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Health package talks break down amid broader spending feud

The smaller bill will likely focus extender policies as well as possible funding for community health centers and partial offsets to scheduled Medicare cuts for physicians

Sen. Bill Cassidy, R-La.,  is seen during Senate votes in the Capitol.
Sen. Bill Cassidy, R-La., is seen during Senate votes in the Capitol. (Tom Williams/CQ Roll Call file photo)

Lawmakers who hoped to address price transparency and lower drug costs are instead negotiating a smaller health care package after talks broke down again amid a broader stalemate over government funding.

They are now working on a pared-down deal that could exclude the vast majority of health proposals previously in the works, including legislation to codify and strengthen price transparency rules, crack down on practices of pharmacy benefit managers and restrict some billing for off-campus hospital clinics. 

The smaller bill is now likely to focus on a package of extender policies, according to multiple lobbyists, along with potential funding for community health centers, partial offsets to scheduled Medicare cuts for physicians, and a delay in scheduled cuts to hospitals that serve a higher portion of low-income patients. 

Funding for other big-ticket items could still be included, though disagreements are far from resolved. That could include reauthorizations of pandemic and emergency response authorities, opioid programs and community health center funding.  

The disputes are happening against the backdrop of a larger fight over government spending levels. Appropriators are poised to punt on fiscal 2024 funding for the fourth time, and are potentially speeding toward billions of dollars in across-the-board spending cuts if they don’t pass full-year funding bills by April 30.

The health discussions have also been elevated to House and Senate leadership after committee leaders were unable to reach an agreement. But it’s unclear whether the package could sustain enough support to ride on another short-term spending bill. 

Various disputes between the House and Senate, Democrats and Republicans and within both parties have plagued the discussions since they started. A rift between House Energy and Commerce Chair Cathy McMorris Rodgers, R-Wash., and Senate Health, Education, Labor and Pensions ranking member Bill Cassidy, R-La., is one key holdup, according to multiple sources, with disagreements over restricting PBMs in the commercial market, price transparency and the pandemic reauthorization.

The Senate’s pharmacy benefit manager bill would prevent PBMs — which manage the prescription drug benefit for health insurance plans — from pocketing rebates negotiated with drugmakers in the commercial market. Other House and Senate bills would only ban the practice in Medicare and Medicaid.

Rodgers doesn’t want to meddle with business tactics in the commercial market. And Cassidy is also attempting to condition his support for an opioid reauthorization bill on the inclusion of the pandemic reauthorization, according to lobbyists.

“Sen. Cassidy is committed to negotiating the most robust package that can pass the House and Senate,” a spokesperson said.

A number of House Democrats led by Ways and Means ranking member Richard E. Neal, D-Mass., are also angling to kill language that would establish transparency and parity in certain drug payments between off-campus hospital clinics and independent physician offices under Medicare. 

And Senate HELP Chairman Bernie Sanders, I-Vt., is asking for billions of dollars more in community health center funding than what was included in a bipartisan House bill. 

Funding for the first set of government agencies, including the Food and Drug Administration, expires March 1. President Joe Biden is summoning the four congressional leaders to the White House Tuesday after both sides failed to reach a deal Sunday night.

Sandhya Raman and Jessie Hellmann contributed to this report.

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