HealthCare Roundtable e-News – December 10, 2019

USCMA Trade Agreement Deal Reached, Harmful Biologic Exclusivity Provision Removed

This morning, the Trump Administration U.S. Trade Representative and Congressional Democrats announced a deal to finalize the U.S., Canada, Mexico Trade Agreement (USCMA). The final Agreement represents a victory for public sector purchasers as a harmful provision that would have created a 10-year exclusivity floor for biologic drugs for the three Parties. The Roundtable has consistently and continuously opposed this provision over the past year as the negotiations took place. To find out more about the USCMA, please find a summary here.

In Joint Letter, Employers and Insurers Urge Lawmakers to Repeal Health Care Tax

 Last week, more than 1,000 public and private sector organizations, including the Public Sector HealthCare Roundtable, signed a letter to Senate Majority Leader Mitch McConnell (R-Ky.) and Senate Minority Leader Charles Schumer (D-N.Y.) to include a repeal of the “Cadillac Tax” in the Senate’ end-of-year package. The letter urges policymakers to “take immediate action to protect the health care of the more than 178 million Americans who receive health care coverage through an employer.”

The Cadillac Tax, a 40% tax on employer-provided health care, has never gone into effect. Earlier this year, the House voted to repeal the Cadillac tax in a 419-6 vote, but the Congressional Budget Office estimated that the nixing the tax would cost $196.9 billion over 10 years.

“This letter demonstrates both the urgent need for repeal and the political momentum for doing so,” said James A. Klein, president of the American Benefits Council. “From mom-and-pop restaurants to small towns and well-known patient groups to large multinational corporations, the message is clear: working families are stretched to the limit today-and they can’t afford to pay even more for their health care tomorrow.”

A recent survey from the National Business Group shows that 73% of employers would have at least one health plan that triggers the tax in 2022 and 94% would in 2026. Last month, a spokesman for Senate Finance Committee Chair Chuck Grassley (R-Iowa) said the senator is open to considering a full repeal of the Cadillac tax, but said, “the more urgent matter is reaching a deal on the more than three dozen tax provisions that expired between the end of 2017 and this year, and a number of clarifications to the tax reform bill.”

House and Senate Lawmakers Reach Arbitration Compromise in Surprise Billing Legislation

On Sunday (Dec. 8), the Senate Health and House Energy & Commerce committees announced that they have reached an agreement on the inclusion of arbitration in surprise billing legislation. The news was announced by Sen. Lamar Alexander (R-La.) and Reps. Frank Pallone (D-N.J.) and Greg Walden (R-Ore.), who noted that the new policy would be attached to the year-end spending bill.

I do not think it is possible to write a bill that has broader agreement than this one does among Senate and House Democrats and Republicans on Americans’ number one financial concern: what they pay out of their own pockets for health care,” Alexander said.

The surprise billing proposal from the House Energy & Commerce Committee had previously included a benchmark payment rate and an independent dispute resolution process allowing providers to appeal claims over $1,250. The Senate bill only included the payrate, but Sens. Bill Cassidy (R-La.) and Maggie Hassan (D-N.H.) agreed to a compromise with the House committee. Additionally, the agreement also includes other drug pricing transparency policies and raising the minimum age for purchasing tobacco to 21. (InsideHealthPolicy).

Updates to the Senate’s Drug Pricing Reduction Bill Include Funds for Medicare, Medicaid Extenders

Last week, Senate Finance Committee Chair Chuck Grassley (R-Iowa) and ranking member Ron Wyden (D-Ore.) released their updated drug pricing plan, known as the Prescription Drug Pricing Reduction Act, including additional provisions to fund Medicare and Medicaid extenders. The updated plan also includes details on how the bill’s savings would be utilized to cancel two years of cuts to disproportionate share hospital payments.

The updated measures would reduce costs to beneficiaries who exceed their deductible but do not reach the catastrophic phase of the Medicare Part D benefit and will allocate discounts more evenly across drug manufacturers. The bill’s savings will likely be used to pay for healthcare programs facing funding expiration at the end of the year. The committee hopes that the new measures will increase support from their Republican colleagues, who have been slow to support the bill since it was initially unveiled.

Senate lawmakers unveiled the plan a day after House leaders announced how House Speaker Nancy Pelosi’s (D-Calif.) drug pricing bill would be reinvested into additional Medicare benefits and extenders. Finance committee staff confirmed that they are waiting on the Congressional Budget Office to inform the committee on how much the measures would save. (InsideHealthPolicy).

According to a new report from the Centers for Medicare and Medicaid Services (CMS), national health expenditures (NHE) grew 4.6% to $3.6 trillion, or $11,712 per person, in 2018. The increase was driven by faster growth in both private health insurance and Medicare, as well as the Affordable Care Act’s health insurance tax that was reinstated in 2018.

Healthcare spending growth picked up across all major payers in 2018 as medical prices grew faster, due in part to the reinstatement of the health insurance tax on all health insurance providers,” said Micah Hartman of the CMS Office of the Actuary. “However, economic growth outpaced healthcare spending and the share of the economy devoted to healthcare fell.”

Congress had delayed the tax several times in recent years, but reinstated it in 2018 after the Consolidated Appropriations Act of 2016 instituted a one-year moratorium on it for 2017. Advocates for a delay or repeal of the tax, including the Public Sector Roundtable and a group via the Stop the HIT Coalition, hope that the report’s findings will push Congress to act and suspend the tax. A spokesperson for the coalition suggested that the tax’s biggest flaw is that it forces consumers to pay additional sales tax “at a time when making health care affordable is a priority of Congress and Americans. The health insurance tax harms consumers because it increases their premiums.” (InsideHealthPolicy).