Health Policy: Expected Movements in the Lame Duck Session – November/December 2024

Congress returned to Washington this week with just five weeks left in this year’s legislative calendar. With a Continuing Resolution (CR) that expires December 20, 2024, either a year-end spending package or a new Continuing Resolution will need to be passed to continue funding the government. There are several health policies that may be included in this package, including policies expiring at the end of the year. Must-pass items, such as extensions for Medicare COVID-era telehealth flexibilities and policy changes that enjoy broad bipartisan, bicameral support, such as Pharmacy Benefit Manager (PBM) Reform and BIOSECURE, are on the docket for consideration. 

Must-Pass

Telehealth Extension: Medicare Flexibilities

The Issue

Medicare telehealth flexibilities put in place during the COVID-19 pandemic will expire at the end of this year following a two-year extension in the Consolidated Appropriations Act of 2023. Prior to the pandemic, telehealth coverage was only available with restrictions in rural areas. These flexibilities include a moratorium on required in-person visit within six months of a preliminary telehealth appointment for mental health services; an exemption to geographic site restrictions, which greatly benefits rural and urban patients; inclusion of all Medicare beneficiaries to receive telehealth services; and authority to provide audio-only services. 

Potential Congressional Fixes

Several bills have been introduced to extend these flexibilities, and have moved through committees of jurisdiction. A few have the potential to land in a year-end package, including:

• H.R. 7623, “The Telehealth Modernization Act of 2024,” introduced by Reps. Buddy Carter (R-GA-01) and several bipartisan members last March, was voted unanimously out of the House Energy and Commerce (E&C) Committee in August. Initially, the bill included a permanent extension of flexibilities, however it was amended to a two-year extension with pay fors via PBM reform. 
• S. 3967, “The Telehealth Modernization Act,” introduced by Sens. Tim Scott (R-SC) and 8 other bipartisan Senators, was referred to Senate Finance back in March. Much like its original counterpart, this bill seeks to make permanent Medicare telehealth flexibilities, though no additional actions have been taken yet. 
• H.R. 8261, “Preserving Telehealth, Hospital, and Ambulance Access Act,” introduced by Reps. David Schweikert (R-AZ-01) and Mike Thompson (D-CA-04), would, among other things, extend key flexibilities through December 2026. This bill was voted out of House Ways and Means Committee in May.

A short-term extension or even permanence of these flexibilities has heavy bipartisan support in both chambers and is likely to be addressed before expiring. 

Voucher for Pediatric Rare Disease Drugs Extension

The Issue

The Rare Pediatric Disease Priority Review Voucher (RPD PRV) is set to expire at the end of the year without a further extension or reauthorization (it was already extended temporarily in the Sept. 30 CR). This 12-year-old program offers incentives to companies for development of therapies for rare pediatric diseases by providing vouchers for a faster U.S. Food and Drug Administration (FDA) review. The program was created to incentivize developing therapies for rare pediatric diseases, as the patient population is typically too small to attract investment. These vouchers can be used either by the recipient or sold to another company for use and are highly sought after with less than 100 ever awarded.

Potential Congressional Fixes

H.R. 7384/S. 4583, “Creating Hope Reauthorization Act of 2024,” is bipartisan legislation introduced in both chambers earlier in 2024 that would extend until FY2029 the voucher program. H.R. 7384, introduced by Rep. Michael McCaul (R-TX-10) and five additional bipartisan sponsors, and S. 4583, introduced by Sen. Bob Casey (D-PA) and three additional bipartisan cosponsors, were referred to E&C and Senate Health, Education, Labor, and Pensions (HELP), but neither has made any additional progress. With little movement on reauthorization bills, it is likely that an additional extension will be needed to avoid expiration. 

Other Expiring Provisions

• Medicare
  1. Extenders
     1. Medicare Low-Volume Payment Adjustment
     1. Medicare-Depending Hospital Program
     1. Medicaid Disproportionate Share Hospital (DSH) Payment Cuts Delay
  1. Medicare Pay As You Go (PAYGO) Cut
  1. Funding for assistance for low-income programs
• Community Health Center Fund  
• Pandemic and All-Hazards Preparedness Act (PAHPA) Reauthorization
• National Health Service Corps
• Advanced Alternative Payment Model Bonus Payment
• Dr. Lorna Breen Health Care Provider Fund

May-Pass

PBM Reform

The Issue

An issue with strong bipartisan, bicameral agreement, reform to PBM practices is at the top of the “may-pass” list. In July 2024, the House Oversight Committee released a report detailing how the largest PBMs control more than 80% of the market and are vertically integrated with health insurers, pharmacies, and providers. The result, the report, notes, is that patients are seeing significantly higher costs with fewer choices and worse care. Lawmakers are seeking to require additional transparency into the process, removing vertical integration to create more competition, targeting spread pricing and preferential treatment for drugs that yield higher rebates, and, ultimately to reduce prescription drug costs for patients.

Potential Congressional Fixes

Key committees, including E&C, House Ways and Means, House Oversight, House Judiciary, Senate HELP, Senate Finance, and Senate Judiciary have all held hearings about PBM Reform, with several pieces of legislation making it through markup, and two passing through the House thus far. The legislation most likely to be included in a year-end package includes:

• H.R. 5378, “Lower Costs, More Transparency Act,” passed the House with strong bipartisan support in December 2023. Introduced by E&C Chair Cathy McMorris Rodgers, this bill would, among other things:
  • Require PBMs to file semiannual reports to health plan sponsors on spending, rebates, and fees associated with covered drugs. Require PBMs to allow audits on certain claims and cost information.
  • Prohibit spread pricing and require pass-through pricing models for payment arrangements with PBMs under Medicaid.
• H.R. 4758, “Accelerating Kids’ Access to Care Act,” was introduced by Reps. Lori Trahan (D-MA-03) and Mariannette Miller-Meeks (R-IA-01) in July 2023 and passed out of the House by voice vote in September 2024, sending it to Senate Finance for consideration. Among other provisions, this bill requires pass-through pricing models and prohibits spread pricing for payment arrangements with PBMs under Medicaid.
• S. 2973, “Modernizing and Ensuring PBM Accountability Act,” introduced by Senate Finance Chair Ron Wyden and Ranking Member Mike Crapo in September 2023 and voted out of committee three months later in December, would prohibit PBM compensation in Medicare from being tied to drug prices and create an independent audit and enforcement measure to increase PBM transparency, among other provisions. Senator Wyden is one of many lawmakers to note his intentions to focus on PBM Reform going into the remainder of the 118^th Congress. 
• H.R. 5385/S. 2254, “Medicare PBM Accountability Act,” introduced in the House by Rep. Greg Landsman (D-OH-01) in September 2023 and in the Senate by Sen. Catherine Cortez Masto (D-NV) in July 2023, would establish stricter reporting requirements for PBMs under Medicare Advantage and the Medicare prescription drug benefit program. This bill has made more traction in the House, passing out of E&C by a vote of 44-0.
• S. 1339, “Pharmacy Benefit Manager Reform Act,” introduced by HELP Chair Bernie Sanders and three additional bipartisan lawmakers in April 2023, passed out of Committee in June 2023. This bill would put stricter requirements in place for PBMs regarding services provided to health insurance plans. The legislation would:
  • Prohibit spread pricing.Require PBMs to report to insurance plan sponsor information about their services and further provide a biannual report to the sponsor with information about pharmacies that are owned by the PBM.
  • Require PBMs to remit to the sponsor all rebates, fees, alternative discounts, and anything else received from a drug manufacturer.

BIOSECURE Act

H.R. 8333, “BIOSECURE Act,” introduced by Rep. Brad Wenstrup (R-OH-02) and Raja Krishnamoorthi (D-IL-08) in May 2024, would prohibit federal agencies from procuring or obtaining any biotechnology equipment or service produced or provided by a biotechnology company of concern. This bill passed the House with a bipartisan vote of 306-81 and was received by the Senate for consideration in early September. With strong support in both chambers, there is a high likelihood that it will be signed into law by the end of the year. BIOSECURE will have lasting impacts on the pharmaceutical and biotechnology companies, and with potential retaliation from the Chinese government. Learn more about BIOSECURE in an in-depth Foley article “BIOSECURE Act: Anticipated Movement, Key Provisions, and Likely Impact.” 

Medicare Physician Payment Fix

The Issue

Following the release of the CY2025 Medicare Physician Fee Schedule (Fee Schedule) Proposed Rule last July with a provision that proposes 2.8% in Medicare physician cuts, stakeholders and lawmakers alike have pushed back on what would be the fifth consecutive year of proposed cuts to the conversion factor. Nearly 7,000 comments were submitted on the proposed rule, many from big name provider groups like the American Medical Association and American Hospital Association criticizing the Centers for Medicare and Medicaid Services (CMS) for not adjusting payments based on inflation. In early October, a House majority comprised of 233 bipartisan members signed a letter to House leadership urging a provision in a year-end spending package that protects physicians from these payment cuts.

Potential Congressional Fixes

In late October, H.R. 10073 was introduced by a bipartisan group of lawmakers. This bill would provide physicians with a 4.73% payment increase in 2025 to offset the 2.8% Medicare cuts in the Medicare Physician Fee Schedule Final Rule. Sponsors include Reps. Greg Murphy (R-NC), Mariannette Miller-Meeks (R-IA), Larry Bucshon (R-IN), John Joyce (R-PA), Jimmy Panetta (D-CA), Ami Bera (D-CA), Raul Ruiz (D-CA), and Kim Schrier (D-WA).  It is possible Congress will include a portion of this payment increase in a year end spending package.

Even prior to the proposed rule, committees of jurisdiction including House Energy & Commerce, House Ways & Means, and Senate Finance, along with the House “Docs Caucus”, have focused efforts on Medicare physician payment reform throughout this session. Legislation introduced includes:  

• S. 4935, “Physician Fee Stabilization Act,” introduced in August by Sens. John Boozman (R-AR) and Peter Welch (D-VT – original co-sponsor), and referred to the Senate Finance Committee, would update the budget neutrality threshold under the Fee Schedule, last updated in 1992, to $53 million with an increase every five years. 
• H.R. 6545, “Physician Fee Schedule Updates and Improvements Act,” introduced in Dec. 2023 by Rep. Mariannette Miller-Meeks (R-IA-01) and a list of bipartisan members, would also increase the budget neutrality from $20 million to $53 million. This bill passed out of E&C by a vote of 64-0.
• H.R. 2474, “Strengthening Medicare for Patients and Providers Act,” introduced in April 2023 by Rep. Raul Ruiz (D-CA-25) with original co-sponsorship from Reps. Larry Bucshon (R-IN-08), Amy Bera (D-CA-06), and Mariannette Miller-Meeks (R-IA-01), would shift the payment rate by providing an annual update tied to inflation based on the Medicare Economic Index (MEI). This bill was referred to E&C and has amassed 170 cosponsors.

In March of this year, Congress was able to partially reverse a proposed 3.37% physician payment cut in the CY2024 Fee Schedule with the passage of the Consolidated Appropriations Act of 2024. However, this is a temporary fix, lasting through the end of 2024. Permanent reform has strong bipartisan support and could see movement in the next Congress.

Foley is prepared to help you navigate these and other important legislative considerations related to business and industry. Please reach out to the authors, your Foley relationship partner, our Health Care & Life Science Sector, or to our Government Solutions and Health Care Practice Groups with any questions.