This Week in Washington: Debt-ceiling agreement passes, House Energy and Commerce Committee reports out legislation on site-neutral Medicare payments for certain drugs



House Energy and Commerce Committee Holds Markup on 19 Bills

On May 24, the House Energy and Commerce Committee marked up 19 bills. The healthcare bills that were considered include:

  • H.R. 3561, Promoting Access to Treatments and Increasing Extremely Needed Transparency (PATIENT) Act of 2023

This legislation, a package of bipartisan bills, would implement various provisions to increase prescription drug price transparency and lower drug costs. This package includes a provision that would expand Medicare site-neutral payments for certain drugs administered in off-campus hospital outpatient departments. It would expand various Centers for Medicare and Medicaid Services (CMS) price transparency rules, bar spread pricing payment arrangements for Medicaid plans, strengthen oversight over pharmacy benefit managers (PBMs), mandate reporting of health-related entity ownership information, and extend various health programs including the Special Diabetes Program and Graduate Medical Education programs.

Additionally, it would eliminate planned Disproportionate Share Hospital (DSH) Payment Reduction cuts for fiscal years (FYs) 2024-2025.

  • H.R. 1418, Animal Drug User Fee Amendments of 2023

This legislation would reauthorize ADUFA and AGDUFA for fiscal years (FYs) 2024 to 2028. It would also establish new transparency requirements for the Food and Drug Administration’s (FDA) Center for Veterinary Medicine (CVM), allow for amendments to the “major species” definition and codify reporting dates for CVM antimicrobial development and stewardship.

  • H.R. 2544, Securing the U.S. Organ Procurement and Transplantation Network Act

This legislation would allow for additional flexibilities within the Organ Procurement and Transplantation Network (OPTN) by amending Section 372 of the Public Health Service Act.

  • H.R. 2666, Medicaid VBPs for Patients (MVP) Act

This legislation would permit pharmaceutical manufacturers and states to enter into value-based payment arrangements to offer an alternative means to cover high-cost, one-time cell and gene therapies in the Medicaid program. It would allow for multiple reporting of the drug’s best price and average manufacturer and sales price.

  • H.R. 3284, Providers and Payers COMPLETE Act

This legislation would require the Department of Health and Human Services (HHS) to consider the implications its annual hospital and provider inpatient and outpatient care payment rules have on the horizontal and vertical consolidation of providers and payers in the healthcare system.

  • H.R. 3290, To amend title III of the Public Health Service Act to ensure transparency and oversight of the 340B drug discount program

This legislation would implement reporting requirements for hospitals participating in the 340B program, and would require hospitals to report total 340B savings.

In addition, the committee considered seven bills related to broadband issues and five related to energy issues.

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Debt Ceiling Deal Passes House and Senate

The debt ceiling agreement announced Memorial Day weekend was passed by the House and Senate in time to avoid the June 5 date when the government would default. The agreement suspends the U.S. borrowing limit until Jan. 1, 2025. The legislation addresses discretionary spending—not mandatory spending programs like Medicare, Medicaid and Social Security. Discretionary spending while important is a smaller part of the federal budget. 

Caps Nondefense Spending: The deal caps nondefense spending in fiscal year (FY) 2024 and increases it by 1 percent in 2025. The House Republican fact sheet says that nondefense discretionary spending would be limited to (FY) 2022 levels and topline federal spending would be limited to 1 percent annual growth for the next six years. 

The breakdown of nondefense discretionary spending for (FY) 2024 is thought to be capped at about $700 billion of which $121 billion would be for veterans’ healthcare and $583 billion would be for other areas. 

Work Requirements: Medicaid will not be subject to work requirements, but the agreement calls for broadening work requirements for certain adults receiving benefits from the Supplemental Nutrition Assistance Program (SNAP) formerly known as food stamps. The agreement increases the upper age limit to 55 in phases. The deal, however, would expand exemptions for veterans, people who are homeless and former foster youth. All changes would end in 2030. The agreement also tightens current work requirements in the Temporary Assistance for Needy Families (TANF) program. It appears that this will be achieved by primarily adjusting the work participation rate credits that states can receive for reducing their caseloads.

COVID-19 Funds: The agreement rescinds unobligated COVID-19 funds, which are estimated to be about $28 billion from more than 120 accounts—including the National Institutes of Health (NIH), the Centers for Medicare and Medicaid Services (CMS) and the Centers for Disease Control and Prevention (CDC). However, $5 billion in funding to accelerate the development of COVID-19 vaccines and treatments, and vaccines for the uninsured is retained.

Last, the agreement also increases funds for healthcare fraud and abuse control by providing new budget authority for fiscal years 2024 and 2025. The administration had requested additional funding for fraud and abuse efforts in its budget, which are divided between the Department of Health and Human Services (HHS) and the Department of Justice (DOJ).

Administrative PAY-GO: Under the compromise package, federal agencies would be subject to an administrative version of PAY-GO rules through 2024. This is part of the “enforcement” effort to control spending.

Before finalizing a rule that would increase direct spending by more than $1 billion over 10 years or $100 million in any single year, federal agencies would have to submit a plan that reduces direct spending by an equal or greater amount. For agency actions mandated by law, agencies would have to identify a least costly implementation option for executive rulemakings. If a rule were to be finalized and hit the spending thresholds set up by the administrative PAY-GO structure, the bill would require the agency to send a written opinion from the general counsel of the agency explaining that the rule is legally required, along with a projection of the amount of direct spending under the least costly implementation option reasonably identifiable by the agency that meets the requirements under the statute. That opinion would go to the Director of the Office of Management and Budget (OMB). The OMB Director would be able to waive the requirements if an agency action is deemed necessary for the delivery of essential services of effective program delivery.

Senators Seek to Add Fentanyl Provision to National Defense Authorization Act

On May 16, Sens. Kaine (D-VA) and Ernst (R-IA) introduced the Disrupt Fentanyl Trafficking Act of 2023. The bill would declare fentanyl trafficking a national security threat and would direct the Pentagon to develop fentanyl-specific counter-drug strategies with Mexican defense officials. Additionally, it would require the U.S. Secretary of Defense to increase cooperation with the Mexican military and address coordination efforts between military and law enforcement agencies. Reps. Bice (R-OK) and Carbajal (D-CA) introduced a companion bill in the House.

The senators also announced their intention to introduce the bill as an amendment to the fiscal year (FY) 2023 National Defense Authorization Act (NDAA). The NDAA authorizes funding levels for the U.S. Department of Defense and specifies the department’s annual budget and expenditures. The Senate Armed Services Committee will hold a closed session to mark up the bill next month.

Read more on healthcare policy in McGuireWoods Consulting’s Washington Healthcare Update.