The Legislative Update is brought to us by Liz Powell, Esq., MPH, Founder of G2G. Liz is an attorney with 20 years government experience, including as Legislative Director on Capitol Hill. She leads a team of bipartisan professionals that has raised over $159M, run advocacy campaigns and shaped CMS reimbursement for clients.
I wanted to send you an overview of what is happening in Washington, D.C. There is lots of interesting news in D.C. these days – check out the details below.
What many on Capitol Hill thought would be a smooth transition into 2019 with a less than ideal, but relatively satisfactory Continuing Resolution (CR) through February 8, 2019 for the remainder of the appropriations bills that fund 25 percent of government programs and offices has transformed in a matter of 24 hours into a chaotic, vitriolic standstill. The reason: border wall funding. All other details were fully negotiated between the Democrats and Republicans and the House and Senate and not just for a CR, but for an Omnibus bill to increase funding throughout FY2019. As the Republican Leadership works frantically to pass legislation providing $5 billion President Trump’s border wall, the Democrats have made it clear it will not pass the Senate so no progress is expected anytime soon. Making things worse is Members’ eagerness to get home for the holidays. More than 35 GOP Members missed multiple recorded floor votes this week because they thought the CR through February 8th was set to be enacted since it had passed Congress and Senator Brian Schatz (D-HI) traveled all the way to Hawaii, seeing his family for just 17 minutes, then turned around and got back on a plane to Washington yesterday. Below is an overview of our assessment of the final days of the 115th Congress and projections for the 116th Congress, which starts on January 3, 2019.
Leadership, Committees and Freshmen
While Rep. Kevin McCarthy (R-CA) sailed to victory for minority leader, the path was more challenging for Democrats. Despite a somewhat rocky climb to speakership, Rep. Nancy Pelosi (D-CA) will be speaker again in 2019. In order to garner the full support of her caucus, she made concessions to a group of almost 30 freshmen and incumbent Members who all vowed to oppose her as speaker on the campaign trail. The concessions include more opportunity for debate and amending legislation brought to the House floor and a 4-year term limit for her as speaker as well as the other top leadership positions: majority leader, majority whip and assistant leader.
Another new leader is Rep. Frank Pallone (D-NJ), who will chair the House Energy and Commerce Committee (which oversees health policy) and said, “We will push an aggressive agenda to rebuild America, combat climate change, make health care and prescription drugs more affordable, and protect peoples’ privacy. We’ll also conduct robust oversight of the Trump Administration’s ongoing actions to sabotage our health care system, exacerbate climate change and weaken consumer protections.” New House Armed Services Committee Chairman Rep. Adam Smith (D-WA) said “We must look to eliminate inefficiency and waste at the DOD; boost oversight of sensitive military operations and ensure that the military works to avoid civilian casualties; protect our environmental laws nationwide; advance green technology in defense; take substantial steps to reduce America’s overreliance on nuclear weapons; and promote greater transparency in national security matters.”
Committee ratios and assignments are delayed due to one final House seat remaining up in the air. After serious allegations of voter fraud, North Carolina has refused to certify the 9th District election results. We expect a new election in 2019. As a result, we may not know full committee and subcommittee memberships until February. The rest of the seats are determined with a ratio of 235 Ds to 199 Rs in the 116th Congress. The freshmen were very active on social media during their orientation, giving their constituents a behind-the-scenes view of the decision-making process they went through to pick their new offices and leadership, demonstrating how open they plan to be next year. G2G will be meeting with many freshmen and some incumbent Members of Congress on Swearing-In Day on January 3rd as we attend several open houses and receptions.
Congress must find a way to pass the remaining seven FY2019 appropriations bills before midnight on December 21st. A short-term resolution was passed after President George H. W. Bush died and with that extra time, both chambers and sides of the aisle seemed to agree that passing another CR would be best until the new Congress starts. Vice President Pence indicated President Trump would sign a CR. But then movement toward a resolution halted due to President Trump demanding $5 billion to build a wall on the southern border. The situation was exacerbated by the televised argument between Leaders Pelosi and Schumer in the Oval Office last week and some very vocal members of his base (including Freedom Caucus leader Rep. Mark Meadows (R-NC)) criticizing Trump this week. Now President Trump said he refuses to sign any bill without $5 billion for the wall while Democrats insist they will block any bill that includes $5 billion for the wall. The House passed a CR with this funding last night and the Senate is taking up a similar measure although the Democrats can block it. If no deal is reached by midnight, parts – not all as the Department of Defense, Department of Health and Human Services, Department of Energy and other agencies are funded through FY2019 – of the government will shutdown.
In Congress, a permanent Medical Device Tax repeal didn’t make it through quite yet this year, but a 5-year extension of the current temporary suspension was included in the tax package legislation that passed the House yesterday. The Senate action is unclear as they work on the CR that just passed the House. The medical device tax is a 2.3 percent excise tax on revenue of medical devices sold domestically. The tax was included in the Affordable Care Act to help cover its cost and has been delayed by Congress twice before, but the tax still exists in statute.
Within HHS, the FDA recently proposed changes to the 510(k) pathway that would make medical device manufacturers incorporate more up-to-date safety features into their devices. The change comes after a series of defective devices that entered the market that caused injury to patients. Unlike new pharmaceuticals, most medical devices reviewed by the FDA are cleared based on similarities to already-approved devices, not specific clinical trial testing.
The Energy and Commerce Subcommittee on Oversight and Investigations recently issued a report addressing cyber security vulnerabilities of the government. The report was drafted with the input from dozens of briefings, hearings and roundtables. The report provides six specific priorities for better protection against cyber vulnerabilities:
- The widespread adoption of coordinated disclosure programs.
- The implementation of software bills of materials across connected technologies.
- The support and stability of the open-source software ecosystem.
- The health of the Common Vulnerabilities and Exposures (CVE) program.
- The implementation of supported lifetimes strategies for technologies.
- The strengthening of the public-private partnership model.
On November 28, 2018, the Department of Health and Human Services (HHS) released a draft Strategy on Reducing Regulatory and Administrative Burden Relating to the Use of Health IT and EHRs for public comment. Congress required HHS to lay out a strategy to reduce regulatory and administrative burdens related to the use of health IT when they passed the 21st Century Cures Act. While EHRs can improve the quality and delivery of care as well as improve patient outcomes, Congress heard from many of their clinician constituents that EHRs can also make it difficult to provide effective patient care. These clinicians also told Congress and the Administration that a lot of time is spent on entering data and less time is spent on actual patient interaction. This draft strategy is designed to:
- Reduce the effort and time required to record health information in EHRs for clinicians;
- Reduce the effort and time required to meet regulatory reporting requirements for clinicians, hospitals, and health care organizations; and
- Improve the functionality and intuitiveness (ease of use) of EHRs.
The public comment period ends on Monday, January 28, 2019 at 11:59 PM ET.
CMS released a proposed rule on November 26th that would give Medicare Part D and Medicare Advantage plans the option to limit coverage of drugs in six categories known as the “protected classes” in a bid to lower pharmaceutical costs and save the government nearly $2 billion. These classes are: antidepressants, antipsychotics, anticonvulsants, immunosuppressants for treatment of transplant rejection, antiretrovirals and cancer drugs. The rule gives health plans the ability to exclude protected class drugs from their formularies in certain instances where the price rises more than inflation or only minor changes are made to older products. Currently, Medicare Part D plans need to cover all of the protected classes. The changes are estimated to save the government $1.85 billion over 10 years and save Medicare enrollees $692 million in cost sharing. CMS also proposed a rule requiring Medicare Part D insurance plans to provide real-time access to drug pricing data by 2020. Called a real-time benefit tool, it would integrate with EHRs or e-prescribing software and allow them to determine the price for a given drug and various alternatives for a specific patient. This information could save both the government and patients money and improve medication adherence.
Also, this morning the Trump Administration finalized a long-delayed Obama-era rule that will penalize drug manufacturers for overcharging providers in the 340B drug discount program, effective January 1, 2019. Administration officials and some Republican lawmakers have criticized how hospitals in the program have used their savings. Hospitals argue the funding is a key part of the health care safety net and proposals to change the program could hurt vulnerable patients. HHS said it believes the new civil monetary penalties will be used in rare situations because a manufacturer would have to knowingly and intentionally overcharge groups participating in the program. The rule also outlines how ceiling prices in the 340B program are calculated.
Meanwhile, in the House, a bill to punish drug manufacturers for trying to game Medicaid’s rebate system to garner bigger profits recently passed. It would allow the federal government to levy fines on pharmaceutical companies that misrepresent their products to avoid higher rebates. While this hasn’t passed the Senate yet, the bill was introduced by Senators Ron Wyden (D-OR) and Chuck Grassley (R-IA), the incoming heads of the Senate Finance Committee, so it can be easily re-introduced next year.
The White House recently released a five-year strategic plan to promote STEM education. The report focuses on advancing STEM literacy and work-based learning among all Americans and emphasizes the need for education programs to foster greater inclusivity. The report outlines three goals: preparing the STEM workforce for jobs of the future, increasing the diversity of the STEM workforce, and expanding STEM literacy across the population. It also emphasizes the importance of non-traditional post-secondary STEM degree programs, such as two-year degrees and apprenticeships. The report does not include any budgetary information or establish any quantitative goals for the priorities it identifies. The administration initiated deep cuts for several programs that support STEM education however, most of which were rejected by Congress. Nevertheless, the report has received initial praise from incoming Science, Space and Technology Chairwoman Rep. Eddie Bernice Johnson (D-TX).
Also, the House and Senate passed the National Quantum Initiative Act which directs the Department of Energy Office of Science to create between two and five quantum information science research centers and recommends a budget of up to $25 million annually for each over five years.
On November 28, 2018, G2G attended a briefing in the Senate sponsored by Senator Jack Reed (D-RI). The panelists discussed a new report from the National Academics of Sciences, Engineering, and Medicine which finds that students learn best when they have opportunities to engage in hands-on science investigations and engineering design. Overall the panel was very engaged on how to bring hands-on science and engineering classes to the next level. There is a lot of room here for public/private partnerships to form and grow not only to teach our students but to assist teachers.
The House and Senate passed Rep. Herrera Beutler (R-WA) and Senator Heidi Heitkamp’s (D-ND) maternal health bill. The bill authorizes $58 million annually through 2023 for data collection, surveillance, research, and prevention activities related to maternal mortality. The bill would also authorize additional activities, such as improving CDC data collection and surveillance, expanding prevention research to include reducing disparities in maternal care, and modifying prevention activities to include promoting maternal health with an emphasis on mental health and substance use disorders.
Senators Patty Murray (D-WA) and Lamar Alexander (R-TN), the lead Democrat and Republican on the Senate HELP Committee offered some indication that a bipartisan deal could be reached to stabilize the Affordable Care Act. Chairman Alexander broached the possibility of reviving the plan he and Murray offered to stabilize the health law by funding a key insurance subsidy program and providing states flexibility to skirt some requirements of the law — provided Democrats are willing to vote on prohibitions on the federal funding of abortion that was not written into the Affordable Care Act.
On December 20th, Secretary Mattis submitted his letter of resignation effective in February. In the letter, he stated that the President had the right to have a Secretary of Defense whose views are better aligned with his. The announcement comes a day after the President announced he was withdrawing troops from Syria. This move has drawn concern and even outrage from both sides of the aisle. Mattis’ announcement has also brought concern from Members from both parties including Mitch McConnell, Nancy Pelosi, Marco Rubio and Chris Murphy.
Within DoD, the first Undersecretary of Defense for Research and Engineering, Mike Griffin came to the job nine months ago having to staff up a new organization while also helping to shape the fiscal 2020 budget request. The position was officially created over the summer when the Pentagon, as required by the National Defense Authorization Act, split the undersecretary for acquisition, technology and logistics portfolio into two jobs: acquisition and sustainment; and research and engineering. Griffin believes the modernization strategy that Secretary Mattis released as part of the overall National Defense Strategy is the best of its kind he has seen since the Reagan era. He stressed the need for rapid innovation and believes there is nothing that this country can’t produce. He signaled to Congress to make this investment in the future.
G2G (Government to Growth Consulting), LLC is a consulting firm specializing in assisting businesses and non-profit organizations. G2G provides comprehensive consultation in the fields of government affairs, economic development, grant writing, public relations, and event planning. G2G also has extensive experience in the areas of lobbying, advocacy, fundraising and grassroots organizing.