John Williams: Hello and welcome to Inside Baseball, a look at healthcare politics and policy in Washington, part of Hall Render’s Practical Solutions Podcast series. I’m John Williams. I’m a shareholder with Hall Render and managing partner of its Washington, DC office. Today I’m joined by my colleague Andrew Coats for the inaugural edition of our podcast. Since this is our first podcast, we’d like to take a little more time to introduce ourselves. Between the two of us we have over 40 years of experience working in Washington, DC. In my case, I first came to Washington in 1996 where I served as Press Secretary for what was then called the House Committee on Government Reform and Oversight. While there, I also served as policy advisor to the chairman on issues such as Medicare, Medicaid and Social Security. Andrew, you want to tell the folks a little bit about yourself?

Andrew Coats: Yeah, thanks John. Wow, the fact that we have over 40 years of DC experience now, but time marches on. I came to the Hill after, in 2000 after college, worked in the Bush administration as a legislative liaison before working on Capitol Hill for a member of Congress handling healthcare issues. After law school, I went to the private side. So I’ve experienced both from administrative congressional standpoint and now in private practice where we’ve been working together with healthcare clients for over a decade now.

John Williams: Thanks, Andrew. So the goal this podcast is to not only provide an update on healthcare policy developments in Washington, but also to give you, our listeners an inside look at the politics of healthcare on Capitol Hill, at the White House and within federal agencies like CMS, FDA or HHS. We plan to keep this at about 15 minutes in the future. However, given that this is our first podcast, we’re probably going to go a little bit further than that.

As President Obama once said, “You can’t separate policy from politics.” So, our goal is to not only tell you what is happening, but to also give you a look at why it’s happening and where things could be going. That last item is really the crystal ball political prediction stuff that we learned from our day in and day out work with lawmakers, congressional staff, and regulators at federal agencies.

Since we are lawyers, I’m obligated to tell you that our predictions are based on the best information we have at the time that we get it, but it’s also based on what happens traditionally on Capitol Hill and in federal agencies year in and year out. So, like the price of gasoline, things in Washington can change very quickly. So, please forgive us if our predictions are wrong from time to time. The general format of this podcast will be to look at healthcare policy developments from a legislative and regulatory perspective. In each edition, one of us will give a legislative update on Capitol Hill and the other will give an update on regulations coming out of or pending before federal agencies, usually with an update on regulations under review by the Office of Management and Budget at the White House. So with that, I will turn it over to Andrew to give you an update on Capitol Hill.

Andrew Coats: Thanks, John. And before we get rolling on the Hill update, I think it’s worth noting that if you’ve been on Capitol Hill in September, Congress has now entered phase three of its reopening plan. And being on the hill this week and last, it felt like we were back in 2019. You had relaxed entry requirements into the House and Senate buildings. Your tours at the Capitol have resumed, so you see tour groups and school groups up there. It felt normal again.

John Williams: And the traffic’s back to being the way it always is, right?

Andrew Coats: The traffic was horrendous this week. Pandemic commutes, which was not enjoyable. But at the same time, things are starting to feel normal again. And with that return to normalcy, there’s a buzz that’s returned that’s been really missing from Congress and in DC since February of 2020. So it’s nice to be back. And we’re now deep into September of a midterm election year and that traditionally means that Congress has one major must pass item on their to-do list and that’s passing the coming year’s spending bill. So for this year, it’s the FY-23 appropriations bill and they need to do that by the end of the fiscal year, September 30th. Now, Congress won’t be able to do that before the November midterms, they almost never do, especially in election year. So my most likely, they will extend current funding FY-22 to mid-December. There’s a framework in place for the CR, which would extend funding to December 16th, that’s a Friday and that’s kind of the target end date right now for Congress.

John Williams: Andrew, let me jump in there real quick because, tell a little bit about what a continuing resolution is, you referenced a CR. What is a CR in general?

Andrew Coats: Yeah, CR just keeps the current years funding going. It keeps it rolling, so you don’t have government agencies shutting down or furloughing employees and essentially shutting down the federal government. So you have a CR, which they’ll assign a certain timeframe and in this instance, they want to get through the November midterms so they can go back to their state and district in October and campaign. And then after the election, sometime, usually around mid-November, they come back and then there’s a three to four week sprint at the end of the year. It’s kind of the end of the year craziness that Congress has, especially at the end of a Congress and that’s to finish up business.

John Williams: And that’s what they traditionally have referred to as a laying duck session, right?

Andrew Coats: Of course. Yep. So with that we have the immediate focus right now of Congress is what policies get attached to the CR [inaudible 00:06:24] resolution framework. And two, the longer term focus is, what gets included in an end of the year Omnibus Bill, which is, that funds the entire government, all the federal agencies and it includes a lot of policy riders, because that’s the last train out of town and it will be for the 117th Congress.

So let’s talk about a short term CR. One of the big items that’s getting a lot of buzz right now is the FDA user fee bill. This comes up every five years. It needs to be passed by Congress by September 30th otherwise FDA has to begin the process of furloughing employees. Now the FDA bill, it’s a time eater for Congress. It takes over a year of negotiation between congress, FDA, industry stakeholders, but it almost always passes before September 30th. And when it does pass, it passes with Republicans and Democrats in lockstep. This year could be different.

Senator Burr, he’s a retiring member from North Carolina. He’s the ranking member on the Senate Hall Committee. He voted against the FDA Bill at the end of the Senate mark up back, during the summer, which is an unusual move. So what we’re looking at because of that is some sort of extension or just passing a clean FDA user fee bill without the policy writers that were added in by the House and Senate in the spring and summer.

Now, today is September 22nd. The Senate Health Committee has been negotiating this since last fall. At some point, the committee’s lack of action is, I like to say, is going to make dad pull the car over on vacation. So someone… And what I mean by that is, someone working under the dome in the Capitol says someone for leadership with either Schumer, McConnell, maybe both, their staff, they’re going to have to come down and override the committee and tell them, “If you’re not going to do this, we’re going to do it.” And that is something committee chairman do not like and committee staff do not like but we’re getting dangerously close to that point if we’re not there already. So, look for the FDA user fee, some sort of extension or clean user fee bill to be included in the CR.

Another item would be additional COVID funding. The administration made a supplemental funding request for 22.4 billion for COVID and Monkeypox funding in early September. This is really high, this becoming a really high bar to reach consensus on in an election year, given President Biden’s comments on 60 Minutes on Sunday that COVID was over. He said, “The pandemic is over.” If you’re the administration, you’re congressional liaisons and administration, it’s hard now to make that case that our country’s not going to function without the billions of dollars in supplemental funding, which is the case they have to make to Congress when they’re asking for this increase in funding.

John Williams: Yeah, I mean, you mentioned that… You’re right. Republicans on the Hill have been hesitant all along to add more money to COVID given the amount of money, in their view that was spent previously. And yeah, you’re right. To your point, I’m not sure that the president’s comments on 60 Minutes that the pandemic is over helped much and I think you quickly saw the Secretary of HHS, the CMS administrator, the CDC administrator walking those comments back pretty quickly. But yeah.

Andrew Coats: Right.

John Williams: It just makes it a heavier lift, right? A much heavier one.

Andrew Coats: No doubt. Now, bigger picture, Biden was at a car show where people were without mask. I think it was fair to say the intent was to show and demonstrate life is returning to normal.

John Williams: Right. Right.

Andrew Coats: But I know providers certainly know, they’re still treating COVID cases, people are still dying from COVID every day. So at the end of the day, the supplemental COVID funding is the potential for the CR or, and/or end of the year omnibus. Another item that could be included into CR is mental and behavioral health care. During the summer, the talks surrounding mental health and behavioral health was all the buzz. It has bipartisan support. Our country was in the wake of a number of high profile shootings. And when you hear members discuss healthcare issues, they’re hearing about, in their district or state, almost everyone mentions behavioral health. Now yesterday, the House Ways and Means committee had a markup, they advanced a package of six bills designed to improve Medicare coverage for mental health services. These bills included amending Medicare…

Andrew Coats: These bills included amending Medicare PPS for psychiatric hospitals and psychiatric units. It included a bill that would bolster coverage of the Medicare outpatient mental health services. It included a bill that would allow coverage of marriage and family therapist services and mental health counselor services under Medicare. It included a bill that would direct HHS to provide outreach and reporting on certain behavioral health integration services offered through Medicare. Another bill would direct the HHS secretary to provide outreach and reporting on opioid use, disorder treatment services furnished by programs under Medicare. And the sixth bill would’ve meant the Social Security Act and establish exceptions for certain physician wellness programs. This package of six bills will most likely presumably get through the House, but the buzz around mental health package in the Senate, they seem to cool a little bit. Regardless, look for these provisions to potentially be included in end of the year omnibus package.

Another big area is telehealth. At some point, the Biden administration’s going to have to declare that public health emergency is over. The administration has said now for quite some time, that they’re going to provide hospital associations 60 days notice before they announce the PHE ends. There’s a line of thinking that sometime around mid-November, after the midterm election, they’re going to announce the PHE will come to an end in January. And with that, when once the PHE ends, a number of different telehealth waivers that have been in place since 2020, will it also come to an end. Congress is going to need to either extend these telehealth waivers or make them permanent, and at end of the year omnibus, it would be the obvious place to do that. John, do you have any thoughts on when they-

John Williams: Yeah, yeah. The telehealth stuff, so Congress addressed the telehealth waiver thing in the last omnibus they did. And what they did was they granted a 151 day extension from the end of the public health emergency. And Andrew noted that we did not get 60 days notice that we were promised from HHS that the PHE was going to expire in October when it is currently set to expire. Everyone is operating under the assumption that it will be renewed in January. Given the President’s comments on 60 Minutes, it’s going to be tough for them to say that we need to continue the public health emergency come January. If it ends in January, then that’s going to trigger the 150 day time period for them to address which waivers they want to make permanent. There is a piece of legislation that passed the House that was sponsored by Liz Cheney that would increase that 150 day window to two years.

I haven’t heard from a lot of people in the Senate, especially Republicans, that they’re too keen on taking that bill up. A lot of that has to do with the politics. There are a lot of Republicans these days who aren’t big fans of Liz Cheney’s. That may be one of the reasons that we end up staying with just the 150 day window for them to figure out what they’re going to do. And as Andrew and I say all the time, Congress operates under the mantra of why do today what you can put off until tomorrow? And so I would expect that whenever the PHE ends Congress is going to take most of the 151 days to figure out which waivers, like permanently eliminating the geographic and originating site restrictions to telehealth, which is really the big one. They’re going to take all that time to figure that out.

Andrew Coats: One of the other items that tend to move in either a CR or omnibus package, it’s called Medicare extenders. And this is a package of Medicare related extenders that tend to be a lot of rural health or behavioral health related provisions that usually enjoy strong bipartisan support. These are bills that can move either on the suspension calendar in the House or on UC in the Senate really without opposition. John, do you want to talk about some of the Medicare extenders that we may see that Congress is currently trying to move and make it thrown into the package next week or at the end of the year?

John Williams: Yeah, absolutely. These extenders are essentially different programs or different payment adjustments that Congress was responsible for renewing so many years and they expire at different times. Those that are set to expire in about eight days at the end of this fiscal year include the Medicare Dependent Hospital program, the low volume hospital adjustment payment, and the rural ambulance add-on payment. Those are three very important rural healthcare programs. And from the folks that we’ve all talked to on The Hill, those will be included in the continuing resolution. We still haven’t seen the language for the continuing resolution yet. As of this morning, we understand that it’s the goal to pass it next week before Congress breaks for the midterm election. We understand that those healthcare policy writers are going to ride with CR, but probably none of the others. And Andrew mentioned a package of healthcare bills that came out of Ways and Means yesterday.

And one of those that Andrew referenced deals with the physician self-referral law, also known the Stark Law. This is something that we at Hall Render had been working on for many, many years. And that bill was actually something that we worked with to have drafted by Congressman Raul Ruiz of California, Larry Bucshon of Indiana, Greg Murphy of North Carolina, and Don Beyer of Virginia. Basically, what it’s intended to do is to create a new exception under the Stark Law for physician wellness programs. Physician burnout has becoming an enormous issue. Healthcare workforce burnout is an enormous issue, and that’s something that we’ve really tried to help address with this. And one of the things that happened earlier was that Congress passed something called the Lorna Breen Act, and what the Lorna Breen Act did, well, let me back up. Lorna Breen was an emergency medicine physician in New York City who unfortunately committed suicide because of stress and burnout. Congress passed this legislation that part of which creates a grant program where hospitals can apply to the government for grants to run wellness programs.

Well, one of the problems there is that the Stark Law doesn’t permit hospitals to spend money remuneration on non-employed physicians unless it meets one of the Stark Law exceptions. And there was no provision in Lorna Breen that addressed the Stark Law. Since 53% of physicians in the country are not employed by a hospital, a hospital couldn’t spend Lorna Breen money on wellness programs for those physicians without violating Stark. We worked with members of Congress to draft this bill to not only correct the issue with Lorna Breen and the Stark Law, but to also create a whole new exception that will allow hospitals to provide wellness program to non-employed physicians without violating Stark. One of the things that we haven’t talked about yet, Andrew, is this idea of a yearend catchall healthcare bill. Andrew’s mentioned the continuing resolution, which is what they’re going to do next week, it looks like, to keep the government running through at least the middle of December.

At which point, they’re going to have to figure out whether or not they’re going to do an omnibus appropriations bill for fiscal year ’23, or they’re going to do another continuing resolution into 2023. From all practical purposes, from everything that we’ve heard, we think it’s likely they will do an omnibus in December. But there are things that won’t be included in the omnibus that lawmakers hope to include in a catchall healthcare bill. What usually happens at the end of a two year session of Congress is that you have all of these bills that members have introduced that haven’t passed, and where you have a dynamic like we do now, where it appears likely that Republicans are going to take control of the House in January, you have a whole bunch of Democrats who really want their pet projects to be passed before they lose control of the process. You very well may see this catchall bill where a whole bunch of different things get included. And that is someplace where you could see all of the bills that Andrew just referenced coming out of Ways and Means yesterday, including that Stark bill. One of the things to add is that just because the House wants to do a year-end catchall bill doesn’t mean that the Senate is going to do a year-end catchall bill too, or even with past it. In fact, I’ve had conversations with Senate staffers over the last couple of weeks where I’ve referenced year-end catchall healthcare bills, and they just essentially rolled their eyes and said that’s all healthcare bills. And they just essentially rolled their eyes and said, “Yeah, the House may do that, but I’m not really sure we’re going to do that over here.” So, that really leaves us… That doesn’t happen. And there’s a lot of pieces of legislation out there.

For example, the SAVE Act, which is a bill sponsored by Larry Bucshon of Indiana, that would essentially mirror the current law, where it’s a felony to attack an airline flight crew member. We would apply that to healthcare workers in the healthcare setting. That’s a policy thing that could be included in some sort of your catch-all bill. Our Stark Law bill would go on something like that.

There are other avenues as well. So you really come down to this year-end thing of a year-end catch-all policy bill. But Andrew mentioned, you got to fund the government. And the interesting thing here is that policy bills like a year-end catch-all, if they have provisions in them that require money from the federal government, then lawmakers are going to have to find offsets to pay for those.

And so, that’s where it really becomes difficult, is if you got to bill that costs anything… And for example, our Stark Law bill doesn’t cost anything, the SAVE Act doesn’t cost anything. But one of the other issues that we haven’t really talked about yet that Congress has to address before the end of the year is the 4% Medicare sequester cut.

And this is something that providers are facing because the American Rescue Plan wasn’t fully paid for, and the statutory pay as you go rules require subsequent cuts if a piece of legislation like that isn’t fully paid for. So we’re looking at a 4% sequester cut in January. And so, that just provides added pressure for lawmakers to do an omnibus instead of a continuing resolution come December. And from everybody that we’ve talked to on the hill, they’re well aware of it and know that they have to address it.

Andrew Coats: So, that’s a big picture of some of the items that Congress is going to be dealing with next couple months. It’s not an exhaustive list. There may be others. But from a healthcare perspective, it’s a pretty good snapshot of what they’re focusing on. John, do you have any thoughts on the regulatory front, some of the big bright letter… Stop that. John, do you have any… Let me start again. John, do you have any thoughts on the regulatory front, some of the things that may be coming down the pipeline?

John Williams: Yeah, absolutely. Things have been somewhat quiet from a regulatory perspective over the last several weeks. As many of you listen to this know, CMS must issue payment rules each year, which either cover a fiscal year or a calendar year. The fiscal year payment rules, like IPPS, LTAC, inpatient rehabilitation facility and inpatient psychiatric facility payment rules, those have all been finalized already, so I’m not going to spend any time discussing those, other than to note that there really wasn’t too much controversy surrounding those.

As for the calendar year 2023 payment rules, so the OPPS, Ambulatory Surgery Center rule, the physician fee schedule, those rules have not been finalized yet. The comment period for those ended earlier this month, so we’re expecting those to be finalized and released sometime in late October or early November. From a content perspective, CMS is proposing to increase payment rates under the OPPS and ASC by 2.7%, which is about a $7.2 billion increase for OPPS and $130 million increase for ASC over what was in ’22.

What many folks are watching for in the OPPS is how CMS intends to deal with the fact that the Supreme Court overturned the almost 30% cut to 340B discounts done under the Trump administration. CMS has to figure out what they’re referring to as unscrambling that egg. The OPPS proposed rule said that they didn’t have the time to address that in the proposed rule, but that the final rule would have some sort of formula by which 340B entities that were subject to those cuts are going to get that money back, whether it’s a one time payment or prospectively an increase in discount down the road, which I think is what’s more likely to happen because it would be really too hard to figure it out any other way. So, that’s something to keep an eye on.

As for the physician fee schedule, CMS is proposing at 4.42% reduction in that, and that reduction is driven really by the expiration of many of the increases that Congress made during the pandemic, the most recent one being in the last appropriations package that passed in December of last year, which had they not acted, would’ve been around 9.75%. While we love Larry Bucshon, and we’re not just… This isn’t the plug Larry Bucshon show, Larry and Congressman Ami Bera have introduced the Supporting Medicare Providers Act of 2022, which would reverse this 4.42% reduction.

And here’s something that they’re either trying to get into the omnibus or most likely going to try to get into the omnibus, because if they put it in catch-all bill, they’re going to have to figure out how to pay for that. And by putting it in the omnibus, what they do is they just bury it in there with all this other spending in a great big package. So lawmakers have different reasons for voting for a great big bill like that, and while they may not like certain provisions in it, they end up voting for it anyway because they like most of the other provisions in it. So, that’s tactically how they’re going to try to position that bill.

Lastly, the White House Office of Management and Budget is responsible for reviewing all rules and regulations before they’re made public. So we’re always checking the OMB dashboard to see which rules have arrived for review. The dashboard doesn’t provide too much information on a substance of many of these rules, but we are able to get an idea of what they’re about from either their title, their history, or things that we pick up around town.

A couple of those worth mentioning include a HRSA proposed rule on 340B alternative dispute resolution process. This is something that’s been in the works for a long, long time. It’s been pending at OMB for well over a year. We really don’t have any idea when it’s going to be released, but it’s one that we’re tracking really closely. Another is titled Rescission of the Regulation entitled Protecting Statutory Conscience Rights in Healthcare Delegations of Authority. Quite a mouthful.

That was the Trump era regulation that was intended to, I’m going to get this right here, quote, “Provide protections in healthcare for individuals and entities on the basis of religious beliefs or moral convictions.” So this is the Biden administration reversing the Trump era regulation that deals with religious beliefs and moral convictions, which was quite controversial at the time that was passed anyway.

Lastly, the DEA has a regulation pending that’s titled Special Registration to Engage in the Practice of Telemedicine, which we expect will deal with the electronic prescription of drugs via telemedicine. Not too much more on that one, but one we are also tracking. And that’s been pending for a while too, and really no idea when that’s going to be coming out. So that is the regulatory overview, the Capitol Hill overview. Andrew, anything you want to add as we wrap this one up?

Andrew Coats: No, although I’d give us a shameless plug for our next podcast, which will take place sometime in October, and we’ll have a lot of good hot takes on the upcoming election, maybe some predictions, and what that may mean for Congress when they come back in November and December.

John Williams: Exactly. That’s always the fun one to do right? Where we get to talk about campaign politics and how that will shake out on Capitol Hill. Because if we go too far down that road and ruin the content, but there are going to be a lot of changes, especially in the House as to who is in charge of the committees with jurisdiction over healthcare. So it’s always fun to take a look at how that works. So thank you Andrew. And thank you to everyone who has joined us today on Inside Baseball, a look at healthcare, politics, and policy in Washington.

If you’d like more information about what Andrew and I do, or how we provide federal advocacy services to our clients, please visit our website at hallrender.com, or you can reach out to me at jwilliams@hallrender.com, or Andrew at acoats@hallrender.com. One last disclaimer, please remember that the views expressed in this podcast are those of the participants only and do not constitute legal advice. Thanks for joining us, everybody. Have a great rest of your day.