deadline to pass spending bills but seemingly is no closer to resolving thorny budget issues that threaten a partial government shutdown and have stalled key healthcare initiatives.

President Donald Trump last week signed a stopgap budget bill keeping the government open until Dec. 21. While most of the government's budget was approved earlier this year, spending will run out in two weeks for operations at the departments of Agriculture, Commerce, Justice, Homeland Security, Interior, State, Transportation, and Housing and Urban Development as well as several smaller agencies.

Most federal healthcare operations – including at HHS, CMS and other agencies – were approved earlier and would be unaffected by a shutdown. But the FDA, which is funded through the agriculture spending bill that has not yet passed Congress, could see nonessential functions stop in a shutdown.

Caught up in the budget brinksmanship are other healthcare initiatives, including pushing back the Affordable Care Act's medical device tax and efforts to lower pharmaceutical manufacturers' mandated discounts for brand-name drugs in the Medicare Part D doughnut hole.

House Republicans this week may try to vote on a package of ACA tax cuts, including the medical device tax, the insurers' tax and the tax on high-cost "Cadillac" health plans.

The healthcare provisions aren't driving the budget divisions. Instead, it's disagreement over funding levels for security at the U.S.-Mexican border. Trump is scheduled to meet with Democratic congressional leaders Tuesday in hopes of breaking the logjam.


Sens. Ron Wyden, D-Ore., and Chuck Grassley, R-Iowa, introduced legislation last week that would permit HHS to fine pharmaceutical manufacturers that overcharge Medicaid by misclassifying their prescription drugs as generics.

Mylan last year reached a $465 million settlement with the Justice Department to resolve claims the company overcharged for its EpiPen emergency allergy treatment. By knowingly misclassifying EpiPen as a generic drug in the Medicaid Drug Rebate Program, Mylan paid lower rebates to the government.

A HHS inspector general report last year found the overwhelming majority of the 30,000 drugs in the Medicaid rebate program were correctly classified. But as many as 3 percent – or 885 drugs – may have been misclassified, and Medicaid was overcharged $1.3 billion for just 10 of those drugs in 2016, the report found.

The senators' bill would allow HHS to reclassify drugs, impose penalties and recover incorrect rebate payments. The Wyden-Grassley bill is scheduled to be considered in the House this week as part of a separate Medicaid measure.


The House this week is scheduled to vote on a catch-all Medicaid bill that would allow states to coordinate care for children with complex medical needs.

The legislation, introduced by retiring Rep. Joe Barton, R-Texas, includes an updated version of Barton's ACE Kids legislation, which would allow states to use an existing Health Homes model to coordinate care for children with medically complex conditions.

Barton's original bill, which has 134 House co-sponsors, won approval in September in the Energy and Commerce Committee. After the bill's likely House approval this week, Barton hopes it can be added to year-end spending legislation that would keep the government open.

Including the language in the spending bill would be key to its winning congressional approval. That's because it's unlikely stand-alone Medicaid legislation could be approved in the Senate, where a handful of conservative lawmakers would object to its quick consideration.

The underlying House bill also would boost funding for state Medicaid programs to help transition individuals with chronic conditions and disabilities out of institutional care, include a three-month extension of spousal impoverishment rules that protect elderly couples from having to bear the full expenses of nursing home care, and exclude complex rehabilitative manual wheelchairs from Medicare competitive bidding.

To help pay for these programs, the bill includes a version of legislation introduced last week by Sens. Ron Wyden, D-Ore., and Chuck Grassley, R-Iowa, that would permit HHS to fine pharmaceutical manufacturers that overcharge Medicaid, as referenced above.


A bipartisan group of lawmakers last week distributed draft legislation that would give the FDA authority to regulate laboratory-developed tests.

The draft was released by Reps. Larry Bucshon, R-Ind., and Diana DeGette, D-Colo., retiring Senate Finance Committee Chairman Orrin Hatch, R-Utah, and Sen. Michael Bennet, D-Colo.

Current law gives the CMS authority over lab-developed tests, but the draft bill would charge the FDA with approval authority of the diagnostic tests and lab development tests – a move FDA Commissioner Scott Gottlieb called for last March.

The draft bill won't be finalized before Congress finishes its term this month. Instead, Bucshon said he hopes that after input from stakeholders, final legislation can be introduced next year.


The House this week is expected to give final congressional approval to bipartisan legislation that seeks to reduce infant deaths and improve infant health by renewing federal research and education programs aimed at preventing preterm births.

The legislation won Senate approval this summer. It was introduced by Senate HELP Committee Chairman Lamar Alexander, R-Tenn., and Sen. Michael Bennet, D-Colo. The House version of the bill was introduced by Reps. Leonard Lance, R-N.J., and Anna Eshoo, D-Calif.

It would reauthorize CDC-backed research and programs on preterm birth, including improved tracking of national data, and reauthorize federal programs that promote healthy pregnancies and prevent preterm births.

Separately, the House also is expected to vote on legislation that would create state grants to eliminate disparities in maternal health and legislation to reauthorize a state rural health grant program. The House also is scheduled to give final congressional approval to legislation that would reauthorize a sickle cell disease prevention and treatment demonstration program.


A House subcommittee this week will hold a hearing on the status of changes Congress made in 2016 to the adoption of electronic health records.

The Energy and Commerce Health Subcommittee hearing Tuesday will include testimony from Dr. Donald Rucker, HHS' national coordinator for health information technology.

The hearing is part of the panel's examination of implementation of the 21st Century Cures Act, which was signed into law in 2016. It included changes to a 2009 law that encourages the adoption and use of electronic health records by giving providers financial incentives for demonstrating meaningful use of electronic records and penalties for not using certified technology.

The Cures law sought to ease the burden on providers of implementation of electronic health records, including by reducing paperwork and expediting interoperability among technologies.

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