Legislative Update
Congress Returns to DC with a Focus on Drug Pricing and Surprise Billing A bevy of health care items remain on the agenda for Congress in 2020. Legislative action on drug pricing and surprise billing stalled in late 2019 but are expected to resume this year, although the timing and outcome remain uncertain given the impeachment process and looming election.
Martha M. Kendrick, Esq., Partner, Akin Gump Strauss Hauer & Feld LLP
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resident Trump will release the Fiscal P Year (FY) 2021 Budget on Monday, February 10, 2020. Impeachment proceedings have moved to the U.S. Senate, but due to disagreements between Republican and Democratic Leadership on the process, is just beginning as we go to press. The presidential election will loom large this year as Congress considers controversial health care proposals, including surprise billing and drug pricing. The final funding agreements for FY 2020 that passed at the end of 2019 included a May 22, 2020, deadline for several health care extenders – a likely driver for other health care legislation to move this year. The FY 2020 funding bills also included provisions to permanently repeal several Affordable Care Act (ACA) taxes, i.e. the medical device excise tax, the “Cadillac” tax on high-cost health plans, and the health insurance fee tax.
AMRPA Magazine / February 2020
House Democrats voted in December to approve the Elijah E. Cummings Lower Drug Costs Now Act (H.R. 3), but Senate Majority Leader Mitch McConnell (R-KY) continues to refuse to take up the bill, which relies on government price negotiation and international reference pricing. Nor has Leader McConnell committed to bringing the Senate Finance Committee-passed Prescription Drug Pricing Reduction Act (S. 2543) to the floor. Many Republican Senators are opposed to the bill’s penalties for drug price increases that are greater than inflation. A group of six Republican Senate Finance Committee members have also introduced an alternative drug pricing bill, which further complicates Finance Chair Chuck Grassley’s (R-IA) relentless efforts to pass S. 2543. January reports from several pharmaceutical companies about price increases may provide an impetus for bipartisan discussions. The president has made drug pricing a priority and the administration may release its much-awaited International Pricing Index (IPI) model proposed rule, which would tie reimbursement for certain Medicare Part B drugs to international prices. Strong Congressional opposition to the proposal could result in legislative action to modify or overturn it, while prompting renewed consideration of alternatives to reduce drug prices. Additionally, the comment period will close in March on the administration’s proposed rule for importing prescription drugs. The rule may spur additional states to consider drug importation legislation. On December 9, Senate Health, Education, Labor and Pensions (HELP) Committee Chair Lamar Alexander (R-TN) and House Energy & Commerce Committee Chair Frank Pallone, Jr. (D-NJ), along with Energy and Commerce (E&C) Republican Leader Greg Walden (R-OR), announced they reached a bipartisan, bicameral agreement on surprise medical billing legislation. The bill would require the insurer to pay at minimum the market-based median in-network rate for the service in the geographic area where the service was delivered. If the median in-network rate payment is above $750, the provider may elect to go to a “baseball-style,” binding arbitration. The bill also aims to increase prescription drug competition and create price transparency, funds public health programs (including grants for maternal health and rural health initiatives and Community Health Centers), and increases the purchasing age of tobacco to 21. Chair Alexander and House E&C leaders pushed for the revised bill to be included in the year-end spending package, but faced several obstacles including the House Ways and Means Committee subsequently releasing their surprise billing package a few days later on December 11. The Ways and Means proposal sets the patient cost-sharing for out-of-network bills at the in-network rate and also calls for a “robust reconciliation process” with clear criteria for payment resolution and pre-determined thresholds.
