Legislative Update

Martha M. Kendrick, Esq., Partner, Akin Gump Strauss Hauer & Feld LLP

Highlights: » Per John Hopkins data, more than 14 million coronavirus cases were confirmed in the United States as of December 3. » Pfizer and BioNTech and Moderna released preliminary analysis showing that their COVID-19 vaccines are effective at preventing symptomatic coronavirus disease. » The Senate Appropriations Committee released 12 Fiscal Year 2021 (FY21) appropriations bills, kicking off negotiations over a year-end spending package. The current Continuing Resolution (CR) expires December 11. » As the 116th Congress concludes its second session, near-term action is expected on a package to fund the government through FY21 that includes COVID-19 relief measures. » Post-election, Democrats and Republicans remain firm on their prior COVID proposals.

2020 Election Day (Weeks) Continues

With a victory in Pennsylvania, former Vice President Joe Biden crossed the 270 electoral vote threshold on November 7, thus winning the election to serve as the 46th President of the United States. His running mate, Sen. Kamala Harris (D-CA), will be the first woman, Black person and Asian-American to serve as Vice President. Their victory is historic in an election where a deeply divided country cast a record number of ballots in the Presidential and closely contested Senate and House races. Senate Republicans currently control 50 seats, and Democrats control 48 seats. The final two Senate seats in Georgia will be decided in a runoff election on January 5. Democrats need to win both Georgia seats for Vice President-elect Harris to break the 50-50 tie and give Democrats majority control of the upper chamber.

Democrats retained control of the House of Representatives, albeit with a much narrower majority of only 14 seats. House Democrats lost seven incumbent seats, including Reps. Debbie Murcarsel-Powell (D-FL), Donna Shalala (D-FL), Xochitl Torres Small (D-NM), Collin Peterson (D-MN), Kendra Horn (D-OK), and Joe Cunningham (DSC). Democrats Kathy Manning (D-NC) and Deborah Ross (D-NC) picked up GOP-held seats in North Carolina (likely due to recent redistricting). As we go to print, the House ratio is 218(D) – 201(R) with 16 seats currently uncalled, or going to a run-off. Notably, a record number of Republican women and minorities will serve in the next House of Representatives, adding at least 13 seats to their ranks and bringing their total to 33. This may influence future Committee assignments (currently only one GOP woman, Rep. Jackie Walorski (R-IN) serves on the Ways and Means Committee, and there are no minorities).

President Trump has not yet conceded the election, and is calling for recounts and investigations into claims of voter fraud. Reportedly, the Office of Management and Budget is moving forward with preparing a Trump administration FY22 budget proposal. President-elect Biden is proceeding with plans to transfer power on January 21, 2021. On November 9, Biden announced his COVID-19 Advisory Board led by co-chairs Dr. Vivek Murthy, former Surgeon General under President Obama; David Kessler, former head of the Food and Drug Administration under Presidents George H.W. Bush and Clinton; and Dr. Marcella Nunez-Smith with Yale School of Public Health. The Advisory Board will focus on executing Biden’s campaign proposals, guided by three principles: 1) Listen to science; 2) Ensure public health decisions are informed by public health professionals; and 3) Restore trust, transparency, common purpose and accountability to our government. The Advisory Board will address masks, vaccine distribution, vaccine prioritization, personal protection equipment, essential drugs and supplies, standards for reopening schools, and bolstering test and trace capacity.

On November 11, President-elect Biden officially announced a transition team, referred to as “agency review teams,” to collect information about federal agency operations.

Biden Administration First 100 Days President-elect Biden’s agenda and approach for his first 100 days in office depends on whether Democrats flip control of the Senate or Republicans maintain their majority. Many of his major campaign promises—comprehensive climate solutions, sweeping immigration reform, infrastructure spending and tax reforms— are only possible with a Democratic majority in both the House and Senate. If Republicans win either of the run-off elections in Georgia and maintain control of the Senate, President-elect Biden’s first 100 days in office will likely focus on executive actions rather than major legislation.

Aside from appointing a cabinet, one of the first orders of business for any new president is taking action to rescind, modify or terminate any pending regulatory actions, executive actions or policies from the previous administration that differ in policy approach. President-elect Biden will likely take executive action to change Trump-era policies and fulfill his campaign promise to strengthen and preserve the Patient Protection and Affordable Care Act (ACA). He has suggested he will implement a special health care enrollment period for the federal marketplace to address gaps in insurance coverage for those who may have lost employment and benefits due to the economic downturn associated with the COVID-19 pandemic. He is also likely to reverse Trump administration policies expanding association health plans and short-term limited-duration insurance plans, which Democrats argue fracture the individual marketplace and drive up costs in the ACA exchanges. It is expected that the Biden administration will roll back Trump administration Section 1332 guidance, which gave states additional flexibility to waive ACA insurance requirements. During a November 10 press conference, following the Supreme Court’s hearing over the constitutionality of the Affordable Care Act (California v. Texas), President-elect Biden promised to bolster the law regardless of the outcome of the case. Within his first 100 days, Biden may instruct his administration to drop federal lawsuits that threaten to strike down the law.

Clearly, the pandemic will be a primary focus of the incoming administration. Look for President-elect Biden to reverse the Trump administration’s withdrawal from the World Health Organization and work with state and local officials to promote a consistent, science-based approach to tackling the pandemic. Biden will also take actions to restore public trust and insulate the Food & Drug Administration, Centers for Disease Control and the National Institutes of Health (NIH) from politics and future political interference. The expansion of telehealth, including the extension of flexibilities implemented during the pandemic, will be a prime focus. The new administration will work with Congress to enact permanent telehealth expansions and advocate for a significant increase in funding for rural broadband to allow greater adoption of this mode of care nationwide.

The Biden administration will also work with Congress to enact limits on drug price increases and provide authority for Medicare to negotiate prices directly with manufacturers. Absent a willing Congress, look for the Biden administration to use demonstration authority to advance drug pricing reform. President-elect Biden aims to stop balance billing when patients cannot choose their provider, but his administration will need to work with Congress to enact a solution. Congress has yet to reach consensus on how to prevent balance bills. The Biden administration will followthrough on its pledge to make a $125 billion federal investment for opioid prevention, treatment and recovery services. Enforcement efforts will likely focus on patient brokers and substance use disorder treatment facilities that are not evidencebased.

President-elect Biden will deny any pending requests from states seeking permission to test work requirements in Medicaid and shift his administration’s positions in the litigation challenging Medicaid work requirements approved in other states. Under his direction, the new administration will use existing antitrust authority to tackle market concentration in the health care system.

A Lame Duck Session As the lame duck 116th Congress concludes its second session, we expect near-term action on several must-pass measures prior to January. The top priority is extending government funding beyond December 11, when the current continuing resolution (CR) expires. The House passed 10 of its 12 FY21 Appropriations bills. On November 10, the Senate Appropriations Committee released all 12 FY21 appropriations bills, kicking off negotiations over a year-end spending package. The Senate process stalled in June, after Democrats indicated they would add policy amendments to the bills as additional pandemic relief and social justice funding. House and Senate appropriators may also pursue a dual package – “CROmnibus” – that includes an assortment of agreed-upon FY21 appropriations bills combined with a CR to fund remaining appropriations bills at current levels through the end of the fiscal year – September 30, 2021.

Of interest to AMRPA, the Senate Labor-Health and Human Services report encourages the Centers for Medicare and Medicaid Services (CMS) to take into account how existing budget neutrality requirements will affect access to various sections of the provider community. A provision encourages CMS to expand program integrity programs, such as the Recovery Audit Validation Contractor program, other parts of Medicare and Medicaid, and to ensure accurate physician payments through the National Correcting Coding Initiative. Additionally, the report notes that health care waste, fraud and abuse accounts for $70 billion annually, and the Committee supports artificial intelligence software to examine waste, fraud and abuse in the health care settings. The Committee also recommends $114,470 million for the National Institute on Disability, Independent Living, and Rehabilitation Research, including an increase of $2.5 million for the ADA National Network Centers.

COVID Relief An agreement on a targeted legislative package to address the COVID-19 pandemic remains a possibility in the lame duck Congress. However, a far-reaching COVID-19 relief deal appears unlikely. Republicans argue that loss of Democrat House seats and recently improved jobs numbers indicate support

for a smaller package (somewhere between $500 billion to $1 trillion). However, Speaker Nancy Pelosi has not backed down from support for a robust relief package, noting Democrats maintain the majority and COVID-19 infection rates continue to increase nationwide. The Georgia Senate elections may actually incentivize a deal before year-end. In negotiations over the summer, both parties agreed on additional funding for health care priorities, the Paycheck Protection Program, child care, US Postal Service and stimulus checks. However, they diverge on unemployment insurance payments, state and local funding, liability protections and back-to-school funding. Prior to the election, President Trump called for spending more than the $2.4 trillion House Democrats included in their aid package (HEROES 2, HR 925). Whether Trump will negotiate after losing his bid for reelection is a critical unknown factor.

Supreme Court Begins Hearing On November 10, the Supreme Court heard oral arguments in Texas v. California, a case that will ultimately decide the future of the ACA. The case focuses on the constitutionality of the individual mandate. Although the Justices’ questions did not provide a clear picture on how the Court may rule on the threshold Article III standing issues and the constitutionality of the ACA’s minimum-coverage provision (i.e., the so-called “individual mandate”), there seem to be at least five votes to sever that provision (if found unconstitutional) and leave the rest of the ACA intact. Chief Justice Roberts and Justice Kavanaugh signaled that the ACA should not fall with the mandate. Chief Justice Roberts made clear that 2010 Congressional findings on the importance of the individual mandate in creating markets does not translate to an inseverability clause, and Congress’s 2017 targeted amendment constitutes “compelling evidence” of its contrary intent. He stated that it is “not our job” to repeal the remainder of the ACA. Justice Kavanaugh pressed both Texas and the federal government on “straightforward” and “fairly clear” severability analysis under this Court’s precedents. A decision on the case may come as early as February 2021 or early next summer.

As we go to press, we cannot resist noting the unique opportunity that occurs only once every two years—identifying and cultivating relationships with the new incoming Congress. Turnover has been extremely high in each of the last four sessions of Congress, and it remains critical that AMRPA identify and build new champions. As we head into 2021, join us! AMRPA urgently needs new, strong Congressional champions, and we stand ready to work with you to meet and achieve this challenge. In closing, heartfelt thanks for your amazing work in serving and meeting the complex medical needs of the most vulnerable Medicare beneficiaries.