Takeaway: Spending bills will likely get punted until December just in time to consider extenders and add a few things on which most Members agree

Welcome to 4Q! Lest you think Congress can’t get anything accomplished, Friday night the president signed a Continuing Resolution to keep the government opened until Nov. 21, which is the last business day before Congress adjourns for Thanksgiving break. Smart money is on a subsequent delay until late December when certain “must-pass” legislation will collide with the need to fund the government.

We have been here before so we should be able to expect year-end legislation that includes certain health-related extenders and taxes subject to moratoria. For our purposes the more relevant provisions are:

• Temporary extension of site neutral payment policy transition for LTCHs
• Temporary exception for certain spinal cord condition from application of LTCH site neutral payment
• Funding of implementation of MACRA, the physician’s payment system under Medicare
• Floor on work geographical practice cost indices applies to Physician Fee Schedule rates
• Transitional payment rules for certain radiation therapy services
• Additional Medicaid funding for the Territories
• Moratorium on Health insurance Fee (HIF)
• Moratorium on 2.3% Medical Device Excise Tax
• Work Opportunity Tax Credit
• Medical expenses deduction of 7.5% AGI

In addition to the tax provisions above, there has been a broad-based effort to repeal the Cadillac Tax. The urgency to do so is great as rulemaking must begin to prepare for implementation in Jan. 2022. This effort, which so far does not include any budgetary offsets, will likely limit the possibility for additional delays in implementation of the HIF. With Medicare Advantage and ACA exchange plan premiums coming in below expectations, there is also little urgency to extend the moratorium.

Additionally, until treason became the topic of conversation on Capitol Hill, both the House and the Senate had made some progress on drug prices. Some of that work may be candidates for inclusion in a year-end deal.

S. 1895 – Lower Health Care Costs Act. This bill is the result of bi-partisan agreement between HELP Committee Chairman Lamar Alexander and Ranking Member Patty Murray. While the legislation contains a provision that is going to be difficult to get past the full Senate and perhaps even the House, Sen. Alexander’s pending retirement creates an opportunity and maybe even the necessity to demonstrate the comity for which the World’s Greatest Deliberative Body is known.

Parts of S. 1985 that might make it into a year-end must pass bill:

• Reducing the Prices of Prescription Drugs. This section includes provisions to improve adoption of biosimilars and generics and limit delays in their marketing.
• Improving Transparency in Health Care. This section would prohibit certain anti-competitive practices such as gag clauses, steering provisions and require greater disclosure by pharmacy benefit managers to plan sponsors. This section would also eliminate spread pricing in pharmacy benefits.
• Improving Public Health. This section would include aid to certain under-served populations and conditions.
• Improving the Exchange of Health Information. This section would require disclosure of certain claims data on a two-year lag.

What is likely to prove too hot a topic for passage is the section titled Ending Surprise Billing. The Senate HELP committee approach to this problem adopted a benchmark pricing solution. The benchmark would be a median in-network rate. 

The benchmark idea has been opposed by providers. Their preferred approach, arbitration, has a number of practical limitations such as how quickly potentially thousands of arbitrations could be accomplished. Additionally, there are concerns about unintended consequences such as impacts to network formation and reimbursement negotiation.

There does not appear to be any resolution in sight. Historically such an impasse just gets tossed overboard while Congress moves forward with that for which there is agreement. 

S. 2543 The Prescription Drug Price Reduction Act of 2019. The result of (sort of) bi-partisan agreement, Sen. Grassley’s signature bill still has many of the same problems as the surprise bill legislation in that it includes some price determination by the federal government of pharmaceuticals, an idea anathema to Republicans.

However, the bill contains similar language on redesign of Medicare Part D included in a House bill spearheaded by Speaker Pelosi. Rumor has it that House Republicans and Democrats had reached agreement on a Part D redesign before the Speaker released her drug price legislation. Part D redesign, then, may stand a chance, although less of one that Sen. Alexander’s legislation, of hitching itself to year-end must-pass legislation.

We are old enough to recall the last impeachment effort so we know that a lot of legislating can get done even when the cameras are pointed elsewhere. This time we have to acknowledge that the list is much shorter and the probability much lower, a reflection of the unusual climate and the power split on the Hill. Hope, as they say, springs eternal or at least that is what we tell ourselves.

Call with questions.

Emily Evans
Managing Director – Health Policy



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Thomas Tobin
Managing Director


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