Last month, State Rural Health Associations were invited to join the NOSORH Policy Committee. The committee heard about the election results, an FORHP regulatory update and a preview of the work of the Policy and Program Monitoring Team. For more information or to join the Policy committee, please contact Matt Strycker.
The following update was provided by Hall Render, NOSORH Policy Liaison:
Democrats Set to Control Key Health Committees in Next Session of Congress
The Democratic takeover of the House of Representatives following the recent midterm elections will significantly change the political landscape for healthcare issues when lawmakers return for the 116th Session of Congress next year. Overall, the election results will mean divided government and a return to the era when little is accomplished legislatively. Lawmakers are expected to go from one “fiscal cliff” to another as they struggle to pass funding bills that will keep the government open.
The main focus of House Democrats is expected to be oversight of the Trump administration’s implementation of health policies but could extend to the idea of “Medicare-for-all” or other programs that would move the country towards universal health care.
Shoring up the Affordable Care Act (“ACA”), drug pricing and surprise medical bills are also anticipated to be some of the major healthcare issues tackled during the new Congress. After Republicans’ unsuccessful efforts to repeal and replace the ACA, House Democrats will be looking to pass legislation bolstering the ACA’s insurance markets and cementing the law’s provisions on pre-existing conditions. They will also look to fixing the cost-sharing reimbursement issue, which saw some bipartisan support in the Senate last year and could be one of the few pieces of legislation that makes it to the president’s desk. By contrast, the Senate, which will remain under Republican control, is expected to focus more broadly on health care.
Both parties are in alignment as to the necessity of lowering drug pricing. House Democrats will try to reign in pharma by making drug pricing one of their top issues. Incoming House Energy and Commerce Health Subcommittee Chairman Anna Eshoo (D-CA) said she wants to hold hearings before developing her prescription drug policy priorities. Meanwhile, Energy and Commerce leadership staff have signaled that 340B drug pricing program reform will no longer be a high priority for the committee. In addition, House Democrats are expected to conduct oversight of issues such as Medicaid work requirements and the Justice Department’s decision to back anti-ACA lawsuits.
At the committee level, Rep. Richard Neal (D-MA) will become the chairman of the full House Ways and Means Committee, which is expected to add at least four new Democratic members. On the Ways and Means Health Subcommittee, Chairman Peter Roskam (R-IL) and Health Subcommittee member Erik Paulsen (R-MN) both lost their races for reelection. With the retirement of Reps. Sam Johnson (R-TX), Lynn Jenkins (R-KS) and Diane Black (R-TN), Republicans will see very large changes in their membership on this subcommittee. Since Republicans currently hold an 11-7 majority on the subcommittee, these losses and retirements should mean no Republican will be removed from the subcommittee and one will be added. As for who will take the gavel as the subcommittee’s next chairman, Rep. Lloyd Doggett (D-TX) is currently expected to get the nod over Rep. Mike Thompson (D-CA) because he has more overall seniority in Congress.
At the House Energy and Commerce Committee, Rep. Frank Pallone (D-NJ) will become the full committee chairman and Rep. Greg Walden (R-OR) will become the Ranking Minority Member. Pallone has a reputation for “doing deals” across the aisle, which could make additional opioid funding a possibility. The change in control of the House means Rep. Michael Burgess (R-TX) will become the Energy and Commerce Health Subcommittee’s Ranking Minority Member once Rep. Eshoo takes the gavel. In addition to drug pricing, Eshoo’s agenda is expected to include coverage of pre-existing conditions and investment in biomedical research and development.
On the Senate side, drug pricing and additional opioid legislation could make some progress, but little else is expected to happen on the healthcare front. Senate Republicans, such as Bill Cassidy (R-LA), will continue to push for 340B reform, but any 340B legislation that passes the Senate should die in the Democratically controlled House. At the committee level, the Health Education Labor and Pensions Committee will see no loss in its membership. Sen. Lamar Alexander (R-TN) will remain chairman and Sen. Patty Murray (D-WA) will remain the Ranking Member.
At the Senate Finance Committee, Sen. Chuck Grassley (R-IA) is expected to become the next chairman. Sen. Grassley says he wants to work “on improving the affordability, quality and accessibility of health care, including in rural America.” Sen. Ron Wyden (D-OR) will remain the committee’s Ranking Member. Losses by Sen. Claire McCaskill (D-MO) and Sen. Dean Heller (R-NV) open one seat on the Democratic side of the committee aisle and one on the Republican, which are expected to be filled before lawmakers return for the 116th Session of Congress in January.
Congress Unlikely to Make Progress on Health Care Bills Before Year-End
As government funding battles overtake Capitol Hill, it appears Congress will not use the lame duck to resolve outstanding healthcare issues. While the desire to steer clear of health are fights is something different from prior years, outgoing House Ways and Means Committee Chairman Kevin Brady (R-TX) said this week that healthcare legislation will not be a priority during what’s left of the lame duck session.
Furthermore, Democratic control of the House of Representatives that comes in January has caused many Democratic lawmakers to push their healthcare priorities into the New Year. However, some policy changes could still surface as additions to a year-end spending package that must be passed before December 7 in order to avoid a partial government shutdown.
Luckily for a majority of healthcare programs, funding for most agencies within the Department of Health and Human Services (HHS) was included in a giant spending package Congress passed in September. Those that remain to be funded include the FDA, which receives its funding through a separate bill and user fees. A House Republican tax bill was released on November 26, but it did not address any of the Affordable Care Act’s taxes, such as the medical device tax and the “Cadillac” tax on health plans.
CMS to Expand Medicaid Covered Mental Health Treatment
On November 14, CMS announced that states can soon begin applying for waivers to expand treatment capacity for serious mental health issues. HHS Secretary Alex Azar highlighted the effectiveness of waivers for substance abuse treatment citing Virginia as an example. Virginia received approval for a waiver in 2016 and subsequently saw a 39 percent decrease in opioid-related emergency room visits.
Waivers will allow states to lift the “IMD exclusion.” The IMD exclusion prohibits the use of federal Medicaid funds to pay for substance use disorder treatment for patients age 21-64 at inpatient mental health treatment facilities that have more than 16 beds. It also prohibits Medicaid beneficiaries who are receiving treatment at IMDs from receiving additional Medicaid-covered care elsewhere. Many experts state the IMD exclusion is a large hindrance to treatment for low income people.
Health-Related Bills Introduced This Month
Sen. Orrin Hatch (R-UT) introduced S.3693 to amend Title XVIII of the Social Security Act to provide for the treatment of certain cancer hospitals.
Sen. Todd Young (R-IN) introduced S.3685 to amend the Public Health Service Act to expand the authority of the Secretary of Health and Human Services to permit nurses to practice in healthcare facilities with critical shortages of nurses through programs for loan repayment and scholarships for nurses.
Sen. Jeff Merkley (D-OR) introduced S. 3680 to require the Secretary of Health and Human Services to establish references prices for prescription drugs for purposes of federal health programs.
Rep. Erik Paulsen (R-MN) introduced H.R. 7177 to amend Title III of the Public Health Service Act and Titles XI and XVIII of the Social Security Act to accelerate the adoption of value-based payment and delivery arrangements among health care stakeholders intended to coordinate care, improve patient outcomes, share accountability or lower costs.
Sen. Bill Cassidy (R-LA) introduced S. 3619 to amend Title XVIII of the Social Security Act to restructure the payment adjustment for non-emergency ESRD ambulance transports under the Medicare program.
Rep. Erik Paulsen (R-MN) introduced H.R. 7122 to amend Title III of the Public Health Service Act and Titles XI and XVIII of the Social Security Act to accelerate the adoption of value-based payment and delivery arrangements among healthcare stakeholders intended to coordinate care, improve patient outcomes, share accountability or lower costs.
Sen. Rand Paul (R-KY) introduced S. 3610, known as the Medicare Patient Empowerment Act of 2018, to amend Title XVIII of the Social Security Act to establish a Medicare payment option for patients and eligible professionals to freely contract, without penalty, for Medicare fee-for-service items and services while allowing Medicare beneficiaries to use their Medicare benefits.
NOSORH has resources to help you and your state partners prepare for the National Rural Health Association Policy Institute being held February 4-7, 2019, in Washington, D.C. One-page state profiles, like this one from South Carolina, are available to help State Offices of Rural Health (SORH) document the impact of their work. . For help in completing your state’s profile, please contact Donna Pfaendtner at firstname.lastname@example.org no later than Friday, January 11, 2019. A SORH factsheet will be provided for your use at the Policy Institute and Hall Render staff will be available to join you on Hill visits. While in D.C., be sure to attend the NOSORH Members Meeting on Monday, February 4th at 6:00 pm ET. We do not have a room assignment yet but be looking for more information to come next month. Lastly, NOSORH will be hosting the webinar “Preparing to Engage with Legislators & Policymakers” on January 17th at 3:00 pm ET to help you get ready. Stay tuned for more details.
For more information, please contact Matt Strycker at email@example.com
The Policy Committee invites all State Rural Health Associations to join the monthly meeting of the NOSORH Policy Committee. Updates will be provided on federal regulatory issues, efforts to reauthorize the SORH program and other policy issues.
SORH Reauthorization Bill Update
While the House and Senate were out of session for most of October, the House version of the State Office of Rural Health Reauthorization bill (H.R. 5641) continued to gain momentum picking up three new cosponsors. In addition to gaining House Energy and Commerce member Morgan Griffith (VA), Reps. Steve Russell (OK) and Elise Stefanik (NY) also signed on a cosponsor. NOSORH met with the Energy and Commerce Committee this fall and believes it is likely the SORH reauthorization bill advances next time the committee addresses public health legislation. The Senate has already passed the reauthorization bill. If there is a House member of the Energy and Commerce Committee in your state, please contact their staff and urge them to cosponsor H.R. 5641.
President Signs Opioid Reform into Law
On October 3, 2018, the “Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act” or short hand—the SUPPORT for Patients and Communities Act (the “SUPPORT Act”)—was approved by the Senate and sent to the President. The President has now signed the SUPPORT Act into law. The SUPPORT Act is the compromise version of the opioid response bills approved by the House and Senate earlier this year.
The bill package includes a broad array of new programs and reforms specific to the opioid crisis and substance use disorders (SUDs) generally advocated by the healthcare industry. The final compromise opioid package contains over 70 opioid-related bills. For a comprehensive summary of the package’s provisions, see the section-by-section summary at: https://tinyurl.com/y9vlrsmy. Some of the key issues addressed in the SUPPORT Act are:
SORH Reauthorization Bill Update
The House and Senate returned to Washington in September for their final legislative work period before the 2018 mid-term elections. With the Senate having already passed the State Office of Rural Health (SORH) Reauthorization bill, the focus shifted to the House. The House bill, H.R. 5641, picked up a critical cosponsor with Rep. Morgan Griffith (R-VA) agreeing to sign-on. Griffith is a member of the House Energy and Commerce Health Subcommittee which has primary jurisdiction over SORH legislation.
NOSORH met with the Energy and Commerce Committee during September and believes there is a good chance the Committee advances the SORH reauthorization bill the next time the committee addresses public health legislation.
SORH Funding Remains Unchanged
On September 13, the House and Senate conferees approved the conference report for the FY 2019 DoD and Labor-HHS spending bill (H.R. 6157). Five days later, the Senate passed the conference report by a 93-7 vote . On September 26, the House easily passed the conference report thus sending the FY 19 spending bill to the President which he is expected to sign.
The SORH number for FY 19 came in at $10,000,000 which is the same number as FY 18. When the House originally passed the FY 19 Labor-HHS bill, the funding was $11,000,000 for SORH. The Senate passed version was at $10,000,000. Conferees went with the Senate number.
Other rural health related items included in the conference report were Medicare Rural Hospital Flexibility grants which were funded at $53,609,000. This is a four million dollar increase over FY 18. Small Rural Hospital Improvement Grant Program was funded at $19,942,000 for FY 19. This is also a four million dollar increase over FY 18.
NOSORH Speaks Before U.S. Senate
On September 27, Lisa Davis, Director of the Pennsylvania Office of Rural Health, spoke before the U.S. Senate Democratic Steering and Outreach Committee at their annual Rural Summit. The Summit was kicked off by Senate Democratic Leader Chuck Schumer (D-NY) and featured Senators and participants from across the county addressing issues facing rural America.
Lisa Davis spoke on a panel addressing health care issues in rural America. The panel was led by Senators Bob Casey (D-PA) and Tina Smith (D-MN) and moderated by Sen. Jeanne Shaheen (D-NH) and Heidi Heitkamp (D-ND). Senators Smith and Heitkamp were original cosponsors on the SORH Reauthorization bill. Davis thanked the Senate for passing the State Offices of Rural Health Reauthorization Act of 2018 and spoke passionately about the challenges facing rural health.
The following update was provided for our members by Hall Render, NOSORH Legislative Liaison:
House Introduces Rural Health Reauthorization Bill
On April 26, House Energy and Commerce members Markwayne Mullin (R-OK) and Kurt Schrader (D-OR) introduced the State Offices of Rural Health Reauthorization Act of 2018. The bill (H.R. 5641) is the companion bill to S. 2278 which was passed in March by the Senate Health Education Labor and Pensions Committee. The Senate bill, which was introduced by Senators Roberts (R-KS) and Heitkamp (D-ND), has been cleared for full Senate passage. The next step for H.R. 5641 will be a mark-up before the Energy and Commerce Committee.
Congress Tackles Opioid Epidemic
The Senate Finance Committee held in April to address opioid and substance-abuse disorders in Medicare, Medicaid and other HHS-related programs. The hearing addressed how the programs can adapt and be improved to address the crisis, as well as what the Trump administration and Congress can do to fight the opioid crisis together. The Committee, through feedback from stakeholders and its members, identified areas of bipartisan support. These include the need to evaluate access to and utilization of non-opioid treatment options for managing pain; enhancing data-sharing to promote appropriate health care interventions and strengthen program integrity; and ensuring evidence-based care is available for patients to identify and treat opioid use disorders.
On April 24, the Senate HELP Committee held a markup for a number of opioid-related bills. Legislation that passed the Senate committee includes: S. 2680, the “Opioid Crisis Response Act of 2018”; S. 2315, the “Over-the-Counter Drug Safety, Innovation, and Reform Act”; S. 2597, the “Children’s Hospital GME Support Reauthorization Act of 2018”; and S. 382, the “Firefighter Cancer Registry Act.” The following day, the House Energy and Commerce Committee advanced a 60-bill package that touches on everything from FDA approval of pain medicines to how government programs pays for addiction treatment. Congress hopes to pass comprehensive opioid reform before Memorial Day.
MedPAC Recommends Cut to Urban Off-Campus Hospital Pay
The Medicare Payment Advisory Commission (MedPAC) recommended Congress to cut pay by 30 percent for certain off-campus emergency departments in urban areas. Off-campus stand-alone emergency departments that are within six miles of an on-campus hospital emergency department would be subject to the cuts. To support this recommendation, MedPAC claims these off-campus facilities have lower patient severity and standby costs than on-campus emergency departments therefore the Medicare payments are askew. In contrast, MedPAC supported the recommendation to allow isolated rural stand-alone emergency departments, or those that are more than 35 miles away from another emergency room, to bill standard outpatient prospective payment fees and Congress provide annual payments to assist with fixed costs.
Additionally, the payment advisers discussed a recommendation to make the four current value-based payment programs into a single initiative. This new initiative would judge hospitals on readmissions, mortality, spending, and how patients’ rate their stay. Depending on performance, two percent of a hospital’s Medicare payments would be withheld or earned back. This plan was cited as a good way to simplify hospital reporting programs and move to outcome-based measures. However, the Commission also raised several concerns such as questions on how to weigh the categories, if two percent is enough of an incentive, etc. MedPAC will continue discussions on this recommendation in the fall.
Rural Health Related Bills Introduced in April
Rep. Collin Peterson (D-MN) introduced H.R. 5498 to amend title XVIII of the Social Security Act to extend the floor on the area wage index under the inpatient prospective payment system to certain sole community hospitals and to amend the Public Health Service Act to provide eligibility for certain sole community hospitals to discounted drug prices under the 340B drug pricing program.
The following update was provided for our members by Hall Render, NOSORH Legislative Liaison:
State Office of Rural Health Bill Nears Finish Line in Senate
During the week of March 19, Senate leadership hotlined (fast-tracked without debate) the State Offices of Rural Health Reauthorization Act of 2018 (S. 2278) through the Senate. Without any of the 100 members objecting, the SORH bill is now set to pass the Senate.
The Senate parliamentary procedure came weeks after the Senate Health, Labor, Education and Pensions (HELP) Committee voted to advance the bill out of committee. The bill advanced after an amendment was agreed to which increases the authorization of appropriations level to $12,500,000 for each of the fiscal years 2018 through 2022. The bill passed the committee unanimously.
Major Spending Bill Passes Congress
On March 23, President Trump signed a major $1.3 trillion spending bill into law, which keeps the government funded through September 30, 2018. The bill passed the House 256-167 and the Senate 65-32. In both bodies, the measure received the support of a majority of members from each party. In the Senate, unanimous consent was needed from all senators to waive procedural rules and set up votes before Friday’s midnight deadline.
The bill includes a total of $78 billion ($10 billion above FY 2017) for the Department of Health and Human Services. Within the HHS funding, the Centers for Medicare & Medicaid Services (“CMS”) received $4 billion in funding for administrative expenses, the Health Resources and Services Administration received $7 billion and the Substance Abuse and Mental Health Administration received $5 billion. The legislation includes nearly $4 billion in resources to combat the opioid crisis through investing in treatment, prevention and law enforcement efforts. More than $2.3 billion in funding is provided for mental health programs and other training.
Rural communities will see a $135 million increase in healthcare program funding, including $100 million for drug addiction treatment and prevention. In addition, Congress appropriated $10 million annually for the State Offices of Rural Health and $49.6 million for rural hospital flexibility grants.
Two provisions that were not included in the bill are stabilization of the ACA’s health insurance markets and providing coverage for patients with high medical costs. The first measure, known as the Alexander-Murray provision, would have reinstated government subsidies paid to health insurers. The second would have provided funding to help states set up high-risk insurance pools to provide coverage for people with high medical costs. Though the ACA stabilization proposal had already been negotiated on a bipartisan basis, Republicans wanted to include language that would ban federal funds from being used for abortions, which Democrats said was a non-starter.
House Energy and Commerce Committee Reviews Solutions to Combat the Opioid Crisis
On the week of March 19, the House Energy and Commerce Health Subcommittee wrapped up a two-day hearing examining 25 bipartisan bills addressing the opioid crisis. The legislation focused on prevention and public health solutions. Energy and Commerce Chairman Greg Walden (R-OR) stated “The unprecedented plague of opioid addiction and substance use disorder in our country requires an unprecedented response.” Legislation reviewed included Jessie’s Law, introduced by Reps. Tim Walberg (R-MI) and Debbie Dingell (D-MI), which would help ensure doctors have access to a consenting patient’s prior history of addiction in order to make fully informed care and treatment decisions.
The Poison Center Network Enhancement Act of 2018 (H.R. 5329), authored by Reps. Susan Brooks (R-IN) and Eliot Engel (D-NY), was discussed to reauthorize the important network of centers within the National Poison Data System that offer free, confidential, expert medical advice 24 hours a day, seven days a week. Oftentimes these programs serve as the primary resource for poisoning information and help reduce emergency room visits. Lawmakers also spent a lot of time debating legislation known as the Overdose Prevention and Patient Safety Act (H.R. 3545) introduced by Reps. Markwayne Mullin (R-OK) and Earl Blumenauer (D-OR). That measure would modernize substance use disorder treatment records to permit records to be shared in accordance with the Health Insurance Portability and Accountability Act for the purposes of treatment. It would also increase penalties in the event of disclosure, add breach notification requirements and provide discrimination prohibitions.
Senate Committee Hearing Assesses 340B Program
On March 15, the Senate HELP Committee held a hearing to examine the 340B drug discount program as some stakeholders have urged lawmakers to scale back its reach. HELP Committee Chairman Lamar Alexander (R-TN) said the purpose of the hearing was to learn more about the program and “how it might be improved so that hospitals and clinics can continue to provide low-income patients with help to afford their health care.” Chairman Alexander said to expect the committee to hold another 340B hearing soon, likely featuring a representative from the Health Resources & Services Administration (“HRSA”), which oversees the program.
The hearing showed a clear dividing line between Senate Democrats and Republicans on the 340B program, with Democrats advocating that savings from the program are desperately needed for the poorest populations and Republicans stating the program is being abused and needs to be reformed. Sen. Bill Cassidy (R-LA) introduced legislation for expansive changes to the 340B program, such as implementing a two-year moratorium on certain new 340B hospitals and outpatient departments and adding new reporting requirements for hospitals. By contrast, Sen. Patty Murray (D-WA) admitted that calls for transparency and accountability are appropriate, but the 28.5 percent cut CMS made last year for certain 340B drugs was “unnecessary” and fails to address skyrocketing drug costs.
House Ways and Means Committee Holds MACRA Hearing
On the week of March 19, the House Ways and Means Health Subcommittee held a hearing on implementing the Medicare Access and CHIP Reauthorization Act (“MACRA”) of 2015, which featured witnesses from CMS. Demetrios Kouzoukas, Principal Deputy Administrator and Director of the Center for Medicare, testified that the full promise of MACRA has not been realized as too few physicians and clinicians are participating in alternative payment models, and far too many clinicians find the law’s reporting requirements too burdensome. He laid out a plan to move forward on four areas of emphasis: “giving consumers greater control over health information through interoperable and accessible health information technology; encouraging transparency from payers and providers; using experimental models in Medicare and Medicaid to help patients drive value and quality throughout the entire system; and removing government burdens that impede this transformation.”
Providers and industry stakeholders have urged Congress to improve fairness and reduce burdens under the program. In the hearing, Kouzoukas urged stakeholders to work with CMS to increase innovation and submit promising ideas to the Innovation Center.
Health Care Price Transparency Working Group Created By Senators
A bipartisan group of senators are launching a working group to tackle the high price of health care. They are seeking feedback from patients, providers and insurers to help craft legislation to make health care pricing more transparent. Led by Sen. Bill Cassidy (R-LA), the group includes Sens. Todd Young (R-IN), Chuck Grassley (R-IA), Michael Bennet (D-CO), Tom Carper (D-DE) and Claire McCaskill (D-MO). The group is seeking data on what information consumers currently have about prices and out-of-pocket costs, who should ultimately be responsible for providing information to consumers and how to ensure transparency requirements don’t place unnecessary burdens on health care stakeholders.
The following update was provided for our members by Hall Render, NOSORH Legislative Liaison:
State Office of Rural Health Reauthorization Update
On February 28, the Senate Health, Labor, Education and Pensions (HELP) Committee voted to advance the State Offices of Rural Health Reauthorization Act of 2018 out of committee. The bill (S. 2278) now heads to the Senate floor for a full Senate vote. The bill advanced after an amendment was agreed to which increases the authorization of appropriations level to $12,500,000 for each of the fiscal years 2018 through 2022. The bill passed unanimously.
On the House side, introduction of a companion bill to the House measure is likely to occur in early March. The bipartisan bill will be introduced by members of the House Energy and Commerce Committee.
Congress Passes Massive Budget Bill with Numerous Health Care Provisions
On February 9, Congress passed a two-year budget deal containing substantial implications for health care. The Bipartisan Budget Act of 2018 sets new limits on how much the federal government can spend in the next two years. The budget deal keeps the government operating until March 23, at which point Congress must pass an omnibus appropriations bill to detail spending levels for each government program for the rest of the fiscal year.
The measure sets up a two-year, $300 billion increase in spending on military and domestic programs. It includes a four-year extension of funding for the Children’s Health Insurance Program, which comes on top of the six-year extension that Congress approved last month, and provides $7.8 billion in funding for community health centers over the next two years. The bill also provides $6 billion to combat the opioid crisis and improve mental health care.
Additionally, the legislation delays the reductions in Medicaid Disproportionate Share Hospital payments for two years and fully repeals the Independent Payment Advisory Board. The measure contains significant changes to telehealth reimbursement by allowing those services to be provided as a basic benefit for Medicare Advantage enrollees, expanding the ability of accountable care organizations to use telehealth and increasing the use of telehealth for individuals with stroke symptoms.
Other health care policy provisions in the measure include the following.
Trump Budget Proposes Cuts to HHS and Entitlement Programs
On February 12, the White House released President Trump’s FY 2019 budget proposal, which seeks major cuts to the HHS, HRSA and rural health. If enacted into law, the budget would cut the HHS discretionary budget by 21 percent and slash Medicare and Medicaid spending by hundreds of billions of dollars. For the second year in a row, the budget proposed to zero-out funding for the State Office of Rural Health and FLEX grant programs.
However, as with every presidential budget, the request is seen as more of an aspirational “wish list” than a realistic legislative proposal by most lawmakers on Capitol Hill. Nevertheless, provisions in the budget could find their way into legislation or agency regulations.
The Trump budget would provide HHS with nearly $10 billion in new funding to fight the opioid crisis through drug abuse prevention, treatment and recovery programs. However, it would also reduce Medicare uncompensated care payments, cut coverage of Medicare bad debt payments from 65 percent to 25 percent over a three-year period starting in 2019 and pay all hospital-owned physician offices located off campus at the physician office rate.
Heavy Focus on 340B Program Reform
President Trump’s budget request also calls for significant modifications to the 340B drug discount program. The proposal calls for savings from hospitals providing a certain amount of uncompensated care to be redistributed based on that percentage. Hospitals that do not meet the requirement would not receive any funds and their payment reductions would be returned to the trust. In addition, the budget proposal pushes for a requirement that hospitals report how they use savings from the 340B program, even including proposed legislative language to let HHS audit the records of providers to determine how savings are used.
The budget also calls for $16 million in user fees to help HRSA administer the 340B program. Nonprofit hospitals and other facilities would pay user fees amounting to 0.1 percent of 340B drug purchases. On February 15, Hall Render attended HRSA’s FY 2019 budget rollout where the agency described program priorities. HRSA officials said they are asking for increased regulatory authority over the 340B program to set standards as well as implement the user fee. HRSA administrators indicated they are still ironing out details of the new proposals and will release them as soon as possible.
The 340B program proposals in the president’s budget echo many of the concerns raised by Congress, and several track very closely to recommendations in a report released by the House Energy and Commerce Committee earlier this year. Members of the committee also raised concerns about the 340B program during a recent hearing on the impact of health care consolidation. In his opening statement, Chairman Greg Walden (R-OR) cited the 340B program as one of the reasons for increased consolidation because it “creates an incentive for hospitals to acquire independent physician offices not eligible for the 340B discount, especially those in the oncology space.”
Prior to the budget’s release, the White House Council of Economic Advisors issued a drug-price report suggesting increased oversight of the 340B program. The report suggests restricting the drug discount program to low income patients, and it raises concerns with current 340B eligibility standards.
GOP Moving Away from ACA Repeal Efforts
Congressional Republicans met for their annual policy retreat in February in West Virginia. Key GOP lawmakers stated that there are no imminent plans to try again to fully repeal the Affordable Care Act (“ACA”). Instead, they are shifting their focus to passing legislation for lowering health care premiums. When addressing the Republican legislative retreat, President Trump focused mostly on non-health care priorities, aside from supporting the Right to Try legislation and lowering drug prices.
Rural Health-Related Bills Introduced this Month
Rep. Cheri Bustos (D-IL) introduced the Rural Health Liaison Act of 2018 (H.R. 4945) to amend the Department of Agriculture Reorganization Act of 1994 to establish a Rural Health Liaison.
Sen. Chuck Grassley (R-IA) introduced S. 2415 to amend Title XIX of the Social Security Act to streamline enrollment of certain Medicaid providers and suppliers across state lines.
As of the most recent count, approximately 60 SORH attendees will participate in the National Rural Health Association’s Annual Policy Institute. NOSORH will provide a member and partner brief with Legislative Liaison Andrew Coats (Hall Render) and convene the State Office Council on Monday, February 5 at 6:00 PM.
NOSORH is asking SORH and their partners to request to pass Senate Bill 2278, please introduce a House companion bill to support for reauthorization of the State Office of Rural Health Program and for level funding for the SORH appropriation. A fact sheet is available for all SORH and their partners to print and include in their visit packets during the Policy Institute or to make a simple contact by email. Printed copies of the fact sheet will be available at the NOSORH members meeting.
The following update was provided for our members by Hall Render, NOSORH Legislative Liaison:
Congress Votes to End Government Shutdown – What’s Next?
After a three-day government shutdown, the Senate voted 81-18 on January 22 to fund the government through February 8, 2018. The continuing resolution (CR) was then sent to the House, where it passed 266-150. President Trump subsequently signed the bill into law on January 22. The three-week CR includes a six-year funding renewal of the Children’s Health Insurance Program (CHIP). The bill also delays the Affordable Care Act’s medical device tax and Cadillac tax on high-cost health insurance plans for two years and its tax on health insurance providers for one year.
Despite passing the CR, lawmakers remain under increasing pressure to reach a long-term budget agreement. In order to strike such a deal, Republicans will need support from at least nine Senate Democrats. While CHIP now has long-term financial support, funding for many other health programs, including “Medicare extenders” and DSH, expired at the end of September but were not included in the most recent CR. In a meeting with senior health care policy staff on Capitol Hill, Hall Render attorneys were told that lawmakers plan to include money for Medicare extenders and DSH in the next government funding bill that must be passed before February 8, if offsets can be found to cover the costs. Historically, Congress has covered such costs by implementing new cuts for providers, and it is expected that lawmakers will do so again in this case.
340B Remains Active Topic in Congress
On January 17, Sen. Bill Cassidy (R-LA) introduced a bill (S. 2312) that seeks to prevent certain hospitals from entering the 340B drug discount program until certain transparency measures and reporting requirements are strengthened. The Cassidy bill is the Senate version of the recently introduced 340B Pause Act and can serve as another reason for the Senate Health Education Labor and Pensions (HELP) Committee to hold future 340B oversight hearings.
The measure would create a moratorium on new DSHs from entering the 340B program for at least two years or until the Health Resources and Services Administration (HRSA) writes regulations for the 340B program with additional transparency measures and reporting requirements for hospitals. The bill would also require hospitals to use CMS’s new 340B claims modifier on drugs purchased through the program.
Under the Cassidy bill, critical access hospitals, rural referral centers, sole community hospitals, grantees and PPS-exempt children’s or cancer hospitals would still be able to enroll in the 340B program. The bill also exempts grantees and rural and critical access hospitals from most of the bills reporting requirements.
On January 10, the House Energy and Commerce Committee released a report following a broad review of the 340B program and several oversight hearings held in 2017. While the report highlights the strong bipartisan support of the program, the report also includes its perceived weaknesses such as the lack of transparency and oversight. The report concluded HRSA lacks sufficient regulatory authority to adequately oversee the program and the audit process in place is inadequate. The report also claims there is a lack of reliable data on how program savings are used because the 340B statute does not include reporting requirements for covered entities.
Azar Confirmed as HHS Secretary
The Senate confirmed Alex Azar as the next Secretary of Health and Human Services in a 55-43 vote. Six Senate Democrats and Independent Angus King (I-ME) joined nearly all Republicans in backing Azar’s nomination. Sen. Rand Paul (R-KY) was the only Republican to oppose Azar, which he said was due to his disagreement with Azar over drug re-importation. As the country’s top health official, Azar has pledged to prioritize lowering drug prices.
NOSORH welcomes new Policy Committee Co-Chair Scott Daniels (HI), stepping in for Mark Schoenbaum who retired earlier this month. Watch for the article in the Roots newsletter next week for a tribute to Mark’s great work for NOSORH over the years. Lisa Davis (PA) will continue to serve on the Board as the Policy Ex-Officio. In addition, Matt Strycker, NOSORH Project Manager, will be adding support to the important work of the the Policy Committee.
NOSORH has resources to help you and your state partners prepare for the National Rural Health Association Policy Institute being held Feburary 6-8 in Washington, DC. One-page state profiles are available to help SORH document rural health and the impact of their work. For help in completing your state’s profile, contact Donna Pfaendtner. A NOSORH request factsheet will be prepared for your use at the Policy Institute and Hall Render staff are available to join you on hill visits if you’re interested. Please plan to join the member and State Office Council meeting February 5 at 6 pm. In addition, NOSORH will host a webinar on January 18 at 2:00 pm ET to help SORH and their partners prepare for the Institute.
The following update was provided for our members by Hall Render, NOSORH Legislative Liaison:
SORH Reauthorization Bill Introduced in the Senate
On January 4, a bipartisan group of Senators introduced the State Offices of Rural Health (SORH) Reauthorization Act of 2017. Co-Chairs of the Senate Rural Health Caucus, Senators Pat Roberts (R-KS) and Heidi Heitkamp (D-ND), introduced the stand-alone bill which NOSORH has endorsed.
The legislation seeks to reauthorize the State Offices of Rural Health grant program for the first time, maintains the three-to-one federal to state match, and ensures greater accountability to HHS from state grantees. Other Senators who have endorsed the legislation as original co-sponsors are John Barrasso (R-WY), Bob Casey (D-PA), Charles Grassley (R-IA) and Tammy Baldwin (D-WI). All SORH and partners are asked to reach out to their Senators to inquire about their interest in sponsoring the bill.
With the stand-alone Senate bill now introduced, NOSORH will focus on getting a companion measure introduced in the House of Representatives.
Rural Broadband Program Expanded by FCC
In December, the Federal Communications Commission (FCC) voted to put additional funds into its rural health broadband subsidy program. The funds will be redistributed to ensure all eligible applicants in 2017 receive money. The Rural Health Care Program distributes $400 million annually for rural doctors, hospitals and nursing homes to adopt and pay for broadband internet access. The additional funds were necessary since the program reached its funding cap the last two years due to the increase in telemedicine use, as well as nursing homes being eligible for subsidies.
On January 2, the FCC issued a notice of proposed rulemaking seeking suggestions on how to expand its Rural Health Care Program. The notice mulls several possible changes to the program beyond merely raising the cap, including changing the definition of “rural health care” and cracking down on perceived waste, fraud and abuse. The NOSORH Policy and Program Monitoring Team will be crafting comments and response to the notice. Comments are due Friday, February 2.
Congress Passes Stopgap Spending Bill to Avoid Government Shutdown
After passing the most significant tax reform legislation in decades, Republicans avoided a government shutdown on December 22 by passing legislation that temporarily funds the government through January 19, 2018. The House voted 231-88 to approve the short-term spending bill, and the Senate quickly followed, passing the bill on a 66-32 vote.
The spending package maintains FY 2017 spending levels and waives the Pay-As-You-Go rules that would have resulted in billions of dollars in cuts to programs like Medicare. It also funds the Children’s Health Insurance Program (“CHIP”) through March 31, 2018 with $2.85 billion in allocated funds. Congress is likely to come to terms on a FY 2018 spending package by mid-January. Congress will then shift its focus to the FY 2019 appropriations process.
Congress Shifts Focus to 340B Drug Discount Program
Starting January 1, 2018, hospitals will receive the average sales price minus 22.5 percent, a change that will result in payment cuts of $1.6 billion. In the House, almost 100 lawmakers from both sides of the aisle have cosponsored a measure (H.R. 4392) that would reverse the action taken by CMS.
In early December, a bipartisan group of six senators submitted a letter to Senate leadership calling for the passage of legislation to prevent a dramatic reduction in payments for hospitals participating in the 340B drug discount program.
In late December, Rep. Larry Bucshon (R-IN) introduced the 340B Protecting Access for the Underserved and Safety-Net Entities Act, or 340B PAUSE Act (H.R. 4710), to amend the Public Health Service Act to establish a moratorium on the registration of certain new 340B hospitals and associated sites. The legislation was introduced to address concerns of lack of transparency or oversight in the program. The 340B PAUSE Act temporarily pauses new enrollment of Disproportionate Share Hospitals into the 340B discount drug program and requires basic data reporting. Critical access hospitals, sole community hospitals and rural referral centers would not be affected by this legislation.