Federal Issues

Duke Health Government Relations continues to engage lawmakers in the 116th Congress on key health care issues impacting Duke, including those listed below. Please email us if you would like to be engaged on these issues. For the most up to date information, please subscribe to our newsletter and follow us on Twitter

FEDERAL APPROPRIATIONS AND THE BUDGET

What’s at stake?
Federal funds help promote Duke Health’s multiple missions of research, education, and patient care. The National Institutes of Health (NIH) is one of the primary sources of federal funding for biomedical research at Duke.

What’s happening now? 

Following the enactment of two short-term continuing resolutions to fund the government since the start of the fiscal year on October 1, 2019, Congress finally approved a $1.4 trillion spending package for FY 2020. The spending bills were signed into law in two packages on December 20, 2019, with one measure funding national security and defense and the other funding mostly domestic programs. 

The FY 2020 spending bill for the Departments of Labor, Health and Human Services (HHS), and Education provided $41.7 billion for the NIH, an increase of $2.6 billion above the FY 2019 level, including $25 million to the NIH and the Centers for Disease Control and Prevention to study gun violence. Among many other things, the package also:

  • delayed reductions in the Medicaid Disproportionate Share Hospital (DSH) program through May 22, 2020 (scheduled cuts total $4 billion in FY 2020 and $8 billion in FY 2021);
  • provided a 10-year reauthorization for the Patient-Centered Outcomes Research Institute;
  • permanently repealed the Cadillac tax on expensive employer health plans, the 2.3 percent tax on medical devices, and a health insurance tax;
  • makes it easier for generic drug companies to obtain samples of brand-name drugs; and
  • raised the age to buy any tobacco-related product to 21.

The President's FY 2021 budget request is expected to be released on February 10, 2020.
 

MEDICARE SUPPORT FOR GRADUATE MEDICAL EDUCATION (GME)

Physician shortage continues to rise, as the population ages and grows every day. Medicare currently has a 23-year old cap on support for training new physicians, which does not reflect the needs in addressing the shortage. In addition, teaching hospitals incur additional costs in training future physicians in treating complex patients on the cutting edge of new treatments and care (indirect medical education or IME). 

Bipartisan GME legislation has been introduced in both the House of Representatives (H.R. 1763) and the Senate (S. 348) that would increase federal support for physician training by adding an additional 3,000 Medicare-supported residency positions each year for five years. Unlike the Senate bill, the House bill would distribute one third of the new positions to hospitals that already exceed their Medicare-funded residency cap by at least 10 residents. Under the bill, Duke Health would benefit from the priority order in which the Centers for Medicare and Medicaid Services (CMS) would allot new slots, including to hospitals training over their caps and hospitals affiliated with Veterans Affairs medical centers.

Duke Health Government Relations supports lifting the cap on Medicare GME to help address the shortage and continue support for GME and IME payments to teaching hospitals. 

 

MEDICAID AND MEDICAID DSH PAYMENTS

Medicaid is the largest health insurance program in the United States, and hospitals provide care for a large number of these patients, despite low reimbursement rates. Medicaid DSH payments help to alleviate the burden for caring for the large number of Medicaid and uninsured patients, but these payments are at risk of being cut by $4 billion in FY 2020 (increasing to $8 billion a year in FY 2021-2025).

The House Energy and Commerce Committee has recognized the importance of Medicaid DSH payments and advanced bipartisan legislation in the summer of 2019 to repeal the scheduled Medicaid DSH cuts for FYs 2020 and 2021 and reduce the burden of the cuts in FY 2022. The spending deal enacted in mid-December 2019 included delayed reductions in the Medicaid DSH program through May 22, 2020.

Duke Health Government Relations will push to protect coverage for Medicaid beneficiaries; ask that Congress maintain the commitment to spending on medically necessary care; and ask Congress not take actions that result in less care, reduced payments for safety net providers, or undermine the ability to treat Medicaid and uninsured patients. 

 

SURPRISE BILLING

In mid-December 2019, the House Energy and Commerce Committee and Senate Health, Education, Labor and Pensions Committee Chairman Lamar Alexander (R-TN) released a compromise surprise billing deal that aims to protect patients from surprise billing and establish a federal benchmark payment with an option to go to arbitration for disputes over $750. The House Ways and Means Committee quickly followed with its own new agreement to address surprise bills, although in neither case was legislative text made available for review. No action was taken on either proposal before the end of the year.
 

DRUG PRICING

In 2019, the Senate stalled on how to proceed with drug legislation after the House passed a comprehensive package aimed at lowering prices. In December, the House approved H.R. 3 by a vote of 230-192 to:

  • require the HHS Secretary to negotiate the prices of at least 50 and up to 250 of the most costly drugs to Medicare and the entire U.S. health system that do not have competition from at least one generic or biosimilar on the market.
  • cap the maximum price for any negotiated drug at 120 percent of the average price charged in six industrialized countries that typically pay less than the United States.
  • create significant penalties for drug manufacturers who refuse to participate in the drug pricing negotiation process or fail to reach agreement with HHS.
  • limit price increases for Medicare Part B and Part D drugs to the rate of inflation and create a Medicare Part B and D inflation rebate.
  • mandate an annual $2,000 cap on Medicare beneficiaries’ out-of-pocket prescription drug expenses.
  • require that savings from drug price negotiations be reinvested in the NIH.

While neither drug pricing nor surprise billing were included in the end-of-year appropriations packages, it is possible that one or both issues could be attached to any must-pass health program extension in May, when funding for several health programs expires. The potential savings that major legislation on either issue could produce are key to funding relief from DSH cuts and other extender priorities.