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Federal Health Policy Updates for the Week of October 26, 2020

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We're down to the last two days of early voting in NC (October 30-31)!
Learn more at https://vote.duke.edu/.

SPECIAL EDITION
This edition of the newsletter has been challenging, not because we don’t have plenty of insights to share about this election and implications for public policy impacting the health system and our communities, but rather that we may have too many. While the immediate path forward is uncertain and the divergent paths from November 4th are precarious and varied, we are going to share our best non-partisan policy insights on what we expect post-election.

One quick reflection on voting from your Duke Health government relations office: while it’s been said that this may be the most important election of our lifetimes, the truth is that has been the case for every election before now and for every election yet to come. We want to remind you once more about the important voting resources available to you at https://vote.duke.edu/resources/.

There is a growing energy and sense of anticipation about what this election means for us as individuals, as communities, and as Duke Health. In addition to all the information available to you, please don’t hesitate to call on our office as a resource to you. And please join us for the Duke Health Post-Election Briefing on November 10 to talk in more detail about what happened and what’s next (more details in the Events section below).

For now, let’s dig in on what we know and what we might expect…

The Issues
It is tempting to just write “everything” here, but we have decided to focus on the most relevant post-election issues through roughly the first 100 days of a new Congress and Administration.

No matter who wins next week, the current Congress will reconvene after the election to address important priorities and begin new member orientation in preparation for the new Congress in January.

Two agenda items that feel certain to receive attention are decisions on FY 2021 funding and the next round of COVID-19 relief. The scope of everything else will be dependent on who may be gaining or losing power heading into next year.

Below is a non-exhaustive list of issues we reasonably anticipate to be on the agenda over the next six months.
 

Federal research funding
(FY 2021-22)
340B Access to healthcare/ACA
COVID-19 (vaccine development, stimulus and relief, future preparedness) Healthcare workforce Tax/Tax-exempt issues
Telehealth Surprise billing Medicare and Medicaid provider payments
Immigration Drug pricing Health equity

 
The Players Always Love You When They’re Playing
Will election year promises turn into post-election goals? We’ll see.

White House / Administration (Federal Agencies)

Biden
As is the custom with most heavyweight bouts, we’ll start with the challenger. Candidate Biden has made no secret that his Administration would take a different approach to the federal response to the COVID-19 public health emergency. The Biden campaign has made clear its plans to coordinate with state and local officials on a national mask mandate and the nation’s top infectious disease and health agencies experts on strategic response and vaccine distribution. The COVID-19 response would also likely include another round of expansive relief and economic stimulus, but the size of any package would depend on the makeup of Congress.

As Vice President, Biden was in charge of the Obama Administration’s Cancer Moonshot. He is a longtime supporter of investments in medical and biomedical research and that funding will likely be prioritized in his Administration’s funding requests to Congress.

Much like in 2010, the Affordable Care Act (ACA) remains a top priority to the former Vice President, and there are plans for improvements and expansion. For starters, a “public option” would represent not quite a full Medicare-for-all mandate but a way to provide more people the opportunity to participate in a government-run health coverage system. An ACA boost would also likely include additional protections for patients, surprise billing reform, and a greater focus on health equity and improving health for underserved populations. The real question, which is once again dependent on the makeup of Congress, is whether they move quickly or wait until the Supreme Court issues its latest ACA ruling in the spring (more on that further down below).

A Biden Administration would likely roll back many of the Trump Administration’s Executive Orders and regulatory priorities, including, but not limited to, immigration, health care provider reporting requirements, and the Medicaid Fiscal Accountability Rule (MFAR). For all the talk about tax plans, a Biden Administration won’t be able to act unilaterally on rate changes and restructuring.

Trump
In some ways, we have a reasonably good idea of what to expect on a number of fronts, but at the same time, the Trump Administration has been vague about its plans for a second term, especially with respect to health care reform.

It remains to be seen whether President Trump’s declaration that the United States has turned a corner on the pandemic will be compatible with the reality of rising COVID-19 cases and public health challenges. With respect to the next round of COVID-19 relief, President Trump before the election has signaled an interest in going “big,” but significant differences with House Democrats remain about the scope of a package. Will an assured second term change that dynamic? Maybe, but no one knows in which direction.

A divided Congress since 2018 has led the Trump Administration to rely more on Executive Orders and agency rulemaking to advance any number of priorities. Expect to see these tools utilized even more, particularly if Democrats gain control of both chambers of Congress. These efforts may include directives to further limit entry and opportunities for non-immigrant visa holders, procedurally wind down the Deferred Action for Childhood Arrivals (DACA) program, and make additional changes to prescription drug programs.

The Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS) under the Trump Administration have utilized their maximum authority to respond to the public health emergency, including creating numerous flexibilities for expanded telehealth. But, questions about the future direction of these agencies remain, even with respect to leadership. While CMS made the decision to shelve the controversial MFAR proposal as health providers are already concerned with proposed cuts to Medicaid and to Medicare as part of the CY 2021 Medicare Physician Fee Schedule, shelving doesn’t necessarily mean the proposal is gone for good. In addition, CMS may look to revamp the CMS Innovation Center as leadership is disappointed with the performance of current voluntary alternative payment models.

If there is a comprehensive health care reform plan in the works, we may need to see it sooner rather than later. The Trump Administration has supported the Supreme Court striking down the ACA, but it has been vague on a potential replacement outside of an Executive Order outlining priorities such as protecting those with pre-existing conditions and promoting choice. The order also called for an end to surprise medical billing, authorizing HHS Secretary Alex Azar to take steps to ban the practice if Congress does not take action by the end of the year.

Congress
How about some good news to start? As of now, statutory budget caps that have limited increases in federal funding priorities go away for Fiscal Year 2022. Of course, Democratic and Republican leaders have very different ideas about how to proceed.

House
Democrats are expected to retain their majority, and whether it increases or shrinks will likely be the biggest election night drama for the House leadership. Speaker Nancy Pelosi (D-CA) has also indicated that she will seek another term as Speaker. After that, the picture just a few days before the election is more clouded.

A Democratic House majority with both a Republican Senate and White House would most likely yield much of the same gridlock that we’ve seen since 2018. A divided Congress with a Democratic White House may yield more compromise on key issues, including federal funding, but that would largely depend on how much of a majority Republicans maintained in the Senate.

A House and Senate Democratic Majority combined with a possible Biden Administration would likely open up possibilities for legislation, including immigration, appropriations, and additional COVID-19 relief. The HEROES Act (H.R. 6800), which is the COVID-19 relief bill passed by the House in May, would likely be the starting point for a more expansive effort. We would also expect a continued prioritization of funding for research, but this note comes with a small caveat. The progressive coalition of the House Democratic caucus has vowed to significantly cut the Defense portion of the budget. Depending on how this approach is prioritized, the effort could impact medical research funding opportunities through the Department of Defense (DoD).

Senate
If by some chance we know the winner of the presidential election before midnight on November 3rd, the Senate races will likely be the source of the most drama. If control of the Senate flips to the Democrats, Senate Leader Mitch McConnell (R-KY) will no longer be Majority Leader as of January 3, 2021. We would expect more activity immediately after the election to confirm as many judicial appointments as possible. If there is no flip and Leader McConnell remains Majority Leader next year, we still expect as much activity as possible to confirm judicial appointments immediately after the election and well into 2021.

If Democrats take the majority, current Senate Minority Leader Chuck Schumer (D-NY) is expected to take back the top spot as Majority Leader. Senator Schumer represents a strong health care provider presence in NY and has close relationships with that constituency. Who might fill the leadership positions below presents tougher questions, as a number of Democrats are unsatisfied with the status quo. Also, as noted above, a fully Democratic Congress would open the door to a much more aggressive legislative agenda.

Comparatively, a Republican majority in the Senate combined with President Trump being elected to a second term may offer additional leverage to chart a path forward on more contentious issues, such as taxes and health care, especially if the ACA in whole or in part, is struck down by the Court.

New leadership on key committees is a certainty no matter who holds the majority. Senate Health, Education, Labor, and Pensions (HELP) Committee Chair Lamar Alexander (R-TN) is retiring at the end of this year. Senator Richard Burr (R-NC) is in line to take over the top Republican spot on the committee, but it remains unclear whether he would opt to do so. Chair Chuck Grassley (R-IA) of the Senate Finance Committee, which has jurisdiction over Medicare and tax issues, will relinquish his top post as either chair or ranking member to once again take the top Republican spot on the Senate Judiciary Committee.

The Courts
The Supreme Court is back to full strength at nine justices, but the appointment of Justice Amy Coney Barrett has led to a big shift in the Court’s perceived ideological framework. Trump Administration appointees are also now filling key open positions on the lower courts due to Senate Majority Leader McConnell’s prioritization of clearing judicial nominations. The specter of Court expansion looms large with a possible Democratic Administration and Congress, but there are no commitments.

The Supreme Court begins hearing arguments on the latest challenge to ACA on November 10. Chief Justice John Roberts has been a reliable swing vote protecting the ACA, but another Justice from the Court’s so-called “conservative bloc” would have to join him to keep the law intact.

It’s also worth noting that many of President Trump’s immigration policies are pending before federal district and appellate courts. Should he be elected for a second term, a more conservative Supreme Court with an expansive view of Executive power may uphold many, if not all, of them, including a projected second attempt to end the DACA program.

The Lamest of Ducks and New Beginnings
Quack? There is going to be substantive legislative activity following the election. The only real question at this point is whether there will be a concerted effort to bring legislative business, and thus the 2020 congressional calendar, to a quick and merciful end in early December – or will we be engaged in partisan squabbles through most of the holiday season?

At the moment, signs point to all parties wanting to get to work as quickly as possible to adjourn for the remainder of the year - and there are some “must do” or “must kick down the road” priorities to address before that will happen:

  • FY 2021 Appropriations – The current continuing resolution (CR) expires December 11. Whether there is agreement on an actual budget agreement or some further extension of the CR in the short term is highly dependent on the outcome of the election. Fortunately, risk of a government shutdown seems low.
  • DSH cuts – A temporary reprieve to planned cuts to the Medicaid Disproportionate Share Hospital (DSH) program expires with the CR. At least another short term fix is expected, but it is not guaranteed.
  • NDAA – The National Defense Authorization Act (NDAA), among its many provisions, provides policy authorization for DoD medical research. House and Senate leaders are expected to reach a deal on the final FY 2021 NDAA relatively quickly.
  • Surprise billing – There’s a number of legislative proposals but thus far little consensus on how best to proceed. There is also the matter of the Administration’s ultimatum to find some compromise by the end of the year. If President Trump isn’t reelected, this is a priority that may slip into 2021.
  • COVID relief – Yes, this time we really expect there will be an agreement, but the details have been held close by the negotiators so far. We’ll learn a lot more after November 3rd just how big Congress and the Administration are willing to go.

What does or does not get done in the last few weeks of 2020 will influence the early priorities and activities of the 117th Congress no matter how the majorities are balanced. Our office has already begun strategic planning for new beginnings in 2021 to continue to elevate Duke Health’s work and imprint on the policy making process.

Wherever we go next, we go together.