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<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" />CONGRESS PUNTS SHUTDOWN DEADLINE AND HEALTHCARE PRIORITIES

Lawmakers last week approved a stopgap budget bill to keep the government open until Dec. 22, creating a pre-Christmas showdown over a host of spending decisions and key healthcare priorities.

Republican leaders on Capitol Hill pledge they won’t let the government shut down, but significant differences exist between the parties – and among GOP lawmakers – such that the risk of budget brinksmanship only days before Christmas is real.

On healthcare policy, Congress effectively punted decisions on renewing the Children’s Health Insurance Program (CHIP), whether to continue cost-sharing subsidies to insurers as part of the Affordable Care Act (ACA) and updating a number of Medicare provider reimbursement policies. Healthcare stakeholders are also worried about payment reductions or other sector-specific offsets that could be included in year-end legislation. For example, Republicans are resisting Democrats’ efforts to target the pharmaceutical industry for pay-fors, including potential legislation dealing with prescription drugs approved under a risk evaluation and mitigation strategy (REMS) safety program and Medicaid rebates for drugs with line extensions.

Leaders insist overall funding issues – in addition to Republicans’ pending tax overhaul – will be successfully resolved before Christmas. But the number and importance of the outstanding policies, coupled with swirling politics and the unpredictability of the Trump White House, make year-end legislative predictions difficult.

CONGRESS OKs SHORT-TERM CHIP PATCH, BUT ADVOCATES WANT LONG-TERM RENEWAL

The two-week stopgap budget bill approved by Congress last week includes a temporary fix for states on the verge of exhausting funding for CHIP, which expired in September.

The fix makes it easier for the Centers for Medicare &amp; Medicaid Services (CMS) to distribute unused funds to states that are running out of dollars for the federal-state program. CMS already has distributed more than $600 million to states to keep their CHIP programs afloat.

Legislation renewing the program, which serves 9 million children nationally, is likely to be added to what’s shaping up to be a massive year-end spending bill. Congressional leaders – including Senate Finance Committee Chairman Orrin Hatch, R-Utah, one of CHIP’s authors – said they’re committed to passing a five-year renewal of the popular program this month.

REPORT: AZAR CONFIRMATION HEARING COULD BE NEXT WEEK

The Senate Finance Committee’s confirmation hearing for Health &amp; Human Services (HHS) Secretary-designate Alex Azar could take place next week, according to media reports.

The committee, which is also the lead Senate panel on Republicans’ tax reform legislation, hasn’t announced a hearing yet for Azar, a former HHS official and Eli Lilly senior executive.

Azar testified last month before the Senate Health, Education, Labor and Pensions (HELP) Committee, but the Finance Committee has jurisdiction over his nomination. Even if the committee does hold a hearing this month, it’s unlikely the full Senate could vote to confirm Azar before January.

GOP RACES TO FINISH TAX BILL, INCLUDING KEY HEALTH PROVISIONS

If all goes according to plan, Republicans on Capitol Hill this week will complete negotiations on their sweeping tax overhaul, which is likely to include several healthcare provisions.

GOP leaders hope to iron out differences in the separate House- and Senate-approved tax bills this week before final congressional approval next week.

The Senate bill effectively repeals the ACA’s individual mandate by setting at $0 the tax penalty for not buying insurance. The House bill didn’t include that provision, but it’s expected to be in the final bill.

Current law allows individuals to deduct healthcare expenses that exceed 10 percent of their annual incomes. The House tax bill repeals this deduction, but the Senate bill would expand it by lowering the threshold to 7.5 percent of income.

The House tax bill would repeal the orphan-drug tax credit, under which pharmaceutical manufacturers can claim a 50 percent deduction for clinical trials of drugs that treat rare diseases. The Senate bill would keep the credit but effectively cut its benefit in half.

INDUSTRIES PRESS FOR RELIEF FROM ACA TAXES

Industries from medical device manufacturers to health insurers are lobbying Congress to delay their ACA taxes.

Medical device manufacturers will again see a 2.3 percent excise tax on all domestic gross sales beginning in January. Congress suspended the tax two years ago, but it will come back next month unless lawmakers vote to stop it.

Democrats are pressing for another delay of the ACA’s so-called Cadillac tax on high-cost health plans, which is scheduled to go into effect in 2020. Democrats want the tax delayed until 2022, arguing employers will begin looking at their 2020 plans as soon as next year.

House Ways and Means Committee Chairman Kevin Brady, R-Texas, is working with the panel’s top Democrat, Rep. Richard Neal, D-Mass., to suspend some of the ACA taxes, including the device tax, the health insurers tax and the levy on high-cost health insurance plans. The effort on ACA taxes may be folded into separate legislation known as “Medicare extenders,” which includes updates to provider payments.

But Brady’s work with Neal to craft a bipartisan agreement on ACA taxes is made more difficult by his separate effort to win congressional approval of tax reform with only Republican votes.

BIPARTISAN SENATE BILL WOULD BLOCK 340B HOSPITAL CUTS

New bipartisan legislation introduced last week in the Senate would block a proposed CMS rule that would mean a $1.6 billion cost for hospitals that participate in the 340B prescription drug discount program.

The legislation was introduced by Sens. John Thune, R-S.D., Rob Portman, R-Ohio, Shelley Moore Capito, R-W.Va., Bill Nelson, D-Fla., Tammy Baldwin, D-Wis., and Debbie Stabenow, D-Mich. Similar bipartisan legislation has been introduced in the House by Reps. David McKinley, R-W.Va., and Mike Thompson, D-Calif.

Scheduled to take effect Jan. 1, the rule would reduce hospital discounts for physician-administered drugs by more than 28 percent. Hospitals, which are suing to try to block the rule, say reducing 340B discounts would jeopardize their ability to serve low-income patients.

Several congressional committees in recent years have raised concerns about the growth of the 340B program, including whether its covered entities are appropriately passing along drug savings to patients. Some lawmakers have also said the program encourages a shift in site of care from physician offices to hospital outpatient settings, increasing overall healthcare costs.

SENATE COMMITTEE FOCUSES ON DRUG PRICES, HOUSE PANEL ON DRUG SUPPLY

On Tuesday, the Senate HELP Committee will hold a hearing on a list of eight recommendations by the National Academies of Sciences, Engineering, and Medicine to lower prescription drug prices, including that the federal government should negotiate prices directly with manufacturers.

Witness include Norm Augustine, the former CEO of Lockheed Martin Corp., who chaired the National Academies of Sciences, Engineering, and Medicine’s Committee on Ensuring Patient Access to Affordable Drug Therapies; David Mitchell, president of Patients for Affordable Drugs; and former Sen. Tom Coburn, R-Okla., currently a fellow at the Manhattan Institute for Policy Research.

The hearing will be the committee’s third this year on prescription drug prices.

Meanwhile, on Wednesday, the House Energy and Commerce Health Subcommittee will hold a hearing examining the drug supply chain. The panel is expected to review manufacturing, wholesale distribution and payment for drugs, and how each affects the cost of medications.

The House subcommittee hasn’t announced a witness list for its hearing.

Capitol Hill Healthcare Update