Congress will try to score drug pricing, surprise billing wins in 2020

Congress in 2020 will focus on securing the healthcare policy wins that slipped through lawmakers’ fingertips at the end of 2019: cracking down on surprise medical bills and high drug costs.

Senators at the forefront of both those efforts will give up their committee gavels at the end of the 116th Congress, so 2020 will be pivotal in cementing their healthcare legacies. Senate health committee Chair Lamar Alexander (R-Tenn.) is retiring and Senate Finance Committee Chair Chuck Grassley (R-Iowa) will leave his chairmanship after serving the six-year maximum.

Although lawmakers left drug pricing and surprise billing out of their year-end spending deal, appropriators extended funding for several Medicare and Medicaid programs through May 22, which sets up another potential vehicle for legislative action.

Tom Nickels, executive vice president for government relations at the American Hospital Association, said he is hopeful for a longer-term resolution on delaying Medicaid payment cuts to disproportionate-share hospitals in the spring. But that will likely have to come with some trade-offs. Grassley wants hospitals to agree to disclose all public funding they receive to the CMS and state Medicaid programs, including non-DSH supplemental payments at the facility level. He argued the disclosure should not be controversial, as hospitals already have the information.

Nickels said the calls for greater transparency on non-DSH supplemental payments are “perfectly reasonable,” adding that there’s bipartisan, bicameral agreement that the cuts should not take effect in 2020.

“The stars are aligned,” Nickels said.

Alexander, who co-authored the bicameral surprise billing proposal, said passing legislation banning balance billing will be his first priority next year.

“I think we look toward May, and I’m going to do everything I can to keep it at the top of Congress’ to-do list in 2020. It’s a law that almost everyone wants passed,” Alexander said.

Senate health committee ranking Democrat Patty Murray, who notably chose not to sign on to the legislation she helped Alexander negotiate last year, similarly has expressed optimism a deal could be reached. A spokesperson for Murray said she supports the surprise billing provision in the bicameral legislation, which lawmakers have said would save the federal government nearly $20 billion over the next decade.

Lobbyists tracking the issues are skeptical that House and Senate leadership will have an appetite to force their members to take votes on legislation that divides powerful corporate interests in the middle of campaign season.

On top of that, differences emerged late last year between key committees that further muddy the waters.

Leaders of the House Energy and Commerce Committee are in lockstep with Alexander and Murray, but Ways and Means Committee leaders are headed in a completely different direction. Ways and Means Chair Richard Neal (D-Mass.) came under fire for releasing a vague one-page proposal to address balance billing just days before a government funding deadline.

Ways and Means ranking Republican Kevin Brady of Texas said the panel is aiming for a “revenue-neutral” approach, even though the White House has indicated it wants to see a proposal that will produce savings for the federal government.

“Chairman Neal and I believe this should be the first issue that Congress takes up after we get back after the first of the year, and then we will move promptly from there,” Brady said.

But many policy observers and congressional aides doubt any new proposal would garner the support of both hospitals and insurers. Benedic Ippolito, a research fellow at the American Enterprise Institute, said he thought the bicameral compromise legislation should have been good enough for providers to accept, as it contained industry-friendly tweaks, including an arbitration backstop with a lower threshold and indexing in-network benchmark payments to inflation.

“If that is not an acceptable compromise, no compromise is acceptable as far as providers are concerned,” Ippolito said.

Nickels said the bicameral policy would save money by reducing in-network pay for providers, which the AHA opposes. But he said a deal might be possible if it focuses on protecting patients from surprise bills.

“I think there is a good possibility a surprise billing deal will get done,” Nickels said.

The logjam on drug-pricing legislation in the Senate appears similarly intact, and it’s unclear if the outlook will change before May. A comprehensive drug-pricing package authored by Grassley and Senate Finance Committee ranking Democrat Ron Wyden of Oregon has stalled due to a controversial provision that would require drugmakers to pay back Medicare for price hikes that outpace inflation.

If the provision is taken out, Grassley argues that the bill would lose Democratic support. But if it remains, many Senate Republicans won’t vote for it because they equate the measure to price controls. Grassley accused Senate Majority Leader Mitch McConnell of instructing Republicans not to co-sponsor the bill, which has the support of the White House. “Senate majority leaders historically, if you have a president of the same party, tend to be spokesmen for the administration, not against the administration,” Grassley said.

A spokesperson for McConnell pointed to remarks the Kentucky Republican made recently indicating that the path forward is still “under discussion” and the Senate is still “looking at doing something on drug pricing.”

Senior Republicans on the Finance Committee have instead expressed support for a package of incremental, bipartisan drug-pricing policies assembled by Republican chairs of House committees with jurisdiction over healthcare. “This bill provides several ideas passed by the Senate Finance Committee, while focusing on policies that can be passed through both chambers of Congress. Importantly, it eliminates those policies that have divided us,” said Senate Majority Whip John Thune (R-S.D.).

Top Republicans opposed to the Grassley-Wyden package introduced a bill similar to the House proposal on Dec. 19.

But drugmakers vehemently oppose both proposals, and Grassley isn’t indicating he will back down. When asked what his legislative healthcare priorities were for 2020, he paused for a while, and then said, “I suppose not much beyond drug pricing.”

May is also a precarious time for bipartisan policymaking on complex healthcare issues, as both parties will be just six months out from a presidential election. House Speaker Nancy Pelosi (D-Calif.) gave her members a drug-pricing win to run on when the House passed her aggressive price negotiation bill in December, and she put House freshmen from vulnerable districts front and center when promoting the victory. Pelosi’s bill will not get a vote in the Senate.

“A May time frame is an abysmal time to make major bipartisan legislation,” said Shawn Gremminger, senior director of federal relations at Families USA.

President Donald Trump has made drug pricing a major healthcare priority and the White House has pushed for passage of the Grassley-Wyden package. But in the absence of a legislative victory, the president can tout administrative actions.

HHS in late December proposed importing prescription drugs from foreign countries, and could move forward with a demonstration that would tie payment for some physician-administered drugs in Medicare to prices in foreign countries in 2020. Both policies fit into Trump’s narrative that Americans are getting ripped off compared with consumers in other countries.

The conceptual debate around expanding insurance coverage and single-payer healthcare swirling among Democratic presidential candidates on the campaign trail is unlikely to translate into action in Congress.

On Dec. 18, the 5th U.S. Circuit Court of Appeals remanded a case that could decide the fate of the Affordable Care Act to a lower court. That means that it’s unlikely the U.S. Supreme Court will rule on the case until after the 2020 election, which takes the pressure off of Republican lawmakers to take legislative action to prepare for a potential ruling against the landmark law.

When asked if he thought lawmakers would act on legislation to protect individuals with pre-existing conditions in the insurance market, Sen. Rick Scott (R-Fla.) shook his head.

“Because it’s so polarizing people are scared to do anything, and I think they don’t have to right now,” Scott said.

On the House side, Pelosi said in November that she is “not a big fan” of Medicare for All, so any action on the issue will likely be symbolic.

Congressional Progressive Caucus Co-Chair Rep. Pramila Jayapal (D-Wash.), the lead sponsor of Medicare for All legislation in the House, said she is working on solidifying another committee hearing including her bill that she hopes to have set early in 2020. The House held four committee hearings on the bill in 2019.

“I’m like water on a rock,” Jayapal said.

If members of Congress are not able to make good on their promises to protect consumers from surprise bills and high drug costs, lawmakers could turn to oversight to make their mark on the issues.

Leaders of the Senate health and House Energy and Commerce committees on Dec. 19 expanded an investigation of surprise billing practices to include several insurers and physician staffing companies. Previously, the lawmakers had sent information requests to private-equity firms that own physician staffing and emergency transportation companies.

The expanded investigation homes in on whether insurance companies refuse to negotiate reasonable reimbursement rates with some providers and on physician staffing companies’ policies on sending patients surprise medical bills.

Grassley also opened several healthcare-related investigations in 2019 that could come to fruition this year.

“He is throwing such a wide net, it’s anyone’s guess which will be the ones,” said Rodney Whitlock, a vice president at McDermott+Consulting and former health policy adviser to Grassley.

Last year, the Finance Committee chairman revived calls for oversight of tax-exempt hospitals, asked HHS for information about how funds for graduate medical education programs are spent, and demanded along with Wyden that insulin manufacturers explain dramatic price hikes for the lifesaving medicine.

“The issues of 2019 aren’t over, even if 2019 is,” Whitlock said.