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 RESPONSE TO COVID-19

Congress has approved three emergency spending packages to address the federal, state, and local response to the COVID-19 virus.

On March 6, 2020, Congress approved and the president signed into law a bipartisan measure that would provide $8.3 billion in emergency aid spending, including:

  • $2.2 billion, available through September 2022, for the Centers for Disease Control and Prevention (CDC), including:
  • $950 million in grants and cooperative agreements for state/local surveillance, epidemiology, laboratory capacity, infection control, mitigation, communications, and other preparedness and response (including $475 million that would be available within 30 days of enactment).
  • At least $300 million for global disease detection and emergency response.
  • $300 million for the Infectious Diseases Rapid Response Reserve Fund.
  • The ability for CDC to use such funds to support grants for construction, alteration, or renovation of non-Federally owned facilities to improve state/local preparedness and response capability.
  • $836 million, available through September 2024, for the National Institutes of Health, including:
  • $826 million for the National Institute of Allergy and Infectious Diseases (NIAID) to prevent, prepare for, and respond to coronavirus domestically or internationally.
  • $10 million transferred from NIAID to the National Institute of Environmental Health Sciences for worker-based training to prevent and reduce exposure of hospital employees and other first responders.
  • $3.1 billion, available through September 2024, for the Public Health and Social Services Emergency Fund to support, among other activities:
  • Development and purchase of necessary countermeasures and vaccines. Purchase of vaccines, therapeutics, diagnostics, and necessary medical supplies, including for potential deposit in the Strategic National Stockpile (with an additional $300 million in contingency funding to purchase additional products if needed).
  • Grants for construction, alteration, or renovation of non-Federally owned facilities to improve state/local preparedness and response capability.
  • $61 million, available until expended, for the Food and Drug Administration to support:
  • Development of medical countermeasures and vaccines. Advanced manufacturing for medical products.
  • Monitoring of medical supply chains.
  • Authority for the Secretary of Health and Human Services to waive, under the public health emergency declaration for the novel coronavirus, certain current telehealth requirements by the Centers for Medicare and Medicaid Services.

The president signed into a law a second coronavirus-related relief package, the Families First Coronavirus Response Act (H.R. 6201), on March 19, 2020. The legislation eliminates patient cost-sharing for COVID-19 testing and related services, establishes an emergency paid leave program, and expands unemployment and nutrition assistance. Moreover, the package provides a temporary increase in the Medicaid Federal Medical Assistance Percentage (FMAP), enabling states to apply for temporary waivers to cover COVID-19 testing for the uninsured through the Medicaid program, and provides $1 billion in testing for the uninsured. 

On March 25, the Senate approved by a vote of 96-0 a third, $2 trillion emergency relief package (CARES Act) that includes, among many other things, $100 billion for hospitals and $945 million for the National Institutes of Health to support COVID-19 research. The House approved the bill by voice vote on March 27, and the president is expected to sign it immediately.

Some details from the final bill include: 

  • Provide $100 billion to reimburse eligible health care providers for health care-related expenses or lost revenues not otherwise reimbursed that are directly attributable to COVID-19.
    • Eligible providers are defined as public entities, Medicare- or Medicaid enrolled suppliers and providers, and other for-profit and non-profit entities as specified by the HHS Secretary.
    • Funding would be on a rolling basis through “the most efficient payment systems practicable to provide emergency payment.”
  • Provide $945 million for NIH to support research at NIH on COVID-19 for activities to expand on prior research plans.
  • Eliminate the Medicare sequester from May 1 through Dec. 31, 2020.
  • Provide a 20% add-on to the DRG rate for patients with COVID-19 during the emergency period.
  • Expand the existing option for hospitals to request and receive "accelerated" Medicare payments.
  • Eliminate the FY 2020 DSH cuts and reduce in half (to $4 billion) the scheduled FY 2021 DSH cuts to begin December 1, 2020.
  • Provide zero liability for volunteer health care professionals during the COVID-19 response as long as no act or omission potentially causing harm was done willfully, recklessly, or under the influence.
  • Reauthorize Health Professions Workforce Programs and Nursing Workforce Development Programs
  • Provide $150 billion for state and local governments, with $8 billion set aside for local governments, in a coronavirus relief fund (we will watch for guidance when this begins to be drawn down).
  • In the last 24 hours, the Senate has twice failed to vote on a procedural motion that allows it to move to debate on the massive third stimulus bill. Negotiations are ongoing, and if the Senate Democrats can reach a deal with the Treasury Secretary, debate and a final vote will be accelerated. A bill would then go to the House for a vote.

On March 23, 2020, House Democrats introduced their version of a third package, and some of these provisions made it into the final bill. Specifically, that proposal would have:

  • Provide $100 billion for hospitals to reimburse health care related expenses or lost revenue directly attributable to the public health emergency resulting from coronavirus
  • Establish a loan program to help eligible health care organizations with anticipated revenue loss or higher operating costs as a result of COVID-19.
  • Eligible health care organizations include hospitals, critical access hospitals, skilled nursing facilities, physician practices, home health providers, community health centers, ambulatory surgical care center, or hospices that participate in Medicare or Medicaid.
  • Provide $800 million to expand COVID-19-related research on the NIH campus and at academic institutions, including on vaccines, treatments, diagnostics, and complications of the virus.
  • Require states and local governments, labs, and health systems to report real-time data coronavirus testing results, including both positive and negative results.
  • Provide that hospitals can qualify for tax credits for charity care they provide and for creating or expanding facilities to handle the COVID-19 patient load.
  • Prevent the HHS Secretary from finalizing the Medicaid Fiscal Accountability Rule (MFAR).
  • Eliminate Medicaid DSH cuts in FY 2020 and reduce cuts in half in FY 2021.
  • Temporarily increase Medicaid DSH allotment to 2.5 percent during emergency period.
  • Require OSHA to issue “an emergency temporary standard to protect from occupational exposure” to the coronavirus. The rule would apply to workers in the health care sector, first responders; and anyone the CDC identifies as having an elevated risk of infection. All covered employers would have to develop “a comprehensive infectious disease exposure control plan,” and within two years, the Department of Labor would have to issue a permanent rule protecting these workers from other “occupational exposure to infectious pathogens.”
  • Create a mechanism automatically increasing a state’s FMAP if a state experiences an increase in the state unemployment rate.
  • Provide a one percent increase to FMAP for telehealth services for state Medicaid programs that cover telehealth services.
  • Renew the Medicare payment rate floor for primary care services furnished under Medicaid for the duration of the public health emergency.

What’s happening now? 

Attention will turn to the administration of this massive legislative package, which will infuse almost 10% of the nation’s GDP into the economy in less than a month. This will be a momentous task that will involve every agency of the federal government, as well as states and localities. We also expect that, even while away from Washington, DC, talks will soon begin around "Phase Four" legislation to cover aspects of stimulus and recovery spending that were not fully addressed in the current effort.

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) and the Department of Defense Medical Research Program are two 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, funding the government through September 30, 2020, with one measure funding national security and defense and the other funding mostly domestic programs. 

 

The President's FY 2021 budget request was released on February 10, 2020, and as in previous years, the Trump Administration proposed slashing funding for programs of importance to academic medicine, including the National Institutes of Health (NIH), the Health Resources and Services Administration (HRSA) Titles VII and VIII health professions and nursing workforce programs, as well as proposing significant cuts to Medicare Graduate Medical Education (GME) funding and other Medicare and Medicaid funding streams.

 

While Congress has historically rejected the proposed budget, it provides insight into the Administration’s priorities.

 

Congress has kicked off the FY 2021 budget and appropriations process with hearings, and despite delays due to the ongoing COVID-19 public health emergency, Congressional leaders hope to maintain a relatively normal appropriations schedule in the late spring and early summer.

 

Our office will continue monitoring the federal Congressional budget and appropriations process as more details are released and hearings are scheduled.

 

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.

With passage of the third emergency relief package, Medicaid DSH cuts scheduled for FY 2020 were eliminated, and the $8 billion scheduled cuts in Medicaid DSH payments for FY 2021 were reduced to $4 billion in cuts to begin December 1, 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 the outline of 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 also followed up with an outline of its surprise billing proposal with plans to mark up legislative text in 2020.

In February 2020, the House Education and Labor Committee approved its version of surprise billing legislation, the Ban Surprise Billing Act (H.R. 5800). The bill draws upon the outline released by the Senate HELP and House Energy and Commerce Committees, relying on a federal benchmark payment to settle disputes between insurers and providers. For bills over $750, providers and payers could appeal to an independent arbiter. The legislation would also bar air ambulance services from sending surprise bills while allowing disputed air ambulance costs above $25,000 to be appealed to an independent arbiter. The Committee approved the bill by a vote of 32-13, with Ranking Member Virginia Foxx (R-NC-05) voting no and Rep. Greg Murphy (R-NC-03) voting yes. 

Also in February 2020, the House Ways and Means introduced and approved by voice vote its version of surprise billing legislation, which includes a mediation process to settle disputes when insurers and out-of-network providers cannot agree on a payment rate. The bill does not contain language related to air ambulances.

House Democratic leaders must reconcile the competing House bills if they hope to bring a compromise to the floor this spring, as well as prepare for negotiations with the Senate. Duke Health has been working with Duke Life Flight to promote alternative language related to air ambulances in any final compromise bill.

Surprise billing is among the issues expected to be addressed following Congress’s work on COVID-19 stimulus legislation and could be an addition to any bill reauthorizing several health programs whose funding expires on November 30, 2020.

 

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 November, when funding for several health programs expires as a result of the third COVID-19 emergency relief package. The potential savings that major legislation on either issue could produce are key to funding relief from DSH cuts and other extender priorities.