Key Takeaways:
- With FY2024 appropriations completed, lawmakers are back for
the spring work period with a loaded agenda but an unclear path
forward. - While there was hope that the spending deal would include
several healthcare proposals, most were excluded from the final
package. - The below list captures the top healthcare priorities that
lawmakers will be focused on going forward, with the key question
being whether Congress can move any legislation prior to the lame
duck session following the election.
Six months into the fiscal year, Congress has finally passed
FY2024 appropriations. It was a painstaking process, which many
expected to include policy victories that both sides could
celebrate. Instead, the spring work period is looking to be another
stretch of hurry up and wait, with no clear legislative vehicles or
deadlines to compel action, and a consequential Presidential
electoral rematch coming into view.
The conventional wisdom is that Congress will punt many of the
pending legislative issues until the lame duck, to avoid
complicated votes and unforeseen political winds that could give
the other side political points to use in the election. The margins
in Congress are exceptionally close and will likely come down to
just a handful of seats in both chambers.
Below, we outline healthcare topics with a high probability for
legislative action. These issues may warrant your attention and
consideration for proactive engagement with lawmakers, whether
legislative movement occurs now or at the end of the year. These
are areas where Congress has devoted considerable time over the
previous 12-24 months, must reauthorize a program, or there is
significant interest in addressing some relatively new and emerging
issue.
ARTIFICIAL INTELLIGENCE
Last fall, the Biden administration issued an executive order to guide federal
agencies on the development and use of artificial intelligence
(AI). This is particularly relevant to healthcare technology, and
the Food and Drug Administration (FDA) reviews of AI-enabled
technologies. This year, a U.S. Department of Health and Human
Services (HHS) Task Force on AI will develop a strategic plan
responsible for the deployment of AI across health settings. On
Capitol Hill, there is a bipartisan Senate AI working group gearing
up to potentially unveil AI legislation. This legislation or
discussion draft would highlight key issues for several, if not all
congressional committees and could accelerate already increasing
attention from Capitol Hill for AI in the health space. It is clear
Congress is prepared to have a more significant role in shaping the
future of AI.
BIOSECURE ACT/CHINA
Congress and the administration are accelerating oversight of
Chinese-related businesses with ties in the U.S., which could lead
to further action later this year. One high-profile bill, the
BIOSECURE Act (S. 3558), would prohibit executive agencies from
procuring or obtaining any biotechnology equipment or service
produced or provided by a “biotechnology company of
concern,” or entering into a contract or extending/renewing a
contract that uses such equipment or service or that will require
the direct use of such equipment or services.
This language has significant implications for healthcare
companies who also engage with the federal government. If passed,
if U.S. companies purchase biotechnology equipment from companies
that may be listed as a biotechnology company of concern, companies
would not be able to receive grants, loans, or direct purchase
contracts from federal agencies. This would extend to grants from
the National Institutes of Health or other HHS agencies, such as
the Administration for Strategic Preparedness and Response (ASPR),
and potentially other loans or direct grants from other federal
entities. A key focus for healthcare stakeholders is how the
legislation will handle current contracts, or wind down active
contracts to minimize disruption to the healthcare industry if
passed.
The Senate Homeland Security and Government Affairs Committee
held a markup in March 2024 on the bill, and lawmakers are
signaling they will attempt to advance the bill later this year.
One potential vehicle for the bill is the National Defense
Authorization Act (NDAA), which has been a vehicle for other
policies that addressed Chinese-related ties to U.S. businesses or
contracts.
DRUG SHORTAGES
There are currently 130 drug products in shortage on the FDA
drug shortages list. These products are critical to patients, and
Congress and the administration appear deeply engaged on this issue
as of late. Congress has spent months debating how to address drug
shortages, including holding hearings in September and December
2023 to directly examine the challenges. House Democrats sought to
include several drug shortages bills in the pandemic preparedness
reauthorization, which has since stalled due to objections over the
scope of the package. FDA Commissioner Robert Califf is testifying
before the House Oversight Committee on April 11, 2024. He will be
asked about FDA’s role and progress in mitigating drug
shortages, especially now that House Oversight Democrats are two
months into their investigation into various drug shortages.
HHS unveiled a white paper on preventing drug shortages on April
2, 2024 and is working with the Federal Trade Commission (FTC) on a
request for information on the root causes of
and potential solutions to drug shortages. This reflects some
urgency and recognition that more must be done to improve the
nation’s supply chain as it relates to drug products.
HEALTHCARE EXTENDERS
The healthcare extenders, which consist of funding for Community
Health Centers (CHC), the National Health Service Corps (NHSC),
diabetes programs, delaying disproportionate share hospital (DSH)
cuts, and teaching health centers graduate medical education
funding (THCGME), are a regular vehicle for legislative action
since these programs largely enjoy strong bipartisan support. They
had been operating on an extension since October, but a short-term
extension was included in the first tranche of FY2024
appropriations, with notable increases and a delay in DSH cuts for
safety net hospitals. All these programs are ‘extended’
through December 31, 2024, setting up for another, dare we say it,
end-of-year package.
HEALTHCARE TRANSPARENCY & PBM REFORM
Despite a high degree of bipartisan support, advancing
healthcare transparency and pharmacy benefit management (PBM)
reform has proven difficult. The House overwhelmingly passed the
Lower Costs, More Cures Act (H.R. 5378) in December 2023 by a vote
of 320-71, and the Senate Finance Committee (S. 2973) and the
Senate Committee on Health, Education, Labor, and Pensions (HELP;
S. 1339) unanimously approved their respective PBM/transparency
packages out of committee. These bills look to increase price
transparency and oversight across the health system, and prohibit
practices such as spread pricing, or by de-linking how much PBMs
profit off the list price of a drug. There is growing urgency to
advance this healthcare package after it was not included in the
FY2024 spending deal, but it is not clear if there will be enough
consensus to move this bill as a standalone package before the
election.
MEDICARE PAYMENT CUTS
In the FY2024 funding deal, Congress agreed to reduce the 3.37%
physician pay cut by about half, or 1.68%, that took effect in
January. This correction was pursued by virtually all provider
groups, and a large cohort of lawmakers, since the Biden
administration finalized the pay cut last year. Payment adequacy is
a top issue for providers, considering the challenges facing
physicians across specialties to uphold access for Medicare
beneficiaries. This has led to a persistent drum beat from
lawmakers to reform the physician payment process. With several
senior lawmakers who sit on key health committees retiring this
year, Medicare payment reform is an area to monitor closely. In
fact, the Senate Finance Committee is holding a hearing on April
11, 2024 on Medicare physician payment and chronic care.
MENTAL HEALTH
Efforts to improve access to mental health services in Medicare
and Medicaid were included in the Senate Finance Committee’s
work in 2023. The Better Mental Health Care, Lower-Cost Drugs, and
Extenders Act (S. 3430) includes proposals to incentivize
physicians and states to maintain or improve access to mental
health services. Such provisions include expanding eligibility for
Health Professional Shortage Area payment, expanding coverage in
Medicare for health behavior assessment and intervention services
when provided by clinical social workers, and directing HHS to
clarify the use of telehealth. It also requires Medicare Advantage
plans to maintain up-to-date provider directories on its websites
beginning in plan year 2026.
In 2023, the HELP Committee signaled interest in increasing
eligibility for loan repayment programs for certain mental health
professionals. In a draft workforce package, committee Democrats
included the Mental Health Professionals Workforce Loan Repayment
Act of 2023 (S. 462), which acknowledges the multidisciplinary
nature of substance use disorder treatment and mental healthcare.
Improving access to mental health services will remain a top
healthcare priority for Congress this year.
OLDER AMERICANS ACT REAUTHORIZATION
A bipartisan group of senators unveiled a request for
information (RFI) in March 2024 launching the effort to reauthorize
the Older Americans Act (OAA), which is set to expire September 30,
2024. OAA is an essential bill that authorizes funding for services
for older adults and individuals with disabilities, family
caregivers, and those living in nursing homes. These services
include nutrition, workforce, and other healthcare services. The
COVID-19 pandemic transformed how services are delivered through
the OAA, and a key question for lawmakers is how those
flexibilities may continue in the next reauthorization of the OAA.
Stakeholders are also exploring other proposals to increase the
direct care workforce, address loneliness, and other solutions to
ease access to older adults in need of these services.
PANDEMIC PREPAREDNESS
The Pandemic and All Hazards Preparedness Act (PAHPA) was first
signed into law in 2006 to scale up the federal government’s
response to a variety of emergencies. The COVID-19 pandemic brought
renewed interest and urgency to the legislation, specifically
regarding how to modernize and strengthen federal emergency
response programs, like the Strategic National Stockpile (SNS),
Project Bioshield Special Reserve Fund (SRF), and the Public Health
Emergency Medical Countermeasures Enterprise (PHEMCE). However, the
bills authorization expired September 30, 2023.
While the continuing resolution included funding for certain
PAHPA programs, most of the program’s authorizations await
further Congressional action. Both chambers have passed their
respective reauthorization bills out of committee but have been
unable to align on the scope of the package, such as how to include
proposals to address drug shortages in the final package.
RARE PEDIATRIC DISEASE PRIORITY REVIEW VOUCHER
Congress has until September 30, 2024, to reauthorize the rare
pediatric disease priority review voucher (PRV). The PRV was first
authorized in 2006 to award priority review vouchers to sponsors of
rare pediatric disease product applications that meet certain
criteria. If Congress does not reauthorize this program by
September 30, 2024, the FDA may only award a voucher for an
approved rare pediatric product application under limited
circumstances. Congress unveiled bipartisan legislation in February
2024, the Creating Hope Reauthorization Act of 2024 (H.R. 7384), to
extend the program through FY2029.
SUPPORT ACT REAUTHORIZATION
In December 2023, the House advanced the Support for Patients
and Communities Reauthorization Act (H.R. 4531), which reauthorizes
funding for substance use disorder (SUD) prevention and response.
The HELP Committee advanced its own version of the reauthorization
(S. 3393) out of committee, but it is not clear when the Senate
will move to advance the bill out of the chamber or align with the
House bill. One provision of the House bill, to lift the
Institutions for Mental Disease (IMD) Exclusion, was recently
included in the FY24 appropriations package. However, the rest of
the SUPPORT Act reauthorization was not included in the latest
spending deal.
The Senate Finance Committee Health Subcommittee is holding a
hearing on April 9, 2024 on improving SUD care in federal
healthcare programs.
TAX DEAL
In a Congress light on legislative activity, key lawmakers
drafted and swiftly approved the Tax Relief for American Families
and Workers Act of 2024 (H.R. 7024), which passed the House in
January 2024. The bill includes an increase in the child tax credit
and permits businesses to immediately deduct the cost of their
domestic R&D investments instead of over five years. It also
extends the allowance for depreciation, amortization, or depletion
in determining the limitation of the business interest deduction.
To offset the $80B cost of the legislation, the bill moves forward
the Employee Retention Tax Credit claim submissions deadline from
April 15, 2025, to January 31, 2024, meaning claims after this date
will no longer be accepted.
It is unclear when the bill will be advanced in the Senate, or
if it will be added to the end-of-year queue. The bill faces an
uncertain path forward in the Senate due to objections from senior
members of the Finance committee, who have raised concerns with the
child text credit provisions.
TELEHEALTH EXTENSION
The COVID-19 public health emergency legislation included
several steps to expand telehealth. Many of these Medicare
telehealth flexibilities were extended through 2024, such as
allowing beneficiaries to receive telehealth services in their home
or eliminating the requirement of an in-person visit prior to a
telehealth visit. Absent action from Congress, these flexibilities
will expire on January 1, 2025. There are several bills in Congress
to permanently extend these telehealth flexibilities, most notably
the CONNECT for Health Act (S. 2016/H.R. 4149), which would expand
Medicare telehealth coverage and make permanent certain COVID-19
telehealth flexibilities.
The Energy & Commerce Health subcommittee is holding a
hearing on April 10th on legislative proposals to support patient
access to telehealth services and has listed 15 telehealth bills
for consideration.
BONUS: DEBT LIMIT
If there was not already enough to do between now and the 119th
Congress, the debt limit deal agreed to last year is coming back
into view. That deal suspended the debt limit until January 1,
2025, meaning Congress could look to the lame duck to further
suspend the limit or actually raise the limit, which gives the
Treasury Department more concrete direction with a set debt limit.
The risk of default will not be realized on January 1, 2025, but if
left unaddressed, it will be a top political issue for 2025 which
will implicate a host of other issues, including the budget, as it
did in 2023. That said, Congress is unlikely to proactively address
the debt limit and complicate what is shaping up to be a loaded
lame duck session.
CLOSING
The end of the 118th Congress could be one of the more
productive lame duck sessions in recent years, due to many pending
items left unaddressed, a record number of retirements, and a
growing list of urgent priorities for senior lawmakers. As Congress
returns for the spring work period, a key question is whether there
will be any momentum to legislate prior to the lame-duck session,
and what steps can be taken to position these priorities for
action.
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