An Updated Look at the Federal Health Care Policy Legislative Landscape: Opportunity for Action or ‘Groundhog Day’?

At a Glance

• Unresolved issues range from reauthorizations of expiring programs or extensions of existing policies, to more complex legislation addressing politically popular issues such as reducing the cost of prescription drugs.
• While pharmacy benefit managers’ transparency and reform are politically popular, major questions are what a final package could look like and, presuming agreement can be reached, if and when this legislation could be enacted.
• Telehealth policies that must be addressed to remain in place are Medicare coverage of telehealth without originating site restrictions, the ability of high deductible health plans with health savings accounts to offer telehealth pre-deductible, and the ability of ERISA employers to offer telehealth as a standalone benefit.

With Congress again delaying full resolution of fiscal year 2024 (FY24) federal spending legislation, now until at least early March, health care stakeholders are once again left waiting to resolve several priority issues.

On one hand, the delay creates an additional six-week window during which Congress could work to address at least some of these issues. Conversely, the same overarching challenges that have prevented Congress from completing work on the FY24 appropriations bills thus far — the top-line spending levels negotiated as part of the debt-ceiling agreement reached last June, which ultimately cost Rep. Kevin McCarthy (R-CA) his speakership, along with divisions over foreign aid and border security funding in addition to several socially conservative policy riders — remain in place. Current Speaker Mike Johnson (R-LA) also will continue to grapple with differences between House conservatives and Senate Republicans.

The pool of unresolved health care issues for Congress to address is large and diverse. It includes reauthorizations of expiring programs or extensions of existing policies, which are generally easier to resolve, to more complex legislation that addresses politically popular issues such as reducing the cost of prescription drugs. It also includes an aggressive push from physicians to undo or at least mitigate cuts to their Medicare payments, bringing back flashbacks to the long-running effort to undo and ultimately repeal the old Sustainable Growth Rate (SGR).

With this framing in mind, following is a closer look at the health policy legislative landscape.

Reauthorizations & Extenders

This category includes a mix of laws that have expired or will expire and where Congress will need to act. Several of these have been addressed in the previously enacted continuing resolution packages, but only in the short-term. Included in this category are:

• Several public health delivery and workforce programs including community health centers, the National Health Service Corps, and the Teaching Health Center Graduate Medical Education Program.
• Full reauthorization of the nation’s core bio-preparedness law, the Pandemic and All-Hazards Preparedness Act (PAHPA). Generally a bipartisan issue, the Senate Health, Education, Labor and Pensions (HELP) Committee cleared its iteration of a reauthorization bill last summer, but the bill has faced some challenges in the House, including divisions over Centers for Disease Control and Prevention (CDC) funding and if it is the appropriate vehicle to address concerns around drug shortages.
• Reauthorization of the SUPPORT Act and its policies to address the ongoing substance-use disorder crisis, which is now driven heavily by illicit fentanyl.
• Delaying, once again, cuts to hospitals through planned reductions of Medicaid Disproportionate Share Hospitals (DSH) funding.
• Reauthorizing pediatric priority review vouchers, created by Congress more than a decade ago and reauthorized several times since, to incentivize development of rare-disease therapies by providing manufacturers of therapies that achieve this designation with a transferable voucher for FDA priority review. Companies can use a voucher to reduce FDA review time for another product or can sell the voucher to another entity. The current voucher program is authorized through the end of September, meaning Congress will have to act again if it chooses to continue this program.

The other emerging issue that is growing in importance is legislation to address a reduction in Medicare payments to physicians that took effect in January. The absence of a January action threatens to make the cuts more challenging to unwind though physician advocates will most certainly remain focused on this issue, particularly as providers begin to feel the reductions in Medicare reimbursement.

Beyond these issues, committees also have acted on more targeted pieces of legislation to reauthorize specific programs or polices. These are measures that could find their way into a larger legislative vehicle given the challenges associated with clearing standalone legislation in the current climate.

The New or Emerging Issues

More than a half-dozen legislative committees have spent the past year working on bills to reform the practices of pharmacy benefit managers (PBMs). In December, the House passed the Lower Costs, More Transparency Act, developed by three committees, which would require additional transparency into PBM practices and also codify and expand health care pricing transparency requirements.

On the Senate side, the HELP, Finance and Commerce Committees have all passed out various pieces of legislation on PBM transparency, including the HELP measure that would prohibit PBMs from using medication spread pricing. While transparency and PBM reform are politically popular, major questions now are what a final package could look like and, presuming an agreement can be reached, if and when this legislation could be enacted.

Telehealth

The COVID-19 pandemic afforded a wide array of flexibilities for providers to offer telehealth to patients. There are three main policies that must be addressed by Congress in order to remain in place:

1. Medicare coverage of telehealth without originating site restrictions
2. The ability of high deductible health plans (HDHPs) with health savings accounts to offer telehealth pre-deductible
3. The ability of ERISA employers to offer telehealth as a standalone benefit

The first two policy flexibilities — Medicare and HDHP — have been extended by Congress through the end of 2024, so they will need to act this year to determine whether to extend those policies further or make them permanent.

The pandemic policy that allowed ERISA plan employers to offer telehealth as a standalone benefit to workers who don’t otherwise qualify for health insurance through that employer (part-time, contracted and seasonal workers), expired at the end of 2023. Congress could still reverse this or make this policy permanent, and employer and telehealth advocates are pushing Congress to consider doing so in the next government funding package.

Advocates would certainly also welcome Congress addressing Medicare and/or HDHP policy in an upcoming package, but realize Congress typically is driven by deadlines and it is more likely those policies will be addressed at the end of 2024 before their expiration. The question also remains whether Congress will continue to extend flexibilities or make many of the policies permanent. Permanence enjoys broad support but is bound to generate challenges in the form of a Congressional Budget Office (CBO) score or cost estimate.

The other major federal telehealth policy that must be addressed before the end of 2024 is the remote prescribing of controlled substances (CS) rules. Congress gave the Drug Enforcement Administration (DEA) the authority to regulate this issue under the Ryan Haight Act back in 2008 and has weighed in multiple times since then, including reiterating the requirement for DEA to create a special registration for telemedicine in the SUPPORT Act of 2018. There is bipartisan legislation to expand access to telemedicine prescribing of buprenorphine treatment for opioid use disorder (OUD), the TREATS Act, but thus far Congress has preferred to defer to DEA rulemaking to address this issue. After holding stakeholder listening sessions in September, DEA is expected to release new proposed rules early this year, for providers to be able to implement them before the end of 2024.

There are plenty of additional telehealth-related policies without specific deadlines or expiration. For example, Congress is interested in ensuring that for providers who practice telemedicine from home CMS keeps their home addresses private and secure, a policy that would be achieved through the Medicare Telehealth Privacy Act, which has cleared the Energy and Commerce Committee.

Final Thoughts

While we don’t know yet whether Punxsutawney Phil will see his shadow, we do know we will have six more weeks of an FY24 continuing resolution.

Another short-term spending patch gives health care stakeholders more time to try to resolve pending legislation, but the likelihood of many measures being wrapped up before St. Patrick’s Day remains modest, given the overarching focus on federal spending and the challenges that remain toward achieving a full resolution of FY24 funding decisions, giving this saga some attributes of the movie Groundhog Day.

Ultimately, in part because likelihood of legislating decreases in a presidential election year while members of Congress are spending much of their time campaigning, the most likely scenario for many areas may be resolution as part of a very active November and December lame duck session of Congress, continuing the trend of sweeping post-election sessions.