Below is this week’s “Capitol Hill Healthcare Update,” which is posted on Mondays when Congress is in session.

MAJOR HEALTH POLICY UNLIKELY IN POTENTIAL DEBT-SPENDING DEAL

As House Speaker Nancy Pelosi, D-Calif., and the Trump administration edge closer to a sweeping agreement to avoid a government shutdown and debt default, it’s increasingly unlikely major healthcare provisions will be included.

Pelosi and Treasury Secretary Steven Mnuchin have been working to permanently lift sequester-imposed budget caps as well as the extend the government’s borrowing authority through July 2012. Mnuchin has warned that without congressional action Washington could reach the debt ceiling shortly after Labor Day.

Democrats want to wrap up a deal this week in advance of the House’s scheduled adjournment Friday, for a monthlong recess.

Raising the budget caps would effectively increase government spending, and the White House had wanted at least $150 billion of that new spending to be offset. Trump officials last week proposed a menu of $574 billion in cuts across the government, including $115 billion in reimbursement cuts or rebate increases by the pharmaceutical industry. Those proposals were included in Trump’s fiscal 2020 budget proposal.

But Pelosi rejected those offsets, and there are some indications that any agreement reached this week would include little in the way of offsets.

Separately, Senate Finance Committee Chairman Chuck Grassley, R-Iowa, and ranking Democrat Sen. Ron Wyden, D-Ore., are continuing to negotiate prescription drug pricing legislation. That measure, which has not been agreed to, would advance separately this fall rather than as part of any budget and debt package Congress might consider this month.

The Grassley-Wyden discussions are centered on proposals to cap increases in drug prices. While committee staff indicated the plan would save money for both the government and Medicare Part D beneficiaries, rank-and-file Republican senators last week were waiting on final Congressional Budget Office analysis before agreeing to advance any legislation.

HOUSE TO VOTE ON HEALTH REAUTHORIZATIONS BUT NO DRUG PRICING BILLS

The House floor agenda this week includes noncontroversial legislation approved earlier this month by the House Energy and Commerce Committee, mostly reauthorizing expiring programs – but absent from the agenda is committee-approved legislation addressing prescription drug prices.

Among the reauthorization bills is legislation by Rep. James Langevin, D-R.I., to renew and increase federal funding for the Lifespan Respite Care Act, which provides state grants to support caregivers nationwide who provide care for loved ones with chronic, disabling health conditions. First introduced by former Rep. Mike Ferguson, R-N.J., and enacted in 2006, the law has led to grants in 37 states and the District of Columbia. (Ferguson is now the leader of BakerHostetler’s Federal Policy team.)

However, the House will not take up bills that would increase transparency in drug pricing or otherwise target drug costs, despite both being top priorities of many lawmakers. Indeed, last week, members of the New Democrat Coalition sent a letter to House Democratic leadership pressing for floor votes on specific bipartisan drug pricing bills.

HOUSE OKs ‘CADILLAC TAX’ REPEAL, BUT OTHER ACA TAX VOTES ON ICE

The House last week overwhelmingly approved legislation to repeal an Affordable Care Act (ACA) tax on high-cost health plans, but Democratic leaders have no plans to unwind other provider taxes included in the health reform law.

The House voted 419-6 to repeal the so-called Cadillac tax, which would impose a 40% surcharge on employer-provided plans costing more than $11,200 for individuals and $30,100 for families. The tax is scheduled to take effect in 2022 after already being delayed twice by Congress.

Eliminating the tax is expected reduce government spending – and exacerbate the deficit – by $193 billion over a decade, according to the Congressional Budget Office.

Labor unions, which negotiate generous health benefits, had long pushed for the vote by their political allies among House Democrats. But Democratic leaders haven’t shown as much enthusiasm for repealing other ACA taxes, such as the medical device tax and the tax on insurers.

But medical device industry advocates see a silver lining in the vote on the Cadillac tax. Some Democratic lawmakers had objected to repealing the 2.3% excise tax on medical technology because the resulting loss of $20 billion in revenue wasn’t offset elsewhere in the budget. But many of those same Democrats just voted to repeal another ACA tax – at nearly 10 times the cost – also without offsets.

Repealing or suspending the device tax – which has bipartisan support in the House and Senate – is most likely a candidate for action in year-end spending and tax legislation.

HOUSE PANEL CREATES HEALTH TASK FORCE FOR RURAL AREAS

The House Ways and Means Committee last week created a bipartisan Rural and Underserved Communities Health Task Force to explore the challenges of healthcare delivery and identify policy options.

The group will be led by four co-chairs: Reps. Brad Wenstrup, R-Ohio, Jodey Arrington, R-Texas, Danny Davis, D-Ill., and Terri Sewell, D-Ala.

The group plans to hold its first meeting Thursday.

“As a doctor representing both rural and underserved areas in Congress, I know that rural patients are lacking access to medical providers,” said Wenstrup, a former podiatrist. “I’m eager to work together to find bipartisan solutions that improve the access, quality and cost of healthcare in our rural areas.”