Capitol Hill Healthcare Update

by BakerHostetler


Lawmakers return to Capitol Hill this week ahead of more self-imposed deadlines to resolve a series of thorny healthcare policies, including funding for the Department of Health and Human Services (HHS) and the rest of the federal government, the Children’s Health Insurance Program (CHIP), and community health centers.

The Senate reconvenes today while the House will be in session next week. Congress last month approved a stopgap-funding bill to keep the government open through Jan. 19 – creating a new deadline that raises the risk of a shutdown later this month.

As part of that pre-Christmas budget bill, Congress approved $2.85 billion in CHIP funding to keep the federal-state program operating through March. Without that infusion – and earlier legislation that allowed the Centers for Medicaid and Medicare Services (CMS) to program more than $1.2 billion to cash-strapped states – as many as 2 million children in 24 states could have lost coverage beginning this month. Still, states say the new funding won’t be enough to cover the program’s costs through the first quarter of this year.

States and children’s advocates this month are expected to increase pressure on lawmakers, and warn that without a long-term CHIP renewal, states could be forced to shut down the program, freeze enrollment and even curtail coverage.


House Speaker Paul Ryan has said he wants to overhaul federal entitlement programs – particularly Medicaid – but that plan is facing pushback from other Republicans on Capitol Hill.

Ryan and Senate Majority Leader Mitch McConnell will meet with President Trump this weekend at Camp David to map out how to settle leftover policy and spending issues while also discussing the 2018 legislative agenda.

Ryan and his allies in the House say they want to press for changes in 2018 to both Medicaid and Medicare. Republicans face growing political headwinds in advance of the November midterm elections, and some rank-and-file GOP lawmakers aren’t eager to engage in another fight over Medicaid after failing twice last year as part of the party’s plans to replace the Affordable Care Act (ACA). But some GOP leaders believe there is a political upside to pushing for Medicaid changes if the changes can be linked to broader efforts at welfare reform.

Although legislation usually requires 60 votes for passage in the Senate, Ryan wants to include Medicaid reforms in budget reconciliation legislation, which only requires a simple majority to pass. (Republicans’ Senate majority will drop to 51-49 this week after Sen.-elect Doug Jones of Alabama is sworn in.)

But reconciliation legislation also would require Congress to approve a separate fiscal 2019 budget blueprint – an arduous, time-consuming and politically perilous task that itself isn’t assured of passage.


After a federal court last month declined to stop CMS from implementing changes to the 340B drug discount program, hospitals and their allies on Capitol Hill are expected to renew calls for passage of legislation that would overturn those changes.

Bipartisan legislation in the House and Senate would roll back the CMS rule that will cost $1.6 billion for hospitals participating in the 340B program. The rule, which went into effect Monday, reduces hospital discounts for physician-administered drugs by nearly 30 percent.

But leaders on key House and Senate committees could block action on those bills. Those lawmakers have increasingly raised concerns about the 340B program, including what they say is its lack of transparency and unrestrained growth.

Reps. Larry Buschon, R-Ind., and Scott Peters, D-Calif., last month introduced legislation that would create a two-year moratorium on new 340B-eligible hospitals and require entities already in the program to submit detailed reports on their charity care costs, use of 340B drugs and drug reimbursements.


Two bills introduced in the House last month aim to incentivize the use of new prescription drugs and medical devices by increasing their federal reimbursements.

The legislation would boost the New Technology Add-on Payment (NTAP) for drugs and devices to 75 percent, up from the current 50 percent. It would also create an appeals process for NTAP determination by CMS and mandate a new Medicare Part A Diagnosis Related Group code for new technologies coming off NTAP.

Another bill would make changes to the Part B Outpatient Prospective Payment System by requiring a new Ambulatory Payment Classification code for drugs and devices coming off pass-through. It would also extend the pass-through period to five years, up from the current three years.

While the NTAP program is generally popular in Congress, the bills – introduced by Reps. Tom Reed, R-N.Y., and Dave Reichert, R-Wash., – face some headwind, particularly for boosting the add-on payment to 75 percent. Amid the ongoing controversy about prescription drug prices, lawmakers may find it difficult to generate bipartisan support for increasing reimbursements for new, cutting-edge treatments that also can be expensive.


Executives of medical device companies are expected to be on Capitol Hill next week lobbying lawmakers to once again suspend the Affordable Care Act’s tax that manufacturers and importers pay on the sales of most devices.

Congress last month failed to block the reinstatement of the 2.3 percent tax on medical technology companies. That excise tax, which had been suspended for the past two years, came back online Monday.

The industry trade association AdvaMed is spearheading the executives’ fly-in. The group hopes to attach another suspension of the tax to separate legislation that would keep the government open beyond the current Jan. 19 deadline, when funds expire.

Rep. Erik Paulsen, R-Minn., whose legislation to repeal the device tax has 267 bipartisan co-sponsors, said the Treasury Department has agreed to provide limited deposit penalty relief through September to help device companies implementing systems to make the semimonthly tax payments.


The Senate Finance Committee this week is expected to announce the hearing schedule for HHS secretary-designate Alex Azar.

The committee’s focus late last year on congressional Republicans’ tax reform legislation effectively prevented the panel from holding a hearing on Azar. With the tax cut bill signed into law, the Finance Committee will likely hold Azar’s confirmation hearing in the coming weeks, paving the way for what could be confirmation by the full Senate later this month.

President Trump in November nominated Azar to succeed former Secretary Tom Price. Azar is a former HHS general counsel during the Bush Administration and a former senior executive with Eli Lilly.

Democrats don’t have the votes to block Azar. But they are expected to use the committee hearing and Senate floor vote to draw attention to prescription drug prices and what they say is Trump’s and Congress’ lack of action to lower them.


Opposition from House Republicans last month kept Congress from restoring subsidies to insurers to hold down co-payments and deductibles for individual plans sold in the ACA’s individual marketplace, but key senators say they will keep working toward a bipartisan deal.

Sens. Lamar Alexander, R-Tenn., and Patty Murray, D-Wash., said they want to reach an agreement this month on bipartisan legislation to stabilize premiums for consumers buying individual plans. But House conservatives mostly object, saying subsidizing insurers is effectively propping up the ACA.

Because most House Republicans oppose the subsidies, any plan addressing cost-sharing, or a separate proposal by Sen. Susan Collins, R-Maine, to create a reinsurance program to help insurers cover people with chronic and costly illnesses, would likely need to be packaged with other items that GOP lawmakers could support. Trump’s position for any cost-sharing plan will be key, as he could temper opposition among House conservatives.

Separately, Reps. Tom Reed, R-N.Y., and Josh Gottheimer, D-N.J., introduced legislation last month that would guarantee future cost-sharing payments to insurers and create a $115 billion fund that states could tap to stabilize insurance offerings. That bill has 26 co-sponsors.

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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