5 Health Care Policy Issues To Follow In 2018

We hope you recharged over the holidays, because we expect health care policy to remain at the forefront as the 115th Congress enters its second session. Both chambers returned on Wednesday after which they will have a scheduled 108 days in the U.S. House of Representatives and 156 days in the U.S. Senate before the mid-term elections. While congressional Republicans safely hold the majority, we anticipate strong efforts to advance their legislative agenda.

Here are the top five health care policy issues to watch for in 2018:

Affordable Care Act "Repeal and Replace"

Expect Congress to make at least one last push to repeal the Affordable Care Act. While Republicans made strides in 2017, they have not fully delivered on their campaign trail promise to "repeal and replace" the ACA.

Congress ended the year by repealing the individual mandate, a central element of the ACA. Under the Tax Cuts and Jobs Act (TCJA), starting in 2019, the penalty for an individual's failure to maintain minimum essential coverage will be reduced to zero. House Speaker Paul Ryan, R-Wis., has vowed to continue pursuing full-scale repeal in 2018, as many of the conference's key priorities remain.

In addition to ACA repeal, we anticipate that Congress will consider legislation that would stabilize the ACA individual marketplace early in 2018. Sen. Susan Collins, R-Maine, had conditioned her vote on the TCJA on passage of two market stabilization bills – the Bipartisan Health Care Stabilization Act and the Federal Reinsurance Act – before the end of 2017. Given the tight timeline and a potential government shutdown right before Christmas, she agreed to push the measures to January.

It is likely, however, that health care reform will face similar challenges as experienced this year, including partisan tensions and intraparty disagreements. Further complicating efforts is Republicans' narrowed majority, with Sen. Doug Jones, D-Ala., replacing Sen. Luther Strange, R-Ala., in the chamber. Even if leadership chooses, once again, to pursue reforms through budget reconciliation – which requires 50 votes in the Senate (as opposed to 60) – Senate Republicans will be able to afford only one defection.

Entitlement Reform

Another contender for budget reconciliation is entitlement reform, which Ryan has indicated that he plans to pursue in 2018. The Medicaid program, which is projected to account for approximately $385 billion of federal spending in 2017, will be a prime target.¹

We expect to see policies aimed at controlling federal spending and shifting authority from the federal government to the states. Proposals will likely be similar to those included in the House-passed American Health Care Act and other ACA repeal and replace measures, such as phasing down Medicaid expansion, as well as shifting Medicaid financing from a federal-state match to a state block grant or per capita allotment.

Prescription Drug Pricing

The rising cost of prescription drugs has intensified, drawing attention and fire across the political spectrum and in the media. This year, legislators introduced over 25 bills and several congressional health care and oversight committees held hearings to investigate the issue. We expect that congressional attention on this issue will continue in 2018.

While the parties have generally not been aligned on drug pricing reforms, proposals aimed at increasing competition have attracted bipartisan interest. The U.S. Food and Drug Administration Reauthorization Act of 2017, which nearly unanimously passed both chambers, codified an expedited pathway for certain generics if the secretary determines that there is "inadequate generic competition." Additionally, during a recent Senate Health, Education, Labor, and Pensions Committee hearing, bipartisan members voiced support for addressing anti-competitive practices in bringing generics and biosimilars to the market, as well as prohibiting pay-for-delay agreements.

340B Drug Pricing Program

2018 could be the year that Congress enacts reforms to the 340B Drug Pricing Program. Over the past several years, the 340B program has been marked by considerable uncertainty, driven, in part, by tension over the intent of the program and debate over the Health Resources and Services Administration's (HRSA) oversight and regulatory authority over the program.

The House Energy & Commerce Committee has taken the lead on 340B reform, with its Oversight Subcommittee expected to release a report on 340B early next year. Committee members, Reps. Chris Collins, R-N.Y., and Buddy Carter, R-Ga., have been developing comprehensive 340B reform legislation, which could codify many unresolved issues, including the scope of HRSA's oversight and regulatory authority, the definition of a "patient," and the original intent of the 340B program.

More immediately, if not addressed before the end of this year, we anticipate efforts to roll back CMS's 2018 outpatient prospective payment system (OPPS) final rule, which starting on Jan. 1, 2018, will reduce reimbursement for certain separately payable, non-pass through Part B drugs purchased under the 340B program. Legislation, which would block implementation of the Medicare payment cuts for drugs purchased under the 340B program, has strong bipartisan support.²

Opioids

Rates of opioid misuse and addiction continue to skyrocket, with the National Institute on Drug Abuse (NIDA) estimating that over 91 Americans die from an opioid overdose each day.³ The White House declared the opioid epidemic a national emergency in October, and there is broad agreement among policymakers that increased funding and policy solutions are needed.

Two signature achievements of the 114th Congress – the Comprehensive Addiction and Recovery Act (CARA) of 2016 and the 21st Century Cures Act – authorized federal grants to states to supplement opioid abuse prevention and treatment activities, including improving prescription drug monitoring, training for health care providers, and expanding access to opioid treatment programs. The 21st Century Cures Act provided funding authorization for such programs during the 2017 and 2018 fiscal years.

Senate Health, Education, Labor, and Pensions (HELP) Committee Chair Lamar Alexander, R-Tenn., has called for additional funding, though it remains unclear how much Congress will authorize and appropriate. In addition to funding, we expect lawmakers to explore policy solutions, which could include requiring health care providers who prescribe opioids to complete continuing education, expanding the Drug Enforcement Administration's enforcement authority, and strengthening requirements for state prescription drug monitoring programs.

Potential Legislative Vehicles

There will be no shortage of legislative vehicles for these policies, as several federal health care programs will be up for reauthorization next year. Programs set to expire at the end of the 2018 fiscal year include:

Pandemic and All-Hazards Preparedness Act

Legal authorities designed to prepare the United States and health professionals for pandemic, epidemic or biological, chemical, radiological, or nuclear accidents and attacks are set to expire at the end of fiscal year 2018. The Pandemic and All-Hazards Preparedness Reauthorization Act of 2013 improved the nation's preparedness for public health emergencies. However, our vulnerability to natural and intentional public health threats remains high, as evidenced by the Ebola and Zika outbreaks and reports of enhanced biological weapon capabilities by state actors such as North Korea, combined with the challenge of increased antimicrobial resistance. Congress will need to turn to funding for medical countermeasures such as vaccines, drugs, therapies and diagnostic tools necessary to address public health emergencies and programs that protect Americans and the global community from health security threats.

President's Emergency Plan for AIDS Relief

The creation of the president's Emergency Plan for AIDS Relief (PEPFAR) in 2003 was a landmark in bipartisan congressional commitment to combatting the global HIV/AIDS, tuberculosis and malaria epidemics. Congress reauthorized the program with bipartisan support in 2008 and 2013. PEPFAR funding constitutes the bulk of U.S. global health funding of global health programs and reflects the largest commitment by any nation to address a single disease in the world. The current strategy aligns with the United Nation's AIDS framework, focuses on reducing HIV infections among adolescent girls and young women in 10 sub-Saharan African countries, and emphasizes accelerating testing and treatment strategies, expanding prevention, engaging with faith-based organizations and the private sector, and strengthening policy and financial contributions by partner countries. Program authorities expire at the end of this fiscal year.

Health Care Workforce Programs

Several key health care workforce programs administered by the Health Resources and Services Administration under the Public Health Service Act have expired, and are likely to be reauthorized in 2018. These include health professions and nursing workforce development programs, the Children's Health Graduate Medical Education program, and the Teaching Health Center Graduate Medical Education programs. These programs have traditionally enjoyed bipartisan support in both chambers.

We hope you got some rest, 2018 is sure to be a busy year for health care attorneys.

© Arnold & Porter Kaye Scholer LLP 2019 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.