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LAWMAKERS COOL TO TRUMP PLAN ON HHS, GOVERNMENT REORGANIZATION

The response from lawmakers on Capitol Hill to the White House plan to reorganize the federal government – including proposed changes to multiple healthcare agencies – ranged from lukewarm to outright opposition.

President Donald J. Trump’s plan would rebrand Health and Human Services (HHS) as the “Department of Health and Public Welfare.” It would consolidate certain welfare and nutrition assistance programs, now run by the Agriculture Department, into the new department.



The Food and Drug Administration (FDA) would become the “Federal Drug Administration,” with the agency’s oversight of food safety moved to a new entity elsewhere in the government. The National Institutes of Health (NIH) would gain ownership of the Agency for Healthcare Research and Quality. The Centers for Medicare and Medicaid Services (CMS) would fall under the Permanent Council on Public Assistance within the new health department. The council would include all federal agencies that offer public assistance programs, including initiatives currently administered by the Agriculture Department and the Housing and Urban Development Department.

The White House said the governmentwide reorganization plan would better align similar functions and increase efficiency. Congressional Democrats panned the proposal as a stalking horse to cut government programs and spending.

Some Republicans said they liked some of the consolidation ideas, but senior GOP lawmakers say they’re skeptical or weren’t even consulted on the proposal before it was released. The two lawmakers who oversee HHS’ budget – Rep. Tom Cole, R-Okla., and Sen. Roy Blunt, R-Mo. – both said last week that they were skeptical the proposal was needed or could even be adopted.

Mick Mulvaney, the director of the White House’s Office of Management and Budget, will testify Wednesday before the House Oversight and Government Reform Committee, which is holding a hearing on the president’s plan.

Any government reorganization or consolidation proposal would require bipartisan support to win approval in the Senate, where 60 votes would be required to implement the plan.

AZAR TO TESTIFY AGAIN ON PLAN TO LOWER DRUG PRICES

HHS Secretary Alex Azar will be on Capitol Hill again this week testifying about the White House plan to lower prescription drug prices.

Azar will be the only witness before the Senate Finance Committee on Tuesday. Although drug prices are the topic of the hearing, Azar also is likely to be pressed on news reports of HHS’ role in caring for migrant families separated at the U.S. southern border.

Few details have been released in the six weeks since Azar and President Trump released their blueprint to reduce prescription drug prices, “American Patients First.” While most senators are likely to question Azar on details of potential HHS regulatory actions, guidance documents and demonstration projects referenced in the plan, the secretary also is likely to be criticized by lawmakers who say it doesn’t go far enough. Azar mostly sidestepped questions about plan details during an appearance last week before the Senate HELP Committee.

Separately, the Senate HELP Committee on Wednesday will hold a hearing on healthcare costs. Scheduled witnesses are Melinda Buntin, chairwoman of the Health Policy Department at Vanderbilt University’s School of Medicine; Dr. Ashish Jha, director of Harvard’s Global Health Institute; Niall Brennan, president of the Health Care Cost Institute; and Dr. Dave Hyman, professor at Georgetown University Law Center.

VERMA WON’T TESTIFY AT SENATE HEARING ON MEDICAID FRAUD 

The Senate committee examining improper payments by Medicaid will hear from a senior HHS official but not from CMS Administrator Seema Verma.

The Senate Homeland Security and Governmental Affairs Committee is probing Medicaid fraud and overpayments in the program, and senators wanted Verma to testify Wednesday. The panel had rescheduled the hearing twice before to try to accommodate Verma’s schedule. She informed the committee last week that she couldn’t testify this week because of yet another scheduling conflict.

Committee Chairman Ron Johnson, R-Wis., had been seeking Verma’s testimony since April on a Government Accountability Office (GAO) report that Medicaid alone accounts for one-quarter of all of the government’s improper payments, which can include the wrong amount or payments to the wrong provider. Johnson earlier threatened to subpoena Verma to testify but backed off that threat earlier this month.

Testifying before the committee this week are Eugene Dodaro of GAO and Brian Ritchie, HHS’ assistant inspector general for audit services.

HOUSE OKs SWEEPING, BIPARTISAN OPIOID PACKAGE 

The House last week overwhelmingly approved legislation designed to stem the opioid crisis by cracking down on abuse, expanding access to treatment and incentivizing alternative pain treatments.

The legislation, which won approval 396-14, was a package of more than 50 individual measures that the House had separately passed this month.

House leaders want to fast-track opioid legislation before Congress leaves for its August recess, but the Senate is separately considering its own opioid package. The Senate plans to combine separate bills that have won approval in the Finance, Judiciary and HELP committees. Senate leaders hope to schedule floor time for their bill next month.

SENATORS URGE FTC TO PROBE BIOSIMILAR ‘PAY-FOR-DELAY’ AGREEMENTS 

The chairman of the Senate Judiciary Committee last week asked the Federal Trade Commission (FTC) to determine whether manufacturers of biologic drugs were improperly using patent lawsuits to thwart generic competition.

Sen. Chuck Grassley, R-Iowa, in a letter to FTC Chairman Joe Simons, urged the commission to investigate drug companies’ global patent settlements on biosimilars to ensure they don’t violate U.S. antitrust laws. Sen. Amy Klobuchar, D-Minn., the top Democrat on the panel’s antitrust subcommittee, joined Grassley in the letter to the FTC.

For several years, Klobuchar and Grassley have introduced legislation that would combat what they say are anticompetitive tactics, including so-called pay-for-delay agreements that the senators say are preventing biosimilars from reaching Americans sooner and therefore forcing patients to pay higher prices for brand-name biologics.

The FTC has previously cracked down on pay-for-delay agreements involving traditional chemical drugs, but the commission hasn’t weighed in on biologics. How the FTC will approach this issue is unknown; the Senate in April confirmed a new slate of five FTC commissioners, none of whom had previously served.

HOUSE COMMITTEE TO VOTE ON HHS FUNDING BILL

The House Appropriations Committee on Tuesday is scheduled to vote on a fiscal 2019 spending bill that would boost funding for HHS, NIH and the Centers for Disease Control (CDC) but trim administrative expenses for CMS.

Under the House’s bill approved earlier this month by a subcommittee, HHS would receive $89.2 billion, a $1.1 billion increase over fiscal 2018 and $2.4 billion more than President Trump had requested. Lawmakers on both sides are expected to offer amendments, so the final spending numbers could change.

The Senate appropriations subcommittee that funds HHS is expected to introduce its spending bill Tuesday, and a vote by the full Senate Appropriations Committee is scheduled for Thursday.

HOUSE GOP PUSHES BUDGET THAT TARGETS MEDICAID, MEDICARE 

Conservative House Republicans are pushing their leaders to schedule a vote on a budget resolution that would likely call for structural changes to both Medicaid and Medicare.

The House Budget Committee last week approved a budget resolution that would eliminate the deficit within nine years, in part by cutting $302 billion from entitlement programs such as Medicaid and Medicare. The budget resolution is like a top-line blueprint; it doesn’t make policy changes but instead directs committees of jurisdiction to develop the legislative specifics that meet the spending objectives.

It’s not clear that the budget resolution could even win House approval, as many vulnerable Republicans seeking re-election in November are unlikely to vote for it. Even if it did pass the House, it’s highly unlikely it could win approval in the Senate, where Republicans hold a one-seat majority.

Medicare spending is expected to increase from $707 billion today to $1.5 trillion in 2028. The budget resolution proposes to control Medicare’s growth by introducing more competition and programs such as Medicare Advantage while also limiting future Medicaid growth to per-capita spending.

Capitol Hill Healthcare Update