Notes* on Alliance for Health Policy Webinar

Wednesday, August 28, 2019

Alliance For Health Policy's

Fall 2019 Legislative and Regulatory Outlook

Speakers

Yvette Fontenot, Avenue Solutions

 

Rodney Whitlock, McDermott+Consulting

 

Sam Baker, Axios

 

Kathryn B. Martucci, Alliance for Health Policy Moderator

*Notes taken by Julie Barnes. Best efforts were made to capture speaker presentation but this is not a word-for-word transcript.

Potential Federal Legislative Actions

Yvette Fontenot

Prior to congressional recess, Congress reached a spending cap deal and a budget ceiling package. This was a big accomplishment.

  • It sets overall targets for appropriations bills and included two-year debt ceiling provision.

  • Legislators will come back and approve appropriations bills by September 26-27.

  • The House has already passed 10-12 appropriations bills, Homeland Security and Legislative Branch bills that are yet to be done.

  • The Senate has passed none, so now that budget agreement is done they will do so, possibly in an omnibus vehicle.

  • Both sides agreed that they would not put riders on any of the bills. HHS is particularly loaded with riders in the past. Issues like guns or kids at the border or vaping may pop up as rider issues.

  • There are a number of questions about whether they can get to a deal by the end of September.

  • We will look to the end of December for a final bill. We will see if those conversations will become more contentious.

 

Rodney Whitlock

The appropriations process sets the clock for the year. Congress tends to leave for recess when the appropriations process of over. The range of issues that will be considered this fall, a Continuing Resolution (CR) is likely because Congress will not have all of its spending bills in place by September 30, so appropriations process will be what to watch to determine how the fall agenda plays out. Likely that all activity will go thru by December 12.

Moderator: There is only 55 days left on the legislative calendar.

What will most realistically get done?

Sam Baker

Surprise hospital billing and drug pricing is where you see rhetorical agreement.

  • There is bipartisan consensus on surprise billing. Hospitals are lobbying hard to kill the House proposal.

  • SFC marked up its drug pricing bill before the recess, it passed, but the sentiments that Republican senators expressed made it pretty clear that the full Senate will not pass it.

  • Overriding dynamic: these are bipartisan issues, but the industry lobbying will cause a breakdown on the discussion. So seems unlikely that surprise billing and drug pricing will actually move.

  • There are also political considerations: Do Dems want to help the Administration get a “win” on this issue? Lots of moving pieces.

Moderator: Will Dems align on drug pricing?

Yvette Fontenot

Sam is right about there being many moving pieces.

  • Plenty of consensus on surprise billing -- rose up from consumer concerns.

  • Senate and House committees have pushed out bills on surprise billing. House scored significant savings – those savings will dissipate as the bill is further negotiated.

  • Drug pricing: there is obvious consensus in legislative and administration branch. Even the uninsured populations have postponed prescription filing due to cost, so this is another issue that rose up from consumer concerns.

  • House Speaker announced that she will introduce her proposal and E&C has marked up drug pricing that is in their jurisdiction, and Ways & Means will meet to act.

  • Drug pricing is something that Congress should tackle and any savings should be driven back into the Medicare program by offering beneficiaries out of pocket limits on spending on drugs, which doesn’t exist in the Medicare program.

  • The SFC proposal was estimated by CBO to save about $85B over 10 years in the Medicare program and $15B in Medicaid. $27B will be saved in beneficiary cost-sharing with an additional $5B in savings on premiums.

  • That’s significant boon to beneficiaries and their benefit level. Can’t achieve those Part D re-designs unless you get a certain level of savings from the drug pricing side of the debate.

  • As Sam said, SFC passed a package out of committee, the House Speaker wants to address the underlying question of what to pay for new drugs – Congressman Doggett’s bill gives Secretary ability to negotiate prices, so the question is whether they pass that in the House and along with the benefit re-design for the beneficiaries or if they are unable to get something that aggressive done, whether they can come to a consensus on the SFC bill.

Moderator: Timeline for bills or other bills?

Rodney Whitlock

The two proposals, drug pricing, surprise billing, will cost a lot of money – there will be debate among those who want to spend the money and those who want to keep it.

Moderator: What will the process be for these bills?

Sam Baker

Two possibilities: Pass stand-alone bill (more possible on surprise billing than drug pricing). Other option is to fold it in to a “must-pass” bill.

 

The legislative vehicle used will depend on how serious everyone is about the policy proposals.

Yvette Fontenot

The appropriations process is a “must-do” – so there will be a focus on the appropriations process. The Senate will be highly focused on the appropriations bills. The extender package is made up of programs that must be re-authorized, like funding Community Health Centers, Medicare payment cut delay, National Service Corps, they are mostly set to expire on Sept 30. There are a number of things that are outside of health care that will expire -- TANF reauthorization, flood reauthorization -  that will expire and need to be extended for a few years or a year in September until December so they can be included in an omnibus bill and those types of provisions always the engine that pulls the train of things we want to do in addition to the things we have to do.

Administration Actions

 

Moderator: The Administration and HHS have released several rule changes, there are new priorities for fall – e.g., President Trump announced that he would release comprehensive health plan. What do you think will be in that plan?

Sam Baker

Nothing is in that plan that will look like an ACA replacement. There are making a concerted push in a couple of targeted areas, including drug pricing, transparency (drug companies should list their prices on tv, hospital-health plan negotiated charges)

Rodney Whitlock

Medicare Part B pricing proposal has been out there for a while. The Administration may or may not take the next step forward on that. Unlikely to do an ACA replacement. 

Moderator: Please discuss the price transparency rule to force hospitals to publish negotiated rates with health plan.

Yvette Fontenot

The Hospital OPPS negotiated rates rule is part of the Executive Order that requires hospitals to post charges in a consumer-friendly format, for 300 shoppable services, which is not clearly defined. There are concerns about that proposal, and it will have to be finalized. I am assuming that there is very strong support for this type of policy within the Administration, so my guess is that it does get finalized probably with limited changes made to it.

Moderator: How have different stakeholders been responding to the price transparency rule?

Sam Baker

There are stakeholders that are against this, and there is an interesting debate from academics who think the disclosure of prices may reduce incentives for competition and there will be tacit consent to keep prices high. It is hard to identify to cost and for consumers to know what the cost is – high deductibles, surprise billing, this is inherent in all those discussions.

 

Rodney Whitlock

The challenge is in that space is which price and “so what” – what price and what does it mean? It is very complicated to figure out what price we are dealing with, when we are talking about what price, and some of that is totally irrelevant for consumers. So the question is how is this helpful to consumers? How is it relevant and valuable to consumers? It is not a panacea.

Moderator: There is a central theme to help patients and their out-of-pocket costs. Is this there last chance to address some of these issues:

Rodney Whitlock

Congress has a tendency to do more in odd-numbered years than even-numbered years, and the Administration will need evaluate what they need to get done.

Yvette Fontenot

I agree that not much legislative work gets done in an election year. Looking back in the last election, health care and health care affordability were the driving issue and Democrats made the largest gains since Watergate. These issues will receive a lot of attention, there will be a lot of points in September and October where health care is going to take a primary role.

  1. The upcoming Dem debate on September 12 where health continues to be a central issue.

  2. The President Trump health care plan.

  3. Upcoming decision on Texas v. Azar.

  4. Census numbers will come out in the beginning of September which will show the greatest increase in the number of uninsured since 2010.

  5. Senator Warner released a joint resolution of the Administration’s 1332 waiver rule, GAO report said this regulation was subject to the Congressional Review Act ( an expedited process for the Congress to review regulations). if Congress were to vote to make effective the joint resolution of disapproval of that rule, then the Administration would be precluded from publishing that rule. The House will introduce a similar joint resolution in September, and there could be a vote forced on that, which would provide an opportunity to protect people with pre-existing conditions.

Moderator: Let’s talk about the pharma direct-to-consumer advertising litigation. (Three pharmaceutical companies filed a legal action against HHS alleging that the CMS rule requiring price transparency in direct-to-consumer advertisements is unconstitutional.)

Sam Baker

If Trump gets a second term, then all of these lawsuit appeals will run its course. But the legal direction will be dictated by whomever wins the election.

Moderator: Texas v. Azar case, court heard oral arguments in July, where will the case go this fall?

Yvette Fontenot

On July 9, the court of appeals held the hearing, affirm or reverse a district court case that determined the entire ACA unconstitutional. Can’t understate the import of this case, which is Trump Administration’s attempt to repeal and replace the ACA which they couldn’t get done legislatively. There is a ruling expected later this fall (could be September, could be October). The court could decide to:

  1. On the merits, uphold the ACA

  2. Strike down only the mandate

  3. Strike down the mandate and other provisions that are deemed inseverable form the mandate

  4. Strike down the ACA in its entirety

  5. Remand the case to the district court

The parties are likely to request a stay pending appeal, and it could end up in the Supreme Court. There is no plan from this Administration to put protections in place protections for people with pre-existing conditions if the ACA is struck down. So this is THE issue to pay attention to in terms of impact on the system. Estimate is that the uninsured rates will increase by 65% if the ACA is struck down. The Supreme Court may not accept, but I am assuming that they will accept the case.

Rodney Whitlock

I don’t agree that Texas v. Azar is that important. The seriousness with which you take this case should be balanced by two things:

  1. Don’t take it seriously until you see Supreme Court Chief Justice John Roberts suggest that he is willing to abandon the compromise he carefully crafted in NFIB v. Sebelius;

  2. Ask the question about what do you plan to do about it between now and then?

So the importance of Texas v. Azar is overstated

Moderator: Another area of court activity is Medicaid work requirements, judges have stalled programs in three states.

Sam Baker

Medicaid work requirements have been approved but stalled in Kentucky and New Hampshire. The reasons why these stand out because this is a big deal in terms of impact and reframing Medicaid and what Medicaid is – if the work requirements move forward, then there will be a new idea of what Medicaid is, welfare v. health care coverage.

Yvette Fontenot

Ton of drug pricing work.  

  • Rate setting on PBMs

  • CA acted to reinstate to improve tax credits for individuals over 400%

  • Reinsurance waivers and public options (Washington state)

Pricing in general are the focus of states – provider pricing, some states have set reimbursement rates at some multiple of Medicare rates. Beginning of a larger focus about what drives health care and spending in this country.

Julie Barnes, J.D. 

Phone: (703) 304-1756 

Email: julie.barnes@maverickhealthpolicy.com

P.O. Box 7117 2200 N. George Mason Drive, Arlington, VA 22207

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