Update for March 20, 2021

Update for March 20, 2021

House Passes Bill to Stop Cuts in Medicare Payments – but Senate Passage in Doubt

Passage of legislation in Congress is more complicated than most people realize.  The Constitution allows each chamber of Congress to set its own rules for getting it done.

Because the House of Representatives has 435 members its rules are much less complicated than the Senate’s, which has 100 members.  If the House had the same rules as the Senate, nothing would ever be accomplished.

Last week we told you that unless Congress passed new legislation soon, there would be significant cuts in Medicare payments to health care providers, such as doctors and hospitals.  And if that happened it is quite possible those patients covered by Medicare would likely face negative consequences with regard to their health care.

The House of Representatives did pass the needed legislation last week so now it moves to the Senate, where passage is not certain.  That’s because the Senate is equally divided 50-50 and no Republicans said they would support President Biden’s Covid relief bill, which resulted in a 50-50 vote on the legislation.

When a Senate vote is tied, the Vice President, who the Constitution designates as the President of the Senate, can cast the tie-breaking vote, which is exactly what happened.

The uncertainty of Senate passage of the new legislation to waive the cuts to Medicare comes about because of  the 2010 Statutory Pay-As-You-Go Act, which requires across-the-board cuts, known as sequestration, to “mandatory” programs if any new legislation increases the deficit.

Mandatory programs are those, like Medicare, that are automatically funded every year without passage of annual legislation to pay for them.  Congress can, however, waive the PAYGO rules to avoid the payment cuts.

However, if a waiver would have been included in the Covid relief bill Senate rules would have required there that 60 votes in favor of passage would be needed instead of a simple majority of 51.

Because there was no waiver in the Covid relief bill, new legislation to waive the mandatory cuts is needed.  Congress passed a similar waiver for Republicans’ 2017 tax overhaul, which was passed in the same manner as the Covid-19 relief bill.

Without passage of the waiver legislation the Office of Management and Budget will impose the Medicare payment cuts at the end of the current congressional session. While Social Security, low-income programs such as Medicaid, and veterans’ benefits are exempt from sequestration, Medicare payments can be reduced up to 4%.

While there is no estimate of how large the cuts would be under the legislation that just passed, the Congressional Budget Office estimated that a previous version of the Covid relief bill would have triggered about $36 billion in cuts to Medicare in fiscal 2022 and between $80 and $90 billion from other mandatory programs.

TSCL strongly supports passage of the waiver legislation because of the potentially severe negative consequences they would eventually have on Medicare patients.

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 Drug Pricing Bills Pass Senate - Now House Must Pass

The Senate has passed two measures that, while rather technical in nature, deal the prices of prescription drugs.

One of the bills (S.415) would help lower drug costs by boosting competition and closing loopholes that prevent generics from coming to market. The other bill (S. 164) would direct the Department of Health and Human Services to establish a central website for educational materials on drugs known as “biosimilars.”

However, passage of two measures will have to wait as House leaders struggle over Congress’ schedule.

According to Bloomberg.gov, “The House was expected to take up the two measures along with more than a dozen others under suspension of their rules, used largely to wave through minor or non-controversial legislation, earlier last week, but Republican lawmakers signaled they planned to object ….”

The House has not scheduled any legislation for passage this week, and is scheduled for a recess the following two weeks.

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Senate to Hold Hearings on Drug Prices

Tomorrow, Tuesday, March 23, the Senate Health, Education, Labor, and Pensions Committee’s Primary Health and Retirement Security Subcommittee is scheduled to hold a hearing on drug prices.  The hearing is titled, “Why Does the U.S. Pay the Highest Prices in the World for Prescription Drugs?”

We will update you next week if any significant news comes out of that hearing.

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Surprise Billing Issues Still Not Settled

At the end of 2020, Congress passed the federal “No Surprises Act” as part of the end-of-the-year coronavirus relief legislation. The legislation bars surprise billing for out-of-network emergency care as well as out-of-network care provided at in-network facilities. It also institutes an arbitration system for insurers and the provider to negotiate payment.

TSCL actively supported ending the practice of surprise billing and while the legislation wasn’t perfect, we felt it was a good start.

While modifying the practice of surprise billing to include more financial safeguards will help protect Americans from unexpected costs after an illness or accident, the issue hasn't disappeared.

According to a report from ModernHealthCare.com, “… providers and insurers will continue their fight over surprise billing as federal officials figure out how to put the No Surprises Act into practice, according to experts.

“The new law protects consumers from receiving unexpected medical bills resulting from out-of-network emergency care delivered by an out-of-network facility or out-of-network providers at an in-network facility. It also blocks out-of-network providers at in-network facilities from balance billing patients for non-emergency care unless they get patient consent. But patients will still be responsible for paying the in-network cost-sharing amount.”

However, there are still lots of details to work out and there will be fights over what those final details will be.

In the legislation that was passed Congress' decided to go with baseball-style arbitration to settle payment disputes between providers and insurers.

Now, policymakers must recruit entities to carry out the arbitration process and provide them with guidance about how to consider a range of factors during arbitration.

Again, from the ModernHealthCare.com report, “The No Surprises Act bans arbitrators from considering provider charges during the arbitration process. Congress had worried that healthcare costs would rise faster if providers' settlement amounts were significantly higher than the amounts insurers paid to in-network providers. The legislation also bars arbitrators from considering how much public payers like Medicare and Medicaid pay for comparable services. That's a win for providers since those payers often have much lower reimbursement rates than commercial plans.

“But lawmakers allowed arbitrators to mull over several other factors when making payment decisions, including the median in-network rate paid by an insurer, any good faith effort by a provider to join an insurer's network, providers' and insurers' market share, and previously contracted rates from the last four years, among other considerations. Congress left it up to HHS [Department of Health and Human Services] to figure out how to calculate qualified payment amounts, which are tied to the median in-network rates paid by insurers.”

The report concludes with this: “With the No Surprise Act set to take effect on Jan. 1, healthcare executives should expect HHS and other federal agencies to start issuing their proposed rules in the coming months. The details of those rules will significantly affect what cards they'll be able to play at the negotiating table.”

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Despite the coronavirus emergency, TSCL is continuing its fight for you to protect your Social Security, Medicare, and Medicaid benefits.  We have had to make some adjustments in the way we carry on our work, but we have not, and will not stop our work on your behalf.

For progress updates or for more information about these and other bills that would strengthen Social Security and Medicare programs, visit the our website at www.SeniorsLeague.org, follow TSCL on Twitter or Facebook.