Hart Health Strategies provides a comprehensive policy briefing on a weekly basis. This in-depth health policy briefing is sent out at the beginning of each week. The health policy briefing recaps the previous week and previews the week ahead. It alerts clients to upcoming congressional hearings, newly introduced bills, regulatory announcements, and implementation activity related to the Patient Protection and Affordable Care Act (PPACA) and other health laws.


Democrats Near Agreement on Reconciliation Package

Democrats continue to negotiate a scaled-down version of the $3.5 trillion reconciliation package containing President Joe Biden’s Build Back Better agenda, with the bill expected to eventually total around $2 trillion. Leadership continues to work to bridge gaps between the centrist and progressive wings of the Democratic party. Recent developments include Sen. Kyrsten Sinema’s (D-Ariz.) opposition to corporate and individual tax hikes – originally intended to offset much of the cost of the spending plan – and Sen. Joe Manchin’s (D-W. Va.) opposition to significant portions of the bill’s climate change provisions.

Proposals to expand the Medicare program benefit and reduce drug costs are among the final issues at hand as Democrats work to assemble the reconciliation bill. Sen. Sinema has come out in opposition to the bill’s drug pricing proposals, and the President has now characterized Medicare expansion as a “reach,” given Sen. Manchin’s opposition to expansion unless the bill also addresses the Medicare program’s long-term solvency. While President Biden stated that he expects a hearing benefit will be included in the bill – given its support from Sen. Sinema – he has been floating an $800 annual Medicare voucher for dental care as an alternative proposal while admitting that there is not yet a consensus around vision care. While Sens. Bernie Sanders (I-Vt.) and Ron Wyden (D-Ore.) have offered assurances that the economic plan will include a provision to allow for the negotiation of drug prices in the Medicare program, the White House is pitching a revised measure that would exempt drugs with government-granted exclusivity from Medicare price negotiations. Latest reports indicate that a separate provision requiring rebates from companies that raise the cost of their products beyond the rate of inflation remains intact.

House Speaker Nancy Pelosi (D-Calif.) has said that more than 90% of the plan is agreed to and written. Leadership hopes to vote on both the reconciliation package and the bipartisan infrastructure framework (BIF) by October 31, ahead of the expiration of several transportation programs. If an agreement has not been reached by this point, lawmakers are reportedly considering an extension of the authority for distributions from the Highway Trust Fund through December 3 to provide additional time to broker an agreement on the broader bill.

The Congressional Budget Office (CBO) released its analysis of provisions in the legislation that would affect health insurance coverage of people under age 65. The agency estimates that the bill would expand coverage to 4.1 million people across Medicaid and the individual insurance market over the next decade at the cost of $553.2 billion. Much of the spending would be associated with provisions to close the coverage gap in states that have not yet opted to expand their Medicaid programs.

House Passes Series of Health Care Legislation

The House of Representatives passed several health care related bills last week, including the National Centers of Excellence in Advanced and Continuous Pharmaceutical Manufacturing Act (H.R. 4369). The bill, which passed by a vote of 368-56, directs the Food and Drug Administration (FDA) to solicit applications from institutions of higher education to be labeled as National Centers for Excellence in Advanced and Continuous Pharmaceutical Manufacturing. The chamber also passed the State Opioid Response Grant Authorization Act (H.R. 2379), by a 380-46 vote. The bill authorizes the State Opioid Response grant program to receive $1.75 billion annually through fiscal year (FY) 2027. The Strengthening America’s Strategic National Stockpile Act (H.R. 3635), authorizing state strategic stockpiles, making changes to the Strategic National Stockpile (SNS), and providing funding for a supply chain manufacturing flexibility pilot program, passed by a vote of 397-22. Finally, the Drug-Free Communities Pandemic Relief Act (H.R. 654), which allows for the waiver of matching requirements for Drug-Free Communities Support Program grantees if the recipient was impacted by COVID-19, passed by a 395-30 vote.

Senate Appropriators Release FY 22 Spending Bills

Democratic appropriators in the Senate have completed the release of their full slate of fiscal year (FY) 2022 spending bills. The government funding bills total $1.5 trillion, with a 13% increase for non-defense programs – less than the 16% in the President’s budget. The $220.8 billion Labor-Health and Human Services-Education funding bill includes $47.9 billion for the National Institutes of Health (NIH), a $5 billion increase over current spending levels. Of the $5 billion increase, $2 billion would be used to fund the Advanced Research Projects Agency for Health (ARPA-H), significantly less than the $6.5 billion requested by the White House. The current continuing resolution (CR) expires on December 3, the same day when the Treasury Department is expected to hit its borrowing limit. While Congress has frequently raised or suspended the debt limit alongside government funding legislation, Republicans have pledged to not provide the support necessary to address the debt limit through regular order. Congress is also expected to resort to a one-year stopgap spending measure to avoid a government shutdown unless Democrats and Republicans can first reach an agreement on top-line funding levels for each of the 12 spending bills.

Lawmakers Urge Changes to MPFS, RO Payment Model

In three separate letters to the administration, members of Congress are calling for action to mitigate an estimated $300 million in cuts contained in the proposed 2022 Medicare physician fee schedule (MPFS) and the proposed radiation oncology (RO) payment model. The lawmakers warn that the payment cuts and the new payment model could adversely impact patient access to care. The proposed MPFS would eliminate a one-time increase of 3.75% provided by Congress in 2021 in response to the COVID-19 public health emergency (PHE). The moratorium on the 2% Medicare sequester is also set to expire at the end of the year. Passage of the American Rescue Plan and pay-as-you-go requirements is expected to result in additional payment cuts of up to 4% next year. The new oncology payment model, set to go into effect on January 1, 2022, will bundle payments for radiation therapy, setting the same rate over a 90-day care episode regardless of setting. The Centers for Medicare and Medicaid Services (CMS) estimates that the model will save $230 million over five years. A letter led by Sens. Debbie Stabenow (D-Mich.) and Richard Burr (R-N.C.) expresses concerns that devaluing radiation oncology services “could have chilling effects on patient access to life-saving care” and urges CMS to mitigate the impact on radiation oncology providers. A group of 67 lawmakers in the House of Representatives signed on to a similar letter led by Reps. Brian Fitzpatrick (R-Pa.) and Brian Higgins (D-N.Y.), which questions whether the “severe cuts” stemming from the proposed MPFS cuts and the parameters of the radiation oncology model would “create instability and undermine the transition to value-based payment.” A third letter from Reps. Bobby Rush (D-Ill.) and Tony Cardenas (D-Calif.) on behalf of the Congressional Black, Hispanic, Asian Pacific American, and Native American caucuses argues that the “proposed combined payment cuts undermine the promise of the RO Model and the chance to improve health equity.”

Blumenthal Warns Opposition to Likely FDA Nominee

Sen. Richard Blumenthal (D-Conn.) has contacted the White House to express concerns with the President’s consideration of Robert Califf, MD to lead the Food and Drug Administration (FDA). Blumenthal voted against Califf ’s confirmation in 2016 because of the nominee’s ties to the pharmaceutical industry. At that time, he was joined by Sens. Joe Manchin (D-W.Va.) and Ed Markey (D-Mass.). Califf is a cardiologist and a senior advisor at the Duke Clinical Research Institute who has emerged as the likely candidate to serve as Commissioner of Food and Drugs. He previously served as FDA Commissioner during the last year of President Obama’s term (February 2016-January 2017). At that time, he was confirmed by the Senate 89-4. More than sixty of the senators who voted for his confirmation continue to serve in the Senate today.

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