Appeals Court Skeptical of Trump Rule On TV Drug Ads

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Source: The Hill, by Jessie Hellmann

Drugmakers and the administration headed to court Monday in a fight over a Trump rule that would require companies to disclose the list prices of their drugs in television advertising.

Three drug companies — Merck, Eli Lily and Amgen — argue the rule, which was blocked by a federal court in July, is outside the authority of the Department of Health and Human Services (HHS).

The Trump administration urged a federal appeals court Monday to overturn that ruling, arguing it has the authority under the law to run the Medicare and Medicaid programs efficiently. The health care programs for the elderly and the poor paid about $240 billion for prescription drugs in 2016.

But the three-judge panel of the U.S. Court of Appeals for the D.C. Circuit sounded skeptical in its grilling of government lawyers, questioning the agency’s authority to issue the rule and whether the disclosure of list prices, which are often higher than what patients end up paying, would be helpful to consumers.

“The problem is the cost of prescription drugs. I don’t see this as a solution to the problem,” said Judge Karen LeCraft Henderson, an appointee of former President George H.W. Bush.

The list price “is not the price I’ll ever pay. Why is that not adding confusion?”

The other two judges who heard arguments on Monday are Patricia Millett, an Obama appointee, and Harry T. Edwards, a Carter appointee.

The case represents another high-stakes test for President Trump’s drug pricing agenda, which mostly relies on administrative action and rulemaking.

While lowering drug prices has been a top initiative for the president, most of his plans have had trouble getting off the ground.

The administration has conceded in the past that it needs more authority from Congress to act on drug prices, but an agreement between the Democratic House and Republican Senate has proven difficult.

The advertising rule, which would only apply to drugs that cost at least $35 a month and are covered by Medicaid and Medicare, would force drug companies to compete and encourage patients to shop for better deals, potentially driving down prices, said Ethan Davis, a Justice Department attorney representing HHS in its case.

A drug’s list price is not usually public information.

“This lack of transparency threatens Medicare and Medicaid’s sustainability and comes at the expense of American taxpayers,” the government wrote in its brief.

But the judges questioned those claims, noting that Congress has not passed a specific law directing HHS to require drug companies to disclose prices in advertising.

They also worried the ads could cause confusion because the list price, which is set by drug manufacturers, often isn’t what patients actually pay for their drugs after insurance is taken into account.

That was the argument made by drug companies, with the attorney representing them, Richard Bress, telling the court Monday the rule could be “far more dangerous than helpful” if it takes effect.

Patients that view a list price as too high might stay away from it, even if it could help their condition, drug companies argue.

Davis, of the Justice Department, agreed.

“Consumers lose interest in higher-priced drugs,” he said. But he added that should give companies incentive to lower their list prices.

The administration also argued the list price has a relationship to what patients end up paying; drugs with a higher list price could also have a higher copay or coinsurance, Davis said.

“It doesn’t tell you what you’ll actually pay … but gives you a good idea of whether you’ll pay more or less,” Davis said.

Still, HHS and the Justice Department face a high hurdle in getting the appeals court to overturn the ruling issued by U.S. District Judge Amit Mehta, an Obama appointee, in July.

Mehta wrote in his ruling that HHS’s authority to issue rules is not “unbounded.”

“No matter how vexing the problem of spiraling drug costs may be, HHS cannot do more than what Congress has authorized,” Mehta wrote. “The responsibility rests with Congress to act.”

The rule is also opposed by broadcasting and advertising groups. The drug industry spends billions on television ads each year, with prescription drugs accounting for a high percentage of it.

The rule, though, has support on Capitol Hill among lawmakers from both parties. Sens. Dick Durbin (D-Ill.) and Chuck Grassley (R-Iowa) have sponsored a bill that would require price disclosures in drug advertisements, but the path forward for their legislation is uncertain.

Durbin has asked for unanimous consent to pass the bill, meaning it would not require a roll call vote, but it has been objected to by some Republicans.

Lawmakers are also pushing other measures on drug prices.

A bill sponsored by Grassley and Sen. Ron Wyden (D-Ore.) would cap the price increases drug companies typically make every year. That bill is supported by Trump but opposed by Senate Republicans.

Meanwhile, the administration is preparing to finalize a rule that would allow some states to import cheaper prescription drugs from Canada.

The rule is fiercely opposed by the drug industry and is likely to also face legal action.

After Years of Financial Woes, Los Angeles Hospital Running Out of Prayers

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Source: Los Angeles Times, by Alejandra Reyes-Velarde

Many years ago, Gilbert San Juan watched as a wrecking ball demolished the old St. Vincent Medical Center.

An elevator operator and painter there at the time, San Juan wanted to fetch some old furniture from the building, but backed down after seeing the massive, threatening ball hanging from a crane.

Still, he knew he would enter its doors again, when the new hospital near downtown Los Angeles sprung just yards away from the old. For 47 years, San Juan worked in that facility.

So it hasn’t quite hit him that the hospital might actually shutter for good after its owners announced that a sale fell through, he said. Verity Health asked a bankruptcy court for permission to close its doors. A judge gave approval for the closure last week.

“They’re going to have to call the SWAT team to get me out of here,” San Juan joked as he walked through the hospital hallways.

Pointing at a sepia-toned framed photograph of the old building labeled “1927,” San Juan declared: “It was beautiful.”

St. Vincent Medical Center on 3rd and Alvarado streets was founded in 1858 by the Daughters of Charity — six nuns who wanted to offer services to the poor and saw a need for healthcare in a growing L.A.

Now, several hundred patients will need to be transferred to nearby Good Samaritan Hospital and St. Francis Medical Center. Community leaders and experts fear the hospital’s closing will have a ripple effect throughout the community and force the poor and elderly to travel farther away for care.

About 1,000 people, including San Juan, work at the hospital and it is unclear what will happen to those jobs.

Throughout the decades, the mission of the hospital to serve the most needy remained consistent. St Vincent Medical Center’s “disproportionate share percentage” is 70%, which means it serves mostly low-income patients who rely on Medicare and Medicaid, said John Romley, associate professor of pharmaceutical and health economics at USC.

The hospital leans heavily on Medicaid and Medicare, which reimburses the hospital at lower rates than commercial insurance, according to experts. It sits in a working-class, predominantly Latino neighborhood with large Mexican and Central American immigrant populations.

The hospital’s community work had decreased over the years as its financial problems worsened, but it had a history of working with organizations such as the Central American Resource Center, or CARECEN, to offer health screenings and general checkups for free to the area’s immigrant and day laborer communities.

“Having institutions that are anchored in a community such as Westlake and Pico Union are critical to the continued growth and strength of an area,” said CARECEN’s executive director Martha Arevalo. “When we lose those anchors, that has a tremendous ripple effect.”

In its early days, the Daughters of Charity offered care for $1.50 per day to the working class: fishermen, shop owners, stable keepers and watchmakers. Doctors treated pneumonia, typhoid and malaria they said was brought by “newcomers, not wearing sufficiently heavy clothing, particularly in the evening,” according to a Los Angeles Times article in 1887.

According to its website, doctors at St. Vincent Medical Center would later become the first to perform an open heart surgery on the West Coast, the first to offer hemodialysis to kidney failure patients, the first to perform an artificial heart implant and the first to perform a human heart transplantation.

As L.A. prospered, so did the hospital. An 1885 article in The Times boasted of the hospital’s views of the city and far-off orange groves and vineyards from its sparkling new building on Beaudry and Sunset: “The valley can be seen for from thirty to forty miles south and east, and on clear days the ocean plainly appears.

“As a public institution, it is without an equal south of San Francisco,” the article read.

But financial woes soon trailed the hospital.

The Daughters of Charity racked up debt to construct new facilities. When the hospital moved to its current location on Third and Alvarado in the 1920s, one Times article noted the nuns were “unable to accumulate the capital to defray the cost of the institution” due to the thousands of patients who received care “without the payment of even a moderate fee.”

In recent years, the hospital had changed ownership several times, though that’s not unusual in today’s market-driven healthcare landscape, according to experts.

Among the creditors in the bankruptcy is the hospital system’s former management company, Integrity Healthcare, controlled by entrepreneur-physician Patrick Soon-Shiong’s company NantWorks. Soon-Shiong also owns The Times.

Verity, the nonprofit operator of six California hospitals, filed for bankruptcy protection in 2018. At the time, officials said the company had more than $1 billion of debt from bonds and unfunded pension liabilities and needed cash to make seismic repairs to its aging facilities. They said they’d purchased the hospitals in 2017 hoping to get back to financial health but could not.

The bankruptcy sparked concerns in communities about the fate of the hospitals. Santa Clara County has taken over operations of two of the hospitals — O’Connor Hospital in San Jose and St. Louise Regional Hospital in Gilroy. The move came after the California attorney general demanded oversight of the transfer.

St. Francis Medical Center in Lynwood has also been the subject of debate, because of its importance to the southeast Los Angeles County region. Lynwood officials last year even discussed purchasing the medical center.

Verity said last week it would continue operating St. Francis as well as Seton Medical Center and Seton Coastside in San Mateo County.

St. Vincent Medical Center (which is not related to the New York health system of the same name) is home to the Asian Pacific Liver Center, which focuses on Hepatitis B awareness, screenings and care for the Asian American population, which is disproportionately affected by the disease.

The hospital’s volunteer department has for years supported operations and deployed people to participate in organizations such as Meals on Wheels.

Through a spokeswoman, Verity Health declined to allow longtime staff members and heads of these organizations to speak to a Times reporter.

St. Vincent’s isn’t the only hospital to face financial challenges. There has been much variability in the healthcare industry in terms of ownership changes and mergers, Romley said. Between 25% and 30% of all California hospitals are operating at a loss. St. Vincent Medical Center, lost $67 million in 2018, he said.

“This organization has been in some turmoil for some time,” Romley said. “It’s been heading in this direction for a while.”

It’s the neediest populations that are often more at risk of losing their hospitals. According to a study on trauma centers by UC San Francisco researchers, emergency rooms in hospitals located in low-income neighborhoods are 1.5 times more likely to close and those patients are affected more severely than other areas.

When the Martin Luther King Jr. Hospital closed in 2007, the number of uninsured patients that one local hospital treated tripled from 12.9% in 1999 to 44.6% in 2009, according to a 2016 study co-authored by Renee Hsia, a professor in the Department of Emergency Medicine at UC San Francisco.

When a hospital closes its emergency room and its patients are diverted to the next closest hospital, both the patients being transported and the patients who were already receiving care in the hospital experience higher mortality rates, Hsia said.

She cited a mix of factors, including longer distances patients need to travel to receive care and overcrowded hospitals.

“Peoples’ emergencies don’t go away when an ER closes,” Hsia said. “There is a very real and documented domino effect, especially in areas where there is need.”

“It’s important people realize the supply of hospitals is not regulated,” she added. “Hospitals can decide whether to open and close where and when they want.”

Verity Health has said patients in need of emergency care will be directed to eight hospitals within a three-mile radius of St. Vincent Medical Center, although it didn’t name which hospitals.

Good Samaritan, a 408-bed hospital also in the Westlake neighborhood, has a 70% disproportionate share percentage and lost $8 million in 2018. St. Francis Medical Center, which has 384 beds, did not suffer losses in 2018, but 100% of its patients are low-income.

Teresa Henrique, 75, who has gone to St. Vincent Medical Center for years, said she didn’t know the hospital would be closing.

“I’ll have to find a new hospital,” she said. “I’ll have to see if they’ll take my insurance. They treated me really well at [St. Vincent Medical Center]. I like it.”

Kay Kim, 65, said she has relied on the hospital for emergency care, for herself, her parents and other family members. It was where both her parents, Korean immigrants, died.

“It’s close to where I live,” she said. “Whenever I have an emergency, I come here. I hope someone else buys it. That’s very sad.”

At the hospital’s “Cafe on 3rd” last week, employees whispered about the closure. A maintenance supervisor tapping on his phone announced he was being ordered to redo the coverings for the emergency room signage.

“We leave the 24th,” said one woman in the hospital’s cafe. “Well be the last ones out.”

Que tristeza,” a cafe employee told colleagues in Spanish. What a shame.

One employee fretted about being without work for an extended time.

Carlos Bueno, the maintenance supervisor, said his company will stay behind after the hospital’s closure, but some co-workers are already tweaking their resumes.

As he covered signs around the hospital, he saw staff members congregate in groups taking photos. For the memories, he guessed.

Elpidio Villaneda, who in March would have reached his 30-year work anniversary at the hospital, said it has been his second home.

“I thought the city or something would jump in,” Villaneda said. “It’s a landmark, you know? We could use another hospital. There’s enough people here to support it.”

“Everybody is sad, everybody is down right now,” Bueno said.

Huddled around a cafe table, San Juan took out his phone to play a song, “Todo Tiene Su Final.”

“Like Willie Colon and Hector Lavoe say, everything comes to its end,” San Juan said.

New Research Showing Californians Are Still Unaware of a Penalty for Going Without Health Coverage

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Covered California Executive Director Peter V. Lee and State Controller and Franchise Tax Board Chair Betty T. Yee urged Californians on Thursday to get health coverage to avoid paying the new penalty now in effect for 2020. Their urging comes as new research released by Covered California shows that many still do not know about the law that took effect on Jan. 1.

The research also shows that many of those without health coverage do not know there is more financial help than ever before to buy health insurance, including new help for middle-income Californians.

“We all have work to do to make sure people in California know that if they can afford health insurance, they have to buy it this year or they will face a penalty next year,” said Covered California Executive Director Peter V. Lee. “Open enrollment is underway, and there’s more help than ever before. Now is the time to enroll to avoid the penalty and ensure you have the coverage you need.”

Controller Yee, who joined Lee at Thursday’s press conference, said taxpayers need to be aware of the penalty, known as the Individual Shared Responsibility Penalty, so they can take steps to avoid it when they file their taxes next year.

“I encourage everyone to secure qualifying health care coverage as soon as possible so they are not surprised with a state penalty when filing 2020 state tax returns in 2021,” Yee said. “There are lots of ways to get coverage, including through Covered California, where open enrollment continues through Jan. 31, and I urge you to look at all the options to get coverage as soon as you can.”

For those facing a penalty, a family of four could pay at least $2,000 for not having health insurance. Controller Yee said there is an estimator on the Franchise Tax Board website to assist consumers in understanding what they could pay. In addition, Covered California and Franchise Tax Board have developed a fact sheet with more information about the penalty.

For 2020, Gov. Newsom and the state Legislature are making new financial help available to eligible consumers to help further lower the cost of their coverage. More than 500,000 Californians have already qualified for the new subsidies.

A market research report released by Covered California, “Californians’ Understanding of the Mandate to Have Health Coverage and the Awareness of Financial Help,”was conducted by Greenberg Brand Strategy from Dec. 6 to 18, 2019.

Among the findings:

  1. 1. Many Californians — especially the uninsured — are unaware of the state penalty.

Many Californians reported being unaware of the requirement to have health insurance coverage in 2020 or else pay a penalty, including a majority of the uninsured (56 percent).

  1. 2. The uninsured are more likely to enroll in coverage if they are aware of the state mandate.

Among the uninsured, 64 percent are more likely to enroll in health insurance to avoid the penalty. This is an increase of intent to enroll from 46 percent when uninsured respondents were asked at the beginning of the survey whether they plan to have health coverage in 2020.

  1. 3. The state mandate encourages already insured Californians to keep their coverage.

Among the insured population, almost all respondents (91 percent) will keep their health insurance in 2020, and almost half (46 percent) state that avoiding the penalty is a factor in maintaining their coverage.

  1. 4. Many uninsured people are unaware that financial help is available.

Among the uninsured, 62 percent are unaware that Covered California offers financial help to help pay for health insurance.

  1. 5. The uninsured are even less likely to know about the new financial help.

Among the uninsured, only 27 percent are aware that Californians can receive even more financial help than ever before for health coverage, compared to the 38 percent who generally know that financial help is available.

  1. 6. Many uninsured Californians who could get financial help are not finding out if they are eligible.

Nearly all the uninsured respondents surveyed (93 percent) could qualify for financial help. However, most uninsured respondents (62 percent) have not looked to see if they qualify for financial help.

  1. 7. Uninsured Californians are far more likely to enroll in coverage if given financial help.

More than two-thirds of uninsured respondents stated that subsidies of $500 per month would make them likely to enroll in a health plan.

Uninsured middle-income Californians (making between 401 and 600 percent of the federal poverty level) are even more likely to enroll in coverage if they knew they were eligible for a $500 per month subsidy.

The average subsidy for eligible consumers earning less than 400 percent of the federal poverty level is $447 per month; the average state subsidy for eligible middle-income consumers is $460 per month.

With research showing that most of the uninsured have not checked to see if they are eligible for financial help, Lee encouraged Californians to look into it.

“You can find out in just a few minutes whether you are eligible for financial help from the federal government, the state, or both,” Lee said. “Do not leave money on the table; do not put yourself at risk if you get sick or ill; do not get stuck with a big bill when you pay your taxes in 2021.”

Lee said the population of the uninsured changes every year: With new people turning 26, moving to the state or leaving employer-based coverage to work on their own, there is a new group of Californians to inform every year. That group now includes people with higher incomes who qualify for financial help for the first time.

“California made a commitment to encourage more people to get covered through the penalty and by making that coverage more affordable through new financial help,” Lee said. “Together the penalty and new subsidies are powerful tools to making sure that Californians follow the law and sign up for a health insurance plan that will protect them and their family. We want to make sure they know about it.”

Cigna, Oscar Health to Launch Co-Branded Health Plans for Small Businesses

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Source: FierceHealthcare, by Paige Minemyer

Cigna and Oscar Health are joining forces to offer health benefits for small employers.

The Cigna + Oscar plans will be fully insured and available on the small group market, the insurers announced. The plans will include integrated medical, behavioral health and pharmacy services and a broad network of providers. In addition, plans will have access to Oscar’s technology tools, including round-the-clock telemedicine.

“Small businesses are the backbone of the American economy and through this partnership, we can take a disciplined approach to offering differentiated health care solutions that help small businesses save money, expand network and product choice and keep employees healthy,” said Julie McCarter, vice president of product solutions at Cigna, in a statement.

Plan members will also be able to access search tools that can assist with booking appointments, reviewing providers, finding facilities and checking prescriptions, and the plans will be enabled with broker, business and provider portals to streamline enrollment and care management, according to the announcement.

About 15 million people are enrolled in small group insurance plans, and small businesses are a growing segment of the economy, according to the announcement. More than 500,000 new companies launch monthly.

The two payers said they intend to equally share risk under the co-branded plans through a reinsurance program, and they intend to launch the new plans in select markets this year, pending regulatory approval. They plan to continue growing the partnership over time.

“Together, we are giving small business owners an affordable, simple-to-use option that makes it easier for their employees to get appropriate care quickly and stay healthy,” said Joel Klein, chief policy and strategy officer at Oscar, in a statement. “Cigna + Oscar will give these business owners and their employees consumer-centric health care coverage and physician networks that provide personalized care.”

‘Concierge’ Medicine Gets More Affordable But Is Still Not Widespread

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Source: NPR, by Selena Simmons-Duffin

Some people spend $200 a month on the golf course or on a fancy cable TV package, says David Westbrook, a hospital executive in Kansas City, Mo. His splurge? He pays Dr. John Dunlap $133 a month for what he considers exceptional primary care.

“I have the resources to spend a little extra money on my health care to my primary care physician relationship,” Westbrook says. “Because I have that access — and am very proactive in managing my personal health — I think I’m going to be healthier.”

That $133 is in addition to Westbrook’s monthly insurance premium, which he still needs to cover whatever Dunlap can’t handle in his primary care practice, such as specialist visits, hospital care and more.

For that fee, he has access to “concierge medicine” perks: a long, thorough annual physical exam — lab work included, no waiting room time, same-day appointments. Any other visits during the year cost him $20. His doctor knows him and understands his medical history. If he needs an answer to a question, he can call his doctor’s cellphone.

More than 1 in 5 wealthy people pay an extra fee for direct access to their doctor, according to a new poll from NPR, the Robert Wood Johnson Foundation and the Harvard T.H. Chan School of Public Health. For low and middle income people, the rates are less than half that.

As an executive who previously owned his own communications business, Westbrook’s income puts him in the top 1%, which is defined in our poll as making more than $500,000 in income a year.

“I’m not surprised that people who enjoy prosperity are likely to choose this kind of medical service,” Westbrook says. “I think we’re likely to choose it for two reasons: One, it’s just sensible — you’re going to stay in better health — and second, if you are a person in a successful career, you’re likely really busy, and so your time is very valuable.”

This kind of arrangement isn’t new. It actually goes back several decades. The idea behind concierge medicine — and its newer, lower-cost sibling, direct primary care — is that patients could have a closer, more personal relationship with their physicians, with less waiting and bureaucratic interference, and that could result in better health.

In its first incarnation, it was pricey. “Concierge medicine appeared in primary care in the 1990s with the purpose of providing luxury medical care,” says Erin Sullivan, the research and curriculum director at the Center for Primary Care at Harvard Medical School. At the high end, some concierge practices charged as much as $30,000 a month, she says.

But lower-priced models have since cropped up. Westbrook’s doctor, John Dunlap, runs a direct primary care practice, which works in a similar way but without the emphasis on luxury services. It’s “direct” because the contract is strictly between the patient and the doctor — no insurance companies are billed for what happens in the office. On average, this model costs patients $93 a month, according to a review of fees from 2015.

“That model emerged in the mid-2000s to focus on restoring the doctor-patient relationship and providing access to more personalized care at a lower price point than concierge medicine,” Sullivan says.

Dunlap says direct primary care is “an excellent way to provide care.” He’s in private practice — it’s just him in the office with some nursing and administrative staff. He’s not affiliated with a hospital or physician group, and that’s how he’s had it since 1980. For many decades, he took insurance like a traditional doctor’s office. But in recent years, he says, with his patients getting older, it felt like he was working harder and earning less.

He says he was approached by MDVIP, a national direct primary care group, which suggested he convert his business model. At first, he was reluctant. He worried about leaving patients behind. He rebuffed the company, but little by little, he says he began to see the advantages of this model — knowing his budget at the beginning of the year, getting to know his patients better, being able to pay his staff more, and taking billing insurance off their plates.

Five years ago, he made the switch on his own. His practice charges patients a monthly fee based on age — $50 for people under 40 and more than double that for people over 55. He has 800 patients — in contrast to traditional primary care providers, who typically see about 1,200 to 1,900 patients. Dunlap said it was emotional for him to downsize his patients, and he does give “scholarships” to some patients who can’t afford the monthly fees.

The smaller group of patients is a big part of the reason why the care is so gratifying for patients like Westbrook — those same day appointments, for instance, that the doctor’s looser schedule can accommodate. But that’s also why, even at this lower price point, the direct primary care model isn’t available to most people.

“There are approximately 1,000 [direct primary care] practices in 48 states serving approximately 300,000 U.S. patients,” says Sullivan from Harvard, citing the Direct Primary Care Coalition. There’s less known about how many patients receive care in true “concierge” practices, Sullivan says. There are also many patients seen at hybrid practices, which charge an extra fee for some of the same perks these other models offer but also bill your insurance, like a traditional doctor’s office.

There’s a basic math problem here. If doctors see fewer patients, there would need to be many more primary care doctors practicing in this country for this model to be more widespread. And that’s a tall order, says Sullivan.

“We have issues with access to primary care in this country. We don’t have enough trainees or enough clinicians choosing primary care,” she points out. “To have [providers] suddenly hopping over to this model would continue to probably decrease access for patients to primary care.”

Still, Sullivan appreciates that the promoters of the direct primary care model are experimenting — trying to disrupt a system that needs improvement, where doctors are burned out and patients have long wait times to get appointments.

“Disruption is a nice way of talking about challenging a status quo,” says Dr. Jewel Mullen, associate dean for health equity at Dell Medical School at The University of Texas at Austin. “The question that comes along with it is: for whose benefit?”

She clearly sees the benefit of this type of model for doctors who get to extricate themselves from the overhead and administrative red tape. She’s less convinced of the benefits for patients. After all, it’s another health care contract to parse, on top of figuring out and paying for an insurance plan.

She also worries that patients could get left out — not just because they can’t afford the additional monthly fees. “We need to be cautious in observing whether or not [direct primary care] providers decide to avoid certain patients, and if there’s any cherry-picking that is contextualized with implicit bias,” she says.

The country’s health care system is set up in such a way that the wealthy can pay for better and faster care. In that way, this corner of the system is not unique. NPR’s poll found the vast majority of Americans say people with higher incomes can get better health care — and about half of those people said that was very unfair.

Trump Administration Says Obamacare Lawsuit Can Wait Until After the Election

A three-judge panel from the Fifth Circuit Court of Appeals ruled last month that the individual mandate was unconstitutional, but declined to say what should happen to the rest of the Affordable Care Act. 

Source: The New York Times, by Margot Sanger-Katz

The Trump administration came into office with its top legislative priority clear: Repeal the Affordable Care Act. It failed. Then, when a group of Republican states tried to throw out Obamacare through a lawsuit, the administration agreed that a key part of the law was unconstitutional.

But now that defenders of the law have asked the Supreme Court to settle the case quickly, the president’s lawyers say they are in no particular hurry. The case, which seeks to invalidate the entire health care law, can wait for the lower courts to consider certain questions more carefully, they said in a filing to the Supreme Court on Friday. There is no “present, real-world emergency,” the brief says, that would require the court to rush the case’s progress.

The case argues that changes made to the Affordable Care Act in 2017 make its requirement that most Americans obtain health insurance unconstitutional — and that the provision is so essential to the health care law that the rest of it should be invalidated as well.

The case could have major political implications because the results sought by the Republican states and the Trump administration would cause substantial disruptions. According to estimates from the Urban Institute, around 20 million more Americans would become uninsured because of the elimination of the law’s coverage expansions and protections for Americans with pre-existing health conditions.

The erasure of other provisions of Obamacare would rattle the health system, eliminating consumer protections for health insurance customers; increasing the cost of prescription drugs for Medicare beneficiaries; weakening penalties for health care fraud; reshaping government payments to hospitals, doctors and insurance companies; and undermining an approval pathway for generic versions of biologic drugs, among many changes.

The Republican states on Friday agreed with the Department of Justice. “The lawfulness of the act is undoubtedly a matter of the utmost national importance, but the current petitions do not justify immediate, emergency review by the court,” said their brief, brought by the attorney general of Texas and elected officials in 17 other states.

So far, the Trump administration and the Republican states have been winning in the courts. A Federal District Court judge in Texas agreed with the litigants that the individual mandate was unconstitutional and that the entire law should be overturned along with it.

Last month, a three-judge panel from the Fifth Circuit Court of Appeals ruled that the so-called individual mandate was unconstitutional, but declined to rule on what should happen to the rest of the health law, asking the lower court to devote more analysis to the question. The Texas court’s ruling has been delayed until the case is resolved, and the Trump administration has said it will continue to administer the Affordable Care Act in the meantime.

The litigants’ chances in the Supreme Court are unclear. The five justices who ruled to uphold the Affordable Care Act after an earlier challenge to the individual mandate, in 2012, remain on the court.

A group of Democratic-led states and the House of Representatives, which entered the case to defend the law, have asked the Supreme Court to rule right away, rather than letting the case go back to the lower court and then back to the Fifth Circuit for another look. Their brief, filed last week, emphasized the major stakes of the case, and argued there were negative consequences from the uncertainty caused by the delays. There may also be political reasons for Democratic politicians to want the case on the front burner this year: The legislative assault on the Affordable Care Act in 2017 became a major theme of many successful Democratic congressional campaigns in 2018.

The Supreme Court typically waits to take cases until the lower courts have finished their work. But it could accept the case at this stage if four justices agree it is ripe for legal review. It would take a five-justice majority for the case to be considered on the “expedited basis” that would set up a ruling by the end of the court’s current session in June — before the 2020 election.

Loopholes Limit New California Law To Guard Against Lofty Air Ambulance Bills

Source: California Healthline, by Michelle Andrews

Kathleen Hoechlin lost control as she crested a small jump on her final ski run of the day at California’s Mammoth Mountain two years ago. She landed hard on her back, crushing one of the vertebra in her lower spine “like a Cheerio,” she said.

An air ambulance flew Hoechlin, then 32, to an airport near Loma Linda University Medical Center in Southern California’s Inland Empire. There she underwent emergency 12-hour surgery to remove bone fragments and replace the crushed vertebra with a metal cage that was fused to the rest of her spine with rods and screws to provide structure and stability.

Hoechlin was still in intensive care when her husband, Matt, got the bill for the 300-mile air ambulance ride. The total: $97,269. The company wasn’t in their health plan’s network of providers, and the PPO plan they had through Matt’s job agreed to pay just $17,569.

The Hoechlins were on the hook for the $79,700 balance.

“It was just shocking,” said Hoechlin, who worked as a business analyst project manager in Highland, California. “I was just focused on, ‘Am I going to be able to walk again?’ I thought I was going to have a heart attack when he told me.”

A California law that took effect Jan. 1 aims to protect consumers from such enormous bills for out-of-network air ambulance services. The measure limits what consumers owe if they’re transported by an air ambulance that’s not part of their insurance network to the amount that they’d be charged if they used an in-network provider. The health plan and the air ambulance provider must then work out payment between themselves.

But the new law won’t protect consumers like Hoechlin, whose health plan isn’t regulated by the state. Matt’s employer pays its workers’ medical claims directly rather than buying state-regulated insurance, a common arrangement called “self-funding.” Self-funded plans are regulated by the federal government and generally not subject to state health insurance laws.

In this regard, the new air ambulance law is like laws in California and other states that protect consumers from surprise medical bills: They don’t apply to residents in federally regulated health plans. Those plans cover about two-thirds of people who get insurance through their jobs nationwide.

In California, that translates to nearly 6 million people.

Federal legislation is the best solution for those consumers, experts say. One of the leading bills before Congress to address surprise medical bills includes air ambulance charges. But that, and other measures, are up in the air, although members of Congress say they are working to reach an accord this year.

Another legal wrinkle affects even consumers with health plans the state does oversee. Under the federal Airline Deregulation Act of 1978, states aren’t permitted to regulate the “rates, routes, or services” of air carriers, including air ambulances. It’s unclear whether the California law, which doesn’t spell out a payment rate for a health plan, would be preempted by federal law if challenged in court, according to legal experts.

“It’s a very big step in balance billing, but it’s not a definitive one,” said Samuel Chang, a health policy researcher at the Source on Healthcare Price and Competition, a project of the University of California-Hastings.

Although people rarely need to be transported by a helicopter or airplane for medical care, it’s often an emergency when they do, and they’re unable to shop for an in-network provider, even if their health plan offers one. According to a federal Government Accountability Office analysis of air ambulance private insurance claims, 69% of air ambulance transports were out of network in 2017.

The median price charged in 2017 was $36,400 for a transport by helicopter and $40,600 by plane, according to the report. If an insurer doesn’t have a contract with an air ambulance provider, the air ambulance company may bill the consumer for whatever the insurer doesn’t pay, a practice known as balance billing.

“The air ambulance issue is such a big deal because it’s just such an eye-popping bill,” said Yasmin Peled, the policy and legislative advocate at Health Access California, a consumer advocacy group.

Air ambulance providers defend their charges, saying the rates offered by commercial insurance companies barely cover their costs. And public insurance programs often pay even less.

“Seven out of 10 of our transports are Medicare, Medicaid or uninsured,” said Doug Flanders, director of communications and government affairs at Air Methods, a large air ambulance company that provides services in 48 states, including California. Medicare pays Air Methods an average of $5,998 per transport, and Medicaid payments are typically half of that, Flanders said via email. That presents a “huge financial challenge,” he said.

In recent years, Air Methods has focused on joining the networks of some major insurers, including Blue Shield of California and Anthem Blue Cross of California, Flanders said. In addition to protecting patients, being in network “stabilizes operations and eases the administrative burden of the claims processing procedures created by insurers,” he said.

For the past several years, reimbursements by Medi-Cal, the state’s Medicaid program, for air ambulance services have been bolstered by funds collected from penalties for traffic violations. But the penalty was slated to sunset in 2020. Under the new California law, the state will extend supplemental funding of Medi-Cal payments for air ambulance services until 2022. Without that agreement, the rates would have reverted to much lower 1993 levels.

With the higher Medi-Cal rates, the industry supported the bill, including the prohibition on balance billing. In fact, the California Association of Air Medical Services sponsored the bill, although it didn’t respond to requests for comment.

In contrast, when other states have tried to prohibit air ambulance balance billing, the companies have often successfully challenged those laws on the grounds that the federal Airline Deregulation Act of 1978 prohibits state rate setting, according to Erin Fuse Brown, an associate law professor at Georgia State University who has studied air ambulance billing.

Legal experts say California’s approach may thread the needle where other states have failed.

“I do think the state has a pretty tolerable argument here that they are not regulating rates,” said Christen Linke Young, a fellow at the USC-Brookings Schaeffer Initiative for Health Policy. “They are telling the air ambulance providers who they can go to to get paid, but they’re ultimately not telling the amount that is getting paid.”

Kathleen Hoechlin and her husband, who now live in Riverside, California, eventually negotiated the amount they owed down to $20,000, arguing to the air ambulance firm that by tapping their savings and using money from a GoFundMe campaign, that was all they could afford.

She is now able to walk with only a slight limp. But she continues to deal with severe pain due to nerve damage. She recently underwent a fourth surgery to implant a spinal cord stimulator to interrupt the pain signal to her brain.

“When you look at the bigger picture, at the total amount, we’re feeling very fortunate,” she said.

Newsom to Propose that California Manufacture its Own Generic Drugs

Image: Gavin Newsom

Source: CalMatters, by Judy Lin & Elizabeth Aguilera

In a bold strategy to drive down prescription drug prices, Gov. Gavin Newsom is proposing that California become the first state in the nation to establish its own generic drug label, making those medications available at an affordable price to the state’s 40 million residents.

The proposal, part of the new state budget Newsom is expected to send to the Legislature on Friday, would authorize the state to negotiate contracts with drugmakers to manufacture selected prescriptions on behalf of California. Such a disruption of the pharmaceutical industry, proponents say, would leverage the state’s massive market to increase competition and lower generic drug prices nationally.

The strategy is one of several the Democratic governor plans to recommend to lower the cost of health care for Californians. The administration released only a summary of the proposal on Thursday without the projected price tag, but indicated it’s part of a multi-prong effort that includes strengthening the state’s public option for health insurance and increasing drug pricing transparency.

Newsom will also continue last year’s push to establish a single market for drug pricing, direct the state to ask for more rebates from drug manufacturers, and open a new health care affordability office sometime this spring.

“The cost of health care is just too damn high, and California is fighting back,” Newsom said in a statement. “These nation-leading reforms seek to put consumers back in the driver seat and lower health care costs for every Californian.”

Drug costs have become a persistent and increasing worry, both nationally and in California. Six in 10 Americans take a prescription and 79% say the cost is unreasonable, according to a recent survey by Kaiser Family Foundation.

And prices can affect whether people take their pills. The same Kaiser survey found three in 10 Americans reported not taking their medicine as prescribed due to the cost of the prescription.

Governmentally, health care also consumes a sizable portion of the state budget. California’s Medicaid program for the poor, known as Medi-Cal, now tops $100 billion a year in state and federal spending.

One way to contain costs is to encourage the use of generic drugs instead of brand name medications, whose prices are often elevated by patent protections — necessary, drug companies say, to underwrite the high financial risks of pharmaceutical research and innovation.

The price protections have their own risks, underscored in recent years by high-profile cases of price gouging. In 2015, for instance, Martin Shkreli made national headlines for hiking the price of Daraprim, used to treat parasitic diseases such as malaria, by 5,000%. And in 2017, state attorneys general in New Mexico and Washington opened investigations into whether Eli Lilly conspired with other companies to drive up the price of insulin, a drug that is nearly a century old.

But generic drug prices also have risen, state health officials say — faster than brand name ones in California. According to the Office of Statewide Health Planning and Development, from January 2017 to June 2019, generic drug prices increased 37.6%, while brand name drugs rose by 25.8%.

Those increases in recent years have prompted allegations of price-fixing in the generics industry and federal antitrust lawsuits. Last year, Newsom signed a first-in-the-nation bill deterring “pay-to-delay” agreements in which drug companies pay manufacturers of competing generics to delay the release of less expensive off-brand drugs.

“A trip to the doctor’s office, pharmacy or hospital shouldn’t cost a month’s pay,” Newsom said.

The notion of a government getting into the business of manufacturing drugs is untested, though it has garnered attention among progressive politicians.

Massachusetts Sen. Elizabeth Warren, a Democratic presidential candidate, has proposed legislation to allow the federal government to manufacture prescription drugs when the market fails or prices become too high. Though Warren incorporated that proposal in her presidential platform, pharmaceutical companies have argued that government shouldn’t be in the complex business of developing, manufacturing and distributing medicine, and free-market advocates have contended that the public sector shouldn’t be competing with private companies.

In the U.K., Labour Party leader Jeremy Corbyn has proposed creating a publicly owned company to make generic drugs the country’s National Health Service needs but can’t afford. Corbyn’s proposal, however, is only likely to advance if his party returns to power.

Nor is it clear how substantial a dent a state-manufactured generic program would make in health care costs in California. Generic drugs make up 90% of all prescriptions but account for a fraction of drug spending because they’re so much cheaper than brand-name prescriptions.

Brand-name drugs make up the remaining 10% but account for 70% of all drug spending, according to IQVIA Institute, a health data research firm. So while buying generic drugs can significantly reduce drug costs, Newsom’s approach may not reduce the state’s health spending that dramatically overall.

Generic drug makers said Wednesday that while Newsom’s approach to create a state label is noble, it’s the wrong strategy. Costs are being driven up by brand name drugs, they said, not generics, which, by their calculation, have saved Californians have saved $26 billion.

“If California enters the market itself,” the Association for Accessible Medicines said in a statement, “it will face the same market dynamics that have led to generic prescription drug price deflation in the past three years, as well as certain cases of patent abuse that have led to longer monopolies by select brand-name drugs.”

Representatives for the broader pharmaceutical industry had no immediate comment, though political pushback would be expected. In 2016, drug companies spent more than $100 million to stop a ballot measure that would have barred the state from paying more for prescription drugs than the U.S. Department of Veterans Affairs, which pays the nation’s lowest prices.

Consumer advocates, meanwhile, welcomed the idea.

“This is a potential game changer,” said Anthony Wright, executive director of Health Access California, a statewide health care consumer advocacy coalition. “California has the capacity and the smarts and the scale to actually do it.”

Wright said patient advocates have for years viewed this type of branding as a way to reduce health care costs and put the pharmaceutical industry on notice that California is paying attention.

Peter Maybarduk, who directs the Global Access to Medicines Program at Public Citizen, a progressive, nonprofit consumer advocacy organization, agreed that California’s powerful economies of scale make the proposal worth trying, even though the federal government’s broad jurisdiction on drug laws might pose a challenge.

“It’s much better than not doing it,” he said. “[The state] can offer a very large market that is an inducement to offer better prices and it can offer this contracting system to both inspire new competition and help select the best offers.”

He noted that the public generic manufacturing idea is one of several policy innovations percolating at the state level. Louisiana, for example, is in the process of setting up a “Netflix model” for pricey Hepatitis C treatments by paying a set sum of money to the drug maker for all the state’s needs, versus paying per prescription.

“Those are states taking matters into their own hands because the federal government has not solved the problem,” Maybarduk said.

Health plans were receptive.

“We share the governor’s concerns about tackling the high cost of prescription drugs,” said Mary Ellen Grant, a spokeswoman for the California Association of Health Plans, a trade group that represents health insurers. “If this idea can address that issue, then there’s a lot of potential there.”

Since taking office a little over a year ago, Newsom has made health care a priority by expanding Medi-Cal to undocumented young adults and continuing to champion Obamacare where the federal government has pulled back by requiring all residents to have health insurance. In the new budget, he’s expected to propose extending Medi-Cal to seniors in the country illegally in another step toward health care for all.

His first executive order called for creating a bulk drug purchasing program across state departments to maximize purchasing power and negotiate better rates from pharmaceutical companies.

That meant the state Department of Health Care Services would begin negotiating the purchase of prescription drugs for all 13 million Medi-Cal recipients, or one in three Californians. Prior to that, the state only represented 2 million Medi-Cal recipients, while the rest were placed in managed care health plans that negotiate their own drug rates.

State officials have estimated the change will save California taxpayers $393 million by 2021.

But the plan has created tension between the state and nonprofit health care providers who care for California’s poorest patients. The takeover of the pharmacy benefit in Medi-Cal removes a nonprofit clinic’s ability to buy drugs at reduced costs through a separate federal program.

Undeterred, the Newsom administration is pushing ahead and awarded a contract last month to a firm to manage the new pharmacy benefits.

Jim Mangia, president and CEO of St. John Well Child and Family Center in South Los Angeles, which serves more than 100,000 mostly Med-Cal patients — and which is standing to lose from the pharmacy benefits takeover — called Newsom’s generics idea “interesting and creative,” but cautioned it would be essential to couple it with a proposal to make sure poorer patients can get those low-cost medications.

“The drugs could be cheap,” he said, “but that doesn’t mean there are going to be pharmacies in reach.”

Congress Seeks Drug-Pricing Deal in Spite of 2020 Rancor

Image result for Congress Seeks Drug-Pricing Deal in Spite of 2020 Rancor imagesSource: Bloomberg, by Erik Wasson

In an election year when nobody expects Congress to pass meaningful legislation, lawmakers are feeling strong political pressure to reach a deal on at least one main voter priority: lowering drug prices.

The most likely result could be a small deal that caps out-of-pocket costs for Medicare beneficiaries but leaves more contentious questions of market intervention until after the election.

The issue is one of few that Democrats and President Donald Trump have vowed to address, even with a rancorous impeachment process, fresh tensions in the Middle East and a presidential campaign getting underway. House Democrats already proved that they’re willing to give Trump a major political victory, when they passed his U.S. Mexico-Canada free trade agreement the day after impeaching him.

Any drug pricing bill — and other legislation on issues like ending surprise medical bills and protecting data privacy — would have to go through a similarly rigorous round of negotiations to find the narrow areas of agreement that might have a chance of becoming law in 2020.

Neither the prescription drug bill from House Democrats nor the bipartisan proposal in the Senate Finance Committee has a path forward in a divided Congress, although they could be the starting points for negotiations. John Jonas, a health care lobbyist at Akin, Gump, Strauss, Hauer and Feld, said for any bill to pass this year, it would have to be “to be close to consensus to get through the buzzsaw.”

Government health programs expiring in May give lawmakers one deadline for a possible drug pricing compromise. Republicans oppose the provision in the Democratic bill that would allow Medicare to negotiate drug prices, and instead proposed a package of smaller initiatives to increase market transparency and access to generic drugs.

“You could certainly see a bill coming together that doesn’t significantly change the landscape,” Jonas said. “Stuff on the margin is generally where Congress comes down.”

There is also a political calculation for Democrats who are wary of working with Trump but want to show voters — especially in swing districts won by Democrats in 2018 — that they’re delivering on campaign promises to lower health care costs.

“The big question is who gets credit in the end,” said FTI Consulting managing director Charlene MacDonald, a former House Democratic leadership aide. “Nobody wants to give Trump a win but is there a way to give the especially vulnerable members on the Democratic side a win on drug pricing without scoring points for Trump.”

Open to Compromise

House leaders in both parties say they are open to compromise on major legislation, but a large part of their election-year messaging is based on attacking the other party for being unwilling to cooperate. On drug prices, as on other issues, there are competing incentives to either notch an accomplishment or carry the issue into the next election.

House Majority Leader Steny Hoyer, the chamber’s second-ranking Democrat, said lowering health care costs by containing drug prices and ending surprise medical bills is a top Democratic priority for 2020. A compromise measure to address surprise medical billing was left out of the year-end spending package last month amid a dispute between two key House committees.

“We are going to be working hard in the early part of the year to get that resolved,” Hoyer said in an interview.

Legislation to contain drug prices would save taxpayer money that could be put toward financing the health programs set to expire May 22. But Capital Alpha in a research note to clients this week pointed out that Congress has already paid for a third of the roughly $25 billion needed for a two-year extension.

“Add to that member distraction with impeachment and the elections, and you have a recipe for what’s likely to be a fairly underwhelming set of ‘small ball’ pricing measures,” the group’s Rob Smith and Kim Monk wrote in the report.

Republicans view the the Democrats’ signature drug price bill, H.R. 3, as injecting too much government interference in the marketplace, but there are smaller things that can be done if Pelosi wants to negotiate, according to House Minority Whip Steve Scalise. He cited bipartisan bills to improve price transparency and competition that passed the Energy and Commerce Committee last year but never got a floor vote.

“Where there was an agreement to lower prescription drug prices and Pelosi took parts of that package and made it very partisan,” Scalise said in an interview.

‘Real Balance’

Scalise also said it could be possible to reach an agreement on surprise bills and other issues like data privacy if Democrats embrace approaches that don’t constrain private enterprise.

“I think there is a lot of bipartisan support for protecting the privacy of consumers who are seeing more of their data being used in ways that they had no intent of it being used,” he said. “You can solve that problem without slowing down innovation, and that is the real balance.”

Hoyer also cited possible legislation to protect consumers from the data privacy practices of technology companies like Alphabet Inc.’s Google, Facebook Inc. and Inc. as a goal for House Democrats. The Senate Commerce Committee already unveiled a data privacy proposal to set nationwide rules on how to collect and handle consumer information, in an attempt to preempt states like California.

And Democrats plan to present a “major infrastructure” proposal early in the year, Hoyer said, although it appears to be more of a messaging exercise to remind voters that Trump abandoned a plan for a $2 trillion infrastructure package after refusing to detail how he would pay for it.

“That was one of his pledges, it was one of our pledges,” Hoyer said. “It’s a shame we have not been able to work on it in a bipartisan basis.”

Short Window

There are two periods in 2020 when real legislating could be accomplished: In the spring after Trump’s impeachment trial ends, and in the lame duck session after the November election.

“Based on exceptionally low expectations, we could be pleasantly surprised,” said Jason Grumet of the Bipartisan Policy Center, which seeks to foster cross-party legislating. “Congress has historically been able to have absolutely brutal debates on a Tuesday and then pass a law that they all agree on, on a Wednesday.”

Grumet gave the example of Congress passing a major bill to facilitate medical cures in the 2016 lame duck session despite political acrimony. He said to look for a Senate bill addressing the costs of higher education and student debt, as well as a possible deal on protections for undocumented immigrants brought to the U.S. as children in exchange for border security enhancements.

“If the courts strike down the DACA program down in June that could create some incentives,” Grumet said.

David Castagnetti, partner at the Mehlman Castagnetti Rosen & Thomas lobbying firm and former Senate aide said he is keeping his eye on China trade bills such as restrictions on China’s Huawei Technologies Co. and on how technology companies handle data.

“Privacy issues are certainly going to get their day in the sun in this Congress,” he said. “It probably will be a set up for action in the next Congress, but you never know how quickly things can come together.”

Jonas said that congressional work this year is important to monitor because it will shape any action early in the next administration, regardless of who wins the presidency. He said the Trump tax cuts of 2017 were largely drafted by Republican lawmakers during the Obama administration.

Congress’ Health Agenda Barrels Toward 2020 Buzz Saw

Image result for Congress’ Health Agenda Barrels Toward 2020 Buzz Saw images

Source: Politico, by Adam Cancryn and Alice Miranda Ollstein

Republicans and Democrats have a narrow opening to cut big deals on drug pricing and surprise medical bills and address two key concerns of voters — just in time for 2020 electoral politics to drive them apart.

Congressional leaders are feeling renewed urgency to do something about the high-profile issues, but they fear impeachment and escalating tensions with Iran could swamp the legislative agenda. And on drug pricing, both sides are reluctant to let the other claim victory on a pocketbook issue that recent polling shows ranks high among voter concerns.

The efforts to deliver on these priorities are also colliding with the broader partisan battle over health care that could hold the key to the presidency.

The first test is likely to come within weeks, when a bipartisan group of House members will meet to try to break a lengthy impasse and finalize plans for protecting patients from being charged thousands of dollars if they get out-of-network care. The effort enjoys widespread support but stalled last year amid fierce battles between insurers, employers and well-funded providers over who would pay for a fix.

“The agreement is that something should be done about each of those issues, but there is great debate about what it is,” said Rep. Lloyd Doggett, a Texas Democrat who chairs the House Ways and Means Health Subcommittee. “[2020] is probably more campaign speeches than serious bipartisan policymaking.”

That would be fine with some well-financed interest groups still eager to influence the debate. Doctor Patient Unity — a dark money group largely funded by two private equity-backed physician staffing companies — was the most prominent of the outside groups to spend heavily to influence the surprise billing debate, dropping more than $53 million on ads over the last half of 2019 to attack a leading surprise billing fix, according to Advertising Analytics.

Congressional leaders blocked an effort to revive the legislation as part of a year-end spending package, instead setting a May deadline for lawmakers to work out an agreement.

“A lot of concerns were expressed” by health care interests since the Senate HELP Committee approved a surprise billing fix in June, said Sen. Tim Kaine (D-Va.). “You hold the patient harmless, but then you allocate the responsibility to providers and insurers. And maybe the allocation was a little more okay with the insurers than the providers. Now we’re back to work to see if we can calibrate it to hit the right balance in the allocation of responsibility.”

The new May deadline — tied to the expiration of funding for several health programs — should give House and Senate negotiators time to iron out the details of legislation that can speed through Congress and retain White House support, lawmakers involved said.

Yet it will also invite a fresh round of high-pressure lobbying that could test vulnerable lawmakers in the House, and give skeptics nearly five months to build a case against a compromise.

Speaker Nancy Pelosi in her end-of-year open letter to the House Democratic Caucus said a top 2020 priority is “ending the financial unfairness of surprise billing.” A senior House Democratic aide told POLITICO the letter was a message to the Energy and Commerce and the Ways and Means committees — whose jurisdictional battle over the issue helped derail any potential action in 2019 — to “figure it out and get this done.”

Senate Majority Leader Mitch McConnell, meanwhile, has not yet said whether he’d bring surprise billing legislation up for a vote, even if House and Senate negotiators reach a deal. Senate Democratic Leader Chuck Schumer of New York remains hesitant as well, amid intense pressure from his powerful home state hospital lobby.

“I’m going to do everything I can to keep surprise medical billing on the front burner between now and May,” said Senate HELP Chairman Lamar Alexander (R-Tenn.), who has made resolving the issue a top goal before he retires this year. “It’s a bill almost everyone wants passed, except a handful of people and the private equity firms that benefit from it.”

Congress faces an even bigger partisan gulf on drug pricing as Democrats and Republicans feature the issue prominently in their 2020 health care agendas. A bipartisan proposal negotiated between Sens. Chuck Grassley (R-Iowa) and Ron Wyden (D-Ore.), the chairman and ranking member of the Finance Committee, has gained little traction despite backing from Trump administration officials, with party leaders more intent on accusing each other of inaction as they fight for control of the Senate in 2021.

Senate Republicans led by McConnell balk at a provision in Grassley and Wyden’s bill that would finedrugmakers that hike prices beyond the rate of inflation, deriding it as a path to price controls.

Leadership’s opposition to holding a vote has turned up the acrimony, with Grassley frequently taking to Twitter to try to enlist President Donald Trump’s help and Wyden repeatedly accusing McConnell of shielding the pharmaceutical industry.

Pelosi and top House Democrats, meanwhile, are insisting that any major drug price deal authorize the government to directly negotiate drug prices — a longtime liberal priority that’s a nonstarter with Republicans.

“My view is that if we don’t have negotiated prices, we’re not accomplishing much,” said House Energy and Commerce Chairman Frank Pallone (D-N.J.).

Though some centrist lawmakers have sought to pass narrower bipartisan measures addressing drug pricing that could boost their own congressional campaigns, House Democratic leaders are signaling they’ll spend much of the year touting their ambitious drug pricing overhaul passed last year — and pressuring Senate Republicans to get on board.

Aside from action on those issues, lawmakers say a pile of unfinished health care business and a slew of investigations several committees launched last year will fill out the health care agenda.

Democratic aides expect the results of an inquiry into whether companies are deceptively marketing short-term health insurance policies promoted by the Trump administration — which critics deride as “junk plans” because of the skimpy coverage — to be released within weeks, including data from the open enrollment period that recently ended. Lawmakers also plan to keep investigating CMS Administrator Seema Verma’s use of private contractors, how states are spending the billions of dollars of funding Congress gave them to address the opioid epidemic, and the Trump administration’s treatment of thousands of separated migrant children.

“We want to know what HHS knew and when they knew it,” a senior Democratic staffer told POLITICO.

Trump’s health department has maintained that all of its decisions were proper and in line with long-standing practices.

House committees are also waiting on responses from pharmaceutical companies about why they raised their prices so much over the last few years, from e-cigarette manufacturers about their marketing practices and internal research on the public health impact of vaping, and from private equity firms about their involvement in the campaign to squash surprise billing reforms.

The Trump administration’s recent walkback of past promises to ban all favored e-cigarettes also has Democratic lawmakers in both chambers seeking further legislative action.

But there’s little confidence much will make it through the GOP-controlled Senate, especially as the presidential campaign heats up.

Trump has already made health care a key element of his rallies, boasting about gutting parts of Obamacare while deriding the “socialist” push for a single-payer system. At the same time, Democrats are confident that a combination of touting their policies to expand coverage and lower drug prices with sustained attacks on Republicans’ moves in court and Congress to roll back the Affordable Care Act will yield the kind of results that flipped control of the House in 2018.

“It’s so polarizing,” said Sen. Rick Scott (R-Fla.). “I think people, because it’s so polarizing, are scared to do anything. And they don’t have to right now. There’s no pressure up here.”

Last Updated 01/15/2020

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