National Election Debrief: Implications for Healthcare...Murkowski, R-AK; Collins, R-ME; Romney, R...

www.alston.com© Alston & Bird LLP 2021

National Election Debrief: Implications for Healthcare

February 4, 2021

Presentation Current as of January 26, 2021

© Alston & Bird LLP 2021 2

Speakers

Michael ParkPartner

Washington, DC

Mark RayderSenior Policy Advisor

Washington, DC


Agenda Implications of Democratic House, Senate, and White House Biden White House and HHS Biden Health Care Policy Agenda Near Term Actions from the Biden Administration and 117th Congress Healthcare Issues to Watch Q&A


IMPLICATIONS OF DEMOCRATIC HOUSE, SENATE, AND WHITE HOUSE


Implications for Legislating During the 117th Congress

U.S. Senate – 50/50 split with VP Harris as tiebreaker A single Senator can determine the fate of legislation or a nomination Moderate Senators will play an out-sized role (Manchin, D-WV; Sinema, D-AZ;

Murkowski, R-AK; Collins, R-ME; Romney, R-UT) Party switching? Members announcing plans not to run in 2022 (Burr, Portman, Toomey)

U.S. House – Slim Democratic majority (currently 222-211) Democratic priorities will be limited due to narrow majority GOP priority may revert to more fiscal conservatism


Democratic Control, Limited Opportunities? We’ve seen this before…

When Trump took office, GOP held the Senate (52-48) and House (241-194) Some important legislation enacted during GOP control of Congress and White House (Tax Cuts

and Jobs Act of 2017, Bipartisan Budget Act of 2018, SUPPORT Act, Consolidated Approps bills) But the GOP was unable to repeal/replace the Affordable Care Act and major drug pricing

reforms stalled How could Democratic majority legislate?

Bipartisanship – Biden’s preferred route Congressional Review Act – could be used to overturn Trump regulations Budget Reconciliation – DC’s latest buzzword Filibuster reform – the nuclear option (in 2013, Democrats ended filibuster non-SCOTUS

judiciary nominees and administration appointments, and in 2017, GOP ended filibusters for SCOTUS nominees)


BIDEN WHITE HOUSE AND HHS


The Biden White HouseAgency Position Biden Appointee/Nominee Requires Senate Confirmation?

West Wing

Chief of Staff Ron Klain No

Deputy Chief of Staff Jen O’Malley Dillon No

Senior Advisor Mike Donilon No

Counselor Steve Ricchetti No

Director of Public Engagement Cedric Richmond No

Director of Intergovt’l Affairs Julie Rodriguez No

Counsel Dana Remus No

OMB

Director Neera Tanden Yes

Deputy Director Shalanda Young Yes

Deputy Director for Management Jason Miller Yes

OIRA Administrator Yes

National Security Council National Security Advisor Jake Sullivan No

National Economic Council Director Brian Deese No

Domestic Policy Council Director Susan Rice No

Council of Economic Advisors Chairman Cecilia Rouse No

CommunicationsCommunications Director Kate Bedingfield No

Press Secretary Jen Psaki No


Key HHS PositionsPosition Biden Appointee/Nominee Requires Senate Confirmation?

Secretary Xavier Becerra Yes

Deputy Secretary Andrea Palm Yes

Assistant Secretary for Health Rachel Levine, MD Yes

Assistant Secretary for Preparedness and Response Yes

Surgeon General Vivek Murthy, MD Yes

HRSA Administrator No

CMS Administrator Yes

CDC Director Rochelle Walensky, MD No

CCIIO Director, CMS Yes

FDA Commissioner Yes

COVID-19 Equity Task Force Chair Marcella Nunez-Smith, MD No

Chief Medical Adviser on COVID-19 to the President Anthony Fauci, MD No


BIDEN HEALTH CARE POLICY AGENDA


COVID-19 – American Rescue Plan

Vaccines• $20 billion for a national vaccination program in partnership with states, localities, Tribes, and

territories• Expand FMAP to 100% for vaccine administration

Testing • $50 billion to expand COVID-19 testing (purchase of rapid tests, investments to expand lab capacity, support for schools and local governments to implement regular testing protocols)

Public Health Response • Fund 100,000 public health workers for vaccine outreach and contact tracing

Health Disparities • Address health disparities (fund health services for underserved populations, expand Community Health Centers, invest in tribal health services)

Protect Vulnerable Populations in Congregate

Settings

• Funding for states to deploy strike teams re-entry for formerly incarcerated, and vaccination in prisons, jails, and detention centers to long-term care facilities and to conduct infection control oversight

• Fund COVID-19 mitigation strategies, safe

Identify and Address New COVID-19 Strains • Fund sequencing, surveillance, and outbreak analytics capacity


COVID-19 – American Rescue Plan (cont’d)

Emergency Relief and Critical Supplies

•$30 billion for the Disaster Relief Fund for supplies and protective gear•100% federal reimbursement for critical emergency response resources to states, local

governments, and Tribes, including deploying the National Guard•$10 billion to expand domestic manufacturing for pandemic supplies

Invest in COVID-19 Treatments

•Support development, manufacturing, and purchase of therapies•Invest in studies of long-term health impacts of COVID-19 and potential therapies

Expanding Health Coverage and Health Services

•Subsidize COBRA through 9/30/2021•Expand and increase the value of the Premium Tax Credit to eliminate premiums and ensure

enrollees pay no more than 8.5% of income for coverage•$4 billion to SAMHSA to expand access to behavioral health services•$20 billion to the Veterans Health Administration

International Health and Humanitarian Response

Support

•Mitigate pandemic’s impact on global health, food security, and gender-based violence•Support international efforts to develop and distribute medical countermeasures•Build capacity to fight COVID-19, its variants, and emerging biological threats



Child Care

• $25 billion for hard-hit child care providers, including family child care homes• $15 billion for Child Care and Development Block Grant program• Increase childcare tax credits and child tax credits• Expand Earned Income Tax Credit for childless adults

Support for Schools

• $170 billion, supplemented by additional state and local relief resources, for K-12 schools and higher education institutions• $130 billion to help schools safely reopen• $35 billion for the Higher Education Emergency Relief Fund, directed to public institutions including

community colleges and public and private HBCUs and other Minority Serving Institutions• Up to an additional $1,700 to students in financial assistance

• $5 billion for governors for hardest hit areas (K-12, higher education, or early childhood education programs)

Protect and Support Workers• Authorize OSHA to issue a COVID-19 Protection Standard and provide additional funding for OSHA

enforcement and grant funding• $350 billion in emergency funding for state, local, and territorial governments to support first responders

and other essential workers



Emergency Paid Leave

•Reinstitute requirements and eliminate exemptions for employers to provide paid leave; this also would apply to healthcare workers and first responders

•Provide over 14 weeks of paid sick and family and medical leave•Expand emergency paid leave to include federal workers•Provide $1,400 per week paid leave benefit for individuals earning up to $73,000 annually•Extend refundable tax credit to reimburse employers with less than 500 employees to cover 100% of the cost of paid leave•Reimburse state and local government for cost of paid leave•Extend emergency paid leave measures until 9/30/2021

Direct Relief to Families ($1 trillion)

•Additional $1,400 per person checks (to supplement $600 payments in December)•$400 per week unemployment insurance supplement and extend programs through 9/30/2021•Extend eviction and foreclosure moratoriums and continue applications for federally-guaranteed mortgage forbearance until 9/30/2021•$30 billion in rental and critical energy and water assistance•$5 billion in emergency assistance to combat homelessness•Extend 15% SNAP increase and temporarily cut state match•$3 billion for WIC program•$1 billion in nutrition assistance for US Territories•Increase minimum wage to $15/hr•Call on employers to provide frontline essential workers back hazard pay•$1 billion for TANF

Support for Struggling Communities ($440 billion)

•$15 billion in grants to hardest hit small businesses•Leverage $35 billion in state, local, tribal, and non-profit small business financing programs into $175 billion low-interest loans and venture

capital to help entrepreneurs


Key Questions on COVID-19 Relief

How quickly can Congress move on COVID-19 relief? Can Democrats agree on the scope of the package? Will this be bipartisan? If not, what lengths will Democrats take to enact this? What does the COVID pandemic look like in 3 months? Will an “American Rescue Plan” be needed, and, if so, will Congress pay

for it?


Broader Health Care Policy Agenda

•Addressed in Consolidated Appropriations Act, 2021

Surprise Billing and Health Extenders

•Democrats likely to push for Part D restructuring, direct price negotiation, and Part B reform and penalties for price increases

Drug Pricing

•Congress must act to avert a return to the status quo after the COVID-19 PHE ends

Telehealth

•COVID shines a light on inequity•First time ever a President appointed an advisor with a sole focus on combating racism and racial disparities in health care

Health Equity and Disparities

•Re-imposing limitations on Qualified Health Plans•Expanding enrollment period and adding flexibilities•Increasing income thresholds for subsidy eligibility

Strengthening the ACA


NEAR TERM ACTIONS FROM THE BIDEN ADMINISTRATION AND 117TH CONGRESS


Key Dates for 2021

1/20: Biden Inauguration

8/1: Debt Limit ExpiresJan-June:

SCOTUS ACA Decision

2/3: President’s FY22 Budget Due but expect it to slip to later February

10/1: FY22 Begins

June: Target forHouse passage

of FY22 Approps

March: Likely Next Stimulus3/14: Federal pandemic unemployment benefits expire3/31: PPP and suspension of Medicare moratorium expire

Biden Nominees Confirmation Process

Jan Feb Mar April May June July Aug Sept Oct Nov Dec

4/21: Public Health Emergency Declaration expires

12/31: 3.75% increase to Medicare PFS ends


Regulatory Freeze Issued on Jan. 20, Biden regulatory freeze memo instructs agencies to:

Propose or issue no rule until a department or agency head appointed or designated by President reviews and approves the rule Rulemaking comes to a halt

Immediately withdraw rules that have been submitted but have not yet been published in the Federal Register Last minute Trump regulatory push now in question

Consider postponing the effective date of rules that have been published in the Federal Register or otherwise issued, but have not yet taken effect Gives Biden Administration opportunity to develop regulatory strategy to undo/unwind Trump rules

Common practice for incoming administrations – Administrations of both Obama and Trump issued such memos


Potential Roadblocks to Regulatory Actions Slim Democratic majorities in both chambers of Congress place more

emphasis on administrative action Many Trump regulations stalled in court The Biden Administration is also likely to see executive actions

challenged in court, which could delay any quick attempts at reform Trump installed hundreds of conservative judges across the country,

who will likely not allow broad interpretations of legislative text Supreme Court 6-3 conservative majority after Barrett’s confirmation

changes the landscape


Congressional Review Act (CRA) CRA allows Congress to overturn federal rules through joint resolution

of approval Provides for fast track legislative procedures to overturn rule with

simple majority Rules issued within 60 days before end of a Congress (“lookback

period”) can be overturned in new Congress under CRA Estimated that rules issued since Aug. 21 qualify for lookback period

including around 62 from HHS


HEALTHCARE ISSUES TO WATCH


Provider Relief Fund Of the $178 billion appropriated, approximately $25 billion remains unallocated

Statutory requirement that not less than 85% of future allocations must be based on applications that consider financial losses and changes in operating expenses in Q3-Q4 2020 and Q1 2021

Recent flexibilities: Permit alternative approaches to calculating lost revenue Permit the roll-up and redistribution of Targeted Distribution payments

Many questions remain: Timing of reporting for 2020 PRF uses? Additional flexibilities on use? Additional flexibility on second and final reporting period (currently through June 2021)?


ACA California v. Texas Shoring up ACA Expand enrollment and adding flexibilities Eliminate coverage gap Increase income thresholds for subsidy eligibility Reimpose limitations on qualified health plans

Public option? Single payer?


Medicaid Sustaining protections and flexibilities during COVID-19 PHE Enhanced FMAP through the end of the PHE Licensing and enrollment waivers Telehealth

Incentivizing Medicaid expansion Reversing Trump Medicaid actions Work requirements TN block grant waiver


Medicare Medicare sequestration to return 4/1/2021 340B and site neutral payments Price Transparency Medicare Physician Fee Schedule (PFS) Cliff – the new SGR? What stamp will the Biden Administration put on the CMS Innovation

Center? Lowering Medicare eligibility age? Medicare solvency (exhaustion of HI Trust Fund in FY 2024)


Drug Pricing Prospects for drug pricing legislation in 117th Congress Government negotiation of drug pricing Part B reform

Penalties for excessive price increases Drug Rebates Most Favored Nation model

Part D restructuring


Telehealth• Federal and state regulatory flexibilities as well as changes in federal law

have played significant role in increased adoption of telehealth • Many of these telehealth flexibilities are limited to duration of PHE

(extended to April 21, 2021)• Numerous telehealth bills introduced during 116th Congress• Currently unclear how telehealth will be addressed in the 117th Congress

even with Democratic control of both chambers of Congress and the White House

• Despite bipartisan support, budgetary issues will still pose a challenge


Q&A

Michael ParkPartner

Washington, [email protected]

202.239.3630

Mark RayderSenior Policy Advisor

Washington, [email protected]

202.239.3562

mailto:[email protected]

mailto:[email protected]

National Election Debrief: Implications for Healthcare...Murkowski, R-AK; Collins, R-ME; Romney, R...

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