Congress likely to punt on drug prices, surprise billing as year-end deadline nears

Both the AH&LA and AAHOA released statements in support of the President’s call for bipartisan efforts to improve border security and ongoing job growth.
Healthcare priorities such as ending surprise medical bills and lowering drug prices appear likely to be punted into 2020. (Getty Images/Bill Chizek)

Major healthcare priorities on drug pricing and ending surprise medical billing appear likely to be punted into 2020.

While the House passed a major bill Thursday to give Medicare the power to lower drug prices, the legislation appears highly likely to die in the Senate. A bipartisan House-Senate deal on legislation to tackle surprise medical bills has also run aground after release of a competing proposal in the House.

The lack of progress comes as Congress attempts to make a flurry of decisions on legislation before the end of the year, as 2020 is a presidential election year in which it's unlikely much gets done.

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Curveball in the fight to end surprise bills

Entering this year, legislation to end surprise medical bills had large bipartisan support and appeared likely to make it through Congress.

But providers have launched major ad campaigns and lobbying efforts to stall momentum over a dispute on how they should be paid for out-of-network charges. Providers want to use an arbitration method where an independent party decides an out-of-network charge and payers want a benchmark rate for such charges.

Earlier this week, a deal was reached between the House Energy and Commerce Committee and the Senate Committee on Health, Education, Labor and Pensions. The legislation would use a benchmark rate but include an arbitration backstop for bills totaling more than $750.

Neither providers nor payers liked the compromise. Provider groups such as the American Hospital Association charged that a benchmark rate would ensure insurers can game the system to charge higher prices, and insurers complained that arbitration would lead to higher charges for patients.

RELATED: Hospitals marked up prices for emergency, anesthesiology services, study finds

“While a solution based on local, median negotiated rates will protect patients and save hardworking taxpayers more than $25 billion, arbitration will do neither,” according to a statement from the Coalition Against Surprise Medical Billing, a constellation of insurers advocating for a benchmark rate.

But the House Ways and Means Committee threw an unexpected surprise that could dash the barely week-old deal. Committee Chairman Rep. Richard Neal, D-Massachusetts, and ranking member Kevin Brady, R-Texas, announced Wednesday an agreement on a “strategy” to pursue ending surprise medical bills.

The text of the bill hasn’t been finalized, but a summary said it would include a “reconciliation process” that would call for an impartial process that settles a payment dispute. A party that loses the process has to pay the reconciliation process fee to disincentivize frivolous use.

RELATED: AMA, MGMA to Congress: Don't hand power to insurers in surprise billing fix

The announcement earned plaudits from providers even though the final text had not been released. The Federation of American Hospitals said it was encouraged the committee “has joined the deliberations with fresh, bipartisan thinking to protect patients from surprise medical bills.”

The new compromise has already thrown off the timing for getting a deal done by the end of the year. Neal told Bloomberg Government’s Alex Ruoff on Wednesday that there needs to be a pause on surprise billing to address qualms on the issue.

House Democrats get victory, but no progress

House Speaker Nancy Pelosi scored a major legislative victory Thursday with a vote to pass a bill to give Medicare drug negotiating power, quelling a potential progressive uprising.

But legislation to tackle drug prices, another major priority for both parties, appears highly unlikely to get through Congress this year.

Senate Majority Leader Mitch McConnell has bashed Pelosi's bill as “socialist” and doesn’t appear likely to bring it up for a Senate vote. But McConnell has also stalled another package led by Sen. Chuck Grassley, R-Iowa, that would impose an inflationary cap on Part D drug prices.

RELATED: Canadian ambassador tells White House drug import plan unworkable, not enough supplies

While Grassley’s bill has some bipartisan support, he said that it hasn’t had enough Republican support. The legislation barely got out of the Senate Finance Committee, which Grassley chairs, earlier this year after Republicans on the committee balked at the inflation cap.

Grassley told FierceHealthcare last month that the bill's future could depend on when Pelosi’s bill passes the House. Pelosi's legislation won’t get 60 votes in the Senate, and the House will have to “wake up and try another approach, and I hope that approach is our bill,” he said.

There is a vehicle for healthcare legislation to ride this week: a must-pass spending package that needs to be signed into law by Dec. 20 to avoid a government shutdown.

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