Health Policy Report

The Week in Review

Lawmakers wrapped up the month of June with a busy week of floor activity that saw significant legislative items pass both chambers. In the House, lawmakers resumed their push to clear fiscal year (FY) 2020 spending bills, passing the second five-bill “minibus” — which includes the Agriculture, Commerce-Justice-Science (CJS), Interior-Environment, Military Construction-Veterans’ Affairs (VA) and Transportation-Housing and Urban Development (HUD) spending bills — as well as the spending measure for  Financial Services and General Government (FSGG). The lower chamber also passed a bill that seeks to bolster election security through authorization of new funding for Election Assistance Commission Grants to states for securing their voting systems. 

Prior to adjourning for the Independence Day district work period, both chambers passed a bill that would provide additional funding for humanitarian assistance at the U.S.-Mexico border. Despite passing separate versions of the bill, House Democratic leadership begrudgingly brought the Senate-passed measure to the floor after centrist Democrats threatened to vote against a substitute amendment that would have tacked on stringent nutrition and oversight provisions to the upper chamber’s bill. The Senate’s supplemental easily passed the House last Thursday, and now sits on President Donald Trump’s desk for signature.

Meanwhile, the Senate also passed its version of the National Defense Authorization Act (NDAA) last week. The upper chamber used an unusual procedure to pass the $750 billion bill, allowing for a vote on a Democratic amendment that would restrict military authorization against Iran the following day to accommodate Democratic Senators who missed votes due to the first Democratic presidential debate. However, the provision did not earn the required 60 votes that were needed for passage.

The Week Ahead

Congress has adjourned for the Independence Day district work period. The Senate will return on Monday, July 8, and the House will reconvene on Tuesday, July 9.

Trump Signs Executive Order to Increase Health Cost & Quality Transparency

President Trump signed an executive order Monday afternoon aimed at increasing transparency around health care cost and quality. The order outlines a five-part plan to help patients better understand medical costs before they receive services and expands flexibility around how patients save and pay health expenses, as well as directives to address surprise billing. On a White House briefing call that morning, Department of Health and Human Services (HHS) Secretary Alex Azar declared the executive order would go down as “one of the most significant steps in the long history of American health care reform.”

Secretary Azar stated that the executive order will encompass five different policy directives and instruct multiple federal departments to collaborate to carry out President Trump’s plan for increased health care transparency. The health Secretary noted that the executive order continues President Trump’s directive to empower patients through additional transparency and follows the administration’s rule to require drug manufacturers to disclose pharmaceutical list prices in direct to consumer ads by July 9. Administration officials have not disclosed how specific the information to be disclosed will be, however said it will be “hammered out” in the rulemaking process. The policies outlined in the executive order have already garnered opposition from hospitals and insurers, and the Federation of American Hospitals, the American Hospital Association, and America’s Health Insurance Plans (AHIP) have argued that disclosing the negotiated costs will not assist patients in understanding their true out-of-pocket costs. Writing in support of the proposed policies, former Senator Tom Coburn (R-OK) and almost 4,000 physicians sent a letter to the administration explaining that “creating real-time price lists isn’t as hard as those who benefit from keeping prices in the dark would have you believe.”

HELP Committee Advances Drug Pricing, Surprise Billing Package

Last Wednesday, the Senate Health, Education, Labor and Pensions (HELP) Committee voted overwhelmingly to approve a sprawling, bipartisan package of health care bills. The Lower Health Care Costs (LHCC) Act (S. 1895) is composed of a variety of proposals, including holding patients harmless from “surprise bills,” instituting a system of regional in-network benchmarks to resolve surprise bills, bolstering generic competition, ending pharmacy benefit manager (PBM) “spread pricing,” and increasing provider education about biosimilars. The Committee also unanimously approved legislation to support poison control centers (S. 1199) and reauthorize the Emergency Medical Services for Children Act (S. 1173). The full bill was ultimately reported to the full Senate with only three senators opposing it: Sens. Elizabeth Warren (D-MA), Bernie Sanders (I-VT), and Sen. Rand Paul (R-KY).

Chairman Lamar Alexander’s (R-TN) remarks indicated that dialogue over certain aspects of the bill — particularly around surprise billing — will continue before the bill hopefully comes to the floor during “the third or fourth week of July.” While this is very possible, it’s also no certainty given the contentious nature of health care politics and Majority Leader Mitch McConnell’s (R-KY) inclination to insulate the 22 Senate Republicans that are up for reelection from politically challenging votes. The strong bipartisan nature of this package makes floor consideration more likely, but Chairman Alexander’s enthusiasm for the measure does not make it a certainty. Meanwhile, the Senate Finance Committee is expected to release a bipartisan drug pricing bill in July, which could potentially package with the HELP bill or attach to a broader government spending bill later this year.

Democrats Highlight Health Care Differences in First Debates

In the first two Democratic Presidential debates this past week, candidates highlighted the growing party divide over universal health care coverage. Both nights, candidates were given the opportunity to raise their hands to identify whether they supported a number of policy proposals under a potential universal system, including abolishing private health insurance in order to implement a government-run plan. Only four candidates stood in favor of this policy, including Senator Elizabeth Warren (MA), Senator Bernie Sanders (VT), Senator Kamala Harris (CA), and Mayor Bill de Blasio (NY). Sen. Harris later said she misunderstood the question and had not meant to raise her hand in support of abolishing private health insurance, and three candidates who have signed on to bills in Congress that promote the policy failed to raise their hands as well.

Democratic candidates face a challenge on universal health care coverage, as they seek to avoid alienating both progressives and more moderate voters. Candidate John Delaney, a former Maryland Congressman, warned that although the party won on health care in 2018, if they “go down the path with Medicare for all” Democrats would lose on it in 2020.

Affordable Care Act Court Cases Heat Up

Two cases impacting the Affordable Care Act (ACA) gained the attention of the courts this past week. The Supreme Court announced last Monday it would hear a case on whether insurance companies are owed billions of dollars in federal payments under ACA policies designed to initially help insurers handle the sickest and most expensive patients. The Supreme Court will consider combined cases from three small insurers, but its eventual ruling will serve as a precedent for dozens of other similar pending cases on ACA risk corridors. Altogether, insurers believe they’re owed more than $12 billion. Although the case doesn’t threaten the constitutionality of the health law, it would be a political loss for an administration that has focused on undoing the policies. 

In other ACA case news last Wednesday, the U.S. Court of Appeals for the Fifth Circuit questioned whether a coalition of Democratic states and U.S. Representatives have standing to appeal a lower court ruling striking down the ACA as unconstitutional. The statement from the court explained that it needed additional information on whether the coalition has legal standing to intervene in the lawsuit and whether their interventions were “timely.” Health and legal experts have warned that the request did not bode well for the future of the law, and that it could suggest the fifth circuit panel will be inclined to support Republican-led states. The federal appeals court is scheduled to begin hearing arguments for the case on July 9.

Trump Administration Underscores Focus on Deregulation in Health Care

Underscoring its emphasis on deregulation to carry out its health care agenda, the Trump Administration released a report last Friday detailing a number of its actions and their impact on the U.S. economy. The report from the Council of Economic Advisors (CEA) discussed the economic impact of deregulatory actions across the Executive Branch, including its rules on short-term, limited-duration insurance (STLDI) and association health plans (AHPs). After early setbacks in enacting its healthcare agenda, notably in the failure of Congress to repeal the Affordable Care Act (ACA), the Administration turned to regulatory actions to advance its goals. Such actions not only target big economic changes, but also are being used to expeditiously streamline processes for providers and consumers, such as through the Centers for Medicare and Medicaid Services’ Patients Over Paperwork initiative. The report demonstrates that the Administration views its efforts thus far as a success and indicates that it will continue to advance its health care agenda at the agency level.