Bipartisan leaders of the Senate Committee on Finance on Dec. 6 released an updated version of the Prescription Drug Pricing Reduction Act of 2019, which includes a provision to eliminate $12 billion of Medicaid disproportionate share hospital (DSH) payment cuts over the next two fiscal years.
This bill largely mirrors a version the committee approved this past summer, with provisions to cap out-of-pocket spending for Medicare beneficiaries with prescription drug plans (Part D) and require drug manufacturers to reimburse Medicare if a drug price increase exceeds the rate of inflation.
Notably, the revised legislation, spearheaded by Sens. Chuck Grassley (R-IA) and Ron Wyden (D-OR), would eliminate Medicaid DSH cuts in fiscal years (FYs) 2020 and 2021 — $4 billion and $8 billion, respectively — but leave in place annual $8 billion DSH cuts from FYs 2022 to 2025. The bill also would:
- establish non-DSH supplemental payment reporting requirements for states;
- redefine Medicaid shortfall to exclude third-party payments;
- require the Government Accountability Office to submit a report on uncompensated care costs to the Senate Committee on Finance and House Committee on Energy and Commerce;
- increase and extend Medicaid funding for U.S. territories for four years;
- permanently extend the “Money Follows the Person” Medicaid demonstration program;
- expand and extend the Community Mental Health Services demonstration program for two years;
- extend the funding authorization and financing fees for the Patient-Centered Outcomes Research Institute (PCORI) for 10 years; and
- extend funding for quality measure endorsement, input, and selection for three years.
In addition to the DSH and health care extenders provisions, the updated legislation would:
- apply the site-neutral payment reduction to the administration of Medicare Part B drugs in grandfathered off-campus provider-based departments (PBDs);
- add physician office payments and copays to the Medicare website comparing Medicare payments and beneficiary out-of-pocket costs for procedures across PBD and ambulatory surgery center settings;
- cap the average sales price–based add-on payment for Part B drugs at $1,000; and
- give states the option of changing the Medicaid definition of covered outpatient drugs.
It is not known at this time whether Senate leaders will hold a vote on the revised legislation. The White House has expressed support for the measure.
House Set to Vote on Drug Pricing Legislation
Meanwhile, the House this week will hold a vote on the Lower Health Care Cost Act of 2019 (H.R. 3), comprehensive legislation led by Speaker Nancy Pelosi (D-CA) to lower the price of prescription drugs. The vote comes after Democratic leaders announced Congressional Budget Office (CBO) estimates that the bill would save half a trillion dollars over a 10-year budget window.
H.R. 3 would cap out-of-pocket spending for Medicare Part D beneficiaries and establish a Medicare rebate penalty for drug manufacturers that hike the price of a prescription drug above inflation. Notably, the bill would allow Medicare to negotiate the price it pays for up to 250 of the costliest drugs without a generic or biosimilar alternative.
The White House opposes H.R. 3. The Council of Economic Advisers last week released a report on the implications of H.R. 3, estimating the bill would result in 100 fewer drugs released in the market and cost the U.S. economy $1 trillion over 10 years.
The Republican-controlled Senate is not expected to consider H.R. 3 as currently written.
Committees Reach Deal on Surprise Billing, Transparency
Over the weekend, leaders of the Senate Committee on Health, Education, Labor, and Pensions and the House Committee on Energy and Commerce announced a bipartisan agreement on a legislative package to lower out-of-pocket health care costs for patients and consumers and extend funding for various health care programs.
According to a summary provided by the committees, the legislation would:
- protect patients from receiving “surprise medical bills”;
- establish a federal benchmark payment rate for out-of-network care based on the median in-network commercial rate for a service in the geographic area where the care was provided;
- add an independent dispute resolution (arbitration) process for charges above a $750 threshold;
- shield patients from “surprise bills” for air ambulance services;
- set a federal benchmark payment for air ambulance services based on the “market-based median in-network” rate for the service in the geographic area;
- allow providers and insurers to pursue arbitration for median in-network air ambulance payments that exceed $25,000;
- prohibit contract clauses between providers and insurers that prevent health plans from directing beneficiaries to certain providers and require plans to contract with all providers within a health system or none at all; and
- extend community health center funding for five years.
America’s Essential Hospitals staff will review the full details when the legislative text is released.
Medicare for All, Health Professionals Training Hearings
The House Committee on Energy and Commerce Subcommittee on Health will hold a Dec. 10 hearing to discuss nine universal health coverage legislative proposals, including the Medicare for All Act (H.R. 1384).
House committees have held four hearings this year on Medicare for All proposals. It is not expected that any version of a Medicare for All bill will be brought to the full House for a vote this year.
The Senate Committee on Health, Education, Labor, and Pensions will meet on Dec. 12 to vote on legislation to reauthorize health professions education and training programs and other bills.
