Washington Watch for the Week of April 19, 2021

Carter L. Alleman, J.D.

 Medicare Sequester Moratorium Extended
The House of Representatives cleared legislation to delay Medicare sequestration cuts for an additional nine months. The House voted 384 to 38 to pass H.R. 1868, which had previously passed the Senate on March 25; the President signed the bill on April 14. The law suspends, through Dec. 31, Medicare sequestration that would reduce provider payments by 2% annually as required by the 2011 Budget Control Act. The cuts were initially scheduled to take effect at the end of last month, but the Centers for Medicare and Medicaid Services (CMS) has been holding claims given the expected moratorium extension.

President Biden to Address Congress April 28
President Joe Biden has accepted House Speaker Nancy Pelosi’s (D-Calif.) invitation to address a joint session of Congress on April 28. The speech will fall right before the President’s 100th day in office. The address will be held in the chamber of the House of Representatives, and House and Senate members are expected to attend. According to administration officials, however, other logistics for the address – including COVID-19 testing requirements and who will attend in person – have yet to be determined.

Biden Administration Releases FY 22 Budget Priorities
The White House released its fiscal year (FY) 2022 discretionary funding request on Friday. The $1.52 trillion preliminary budget proposal includes topline funding figures and sheds light on the administration’s prioritization of combating inequality, protecting public health, and addressing climate change for the upcoming fiscal year. The budget includes a 15.9% boost to nondefense discretionary spending, and a $1.7% increase for defense programs. Agencies within the Department of Health and Human Services would see a 23.5% budget increase. While presidential budgets outline administration priorities, the top-line spending figures may guide the work of Democratic appropriators in Congress. The budget proposal involves only discretionary spending, and not entitlement programs like Medicare and Medicaid. In addition, it does not include details on economic assumptions, deficit or revenue projections, or spending contained in the President’s proposed infrastructure package.

White House Releases Part One of Infrastructure Proposal
The White House released the first portion of its infrastructure and jobs plan last week. Dubbed the “American Jobs Plan,” the $2.25 trillion proposal focused on broad infrastructure projects but contained a few, targeted health care provisions, including expanding access to long-term care (LTC) services by investing $400 billion over the next eight years in Medicaid home- and community-based care (HCBC). The plan also calls for addressing the issue of low wages across the LTC industry. It would extend the Money Follows the Person demonstration project and expand the ability of home care workers to collectively bargain. The plan calls for approximately $18 billion to upgrade VA hospitals. A

Another $30 billion would be spent over the next four years on preventing the next pandemic, through investments in the Strategic National Stockpile (SNS), development of tests, treatments, and prototype vaccines for emerging diseases, improving vaccine production technology, strengthening the public health infrastructure, and pandemic response workforce training. The plan would be offset by a variety of tax changes, including increasing the corporate tax rate to 28 percent as well as a new global minimum tax to attempt to curtail the ability of multinational corporations to greatly reduce what they owe the U.S. government.

Democrats Consider the Use of Reconciliation for Infrastructure Package
Senate Majority Leader Chuck Schumer (D-N.Y.) has confirmed that Democrats can use the budget reconciliation process for a second time during fiscal year 2021 to pass the President’s infrastructure and jobs proposal. The announcement follows a ruling from the Senate parliamentarian on the issue. According to Schumer’s office, the parliamentarian advised that Democrats could use the same process employed to pass the American Rescue Plan Act earlier this year, although “some parameters still need to be worked out.”

CBO Releases Reports on 2020 Enacted Legislation, Public Option, and Drug R&D
The Congressional Budget Office (CBO) has released a report summarizing the agency’s estimates of the effects on mandatory spending or revenues of authorizing legislation that was enacted during the second session of the 116th Congress. CBO estimates that laws enacted in 2020 will add $2.8 trillion to the cumulative deficit between 2020 and 2030 as a result of a $634 billion reduction in revenues and a $2.2 trillion increase in outlays. The Coronavirus Aid, Relief, and Economic Security (CARES) Act and the Consolidated Appropriations Act, 2021 account for $2.3 trillion (or roughly 80%) of the estimated increase in deficits over the 2020–2030 period.

CBO also released a new report that explores key design considerations and implications of the creation of a public health insurance option, including potential impacts on provider pay rates and participation. The report also outlines decisions policymakers would need to make related to prescription drugs, including negotiation, contracting with a pharmacy benefit manager, and price setting. While CBO acknowledges that the impact of a public option would depend on its design, the agency notes that Affordable Care Act (ACA) marketplace and employer health plans pay approximately twice as much as Medicare for hospital care, and 25% more to physicians. The report cautions that a public option could be disruptive to the market and reduce coverage options and would likely reduce the revenues of both providers and prescription drug manufacturers.

Stakeholders Urge CMS to Reconsider Prior Authorization Rule
A group of 40 medical associations and medical device organizations have sent a letter to the Centers for Medicare and Medicaid Services (CMS) urging the administration to reconsider a regulation scheduled to go into effect on July 1 expanding the use of prior authorization for certain medical procedures. The letter expresses serious concerns that beneficiaries will experience significant barriers to access to medically necessary procedures as a direct result of the policy. The organizations request that the rule by delayed and that CMS withhold action on any further expansion of prior authorization requirements until it has established specific criteria, to guide its decision-making related to the use of prior authorization.