John Williams: Hello again, everybody. Welcome to another episode of Inside Baseball — A Look at Health Care Politics and Policy in Washington, part of Hall Render’s Practical Solutions Podcast series. I’m John Williams, managing partner of Hall Render’s Washington, DC office. And as always, I’m joined by my colleague and DC cohort, Andrew Coats. Andrew, how are you today?

Andrew Coats: Doing good. We got Monday, but it’s a short week Monday. So all things are good.

John Williams: Yeah. Probably doing better than our picks for the election the other week, right?

Andrew Coats: Yeah, that was a rough night.

John Williams: Yeah. As you all can tell, this is our post-election podcast where we’re going to look at the results of the midterms and quite frankly, just how wrong we were in our predictions during our last podcast. In our defense, I will say that just about everyone appears to have been wrong in their predictions. House Republicans had, I think it was two election night parties scheduled or hosted in Washington, DC on election night and the House Democrats had none planned. So I think it’s safe to say that both sides really got it wrong. I think what we’ll do is, Andrew, I’ll kick it off with a look at the House results and let you take the Senator. That work?

Andrew Coats: Sounds great.

John Williams: All right. Well, as a refresher on the last podcast, we recommended that folks look to the House races in Upstate New York, the Rio Grande Valley of Texas, and the 2nd, 7th and 10th districts of Virginia, for indicators on how the night might go. I think while both Democrats held their own in the Rio Grande Valley and Republicans won pretty big in Upstate New York, the three House races that we identified in Virginia were really the best predictors of how things ended up. For those who listened to the last podcast, you’ll recall that we said Republicans winning the second district of Virginia would mean that they are meeting expectations that evening because that is what is known as an R+2 district. The Cook Political Report does what they call a Partisan Voter Index, and they rank things by Republicans +2, Democrats +2, D+2, R+2, as we refer to it, to show how a certain district leans one way or the other.

So winning Virginia seven meant that they were exceeding expectations. That’s a D+1 district. And then winning Virginia 10 would’ve meant that there really was a red wave going on because it is a D+6 district. In the end, they met expectations by winning Virginia 2. They barely lost Virginia 7. That was a long night on Virginia 7. And they really didn’t come that close in Virginia 10. So while the Republicans did end up winning the House of Representative, that’s beneficially called, they have reached the mark of 218 seats, which is what’s necessary in order to control the process in the House of Representatives.

It certainly wasn’t anywhere close to the 12 to 25 seat margin that most people expected, and it was nowhere near the 30 to 60 seat margin that some members of the Republican House leadership in Washington were predicting a few days before the election. So they were way off on that.

Again, if you pay attention to this stuff in the news, you know that Republicans have reached that 218 number. There’s still a number of races left to call officially. So we don’t know what kind of margin Republicans are necessarily going to have in the House of Representatives, but I do think it’s safe to say that we’ll almost certainly be either at or below the margin that House Democrats have had for almost the last two years, which is right at six seats. So going to be a very narrow majority for Republicans. It’s going to make it very difficult for the Republican leadership to control the members of their caucus, which is what always happens. Nancy Pelosi had a difficult time keeping either moderate Democrats on board or the progressive wing on board at times, although she did a phenomenal job of navigating that.

And Kevin McCarthy’s going to have that same problem between the very conservative members of his caucus and the moderate members of his caucus who are both going to have incredible amounts of leverage come January when the new session of Congress kicks off. Andrew, you want to walk us through the Senate?

Andrew Coats: Yeah, absolutely. But I’ll just quickly add, I think McCarthy’s inheriting basically the same margin that Pelosi did. And to Pelosi’s credit, when there was a big vote there, she got her party in line. And it will be very interesting to see if McCarthy has that same touch and is able to keep the party in line on the big votes when he really needs all of his caucus to come in for them to fulfill.

John Williams: Yeah, and before you jump into the senate real quick, I think it’s probably worth hitting right now just because again, if you pay attention to this stuff in the news, you’ll know that Nancy Pelosi announced last week that she will not be running for the speakership again. And the same with Steny Hoyer, who was the number two Democrat in the House, and Jim Clyburn, who was the number three, is going to stick around in a leadership position. But it will not be as the number three Democrat in the House. So yeah, to your point, Pelosi was very adept at her job, but we are going to have new Democratic leadership.

Andrew Coats: That’s a lot of experience. That’s over 100 years of experience that they are losing with Pelosi and Clyburn.

John Williams: What was the statistic that I saw that if you add up the age of Pelosi, Hoyer and Clyburn, you come out with a number that’s actually higher than the age of the country itself.

Andrew Coats: Right.

John Williams: Yeah, that is institutional knowledge right there. But I know from talking to a lot of Democratic members of the House, some of whom are anxious to get into a leadership position, that this is something that the Democratic caucus has wanted for quite some time. But I know what will not be changing is over on the Senate side, so I’ll let you take us into that.

Andrew Coats: Yeah. The Senate, I think I had predicted a one to three Republican pickup in the Senate. And if you looked at polling, that was kind of in line with what the polls were saying, a lot of the polls were saying. But it turns out it’s going to be at best, a zero gain and we’re still waiting on Georgia, obviously. They have the runoff between Warnock and Walker the first Tuesday in December. So we’ll see if Republicans win that, then it would be back to a 50/50 split, with Democrats getting the tiebreaker from the White House. This was built up, this kind of election cycle, to be Republican route, and it wasn’t even close. I think Republicans, where they really got hammered was on the expectations game. You looked at where the GDP was, you looked at the inflation, you looked at the stock market, all those were trending in the wrong direction for the party in power.

And people thinking what we saw in Florida where Republicans had a lot of stuff would be nearer than the rest of the country. It just wasn’t. And I think, you can look at the Dobbs decision, I think obviously in the Western states that played a much bigger role than was anticipated. I think initially, when the Supreme Court’s decision came down, people were thinking this would really hurt Republicans. And that kind of thought process died out as we got close to an election day. But once election day came, it was clear that Colorado, Washington, Nevada, Arizona, you saw a lot of voters come out as a protest against the Supreme Court decision. And I think you just saw some polling firms massively whiff on some of their predictions, which obviously, it’s a tricky business. But there’ll be less credibility there next election cycle for some of these firms that we’re predicting are plus large margins.

But at the end of the day, the senate’s going to be very tight. It’s like the rest of the country, it’s like the House. Razor thin margin for the Democrats. It’s even like the governor’s races, which I think now are 26-24 in favor of Republicans. So across the country, you see these really thin margins. In looking at the elections, the red state stayed red and basically, the blue states stayed blue. Of the 28 incumbents on the ballot, all of them stayed… So for red, if the red state went for Trump in ’20, Republicans were 17 for 17 in those states. If the state went for Biden in ’20, Democrats in the Senate were 15 out of 16. The only outlier being Wisconsin, where Senator Johnson won in a very close margin.

So historically speaking, this is something I saw somewhere, and it was one of those stats I wish I picked up before the election, and it made a lot of sense after. For whatever reason, the Senate has a trend of staying under control of the party in the White House in the first president’s midterm. Out of the last nine midterms for the first midterm of the president’s term, the party in power has held the Senate.

So Biden’s going to do so in ’22. Trump did this in ’18, where they picked up two to hold the Senate. Obama lost seats in ’10, but still held the Senate. Democrats still held the Senate. W. Bush picked up four seats in 2002, held onto the Senate. Reagan in ’82 held onto the Senate. Carter lost seats in ’78, but Democrats still held the Senate. Johnson lost three seats in ’66, Democrats still held the Senate. Kennedy picked up seats in ’62, Democrats still held the Senate. The one outlier was ’94. And Clinton, that was a huge red Republican year. Democrats lost eight seats and they lost the Senate. So eight of the last nine elections, the Senate has stayed in whoever’s in White House’s party in their control.

John Williams: Yeah, you’re right. And to that point, the other thing was, this was a bad map for Republicans to get to start off with. They were having to defend way more seats than Democrats had to in this cycle, in the Senate. And so, you heard me a year and a half ago saying that I didn’t think that the Republicans were going to win the Senate because I didn’t think that they had a map that was in their favor. Now, I also bought into the momentum argument in the last month and I was predicting, yeah, Republicans going to pick up two, one, whatever. I bought into that as well because it was the same thing that everybody was saying. But yeah, the Republicans had a bad map and history, to your point, actually played out the way that history was expected.

Andrew Coats: Republicans did themselves probably no favors by kind of electing in the primaries, a lot of untested candidates who had never run for office before. And when you’re running for Senate in a statewide race and you’ve never run for political office before, that’s a very large mountain climb. You are making thousands of decisions in that process. And when you have no experience to fall back on, that’s a very tough go. And I think, you look at the Trump factor, for President Trump, he remains a fourth and primaries. And a lot of his decisions kind of kept a Trump favored candidate allowed them to win the primary. But thus far, we’ve seen Trump’s candidates really struggle in general elections. And that came true last Tuesday.

John Williams: Yeah. A couple things. One, on the election side of it, one of the interesting things that I’ve been watching is this issue with the congressional generic ballot versus the popular vote. The generic congressional ballot basically looks at just sort of an overall number of, would you prefer a Republican Congress or a Democratic Congress? And it sort of tracks with the popular vote. And I think that the final generic congressional ballot was right at about four to four and a half percent in favor of Republicans. It’s fascinating that the popular vote, Republicans are winning the popular vote in the midterms and they’re doing it by about four to four and a half percent. So actually, the results will end up actually tracking the congressional ballot, I think pretty much spot on, which is kind of interesting in itself.

To go back to a point that you made about the split and the issue with the Warnock/Walker race and whether it means a 50/50 split or a 51 49 split, it’s important, and this is serious Inside Baseball stuff, this is the title of our podcast. One of the impacts that that’s going to have, whether it’s 50/50 or 51/49, is just beyond Vice President Harris breaking ties in a 50/50 Senate. In a 50/50 Senate, you have equal representation on committees and that plays into a lot of inside baseball stuff with discharge petitions and a whole host of other procedural moves that if it’s a 51/49 split, then you don’t have the power sharing dynamics that go along with a 50/50 Senate.

And so you will have more Democrats on committees than you will, than Republicans. And this also plays into things like how many people you need to have a quorum, how many in order to hold votes and how many absences do you have? And if a senator gets sick. And what that does is you’ve got a one vote safety cushion now if you get 51/49 versus whether you have 50/50. So there is some importance to what’s going to happen with the outcome of that Georgia runoff that goes just beyond who’s going to control the Senate.

Andrew Coats: That’s why the people of Georgia are going to continue to see Senate ads for the next month leading up to election just about every cycle.

John Williams: Well, Congress’s business is not completely finished. Yeah, we’ve had the election now and there’s some things left to play out in terms of margins in Georgia. But from a legislative perspective, Congress does have unfinished business to deal with before the end of the year. Law makers returned last week to kick off what is known as the lame-duck session of Congress, which is that period that runs between the election and when Congress officially ends its work for the year. And in this case, would be the complete end of the 117th Congress. I know that the most pressing issue right now on Congress’s plate is funding the federal government for the rest of fiscal year 2023. And I say for the rest, because the government has been funded and operating under what we call a continuing resolution, or a CR, that runs from the end of fiscal year 2022, so September 30th of this year, until December the 16th of this year.

So Congress is going to address all of the outstanding issues that it intends, and I use that word intentionally, to address through an omnibus bill, which is one of these massive 2,000 plus page bills that covers a whole variety of different issues including healthcare. So the first thing that they’re going to put into this omnibus bill is going to be how they’re going to fund the federal government for the remainder of FY 2023. And we expect it to last that long. I don’t think they’re going to come up with anything shorter than a full fiscal year’s worth of funding in that bill.

We had heard rumors that they were going to possibly put the debt ceiling in the omnibus in order to take that off the table so it can’t become a political hot potato next year. But it looks like that’s not going to make it into the omnibus. But there are a lot of healthcare issues that need to still be addressed. And the omnibus is going to be the vehicle as we call it, by which their Congress is going to try to address that at the end of the year. There’s a whole bunch of stuff flying around. Andrew, jump in here. What are you hearing as far as healthcare issues that might make it into the omnibus?

Andrew Coats: Yeah, well, as you noted, first off, time is running short. Today is the Monday before Thanksgiving. Congress will be out this week and they return next week and that will give them three weeks to come up with a end of the year omnibus before they turn the lights out for this Congress. And three weeks moves very quickly. So you’re going to see measures they get past and eventually signed into the law are going to be measures that have full bipartisan support and there’s not a lot of disagreement on. And some of the items that need to get done from a healthcare perspective during lame-duck include extension of the statutory 4% sequester cut that would impact Medicare starting on January 1, 2023. We’re going to see extension of the Medicare Dependent Hospital program, the low volume hospital adjustment and ground ambulance add on payment. Another item likely to be added is language to avert a fourth round of Medicare cuts to lab services that’s also set to take effect on January 1st, 2023.

And last on a list, if you’re making it, that’s likely to be included is reauthorization of the user fees for the FDA programs. But without the policy riders, if you recall, the House has passed its own FDA user fee agreement. The Senate has passed an agreement through the help committee. There are a number of policy riders that need to be cleared. We’ll see which ones make it and which ones do not.

There’s also a number of items that could go, that could be included in omnibus package. I’d say the first on that list, it’s provision to avert the looming 4.5% pay cut to Medicare physicians that kick in January 1, 2023. You look at telehealth, extension of the pandemic related telehealth waivers from 151 days to two years after the PhD ends could also be included, as well as the provision that extends a high deductible health plan’s ability to pay for telehealth services. And then, there’s a number of other provisions that could get included. John, I know one that you’ve been working on deals with the Stark Law. Do you want to touch on that?

John Williams: Yeah, so just to jump back real quick, I know that Larry Bucshon, Republican from Indiana and Ami Bera from California, Democrat, have introduced legislation to deal with that four and a half percent physician pay cut. They introduced that in the last month or so, and I know they were working really hard to get that included into the omnibus as well. It’d be interesting to see whether or not the 4% overall PAYGO cut makes it or they both make it. Not everything’s going to make it, right? So they’re going to have to pick and choose because all this stuff is going to have to be paid for somehow and we’ll have to see how that plays out. But yeah, to your point, the other thing that we’re hearing could make it into the omnibus is mental health legislation. There is a House passed bill, called Restoring Hope for Mental Health and Wellbeing Act of 2022. That did pass the House, as I said, with bipartisan support. That could end up going in to the omnibus bill.

There’s a number of bills introduced in the Senate to deal with mental health. That also could be included in the omnibus. One of those is Protecting Our Physicians Act, which is something that Hall Render proposed to lawmakers that would create a new exception to the Stark Law for physician wellness programs. So that’s something that we’re monitoring pretty closely and hopeful that could be included. There’s a number of other things too, I think, that are… Look, the omnibus is what we refer to as a Christmas tree in Washington. Everybody wants to get their ornament hung on the Christmas tree before Christmas is over. And what you try to avoid is hanging too many ornaments on it such that the Christmas tree collapses. But a lot of folks are going to be trying to get their issue, their bill included, especially now that we’re going to have a situation where we’re going to have a change of power in the House.

So a lot of Democrats are going to be looking to use the lame-duck as a chance to get their bills through, knowing that they’re probably not going to have a very good chance come next year. So other things that we hear are being included in the negotiations, but we think stand a long shot of being included is Cures 2.0. That’s one that Diana DeGette and Fred Upton have been working on.

There is a provision that would correct the definition of Medicaid shortfall for purposes of calculating the limit on dish payments. That is important to a number of states around the country. Not quite certain that’s going to make it. There’s talk of including a cap on insulin that’s been discussed a lot over the last two years. Not sure that makes it. I know the administration is asking for more COVID-19 funding more money for Monkey Pox, that’s probably not going to make it. I know that some folks are calling for more money to go into the provider relief fund. I don’t see that happening.

Interestingly, there’s also a piece of legislation that would reform prior authorization in the Medicare Advantage space. There’s a bill that passed the House earlier this year with overwhelming bipartisan support. However, it did so before there was a cost estimate to the federal government for passing the bill or turning the bill into law. And it’s like 16 billion over 10 years. So don’t expect that to make the final cut now, now that there’s a price tag on it because the bipartisan support completely dropped off for that. Anything else I’m missing, Andrew? Anything else? Pretty comprehensive list there.

Andrew Coats: Yeah, it’s a pretty comprehensive list. I’m sure there are other things.

John Williams: There’s always stuff. There’s going to be stuff that we were thinking about that’s going to pop up. From a timing perspective, what do you think? I don’t think there’s going to be any appetite to get anything done until the runoff’s over in Georgia on the 6th. Considering this week’s Thanksgiving, they come back next week, you’re almost at the 6th anyway, right?

Andrew Coats: I think that’s right. I think, you see next week members come back in town and that’s where they’re going to be going to the chairman of the committees and leadership saying, “This is my priority and I want to see this moved.” Committees will take it from there and kind of build the pecking list.

John Williams: Yep. Well, hopefully our forecast on what gets included in the omni is better than our forecast for the elections. The elections were… But I think with that, we’ll wrap up this edition of Inside Baseball. Thank you for joining us. We’ll be back next month to do a rundown of what happened during the lame-duck session, talk a little bit about what to expect in the 118th Congress, which kicks off the first week of January. As always, 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. And as always, one last disclaimer, please remember the views expressed in this podcast are those of the participants only and certainly do not constitute legal advice. So long everybody.