The federal appropriations process is always a triumph of hope over experience. High profile and usually partisan debates over spending caps, border security, fetal tissue research and gun control often prevent the necessary agreement between the House and the Senate and between Capitol Hill and the White House. Notwithstanding the outcome, which appears uncertain at best, appropriation bills are a valuable expression of Congress’ priorities and for that reason, worth a read.
There are two appropriations bills that have the biggest impact on the health care sector: Labor, Health and Human Services and Education; and Agriculture and the Food and Drug Administration. To a lesser extent, the Military-Veterans Affairs bill has an impact insofar as Congress looks to micromanage the CERN contract at the VA. This year, House leadership is bundling these appropriations into what are fondly referred to around Washington as “minibuses.”
Tuesday, the House approved Labor, Health & Human Services and Education as part of a minibus that combines it with Defense, State-Foreign Operations and Energy-Water. The Agriculture -Food and Drug Administration bill will be bundled up with Commerce-Justice-Science, Transportation-HUD and Military Construction-Veterans Affairs. Passage of that minibus is anticipated this week.
As expressed through the appropriation bills, here are the relevant priorities of the House appropriators:
Funding for National Institutes of Health. The House proposes to increase funding for NIH by about 5%. Of this increased amount, $195 million is being made available for the Cancer Moonshot Initiative; $500 million for the “All of Us” Precision medicine initiative and $411 million for Brain Research through Application of Innovative Neurotechnologies (BRAIN) initiative.
The 5% increase is lower than the 8% bump the Agency received in 2018 but still above the ten year average of 3%.
Cannabis Regulation. In both the National Institute of Drug Abuse and the Food and Drug Administration’s budgets are direct instructions regarding marijuana and cannabis regulation. For the NIDA, the Committee, having expressed concerns about changes to state marijuana laws without the benefit of thorough study, requests research into the health effects of marijuana use.
To encourage research the Appropriations Committee requests that the NIDA submit a report on barriers to research for Schedule I drugs. At the FDA’s public hearing regarding Cannabis regulation, a number of witnesses criticized the availability and quality of marijuana samples provided by NIDA’s contracted grower, the University of Mississippi. The Appropriators appear to share their concern.
In conjunction with that request, the Committee is requesting in the Commerce-Justice appropriation that the Drug Enforcement Agency process any pending application for authorization to produce marijuana for medical research. (GWPH)
On Thursday, an amendment was added to the Commerce-Justice appropriation that, as in years past, prohibts the federal government from interferring with the implementation of state marijuana laws. While more than 40 Republicans voted in favor - many of whom did so in support of federalism rather than in support of legalization broadly - there were 165 Nays, 158 of which were Republicans.
Drug Prices. It is no surprise that the Appropriators took up the issue of drug prices given its topical nature. The Committee urges adoption of stakeholder feedback on insulin approvals and prices submitted at May meeting. The Committee also suggests new strategies to spur development approval and demand for biosimilars through changes in benefit design such as reduced patient copayments and cost sharing programs with providers. (LLY, SNY, TEVA, NVS)
The Committee also asked CMS to consider changes to Medicare benefit design to eliminate specialty tiers as a way to spur orphan drug development.
Laboratory Tests. In response to a GAO report on billing for panel tests, CMS issued new guidance effective January 1, 2019 that requires labs to bundled tests when there is an appropriate panel code instead of billing them separately. The Appropriations Committee is asking for a report on that policy.
The Committee is also requesting that CMS encourage access to BRCA genetic testing through expanded eligibility and increased awareness. The test is freely, some would say too freely, reimbursed by Medicare so the appropriators are likely referring to Medicaid Managed Care and Medicare Advantage medical policies. (LH, DGX, MYGN, GH, GHDX)
Medicare Advantage. The Committee is taking a swing at Trump administration policy which has imposed prior authorization and step therapy for certain prescription drugs as a cost containment strategy.
The Appropriators also called on CMS to refrain from any promoting one form of Medicare coverage over another. While the majority on the House side has to grudgingly accede to the non-partisan popularity of the Medicare Advantage program they have made preventing privatization of Medicare a political priority. Caught between a rock and a hard place, they are left with limiting funding of any effort to promote Medicare Advantage over Fee-for-Service. (UNH, HUM, ANTM)
Nurse Staffing. Nurse staffing gets a lot of attention on Capitol Hill due to the abysmal ratios at nursing facilities. The appropriators are asking for a report in the FY2021 budget justification on recommended levels. Nurses in California have successful promoted mandatory staffing levels across a large variety of practice areas but so far the federal government has resisted imposing national standards. (AMN)
Opioid Epidemic. The opioid epidemic remains top of mind across parties and appropriators report reflects that again this year. The have asked CMS to review policies that may favor opioid prescribing over non-opioid alternatives. Specifically, package policies that will not separately reimburse pain management alternatives that may be higher cost but more desirable from a public health perspective. (PCRX)
EHR Modernization. The CERN project at the Department of Veterans is scheduled to receive $500 million more in funding which should give a lift to bookings if task orders are issued in FY2020. Congress continues to monitor the pace and effectiveness of the CERN implementation and express concern about the lack of coordinated governance of the project between DoD and the VA.
Separately in the DoD appropriation, the Committee attempts to break the logjam by directing the Secretary of Defense and the Secretary of Veterans Affairs to develop a reporting structure the ensure the Interagency Program Office is the single supervisory entity.
With a planned March go-live date in Spokane, WA, decision-making being micromanaged by Congress and the inter-agency power struggle over management of the project, delays and the accompanying reputational risk to CERN seem likely. (CERN)
All that said, the most likely fate of the FY2020 budget is probably a Continuing Resolution for a year. In that case, departments will continue to be funded at FY2019 levels. Which does not make reading appropriations bills our own triumph of hope over experience. When Congress speaks, it is always good to listen even if nothing will come of it immediately.
Emily Evans
Managing Director – Health Policy
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