UPDATE: Dec. 23, 2019: President Donald Trump signed the measure into law late Friday.
- Congressional negotiators have agreed to an end-of-year bipartisan bicameral package to fund the government that would permanently repeal three Affordable Care Act taxes on medical device manufacturers, high-cost health insurance plans and the health insurance industry.
- Funding for the package comes from the CREATES Act, which aims to enable generic drug makers to more easily procure samples of branded drugs to develop a generic copy. The bill also grants Medicaid funding for Puerto Rico and other United States territories.
- It also has language to bolster the ACA, prohibiting HHS from ceasing exchange auto-enrollment and preventing the government from stopping insurers that load cost-sharing reduction payments onto silver plans to raise federal premium tax credit amounts.
One major bipartisan priority, surprise billing legislation, was left out by lawmakers after a lengthy lobbying blitz by industry and private equity investors. However, the issue may still have a vehicle next year with certain health program extenders only set to last until May 2020, according to Cowen's Rick Weissenstein and Eric Assaraf.
"A hodgepodge of Medicare and Medicaid extenders in the year-end spending package are only expected to last until May of 2020, giving surprise billing legislation a potential pathway in 2020," they wrote in a policy note.
Senate Health Committee Chairman Lamar Alexander, R-Tenn., said in a statement Monday surprise billing would be a top legislative priority next year.
If enacted into the law, the measure culminates a years-long battle by medical device companies to scrap the levy. AdvaMed lauded the deal, calling it a win for patients and medical innovation.
The year-end package, often deemed a "Christmas tree" due to a diverse set of policy riders attached to it, appears to have bipartisan support.
The bill provides $41.7 billion for the National Institutes of Health, $3.16 billion in discretionary funding for FDA, and $4 billion for CMS administrative expenses. FDA's Center for Devices and Radiological Health and associated activities in the Office of Regulatory Affairs are set to receive nearly $582 million in funding.
"I'm pleased that we have reached a bipartisan agreement that will keep government open, provide the certainty of full-year funding, and make strong investments in key priorities for American communities," House Appropriations Committee Chair Nita Lowey, D-N.Y., said in a statement.
Payers will no doubt be pleased by the plan to repeal the health insurance tax. America's Health Insurance Plans has lobbied extensively for the tax's removal, saying if it is in place for 2020 either benefits will be cut or premiums will rise. The tax was a key driver of health spending growth last year, when it was in place after a delay meant it was not in effect for 2017. That tax was also not in effect for this year.
AHIP also pushed for nixing the so-called Cadillac tax on high-cost employer plans, which was scheduled to go into effect in 2022. The lobby was joined by more than 1,000 employers in writing to Senate leadership earlier this year to request a repeal.
The spending package also contains the Laboratory Access for Beneficiaries Act, which the American Clinical Laboratory Association and AdvaMedDx lobbied for. The legislation delays data reporting used to establish the Medicare clinical lab fee schedule by a year.
Durable medical equipment makers came away with a small win, garnering an exclusion of complex rehabilitative manual wheelchairs from CMS' competitive bidding program. But the industry's top priority, an exclusion for non-invasive ventilators from the Medicare competitive bidding program, was not included in the package.
The repeal of the major ACA taxes removes a funding stream originally intended to help offset the law's costs.
The Congressional Budget Office and the Joint Committee on Taxation estimated in December 2018 eliminating the medical device tax would cost $1.6 billion in 2020 and $2.2 billion in 2021.
The groups said extending the suspension of the health insurance tax would cost nearly $13 billion in 2020 and $13.7 billion in 2021. Meanwhile, delaying implementation of the Cadillac Tax would cost $7.8 billion in 2022 and $5.7 billion in 2023.