September 28, 2020

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September 28, 2020

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McDermottPlus Check-Up: July 26, 2019

This Week’s Dose: The Senate Finance Committee finally released its drug pricing package and moved quickly to a markup. The bill passed out of committee, but work will continue before the full Senate votes. We’ll be watching closely as things develop.


Senate Financed Advanced Drug Pricing Legislation. Chairman Chuck Grassley (R-IA) and Ranking Member Ron Wyden (D-OR) released a draft, and held a markup, of their sweeping drug pricing legislation, the Prescription Drug Pricing Reduction Act. The bill reforms the Medicare Part D program (including establishing a controversial inflation cap on drug price increases and changes to the Part D catastrophic phase), creates inflationary rebates in in Medicare Part B and raises the rebate cap in Medicaid. The draft seemingly makes changes to the much talked about site neutral policy by removing the grandfathered protection for hospital outpatient departments as it relates to the site neutral payment policies implemented in 2017 (though the draft text is unclear on this issue). The White House endorsed the proposal, which the Congressional Budget Office (CBO) estimates would save taxpayers $85 billion in Medicare and $15 billion in Medicaid. However, it remains to be seen how much support the bill garners in Congress. Republicans have long opposed price caps, and many Democrats had hoped for price negotiation in Medicare. The bill ultimately passed out of committee with a vote of 19-9. All the Democrats voted yes along with five Republicans. Chairman Grassley said that he expects the full Senate to vote on the bill this fall, though such strong Republican opposition to the bill in committee will likely slow momentum.

Senate Will Vote on Major Legislation This Fall. In addition to the Finance Committee’s drug pricing bill, Health, Education, Labor and Pensions (HELP) Committee Chairman Lamar Alexander (R-TN) announced that a vote on the Lower Health Care Costs Act (S.1895) would also not take place before the fall, abandoning his earlier hope that the Senate would vote at the end of July. The Finance bill’s drug pricing provisions remain controversial among Republicans, and multiple Senators still object to the surprise billing portions of the HELP bill. Congressional staffers will be using the August recess to work on building compromise on these various issues, while stakeholders continue to push for their priorities. It is unclear how this will all come together in September.

Senate Held Hearing on Elder Abuse. The Senate Finance Committee held a hearing to examine proposed reforms to reduce neglect and abuse in nursing homes and the need to reauthorize key provisions of the Elder Justice Act. The conversation focused primarily on a Government Accountability Office report released this week that details abuse and neglect deficiencies in nursing homes and how to address them. Committee members broadly agreed that even one case of elder abuse is too many, and Chairman Grassley and Ranking Member Wyden expressed hope that Congress could enact bipartisan reforms to nursing home standards and oversight. Read our full summary of the hearing here.


CBO Said Budget Deal Extends Medicare Sequestration. This week, Congress and the White House reached a budget deal that CBO says will extend Medicare sequestration through 2029. CBO estimates that the deal will increase spending for Medicare beneficiaries by about two percent through September 2027, then reduce spending by two percent from October 2027 through March 2029, and by four percent through September 2029. The deal represents an effort to pay for lifting the discretionary spending cap established in the Budget Control Act of 2011, which would have forced Congress to cut discretionary spending by 10 percent across the board. The House passed the bill, the Bipartisan Budget Act of 2019 (H.R. 3877), by a vote of 284-149. The bill now heads to the Senate.


Court Upheld Administration’s STLDI Rule. A federal judge ruled in favor of the Trump administration’s rule that expanded the use of short-term limited-duration insurance (STLDI) plans. A group of seven industry stakeholders sought to overturn the rule, which they see as undermining the Affordable Care Act and an overreach of administrative authority. The plaintiffs plan to appeal the decision.

Judge Heard Oral Arguments on New Hampshire Work Requirement. Three advocacy groups are leading the charge to overturn the recently established Medicaid work requirements in New Hampshire. US District Court Judge James Boasberg, who previously ruled to overturn similar requirements in Arkansas and Kentucky, indicated that he is likely to rule against the New Hampshire requirement as well. However, the Trump administration asked Boasberg to delay his ruling to give New Hampshire time to submit an updated waiver application. The DC Circuit will also hear arguments appealing the Arkansas and Kentucky rulings this fall.

Next Week’s Diagnosis: The House is out of session for the August recess. The Senate has one more week before leaving town as well. Negotiations will continue over both drug pricing and surprise billing legislation.

© 2020 McDermott Will & EmeryNational Law Review, Volume IX, Number 207


About this Author

Mara McDermott, McDermott Law Firm, Washington DC, HealthCare Law Executive

Mara is an accomplished health care executive with a deep understanding of federal health care law and policy, including delivery system reform, physician payment and Medicare payment models.

Most recently Mara served as the senior vice president of federal affairs at America’s Physician Groups (formerly the California Association of Physician Groups, CAPG), a professional association representing medical groups and independent practice associations practicing in capitated, coordinated care models. As head of the Washington, DC, office, Mara...

Rachel Stauffer, McDermott Law Firm, Washington DC, Health Policy Consultant

Rachel is a highly experienced government relations and legislative affairs strategist and advocate who is informed by a solid foundation of health policy knowledge.

Prior to joining McDermottPlus, Rachel served as the director of policy and government relations for a health IT contractor, where she developed the company’s first strategic plan for government relations. She grew the company’s profile on Capitol Hill by establishing new relationships with key leaders in the federal, state and military health program space. As a result, the company became an authoritative source on a variety of legislative approaches, especially related to veterans’ health.

Prior to that role, Rachel was lead legislative liaison at the US Department of Health and Human Services’ Office of the National Coordinator for Health IT (ONC) where she was instrumental in providing research, analysis and feedback to Members of Congress and staff on the 21st Century Cures legislation, among other relevant policies. Rachel also created short- and long-term strategic outreach plans that increased ONC’s visibility and profile.

Katie Waldo Healthcare Attorney

Katie is an experienced government relations strategist who helps clients navigate the complex issues surrounding Medicare, Medicaid and the healthcare marketplace.

Katie works with clients to represent their needs before the US Congress and the US Department of Health and Human Services (HHS) and its agencies by relying on extensive experience as a policy advisor on the Medicaid and Medicare programs, as well as the 340B program and other aspects of the Public Health Service Act. She anticipates the effects of state and federal policymaking on issues impacting their businesses and...

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Government Relations Professional and Registered Lobbyist

Emma is a government relations professional and registered lobbyist who supports clients on a range of health policy issues.

As a policy consultant, Emma lobbies and consults with legislators and congressional staff on issues relating to Medicare, Medicaid payment and regulation, and the 340B Drug Pricing Program. She provides analysis of the federal political and regulatory environment, and routinely monitors pertinent Hill activities including congressional hearings, bill markups and think tank events.

Emma graduated...