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Surprise billing, drug prices left to 2020

Insurers got repeal of the Cadillac tax, HIT and an extension of silver loading in year-end spending package.

Susan Morse, Managing Editor

Legislation on surprise billing and lowering drug prices - two key bipartisan issues in 2019 - were not included in the $1.37 trillion year-end spending package, which could push these issues into the 2020  election year.

The healthcare package permanently repealed the 40% tax on Cadillac plans, the health insurance tax and the 2.3% medical device tax.

It kept auto-enrollment for exchange plans and allows insurers to continue the practice of silver loading through 2021.

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It also delayed the reduction in payment to disproportionate share hospitals until May 22, 2020, a new deadline for that issue and several healthcare programs that were set to expire.

Congress passed the Creating and Restoring Equal Access to Equivalent Samples Act of 2019, or CREATES, to pay for the extension of healthcare programs through May 22, 2020.

CREATES encourages generic drug competition, but no deal was made to allow the federal government to negotiate prices on an estimated 250 drugs.

Speaker Nancy Pelosi is reportedly pushing for a healthcare package ahead of the May 2020 deadline.

WHY THIS MATTERS

The May 2020 extension sets up a must-pass mechanism for Congress to revisit the issues of surprise billing and high drug prices in 2020, according to a source with the Washington Examiner.

The American Hospital Association is against surprise billing, but did not support the proposed legislation that came in the form of two competing bills.

Lawmakers were unable to agree on the policies within the bills, such as whether hospitals should be allowed to appeal bills to an independent arbiter.

THE LARGER TREND

Congress in 2019 worked on bipartisan plans to lower drug prices and protect patients from surprise medical bills.

Both received push-back in lobbying from doctor staffing firms owned by private equity groups, hospitals and the pharmaceutical industry.

On drug prices, Democrats passed a major bill through the House which would allow the government to negotiate lower prices on up to 250 drugs per year, with savings applied to both people on private plans and those on Medicare.

But Republicans said they would block that bill, calling it federal price control.

ON THE RECORD

Matt Eyles, president and CEO of America's Health Insurance Plans said  following repeal of the health insurance tax, "CMS recently issued an analysis identifying the HIT as a major driver of healthcare cost growth when it was in effect in 2018. And nearly 150 million Americans would pay more for their coverage if this tax was implemented in the future."

AHA President and CEO Rick Pollack said this of the surprise billing legislation, "Take the so-called 'compromise plan' that was announced over the weekend. While we have not seen the text yet, we know it is in no way a true compromise and contains unworkable provisions from earlier pieces of legislation, including a benchmark rate that would jeopardize patient access to hospital care, particularly in rural communities. Setting in law an arbitrary rate for care gives insurers an incentive to remove hospitals from their networks and force artificially low reimbursement rates, which serves to limit access and gives a huge windfall to commercial insurance companies."

The National Coalition on Health Care expressed disappointment that Congress did not act in 2019 on surprise medical bills or high prescription drug prices, saying, "Although we applaud the inclusion of CREATES Act in the final year-end spending package, which will help provide a boost to the generic drugs market, the end of the year package lacks any significant changes to drug policy that would protect Americans from the most expensive drugs."

Twitter: @SusanJMorse
Email the writer: susan.morse@himssmedia.com