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Health industry scrambles for funding in third coronavirus bill

Hospitals facing spiraling costs pushing for $100 billion

The $1 trillion COVID-19 Senate GOP stimulus bill is filled with provisions the health care industry has long desired and could help bolster the response to the pandemic, but it also contains loosely related health care measures that members have struggled to advance in a divided Congress where little legislating has been accomplished.

The bill would increase funding for hospitals but Senate Minority Leader Charles E. Schumer, D-N.Y., says it falls short of the “Marshall Plan” needed for increasing health care system capacity, and notes the additional money would come from extra reimbursements rather than a direct cash infusion. 

Labs struggling to keep up with testing demand and front-line health workers running out of protective equipment also view the measure as inadequate. 

The bill also includes provisions related to mental health and substance use treatment that arguably has nothing to do with responding to COVID-19 that have been sought for years by the insurance industry and doctors’ groups but that patient groups have opposed. Congress is similarly divided over the changes. 

And proposed changes to federal procurement and investment in drugs and medical supplies would likely support the COVID-19 response but could also be seen as industry giveaways — even as Democrats seek more money for hospitals. 

“You all heard about the terrible problem our hospitals are having,” Schumer said Friday. The bill “hardly gives hospitals any money at all.” 

Hospitals are pushing for $100 billion upfront to help deal with spiraling costs associated with the outbreak, including the supply shortage, declining revenue from canceling elective procedures and child care for staff as schools shut down.

The bill includes provisions that would raise Medicare reimbursements for coronavirus treatments by 15 percent, while also suspending ongoing 2 percent sequester reductions. Spencer Perlman, director of health care research at Veda Partners, estimates the provisions would amount to less than $4 billion.

The bill would also boost payments for durable medical equipment and add tax incentives for concierge doctors who require patients to pay annual fees.

“These steps fall far short of what’s needed to make health care more affordable for families and ease the strain on the health care system,” Senate Finance ranking member Ron Wyden, D-Ore., said in a statement.

The diagnostic lab test industry is also requesting at least $5 billion in direct emergency funding as it tries to address one of the biggest problems with the response to COVID-19 in the United States. 

“We will not be able to make necessary investments to meet future demand without more support from the U.S. Government,” Julie Khani, president of the American Clinical Lab Association, said in a statement.

“The current stimulus package has tens of billions of dollars in aid for affected industries—restaurants, airlines, and manufacturers who have started to shut their doors. The availability of reliable, accurate and accessible testing is a requirement for those industries to make a comeback. As Congress considers additional provisions to this bill, it would be dangerous to overlook this fact,” she said.  

Status quo on supplies 

The bill would do little to shore up the supply of N95 respirators and surgical masks in the Strategic National Stockpile, despite shortages at hospitals and nursing homes across the country, labor advocates say. 

The lack of action on the distribution of masks comes as nurses and doctors have raised alarms on social media about rapidly depleting supplies of the equipment that shields them against COVID-19 and other diseases. 

Nurses’ unions say that problem is unique to the U.S.

“We were on a call yesterday with South Korea, with Japan and with Italy and none of them raised the issue of personal protective equipment,” said Randi Weingarten, president of the American Federation of Teachers, which represents many nurses. 

The legislation would clarify that Assistant Secretary for Preparedness and Response Robert Kadlec, who leads Health and Human Services’ response to the pandemic, oversees the stockpile. But that office has overseen the stockpile since October 2018, according to its website. 

Kadlec currently has limited authority to mobilize the supply of masks and ensure they reach the areas with most need, according to an HHS spokesperson. 

Just 25 percent of the stockpile is going to the biggest hotspots of COVID-19. Another 25 percent is distributed on a per-capita basis, including the country’s four largest metropolitan areas. Los Angeles County and New York City have both seen high rates of community transmission. 

The stockpile is holding onto up to 50 percent of its supply in order to distribute it later. The supply of masks in the stockpile has not been significantly replenished since 2009. 

House Education and Labor Chairman Robert C. Scott, D-Va., said in a letter to Vice President Mike Pence Thursday that the supply chain shortages are straining the availability of protective equipment and nobody is directing supplies to the areas of most need. 

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The Trump administration has “no apparent coordination to ensure newly manufactured N95s and other equipment are being distributed to the highest priority areas,” Scott wrote. 

Unions like the AFL-CIO have for weeks petitioned Pence to add someone from the Labor Department to the coronavirus task force to better coordinate supply distribution. 

AFL-CIO President Richard Trumka panned the bill in a string of tweets Thursday night, saying it “does nothing to address the ongoing health crisis.”

National Nurses United has called on the Strategic National Stockpile to immediately release its supply. 

The bill also would expand indefinitely liability protections for manufacturers, a common measure to surge supplies during emerging infectious diseases. A provision was in an earlier stimulus law cleared Wednesday to expand liability protection to manufacturers until 2024.

The Senate provision also would extend liability protections for reusable respirators, which coincides with downgraded Centers for Disease Control and Prevention guidance recommending medical providers reuse masks, and would expand protections to all novel infectious disease agents, not just COVID-19, according to International Safety Equipment Association Public Affairs Director Daniel Glucksman.

Wins for drug, device companies

Some provisions could present the appearance of giveaways to the pharmaceutical and medical device industry. Democrats have tried to take a hard line against anything that could be seen as favorable to Big Pharma during negotiations over COVID-19 response bills, though the provisions in the latest bill are narrower than broad pricing protections members sought in an emergency supplemental enacted earlier this month. 

The Senate Finance Committee included a provision to increase Medicare payments for hospitals when they use antibiotics for severe infections that are supposed to be used sparingly, which is based on a bipartisan bill meant to boost development of new antibiotics while ensuring they are used conservatively.

The bill, which would in theory result in higher prices for those drugs, hadn’t gained traction in Congress amid a focus on keeping drug prices low, but the committee said it would “prevent the spread of serious infection at a time when hospitals are overwhelmed with COVID-19 patients.” 

The bill would also require Medicare to expedite coverage decisions when the Food and Drug Administration approves drugs and devices that receive a “breakthrough” designation. That designation and an expedited review are granted to products that treat serious or life-threatening conditions and would represent an improvement over existing products. The use of “breakthrough” designation has grown in recent years and is anticipated to keep growing as medicine becomes more specialized and companies prioritize untreated areas. 

While COVID-19 treatments would likely receive “breakthrough” designations, the bill’s provision for Medicare coverage determinations would apply to a broad swath of products and would represent a big win for the drug and device industries. 

The bill also includes controversial language to lift privacy restrictions that would align substance use treatment records with the Health Insurance Portability and Accountability Act (PL 104-191), or HIPAA.

The provision passed the House 357-57 as a standalone bill in 2018, but was not in a final broad opioid law that year.

Bipartisan interest in action on this language has been stalled because its opponents include Energy and Commerce Chairman Frank Pallone Jr., D-N.J., and Senate Health, Education, Labor and Pensions ranking member Patty Murray, D-Wash., whose committees oversee the issue.

House and Senate Democratic aides confirmed they remain concerned.

“Senator Murray has been working with her colleagues… but she doesn’t feel this is relevant to the crisis at hand and is urging everyone to stay focused on ideas that actually address the COVID-19 pandemic,” said a Murray aide.

Supporters of the change include national advocacy and medical groups and the insurance industry. But privacy and patient groups oppose it, saying it could increase discrimination and stigma.

Insurers’ requests

The bill also contains language that would mandate coverage provisions for insurance companies, including covering testing with no cost-sharing and requiring insurers to pay a provider’s cash price for a test if no contract rate exists. 

America’s Health Insurance Plans spokeswoman Kristine Grow noted that more companies are already waiving out-of-pocket costs related to testing. But insurers are also pushing for lawmakers to include funds for them as the bills pile up. 

AHIP and the Blue Cross and Blue Shield Association on Thursday requested Congress establish an emergency “risk mitigation” fund to keep premiums from rising in the event of catastrophic costs, while also pushing for a special enrollment period on HealthCare.gov and expanded subsidies for exchange enrollees.

Alliance of Community Health Plans President and CEO Ceci Connolly said the bill contains “valuable provisions” like expanding telehealth and the sequester suspension, but said more help is needed for small business insurance costs.

“We remain concerned about the uninsured or those who may lose insurance,” she said in a statement.

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