CONGRESS SCRAMBLES THIS WEEK TO AVERT GOVERNMENT SHUTDOWN.

Congressional Republicans face a Friday deadline to approve a stopgap budget bill to avert a government shutdown, delaying until later this month key decisions on healthcare priorities like renewing children’s insurance and Medicare provider programs.

Republicans will push a temporary funding bill this week to keep the government open until Dec. 22, effectively punting a series of policy choices that could elevate the risk of a government shutdown right before Christmas.

In addition to flashpoints on funding for a U.S.-Mexican border wall and overall spending levels, lawmakers also must renew the Children’s Health Insurance Program (CHIP) and numerous expiring Medicare provider payments. The Senate will try to attach to a year-end budget bill separate bipartisan legislation that would guarantee federal subsidies to insurers offering individual policies under the Affordable Care Act.

Another minefield for Republicans this month: They need to waive a budget procedure known as “pay- go” to avoid triggering across-the-board spending reductions, including $25 billion in cuts to providers’ Medicare reimbursements. But House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell last week said they won’t allow the government to shut down and will block the across-the-board spending cuts from occurring.

GOP TAX CUT BILL INCLUDES ACA MANDATE REPEAL.

The Senate on Saturday approved sweeping tax legislation that would effectively repeal the Affordable Care Act’s individual mandate.

The Senate bill would repeal the mandate by setting the tax penalty at $0 for individuals failing to purchase insurance coverage beginning in 2019.

Another healthcare provision in the tax bill would temporarily reduce the threshold for deducting medical expenses. For this year and 2018, the Senate bill would allow individuals to deduct medical expenses that exceed 7.5 percent of income rather than 10 percent as under current law. The House bill would repeal the deduction entirely.

The tax bill now moves to a House-Senate conference committee, where GOP leaders hope to produce a final bill as soon as this week and set up congressional approval for next week. It’s expected the individual mandate repeal would remain in the final legislation.

DEMOCRATS DOUBT AZAR’S ABILITY TO LOWER DRUG PRICES.

Health and Human Services (HHS) Secretary-designate Alex Azar told senators last week that he was open to reviewing how the government reimburses for physician-administered drugs in Medicare Part B, but Democrats said they’re skeptical Azar’s drug industry background would make him an advocate for lowering overall prices.

Azar said applying the negotiation by private insurers within the Part D program to Part B could be a way to lower patients’ costs. He also said a priority would be to increase competition among generic and brand-name drug manufacturers, including cracking down on what he said was brand industry “gaming” of the system to extend patents.

Those ideas didn’t satisfy Democrats on the Senate Health, Education, Labor and Pensions (HELP) Committee. Sens. Elizabeth Warren (D-Mass.) and Bernie Sanders (I-Vt.) led much of the criticism of Azar, a former top Eli Lilly executive. Sen. Rand Paul (R-Ky.) also questioned Azar’s opposition to allowing U.S. patients to import prescription drugs from countries where government price controls have forced lower prices.

The committee with responsibility for advancing Azar’s nomination – the Finance Committee – hasn’t announced a schedule for hearings this month. Nothing occurred at the HELP Committee hearing that might jeopardize Azar’s confirmation, though it could be delayed until early next year.

HEARING TO EXAMINE SCIENCE ACADEMIES REPORT ON DRUG PRICES.

The Senate HELP Committee will hold a hearing next week on a new National Academies of Sciences report that says the federal government should negotiate prescription drug prices directly with manufacturers and allow for more flexible drug formularies.

Committee Chairman Lamar Alexander (R-Tenn.) made the announcement during a separate hearing last week on Azar’s nomination to be HHS secretary. This will be the third hearing this year by Alexander’s committee on prescription drug prices. No witnesses have been announced by the committee, but a Science Academies official and former Sen. Tom Coburn (R-Okla.) are expected to testify.

In addition to the government negotiating prices directly with manufacturers for Part D – which current law prohibits – the Science Academies said U.S. patients should be allowed to import drugs from other countries and consumer advertising by drug companies should be eliminated.

HATCH, WALDEN PLEDGE SUPPORT FOR RENEWING CHIP.

Senate Finance Committee Chairman Orrin Hatch (R-Utah) and House Energy and Commerce Committee Chairman Greg Walden (R-Ore.) last week both said they’re committed to ensuring states will have the resources needed to operate CHIP without disruption.

Walden on Friday said he’s backing legislation that would make it easier for states to access existing federal funding to keep CHIP operational even after federal funding expired in September. That legislation – the “CHIP Stability Act,” introduced last week by Rep. Ryan Costello (R-Pa.) – was added to a short-term spending bill that the House will consider this week.

Because CHIP has lacked federal funding since the end of September, CMS has awarded $600 million to more than a dozen states and territories to keep their programs running. But without additional action by Congress, many more states will begin to exhaust funding in January.

CHIP renewal is a prime candidate to be included in a year-end package before Congress leaves for the holidays. But the program does face some risk if bipartisan agreement breaks down on separate spending and policy issues.

SENATE PANEL TO EXAMINE 21ST CENTURY CURES IMPLEMENTATION.

One week after testifying before a House committee on implementation of the 21st Century Cures law, FDA Commissioner Scott Gottlieb and NIH Director Francis Collins will headline a Senate hearing Thursday on the status of the medical innovation law.

Last week, the House Energy and Commerce Subcommittee on Health examined the 2016 law, which was designed to spur medical research and boost funding for NIH and created a precision medicine initiative and a project to study the brain and diseases like Alzheimer’s.

Democrats on the House panel used the hearing to criticize prescription drug prices, questioning Collins on why he was opposed to invoking so-called march-in rights that would allow NIH to reclaim a patent for a drug it helped develop. Collins said NIH lawyers have determined march-in rights can be used narrowly when a drug is physically unavailable, not just overpriced.