Health Policy Report

The Week in Review

After two weeks of negotiation, the Senate finally finished work on a reauthorization measure for the Federal Aviation Administration (FAA) last week, before moving on to a comprehensive energy bill and the first appropriations bill – Energy and Water Development – to reach the floor of either chamber. The House, meanwhile, spent a week considering measures to curb the Internal Revenue Service (IRS) in connection with the country’s annual tax-filing deadline.

The legislative vehicle (H.R. 636) used for reauthorizing the FAA through September 30, 2017 advanced through the upper chamber on a 95-3 vote on Tuesday after senators were able to hammer out remaining differences on amendments to be included in the must-pass legislation. Senate lawmakers then moved to comprehensive energy legislation (S. 2012), which had been stalled on the Senate floor due to Democratic demands that provisions be included to help Flint, Michigan recover from its tainted water crisis. A new deal, however, allowed the bill to be quickly approved on a 85-12 vote Tuesday afternoon. The bill – championed by Senate Energy and Natural Resources Committee Chairman Lisa Murkowski (R-AK) – aims to expand a number of programs related to energy cybersecurity, efficiency, infrastructure, and supply management. Finally, last week the appropriations process officially began on the Senate floor with consideration of the Energy and Water Development spending bill (H.R. 2028) that would provide $37.5 billion for the Energy Department, Army Corps of Engineers, and parts of the Interior Department, among other federal agencies.

With House Republicans failing to agree on a budget resolution prior to an April 15 deadline, lawmakers in the lower chamber must wait until May 15 to bring any appropriations bills to the House floor. This week, Majority Leader Kevin McCarthy (R-CA) teed up a series of bills over Democratic opposition to alter IRS practices, including a pair of measures that would ban the payment of bonuses to IRS employees until the agency develops and implements a comprehensive customer service strategy (H.R. 4890) and prevent the IRS from rehiring employees who were fired for misconduct (H.R. 3724). The White House has signaled its opposition, but fell short of issuing a veto threat.

The Week Ahead

Both chambers are in session this week ahead of a week-long recess due to begin Monday, May 2. The Senate will continue its appropriations work – aiming to complete Energy and Water Development and move on to the Commerce-Justice-Science spending measure – while the House will consider a disapproval of the recently completed Labor Department rule on fiduciary status for retirement advisers along with a series of other bills.

House lawmakers plan to consider a resolution (H. J. Res. 88) formally rebuking the Department of Labor (DOL) for its final rule redefining the term “fiduciary” and requiring by law that retirement advisers act in their clients’ best interest. The resolution – which would nullify the rule per the provisions of the Congressional Review Act – was advanced on a party line vote by the House Education and the Workforce Committee last week and is strongly opposed by the White House. Also due for consideration in the lower chamber next week are measures expanding access to angel investors (H.R. 4498), extending the District of Columbia’s school voucher program (H.R. 4901), and revising the process for cutting duties on imports of manufacturing resources (H.R. 4923). 

The Senate will move toward advancing the legislative vehicle for the fiscal 2017 Energy and Water Development spending bill, with four amendments scheduled for votes by Tuesday. Controversial riders, such as a proposed amendment gutting the Environmental Protection Agency’s (EPA) Waters of the U.S. rule, have been subjected to a 60-vote threshold, essentially ensuring that the underlying bill remains free of “poison pills” from either party. After work on that measure is completed, senators are likely to move to the Commerce-Justice-Science spending bill that was approved by the Senate Appropriations Committee last week. Senate appropriators are also working on a supplemental spending package in response to the White House’s $1.9 billion funding request to fight the Zika virus, with Appropriations Chairman Thad Cochran (R-MS) suggesting that emergency funds will be included in the appropriations process.

Away from Washington, five states across the Mid-Atlantic region are scheduled to hold primary elections tomorrow. Hillary Clinton and Donald Trump will be looking to further cement their positions as frontrunners after claiming resounding wins in the New York primary elections last week. Polls in states with the largest delegate prizes this week – namely Pennsylvania and Maryland – both show significant leads for Clinton and Trump over their nearest competition, Sen. Bernie Sanders (I-VT) and Sen. Ted Cruz (R-TX), respectively. 

E&C Panel Advances 12 Opioid Bills as Financing Debate Looms

The House Energy and Commerce Subcommittee on Health on Wednesday advanced a dozen bills to address the opioid epidemic, along with numerous amendments to the various bills. Together, these bills aim to improve access to medication-assisted treatment (MAT) and overdose reversal drugs, establish a new forum on guidelines for opioid use, and strengthen the federal government's power to enforce drug trafficking laws. While the Committee made progress in advancing these bills to the full Committee, a major battle over opioid funding may be imminent, as House Republican leaders separately announced that they are not planning to include new funding in the House opioid bill. Although Democrats on the Committee did not try to add funding at Wednesday’s mark up, issues around funding have been prominent as Democrats have demanded millions of additional dollars for initiatives like prescription drug monitoring and doctor education programs. Republican leaders, however, say they have already done their part by approving $6 million in opioid programs in last year’s omnibus spending bill.  The battle over funding in the House mirrors what took place in the Senate last month, as Senate Democrats threatened to oppose the opioid legislation, known as the Comprehensive Addiction and Recovery Act (S. 524), if Republican leaders did not include $600 million in emergency funding. However, CARA ultimately passed 94-1 without the additional funding.

While last week’s markup was largely noncontroversial – each bill passed by voice vote – some disagreements remained evident, particularly as lawmakers sparred over caps on the number of patients doctors can treat with MATs. Although the draft bill being marked up increased prescribing caps from 30 to 250, Democrats expressed the need to raise the caps even further, as Subcommittee Ranking Member Rep. Frank Pallone (D-NJ) introduced an amendment to raise the cap to 300. Meanwhile, Republicans argued that the cap was too high, and Rep. Tim Murphy (R-PA) offered and withdrew an amendment to lower the caps to 200. However, the middle ground on the issue prevailed when, on a voice vote, Pallone’s amendment was rejected.

The full Committee is expected to finish marking up its bills this week and bring a package to the floor when the House returns from its recess in May. The two chambers will then likely need to go to conference to reconcile the legislation, as the final House bill is expected to include provisions that were not included in the Senate package.

HELP 'Innovation' Package Stalls as Agreement Over NIH Funding Remains Elusive

Leaders on a pair of key Senate committees are struggling to reach a funding agreement that could send a package medical innovation bills to the Senate floor. While Senate Health, Education, Labor and Pensions (HELP) Committee Chairman Lamar Alexander (R-TN) and Ranking Member Patty Murray (D-WA) had committed to providing offsets for an estimated $9 billion in mandatory funding for the National Institutes of Health (NIH) before bringing their ‘Innovation for Healthier Americans’ package to the Senate floor, top Senate aides indicate that a deal is not yet close to being struck. 

Chairman Alexander has asked Finance Committee Chairman Orrin Hatch (R-UT) to find offsets within his Committee’s jurisdiction to fund new resources for a slate of NIH initiatives. But thus far, Chairman Hatch and his Democratic counterpart, Sen. Ron Wyden (D-OR), have been reluctant to offer funds within their jurisdiction to offset the HELP Committee bill. In a recent joint statement, the Finance Committee leaders poured cold water on the idea of underwriting a boost in NIH funding solely from their jurisdictional purview. “We look forward to hearing from our colleagues on the HELP Committee about their ideas and working with them to see if we, as an entire legislative body, can examine spending across the budget to help create a viable and fiscally responsible path forward for their legislation,” the senators said.

While Majority Leader Mitch McConnell (R-KY) has committed to reserving floor time for the bipartisan ‘Innovation’ initiative if a deal is ultimately struck, the legislative calendar is quickly becoming full as the upper chamber delves into their annual appropriations work. Leader McConnell has said he would devote up to 12 weeks of floor time to get all 12 spending bills passed before October 1, which significantly reduces the number of available days for the chamber to consider other legislation. The Senate currently has 19 weeks of scheduled floor time left in the year following this week, including a lame-duck session following November’s general elections. Still, a breakdown in the regular appropriations process — which some call inevitable — could open the door for a healthcare package to receive a vote.  Either way, given the current state of negotiations, Senate aides suggest that June is the earliest that the ‘Innovation’ package is likely to hit the Senate floor.  

UnitedHealth to Pull Out of Most ACA Exchanges

On Tuesday, insurance giant UnitedHealth announced that it will be pulling out of the Affordable Care Act (ACA) exchanges in all but a “handful” of states in 2017. While the insurer’s announcement made headlines last week, its exit does not come as a total surprise. Last November, UnitedHealth threatened to leave the exchanges because of financial losses. And then earlier this month, the insurer announced that it has decided to drop its ACA plans in Arkansas and Georgia. Congressional Republicans have pointed towards UnitedHealth’s threats to exit as evidence that the ACA would eventually “collapse under its own weight.” Insurance companies are expected to ask for significant premium increases next year to stem their financial losses in the exchange. The Obama Administration has tried to assuage concerns over the UnitedHealth’s future exit by downplaying the insurer’s importance. Sources have stated that the insurer is a fairly small player in the marketplaces, with only about 6 percent of all enrollees, and that the insurer’s coverage was often not priced competitively.

Despite UnitedHealth’s announcement, a number of other insurers have come out favorably for the exchanges. Cigna, Anthem, Aetna, and Blue Cross Blue Shield have all expressed that they will likely stay in the exchanges despite its challenges, and have expressed strong hopes that the marketplace will eventually become more stable. “We believe that the market offers a potential longer-term opportunity for profitable growth through collaborative partnerships with physicians, customers, regulators, and distribution partners,” said a Cigna spokesperson last week. Additionally, a senior fellow at Urban Institute's health policy center has said UnitedHealth’s departure does not signal that the marketplaces are in trouble or not sustainable in the long run.

CMS to Discontinue Two-Midnight Cuts, Will Reimburse Hospitals

Hospitals applauded the Centers for Medicare and Medicaid (CMS) after the agency announced last week that it will no long implement the 0.2 percent cut pursuant to the controversial two-midnights inpatient hospital admissions policy and will pay back hospitals for the years the cut was in place. Implemented in 2014, the policy required that a beneficiary stay in a hospital for at least two midnights for them to be admitted as an inpatient. Originally, CMS expected more claims to be classified as inpatient as a result of the two-midnights rule and therefore implemented a 0.2 percent cut in order to keep the policy budget neutral. However, the agency says it may have been too conservative in estimating how many stays would go from being classified as “outpatient” claims to “inpatient” ones. Thus, in a proposed rule released late Monday, CMS said after reviewing stakeholder comments that it realized its original estimate for the 0.2 percent cut “had a much greater degree of uncertainty than usual” and decided to remove the cut altogether, as well as reimburse hospitals for the years the cut was in place.

Urban Institute: 18 Million Gained Coverage from ACA

A new study from the Urban Institute found that roughly 18 million people have gained health insurance under the Affordable Care Act (ACA). While the study looked into other causes for increases in the newly insured – such as an improving economy – it found that 18 million people have gained coverage directly as a result of the healthcare law, translating to a 46 percent reduction in the uninsured rate. Specifically, the study found that 16.9 million people gained coverage from the health law’s main provisions – its marketplaces and expansion of Medicaid – and 1.2 million people gained coverage by virtue of staying on their parents’ plans until age 26. The Department of Health and Human Services (HHS) reported similar findings last month, reporting that 20 million people gained coverage because of the health law as of early this year. A survey from the Centers for Disease Control and Prevention (CDC) found that the uninsured rate fell to a record low of 9.1 percent last year.