Congress has completed action on federal fiscal year (FY) 2020 spending, and President Trump has signed the two domestic and national security funding packages into law.  The major health care policy provisions included in the domestic spending package, HR 1865, the “‘Further Consolidated Appropriations Act, 2020” (the “Act”), are summarized below.

Repeal of ACA Device, Insurance Taxes

The Act permanently repeals the Affordable Care Act’s (ACA) 2.3% excise tax on the sale of certain medical devices, which has been a top priority of the medical technology industry.  It also permanently repeals the excise tax on certain high-cost employer-sponsored health coverage (the so-called “Cadillac tax”) and the annual excise tax imposed on health insurer providers.

Medicare Part B Policies

The Act incorporates provisions of the Laboratory Access for Beneficiaries (LAB) Act, which delays the next round of clinical laboratory private payer data reporting for one year.  The Act also directs the Medicare Payment Advisory Commission (MedPAC) to study how to improve this data collection.

In addition, the Act excludes certain complex rehabilitative manual wheelchairs (e.g., HCPCS codes E1235, E1236, E1237, E1238, and K0008) from the Medicare durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) competitive bidding program.  The Act also bars CMS from using competitive bidding rate information to adjust payment for certain wheelchair accessories and cushions furnished with complex rehabilitative manual wheelchairs.

The Act reimburses acute care hospitals on a reasonable cost basis for furnishing allogeneic hematopoietic stem cell transplants.  It also extends outpatient hospital pass-through status for a number of diagnostic radiopharmaceuticals.

Medicare, Medicaid, and Public Health Extenders

The Act extends through May 22, 2020 a number of Medicare, Medicaid, and public health programs and policies, including the following:

  • The work geographic index floor under the Medicare physician fee schedule.
  • Quality measurement endorsement, input, and selection activities.
  • Specified outreach and education assistance programs for low-income beneficiaries.
  • The Certified Community Behavioral Health Clinic demonstration.
  • Current Medicaid spousal impoverishment protections for recipients of home- and community-based services.
  • The Money Follows the Person rebalancing and health professions workforce demonstration programs.
  • The Temporary Assistance for Needy Families program.
  • The Community Health Center Fund and the National Health Service Corps.
  • Funding for teaching health centers that operate graduate medical education programs.
  • The Special Diabetes Program.

In addition, the Act funds the Patient-Centered Outcomes Research Trust Fund through 2029, with a requirement that research projects consider a broader range of outcomes data and an expansion of research priorities to include research with respect to intellectual and developmental disabilities and maternal mortality.  The Act also establishes Medicaid funding policy for the territories through FY 2021.

Other Health Policies

Other policies addressed by the Act include, among others:

  • DSH Payments. The Act delays a scheduled $4 billion reduction in Medicaid disproportionate share hospital allotments until May 23, 2020.
  • Biological Products.  The Act revises the definition of biological product to include chemically synthesized polypeptides; “streamlines” Food and Drug Administration review of applications for certain products transitioning from the drug to the biologics pathway and clarifies their market exclusivity status; and allows generic manufacturers facing delays in receiving requested product samples to bring an action in federal court.
  • Health Program Funding. The Act funds Health and Human Services (HHS) programs throughout FY 2020, including increased funding for the Health Care Fraud and Abuse Control fund, the National Institutes of Health, HIV epidemic initiatives, opioid abuse treatment and prevention efforts, and various FDA operations.
  • Tick-Borne Diseases. The Act calls for development and implementation of a national strategy to address vector-borne diseases, including tick-borne diseases, including expanded research and treatment efforts.
  • ACA Health Plans. The Act would bar HHS from ending auto-enrollment in ACA Exchange qualified health plans (QHPs).  Furthermore, for plan year 2021, the Act prevents CMS from restricting “silver loading,” which CMS has described as the practice of health insurance issuers increasing premiums on silver level QHPs, on which premium tax credits are generally calculated, in response to the absence of cost-sharing reduction payments to issuers.

Note that the Statement of Managers accompanying the Act also includes nonbinding requests that CMS review a wide range of reimbursement and other policies, such as air ambulance policy, reimbursement for innovative drugs, inefficiencies in the Recovery Audit program, telehealth coding, CMS innovation models, and Medicare Part D performance metrics.