In a June 18 opinion piece for Market Watch, McGuireWoods Consulting senior vice president, Ryan Bernstein, and research associate, Mariam Eatedali, reviewed the current state of the new USMCA trade agreement between the United States, Mexico and Canada, and what is needed for ratification in these countries.

In Mexico, the Senate has the exclusive power to approve treaties made by the president with foreign countries. The trade deal can pass in Mexico with a majority vote, and all state laws must conform to the new treaty.

“While the Mexican Constitution sets out an easy ratification process, politically Mexico had to make legislative changes to its labor laws to help address concerns voiced by Democrats in the United States and labor concerns at home,” Bernstein and Eatedali said.

Canada began its ratification process on May 29, and the legislation (C-100) includes amendments needed to conform to the new trade agreement.

“If C-100 does not pass by the end of June, either session can be extended or called back during the summer. The more likely hard deadline is the middle of September when the writ drops and Canada transitions into election mode for October,” Bernstein and Eatedali noted. “If it is not passed by the middle of September, it will “die on the order paper” and will have to be reintroduced in the next Parliament, which might be a different government.”

In the U.S., House Speaker Nancy Pelosi has the ultimate control on the timing and passage of USMCA. The implementing bill, which is considered a revenue bill that the House must pass first, must be passed by the House within 15 session days to keep its protection from amendment and filibuster, and must be passed by both chambers within 90 session days of the bill’s introduction.

“Changes made to address Democrats’ concerns could be solved with side letters, yet Pelosi requested that enforcement provisions be included within the implementing bill instead of as side legislation,” the authors said.  “At the same time, the New Democrat Coalition is using the current momentum, and the president’s need for their support, to bring attention to infrastructure- and workforce-related legislation, including a push to increase the federal minimum wage.”

Ratification of the USMCA must happen this year in the U.S., or wait until after the 2020 election.

“Until all three counties ratify the new agreement, the original NAFTA continues to govern North American trade,” said Bernstein and Eatedali. “If Congress were to amend their ratification legislation, treaty negotiators among all three countries would then need to determine whether Mexico and Canada would be willing to accept the amended legislation and amend any ratification legislation they might have already passed.”

Read more on the McGuireWoods Consulting website.

Federal Updates

  • The House brought its first FY20 appropriations bills to the floor in a “minibus” that included the Labor-Health and Human Services-Education, Defense, State-Foreign Operations, Energy-Water, and Legislative Branch bills last week and is expected to vote on the package early this week.
  • The Department of Education published a notice in the Federal Register proposing regulations regarding “Student Assistance General Provisions, the Secretary’s Recognition of Accrediting Agencies, the Secretary’s Recognition Procedures for State Agencies”. The deadline for public comments is July 12, 2019.
  • The Treasury Department recently released rules that shield private school vouchers and other school choice programs from the new cap on state and local tax deductions. The Secretary of Education announced support for the new rules.

State Updates

Fifteen states are currently in session with six adjourning at the end of June.

  • In the final days of  its session, New York is considering several bills to further regulate for-profit institutions of higher education (S 5598/A 7965S 5581/A 8170).
  • In New Hampshire, the legislature passed a commission to study teacher preparation and education programs (HB 258). The California State Assembly passed a bill to require the State Department of Education to develop and implement the Literacy Academy for California Educators as a statewide professional learning infrastructure to provide evidence-based support to educators in teaching, reading and literacy across grades and across the content areas (A 1684). The measure is now being considered by the Senate.
  • The Louisiana legislature passed SR 182 which establishes the Louisiana Early Literacy Commission. The purpose of the commission is to study and make recommendations to develop and implement an aligned system to provide effective evidence-based reading instruction for children from birth through third grade.
  • Recent legislation in Nevada and Texas regulates the autonomy of charter schools. Nevada AB 462 prohibits state education authorities to open a charter school until January 1, 2021. Texas SB 372 gives authority to open-enrollment charter schools to expand school safety personnel.

Read more in education policy on the McGuireWoods Consulting website.

Hearings/Markups

Senate Committee on the Judiciary: “The State of Patent Eligibility in America: Part III”

Tuesday, June 11, 2019: The Senate Judiciary’s Subcommittee on Intellectual Property held a hearing continuing its work on patent eligibility, with a large panel of witnesses, most of whom are arguing in favor of statutory reform that would tighten up the law of eligibility. Find the draft bill here. Find witness testimonies and hearing updates as they become available here

Why this is important: Chairman Thom Tillis (R-NC) The hearing was the final gathering before the subcommittee alters the draft bill that would undo U.S. Supreme Court decisions and expand patent eligibility.

Senate Committee on the Judiciary: “Your Doctor/Pharmacist/Insurer Will See You Now: Competitive Implications of Vertical Consolidation in the Healthcare Industry”

Wednesday, June 12, 2019: The Senate Judiciary’s Subcommittee on Antitrust, Competition Policy, and Consumer Rights held a hearing on how vertical consolidation practices in the health care industry could threaten competition. Find witness testimonies and hearing updates as they become available here.

Why this is important: While the witness panel saw benefits to vertical mergers done properly, there was warning that efficiencies in vertical mergers can be over-hyped, as the benefits are not, statistically speaking, likely to be achieved. Witnesses encouraged more transparency to attorneys during mergers, which could address legality concerns. The panel ultimately warned that while most vertical mergers do not impair competition, it should not be assumed that all are benign, and that significant efficiencies will always be realized, or that cost savings will be passed along to consumers. A broad agreement for more oversight and regulatory measures was called for.  

House Ways and Means Committee: “Pathways to Universal Health Coverage”

Wednesday, June 12, 2019: The House Ways and Means Committee held a hearing on the single-payer issue, marking the first time in decades that one of the two main health care committees of jurisdiction will hold a hearing on the topic. The hearing will also discuss other ways to achieve universal coverage. Find witness testimonies and hearing updates here.

Why this is important: Democratic members stayed unified on the need for universal coverage.  Republicans spent their time speaking against Medicare for All, which was not the sole subject of the hearing. Some Democratic members asked about Medicare and Medicaid buy-ins and opportunities for states to expand health coverage, and rebutted Republicans’ statements about how single-payer health care approaches would cause irreparable harm to patients and to the economy.

House Energy and Commerce: “No More Surprises: Protecting Patients from Surprise Medical Bills”

Wednesday, June 12, 2019: The House Energy and Commerce Health Subcommittee will hold a hearing on surprise medical billing with a goal to protect patients by developing a solution that takes patients out of the middle of pricing issues without increasing health care costs. An unannounced group of stakeholders will testify as the committee considers legislative proposals to address the surprise billing concerns. Find witness testimonies and hearing updates as they become available here.

Why this is important: While all the panelists agreed that patients should not be caught in the middle of surprise billing issues, stakeholders repeated their warnings related to federal involvement. There was agreement on the panel against balanced billing as a solution, and more support for methods of arbitration. Yet, members of the subcommittee were split, with Rep. Raul Ruiz (D-CA) advocating for his own arbitration proposal not yet introduced. Supporters of the Ruiz proposal include Rep. Larry Bucshon (R-IN), who argued during the hearing that providers need more negotiating power with insurers for higher rates. Rep. Ruiz’ proposal is backed by physician groups and would set up an arbitration model similar to the one hospitals and doctors use in New York and Texas. Members also pressured witnesses about transparency on prices and overall costs.

Read more on healthcare policy on the McGuireWoods Consulting website.

Border Funding

Next Wednesday, the Senate Appropriations Committee will markup a $4.5 billion supplemental funding bill per the President’s request for more funding to secure the border.

National Defense Authorization Act

Leader McConnell (R-KY) is also expected to bring the FY20 National Defense Authorization Act (NDAA) to the floor.

FY20 Spending Bills

The House will vote on its first FY20 minibus early next week before bringing up its second package of spending bills, including the Commerce-Justice-Science, Agriculture-Rural Development-FDA, Interior-Environment, Military Construction-Veterans Affairs, and Transportation-Housing and Urban Development bills.

Read more in McGuireWoods Consulting’s Emerging Technologies Washington Update.

Net Neutrality

The Senate spent the week considering another slew of judicial nominations, but on Tuesday, Senate Democrats tried to force a vote on House-passed net neutrality legislation. Senate Commerce Committee Chairman Wicker (R-MS) objected. The effort was largely symbolic on the one year anniversary of the FCC repealing Obama-era net neutrality regulations. The Democratic-controlled House passed the Save the Internet Act earlier this year with little expectation of the Republican-controlled Senate taking it up. Wicker and Senator Sinema (D-AZ) announced a bipartisan net neutrality working group earlier this year, but have not yet offered a proposal.

FY20 Appropriations

On the other side of the Capitol, the House brought its first FY20 appropriations bills to the floor in a “minibus” that included the Labor-Health and Human Services-Education, Defense, State-Foreign Operations, Energy-Water, and Legislative Branch bills. A final vote is expected early next week amid a veto threat from the White House.

Deepfakes

Today, the House Intelligence Committee holds a hearing on the “National Security Challenges of Artificial Intelligence, Manipulated Media, and “Deepfakes.”

T-Mobile and Sprint Merger

Elsewhere, 10 state attorneys general led by Xavier Becerra (CA) and Tish James (NY) filed a suit on Tuesday to block the proposed merger between T-Mobile and Sprint, which is still undergoing review at the Department of Justice. FCC Chairman Pai endorsed the merger last month, arguing that the companies’ commitments will help close the digital divide in rural America and advance US leadership in 5G. The attorneys general of Colorado, DC, Maryland, Michigan, Mississippi, Nevada, Virginia, and Wisconsin joined the suit.

Read more in McGuireWoods Consulting’s Emerging Technologies Washington Update.

Hearings

House Energy & Commerce, Subcommittee on Health: “Investing in America’s Healthcare”

The Health Subcommittee of the Committee on Energy and Commerce held a hearing on health care extenders, discussing the following legislation:

  • H.R. 1767, the “Excellence in Mental Health and Addiction Treatment Expansion Act”
  • H.R. 1943, the “Community Health Center and Primary Care Workforce Expansion Act of 2019”
  • H.R. 2328, the “Community Health Investment, Modernization, and Excellence Act of 2019”
  • H.R. 2668, the “Special Diabetes Program Reauthorization Act of 2019”
  • H.R. 2680, the “Special Diabetes Programs for Indians Reauthorization Act of 2019”
  • H.R. 2815, the “Training the Next Generation of Primary Care Doctors Act of 2019”
  • H.R. 2822, the “Family-to-Family Reauthorization Act of 2019”
  • H.R. 3022, the “Patient Access Protection Act”
  • H.R. 3029, the “Improving Low Income Access to Prescription Drugs Act of 2019”
  • H.R. 3030, the “Patient-Centered Outcomes Research Extension Act of 2019”
  • H.R. 3031, a bill to amend Title XVIII of the Social Security Act to extend funding for quality measure endorsement, input and selection under the Medicare program
  • H.R. 3039, a bill to provide for a five-year extension of funding outreach and assistance for low-income programs

Why this is important: The majority of the House has asked House leadership to move legislation delaying cuts in DSH payments scheduled for Oct. 1. The majority of members supports delaying the cuts by an additional two years.

At the hearing, most members agreed that extending funding for community health centers, the National Health Services Corps and the Teaching Health Center Graduate Medical Education program for more than two years is a priority, but some House Republicans held concern about increasing funding with no offsets.  

Read witness testimonies and the full hearing.

House

Bipartisan Bill Unveiled to Repeal Ban on Physician-Owned Hospitals

On June 5, House Energy & Commerce health subcommittee ranking Republican Michael Burgess (TX) and Rep. Vicente Gonzalez (D-TX) announced a bipartisan bill to repeal the Affordable Care Act’s (ACA) ban on new physician-owned hospitals. H.R. 3062, the Patient Access to Higher Quality Health Care Act of 2019 would eliminate the restrictions that put a moratorium on physician-owned hospitals and limited the expansion of most grandfathered physician-owned hospitals. Read the bill.

House Passes Pandemic Preparedness Bill

On June 4, the House passed by voice vote the Senate’s Pandemic and All-Hazards Preparedness and Advancing Innovation Act (PAHPAI). The legislation reauthorizes HHS efforts to respond to disasters, emerging infectious diseases and chemical/biologicals threats. The bill authorizes funds to encourage new antibiotics and stockpile critical medicines and authorizes a range of state and local disaster responses. It was delayed in passing the Senate because of issues related to over-the-counter drug reform which had been included in the House version. The final version of the pandemic legislation does not include the reform of the Food and Drug Administration’s (FDA) over-the-counter (OTC) drug regulatory framework that was part of the House’s original pandemic bill. Because it was left out of the final bill, the OTC reform legislation will now have to pass through Congress on its own or be attached to a different vehicle, although it is not clear whether it is a priority at the moment.

House Appropriations Sends Agriculture-FDA Spending Bill to Floor

On June 4, the House Appropriations Committee approved its Agriculture-FDA spending bill 29-21. The bill includes a total of $24.3 billion in discretionary funding for the Department of Agriculture (USDA) and the Food and Drug Administration (FDA), which is $5.1 billion more than the Trump administration requested in its budget plan. The committee adopted by voice vote an amendment that blocks the use of funds for reviewing research into genetically modifying human embryos. The bill would also boost the FDA’s taxpayer funding by $185 million and includes language urging the FDA to expedite pre-market review of e-cigarettes, establish a track-and-trace system for tobacco products and expand the “Real Cost” anti-tobacco ad campaign that targets teens. An amendment introduced by Rep. Aderholt to raise the tobacco purchasing age to 21 and to limit online e-cigarette sales failed in a 23-27 recorded vote.

Senate

Senate Finance Adds Health Insurance Tax to List of Fees Needing Permanent Fix

On June 6, a Senate Finance Committee task force added the Affordable Care Act’s (ACA) health insurance tax to the list of health fees for which it is seeking a permanent fix. The fee applies to nearly all health issuers, including Medicaid managed care and Medicare Advantage plans, and is apportioned based on market share. The tax was to bring in $8 billion in 2014 and $14.3 billion in 2018, and it was indexed to premium growth post-2018. However, Congress paused the tax in 2017 and then again for 2019.

Coons Says Patent Draft Bill Would Not Allow Gene Patenting

On June 4, Sen. Chris Coons (D-DE) said a draft bill aiming to broadly reform how patents are granted would not allow for the patenting of individual, isolated genes. The draft eliminates a restriction on patenting broad categories of intellectual property such as “abstract ideas,” “laws of nature” or “natural phenomena.” It would establish a new benchmark involving “specific and practical utility in any field of technology through human intervention.” The draft bill text to reform Section 101 of the Patent Act was released on May 22 by Sens. Thom Tillis (R-NC) and Coons. Reps. Doug Collins (R-GA), Steve Stivers (R-OH) and Hank Johnson (D-GA) introduced a companion to the Coons-Tillis bill in the House. Read the draft bill.

FY20 Appropriations Bills

The House will start bringing FY20 appropriations bills to the floor next Wednesday with the Senate Appropriations expected to start marking up its bills shortly thereafter.

Pending Nominations

The Senate will continue considering pending executive branch and judicial nominations, including Edward Crawford’s nomination to be Ambassador to Ireland.

FY20 National Defense Authorization Act

Senate Majority Leader McConnell (R-KY) and Armed Services Committee Chairman Inhofe (R-OK) are aiming to bring the FY20 National Defense Authorization Act (NDAA) to the floor the week of June 17. The House Armed Services Committee is in the process of marking up its companion legislation, which will continue next week.

Read more in McGuireWoods Consulting’s Emerging Technologies Washington Update.

Disaster Aid Legislation Passes, Senate Continues to Process Nominations

With the President in the United Kingdom for a state visit, the House and Senate returned to Washington on Monday after the weeklong Memorial Day recess. The House immediately passed a supplemental disaster aid bill, sending it to the President for his signature. The Senate continued to process executive branch and judicial nominations, including Andrew Saul’s nomination to be Commissioner of Social Security and Heath Tarbert’s nomination to be Commodity Future Trading Commission (CFTC) chairman. Both chambers wrapped their work mid-week as many lawmakers traveled to Normandy to mark the 75th anniversary of D-Day alongside the President and other world leaders.

STREAMLINE Small Cell Deployment Act

Senators Thune (R-SD) and Schatz (D-HI) reintroduced the STREAMLINE Small Cell Deployment Act this week, which aims to expedite 5G deployment by “setting reasonable standards for public review of infrastructure siting while recognizing the unique challenges for small municipalities,” according to the sponsors. The legislation mirrors a bill they offered last Congress that drew criticism from local governments who consider it federal overreach, but Schatz said this week that local government support will be critical for passage and he will continue to seek compromise.

House to Evaluate Communications Decency Act

Elsewhere, House Energy and Commerce Committee Chairman Pallone (D-NJ) confirmed this week that he plans to take steps to evaluate Section 230 of the Communications Decency Act (CDA) after tweeting last week that “Sec 230 is meant to enable platforms to take down harmful content. It should not be a shield for inaction.” Pallone’s comments are consistent with those of Speaker Pelosi (D-CA), who last month warned that the protection could be “in jeopardy.”

Federal Motor Carrier Safety Administration Moves Up Comment Deadline

In a Federal Register notice posted last Friday, the Federal Motor Carrier Safety Administration (FMCSA) moved up from August 26 to July 29 the comment deadline for an Advanced Notice of Proposed Rulemaking (ANPRM) requesting public comments on what Federal Motor Carrier Safety Regulations need to be amended, revised, or repealed to facilitate safely introducing Automated Driving Systems (ADS) in commercial vehicles. The July 29 date matches the comment deadline for a National Highway Traffic Safety Administration (NHTSA) ANPRM requesting public comment on Removing Regulatory Barriers for Vehicles with Automated Driving Systems published the same day. For more information on these proceedings, click here. The FAA also announced last week that it will extend the comment deadline from June 15 to July 30 for a proposed rule to streamline and increase flexibility in the FAA’s commercial space launch and reentry regulations.

Visa Applicants Must Disclose Social Media Monikers under New Policy

Last Friday, the State Department said it will begin implementing a new policy under which visa applicants will be required to disclose their social media monikers for the purposes of background checks. The enhanced vetting is a response to a March 2017 executive order, “Protecting the Nation From Foreign Terrorist Entry Into the United States.”

FCC Votes to Allow Wireless Service Providers to Block Unwanted Robocalls

Earlier today, the FCC voted unanimously during its June Open Commission Meeting that wireless service providers can proactively block unwanted robocalls before they reach consumers. Under the Declaratory Ruling, these providers can block unwanted calls based on “reasonable call analytics,” as long as their customers are informed and have the opportunity to opt out of the blocking. The FCC also adopted several related initiatives during the meeting aimed at combating unwanted and illegal robocalls.

Read more in McGuireWoods Consulting’s Emerging Technologies Washington Update.

McGuireWoods Consulting senior vice president, Stephanie Kennan, commented on the U.S. Supreme Court decision in a recent Medicare reimbursement case in a June 3 article for Inside Health Policy.

The court rejected Centers for Medicaid and Medicare Services’ (CMS) argument that it had broad authority to issue its own legal interpretations of the Medicare statute without going through the rulemaking process.

It ruled 7-to-1 that the Department of Health and Human Services (HHS) neglected its statutory notice and comment obligations when it implemented a change to the Medicare disproportionate share hospital (DSH) payment formula.

The case centered on whether HHS has to provide a 60-day notice and comment period before making substantial legal changes in policy. The policy in question added Medicare Part C patients in the formula, which would have substantially decreased DSH payments to hospitals. Because HHS did not follow the notice and comment obligation, the policy was vacated.

The court’s ruling could throw into question the validity of various subregulatory guidance documents and could mean that CMS will have to conduct rulemaking before making certain types of technical policy changes.

“The court’s decision makes HHS and its agencies less nimble in changing policy,” Kennan said. “Many important policy changes have occurred without notice-and-comment rulemaking.”

Read more on healthcare policy on the McGuireWoods Consulting website.

congressPending Nominations

When the Senate returns on Monday, it will take up Andrew Saul’s nomination to be Commissioner of Social Security before moving to a number of other pending judicial and executive branch nominations, including Rita Baranwal’s nomination to be an Assistant Secretary of Energy.

Disaster Aid

The House returns on Tuesday and is expected to pass the Senate-passed supplemental disaster aid bill, sending it to the President for his signature.