Health Policy Report

The Week in Review
 
Last week both chambers were in session, with the House returning from recess to pass a trio of financial services bills and the Senate continuing to deliberate on legislation to reauthorize the Federal Aviation Administration (FAA).

The first bill (H.R. 3340) passed by the lower chamber – on a 239-179 party line vote – would subject the Financial Stability Oversight Council (FSOC) and the Treasury Department’s Office of Financial Research to the congressional appropriations process. A second bill (H.R. 3791), approved 247-171, would allow banks and thrifts with assets of less than $5 billion to incur higher amounts of debt when acquiring another firm. Late in the week, the lower chamber also approved a bill that would bar the federal government from regulating consumer broadband Internet rates. The Administration has threatened a veto of all three measures. Finally, after a Centers for Disease Control and Prevention (CDC) report last week suggested the Zika virus was “scarier than we initially thought,” the House advanced a bill (S. 2512) under suspension of the rules that would add treatments for the mosquito-borne virus to the Food and Drug Administration’s (FDA) Priority Review Voucher Program.
 
The upper chamber continued deliberating which provisions will be included in a legislative vehicle (H.R. 636) to reauthorize the FAA until September 30, 2017. While Democrats were hoping to insert renewable energy tax credits into the legislation, Republican opposition killed that provision last week. However, senators were able to celebrate a minor bipartisan victory with the announcement that long-stalled energy legislation will return to the Senate floor in the near future. The move comes after a pair of lawmakers – Sens. Bill Nelson (D-FL) and Debbie Stabenow (D-MI) – lifted their holds on the energy legislation (S. 2012) that would boost energy efficiency and protect the electric grid from cybersecurity threats. However, Sen. Mike Lee (R-UT) has maintained his opposition of a separate Flint-aid sidecar bill, with Stabenow saying yesterday that senators are “working on a bipartisan basis to find another place for Flint [legislation] to move.”
 
The Week Ahead
 
In a nod to the annual tax-filing deadline, the House will begin the week with votes on four measures designed to impose restrictions on the Internal Revenue Service (IRS). The series of bills includes provisions freezing IRS hiring until it certifies no IRS employee has a “seriously delinquent” tax debt (H.R. 1206), barring the rehiring of employees who were fired for misconduct (H.R. 3724), requiring user fees to be deposited into the Treasury’s general fund (H.R. 4885), and finally, ending all IRS bonuses until the agency develops a comprehensive customer service strategy (H.R. 4890).
 
The Senate, meanwhile, will attempt to conclude work on a legislative vehicle (H.R. 636) for reauthorizing the Federal Aviation Administration (FAA). The White House, while stopping short of a veto threat, has said that the proposed 18-month reauthorization is too short and that the bill’s drone and airport security provisions are overly prescriptive. A final vote on the bill is expected by Wednesday, allowing the upper chamber to move to the first of the year’s spending measures later this week. The fiscal 2017 Energy and Water Development appropriations bill (S. 2804) will be the first to be considered on the floor of either chamber, as House appropriators failed to meet an April 15 deadline to advance a budget resolution. It includes a $355 million increase from fiscal 2016 levels, and is also $261 million more than requested in the President’s budget.
 
Finally, the presidential primary campaign heats up again this week, with a crucial contest taking place in New York tomorrow. Democratic front-runner Hillary Clinton is hoping to stymie the recent success of her opponent Sen. Bernie Sanders (I-VT), and a resounding win may put an end to the Vermont senator’s hopes for the nomination. On the Republican side, real estate mogul Donald Trump is heavily favored to win and move closer to the 1,237 delegates that he would need to seal the nomination before July’s Republican National Convention in Cleveland, Ohio. However, Sen. Ted Cruz’s (R-TX) recent string of victories and Ohio Governor John Kasich’s resilience in the race has raised the likelihood of a contested convention – rather than a Trump coronation – this summer.  
 
CMS Open to Part B Demo Changes, But Needs Detailed Input
 
Last Monday, supporters and opponents of CMS' controversial Medicare Part B pricing demonstration debated whether the plan would lead pharmaceutical companies to slow the rate of price increases so doctors would not lose money on those drugs. At a hearing hosted by the Pew Charitable Trust, CMS Principal Deputy Administrator Patrick Conway said his agency would consider changing aspects of the drug pricing demonstration, but said he needs specifics to help refine it, not broad-stroke criticism aimed at killing the effort. At issue is an Obama Administration proposal released in March to change the way Medicare pays for billions of dollars in medicines covered under Part B. The five-year project would let Medicare vary what it spends on drugs given in the hospital or doctor's office to test whether its current payment model encourages doctors to use more expensive medicines that are not necessarily the most effective.
 
The agency intends to move toward greater use of a flat fee for reimbursing doctors for Part B drugs through the test program, and shift away from a system in which physicians count most financially on a premium placed on the reported average sales price of these treatments. CMS also envisions in the draft rule making eventual moves toward larger changes in paying for Part B drugs, such as potentially pegging reimbursement to the value provided for patients. Dr. Conway said providers tell him the demo could impede patient access to drugs, speed the trend toward hospitals buying oncology practices, and increase Medicare spending due to hospitals administering drugs that normally physicians would administer at their offices, where pay rates are much lower. Dr. Conway said he does not want those outcomes, but the agency needs examples, supported with data, that demonstrate those unintended consequences. The Part B plan has drawn support from Congressional Democrats, but influential Republicans argue that CMS has gone too far with its attempt to change drug reimbursement.
 
GOP House Leaders Map Out Opioid Plans
 
On Wednesday, Speaker Paul Ryan (R-WI) reiterated the House’s commitment to passing legislation to combat the prescription opioid and heroin abuse epidemic, but said they will likely add their own ideas to the Senate passed measure. While Speaker Ryan said the House effort will ultimately resemble the Senate’s measure, the Comprehensive Addiction and Recovery Act (S.524), also known as CARA, they will likely take up several new amendments to the bill. For example, the House is likely to take up (H.R. 2872) which would require prescriber training every two years in the appropriate use of opioid drugs and the use of overdose reversal drugs. The House will also likely consider a bill (H.R. 2536) which would raise the number of patients doctors may treat at one time with opioid withdrawal medication from 30 to 100. A similar Senate bill (S 1455), which the Health, Education, Labor and Pensions (HELP) Committee approved last month, would allow certain doctors to treat up to 500 patients.
 
Among the bills mirroring the Senate’s effort is the House companion (H.R. 953), which would authorize federal grants to the states for increasing access to overdose drugs, training first responders and enhancing prescription drug monitoring programs. The Senate version was amended before passage to include provisions that would strengthen the Justice Department’s ability to fight drug trafficking, promote education on the dangers of prescription opioids, and prevent potential addicts from using multiple doctors to seek new prescriptions.
 
Not everybody is pleased with the House leader’s announcement of interest in passing a new bill. Several members of the Senate were frustrated that the House did not simply take up and pass the Senate bill, including Sen. Sheldon Whitehouse (D-RI), CARA’s primary sponsor. “We spent several years writing it. We did it bipartisan from the get-go. We had five national seminars to inform what was in the bill, and it passed 94-1. I don’t know what more we can do to make it easy for them,” he said.  The Judiciary Committee and Energy and Commerce Committee are expected to mark up the opioid bills later this month and House floor action on a package is expected after the chamber’s recess in early May.
 
Mental Health Reform Bill Stalls Over Gun Provisions
 
Sen. John Cornyn (R-TX) is in talks with leaders of the Senate HELP panel to combine his mental health bill with one that passed the committee last month. But the fight over gun control is threatening to scuttle a bipartisan mental health reform effort in the Senate as lawmakers rush to get the issue to the floor. While most of Sen. Cornyn’s bill is bipartisan and would change the way mental illness is handled in the criminal justice system, Democrats take issue with a provision that would alter the national background check system for those purchasing guns. Democrats say the revision currently in Sen Cornyn’s bill would make it easier for people with mental illnesses to obtain guns. Sen. Chris Murphy (D-CT), one of the sponsors of the health committee’s bill, said such provisions would prevent him from supporting the bill. Sen. Cornyn disagrees with Democrats’ argument, calling the position “unrealistic.” But he said he is open to discussing changes.
 
Murphy is one of the Senate’s strongest proponents of gun control, representing the state where the Sandy Hook Elementary School shooting took place in 2012.  Asked if Sen. Cornyn has been open to dropping the problematic provisions, Sen. Murphy indicated that talks are still in an early stage. Also involved in the conversation are Sens. Bill Cassidy (R-LA) and health committee leaders Lamar Alexander (R-TN) and Patty Murray (D-WA). Both sides are still hopeful that some agreement can be reached. Mental health reform is seen as one of the few issues on which a meaningful bipartisan bill could pass this year. Republicans argue for mental health reform as a response to mass shootings, while Democrats contend that mental health reform, while important in its own right, is no substitute for new gun control laws. It’s widely understood that Majority Leader Mitch McConnell (R-KY) wants to avoid a fight over gun policy on the Senate floor in an election year. Therefore, a bill with the potential to force vulnerable Senators to vote on controversial gun amendments is unlikely to see floor time. That hasn’t stopped Democrats from being aggressive on the issue, forcing votes whenever possible and keeping up a steady stream of passionate floor speeches about gun violence.
 
CMS to Launch New Payment System
 
Last Monday, the Centers for Medicare and Medicaid Services (CMS) announced a new initiative aimed at changing payment incentives so that doctors have more freedom to choose how to care for their patients.  The new payment program, called Comprehensive Primary Care Plus, is intended to shake up the way 20,000 doctors and clinicians treat more than 25 million patients when it goes into effect January 2017. The initiative marks a significant departure from the current “fee-for-service” system, which offers reimbursements per visit or procedure. Under the new program, part of doctors’ payments will include a monthly fee to pay for a certain group of patients, freeing up doctors to talk on the phone, email their patients or set up longer visits outside of the usual structure. The initiative is part of a larger Administration effort to move the healthcare system away from paying simply for the number of procedures or visits and toward rewarding quality health outcomes for patients, using authority the 2010 health law gave to an innovation center able to test out new payment models.
 
CMS says the program will be implemented in up to 20 regions of the country, covering 20,000 doctors and 25 million people.  The new initiative is voluntary, so doctors can choose to join if they wish. The program also seeks to partner with private health insurers so that the payment changes come not just from Medicare but from private health insurance as well.  Most of the attention devoted to the ACA has involved its coverage expansion for the uninsured and its new rules governing insurance, but its little-noticed changes to the actual delivery of care could be just as consequential in the long run. This new five-year primary care initiative would be its most ambitious delivery reform yet, designed to serve twice as many Americans as are now enrolled in the higher-profile ACA exchanges.
 
HHS Report: Premium Increases Smaller than Expected
 
On Tuesday, the Department of Health and Human Services (HHS) released a report highlighting a four percent average premium increase for people getting tax credits under the new health law, signifying that insurance premium increases will be lower than expected. Earlier this year, insurers had proposed double-digit premium hikes – some even asking for rate hikes as high as 35 to 40 percent – sparking negative headlines and enraging Republicans who oppose the Affordable Care Act (ACA). In its report, HHS emphasized that those initial proposed rates do not predict what consumers will actually pay, because they do not take into account state insurance commissions' rate reviews, the ability consumers have to shop for cheaper coverage, or the tax credits consumers often receive under the health law, which increase if the cost of a benchmark plan increases. Furthermore, the report highlighted that more than 2.3 million people – 43 percent of returning HealthCare.gov customers – chose a new plan for 2016, which the agency said greatly reduced the average premium increase and cut premiums by an average of $42 per month. And, it estimated that state regulator reviews saved consumers $1.5 billion last year.
 
Nonetheless, health plans continue to express concerns about their financial stability under the ACA’s exchanges. Insurers say they are losing money on their ACA plans at a rapid rate, and some have considered dropping out of the marketplaces altogether. “Something has to give,” said Larry Levitt, an expert on the health law at the Kaiser Family Foundation. “Either insurers will drop out or insurers will raise premiums.” Last November, one of the largest insurance companies, UnitedHealth, threatened to leave the exchanges in 2017 because of financial losses. And last week, the insurer announced that it has decided to drop its ACA plans in Arkansas and Georgia.