Insights

Good morning from Washington where a Sunday bipartisan deal was announced of $1.7 trillion to fund the government through September 30^th with $886 billion to defense and $773 to non-defense amounts. Both parties are spinning wins to their members. We remember the good old days when billions were enough to fund the government.  We also remember the Fiscal Responsibility Act, last year’s deal between President Biden and then Speaker McCarthy which angered Freedom Caucus members and others and helped propel McCarthy out of his leadership post.  The deal announced yesterday adheres largely to the Fiscal Responsibility Act with minor revisions. Will Republicans in the House make Speaker Johnson pay for this agreement?  We know with the small two vote margin the Speaker currently enjoys; it is likely bipartisanship (Dem support) will be needed to get this through the House. With the difficulties presented by the right on this deal, coupled with impeachment season – can Majority Leader Schumer and Speaker Johnson navigate this topline budget number through their respective legislative bodies?  Or will partisanship rear its ugly head once more in this incredibly unproductive 118^th Congress?  In this Week Ahead, we tackle both houses together as we examine the ramifications of the upcoming funding deadlines.

The Administration

The President and his negotiators continue to push for a war supplemental for Ukraine and Israel, and as previously reported, the request is being tied into border security reforms. The bipartisan group working on a border security deal, including Secretary of Homeland Security Mayorkas, said they made progress over the weekend and hope to have language later this week.  Of course, Secretary Mayorkas is going to be impeached shortly by House Republicans, and it appears the impeachment will be successful in the House, and he will be acquitted in the Senate. Any border negotiation language comes at a time with congressional elections around the corner, and some vulnerable House Democrats may be interested in supporting any reform language.

Congress

The House is back this week after recess. As mentioned, yesterday evening Speaker Johnson, Leader Schumer, and the White House struck a deal for the 2024 Budget topline numbers. Speaker Johnson worked an additional $16 billion worth of cuts beyond the initial McCarthy / Biden 2023 deal, but it will not be enough to appease the far right of his party. The Budget is just the framework for the overall government spending. Speaker Johnson has a narrow majority, and the House Freedom Caucus is surely going to oppose this measure leading the Speaker to rely on Democrat support to get across the finish line.

When members return, they are going to have to work quickly to ensure the departments of Agriculture, Transportation, Energy, Veterans Affairs, and more are funded by January 19^th. Then on February 2^nd, Department of State and other important agencies will also need to be funded before they run out of money. With the MLK holiday and less than eleven days before the first deadline, a shutdown could still happen. Rumors are swirling from short-term extensions to a longer funding mechanism that ensures both parties do not have to vote on these measures respectively over the next several months. At this point it is only a guessing game of what the government funding solution will be. The Senate wants the House to work with Senate passed appropriations bills, but it is unlikely the House will concur.

Congress will be also examining the border, Ukraine, Israel, and Taiwan funding, which are thorny political issues with both parties. Who says a Presidential election cycle is quiet? There will not be a shortage of fireworks as we kick off this Presidential election year with what Congress needs to accomplish.

Health

Even though much attention will be paid to the progress of deliberations to fund the government and address certain health policy issues, there will be other work on Capitol Hill as well. On Thursday, the House Committee on Veterans Affairs’ will hold a hearing titled: “Rural Access: Is VA Meeting All Veterans Where They Live?”

While an agreement was reached on topline spending numbers over the weekend, uncertainty around what Congress will agree on funding measures extends to health care as well. Multiple health extender deadlines are coming on either January 19 or 20, and questions remain as to what agreement can be reached on any of these expiring programs. Expiring provisions include payments under the Medicaid Disproportionate Share Hospitals (DSH) Program, the Work Geographic Practice Cost Index (GPCI) Floor, and funding for Teaching Health Center Graduate Medical Education (THC GME), Community Health Centers (CHCs), and the National Health Service Corps (NHSC). In addition, authorization for the Pandemic and All Hazards Preparedness Act (PAHPA) also expires, and the House and Senate still seem to be a way off from reconciling their differences, which includes opposing views on whether to include measure to address drug shortages.

In addition, while the House acted on both the Support for Patients and Communities Reauthorization Act and the Lower Costs, More Transparency Act before adjourning in December, it also remains to be determined if these measures might be in play for inclusion in one of the funding bills that Congress must pass in the coming weeks.  The Senate remains content to work on its own health care package this year more focused on primary care.

Before Congress adjourned in December, there was momentum building for Congress to provide some relief from the 3.37% cut in Medicare payments that hit physicians and other clinicians on January 1. While full relief is not expected, if provided, the partial relief is expected to be retroactive to January 1, and to closely align with 1.25% offset of 3.37% cut that was passed by the Senate Finance Committee and by the House Energy and Commerce Committee and in separate measures late last year.

Create a great week!

Good morning from Washington as we embark on a New Year filled with resolutions, hopes, and a return to a Congress challenged with budget deadlines, supplemental war funding, and border security reform. As Congress returns to Washington next week, this week we look examine some of the upcoming challenges for 2024 from an electoral and policy perspective. Many of us make resolutions for the New Year, we can only hope Congress will resolve to remove its mark in this second session as one of the least productive legislative bodies in history.  Welcome to the Week Ahead!

The Administration

Surely the biggest storyline in 2024 will be President Biden’s quest for reelection.  He will have to overcome concerns about his polling numbers, as well as his age. In recent days, Democrats have rallied behind President Biden arguing the nation has beaten back COVID, the economy is strong, and so is our nation’s standing. Many Americans have yet to give Biden credit for avoiding a recession and having low unemployment numbers which defy expectations. President Biden and his team have dismissed low polling numbers as not being relevant 10 months away from any real election. One thing which is real, is the President never has been popular with high polling numbers. If anything, Biden’s career has been one with consistent low comeback numbers, but one thing can be said: he previously beat the expected Republican challenger, Donald Trump.

For 2024, Health and Human Services will continue to drive home its work on lowering drug costs through Inflation Reduction Act. As discussed last year, the administration will continue to work on drug pricing, mental health, and reproductive health as some of its top priorities for 2024. Key administration officials will continue to discuss the IRA’s impact on Medicare drug pricing, as President Biden’s campaign works to influence seniors prior to the election.  Additionally, the agency will have to form an artificial intelligence task force by the end of the month per President Biden’s Executive Order.

In the meantime, officials from the Biden administration will continue to be involved In budget talks and pushing for war funding for our allies – both of which are tied to border security. With looming deadlines in January and February, President Biden’s team will have to walk a tightline between needed border reforms and not upsetting his Democrat colleagues on the issue.

The Senate

As we approach the 2024 election, it remains clear maintaining control of the Senate is a challenge for Democrats. Incumbent Democrats are defending seats in red states like Montana and Ohio, while West Virginia flips due to the retirement of Joe Manchin. One of the biggest mysteries remains in Arizona since Senator Sinema has yet to announce if she is running again.

The Senate is in session next week kicking off 2024 with a major role in pending deadlines. Senate appropriators want to take the lead in the funding process – but you know… partisan issues prevail between the two bodies. Senate negotiators have been engaged in border security talks for weeks along with folks from team Biden. The Rubik’s Cube of negotiations ties border security to additional funding for Ukraine. Majority Leader Schumer has tied Ukraine to additional funding for Israel and Taiwan. To make the negotiations even more complex, Speaker Johnson only wants the House bill H.R. 2 to be the only discussion on border security, even though it is a nonstarter in the Senate. Are you tired yet?  The New Year is upon us!

The House

Speaker Johnson is going to have his work cut out for him to hang on to a narrow two-seat majority for this Presidential election year. The Speaker is tasked with funding the government in 16 days, producing a plan for the border, Ukraine, Israel, and Taiwan.  All while trying to sell the American people on increasing the Republican majority and selling another term for the likely presidential candidate Trump.

The funding fight is still a battle where the Speaker will likely need Democratic support. Does Speaker Johnson keep the same deal as the McCarthy cut or does he try and negotiate something new to keep the far right of the party happy? Does he just vote on a clean Continuing Resolution to keep the government running? All questions that we in DC want to answer.

What we do know is the Speaker still would like to finish all twelve appropriations bills this year. The likelihood of this happening is slim to none because of divisions in the party and narrow voting margins. We are predicting the outcome in February will be a year-long continuing resolution to fund the government at current levels through Fiscal Year 2024.

Health

While the House remains in recess, things are expected to pick up quickly next week when the House reconvenes. The House will only have eight legislative days before the first tranche of government funding expires on January 19, and then the House will only have an additional four legislative days before the second government funding deadline hits on February 2.  With the limited timeframe to fund government operations for Fiscal Year 2024, there has also been speculation that the House could extend the appropriations bills set to expire on January 19 to February 2.

With multiple health extender deadlines hitting on either January 19 or 20, whatever package is passed to fund the government past January 19 will include at least some health provisions. Among expiring provisions in need of extension are payments under the Medicaid Disproportionate Share Hospitals (DSH) Program, the Work Geographic Practice Cost Index (GPCI) Floor, and funding for Teaching Health Center Graduate Medical Education (THC GME), Community Health Centers (CHCs), and the National Health Service Corps (NHSC). What remains to be determined in the coming days is what additional health measures might catch a ride with the must-pass January package. With a flurry of activity on health legislation before the House adjourned for 2023, provisions included in both the Support for Patients and Communities Reauthorization Act and the Lower Costs, More Transparency Act could be in play for being attached to government funding legislation in either January or February.

Physicians and much of the provider community will also continue their push for relief from the 3.37% cut in Medicare physician payments that took effect on January 1. While Congress is not expected to provide full relief from the cuts, provisions to provide partial relief, along with an extension of incentive payments for alternative payment models, retroactive to January 1, could be included with the January government funding measure. Should Congress provide some relief from the cuts, it is expected that the relief would closely align with 1.25% offset of 3.37% cut that was passed by the Senate Finance Committee and by the House Energy and Commerce Committee and in separate measures in November and December, respectively.

Create a great week!

Good morning from Washington DC where the weather changed from rain, to snow, to warmer temperatures and sun in a matter of 36 hours.  The dramatic shift in weather cycles reminds us of the recently announced retirement of former House Speaker Kevin McCarthy.  Where else can you go from being Speaker, to being removed by your own party, to retiring all in one year?  Here in Washington of course!  Rep. McCarthy is not the only one to announce retirement for this term, and we do expect many more to leave before filing for another term.  With the slight majority Republicans hold in the House, each retirement and expulsion (Santos) makes the holiday season more enjoyable for House Democrats looking to take control next session.  In addition, we only have one week left of legislative business, and we still have no agreement reached on aid for Ukraine and Israel.  Congress returns this week to what could be a very busy time! Welcome to the Week Ahead!

The Administration

President Biden continues to work behind the scenes with Senate negotiators on the White House supplemental request for funding to Israel, Ukraine, and Taiwan.  As previously mentioned, Republicans in Congress want to tie any aid for these countries to increased border security measures.  The administration publicly stated reforms are needed at the border, but at this time, no agreement has been reached for foreign aid. President Biden will host Ukrainian President Zelensky this week.  With time running out and House Republicans becoming increasingly skeptical of funding Ukraine, President Zelensky returns to Congress for a last-minute plea to the Senate.

In health care news, and in line with its priorities, the White House celebrated the announcement that the FDA announced the approval of gene therapies to treat sickle-cell disease via its statement.  To address health inequities and improve on treatment of sickle-cell disease which disproportionately impacts African Americans and Hispanic Americans, the Biden Administration believes this breakthrough can save and improve the lives of millions.

The Senate

The Senate will welcome Ukrainian President Zelensky for a speech on the importance of funding to Ukraine.  The invite was extended by both Majority Leader Schumer and Minority Leader McConnell.  Behind the scenes negotiations will need to resume on border security measures to couple with potential funding on the war supplemental.

With an eye on health care for moving into 2024, the Senate will look to the following this week:

• • Tuesday
    • Senate Health, Education, Labor & Pensions (HELP) Committee is scheduled to consider and expected to approve the SCREENS for Cancer Act of 2023 (S. 1840) and its own version of the SUPPORT for Patients and Communities Reauthorization Act (S. 3393).  In addition, they will also look to pass S.644, The Modernizing Opioid Treatment Access Act.
  • Thursday
    • The Senate Aging Committee will hold a hearing on substance use trends for older adults.

The upper chamber will look to conclude the year by finishing off its health care priorities, although they lack a bipartisan larger “package” which Leader Schumer expressed desire to complete this year.

The House

Retirement season has officially kicked off on Capitol Hill. Former Speaker McCarthy is leaving at the end of the year, Chairman Patrick Mc Henry (R-NC) is in his final term, and we expect several more are going to leave before they must file to run for another term. Many members are citing (shocker) dysfunction and just want to go back to their private lives.  With one week remaining, major fireworks remain on emergency packages for Ukraine, Israel, Taiwan, and the border wall. The Senate continues to negotiate, but the Senate package still must pass the House and must include border security.

In the area of artificial intelligence, the House Energy and Commerce Committee will hold a hearing on Wednesday leveraging agency expertise across the economy to position America as a leader in AI.

Health Care

As Congress looks to close its work for 2023, the House will be taking steps to move health legislation forward with an eye to positioning themselves going into 2024.

• The House will consider 14 bills, including:
  • Lower Costs, More Transparency Act (H.R. 5378), which would establish increased transparency for insurers hospitals and PBMs.
  • Support for Patients and Communities Reauthorization Act (H.R. 4531)
  • PREEMIE Reauthorization Act of 2023 (H.R. 3226).

Each of the bills will be considered under the suspension of the rules signaling House leadership’s belief that the bipartisan bills will garner enough support to pass with the required two-thirds majority needed under the procedure. By moving the legislation with strong bipartisan support, the House leadership will be asserting a strong position on several health issues, including pharmacy benefit manager reforms and provider payments, as House and Senate are expected to work to reach an agreement on health legislation in 2024.

Beyond this public work on health care, we also expect work and conversations to continue behind the scenes, as leadership and committee staff on both sides of the Capitol work with an eye toward drafting legislation to address several expiring health care provisions and programs in January. As readers are likely aware, the House Energy & Commerce Committee moved 19 pieces of health-related legislation last week, including measures to extend the work Geographic Practice Cost Index floor, to revise the phase in of certain payment changes for lab services, an extension of expiring incentive payments for alternative payment models, and additional relief to help mitigate the 3.4% cuts in Medicare physician payments scheduled for January 1, 2024. At this time, we do not anticipate seeing a final agreement on these provisions before Congress adjourns in 2023, but it is expected that these other health provisions could be included in a legislative package in January.

Your insights are valuable, so please reach out with any questions or information.  Please create a great week!

Welcome back to Washington, DC the town which continues to provide as much drama as Hollywood but without the glitz and glamour.  The weather remains mild, but the heat is on for the Biden Administration and Congress to come to an agreement on a supplemental funding package for Ukraine, Israel, and Taiwan.  As per the usual, this weekend your author took his four-year-old daughter to the movies, this time to see Trolls Band Together.  The theme focused on a music group overlooking its differences and working together during an emergency to save one of their own from a potentially fatal outcome.  If only Congress could take a cue from the third installment of the animated trilogy and work together to end the year on a successful note.  Some say it happened this past week with the ousting of the disgraced George Santos from the House, but we here in Washington know there is much more to be done.  We are in December and much more needs to be done!  Welcome to the Week Ahead!

The Administration

As the end of the year approaches, we are beginning to see priorities of the Biden Administration being challenged by a divided government. The Biden Administration will continue this week to focus on pushing for its war supplemental focusing on aid to America’s allies.  Much remains to be seen on this matter as congressional Republicans are demanding border security measures be coupled with the supplemental.  Of particular concern remains additional funding to Ukraine, which could see Congress pass for a third time on providing additional resources.  In a memo to Congress, Budget Director Shalanda Young expressed the urgency of providing additional funding to Ukraine, as she expressed no more funds exist to support Ukraine. Around 60% of the funding has remained here at home to improve military preparedness here at home, while shipping out equipment to Ukraine.

Among other White House initiatives, House Republicans are pushing back on the Supplemental Nutrition Program for Women, Infants and Children.  The House failed to include extra aid money for the WIC program which helps low-income moms and babies.  The program usually enjoys bipartisan support, but House Republicans are pushing to cut spending for the program this year.  The Biden Administration has requested an additional $1 billion in funding for the program.

The Senate

Majority Leader Schumer is looking to move this week on putting the war supplemental on the Senate floor.  The sticking point for the package, as mentioned previously, is that Republicans want to make any funding package contingent on border security reform measures.  While both Senate and House Democrats agree some border reform measures are needed, Republicans are pushing for more aggressive measures on the border front.  They want to include language from HR2, which Democrats view as a non-starter. Weekend talks on working together fell apart, but we can hope lawmakers return to work together to resolve the disagreement as the world is watching.

In notable committee activity this week, the Senate Finance Committee plans will hold a hearing entitled, “Drug Shortages: Examining Supply Challenges, Impacts, and Policy Solutions from a Federal Health Perspective.”  The hearing will touch on drug shortages in light of critical diseases to include cancer drugs.

The House

The never-ending drama continues to drag out in the House. Last week Congressman Santos was expelled from Congress for ethical violations, (and there were a lot of them), and next the Speaker is saying he has enough votes to bring up articles of impeachment against President Biden. Deep divides remain in the narrowly controlled Republican House and more retirements are rumored by the end of the year (including former Speaker McCarthy).

With only two more weeks to go, Speaker Johnson’s honeymoon is over. The Republican majority narrows to three with Santos out and the government shutdown is looming after the holidays. The Speaker said last week they need to fund Ukraine, which sent the Freedom Caucus in an uproar. The rest of the conference is not even close to agreeing on a foreign aid package that funds Israel, Taiwan, and the border. Speaker Johnson has his work cut out for him finishing up the rest of the year and going into next. There are even rumblings they might even call to vacate the Chair on HIM!

As last week, much of Congress’s attention this week will continue to be on matters other than health care. While health policy won’t be on the floor, and even though Congress extended several expiring health provisions and programs into January, that doesn’t mean that work on important health policy matters won’t be happening.  The House Energy and Commerce Committee announced that it will hold a markup of 44 pieces of legislation, with over 20 being of health policy in nature, on Tuesday. Tuesday’s markup could provide an insight into what additional provisions Congress might include in health-related legislation early next year as Congress had extended several health programs and provided protections from potential cuts into January as well.

Among the legislation being considered on Tuesday will be legislation aimed at lowering prescription drug costs and targeting pharmacy benefit managers and certain PBM practices. In addition, the Committee will consider measures to extend the work Geographic Practice Cost Index floor, to revise the phase in of certain payment changes for lab services, and an extension of certain expiring incentive payments for alternative payment models. In addition, of particular interest, will be the Committee’s consideration of legislation that H.R. 6545, the Physician Fee Schedule Update and Improvements Act, which would not only include a provision providing an additional relief of 1.75%, over current law, to mitigate the 3.4% cuts in Medicare physician payments in 2024, but it would also reform and update how budget neutrality requirements impact Medicare payment rates to physicians and other providers as well. While previous indications pointe to the fact it was doubtful that Congress would take action to provide any relief from cuts to Medicare physician payments, assuming Committee approval this week, along with Senate Finance Committee’s action last month, there seems to be growing interest in providing some relief from pending Medicare physician payment cuts in 2024—even if that relief may need to be retroactive.

Create a great week!