John Williams: Hello again, everybody, and welcome to another episode of Inside Baseball, a look at healthcare 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. As always, I’m joined by my colleague and DC cohort, partner in crime, whatever you want to call him, Andrew Coats. Andrew, how are you?

Andrew Coats: Good. Happy new Congress.

John Williams: Happy new Congress. Happy New Year.

Andrew Coats: First recess week of the year.

John Williams: Right? Yeah, absolutely. It is a brand-new day, if you will, on Capitol Hill, with a whole lot of new things to look forward to. This is our first podcast of the new year and end of the 118th Congress, which is already off to a very interesting start. If you’re watching the news at all, then you know the speaker’s election was quite the high drama. I thought that C-SPAN’s coverage was absolutely amazing, for all of you listening to this that are political geeks like Andrew and I. And actually spent the time watching C-SPAN instead of the national news shows.

It was fascinating because normally the party that’s in control of the House controls the C-SPAN feed and controls the C-SPAN cameras, but because of a technicality, neither party was actually in control of the House for that period. The clerk of the House was in control, and so C-SPAN got to control their own cameras and because of that, I think America got a really amazing view of how the House floor works. And I, for one, wish they would do an awful lot more of that. But I think for obvious reasons and optics they don’t, and I know Republicans are already in control of those cameras again.

Andrew Coats: Thank you, John. And more people watched C-SPAN and that drama over the speaker vote than probably any other House proceeding short of maybe an impeachment vote.

John Williams: Exactly. I was going to say, probably not since the last Trump impeachment has anybody watched that much C-SPAN. No question. No question. Well, for this episode, I think we’re going to look at the political power dynamics of the 118th Congress and then talk a little bit about what you might expect on the healthcare front. Andrew’s going to walk you through the new power dynamics in the Senate, which aren’t really that new, I guess. Talk a little bit about the healthcare committees of jurisdiction over there, and then I’m going to do the same thing over in the House with the House Republican majority, the new House Republican majority, and what we might be able to expect from them since they are in the majority. Andrew, you ready?

Andrew Coats: Let’s do it.

John Williams: Take it away, my man.

Andrew Coats: All right. Yeah, so let’s talk about the Senate and what has changed and what hasn’t. There’s not a lot of drama compared to what’s going on with the House. The Senate is still going to be the Senate. They’re swearing in new members and basically are out now, but you’re still going to need 60 votes unless there’s a reconciliation vote, and there’s not going to be in this Congress. What we do see that’s different is that a lot of the Republican deal makers who had big roles on the A committees as far as healthcare goes are now gone. Senator Blunt, key appropriator, Labor, HHS Committee, ranking member, he’s gone, he retired. Senator Burr, ranking member on the Health Committee, from North Carolina, retired. Senator Portman, key member on Senate Finance from Ohio, retired. Senator Toomey, another Finance member, Pennsylvania, retired.

These are all members that McConnell kind of leaned on and they did a lot of the deal making and worked closely with Democrats. They’re gone now. And because of that, you have a much different Republican Senate caucus than you did last Congress. And we’ve already seen McConnell face a leadership election challenge from Senator Rick Scott in Florida. It’s the first time there’s really been a group that’s publicly opposed to McConnell, who has for the bulk of his time in leadership, really enjoyed unified support from within the caucus. So he’s going to face a little bit of headwinds this year from within, and that will be something new to watch. Now, Senate is out this week. They come back the week of January 23rd.

You’re going to see the committee appointments and the committees get filled out, so new members get appointed to committees. And then the Senate will be off and running from there. The two big sort of Senate A committees that we keep an eye on, one is the Health Committee, the other is the Senate Finance Committee. The Health Committee is where we see the big change. Gone are Senator Burr, which I’ve mentioned. He retired. Senator Murray is no longer going to be chairwoman. You’re going to have Bernie Sanders in charge of the Health Committee and you’re going to have Dr. Cassidy from the Republican side as ranking member.

John Williams: Yeah, you’ve got Mr. Medicare for all on the one side and then you’ve got a former physician on the other. That will be interesting.

Andrew Coats: Two members that they’ll never shy away from healthcare issues. Say what you will, both take a very much interest in healthcare, diametrically opposed guys. So not as much in last Congress, but in recent years the Health Committee has always worked well together. And when you meet with their committee staff, you’re usually joined by Republican and Democrat staffers who would sit in on that meeting. We’ll see if they go back to this format under Sanders. I don’t know, and this is such an unknown to so many people of how this will play out that it’s going to be interesting to see how well these two work together and how well the committee works together in the [inaudible 00:06:36]

John Williams: That’s really a good point. Cassidy is… I don’t know the gang of whatever number it is now, but you do have this group of Republicans that have worked across the aisle to pass legislation to get to the 60 votes, and Cassidy has traditionally been one of those. Todd Young from Indiana has been part of that from time to time. Mitt Romney from Utah has been part of that. You’ve had this group that has been willing to work across the aisle to get stuff done, and Cassidy’s been a part of that.

Now, how far he’s going to go to what Bernie Sanders’ traditional views of healthcare are, who really knows? Cassidy’s got a real soft spot on behavioral health, which could be an area where they work together. Although there was a lot of money for behavioral health in the omnibus that passed last month. I do think it’s going to be fascinating to watch, but I think it’s possible that there could be some areas where they actually work together. But I think to your point as well, seeing how the staff works together is going to be fascinating too, and that’s something that people like us will keep an eye out for.

Andrew Coats: And then the other big A committee in the Senate is the Senate Finance Committee. And here you have basically the same roster intact, Senator Wyden from Oregon as chairman and Crapo from Idaho as ranking member. Again, if you only listen or watch MSNBC or Fox News, you’d probably be surprised to learn that the Finance Committee, like most committees in the Senate, attempts to work in a bipartisan manner. And if we’re up there with a client or you have a proposed bill that a client wants to have introduced, you’re going to need to have buy-in from both Republicans and Democrats on that committee to make it really a serious legislative effort. So again, I think we’re going to see that bipartisanship on the Senate Finance Committee.

John Williams: Hate to interrupt you, I’m sorry, but there’s a fascinating development. And maybe you were going to get to this and I apologize if you were, but is this retirement of Debbie Stabenow from Michigan. You talk about somebody that’s worked across the aisle over the years, on healthcare issues especially. And not only that, but somebody that was in line to be the next chairperson of that committee, and then just up and decided not to run for reelection in ’24. So some changing dynamics there too.

Andrew Coats: One of the interesting nuggets that Senate Democrats now have is subpoena power. Last year, with a 50/50 split, they did not have the subpoena power that the Senate normally enjoys. So I would expect a number of industry leaders being hauled up before the Senate. And then in the House you’re going to see this back and forth, because the House can kind of respond in kind. So if you see the House do something on document leak from President Biden, you see the Senate respond with something regarding Trump.

Or the Senate does something on climate change, why are you killing the environment? You may see the House respond with something on tech, and why is the company so woke? So you’re going to see this kind of ping pong match going back and forth. But I think it puts a lot of the Fortune 500 CEOs and big industry leaders and trade associations on their toes and be ready to be hauled up before Capitol Hill at a moment’s notice.

John Williams: Yeah, and I think you’re absolutely right. I think what we’ve always seen in the past is that when you have divided government like that and you’ve got one party controlling one body, one party controlling the other one, the chances of getting legislation passed is really remote. And so what does everybody spend their time doing? They spend their time on oversight, and to your point, having subpoena power to do oversight. So yeah, I think you’re absolutely right. I think you’re going to see a ton of oversight from both parties, but coming from different angles, depending on whether or not it’s the Senate you’re talking about or the House.

Andrew Coats: But end of the day, Senate is still going to be fairly status quo from what we saw over the past two years. Where the big change, and where I think a lot of the interest has been, at least in this opening couple weeks, has been the House.

John Williams: Yeah, you think?

Andrew Coats: You want to talk about the power struggle on what the speaker vote and all the implications of that mean for this Congress?

John Williams: Yeah. I mean, as I said, it was high drama for political geeks like us. And in case you weren’t watching the speaker’s vote because you had a lot better things to do, it took 15 votes, or 15 ballots, for Kevin McCarthy to finally win. The 14th ballot was especially intense because everybody went into that vote believing that Kevin had finally gotten enough votes to get across the finish line and win the speakership. But it turns out that he didn’t because a handful of Republicans changed their minds at the very last minute. Literally, as the vote was starting, they changed their minds. And there was this really intense 25-minute standoff on the House floor that was caught on television, not just C-SPAN, but CNN, Fox, everybody was showing it. And they eventually proceeded to a 15th ballot where Kevin, again, finally secured enough votes to become the speaker.

And there’s really two schools of thought regarding how all this played out and what it means. I tend to agree with those who say that this episode is really a display of how the process should work. Although it was truly a close view of how the sausage gets made in Washington, the legislative process, which includes picking leadership can be very, very messy. And in this case it was on display for the whole world to see. But there are many Republicans that really wanted to move away from this top-down leadership-driven approach to legislating that has become the norm for both parties over the last 20 to 30 years. And this was their opportunity to try to do that. The other school of thought, which I also agree with, is that this episode is merely an example of the dysfunction that we’re all in store for on the Republican side this year.

When you look at the vote itself, there was really two factions at work here. First you had this Chip Roy, Byron Donalds camp, if you will, of about 20 Republicans who wanted rules changes and greater representation of conservatives on committees. They basically wanted to go back to the Schoolhouse Rock, I’m just a bill method of doing things, where bills went through committee and they get marked up and they go to the floor and they can be amended on the floor and all of that. So those are legitimate political and policy concerns and I think that that is the right arena in which to have that debate, as messy as it was and as public as it was. The other faction was just for Republicans, really, led by Matt Gaetz of Florida. And I’m not really sure what their endgame was other than to draw attention to themselves in order to raise money off of social media, which I know some of them were doing the entire time this process was going on.

What their legitimate policy concerns were, I’m not really sure to this point. But in the end, Kevin got the votes he needed to become speaker. What does that mean for the future? Republicans have a very small majority here. And that means that the smallest group of Republicans can bring everything to a complete standstill. So it’s going to be really hard for Republicans to pass any meaningful legislation through the Congress. They got the votes to get it through the House, but getting 60 votes in the Senate, which means getting Democrats to go along, is going to be incredibly difficult, if not impossible. So despite their promises to stop the IRS from hiring these 87,000 new employees and their promises to use the power of the purse to lower government spending, there’s no bill to do those kinds of things that can get 60 votes in the Senate, much less get Biden to sign it.

So Republicans seem to be sticking with this time-tested tradition that they have of overpromising and under-delivering. And look, both sides do it. I’m not just picking on Republicans here. But just think of the ACA repeal debacle if you want to see what I’m talking about. And if you really want to see what we’re in for, I think, over the next two years, all you really have to do is think back to that period of 2010 to 2016 when Obama was president and John Boehner was speaker, and we just went from fiscal cliff to fiscal cliff from continuing resolution to continuing resolution and government shut-down threats and whatnot.

And I think hopefully, and I say this, hopefully, Republicans learned their lesson on government shutdowns. But I’m not really sure because you still have a significant number of Republicans in the House who weren’t around the last time Republicans shut the government down. So they don’t really understand what the political cost is for doing that. But hopefully McCarthy can keep everybody on board and they don’t run the train off the rails.

Andrew Coats: We knew that this was going to be a tough slate for McCarthy. We knew this would be a tough Congress. We talked about it in our post-election recap. I think anyone who follows politics closely knew he had a tough schedule ahead.

John Williams: You know what? [inaudible 00:16:31] but I think you’re absolutely right. We knew that after the election. But before the election, all the predictions, ours included, was like, oh, Republicans are going to get anywhere from 12 to 40 seats in the House. And ended up being four or five. And so I think that’s part of what McCarthy had to deal with, was that he went in to the midterm election thinking that he wasn’t going to need Chip Roy, he wasn’t going to need Byron Donalds or Matt Gaetz or Lauren Boebert. And that call-

Andrew Coats: The speaker vote was so dramatic and so many people watched it. Now it’s not just the kind of inside baseball, shameless plug, folks that know this, but your Uber driver knows it’s going to be tough for McCarthy. Your kid’s basketball coach knows it’s going to be tough for McCarthy. Everyone knows how tough it’s going to be this year for McCarthy. And in a way, that may help lower the expectations for Republicans and for leadership. Because [inaudible 00:17:32], as you mentioned, when a new party takes over the House, there’s always that January, February period where just the sky is the limit. And we’re going to impose term limits, we’re going to repeal the ACA, we’re pass climate change. Of course, he’s coming at this from the opposite end here. So any sort of movement he gets is going to be seen as a positive, and kind of unexpected.

John Williams: Right. I mean, so tough to the point that nobody else wanted the job, all right? For the people that were watching it, you kept see them nominating Republicans, nominating Jim Jordan to be speaker, even though he didn’t want the job and he was backing McCarthy. That’s how hard it was to become speaker, third in line for the presidency of the United States, that nobody else in the Republican Party wanted the job and the Republican House guys wanted the job other than Kevin McCarthy. So yeah, I mean…

Andrew Coats: For the Democrats, can you ever remember a change in power in the House where the minority party comes in with more momentum than House Democrats right now?

John Williams: No.

Andrew Coats: Usually the party that lost has this month of recrimination, and you’re reading these 10,000 word think pieces about who’s to blame for losing the House. But that really hasn’t been the case. Partly, they have new leadership for the first time in a long time. They’re kind of enjoying that honeymoon period.

John Williams: Well, and the enthusiasm that goes with it, right? I mean, they’re excited about having this new young crop of leaders on the Democratic side. And they’ve got some good ones. I mean, Pete Aguilar has got a great record and Hakeem Jeffries does too. I mean, they’re qualified to do the job. But yeah, they certainly… You talk about over-promising and underdelivering. I mean, they outperformed their expectations, which always gives you momentum when you’re going into a new job. But speaking of new jobs in the House, we’re going to have new leadership of committees. And in the House there’s two committees that have jurisdiction over healthcare, Ways and Means, and Energy and Commerce. And if a person wants to be a chairman of a committee in the House, they literally have to run a campaign for it. And this is some serious inside baseball stuff.

The steering committee inside the Republican caucus… And don’t ask me how many people serve on it because I can’t remember, they are really who determines who becomes chairman of these committees. And so you have to run these campaigns in front of the steering committee to win enough votes to become a chairman. And different people on the committee, which includes Kevin McCarthy and Steve Scalise, they have a different number of votes. I think the last time I checked, the speaker has seven votes on the steering committee, so the greatest amount of influence. So these folks literally have to run these campaigns for these chairmanships. And that includes raising a significant amount of money for your colleagues, and in this case doing that for the National Republican Campaign Committee.

So if you look at Ways and Means, of the two healthcare committees, it was really the only one that had a race for its chairmanship, and that was between Vern Buchanan of Florida and Jason Smith of Missouri. And Vern has more seniority on that committee, a committee where seniority is fairly important. On the Democratic side of things in the House, seniority is still the most important thing. It hasn’t been the most important thing for Republicans since about 1994 when Newt Gingrich picked Bob Livingston over John Myers from Indiana for the House Appropriations Committee chairmanship, but it still plays some factor. And Vern, you talk about money, Vern raised more money for the NRCC than Jason did, although not by much. I think Vern raised like 4.1 million and Jason raised 3.8 or something like that. So he raised slightly less money, but Jason is much closer personally to Kevin McCarthy even though Vern and Kevin came into Congress in the same class together.

I think ultimately it came down to the fact that Jason is viewed as more conservative than Vern, and more importantly for that, making Jason chair of the Ways and Means Committee was another bargaining chip that Kevin could use in his negotiations with conservatives to win the vote for speaker. It was a bargaining chip, and he could say to them, “Okay, I know you like Jason better than you like Vern because he’s more conservative, so I promise I’ll make Jason chairman of Ways and Means instead of Vern if you’ll vote for me.” There’s been reports that there was a very heated conversation between Vern and Kevin on the floor after that, where Vern told him that “You screwed me,” which is not exactly the word he used.

So high drama there. Ways and Means does have a health subcommittee and I think Vern’s consolation prize is that he gets the Health Subcommittee gavel. He was already the highest ranking Republican on that subcommittee, and so he’ll now become the chairman of that subcommittee. He made a lot of noise during the whole process that if he didn’t get the gavel for Ways and Means, the full committee gavel, that he was going to retire from Congress, and now that looks like it’s probably not going to happen. So he’s going to stay and serve in that role.

On the Democratic side, Lloyd Doggett from Texas has been serving as the chairman of that subcommittee, and he’ll just assume the highest ranking Democratic spot on that subcommittee. As we sit here today, we know that Republicans will have 25 seats on the full Ways and Means Committee and Democrats will have 18, which is fewer than they have now. That’s the way the process works. Whichever party controls the Chamber gets more seats on the committee than the other one does. No word yet on which Democrats are going to lose their seats on that committee. But we do know that there’s going to be about 10 new Republicans on that committee because of other vacancies and whatnot.

The other committee in the House that has jurisdiction over healthcare, Energy and Commerce, nowhere near the type of changes that we’re seeing in Ways and Means, in fact barely any changes at all, quite frankly. At the full committee level, Cathy McMorris Rodgers is moving from the ranking Republican spot to the chair. Frank Pallone of New Jersey is moving from the chair to the highest ranking Democrat spot on that full committee. At the Health Subcommittee level, Brett Guthrie’s taking the gavel as chairman and Anna Eshoo is moving from the chair to the highest ranking Democrat on that committee.

Andrew Coats: I think on E&C, that’s a committee you could look at and say you could see legislation moving out of that committee. Last year with Pallone and CMR, you saw that they moved a privacy bill, they moved the FDA user-fee bills and worked in, from what we could tell, a bipartisan fashion. I pinpoint that committee as one where I’d looked at, predicted to see legislation getting moved.

John Williams: Yeah, absolutely. And it will be interesting because 29 Republicans on that committee, 23 Democrats. No word yet on who’s going to get that seat and who’s going to lose it on the Democratic side. But to your point, there are issues that have been bipartisan that come out of this committee. And one of those issues could be the issue of healthcare monopolies and antitrust. And that leads us into what we might expect, as far as a healthcare agenda is concerned, from House Republicans. And obviously focusing on House Republicans because Democrats control the Senate. And they really haven’t put out necessarily a blueprint yet, which House Republicans did last year when they created this Healthy Future Task Force that outlined their priorities if they were given control of the chamber.

And they divided issues into taskforce subcommittees that had titles like the Affordability Subcommittee and the Modernization Subcommittee, Security Subcommittee or the Doctor-Patient Relationship Subcommittee. And each of these subcommittees put out white papers, and then the items in those white papers read like a greatest hits compilation of past Republican proposals like encouraging more portable health coverage or making health savings accounts more accessible and promoting association health plans. However, there were some things in there that I won’t say are necessarily new, especially for people who deal with healthcare at the state level and state houses, but are fairly new in Washington and could be pretty concerning, especially for hospitals and health systems.

And these include things like reforming the inpatient only list or pursuing site-neutral payment reform, repealing the moratorium opposition on hospitals. Those were all things that were included as recommendations from the Healthy Future Task Force. From what we have been told by the leadership staff, Republicans are considering using a collection of bills that were introduced in the last Congress as a blueprint of sorts for their agenda, a comprehensive healthcare package, if you will. And those bills had titles like the Addressing Anti-Competitive Contracting Clauses Act or the Consumer Choice of Care Act or the Transparency of Hospital Billing Act.

So you can look at the titles of those and get an idea of where Republicans might be going with their healthcare agenda in the House. Another area that we think is going to be a significant focus for the House, and this goes back to the point we were making earlier about oversight and subpoena power, is that House Republicans are going to spend some time focused on exactly how it is that hospitals and other healthcare entities used the monies that they received from the Provider Relief Fund. Many of you listening to this podcast probably read the Wall Street Journal article that ran last month, or I think it was even a series that they’ve been running on this stuff. But at least one article from last month that claimed that billions of dollars in Provider Relief Fund monies went to hospitals that didn’t need it, and/or who used it to either improve their bottom line or bonus up their executives or used it for some purpose that Congress did not intend Provider Relief Fund monies to go to.

We’re even getting word that Representative James Comer of Kentucky, who’s the incoming chairman of the House Oversight Committee, which I guess, ironically for me, is the committee that I worked on when I was on the Hill in the nineties, is going to hold hearings that not only focus on how hospitals spent their Provider Relief Fund dollars, but is also going to hold hearings on how hospitals spend their 340B dollars, hold hearings on hospital not-for-profit status and how the FTC, Federal Trade Commission, conducts oversight of their consolidation activities, the merger and acquisition activities in the healthcare space. And it’s that issue of competition and antitrust enforcement that I think might have the best chance of legislative success. And you talk about the things that Republicans and Democrats can work together on, and you look at Energy and Commerce, and it’s got jurisdiction over this issue.

On the one hand, you’ve got this new strain of populism that’s running through the Republican Party that isn’t necessarily as pro-business as it has been in previous years. And on the other hand, you’ve got Democrats in the Senate, like Elizabeth Warren or Bernie Sanders, who might be willing to go along with Republican legislation that cracks down on what they view as monopoly forces in the healthcare marketplace. So trying to read these tea leaves here, I think antitrust and monopoly, or what are viewed as monopoly issues in healthcare, is areas that we might see folks on the Hill working together on. But it’s early and we’ll just have to see how it all plays out.

Andrew Coats: Stepping back from a 10,000-foot view, you have 117th Congress, you have a new presidential administration, you have big ideas, and you had big bills coming out. American Rescue Plan, Build Back Better. These are hundreds of billions of dollars that were poured into these bills. Those days are gone. 118th Congress is going to look a lot different. It’s going to be much more micro-driven, less coming from the White House, more coming out of the congressional office buildings and the policy staff on these committees. And at end of the day, if the bills they’re going to move, they’re going to need to be broad bipartisan support, and fairly not controversial because of that. And then I think you have to pay for it too. I think that’s going to come back into focus as well. And we got away from that a little bit, and I think that’s going to be back in vogue again.

John Williams: Yeah. Looking in the healthcare space and looking down the road, there isn’t a lot of must-pass legislation that needs to get done this year, except for the $8 billion in ACA-related dish cuts, Medicaid dish cuts that are set to kick in on October 1st, right at the end of this fiscal year. Those have been postponed over the years and they’re going to kick back in unless Congress does something about it. And from everything that we’ve heard on the Hill, they are going to do something about that, probably postpone it again. I doubt they’ll eliminate it. They’re probably postpone it again, but that provides a vehicle then to do other things in healthcare. And to your point, if they postpone it, they’re going to have to figure out how to pay for it.

And if they have to figure out how to pay for it, one of the areas that has always been talked about is this site neutral payment reform for hospital outpatient departments that are receiving on-campus hospital rates instead of physician office rates. And those were banned, then there was a exception for mid-builds. But there was a large group that were grandfathered in. And so in order to pay for this dish cut legislation, they could very well go back and use the monies from site neutral payment reform to help cover the cost of that legislation. So that’s something that was on Republican agenda to do, and I’m sure Democrats would go along with something like that in return for postponing these dish cuts. But I guess we’ll just have to wait and see how it all plays out.

Andrew Coats: It’s hard to see a big healthcare vehicle moving as a standalone. You have to think it’s going to be attached to some sort of either raising the debt ceiling, supplemental funding, year-end appropriations type bill. Maybe I’m wrong, but you kind of see it moving through those type of bigger vehicles.

John Williams: No, no, I agree with you. Well, however it all plays out, we’ll be here to tell you about it on Inside Baseball. So thank you for joining us for this edition. As always, if you would 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 reach out to me at jwilliams@hallrender.com or Andrew at jcoats@hallrender.com. And one last disclaimer because we are lawyers, please remember that the news expressed on this podcast are those of the participants only and do not constitute legal advice. So long, everybody. Thanks for joining us.