Federal Government Funded for Fiscal Year 2020; Surprise Billing and Comprehensive Drug Pricing Legislation Postponed Until 2020

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Last Friday, President Trump signed into law two bipartisan legislative packages that included all twelve Fiscal Year 2020 funding bills. Comprehensive surprise billing and drug pricing legislation were not included in the year-end appropriations bills.

One of the two legislative packages, H.R. 1865, the “Further Consolidated Appropriations Act, 2020” extended funding for various health-related programs, including the Community Health Centers Fund, and delayed Medicaid Disproportionate Share Hospital (DSH) cuts through May 22, 2020. This five-month extension was largely paid for by incorporating one legislative proposal related to drug pricing: The Creating and Restoring Equal Access To Equivalent Samples (CREATES) Act, to deter pharmaceutical companies from blocking lower-cost generic alternatives from entering the marketplace. With DSH cuts and health care program funding set to expire in May, debate over these health-related policies will be pushed until early next year. H.R. 1865 also repealed three taxes established by the Affordable Care Act: the "Cadillac tax" on expensive employer plans, the medical device excise tax, and the health insurance fee.

Despite a last minute advocacy effort, surprise billing legislation was not included in the end-of-year appropriations packages. Debate over drug pricing bills will also continue into 2020, as no comprehensive drug pricing legislation was included in the comprehensive Fiscal Year 2020 appropriations bills. The Senate Finance Committee marked up S. 2543, the Prescription Drug Pricing Reduction Act, in July that was endorsed by President Trump and updated this month. The Senate bill caps Medicare Part D out-of-pocket spending at $3,100 a year in 2022 and restricts drug pricing increases to the rate of inflation. Earlier this month the House passed a bill that would require the Health and Human Services Secretary to negotiate the price of Medicare drugs, at least 25 drugs in the first year and then a minimum of 50 drugs every year after the initial year, and impose financial penalties on pharmaceutical companies that raise drug prices at a rate higher than the inflation rate.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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