August 25, 2022

Fall 2022 Federal Health Care Legislative Landscape

With President Biden signing the Inflation Reduction Act (IRA) into law on August 16, the next big question is what the last third of 2022 will bring. Enacting the IRA takes the “will it or won’t it happen” issue of reconciliation — which has dominated the Democratic caucus for most of the past two years — off of the table. With the bill enacted into law, September will likely be oriented toward a modest number of “must pass” activities before legislators head back home to campaign before the November elections. Should the mid-term elections bring about a change in the balance of power of one or both houses, the prospects of a more robust post-election or “lame duck” legislative session will increase, though recent actions — such as extension of the ACA premium subsidies via the IRA — may reduce some of the lame duck urgency. With this climate in mind, this alert provides an updated overview of the federal health care legislative landscape for the remainder of this year.

The Must-Pass

Reauthorization of the Food & Drug Administration User Fees: At the beginning of the year, many Congressional leaders and FDA stakeholders hoped and anticipated reauthorization of the FDA’s user fees would be done by now, following recent past cycles — but that goal has not been achieved. While the House passed its user fee package by a bipartisan 392 to 28 vote in late May, the Senate HELP Committee advanced its bill by a narrower margin that saw several Republicans, including Ranking Member Richard Burr (R-NC), vote no. In addition to reauthorizing FDA’s authority to collect user fees from industry, the Senate bill contains provisions pertaining to regulation of laboratory-developed tests (LDTs), dietary supplements and cosmetics. While legislation pertaining to each of these topics has been introduced in multiple Congresses, consensus has been elusive, contributing to the delay in enacting the user fee package.

Rather than party vs. party, the user fee dynamic has been chamber vs. chamber with Energy & Commerce Chairman Frank Pallone (D-NJ) and Ranking Member Cathy McMorris Rodgers (R-WA) issuing a July statement urging the Senate to take up the House-passed package following Ranking Member Burr’s introduction of a “clean” reauthorization package with no added policy changes. Burr’s proposed “clean” bill differs from previous user fee reauthorization packages that have included other FDA-related policy priorities. Prior to the August recess, FDA leadership and industry stakeholders were vocal about the consequences further delays would have on FDA operations, with the agency estimating it would need to lay off or furlough some staff as early as November. As September nears, we anticipate this activity will intensify as FDA leaders and stakeholders push for Congress to act before the current authorization expires September 30.

Health Care Discretionary Spending via Appropriations: The House has passed six of the twelve appropriations bills, including the bill that would fund the FDA, but not the bill that would fund the rest of the Department of Health and Human Services (HHS). The Senate majority has introduced drafts for all its bills but did not move any of the bills to markup, setting up appropriators to negotiate between the House and the Senate. Although the FY 22 government funding expires September 30, final resolution of Fiscal Year 2023 appropriations legislation will not likely occur until the lame duck legislative session in December.

The near-term need will be for Appropriations Committee leaders to agree on a temporary spending bill that can buy time for Congress to reach agreement on the bills likely in a large omnibus package passed during that session at the end of the year. With Senate Appropriations Committee Chairman Pat Leahy (D-VT) and Vice Chairman Richard Shelby (R-AL) retiring, anticipation is that lawmakers will complete work on FY 23 appropriations so incoming committee leaders will have a fresh start for FY 24. Another big question for health care and other stakeholders will be if the final package for FY 23 will contain a second round of community project or earmark funding, and whether such funding, which has been unpopular with some Republicans, will remain come FY 24. The House and Senate included projects in their respective bills, making inclusion of projects in a final FY 23 package likely.

Maternal, Infant, and Early Childhood Home Visiting Program (MIECHV): The MIECHV program helps expectant and post-partum mothers, infants and pre-school aged children living in disadvantaged communities by providing a range of services to support the targeted population during the pregnancy and early childhood years. The program’s current authorization expires at the end of September. While Congress has a long history of continuing to fund programs whose authorizations have lapsed, stakeholders hope to see the program fully reauthorized for another five-year period.

Other Priority Issues

Mental and behavioral health legislation: This has been a priority topic for many in Congress, particularly leaders and members of the Senate Finance Committee, which has invested significant time into the issue including by forming multiple working groups and issuing some draft legislation. Other committees working on the issue include the HELP Committee and Energy & Commerce, which advanced through the House the Restoring Hope for Mental Health and Well-being Act that expands and reauthorizes several programs. While addressing the mental health crisis enjoys bipartisan support, a major question is if members can reach agreement on a set of policies, as well as if inclusion of mental health provisions within the Bipartisan Safer Communities Act may diminish interest in further action.

Improving response to future pandemics: The HELP Committee advanced the PREVENT Pandemics Act in mid-March, which contains multiple provisions to strengthen the ability of the United States to respond to future pandemics and related threats. Led by HELP Chair Patty Murray (D-WA) and Ranking Member Burr, it caps much committee activity focused on pandemic response. Pandemic preparedness has been a longstanding priority for Burr, who is retiring at the end of the Congress and who will likely want to see this work finalized before he leaves the Senate.

Telehealth Policy: Sustaining access to telehealth services once the COVID-19 public health emergency ends enjoys strong bipartisan support. In late July, the House passed (by a 416-to-12 margin) a bill by Rep. Liz Cheney (R-WY) that would continue key Medicare telehealth policies through the end of 2024. The bill’s fate is uncertain, particularly now that Cheney lost her primary election and because several other telehealth bills are also pending in Congress. While the bill extends most of the key Medicare provisions, it does not address the ability of high deductible health plans to offer telehealth pre-deductible (which expires at the end of 2022) or the flexibility from the Drug Enforcement Agency (DEA) to allow the prescription of controlled substances via telemedicine without a prior in-person visit (which would end when the PHE does). On the latter, the DEA is expected to issue a proposed rule creating a Special Registration process for telemedicine at any time, but it is uncertain whether that will be completed before PHE flexibilities expire. Preventing loss of access to telehealth services enjoys strong support and is an issue to continue keeping an eye on, particularly as the Biden administration is now indicating that the COVID-19 public health emergency (PHE) — and thus its authorities including flexibilities for telehealth – may expire late this year.

ARPA-H Authorization: In late June, the House passed legislation sponsored by Energy & Commerce Health Subcommittee Chair Anna Eshoo (D-CA) that would authorize the Advanced Research Projects Agency — Health (ARPA-H). The legislation would establish ARPA-H as an independent agency within the HHS which stands in contrast to HHS Secretary Xavier Becerra’s action earlier this year to locate the agency within the National Institutes of Health (NIH) after the new organization was funded in the FY 22 appropriations package. Like user fees, the location of ARPA-H is another area of difference between key House and Senate health legislators, with HELP Committee Chair Patty Murray and Ranking Member Richard Burr leading their own authorizing bill that would place ARPA-H within NIH.

Cures 2.0: Reps. Fred Upton (R-MI) and Diana DeGette (D-CO) continue to advocate for passage of their Cures 2.0 legislation as a follow-on to their widely successful 21st Century Cures Act that was enacted in late 2016. With Upton retiring at the end of the Congress and many provisions of the draft bill not included in the user fee package, the bill’s leaders are hoping there may be a chance to advance this legislation this year. Whether or not that happens and how narrow or broad the bill may be are major questions, particularly given the state of limbo with the user fee package.

Payment Policies: From restoring the moratorium on sequestration of Medicare provider payments and additional Covid relief funding to more targeted payment reforms and addressing territorial Medicaid funding, multiple Medicare and Medicaid bills are dotting the Congressional landscape. A decade ago, advocates could count on the “must pass” fix to the Medicare Sustainable Growth Rate (SGR) physician payment formula as a vehicle for other CMS-related bills. But with the SGR fix long off the table, there is no clear “must” action, leaving some uncertainty to these types of measures.

And the Rest

The issues and bills listed above are but a subset of the universe of pending health care legislation, including myriad bills that enjoy strong bipartisan and bicameral support. But with a limited calendar, the prospects for many of these bills does not look very favorable. Bills more likely to advance include those that have been marked up by relevant committees or that have made it through one of the chambers. Other candidate bills for actions would be those led by members or leaders of key committees, those with sizeable bipartisan cosponsors and those likely to have a low or no “score” or cost estimate from the Congressional Budget Office (CBO). Their path forward could include a larger omnibus bill, particularly during the lame duck session, or clearance via the expedited Unanimous Consent (Senate) or suspension calendar (House) processes.

Other issues are always bound to come up that either take up legislative energy and floor time or provide another moving vehicle opportunity upon which to add related policies. Some examples of hot or emerging issues in the health care space that would fall into this category include the ongoing debate around abortion access following the Dobbs decision, the evolution of the monkeypox public health emergency and COVID-19 boosters and related pandemic issues. As September dawns, stakeholders will have limited time to position legislation for action either pre-election or during the year-end lame duck session.

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