With Time Running Short, Congress Looks to Stem Drug Prices, Surprise Billing

September 17, 2019

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Source: Modern Healthcare

A leaked draft of a Democratic plan for the government to negotiate drug prices, curbing surprise billing, and billions of healthcare funds ready to expire: Congress returned from an extended summer break with high stakes for its legislative sprint to the end of the year.

For the first time since President Donald Trump took office, both parties are mostly united in wanting to attack the practice of surprise billing and drug prices. And they are doing so against healthcare industry headwinds. But can they deliver?

For the past month, dark money groups, physician staffing companies, and hospital and doctor coalitions have poured money and manpower into a lobbying and PR blitz against Congress’ frontline proposal to end surprise medical bills with an intensity that aides say has shaken lawmakers and could threaten the effort.

As a result, the congressional-level politics around surprise medical billing has only grown more complicated since earlier this summer, when the Senate Health, Education, Labor and Pensions Committee and the House Energy and Commerce Committee passed nearly identical proposals to cap any out-of-network care costs at a median insurance-negotiated rate.

Now, two additional House committees are weighing in.

Before the August recess, the House Education and Labor Committee planned to work from the existing Senate and Energy and Commerce legislation.

But in the meantime advocates for a rival specialty physician-backed bill by Reps. Raul Ruiz (D-Calif.) and Phil Roe (R-Tenn.) have been busy. Co-sponsors of the Ruiz-Roe bill include 20 members of the Education and Labor panel, and Roe has been whipping his fellow members to try to secure a panel vote on the measure. Committee Chair Bobby Scott (D-Va.) hasn’t yet agreed, according to Roe, who is hoping nevertheless to steer the bill away from the benchmark.

A spokesperson for Scott did not comment on how the panel will proceed, nor on a specific date for the expected legislative vote. Roe and other committee members told Modern Healthcare they expect it will happen next week, but that remains tentative.

Rep. Frederica Wilson (D-Fla.), who chairs the Education and Labor health subcommittee that will consider the legislation, returned to Washington with her own stories of the attack-ad frenzy. Her constituents were sent notices from doctor groups, featuring her photograph and an urgent plea for them to call her about the surprise billing policies under consideration. The message indicated that she opposed “great healthcare.”

“My constituents didn’t even call,” Wilson said. “They would see me, and say, ‘What is all this foolishness?’ ”

The state of play is even more vague on the House Ways and Means Committee, where representatives are working on their own legislation. Leaders didn’t have any guidance this week on when it could be ready, or when they’d be likely to hold a hearing given that Congress is set to leave Washington again for the first two weeks of October.

Ways and Means Chair Richard Neal (D-Mass.) said his staff is still developing timelines, and so far his agreement with the committee’s ranking member, Rep. Kevin Brady (R-Texas), is that “there’s a problem” with surprise medical billing.

“At the end of the day, we’ll need bicameral and bipartisan support, and the president, and so having our involvement is pretty crucial,” Brady said. Some policy watchers argued that a full debate by yet another committee could future complicate, and perhaps stymie, the process.

On the other side of the Capitol, Sen. Bill Cassidy (R-La.), who like Ruiz and Roe wants a policy that would boost potential revenue for doctors, will meet with HELP Committee Chair Lamar Alexander (R-Tenn.) next week to push for more changes to that bill. The Senate panel has already made tweaks that could allow pay boosts for rural doctors.

Despite the ferocity of the hospital and physician lobbying, Rep. Anna Eshoo (D-Calif.)—who chairs the Energy and Commerce health subcommittee—said Congress must fix the problem and reminded reporters that it was industry-created.

“While I think there’s more than one way to do (the fix), I think we have to thread the needle so that perhaps each stakeholder will be just a little displeased,” Eshoo told reporters outside the House chambers.

Negotiating drug prices

Although surprise billing dominated the airwaves over the August recess, drug pricing reclaimed the headlines this week. A highly anticipated draft plan from House Speaker Nancy Pelosi (D-Calif.) leaked on Sept. 9, outlining House Democrats’ plan to let Medicare negotiate drug prices.

The draft was downplayed by senior Democratic aides and lawmakers as an outdated version of the forthcoming legislation, but it highlighted Pelosi’s strategy: harnessing Trump’s international price index idea as the ceiling for any of the 250 high-cost drugs the legislation would address. Some Democratic lawmakers were quick to say its inclusion ought to bring the president on board.

Crucially, the government-negotiated prices would extend beyond Medicare and into the commercial market where most Americans are insured.

While lacking such specifics as which drugs would be addressed, provisions in the draft were well-received by progressive Democrats.

They came like a grenade at a critical time for the drug debate in the Senate, where several key Republicans are still hoping to squash or temper a bipartisan Senate Finance Committee proposal to cap Medicare’s annual pay increases for existing drugs at inflation. The White House wants a victory on drug pricing and backs the policy advanced by Senate Finance Committee Chair Chuck Grassley (R-Iowa) and ranking member Ron Wyden (D-Ore.).

Panned by pharmaceutical lobbyists as a political maneuver, the Pelosi draft inspired hope in reform-minded advocates that Democrats can negotiate some hard-line reforms.

“We are open to finding common ground,” Brady said of the Pelosi plan during a news briefing.

Pelosi’s office and relevant committee leaders haven’t indicated when a final plan will be released, although some lawmakers said they expect it next week. But for longtime pharma critic Rep. Peter Welch (D-Vt.), the leak marked a significant step in and of itself.

“The next step is, we’ve got to have a bill that has specifics in it, and then there will be reactions, and hopefully the president is going to find a way to be supportive,” Welch said. “I think we are going to try to incorporate essentially an orientation he has expressed support for, to get us paying much closer to what other countries pay.”

Eshoo, who will likely lead a hearing on the final legislation, couldn’t specify timing, but noted that the year is running out, and Congress will act in 2019.

The White House has mostly stayed mum on Pelosi’s ideas.

“While administration officials have been in touch with the speaker’s office for many months on this topic, we have not seen any text or been provided details,” White House spokesman Judd Deere said in a statement. “The president has been focused on this topic since he took office, and he welcomes the speaker’s ideas to help build bipartisan, bicameral consensus for the American people.”

Deere reaffirmed the president’s support for the Grassley-Wyden proposal, where the administration has a long way to go to shore up Senate Republican support.

Grassley, in reviewing the prospects for his bill, said he hopes Trump will “get involved personally,” and he noted that he needs more Republican co-sponsors in the Senate.

Sen. Pat Toomey (R-Pa.), who was one of the chief critics of that plan’s core proposal to cap the Medicare subsidy for price increases, said he hasn’t had a discussion on the legislation since returning to Washington. Nor had Sen. Tim Scott (R-S.C.).

“We’ve got a long way to go, I think,” Scott said.

Stalling DSH cuts

Grabbing fewer headlines, but also driving a flurry of hospital lobbying, are the Medicaid disproportionate-share hospital cuts that Congress put on hold until Sept. 30.

Lawmakers like Grassley and Sen. Marco Rubio (R-Fla.) hoped to use the deadline to pass reforms that make distribution of the funds more equitable.

But major hospital groups have made it clear they don’t want their members to see any cuts in exchange for boosts to others.

For the Greater New York Hospital Association, extending the delays is the group’s top lobbying priority. The state gets the highest amount of DSH funds under the current formula, and would therefore see the deepest cut.

The association boasts a powerful delegation, including Senate Minority Leader Chuck Schumer (D-N.Y.), and has already spent $1.26 million on lobbying this year. This ranks them sixth in spending among hospital groups.

While it’s looking unlikely Congress will delay the cuts before they’re slated to start on Oct. 1, it’s unclear when or if they would actually hit hospitals, since Congress could pass a delay before any losses are felt. There is no federal guidance for states on how to implement the cuts.

New York hasn’t come up with a plan yet for administering cuts, according to the GNYHA. The Missouri Hospital Association said cuts would likely total more than $300 million to the state’s hospitals in fiscal 2021. But it too is unsure how the state would implement them.

The hold on Medicaid DSH cuts is part of a slew of programs set to expire Sept. 30—including the Medicaid block grant funding for U.S. territories like Puerto Rico and the U.S. Virgin Islands. Yet since most programs have at least some runway, Congress doesn’t appear to be feeling the pressure yet.

Aides from both chambers and both parties who are close to the negotiations declined to comment on their status.

With these contentious policies up in the air, even the Senate’s relatively smooth appropriations process stalled last week. A sharply partisan dispute over whether to block the Trump administration’s overhaul of the Title X family planning program held up a vote on the HHS spending bill.

As of deadline, it was unclear whether Senate appropriators could resolve their impasse before the close of the fiscal year—which is also Sept. 30.


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