Legislative Update

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

Highlights: » President Trump will release the Fiscal 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.

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.

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.

Although conventional wisdom suggests that major legislation is difficult to pass in an election year, the Fiscal Year (FY) 2020 appropriations packages enacted last month established a May 22, 2020, deadline for Congress to act to extend certain expiring health care programs. This provides a pre-election, legislative vehicle for members to advance bipartisan, bicameral policy priorities, including surprise billing and drug pricing reforms. Extensions of the expiring health care programs could cost as much as $33 billion over 10 years, depending on the length of the extensions. Congress will likely seek to pay for the cost of any extenders package through advancement of other health care policies, including surprise medical billing and drug pricing, along with a number of individual health care bills already moving forward through the legislative process to address distinct issues related to specific diseases/conditions and targeted health care benefits.

Impeachment Proceedings Begin in the Senate While the Senate had planned to start on the impeachment trial in early January, Speaker Nancy Pelosi (D-CA) decided to hold onto the House-passed Articles of Impeachment while Senate Majority Leader Mitch McConnell (R-KY) and Senate Minority Leader Chuck Schumer (D-NY) negotiated the process and procedure for the Senate trial. Speaker Pelosi and Sen. Schumer were demanding that certain documents and witnesses be included as part of the Senate trial, while Sen. McConnell argued that the Senate should follow the precedent of the Clinton impeachment trial and consider the question of potential witnesses and documents after the initial presentation by House managers and President Trump’s defense team. On January 15, the House voted 228-193 to appoint a team of seven managers and to officially transmit the Articles of Impeachment to the Senate. Chief Justice John Roberts was sworn in on January 16, 2020, to preside over the impeachment trial, which begins more formally on Tuesday, January 21.

FY 2021 Budget Outlook The Trump administration announced that it intends to release its FY 2021 Budget Proposal on Monday, February 10, a month earlier than last year’s release of budget documents. Congress is unlikely to produce a Budget Resolution this year, given that fiscal 2021 topline numbers have already been agreed to for this upcoming year, but a final decision is forthcoming. Appropriators are focused on a June target to move through the FY 2021 Appropriations process. However, in a presidential election year there is always a chance Congress waits until the Lame Duck session to address the often controversial issues that pop up during the development of annual funding bills.

New Innovation Center Leader Named The Center for Medicare and Medicaid Innovation (CMMI) has a new leader, Brad Smith, who will oversee the finalization and implementation of key models focused on radiation oncology and kidney care, among other initiatives. In light of Congressional

// 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."

and industry concerns about these and past models and the forthcoming IPI model, bipartisan legislation is expected to be introduced soon to establish parameters for CMMI in developing new payment and delivery models.

Part I of MA Advance Notice Released On January 6, 2020, the Centers for Medicare and Medicaid Services (CMS) released Part I of the 2021 Advance Notice of Methodological Changes for Medicare Advantage Capitation Rates and Part C and Part D Payment Policies Comments on the proposals must be submitted by March 6, 2020. Part I lays out policies for continued transition to the Part C CMS-Hierarchial Conditional Categories (HCC) risk adjustment model. The notice also makes modifications to the methodology used to calculate the encounter data. The subsequent notice is expected soon, and the final 2021 Rate Announcement will be published by April 6.

Affordable Care Act Developments The future of the Affordable Care Act (ACA) could come down to a crucial Supreme Court decision in 2020. On December 18, 2019, the Fifth Circuit Court of Appeals ruled that the ACA’s individual mandate is unconstitutional because it can no longer be considered a tax after the Tax Cuts and Jobs Act of 2017 reduced the individual mandate penalty to $0. With regard to

the severability of the law, the Fifth Circuit remanded the case back to the U.S. District Court for the Northern District of Texas to determine which parts of the ACA can stay in place. On January 3, 2020, the defendant States in Texas v. United States, led by California Attorney General Xavier Becerra, filed a petition to the Supreme Court seeking immediate review of the ruling. If granted, a final decision on the fate of the ACA could be announced before the end of 2020. On January 6, the Supreme Court asked the Trump administration and Republican-led states challenging the ACA to respond to the petition by January 7. The administration argues that because the ACA remains in effect during the appeal process, the Supreme Court should not feel compelled to weigh in during an election year, whereas the Democrats are urging the Supreme Court to make a quick decision on the fate of the law.

*** Lawmakers have commenced the 2nd Session of the 116th Congress amidst significant uncertainty. An impeachment trial awaits Senators, as the Trump administration braces for its impact. The May 22 deadline for several important health extenders to expire does offer an opportunity for health priorities to move legislatively this spring. Committees of jurisdiction will be working to develop a package of proposals, that likely will include small bills deemed non-controversial, and could include drug pricing and surprise billing, that is bipartisan and can move in a Presidential election year.

We encourage AMRPA members to take advantage of this opportunity to educate members of Congress on how critically important and medically necessary rehabilitative care is for its patients and the unique role of rehabilitation hospitals in the continuum of care. Specifically, please encourage your members of Congress to co-sponsor H.R. 3107, the Improving Seniors’ Timely Access to Care Act of 2019, which tackles some of the most challenging problems presented by prior authorization. Please reach out to your elected members and ask them to visit your hospitals and outpatient facilities – these types of visits help cultivate and strengthen Congressional champions for the field!

We also urge AMRPA members to register for the upcoming Leadership Conference and Advocacy Fly-In, which will be held in Washington, D.C. March 22-24, 2020. We will help set up meetings for you and your colleagues on Capitol Hill with your members of Congress and senators, brief you on the field’s most pressing policy issues.

We look forward to working with you in 2020 and hope to see you in Washington, DC, in March!

AMRPA Schedule of Events

CONFERENCE DATES

2020 Spring Conference and Congressional Fly-In March 22-24, 2020 Washington, DC REGISTER TODAY!

AMRPA 2020 Fall Conference October 4-7, 2020 Renaissance Dallas Hotel Dallas, Texas CALL FOR ABSTRACTS NOW OPEN!

AMRPA REGIONAL MEETING SERIES

Friday, May 8, 2020 Nashville, Tennessee Hosted by HCA Healthcare

Friday, June 5, 2020 West Orange, New Jersey Hosted by Kessler Institute for Rehabilitation

Wednesday, July 15, 2020 Denver, Colorado Hosted by Vibra Rehabilitation Hospital of Denver

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Wednesday, March 11, 2020, Noon - 1:00 p.m. ET Wednesday, June 3, 2020, Noon - 1:00 p.m. ET Wednesday, September 13, 2020, Noon - 1:00 p.m. ET Wednesday, November 10, 2020, Noon - 1:00 p.m. ET

eRehabData ® CLINICAL TRAINING WEBINAR SERIES

Free for eRehabData subscribers only

Tuesday, February 4, 2020: Review of 60% Rule Compliance Tuesday, March 3, 2020: Managing the Patient Experience Tuesday, April 7, 2020: Nursing and Therapy Documentation Tips Tuesday, May 5, 2020: Physician Documentation Tuesday, June 2, 2020: Managing Outcomes with eRehabData