National Legislative Update for March 2018

March 26, 2018

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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.

Contributor-LPowell

The G2G team has been on Capitol Hill almost every day the past two months, meeting with several Members of Congress and staff regarding funding levels for various programs. With individual offices setting FY2019 appropriations deadlines during mid-February through end of March at the same time trying to finalize the FY18 Omnibus bill, it has been a hectic time.

Overview

Hidden treasures permeate the FY2018 Omnibus bill that was passed by Congress this week then signed into law by President Trump on Friday. From a 15 percent increase in Defense funding to a 9 percent increase in NIH funding to big boosts for pet initiatives such as opioids, Alzheimer’s research and Precision Medicine to school safety funding to renewable energy research to FAA reauthorization, there is something for everyone in this bill. Unless, of course, you are a deficit hawk or wanted the ACA insurance exchanges shored up. This package in combination with the largest tax cut package in decades busts budget caps and is expected to add hundreds of billions more to the $21 trillion national debt over the next two years. Also, the health insurance fix was excluded due to disagreement about allowing the Hyde amendment that blocks the use of government dollars for abortion to be attached to it. But it is in line with the 2-year budget caps deal struck in February, which allows Congress to increase nondefense spending by $60 billion, or 12 percent, and defense spending by $78 billion, or 14 percent over two years and it creates a bipartisan commission to examine the budgeting process and recommend changes, however, those recommendations will not be binding. Let’s take a closer look at what is in the Omnibus. Following this summary are updates on other events in Washington concerning health, defense and economic development policies.

FY18 Omnibus Overview

On March 22nd – almost six months after the fiscal year started on October 1, 2017 and after passing multiple short-term Continuing Resolutions – Congress finally passed the $1.3 trillion Omnibus bill that includes 12 different spending bills that fund the entire government through September 30th. The 2,232-page bill was released late Wednesday, March 21st with a noon vote the next day. Democrats ridiculed the process of rushing the measure to the floor with no meaningful examination or debate, especially when so many decisions were made by just 4 people: Majority Leader Mitch McConnell (R-KY), Speaker Paul Ryan (R-WI), Senate Minority Leader Chuck Schumer (D-NY) and Minority Leader Nancy Pelosi (D-CA). I talked with a handful of Congressmen on the Appropriations Committee this past week, including a Chairman, who admitted they have little to no say in the final negotiating. In the end, 145 Republicans and 111 Democrats voted for final passage in the House totaling 256-167. The next day, the Senate voted 65-32 to pass the bill after some late-night threats to filibuster by Senator Paul Rand (R-KY) and strong opposition from Senator Bob Corker (R-TN) due to the increased spending with no “pay-for” provisions. Once Congress sent the bill to the White House, some mixed messages were circling Washington as President Trump contradicted his own staff claiming he might veto the bill because a path forward for permanent protections for young undocumented immigrants and funding for the border wall were excluded. (However, the President could just rescind his own executive order that ended Deferred Action for Childhood Arrivals (DACA) without any involvement of Congress and some funding was included in the Omnibus for technology to shore up the southern border.) In the end, he signed it. Amidst all the attention on the FY18 Omnibus bill, congressional staff have been consumed with FY19 appropriations, with deadlines hitting last week. In fact, most staff refused to meet the past 6-8 weeks unless the topic was on appropriations and were busy organizing key FY19 appropriations subcommittee hearings the past two weeks.

FY18 Omnibus Highlights:

HEALTH

HHS & NIH: $78 billion for the Health and Human Services Department (HHS), $10 billion more than last year.

  • NIH will receive $37 billion, $3 billion more than FY2017 and $10.48 billion more than requested by the President. The $3 billion increase will build on two consecutive $2 billion increases for the NIH for fiscal years 2016 and 2017. All of the institutes will see at least a 5 percent funding boost. The $7 billion increase over the past three years is a 23 percent increase for NIH, which Labor, Health and Human Services subcommittee (LHHS) Chairman Roy Blunt (R-MO) boasted has “…fundamentally changed the prospects of scientists looking to treat and cure the most costly and deadly diseases impacting millions of Americans…and will advance our goal of maintaining a pattern of sustained increases for medical research.” This demonstrates unequivocal bipartisan commitment to keep increasing funding for NIH. Also, the bill rejects the administration’s proposal to implement a cap on reimbursements for facilities and administrative costs, clarifying that NIH must continue using its current methodology for negotiating indirect rates.
  • All of Us Precision Medicine Initiative will receive an additional $60 million in funding, the BRAIN Initiative will receive an additional $140 million in funding, Alzheimer’s research will receive an additional $414 million, Regenerative Medicine will receive an additional $8 million, Antibiotic Resistance Research will receive an additional $50 million, and Universal Influenza Vaccine will receive an additional $40 million. As part of 21st Century Cures Act, $300 million is transferred to the National Cancer Institute (NCI) and $110 million will be allocated from the NIH Innovation Fund directing $100 million to the Precision Medicine Initiative cohort and $10 million to Regenerative Medicine research. The Clinical and Translational Science Awards (CTSAs) run by NCATS will receive increased funding totaling $542.771 million, which is $26.651 million above last year. Also, the Omnibus explicitly states the expectation that increased funding is “…to support an increase in the number of new and competing Research Project Grants. NIH will continue its focus on emerging investigators and first-time renewals of these young investigators with actions to significantly reduce the average age of an NIH-supported new investigator.”
  • CDC will receive $8.3 billion, $1.1 billion more than FY17 and $2.27 billion more than requested. Some programs include: $648.559 million for Injury Prevention and Control activities, $475.579 million for opioid overdose prevention and surveillance (which is a $350 million increase), $367.674 million for Cancer Prevention and Control, and $4 million for National Early Child Care Collaboratives. It also states that the Secretary of HHS has said the CDC has the authority to conduct research on the causes of gun violence.
  • SAMHSA will receive $5.159 billion, increasing by more than 20% from FY17.
  • Centers for Medicare & Medicaid Services (CMS) will receive $747.558 billion, $56.752 billion more than FY17.
  • Opioid funding is increased across several agencies—a new $1 billion State Opioid Response Grant under SAMHSA; $500 million in additional research dollars at the NIH for addiction, where recipients will be subject to a 50 percent match through the National Institute of Neurological Disorders and Stroke (NINDS) and National Institute on Drug Abuse (NIDA); $500 million for the State Response to the Opioid Abuse Crisis Account created under the 21st Century Cures Act; $475.6 million to the CDC for prescription drug overdose prevention; $100 million for a new Rural Communities Opioids Response program focused on the 220 counties identified by the CDC as high-risk for substance use disorder; and $20 million from the Children and Families Services for Regional Partnership Grants for community collaborations among substance abuse treatment, courts and child welfare agencies to improve lives affected by opioids and substance use disorders.
  • The Public Health Preparedness and Response will receive $1.450 billion for public health preparedness and response activities.

FDA: The FDA within the Department of Agriculture will receive $5.21 billion under the measure, $483.4 million more than in FY2017. Of that amount, $2.81 billion will be discretionary appropriations and $2.4 billion will come from user fee revenue.

EDUCATION & STEM

Education: Ignoring the administration’s proposed cuts to education grant programs that states and school districts use for STEM initiatives, the Omnibus bill will fund the Department of Education (DOEd) with increases across the board for a total of $70.9 billion, which is $2.6 billion more than last year.

  • It will increase the maximum Pell Grant award by $175, for a total of $6,095, and will allocate $350 million to cancel loans under the Public Service Loan Forgiveness Program.
  • A Cybersecurity pilot grant program will be established with $1 million to support technological upgrades for community colleges and an Open Textbooks pilot program will be established with $5 million to support creating new open textbooks to save students money while improving instruction.
  • It will provide a $700 million boost for $1.1 billion total for the Student Support and Academic Enrichment Program, which received $400 million in FY2017. The bill specifies spending can be used for expanded school-based mental health services, trauma-informed practices, bullying prevention, and professional development for personnel in crisis management and school-based violence prevention strategies. Related, it will increase by $22 million the Safe Schools and Citizenship Education Program for a total of $90 million that is geared toward improving school climates, preventing violence in schools and providing services in response to serious incidents.
  • It will essentially maintain level funding levels for the 21st Century Community Learning Centers and Supporting Effective Instruction State Grants programs.
  • The bill will carve out $50 million in the Education Innovation and Research program to support STEM and computer science education projects and notes that a wide range of DOEd grant programs can be used to support STEM education initiatives. The bill encourages pre-kindergarten through grade 12 computer science education programs that address enrollment gap for underrepresented students, such as minorities, girls and youth from families living at or below the poverty line.
  • Charter Schools developer grants for underserved, high poverty, rural areas will receive $7.5 million.

SCIENCE, TECH & ENERGY

Congress rejected the administration’s proposed cuts to many of the science, energy and related R&D programs. Science programs under the bill will all receive increases, totaling $28.5 billion, an increase of $1.38 billion from FY2017 and $2.76 billion more than requested.

NSF: NSF will receive a total of $7.767 billion, which is 4 percent above FY2017.

NASA: NASA will receive a total of $20.736 billion, which is an 8 percent increase.

EPA: The Omnibus flat funds the EPA at $700 million, which is a win considering how most expected this agency to be decimated.

USGS: The U.S. Geological Services will obtain 6 percent more funding, up from $1.1 billion.

Energy: The Energy Department (DOE) will receive a total of $34.5 billion, which is $3.77 billion more than FY2017 and $6.65 billion more than requested.

  • Office of Science will receive 16 percent increase, up from $5.4 billion.
  • ARPA-E will receive 15 percent increase, up from $.3 billion.
  • Energy Efficiency and Renewable Energy (EERE) will increase by 11 percent from $2.1 billion.
  • The bill will fund $10.6 billion for weapons activities, $2 billion for defense nuclear nonproliferation, and $1.62 billion for naval nuclear reactors.

DEFENSE

Defense: As expected, the Department of Defense saw huge increases with a total of $654.6 billion in base funding and $65.2 billion in Overseas Contingency Operations (OCO).

  • Research, development, test, and evaluation will receive $88.308 billion, a $16 billion increase from FY2017. This 22 percent increase flows mainly to late-stage technology development, prototyping, and testing. Funding for the three early-stage Science and Technology accounts will rise by 6 percent, or about $850 million.
  • Procurement saw the largest increase, with $133.87 billion going into the account—a $25.4 billion increase from FY2017. The largest procurement increases are for 14 new navy ships and 90 Lockheed Martin F-35 Joint Strike Fighters.
  • The Services procurement breakdown in the billions includes: Army $23.971 ($7.989 increase) for items such as 56 Black Hawk helicopters, Navy and Marine Corps $57.980 ($9.172 increase) for items such as 14 Navy ships, Air Force $46.419 ($7.727 increase) for items such as 90 F-35s, and Defense-wide $5.429 ($548.2 increase).
  • The Defense Health Program will receive $34.428 billion, a $646.9 million increase from FY17 and $763.7 more than requested with $15 billion going to private-sector care and $9.3 billion for in-house care.
  • Medical Equipment Combat Support will increase from $43.343 million to $69.843 million, Medical Advanced Technology (MAT) will increase from $67.780 million to $106.780 million, and Medical Development (MD) will increase from $9.353 million to $37.353 million. Within MAT, funds are dedicated to peer-reviewed neurotoxin exposure treatment Parkinson’s research ($15 million), peer-reviewed neurofibromatosis research ($15 million), and peer-reviewed military burn research program ($8 million). Within MD, funds are dedicated to wound care research ($10 million), military dental research ($10 million), hypoxia research ($5 million), and aircrew mounted physiological sensors ($3 million). The undistributed medical research program which was zero funded in the administration’s budget will rise to $1.386 billion.
  • Within the Peer-Reviewed Research Program, Medical Research will receive $330 million, Breast Cancer research will receive $130 million, TBI and Psychological Health will receive $125 million, Prostate Cancer research will receive $100 million, Cancer research will receive $80 million, orthopedic research will receive $30 million, Gulf War illness research will receive $21 million, Alzheimer’s will receive $15 million, vision research will receive $15 million, hearing restoration research will receive $10 million, and Core Funding research will receive $291 million.

HOMELAND SECURITY

Homeland Security: The Homeland Security Department will receive a net $47.7 billion in discretionary funds subject to spending caps, $5.32 billion more than in FY2017 and $3.72 billion more than requested. Additional discretionary funds that will not count toward the spending caps will include $7.37 billion for the Disaster Relief Fund and $163 million in OCO funding for the Coast Guard.

  • Customs and Border Protection will receive $14 billion, $1.83 billion more than FY2017. An additional $1.57 billion will fund border security infrastructure and technology, including fencing, but will not provide funding for concrete border wall prototypes sought by President Trump.
  • ICE will receive a $640.6 million boost, totaling at $7.07 billion
  • TSA will see a $260.8 million decrease, totaling at $4.92 billion.
  • FEMA will receive $12.309 billion, which is $1.830 billion above last year.
  • Coast Guard will receive $12.107 billion, which is $1.653 billion above FY2017.

JUSTICE

Justice Department: The Justice Department will receive $30.3 billion, $1.35 billion more than in fiscal 2017 and $1.97 billion more than requested.

  • The FBI saw the largest increase in funding, totaling $9.4 billion, which is $393.8 million more than FY2017 and $625.7 million more than requested.
  • The DEA will receive $2.19 billion, $87.4 million more than FY2017 and $26.3 million more than requested.
  • The Justice Department’s Secure Our Schools program will be reauthorized at $100 million annually from FY2019 through 2028 through the Bureau of Justice Assistance (BJA) and the Office of Community Oriented Policing Services (COPS).

Other:

  • Overall, the Omnibus includes $2.3 billion for mental health, training, and school safety programs at the Departments of Justice, Education, and Health and Human Services, which includes $75 million for school safety grants.
  • It includes $2.3 billion increase in funding for child care for low-income working families and $115 million in increased funding for Early Head Start and a full Cost-of-Living adjustment of $216 million for Head Start.
  • Within HHS, it will provide $9 million increase for Family Violence Prevention and Services and $2 million grant funding for the Assistive Technology program.
  • Domestic food programs will receive $104.9 billion, $3.19 billion less than FY2017 and $457.7 million more than requested. The Supplemental Nutrition Assistance Program (SNAP) will receive $74.013 billion, which is $4.467 million below last year while WIC will receive $322.1 billion, which is $175 million below last year.
  • The Department of Labor will receive $12.2 billion, which is $129 million more than FY2017. The Employment and Training Administration will get a boost of $44 million for a total of $10.018 billion while OSHA is level funded.
  • The Small Business Administration will receive $700.8 million, a $185.9 million decrease from FY2017.
  • The Veterans Health Administration will receive $70.7 billion, $4.3 billion more than FY2017. It also includes $782 million for the VA to develop a new Electronic Health Record (EHR) system.
  • The Legislative Branch section of the bill will fund House, Senate and congressional agencies with $4.7 billion, which is $260 million more than FY2017. The Cost-of-Living increases for Members of Congress will be blocked for another year.
  • Provides $380 million for Election Assistance Commission grants to help states improve and secure their election systems.
  • The Transportation Department will receive $86.2 billion, including a net discretionary appropriation of $27.3 billion. Total resources will be $9.97 billion more than in FY2017 and $11.1 billion more than requested. The FAA will receive $14.650 billion in discretionary dollars plus $3.350 billion in Trust Fund dollars for total of $18 billion, TIGER grants will receive $1.5 billion (3-fold increase with 30 percent required to be spent in rural areas), the Federal Highway Administration (FHA) will receive $2.525 billion in discretionary dollars plus $44.234 billion in Trust Fund dollars for a total of $47.498, and the Federal Railroad Administration (FRA) will receive $3.091 billion. The FAA will be reauthorized through the remainder of FY2018 only because the House Transportation and Infrastructure Committee approved a bill on June 27th by 32-25 to reauthorize the FAA for six years and privatize air traffic control, but it was never brought to the House floor and Chairman Bill Shuster (R-PA) is no longer advocating for it since privatization failed to garner broader support. Meanwhile, the Senate Commerce, Science, and Transportation Committee approved a bill on June 29th to reauthorize the FAA for four years, but it too is stalled due to a controversial provision to reduce the number of hours pilots need to spend in flight during training.
  • Housing and Urban Development (HUD) will receive a net appropriation of $42.7 billion under the measure, $3.86 billion more than FY2017 and $11.3 billion more than requested. The agreement will increase funding for Community Development Block Grants by $300 million.
  • Rural development programs within the Department of Agriculture will receive $3 billion, $63.7 million more than FY2017 and $1.02 billion more than requested.
  • The Corporation for National and Community Service will receive $7.6 million for innovation, demonstration and assistance activities, and within that, $5.4 million will be allocated for the Volunteer Generation Fund.
  • The Institute of Museums and Library Services, which funds library and technology grants, will receive $240 million.

HEALTH

Right to Try

On March 21st, the House passed the Right to Try legislation, which was co-sponsored by Rep. Andy Biggs (R-AZ) would permit terminally ill patients to try experimental, unapproved drugs, largely along party lines by a 267-149 vote. It was the second time the measure had come up for a vote on the floor, but this time, a simple majority vote was needed. The measure heads back to the Senate, where a version of the bill introduced by Senator Ron Johnson (R-WI) passed in August by unanimous consent. On March 13th, the House failed to pass this bill when it was placed on the Suspension Calendar requiring two-thirds vote mainly because Democrats argued there is already a program in place to give terminally ill patients access to experimental drugs and this gives false hope to dying patients and does not actually incentivize companies to make experimental drugs available to those who need it most. Similar legislation has passed in 38 statehouses across the country but it has done little to advance more options for terminally ill patients because although it removes the FDA from the share experimental drugs.

Opioid Epidemic

On March 22nd, AdvaMed held a MedTech Showcase for Congress to educate them on and show the various medical innovations helping to address the opioid crisis. G2G attended this Hill event and was pleased to see a packed room with a handful of Members of Congress stopping by.

Also, on March 22nd, HHS Secretary Alex Azar met with state officials who work on prescription drug monitoring programs (PDMPs) in the District of Columbia, Kentucky, Maryland, Virginia, and West Virginia. He was joined by Acting CDC Director Anne Schuchat and staff from the Office of the National Coordinator for Health IT. This followed President Trump’s Monday announcement in New Hampshire of the administration’s new opioid addiction initiative. The plan encourages innovative research and development towards addiction preventing therapies, alternative pain management therapies, and vaccines to prevent opioid addiction. It also includes a multi-level approach, such as a proposal to use the death penalty on some drug dealers. Other aspects of the proposal aim to work with the Justice Department to create a new taskforce that will monitor online sales, working with CMS to make inpatient care more easily accessible for addicts, and changing how the federal government pays for opioid prescriptions to limit access to certain painkillers. The plan aims to reduce the number of opioid prescriptions by one third within three years. The plan also calls on states to develop prescription drug monitoring databases, aims to expand emergency access to naloxone, and screens federal inmates for opioid use so they can be directed to proper treatment. Also, NIH is working with 33 companies interested in tackling the opioid epidemic and is assessing available funds to decide how to move forward.

Meanwhile, Medicare is being criticized by Republicans and Democrats alike for not going far enough with its Part D provisions. The 2016 Comprehensive Addiction and Recovery Act (CARA) required CMS to develop rules on drug dispensing and monitoring. Among those rules proposed by Medicare is a provision to “wait at least six months from the date a beneficiary is identified as potentially at risk before limiting access to frequently abused drugs.” Several members of the House have asked for a clarification as to why the 6-month date was attached to this provision. Four Senators, including both Senators Portman and Brown (OH) say that Medicare’s implementation of its Overutilization Monitoring System does not meet the CARA law and falls short, leaving room for those most at risk to slip through the cracks. The final version of this rule is under White House review and will be published in the next few weeks.

In addition, DEA, which is sitting on 9 years-worth of data regarding the sale and movement of opioids across the country. This data tells where prescription opioids are being sold and where they are coming from, and this data could be extremely helpful to counties and cities as they attempt to stay on top of potentially suspicious orders. Localities have been pushing for this data to be made available to them for litigation purposes, reserving the information for counties and cities who are suing drug manufacturers and distributors. The DEA has said they will make 95% of this information available with the required protective order and under the provision that the data must remain confidential and only be used for litigation and law enforcement purposes.

HHS Advisory meetings

In an effort to save costs, the HHS has decided to cease holding all advisory meetings in person, cutting back on several health advisory panels. Committees such as the Advisory Committee on Human Research Protections will now all be held virtually. While this is said to be a cost-saving move, a Chairman of one the HHS advisory committees worries that it will take these important discussions out of the public eye and make it more challenging for panel members to engage the research community in these important discussions.

Skinny Healthcare Plans

The Department of Labor is proposing a new type of “skinny” healthcare planned aimed at making it easier for the self-employed and small businesses to access cheaper healthcare. This plan changes the definition of employer to allow associations to create plans for their self-employed and small business members. The plan will not require full health benefits mandated by the ACA, and instead will require things like pregnancy, childbirth, and mental health services. Critics of the plan see it as something that will drive up costs in the ACA market, as healthy people will opt to use the “skinny” plans thus saturating the ACA market with a sicker population.

DEFENSE & VETERANS

Army Recruitment

With the Trump Administration’s goal of expanding the military, the Army has been charged with recruiting 80,000 men and women—11,500 more soldiers than last year.  While the U.S. Army has consistently met recruitment goals in the past, higher unemployment rates have likely helped. With the current unemployment rate at its lowest in five decades (4.1%), the goal of adding 80,000 soldiers is steep, and may undermine Trump’s goal to grow the military.

Veterans Affairs

On March 21st, Secretary David Shulkin testified before Senate Veterans Affairs Committee about the president’s FY2019 budget request for $198.6 billion, $88.9 billion in discretionary funding, and $109.7 billion in mandatory funding. The discretionary budget represents an increase of $6.8 billion or 8.3 percent over the 2018 request. The budget includes $8.6 billion for veteran’s mental health services an increase of $468 million or 5.48 percent increase above the current level. He also discussed how the budget proposal targets women’s health, one of the fastest growing populations in VA by adding $29 million more dollars to the FY2019 budget and increases 6 percent over FY2018. The budget also supports a new EHR modernization program to significantly enhance the coordination of care for veterans who receive care from VA and DoD. The budget includes $1.2 billion to advance the single accurate lifetime EHR. As of March 16th there is $1.1 billion left in the Choice fund that is unobligated. At a run rate of about $370 million a month, we will get to probably the first week in June before we start running out of money in the Choice Program.

ECONOMIC DEVELOPMENT

Debt

Under President Trump’s administration, debt has increased more than $1 trillion, putting the federal debt level just above $21 trillion for first time on March 15, according to latest update of U.S. Treasury Department data.

National Economic Council

Trump’s pick to replace Garry Cohn, former Director of the White House National Economic Council and Chief Economic Advisor, is Larry Kudlow. Kudlow is a former CNBC economic commentator, radio host, and columnist. He is well known for his vocal support for tax cuts, especially corporate tax cuts. He also served in the Reagan administration as the associate director for economics and planning in the Office of Management and Budget (OMB). His strong support for tax cuts mirrors Trump’s most recent signature tax law.

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