This week in Washington: Continuing resolution passes House, government shutdown averted for now, infrastructure and reconciliation package votes delayed.

House

Continuing Resolution Passes House and Senate, Government Shutdown Averted
On Sept. 30, both the House and Senate voted to pass the continuing resolution that will extend federal funding through Dec. 3. The bill also includes $28.6 billion for disaster assistance and $6.3 billion for Afghan refugees. An earlier version of the bill failed to pass the Senate on Sept. 27 due to its inclusion of a measure that would raise the debt ceiling. Republicans opposed raising the debt ceiling. The passage of a “clean” continuing resolution allowed the government to stay funded. Congress has yet to deal with the debt ceiling limit issue, which must be addressed by Oct. 18 when the government will run out of borrowing authority.

Reconciliation Update
Despite House Speaker Nancy Pelosi’s efforts to hold a House vote on the infrastructure package on Friday, Oct. 1, the vote was delayed. Speaker Pelosi had previously stated the vote would be held Thursday, Sept. 30 but was forced to delay it due to fractions within the Democratic party. The Senate passed the bipartisan bill in August. Progressive Democrats have stated they will not support the infrastructure bill until moderate Democrats make a deal with them on the $3.5 trillion reconciliation package of social spending. Moderate Democratic Sens. Kyrsten Sinema (D-AZ) and Joe Manchin (D-WV) have opposed the budget reconciliation package. Sen. Manchin stated that the highest amount he would support for the reconciliation package is $1.5 trillion, a substantial decrease from the current level of $3.5 trillion. All Democratic votes are needed to pass the reconciliation legislation in the Senate. Therefore, at the current time, both the infrastructure package and the reconciliation package are held up. Speaker Pelosi wrote a Dear Colleague letter on Oct. 2 calling for the infrastructure bill to be passed before Oct. 31.

House Judiciary Committee Markup on Healthcare Bills
On Sept. 29 and 30, the House Judiciary Committee passed several healthcare-related bills that were previously passed by the Senate. The bills and a brief description can be found below.

  • H.R. 2883, the Stop STALLING Act, which would penalize pharmaceutical companies for abusing citizen petitions to delay generic and biosimilar approval
  • H.R. 2891, the Preserve Access to Affordable Generics and Biosimilars Act, would codify the assumption that pay-for-delay agreements are anticompetitive and illegal
  • H.R. 2873, the Affordable Prescriptions for Patients Through Promoting Competition Act of 2021, would prohibit the practice of “product hopping”
  • H.R. 2884, the Affordable Prescriptions for Patients Through Improvements to Patent Litigation Act, would cap at twenty the number of patents that pharmaceutical companies can assert in an infringement action filed before biosimilar marketing

House Energy and Commerce Committee Republicans Write to CDC Regarding COVID-19 Breakthrough Tracking
On Sept. 28, three Republican members of the House Energy and Commerce Committee wrote to the Centers for Disease Control and Prevention (CDC) Director Rochelle Walensky regarding the agency’s decision not to collect data on COVID-19 breakthrough cases unless they result in hospitalization or death. The letter was sent by Reps. Cathy McMorris Rodgers (R-WA), Brett Guthrie (R-KY) and Morgan Griffith (R-VA). On May 1, 2021, the CDC stopped monitoring all reported vaccine breakthrough COVID-19 cases and focused on cases that resulted in hospitalization or death. In the letter, the members stated that the full extent of breakthrough infections is not known, and policy decisions are being made without complete information. The letter can be found here.

Senate

Sen. Murray and Rep. Pallone Statement in Support of HHS Rule on Surprise Billing
On Sept. 30, Sen. Patty Murray (D-WA), chair of the Senate Health, Education, Labor and Pensions Committee, and Rep. Frank Pallone (D-NJ), chair of the House Energy and Commerce Committee, issued a press statement in support of the Health and Human Services (HHS) interim final rule on surprise billing. The interim final rule contains provisions from the No Surprises Act and establishes new protections from surprise billing and excessive cost sharing for consumers receiving healthcare services. The press release can be found here.

Read more on healthcare policy in McGuireWoods Consulting’s Washington Healthcare Update.

This week in Washington: Reconciliation talks continue.

House

Reconciliation Update
On Sept. 17, Democratic leadership acknowledged that the reconciliation package will not be ready for a Sept. 27 vote. House Speaker Nancy Pelosi (D-CA) had previously stated that the reconciliation package would be voted on together with the infrastructure bill on Sept. 27.

House Passes Bill Aimed at Avoiding Government Shutdown
On Sept. 21, the House voted 220-211 along party lines to pass a continuing resolution intended to prevent a government shutdown at the start of Oct. The House-approved package would lift the limit of federal borrowing, known as the debt ceiling, and fund the government at current levels through Dec. 3, 2021. The debt ceiling limit would be lifted until the end of 2022. The bill also includes funds for natural disaster recovery and Afghan refugees. The resolution now goes to the Senate, where it faces Republican opposition due to its inclusion of the debt ceiling. If the resolution does not pass by Oct. 1, funding for the government ends and the federal government will have to shut down.

Bipartisan Letter to President Biden Urges Increase of COVID-19 Vaccine Distribution
On Sept. 21, a group of 37 bipartisan representatives led by Reps. Susan Wild (D-PA), Gregory Meeks (D-NY) and Michael McCaul (R-TX) wrote to President Biden requesting that the U.S. increase global COVID-19 vaccine supply and distribution efforts by redirecting unused vaccines and increasing vaccine production. The letter also asks President Biden to enlist allies and partners in these efforts. The letter comes while the Biden administration is considering a booster shot regimen while a majority of the world’s population has not received a first dose.

Senate

Sen. Wyden Calls for Hospital Health Care Pricing Transparency Measures
On Sept. 20, Sen. Ron Wyden (D-OR) wrote to the Administrator of the Centers for Medicare and Medicaid Services (CMS) Chiquita Brooks-LaSure to express his support for improving transparency of hospital health care prices. In the letter, he observed that despite the recent Medicare Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System Proposed Rules, more needs to be done. He called for finalizing policies that increase the accessibility of price data for consumers and researchers.

MACPAC Holds September Meeting
On Sept. 23 and 24, the Medicaid and CHIP Payment and Access Commission (MACPAC) held a public meeting. For more information on the meeting, click here.

Finance Committee Members Request Stakeholder Input on Behavioral Health Care Improvements
On Sept. 21, chair and ranking member of the Finance Committee Sen. Ron Wyden (D-OR) and Mike Crapo (R-ID) wrote a letter requesting stakeholder input on how Congress can best address behavioral health challenges. The senators stated they are particularly interested in ideas to improve the behavioral health workforce, increase access to care, ensure parity between behavioral and physical health care and advance telehealth. The letter can be found here.

Read more in McGuireWoods Consulting’s Washington Healthcare Update.

This week in Washington: Reconciliation markup passes out of House Energy and Commerce and Ways and Means Committees.

House

House Energy and Commerce Committee Marks Up Build Back Better Act
From Sept. 13-15, the House Energy and Commerce Committee held a markup of the Build Back Better Act provisions. The committee approved measures to permanently extend the Children’s Health Insurance Program (CHIP), expand maternal health coverage, fund ARPA-H, invest in home- and community-based services and expand Medicare coverage of dental, vision and hearing, among other things. The committee did not pass the Medicare drug price negotiation bill (H.R. 3) due to resistance from three centrist Democrats. However, H.R. 3 will be included in the budget reconciliation bill since it was passed by the Ways and Means Committee. The next step is for the proposals of the different committees to be packaged together and considered by the full House. For more information, find Chairman Pallone’s press release on the markup here.

House Ways and Means Committee Marks Up Build Back Better Act
On Sept. 15, the House Ways and Means Committee finished their markup of the Build Back Better Act provisions. Health care measures approved included making the Affordable Care Act tax credit permanent. The previous week, the committee had approved other health care measures including expanding Medicare hearing, vision and dental benefits and improving data collection in nursing homes. The next step is for the proposals of the different committees to be packaged together and considered by the full House. For more information, find Chairman Neal’s press release on the markup here.

House Rules Committee to Consider Continuing Resolution
On Sept. 20, the House Rules Committee will meet to consider a continuing resolution to ensure that funding continues for the government past Sept. 30, 2021.

Reps. Scalise and Comer Write to FDA Commissioner with Concerns Regarding White House Booster Shot Position
On Sept. 14, ranking member of the Select Subcommittee on the Coronavirus Crisis Steve Scalise (R-LA) and ranking member of the Committee on Oversight and Reform James Comer (R-KY) wrote to the Food and Drug Administration’s (FDA) Acting Commissioner Janet Woodcock expressing their concern that the Biden administration is promoting COVID-19 vaccine booster shots despite a recent FDA publication stating that the current evidence does not support the need for a booster vaccine. President Biden previously stated that booster doses of the mRNA vaccine would be available to Americans starting on Sept. 20. The Republicans expressed concern that the White House is pressuring the FDA to authorize the booster shots and requested documents of communications with the White House on this topic. The letter can be found here.

Senate

The Senate and Reconciliation
On Sept. 15, President Biden met with Sens. Kyrsten Sinema (D-AZ) and Joe Manchin (D-WV) to discuss their concerns with the Build Back Better reconciliation bill. Democrats need every Democratic senator to vote for the reconciliation package in order for it to pass. While the Senate committees have not formally acted on the reconciliation, members are discussing legislation and will differ from the House in several ways.

Read more on healthcare policy in McGuireWoods Consulting’s Washington Healthcare Update.

This week in Washington: Reconciliation markups begin.

Need for Continuing Resolution to Fund the Government
On Sept.10, Majority Leader Steny Hoyer (D-MD) stated that he expected the House to act on a Continuing Resolution (CR) the week of Sept. 20. It is expected that the CR would run approximately through Dec. 10. This would provide more time for the House and Senate to finish appropriations bills to fund the government.

House Ways and Means Committee Acts on Budget Reconciliation
On Sept. 9 and 10, the House Ways and Means Committee held a markup of the committee’s portion of what will be the budget reconciliation package. The Ways and Means Committee proposal includes expanding Medicare coverage to include dental, vision and hearing benefits and addressing staffing shortages in long-term care facilities by providing funds for recruitment and retention including wage subsidies, child care and tuition reimbursement. In addition, the proposal includes improving accuracy and reliability of data collected in long-term care facilities. The committee will continue marking up tax issues this week. The chairman’s mark can be found here.

House Energy and Commerce Committee to Mark Up Budget Reconciliation
On Sept. 13, the House Energy and Commerce Committee will hold a markup of their section of the budget reconciliation package. Among the proposals under consideration are drug pricing reform, addressing the Medicaid gap and making funding for the CHIP program permanent. The chairman’s mark can be found here.

Congressional Black and Hispanic Caucus Members Urge Congressional Leadership to Close the Medicaid Gap
On Sept. 5, four members of the Congressional Black Caucus (CBC) and the Congressional Hispanic Caucus leadership wrote to Majority Leader Chuck Schumer (D-NY) and Speaker Nancy Pelosi (D-CA) urging action to close the Medicaid coverage gap. The members wrote that improving Medicaid coverage will reduce racial health inequalities. Signatories to the letter included Rep. Robin Kelly (Health Braintrust chair of the CBC), Rep. Yvette Clarke (CBC member), Rep. Joyce Beatty (CBC chair) and Rep. Raul Ruiz (Hispanic Congressional Caucus chair). The letter can be found here.

Reps. Pallone and Maloney Request More Information on FDA’s Review and Approval of Aduhelm
On Sept. 1, Chair of the Energy and Commerce Committee Frank Pallone (D-NJ) and Chair of the Oversight and Reform Committee Carolyn Maloney (D-NY) sent a letter to Acting Food and Drug Administration (FDA) Commissioner Dr. Janet Woodcock. In the letter, Reps. Pallone and Maloney requested additional information on the review and approval of Biogen’s Alzheimer drug Aduhelm. Reps. Pallone and Maloney state that although the FDA’s Center for Drug Evaluation and Research (CDER) provided a briefing and related materials to committee staff in July, questions about the approval process remain. The letter can be found here.

Read more on healthcare policy in McGuireWoods Consulting’s Washington Healthcare Update.

On Aug. 31, 2021, the Department of Health and Human Services’ Health Resources and Services Administration (HRSA) issued a notice announcing the reorganization of several parts of the agency. This is not the first effort in recent years to reorganize HRSA. On June 3, 2020, the Trump administration issued a notice to make changes to HRSA’s organization.

The most recent notice announced the creation of the Provider Relief Bureau, which will replace the HRSA Office of Provider Support created by the Trump administration. The new bureau will be responsible for managing the $175 billion Provider Relief Fund created by the CARES Act to compensate for expenses and lost revenue related to the COVID-19 pandemic. This comes at a time when providers are pushing for the release of $44 billion remaining from the CARES Act provision.

In addition, the notice details the objective and responsibilities of the Office for the Advancement of Telehealth, which was established in HRSA’s Office of the Administrator in Jan. 2021 as part of the Trump administration reorganization. The Office for the Advancement of Telehealth includes the Telehealth Innovation and Services Division, which supports grant programs and technical assistance.

The notice also clarifies that the organ donation and transplantation programs will remain with HRSA’s Health Systems Bureau (formerly known as the Healthcare Systems Bureau). The Trump administration reorganization had moved the transplant programs out of the agency to the Office of the Assistant Secretary for Public Health.

Read more on healthcare policy on McGuireWoods Consulting’s website.

This week in Washington: House passes budget resolution with compromise, setting up a September deadline for infrastructure bill vote.

House Passes Budget Resolution
On Aug. 24, the House voted 220-212 to pass a $3.5 trillion budget resolution and also advanced a $1 trillion bipartisan infrastructure bill. The vote allows Democrats to write and approve the spending package without Republican support. This vote came after House leadership compromised with centrist Democrats by agreeing to a Sept. 27 deadline for the infrastructure bill vote. The reconciliation instructions make way for health care measures such as extending the Affordable Care Act (ACA) tax credits, expanding Medicare benefits and closing the Medicaid coverage gap. The resolution assumes these measures will be paid for by drug pricing reforms.

Reps. Kuster and McKinley Request a New Formulary Tier for Generics and Biosimilars
On Aug. 25, Reps. Annie Kuster (D-NH) and David McKinley (R-WV) wrote to the Centers for Medicare and Medicaid Services (CMS) requesting the creation of a preferred formulary tier just for generics and biosimilars. In addition, the representatives asked CMS to set a lower coinsurance for the specialty generic and biosimilar tier, and that brand drugs be prohibited from the specialty tier. The letter can be found here.

Read more on healthcare policy in McGuireWoods Consulting’s Washington Healthcare Update.

This week in Washington: Senate passes infrastructure bill; Senate passes budget resolution with reconciliation instructions; Congress enters recess with House members to return Aug. 23.

Senate Passes Infrastructure Bill

On Aug. 10, the Senate voted 69-30 to pass the bipartisan infrastructure bill, with 19 Republicans voting in favor. The path forward for the bill is not straightforward, as House Speaker Nancy Pelosi has repeatedly stated that the House will not take up the infrastructure bill until the Senate passes the reconciliation package.

The infrastructure bill includes two offsets related to drugs: it would delay the Trump-era Part D drug rebate rule and require drug companies to refund Medicare for leftover medicine when vials contain more than patients need. The rebate rule was intended to eliminate Part D rebates unless they are shared upfront at the point of sale, and its delay will offset $49 billion. The measure, which requires drug companies to pay back Medicare Part B for unused portions of drugs packaged in vials, would save $3 billion over a decade.

Budget Resolution Passes Senate with Instructions Setting Up Healthcare Debate in the Fall

In the early morning, the Senate adopted a budget resolution with reconciliation instructions after 14 hours of continuous amendment votes. This will allow the Senate to deliver legislation to address the Biden administration’s “human infrastructure” legislation without Republican votes. The budget resolution calls for a $3.5 trillion framework of climate and social initiatives, including subsidized childcare, expanded Medicare and paid family and medical leave benefits. The House will return early from their district work period to consider the resolution. The budget measure instructs committees to begin drafting the pieces of President Joe Biden’s plan, with a flexible deadline of Sept. 15.

Some of the health issues the resolution makes way for include: adding dental, vision and hearing benefits to Medicare; lowering the age of Medicare eligibility; permitting Medicare to negotiate drug prices; and addressing the “Medicaid Gap” created by some states not having expanded their Medicaid programs. In addition, it is expected that the reconciliation package may also include other drug pricing reforms. Two Democratic senators who already voted for the resolution are expressing discomfort with the top line $3.5 trillion number.

Read more on healthcare policy in McGuireWoods Consulting’s Washington Healthcare Update.

The clock is ticking for Congress to reach a deal to raise the federal borrowing limit — the debt ceiling. On July 23, 2021, Secretary of the Treasury Janet Yellen notified Congress that, as of Aug. 1, the outstanding debt of the United States will be at the statutory limit and the Treasury would use extraordinary measures, including suspending the sale of nonmarketable debt, to prolong the period before Congress needs to act.

Under normal circumstances, the Treasury has sufficient financial resources to pay all obligations arising from discretionary and mandatory spending, including interest payments on the debt partly due to its ability to borrow funds. Once the country hits the debt ceiling, the Treasury cannot borrow more unless Congress votes to raise the ceiling. The Congressional Budget Office (CBO) and other third-party analysts predict that the extraordinary measures probably will allow the Treasury to make it to early fall or October or November before congressional action would be needed, either to raise the debt limit or suspend it. The CBO also notes that the government’s obligations are about twice as much as the revenue it expects to collect.

When Senate Democrats released their budget resolution, it did not contain a provision to raise the debt limit. On the same day, Senate Minority Leader Mitch McConnell (R-Ky.) doubled down, saying Republicans would not be a part of raising the debt limit for Democrats to spend. He in essence dared the Democrats to push through an increase in the debt limit using only Democratic votes, just as they plan to do for budget reconciliation. On Aug. 11, Senate Majority Leader Chuck Schumer (D-N.Y.) pointed out that this usually has been a bipartisan issue and that the White House and the Treasury wanted this to be resolved outside of budget reconciliation, so it would be a bipartisan response and because rules related to reconciliation would limit solutions.

Read more on the debt ceiling on McGuireWoods Consulting’s website.

On Aug. 10, 2021, the Senate passed the infrastructure bill, called the Infrastructure Investment and Jobs Act (IIJA) in a 69-30 vote. The bill will now wait for consideration in the House of Representatives. The total cost of the bill is $1.2 trillion with $548 billion in new spending. The bill reauthorizes the traditional surface transportation programs for five years, and provides additional funding for energy, water and broadband.

The IIJA includes the committee-passed surface transportation reauthorization bills from the Commerce and Environment and Public Works Committees, the Drinking Water and Wastewater Infrastructure Act passed by the Senate, and the Energy Infrastructure Act approved by the Energy and Natural Resources Committee.

Read more on McGuireWoods Consulting’s website for a breakdown on new spending included in the bill, as well as details on topline provisions included in the legislation.

The courts continue to play an important role in health policy. 2020 saw several notable lawsuits related to the Affordable Care Act (ACA). Several other Trump administration policies were challenged, including Medicare payment policies, price transparency, how the Medicaid program can change and whether Medicaid beneficiaries can sue over curtailed benefits, and immigration changes affecting access to programs like Medicaid. By June 2021, the Supreme Court had ruled in the risk corridors case and the case of Texas v. United States.

The courts will play an important role going forward, and the Supreme Court has agreed to take up several cases related to healthcare in the next term.

2022 Cases

340B Reimbursement. On July 2, 2021, the Supreme Court stated that it would hear American Hospital Association v. Becerra, a lawsuit by hospitals over cuts to Medicare reimbursement for 340B drugs and will also hear arguments on whether a review is precluded by statute.

The Centers for Medicare and Medicaid Services (CMS) cut Medicare pay for 340B drugs by approximately 30 percent in 2018, and the district court ruled that CMS did not have the authority to make this change. CMS appealed the decision, and an appeals court upheld the pay cuts.

Medicare Disproportionate Share Payments. On July 2, 2021, the U.S. Supreme Court accepted the Department of Health and Human Services’ (HHS) request to review HHS Secretary Xavier Becerra v. Empire Health Foundation since the courts’ decisions are split. The case involves the question of whether or not the Centers for Medicare and Medicaid Services (CMS) must include patients who have exhausted their Medicare Part A benefits when calculating disproportionate share hospital (DSH) payments.

The issue stems from a 2005 rule in which HHS stated that although patients are entitled to benefits under Medicare if they have used all of their Part A benefits, Medicare will no longer pay providers for their care. As a result, hospitals sued HHS, accusing the Department of incorrectly equating the statutory language of “entitled” to with “eligible” for benefits. Two circuit courts sided with HHS, finding the law was ambiguous and the secretary’s interpretation of the law was reasonable. However, the 9th Circuit Court ruled earlier this year in favor of the hospitals, stating that “entitled” and “eligible” cannot be considered interchangeable if the statute includes both words.

States’ Ability to Recover Medicaid Beneficiaries’ Settlement Costs. On July 2, 2021, the Supreme Court agreed to hear Gallardo v. Marstiller, a case on whether state Medicaid agencies can recover costs for Medicaid beneficiaries’ past medical expenses from settlements that are aimed at compensating them for their future medical costs.

The case revolves around a Florida woman, Gianinna Gallardo, who was hit by a truck while getting off a school bus at 13 years of age in 2008, and has been in a vegetative state since. She received an $800,000 settlement for her medical expenses and other damages, but the amount only covered a fraction of the expenses. The Florida Agency for Health Care Administration wanted to recover $300,000 from the settlement after its state Medicaid program paid over $860,000 for Gallardo’s care, but only $35,000 of Gallardo’s settlement was earmarked for past medical expenses. Florida statute allows Medicaid to recoup costs from payments earmarked for future expenses. Lawyers argued that Florida’s law violates federal Medicaid statute. The District Court for the Northern District of Florida agreed that the Medicaid statute preempted Florida’s statute. However, the 11th Circuit Court reversed the decision three years later.

States laws vary on whether costs can be recouped from settlements designated for future medical costs, and state supreme court decisions have been similarly varied.

Read more on healthcare policy on McGuireWoods Consulting’s website.