Congressional Republicans Plan Next Steps for Health Reform

After a weekend of reflection over the last minute decision not to vote on the American Health Care Act, House Republicans reconvened in Washington this week seeking a way forward on the repeal and replacement of the Affordable Care Act (“ACA”). Despite renewed discussions, Republican conservatives and moderates in the House remain at odds over legislation that would repeal large portions of President Obama’s landmark health care law and significantly reform the Medicaid program.

Although there are a number of reasons an ACA repeal and replace bill is unlikely to happen anytime soon, the biggest hurdle continues to be the House Freedom Caucus. The group of nearly 40 of the most conservative Republican lawmakers in the House refuses to support anything short of full repeal. The White House has also shown tepid interest in reengaging in the ACA repeal debate. The Trump administration seems intent on moving to tax reform coupled with an infrastructure bill.

With a congressional calendar dominated by spending bills and the Supreme Court nomination, the focus now shifts to what administrative actions, if any, will be taken by HHS Secretary Tom Price. Last week, the Department of Health and Human Services (“HHS”) created a webpage detailing administrative actions HHS is looking into to stabilize the individual and small group insurance markets. This included providing states greater flexibility on how they spend Medicaid dollars through 1332 waivers.

Congress Turns Attention to Funding

As the April 28 deadline to continue funding the federal government approaches, congressional leaders have indicated their goal is to update fiscal year 2017 spending levels and not pass another continuing resolution. The procedural strategy is to group all remaining fiscal year 2017 bills, which includes the appropriations bill that funds HHS, into an omnibus spending bill and send it to the White House. Congressional leaders from both sides have indicated negotiations on the measure are progressing despite potential hurdles.

Late last week, the White House asked Congress to cut $18 billion from discretionary spending bills for fiscal year 2017. The proposed cuts would be absorbed over the five months left in the current fiscal year. The administration is calling for broad, across the board cuts with the Labor-HHS spending bill seeing the steepest cuts. Much of the administration’s proposed HHS cuts would come through reductions in NIH and FDA funding. Another hurdle is the legislative calendar as Congress is scheduled to be in session for only eight days in April.

CMS Issues Final Rule on Medicaid DSH Calculation

On March 30, CMS issued a final rule addressing how funding limits will be calculated for hospitals using Medicaid Disproportionate Share Hospital (“DSH”) money to cover uncompensated care expenses. The rule states that uncompensated care costs for Medicaid enrollees are only those that remain after hospitals have received other payments from third-party entities, including private insurers and Medicare. The Medicaid uncompensated care funding will be limited to costs for which the hospital hasn’t been made good by any other source.

Health-Related Bills Introduced This Week

Rep. Cathy McMorris Rodgers (R-WA) introduced the Cancer Care Payment Reform Act (H.R. 1834) that seeks to establish a national oncology medical home demonstration project under Medicare. According to a press release, the five-year demonstration project will require medical practices that participate to report on a number of quality metrics and overall patient satisfaction. The metrics will then be used to compare practices and treatment methods in order to determine best practices.

Sen. Cory Gardner (R-CO) introduced a bill that would require the Center for Medicare and Medicaid Innovation (“CMMI”) to test the effect of including telehealth services in Medicare health delivery reform models. According to the press release, the bill would require HHS to allow eligible hospitals to test telehealth services through CMMI.

Rep. Tom MacArthur (R-NJ) introduced a bill (H.R. 1831) to amend Title XVIII of the Social Security Act to permit hospitals in all-urban states to be considered Medicare dependent hospitals.

Rep. Lynn Jenkins (R-KS) introduced a bill (H.R. 1828) that would provide for payments for certain rural health clinic and federally qualified health center services furnished to hospice patients under Medicare.

Rep. Larry Bucshon (R-IN) introduced a bill (H.R. 1736) to amend the Federal Food, Drug and Cosmetic Act to improve the process for inspections of device establishments and for granting export certifications.

Rep. Devin Nunes (R-CA) introduced a bill (H.R. 1838) that would amend Title XVIII of the Social Security Act to modernize payments for ambulatory surgical centers under Medicare.

Sen. Johnny Isakson (R-GA) introduced a bill (S. 794) that seeks to improve the process of Medicare administrative contractors issue local coverage determinations under the Medicare program.

Next Week in Washington

The House and Senate return on April 3. The Senate HELP Committee has a pair of FDA-related hearings next week. On April 4, the committee will hold a hearing on the Medical Device User Fee Amendments legislation. On April 5, Trump’s pick to lead the FDA, Dr. Scott Gottlieb, will appear before the committee for his confirmation hearing. Also next week, the House Energy and Commerce Committee will hold a hearing examining cybersecurity in the health care sector.