Health Law Update

Home | Health Law Update

<img class="alignright size-medium wp-image-4777" src="https://healthlawupdate.bakerhostetlerblogs.com/wp-content/uploads/sites/19/2017/03/hlu-photo-300x200.jpg" alt="" width="300" height="200" />House Plans CHIP Vote This Week but Final Action Not Likely Until December

House Majority Leader Kevin McCarthy (R-Calif.) said lawmakers will vote this week on legislation to renew federal funding for the Children’s Health Insurance Program (CHIP), even amid unresolved partisan disagreements over how to pay for it.

Republicans and Democrats on the House Energy and Commerce Committee have been trying to hash out competing offsets to pay for extending for five years the insurance program that covers nearly nine million children of low-income families. The bill also includes $1 billion to bolster Puerto Rico’s Medicaid program as part of general hurricane relief for the island.

Republicans on the committee want to pay for the CHIP extension by tapping money from the Affordable Care Act’s (ACA’s) prevention fund and increasing Medicare premiums for wealthy seniors. Democrats object to those pay-fors, and the two parties have not been able to develop a bipartisan solution.

The Senate Finance Committee approved its version of CHIP renewal earlier this month, but did not include any offsets. Even if the House acts this week, a final agreement is not likely until December, when Congress faces a series of year-end deadlines.

ACA Cost-Sharing Fix Remains Stalled as New Plans Emerge

Bipartisan efforts in the Senate to bolster the ACA’s individual markets remained stalled as the White House last week continued to send mixed signals on whether it would support the plan.

Meanwhile, the leaders of two key committees last week announced a <a href="https://www.finance.senate.gov/chairmans-news/healthcare-leaders-propose-bicameral-agreement-to-provide-certainty-and-relief-from-failures-of-obamacare">proposal</a> that would guarantee the ACA’s cost-sharing payments to insurers through 2019 as a tool to keep premiums affordable for low-income consumers. But the plan from Senate Finance Committee Chairman Orrin Hatch (R-Utah) and House Ways and Means Committee Chairman Kevin Brady (R-Texas) would also end the ACA’s individual and employer mandates – a likely non-starter for Democrats in the Senate, where any plan would require 60 votes for approval.

Senate HELP Committee Chairman Lamar Alexander (R-Tenn.) and Sen. Patty Murray (D-Wash.), the top Democrat on the panel, had reached a consensus earlier this month on continued cost-sharing payments in return for states’ gaining enhanced flexibility with some of the ACA’s coverage mandates. That <a href="https://www.help.senate.gov/imo/media/doc/THE%20BIPARTISAN%20HEALTH%20CARE%20STABILIZATION%20ACT%20OF%202017-%20TEXT.pdf">plan</a> picked up the support of at least 12 Republicans and all 48 Democrats, meaning the bill had enough votes to overcome a filibuster and win Senate approval.

But Hatch and other senior Senate Republicans were cool to the Alexander-Murray plan, and House Speaker Paul Ryan (R-Wis.) came out against it. The White House originally prodded Alexander to make the deal with Murray, but then tried to expand the agreement to include the sale of insurance policies across state lines and expanding the use of health savings accounts and flexible spending accounts.

Democrats Introduce Bills Targeting Drug Prices

House and Senate Democrats last week introduced <a href="https://www.sanders.senate.gov/download/medicare-drug-price-negotiation-act?id=193B96BF-6552-4E6F-8C40-045E14111B67&amp;download=1&amp;inline=file">legislation</a> that would require the U.S. Department of Health and Human Services (HHS) to negotiate with pharmaceutical manufacturers over prescription drug prices within the Medicare Part D program. In addition to overturning that “non-interference” statute, the lawmakers’ bills would extend rebates currently offered in the Medicaid program to Medicare. The Senate bill was introduced by Sen. Bernie Sanders (I-Vt.), and the House bill was backed by Reps. Elijah Cummings (D-Md.), Lloyd Doggett (D-Texas) and Peter Welch (D-Vt.).

Doggett separately introduced <a href="https://www.congress.gov/115/bills/hr4117/BILLS-115hr4117ih.pdf">legislation</a> to block “pay-for-delay” agreements between brand and generic drug companies. A second Doggett <a href="https://www.congress.gov/115/bills/hr4116/BILLS-115hr4116ih.pdf">bill</a> would require manufacturers to disclose a drug’s research and development, manufacturing, and marketing costs as well as any “federal investments.”

None of the bills are expected to gain traction in the Republican-controlled Congress. At a Capitol Hill news conference announcing their bills, the Democratic lawmakers criticized President Trump for not acting to reduce drug prices despite repeatedly saying that manufacturers were “getting away with murder.”

Cruz Introduces Bill Allowing for Reciprocal Drug, Device Approval

Sen. Ted Cruz (R-Texas) last week introduced <a href="https://www.cruz.senate.gov/files/documents/Bills/20171026_Result_Act.pdf">legislation</a> that would allow for reciprocal U.S. approval of prescription drugs, biologics and medical devices approved by regulators in “developed and trustworthy countries.”

Cruz said the effort to sidestep the U.S. Food and Drug Administration (FDA) would increase access to potentially life-saving drugs and therapies. Under the bill, manufacturers could apply for FDA reciprocal approval if the therapy had been approved in Australia, Canada, Israel, Japan, New Zealand, Switzerland, South Africa, or any nation in the European Union or the European Economic Area.

The FDA could still reject the application if it determined the drugs or devices were not safe or effective. The agency would have 30 days under Cruz’s bill to act on a reciprocal application.

Cruz introduced similar legislation in 2015, but it gained little traction in the Senate.

ACA Taxes Not Expected to Be in GOP Tax Overhaul

House Republicans on Wednesday are expected to introduce plans to overhaul corporate and individual taxes, but repealing the ACA provider taxes will not be among them.

House Ways and Means Committee Chairman Kevin Brady has said his legislation won’t roll back the ACA taxes on pharmaceutical and medical device manufacturers or insurers. One of those ACA taxes – a 2.3 percent tax on the sales of medical technology – was suspended for two years but is scheduled to come back online January 1 unless Congress blocks it.

Last week, 179 House lawmakers wrote to Speaker Paul Ryan urging that he schedule a vote on stand-alone legislation to repeal the device tax. That <a href="https://banks.house.gov/media/press-releases/banks-bipartisan-group-urge-action-medical-device-tax">letter</a>, led by Reps. Erik Paulsen (R-Minn.) and Ron Kind (D-Wis.), included support from 43 Democrats. Ending the device tax also gained additional bipartisan support last week in the Senate, where Sen. Richard Blumenthal (D-Conn.) became the eighth Democrat in that chamber to back repeal legislation.

Sen. Heidi Heitkamp (D-N.D.) last week introduced <a href="https://www.congress.gov/115/bills/s1978/BILLS-115s1978is.pdf">legislation</a> to delay the ACA tax on insurers and make it tax-deductible if it is enacted after that.

With changes to ACA taxes unlikely to be included in the larger tax overhaul, lawmakers like Paulsen and Heitkamp and their industry advocates, are looking to a year-end budget bill as a potential legislative vehicle to repeal the taxes created in the 2010 health law.

House Schedules Vote to Repeal IPAB

House Republican leaders have scheduled a vote this week to repeal a controversial Medicare cost-cutting panel that has generated bipartisan opposition. Established by the ACA, the Independent Payment Advisory Board (IPAB) was never officially constituted because Medicare spending has been below the threshold that would automatically create the panel. But IPAB has generated widespread opposition not only from lawmakers but also from an array of healthcare providers.

Republicans and Democrats alike worry over IPAB’s sweeping powers to make Medicare spending and reimbursement changes. To block IPAB initiatives, Congress would need to approve alternative Medicare changes with super-majorities in both the House and Senate – a herculean feat given the hyper-partisanship over healthcare policy on Capitol Hill.

Senate Committee to Examine Status of Health IT

The Senate HELP Committee on Tuesday will hold a <a href="https://www.help.senate.gov/hearings/implementation-of-the-21st-century-cures-act-achieving-the-promise-of-health-information-technology">hearing</a> examining health information technology provisions included in last year’s 21st Century Cures law. That law enacted a series of interoperability initiatives, including mandating that HHS’s Office of National Coordinator (ONC) develop strategies to streamline administrative barriers to adopting health IT. Scheduled witnesses include Dr. Jon White of ONC; Dr. Kate Goodrich, director of the Centers for Medicare &amp; Medicaid Services Center for Clinical Standards and Quality; and James Cannatti, senior counselor of health IT in the HHS office of inspector general.

Leaders Reach Agreement on Medicare Therapy Caps

The leaders of two key House committees last week agreed to permanently repeal the annual limits on Medicare beneficiaries’ outpatient therapy. The proposal would repeal therapy caps for services like occupational and physical therapy, and speech-language-pathology services. Physicians would still be required to certify the services were medically necessary. The agreement was reached among the bipartisan leaders of the House Energy and Commerce and Ways and Means committees. The lawmakers said they had a framework agreement but did not release legislative text or details on how elimination of the therapy caps would be paid for.

House Panel to Hold Hearing on Dangerous Pathogens

A House investigations subcommittee on Thursday will <a href="https://energycommerce.house.gov/hearings/concerns-federal-select-agent-program-oversight-dangerous-pathogens/">hear</a> from top health officials on the status of federal oversight of dangerous pathogens. The House Energy and Commerce Subcommittee on Oversight and Investigations for several years has been examining the need for stronger oversight of the inactivation of dangerous pathogens in high-containment laboratories. Scheduled witnesses at the subcommittee’s hearing this week include Mary Denigan-McCauley, the acting director of the Government Accountability Office; Dr. Samuel Edwin, director of the Centers for Disease Control and Prevention’s Division of Select Agents and Toxins; and Dr. Freeda Isaac, a director at the Animal and Plant Health Inspection Service.

Capitol Hill Healthcare Update