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On the Hill: Government Funding, Health Care Extenders

Congress, back this week from August recess, faces multiple legislative challenges before the Sept. 30 end of the current fiscal year (FY), including stopping an Oct. 1, $4 billion cut to Medicaid disproportionate share hospital (DSH) payments, extending expiring health care programs, and funding government operations for FY 2020.

Lawmakers also are considering a legislative response to recent mass shootings in Ohio and Texas. But Congress will be in session for only 13 legislative days this month, giving it little time to complete this work.

Government Funding

The Senate will jump start the appropriations process this week, with the Committee on Appropriations marking up several spending bills for FY 2020, including the Subcommittee on the Department of Labor, Health and Human Services, and Education, and Related Agencies Appropriations Act. The Senate has not passed a single spending bill for FY 2020 and lags behind the House, which already has passed 10 of 12 spending bills. Congress likely will need to pass a short-term spending bill that temporarily extends current funding levels to operate the government and avoid a shutdown.

Medicaid DSH, Extenders, Surprise Billing, and Drug Pricing

Before the August recess, the House Committee on Energy and Commerce passed the Reauthorizing and Extending America’s Community Health (REACH) Act (H.R. 2328), a bipartisan legislative package that would:

  • eliminate the scheduled reductions to Medicaid DSH funding in FY 2020 and FY 2021 and reduce by half the amount of the cut required in FY 2022, for a $16 billion in total relief;
  • provide fresh funding for community health centers, the National Health Service Corps, and other programs; and
  • protect patients from surprise medical bills, among other provisions.

While the legislative clock ticks, House leaders must determine how to pay for the costs of the DSH repeal and the new round of funding for expiring health programs. Lawmakers have considered legislation intended to reduce health care costs, including surprise medical bills and prescription drug prices, as vehicles to pay for repealing the DSH cuts and fund other health care priorities. But outstanding policy disputes are barriers to a final vote. 

The REACH Act and the bipartisan cost containment package passed by the Senate Committee on Health, Education, Labor, and Pensions (HELP) establish a federal benchmark payment rate for out-of-network providers that is based on the median in-network rate for a service in that geographic area. After essential hospitals and other providers raised concerns, lawmakers are paying attention to this provision’s unintended consequences and actively considering whether to include an avenue for providers and plans to negotiate an appropriate payment for out-of-network care. For bills greater than $1,250, the REACH Act would allow providers and plans to enter an independent dispute resolution process overseen by a mediator to determine the payment to out-of-network providers. This is a step in the right direction, but not enough, the association has said.  

In addition, both the Committee on Ways and Means and the Committee on Education and Labor need to complete their work on surprise billing legislation before the full House can vote. This additional step in the legislative process is another complication for the legislative calendar.

Meanwhile, congressional leaders continue to work on developing legislation to reduce the price of prescription drugs. Speaker Pelosi soon will release a legislative proposal that would give Medicare the authority to negotiate the price it pays for certain prescription drugs, among other provisions. The Speaker’s proposal likely will meet opposition from Senate Republicans, despite the president’s past statements of support for Medicare negotiation.

The bipartisan leaders of the Finance Committee need to overcome resistance by Republican senators to the Prescription Drug Pricing Reduction Act, which the committee approved in July. Some GOP senators oppose the bill’s requirement for drug manufacturers to pay a rebate to the Medicare program for price increases that exceed the inflation rate. America’s Essential Hospitals opposes the provision, which would expand site-neutral payment policy to grandfathered hospital outpatient departments by reducing the Medicare payment for the administration of Medicare Part B drugs to the Physician Fee Schedule rate.

Upcoming Congressional Hearings

The House Energy and Commerce Subcommittee on Health will hold a hearing on improving maternal health. The Tuesday hearing will focus primarily on four bills that would address prevention and access to care.

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About the Author

Erin Delaney is the legislative affairs associate at America's Essential Hospitals.

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