HELP to Mark Up Lower Health Care Costs Act This Week

The Senate Health, Education, Labor, and Pensions (HELP) Committee formally introduced a revised version of the bipartisan Lower Health Care Costs Act of 2019 (S. 1895) last week. The legislation would use a benchmark rate set at the median in-network payment for each insurer for a geographic area to compensate certain out-of-network health care providers. The legislation would extend the benchmark policy to air ambulance bills; air ambulance providers would be prohibited from sending balance bills to patients, and patients would only be required to pay the median in-network payment amount for air ambulance transport. Chairman Lamar Alexander (R-Tenn.) had previously stated that he would prefer an in-network guarantee approach (also known as network matching), but he was ultimately swayed by the Congressional Budget Office’s (CBO) findings that the benchmark rate policy would be the most effective means to lower health care costs. The surprise billing provisions contained in the Lower Health Care Costs Act are similar to the House Energy and Commerce Committee’s bipartisan No Surprises Act. The HELP package, which also includes provisions to increase prescription drug competition and create more transparency in the health care system, will be marked up on June 26. Sen. Chris Murphy (D-Conn.) has said that he may vote against the bill unless measures are added to address the administration’s recent efforts to undermine the Affordable Care Act (ACA), such as the funding cuts to enrollment outreach and the expansion of short-term, limited-duration health plans. Both Chairman Alexander and Ranking Member Patty Murray (D-Wash.) have stated that issues related to the ACA should be handled separately from the Lower Health Care Costs Act package. Hart Health Strategies Inc. has updated its side-by-side comparisons of the Senate out-of-network legislation to reflect the latest developments out of the HELP Committee. A comparison of the House proposals is also available.

Update on Congressional Drug Pricing Negotiations

Senate Finance Committee Chairman Chuck Grassley (R-Iowa) has announced opposition to the White House’s international pricing index (IPI) proposal, which would tie the price Medicare pays for certain Part B prescription drugs to prices in other countries. Grassley had far been waiting for a formal proposed regulation to decide his stance on the policy but stated that he has now studied the issue for long enough to determine that it would not “be to the benefit of the adoption of and research for modern drugs.” Despite it being touted as one of the administration’s key proposals to lower drug prices, the IPI policy has already been denounced by many congressional Republicans. The proposed rule was recently sent by the U.S. Department of Health and Human Services (HHS) to the White House for review. Sen. Grassley had previously aimed to release the Finance Committee’s own drug pricing package last week but announced that negotiations with Committee Democrats are still ongoing and that a bill is not likely to be unveiled before the Fourth of July recess. The Finance package is expected to include reforms to Medicare Part B as an alternative to the international pricing proposal.

House Speaker Nancy Pelosi (D-Calif.) has stated that congressional leadership is making progress on prescription drug pricing negotiations with the White House, but that it is still unclear whether Congress will act on any legislation before the August recess.

House Oversight Committee Chairman Elijah Cummings (D-Md.) and Sen. Debbie Stabenow (D-Mich.) have asked the Government Accountability Office (GAO) to examine how HHS prevents pharmaceutical manufacturers from infringing on government-owned patents, and how the department could use government-owned patents to improve drug access and affordability. The lawmakers specifically reference reports of Gilead Sciences infringing on a government-owned patent for pre-exposure prophylaxis (PrEP).

Reps. Diana DeGette (D-Colo.) and Tom Reed (R-N.Y.) are considering drafting legislation that would apply specifically to the cost of insulin products because of the slow progress being made on more comprehensive drug pricing legislation. Their bill would likely draw on a paper published by the Congressional Caucus on Diabetes last year, according to Rep. DeGette. It could include provisions to transition from a drug rebate system to a flat-fee-based payment model, require increased transparency around how insulin prices are set, or cap out-of-pocket costs for prescription drugs for chronic conditions such as diabetes.

Lawmakers Push Back Against WH Effort to Repeal ACA

In an interview last week, the President stated that he would be announcing his plan to repeal and replace the ACA over the next two months. His remarks, along with the administration’s actions to declare the 2010 health care law unconstitutional in court, have been widely denounced by Democratic lawmakers. Congressional Republicans are also wary of returning to the ACA repeal debate and would prefer to focus on other more bipartisan health care priorities, such as protecting patients from surprise insurance gaps and lowering drug prices. Senate Majority Leader Mitch McConnell (RKy.) has stated that Congress will wait to act on the administration’s proposal until after next year’s election.

CBO Releases Latest Mandatory Means-Tested Spending Estimates

The CBO has released its estimates of federal mandatory spending for means-tested programs from 2009 through 2029, projecting that the Medicaid program will grow by approximately 5.5 percent annually between 2020 and 2029. ACA insurance subsidy spending is estimated to grow by just over three percent per year over the same time period. Total spending on means-tested health programs will increase from $497 billion in 2019 to $834 billion in 2029, according to the report.

Health Prices Transparency Order Expected Today

President Trump plans to sign an executive order this afternoon to require the disclosure of prices in health care. The “Executive Order to Improve Price and Quality Transparency in Healthcare” is expected to direct federal agencies to begin drafting regulations and guidance that would compel insurers, doctors, hospitals, and other stakeholders in the health care industry to provide more transparency around the negotiated and discounted costs of care.

Trump Administration Personnel Update

HHS Secretary Alex Azar announced the promotion of Judy Stecker to Deputy Chief of Staff for Operations and Strategy. She will continue in her current role as Assistant Secretary for Public Affairs as well and will serve under recently promoted Chief of Staff Brian Harrison.

Senate HELP Committee Chairman Lamar Alexander (R-Tenn.) is planning to meet with acting Commissioner of Food and Drugs Ned Sharpless in the near future. Sharpless has expressed interest in officially leading the Food and Drug Administration (FDA), but has not yet been nominated by the White House. As HELP Committee Chairman, Sen. Alexander would preside over Dr. Sharpless’s confirmation hearings if he is eventually nominated.

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