United States: Capitol Hill Healthcare Update - December 17, 2018

Below is this week's "Capitol Hill Healthcare Update," which is posted on Mondays when Congress is in session. Highlights this week include a lame duck update on year-end health bills and tax provisions; lawmakers reacting to a federal judge ruling the Affordable Care Act is unconstitutional; Sen. Hatch seeks to update Hatch-Waxman; health providers targeted by proposals to reduce the budget deficit; and more.

GOVERNMENT SHUTDOWN: CONGRESS WAITS ON TRUMP

Congressional Republicans are waiting for President Donald Trump to signal whether he would accept a short-term funding extension that would push back this week's risk of a partial government shutdown into January.

The House last week adjourned until Wednesday, leaving only two days before a Friday deadline when funding expires for about 25 percent of the government that employs 380,000 federal workers. Expiring funding would impact operations at the departments of Agriculture, Commerce, Justice, Homeland Security, Interior, State, Transportation, and Housing and Urban Development as well as several smaller agencies.

While most spending issues for those departments have been resolved, the White House and congressional Democrats are at loggerheads over Trump's demand for $5 billion for additional fencing along the Mexican border. Although Republicans control Congress until January, any budget bill needs 60 Senate votes, requiring Trump to win over some Democrats.

GOP appropriators on Capitol Hill are preparing two scenarios: a stopgap funding bill that would extend current spending into January and a bill that would keep homeland security funding flat while approving new spending for the other departments.

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.

GOVERNMENT SHUTDOWN: WHAT HAPPENS TO THE FDA?

If the government closes, the FDA won't accept regulatory submissions such as new drug and medical device applications that require user fees, and nearly half of the agency's workforce could be furloughed.

Neither the FDA nor HHS has issued guidelines for what happens in the event of a shutdown this week. But when the government was briefly closed in January during a separate budget battle, HHS contingency plans called for many functions funded by industry user fees to continue while other agency operations shuttered.

Although FDA staff were available for emergency facility inspections during that shutdown, routine inspections stopped. The agency said it lacked legal authority to accept user fees and that it couldn't accept regulatory submissions that required an industry fee.

FDA furloughed 42 percent of its workforce earlier this year, but the agency said it could have responded to emergencies such as drug shortages, and outbreaks related to foodborne illness and infectious diseases. FDA also said it could have managed high-risk recalls and pursued criminal enforcement and civil investigations.

The House earlier this year voted to increase FDA's fiscal 2019 budget by $308 million, and the Senate voted to boost FDA funding by $159 million. But final agency funding has been stalled amid Congress' larger budget standoff.

PHARMA'S PART D 'DOUGHNUT HOLE' FIX STALLS IN LAME DUCK

Pharmaceutical manufacturers' efforts to change mandated discounts they provide in the Medicare Part D prescription drug "doughnut hole" continue to stall amid opposition from Democrats and the White House.

Medicare covers most drug costs up to $3,750 annually, and beneficiaries are responsible for costs above that and up to $5,000, when catastrophic coverage beings. To help seniors pay for medicine in that coverage gap, manufacturers had been required to provide 50 percent discounts. But an erroneous Congressional Budget Office fiscal forecast led lawmakers in February to increase that mandated discount to 70 percent – costing the industry billions of dollars.

House Speaker Paul Ryan, R-Wis., has been leading the effort to lower the discount to 63 percent. This summer, more than 200 House lawmakers – including several dozen Democrats – called on congressional leaders to press for that change.

But House Democrat leaders have blocked it, and the White House is reluctant to support a plan that would save the industry billions of dollars annually at the same time the Trump administration is trying to advance policies to reduce drug prices.

CHANGES TO ACA TAXES UNLIKELY AMID DEMOCRAT OPPOSITION AS GOP DELAYS VOTE

House Republicans last week introduced but then postponed a vote on new legislation that would delay several Affordable Care Act tax provisions.

The measure would suspend the 2.3 percent excise tax on medical devices through 2024. It would delay the tax on high-cost health coverage until 2023, and suspend until 2022 an annual fee on health insurance providers. The legislation also includes separate tax changes to education and retirement savings while also including corrections to the 2017 tax reform law.

While Republicans may be able to pass the bill on a party-line vote in the House, it's doubtful they would pick up the nine Democrats needed to win passage in the Senate. House Democrats, who will take control of the chamber next month, want to delay the tax vote until they have more leverage to shape the legislation and extract policy concessions from Republicans.

SENATE FATE UNCERTAIN FOR BILL COORDINATING CARE FOR KIDS

The House last week overwhelmingly approved a catch-all Medicaid bill that would allow states to coordinate care for children with complex medical needs, but its future in the Senate is unclear.

As lawmakers enter the final days of the lame duck session and with a Friday deadline to approve funding to avert a partial government shutdown, the Medicaid legislation hangs in the balance. It could be added to a year-end spending bill if one is approved. A less clear pathway would be as a standalone bill in the Senate, where any senator could block it.

Introduced by retiring Rep. Joe Barton, R-Texas, the bill 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.

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

BUDGET FORECASTERS SAY CHANGES TO HEALTH PROGRAMS COULD SAVE BILLIONS

The Congressional Budget Office (CBO) last week catalogued policy changes that lawmakers could consider to reduce the budget deficit, including sharp reductions in federal health programs that would affect both providers and beneficiaries.

To help inform lawmakers, CBO periodically issues policy options to reduce the deficit, which currently stands at $779 billion. Entitlement programs like Social Security and Medicare are included along with proposed cuts to discretionary spending such as defense, education and transportation.

Most of CBO's proposed healthcare spending cuts and program changes would be politically explosive and would be unlikely to win congressional approval, including:

  • Reduce Washington's $375 billion annual commitment to Medicaid by establishing per-enrollee spending caps. Republicans tried to do this in 2017 as part of repealing the Affordable Care Act. But that effort split the party, was defeated in the Senate and likely contributed to the GOP's losses in the midterm elections last month.
  • Change Medicare beneficiary cost-sharing and Medigap rules, including creating a single annual deductible for Part A and Part B and capping enrollees' out-of-pocket expenses. Depending on the details, the government could save nearly $100 billion between 2022 and 2028.
  • Increase over five years to 35 percent the premiums for both Part B outpatient services and the Part D prescription drug benefit, reducing government spending by $389 billion between 2020 and 2028.
  • Increase the Medicare eligibility age from 65 to 67, saving $18 billion between 2023 and 2028.
  • Require pharmaceutical manufacturers to pay a rebate to the federal government for brand-name drugs sold to low-income enrollees in the Medicare Part D program, reducing taxpayer spending by $154 billion between 2021 and 2028.
  • Consolidate all mandatory federal spending for graduate medical education into a grant program for teaching hospitals, reducing spending by $34 billion between 2020 and 2028.

SENATE DEMOCRATS KEEP UP PRESSURE ON DRUG INDUSTRY

Four Democratic senators last week introduced legislation that would give the federal government tools to end "predatory price gouging on lifesaving drugs."

The legislation would require drug companies to submit "justifications" to HHS for price increases of more than 10 percent. If HHS found a price increase "in substantial excess of an amount that could be reasonably justified," the department could deem the manufacturer guilty of "price gouging."

Under the bill, HHS could force manufacturers to reimburse consumers, private payers and Medicare and Medicaid. It also could impose civil penalties up to three times the "excessive price" and refer the matter to the Justice Department.

The bill by Sen. Richard Blumenthal, D-Conn., was co-sponsored by Sens. Kamala Harris, D-Calif., Amy Klobuchar, D-Minn. and Jeff Merkley, D-Ore.

Blumenthal's legislation is just the latest congressional salvo aimed at the pharmaceutical industry. Sen. Tammy Baldwin, D-Wis., last week criticized a pharmaceutical company for "playing political games" by raising prices for 41 of its drugs, several months after the company said it would delay price increases.

Earlier this month, Sen. Bernie Sanders, I-Vt., said he wants to tie Medicare drug expenses to prices paid by consumers in countries where costs are fixed by government price controls. If pharmaceutical manufacturers refused to lower prices, the federal government could invalidate the drug's patent and approve an immediate generic version.

HATCH BILL WOULD BLOCK DUAL CHALLENGES TO DRUG PATENTS

Retiring Senate Finance Committee Chairman Orrin Hatch, R-Utah – co-author of the 1984 law that established the pathway for generic drug approval – introduced legislation last week that would require drug patent challengers to choose either the Hatch-Waxman framework or a separate Patent and Trademark Office (PTO) process.

Congress in 2012 overhauled patent law and created the PTO's inter partes review to crack down on so-called patent trolls. Hatch said generic drug and biosimiliars manufacturers have increasingly used IPR to circumvent the patent challenge process in Hatch-Waxman. Hedge funds with no interest in drug manufacturing also have filed IPR challenges, he said, hoping to profit from stock selloffs triggered by the IPR filings.

Hatch said his bill would restore the "careful balance" of ensuring a vibrant generic drug industry while ensuring innovator companies are incentivized to invest in research, development and clinical trials. Industry stakeholders, such as the Biotechnology Innovation Organization, praised the senator's bill.

The legislation was co-sponsored by Sen. Thom Tillis, R-N.C., and companion legislation was introduced in the House by Rep. Bill Flores, R-Texas. The bill is unlikely to win congressional approval in the lame duck session or gain favor next year, when Democrats will control the House.

LAWMAKERS PROMISE VOTES, HEARINGS IN WAKE OF LATEST ACA COURT RULING

The decision Friday by a federal judge in Texas to strike down the Affordable Care Act (ACA) as unconstitutional triggered pushback from Democrats, including two leaders who advocated congressional intervention.

Judge Reed O'Connor of the U.S. District Court for the Northern District of Texas ruled the law is invalid without the "individual mandate," which Congress effectively repealed in last year's tax reform law by eliminating the tax penalty for individuals who failed to purchase health insurance.

The ruling will be appealed, and it could take years to reach the Supreme Court, if it even gets that far. The ACA remains in effect pending that appeal.

Senate Democrat Leader Chuck Schumer, D-N.Y., said Congress should intervene in the case by passing new legislation. Incoming House Speaker Nancy Pelosi, D-Calif., called the ruling "absurd" and said when Democrats take control of the House in January they will "move swiftly to formally intervene in the appeals process."

Congressional Republicans – many of whom were criticized during the midterm elections for undermining the ACA's protections on pre-existing conditions – took a more measured response.

The ruling provides an "opportunity for truly bipartisan healthcare reform that protects those with pre-existing conditions, increases transparency and choice, and lowers costs," said House Energy and Commerce Committee Chairman Greg Walden, R-Ore.

Incoming Senate Finance Committee Chairman Chuck Grassley, R-Iowa, tweeted after the ruling that the ACA is "fatally flawed" and that his committee will hold hearings on the health law next year.

BIPARTISAN BILL WOULD AID COVERAGE OF ORAL ONCOLOGY MEDICINE

Insurance companies couldn't apply different cost-sharing requirements for oncology medicines that are administered orally or intravenously, according to bipartisan legislation introduced in the Senate last week.

Health plans' medical benefit typically covers traditional cancer medications administered intravenously, and patients face a moderate co-payment. But oral and self-administered medicines are usually covered under a plan's pharmacy benefit, which frequently requires higher out-of-pocket costs.

Patients prescribed oral oncology drugs can face hundreds or even thousands of dollars more in cost-sharing than patients receiving an IV cancer drug, according to the Leukemia & Lymphoma Society, which endorsed the Senate bill.

Introduced by Sen. Tina Smith, D-Minn., the bill would prevent insurance plans governed under federal laws from applying different cost-sharing to oral and self-administered cancer medicines. Forty-three states have enacted similar laws affecting state-regulated plans.

The federal so-called oral parity bill was co-sponsored by Sens. Jerry Moran, R-Kan., Chris Murphy, D-Conn., and Roger Wicker, R-Miss. Similar legislation was introduced last year in the House by Reps. Leonard Lance, R-N.J., and Brian Higgins, D-N.Y.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions