Health Policy Report

The Week in Review 

The first session of the 114^th Congress ended on a high note as Democratic and Republican lawmakers were able to work through their differences and pass a mammoth $1.6 trillion spending and tax deal that will fund the government for the remainder of the 2016 fiscal year. On Friday morning, House lawmakers voted on the omnibus and ‘tax extenders’ packages separately, passing the first by a vote of 316 to 113 and the latter by a 318 to 109 margin. The deal was then combined into a single bill (H.R. 2029) and presented to the Senate, who passed it on a 65-33 vote. President Obama has already indicated that he will sign the combined spending and tax package, which should mark the end of the final fiscal fight of his presidency. 

Once the text of the long-negotiated deal was released late on Monday night, its passage was never in any serious doubt. Government funding had been set to expire on Wednesday, but the passage of another short-term funding patch allowed Congress to use the entire week to push the deal through both chambers. Despite the omnibus passing by a fairly comfortable margin, some conservative lawmakers voted against the package because of its spending levels and their inability to secure certain policy riders, such as defunding Planned Parenthood or nullifying Environment Protection Agency rules on water regulation and power plant emissions. In the Senate, presidential candidates Sens. Marco Rubio (R-FL) and Ted Cruz (R-TX) both voiced concerns on the bill, with the former briefly threatening to slow the voting process down and the latter voting against it. For a full breakdown on the key provisions included in the omnibus and tax packages, please see our detailed section below and refer to this post on the TRP Blog.

A series of other measures passed through the House under suspension of the rules last week, which limits debate to 40 minutes and requires a two-thirds majority to pass. Among those bills were two national security measures, one (H.R. 3654) requiring the White House to compile a report on efforts to combat terrorist organizations’ use of social media and another (H.R. 3878) seeking to improve cybersecurity at U.S. ports.  

The Week Ahead

Both chambers of Congress have adjourned until the second session of the 114^th Congress opens in January. The first day for the House is scheduled for January 5, while the Senate is set to convene for the first time in 2016 on January 11. Please note that the TRP Health Policy Report will not publish next week, December 28.

Congress Passes Omnibus and Tax Extenders Packages

Congress is finally home for the holidays after reaching a deal on an omnibus and tax extenders package that will fund the government through the 2016 fiscal year and extend or make permanent a number of existing tax credits. The spending bill includes some policy riders that Republicans had been seeking, most notably a provision sought by the oil industry that lifts the 40-year-old ban on crude oil exports. However, with Republican leaders needing Democratic votes for the measure to pass, the White House and congressional Democrats were able to fend off other proposed riders, such as defunding Planned Parenthood, blocking Environmental Protection Agency rules on water and power plant emissions, and barring Syrian refugees from being resettled in the U.S. Due to Democratic opposition to certain provisions in the tax extenders piece of the deal, the House voted on the spending and tax packages separately, before combining them and sending the unified vehicle to the Senate.

Among the health-related policy changes in the broad spending and tax legislation is a delay of the Affordable Care Act’s (ACA) medical device and ‘Cadillac’ tax for two years, marking some of the most significant changes Congress has made to the president’s signature health care law since it was passed in 2010. The ACA’s 2.3 percent excise tax on medical devices that took effect in 2013 will now be paused until 2017 and the levy on high-cost employer health plans will be delayed two years from its scheduled start in 2018 to now begin in 2020. Additionally, the funding bill will suspend the law’s annual tax on insurers, which took effect in 2014, for one year until 2017. While the President has opposed changes to the ACA funding measures, their inclusion in the broader spending package will deter the White House from using its veto authority to prevent them from being enacted into law.

Other stocking stuffers that made the final cut of the bill include legislation that will restrict ACA risk corridor funding and issue directions for the Department of Health and Human Services (HHS) to further detail exchange enrollment, money spent, and employment in future reports and budget documents prepared for Congress. Additionally, the bill will significantly increase funding for the National Institutes of Health (NIH) by $2 billion to a total of $32.1 billion – a figure $900 million higher than the one originally proposed in the House appropriations bill. Furthermore, the bill will increase funding for the Centers for Disease Control and Prevention (CDC) by $278 million, including $70 million for state-based efforts to address prescription opioid abuse, tripling the funding level from the 2015 fiscal year. Finally, the legislation will provide a $160 million increase to the Substance Abuse & Mental Health Services Administration (SAMHSA) and will renew health benefits for firefighters, police officers, and other rescuers who became sick due to toxic exposure at the World Trade Center attacks on September 11,^, 2001.

Democratic Senators Ask CMS How It Could Halt Rising Drug Costs 

The rising attention on drug pricing has shown few signs of slowing down, as Senate Democrats last week asked the Centers for Medicare and Medicaid (CMS) what it can unilaterally do to curb rising drug prices. In a letter addressed to CMS Acting Administrator Andrew Slavitt Thursday, senators requested information on whether CMS has the ability to slow rising drug costs, if it can provide public comparisons of drugs based on price and effectiveness, and how it can ensure that exchange plans offer adequate drug coverage. Furthermore, Democratic members wanted to know how CMS could use its authority to run pilot programs to test new policies addressing drug costs. 

Senators also asked about the use of comparative effectiveness research from outside organizations—such as the Patient-Centered Outcomes Research Institute (PCORI) and the Institute for Clinical and Economic Review (ICER)—to help explore ways to deal with high drug costs. While PCORI is currently unable to compare products based on price, some consumer advocates have called for the Food and Drug Administration (FDA) to consider cost-effectiveness as part of their approval criteria. The letter also asks about CMS’ handling of Medicaid managed care plans and the agency’s efforts to educate consumers and providers on the cost of prescription medications. The group of Democratic senators suggested CMS promote its website as a tool for evaluating drug coverage and cost-sharing within individual plans to help consumers compare drug costs.

Despite the mounting interest in the drug pricing issue, including from a growing number of Republicans, it is unlikely that Congress will pass legislation to address drug costs before the 2016 general elections. Many are looking instead to HHS and the Obama Administration to contemplate a move on drug pricing as the President looks to secure his health policy legacy in the final year of his second term. 

HELP Committee Likely to Vote on FDA Nominee Next Month

The Senate Health, Education, Labor and Pensions (HELP) Committee is likely to vote on the nomination of Dr. Robert Califf to lead the Food and Drug Administration (FDA) as soon as the Senate returns in January. Consideration of his nomination had been postponed until after the Thanksgiving holiday due to the committee’s work on a replacement to the No Child Left Behind Act and passing the omnibus spending bill. Califf, currently the FDA’s deputy commissioner for medical products and tobacco, was nominated to lead the agency in September and had his confirmation hearing in front of the panel in late November. Although the nomination is likely to be approved by the HELP committee, a Republican HELP committee aide said last week that the full Senate is unlikely to act quickly on the nomination. Two Republican senators, Ben Sasse (R-NE) and Lisa Murkowski (R-AK), had previously said they would block his nomination from full Senate consideration, but Sen. Sasse announced Thursday he is lifting his hold on the pending nominee after HHS released information on ACA co-ops that he had previously requested.