Jul 25, 2017

Axios Vitals

Good morning … Sen. John McCain is headed back to Washington, putting Majority Leader Mitch McConnell in a much better position to at least open the gates on a wild, unpredictable vote-a-rama.

You should always stay tuned to Axios' health care stream, but today especially. If past is prologue, this story is going to change dramatically, oh, maybe 10,000 times, give or take, before the sun sets.

Game change

It's impossible to overstate how incredible this is: The Senate is planning to vote today to begin debate on a health care bill, but no one knows which one. Would it fundamentally restructure Medicaid? Would it send individual insurance markets across the country into a tailspin? The lawmakers themselves don't know which version will make it to the top.

But their chances of getting there seem to be improving:

  • Stranger things have happened, but McCain probably isn't taking a break from his brain-cancer treatments to travel 2,300 miles across the country so he can torpedo a bill about an issue he's never been especially invested in.
  • If McCain is a "yes" on today's motion to proceed — and, sure, take nothing for granted, but if — then McConnell is in a considerably better position.
  • Sen. Susan Collins is a "no." But it sounds like Sens. Rand Paul and Mike Lee will get their request to begin the voting with a modified version of the 2015 straight-repeal vote. If those two support the motion to proceed, it would take two more moderates to join Collins and prevent a vote-a-rama.

All the options have major shortcomings:

  • Why it matters: These shortcomings will be enormously difficult, if not impossible, to address in the extremely limited timeframe available, if and when the clock starts running today.
  • The parliamentarian struck a six-month waiting period, designed as a replacement for the individual mandate, from the repeal-and-replace bill. So far, no one has come up with an alternative — aside from throwing more money into a temporary fund — to help stabilize states' insurance markets.
  • Moderates have said this whole time they're concerned about the size of the bill's Medicaid cuts, and about pulling the rug out from under their constituents. They'd have to do one or the other to pass anything here.
  • CBO has said both bills — repeal-only and repeal-and-replace — would leave 32 million and 22 million more people uninsured, respectively, compared with current law.
  • Note: CBO has wrong before about the magnitude of a legislation's effects, but not about the broad strokes. When it said millions of people would gain health insurance from the Affordable Care Act, millions of people still gained health coverage. Now, it says, millions would go uninsured.

Key caveat: A successful motion to begin the voting process doesn't necessarily mean any of the underlying health care bills will pass. But this has been leadership's message so far: Just let us get on the bill. Each incremental victory puts another one within reach.

What to expect when you’re repealing

Senate aides tell us this is how the process will likely unfold:

  1. Today, McConnell will call a vote on a motion to proceed to the House-passed bill.
  2. If the motion to proceed succeeds, McConnell would then offer a substitute amendment of some sort, and the clock would start running on 20 hours of debate. (FYI - It could take longer than 20 real-world hours to exhaust 20 legislative hours.)
  3. Sources tell our colleague Caitlin Owens the primary substitute would probably be the 2015 repeal-only bill, with a version of repeal-and-replace offered as an amendment to that amendment.
  4. Once those 20 hours are up, the voting marathon begins — on amendments to McConnell's substitute, and on points of order to strip out provisions that don't conform to the Senate's budget rules. McConnell could also offer different substitutes during this part of the process.
  5. If and when everyone has worn themselves out, at the end of the process, they'd vote on whether to adopt the substitute amendment (including whatever changes have been made to it throughout the process); and then to pass the underlying bill.

How insane could all this get? Completely, wildly, utterly, spectacularly insane:

  • No one knows how long the process will take or how it's likely to end.
  • Even though reconciliation is a partisan process, the particulars of using it have, in the past, relied heavily on bipartisan agreement. We asked our experts, for example, how the process ends — what's the mechanism to say a vote-a-rama is over and there are no more amendments? Usually, they have ended when the minority party either wears itself out or just agrees that after a certain point, the Senate can move on. This could all get even messier without that agreement.
  • Per Caitlin, senators are still trying to broker compromises — including one between Sens. Rob Portman and Ted Cruz that would revive Cruz's consumer-choice proposal while adding more money to help states stabilize their markets.
  • Note: Those amendments, though, haven't been evaluated by CBO and therefore would require 60 votes, which means they'd fail.
Shifting hard Medicaid decisions to the states

Caitlin Owens has a good reminder this morning of what's at stake with the Senate bill. The Medicaid spending reductions would force states to choose between multiple unpleasant options when it comes to covering even traditional enrollees like the aged and disabled.

The bottom line: The bill's per-capita caps reduce the amount the government spends on Medicaid by about $180 billion compared to current law, according to the Center on Budget and Policy Priorities. That means states — which must balance their budgets — will be forced to choose between three main options: raise taxes, cut spending elsewhere (like education), or cut Medicaid eligibility, benefits, or provider payments. The best case scenario is that some states may be able to make their programs more efficient.

Reality check: Per Diane Rowland of the Kaiser Family Foundation: "Why do you have to cut services to the elderly and disabled? Because those are where the big dollars are."

PhRMA leads lobbying spending with AMA a close second

Lobbying disclosures for the second quarter of 2017 have been pouring out. Bob Herman put on his galoshes and waded through the health care deluge:

PhRMA + member companies:

No health care group spent more in the second quarter than, you guessed it, big pharma. The Pharmaceutical Research and Manufacturers of America had lobbying expenses of $6 million, less than what it spent in the first quarter of this year but $120,000 more than in the same period of 2016. PhRMA also paid more than a dozen other lobbying shops to push its agenda.PhRMA member companies similarly played fast and loose with their wallets. Amgen spent $3.6 million, the most of any individual health care company. Bayer, Eli Lilly, Merck, Pfizer, Novartis and Johnson & Johnson each spent more than $1 million.AMA + AHA: Among the trade groups, right behind PhRMA was the American Medical Association ($5.28 million) and the American Hospital Association ($3.82 million). Both groups have opposed the Republican health care bills, which would result in doctors and hospitals treating more uninsured people.Not-for-profit hospitals: Fifteen individual not-for-profit hospital systems spent more than $100,000 lobbying Washington on everything from opposing the Republican health care bills to boosting Medicare payments to tax rules around uncompensated care. The biggest spenders, each doling out more than $200,000, were Children's Hospital of Philadelphia, Mayo Clinic, Ascension, Advocate Health Care, Cleveland Clinic, and BayCare Health System.Large companies:Don't forget that the nation's largest companies subsidize their employees' health insurance and have a lot at stake in any reform. Google, Boeing, FedEx, General Motors, Coca-Cola, UPS, MillerCoors and General Electric were just a sample of the many, many names that lobbied Congress on health care.

The Democrats' "price gouging enforcer"

Think rising drug prices are bad enough that they should get their own federal agency? The Democrats may have just the plan for you. Their "Better Deal" plan released yesterday has a drug prices proposal that would create a new "price gouging enforcer" — an independent official, to be confirmed by the Senate, who would lead a new agency created to investigate "unconscionable" price increases and fine drug companies that impose them.

Reality check: Democratic leaders say there's no agency right now that has this kind of authority, and that lowering drug prices should be the sole mission of a new entity. But the proposal won't help Democrats shed their image as a party that wants a new bureaucracy for every problem. When Maryland took on price-gouging, they just put the power in the hands of the state attorney general.

The FDA's role: FDA commissioner Scott Gottlieb won't go after drug companies in that way — and he doesn't have the power anyway — but he told Bloomberg about some smaller steps he's thinking of taking:

  • Loosening the rules on generic equivalents to drug-device combinations like EpiPens.
  • "Make the drug development process more efficient," not necessarily the review process.
  • On steps that could be taken with other agencies: "We haven't announced everything that we intend to do. I want to make sure that some of the other things are more fully baked."
Who’s behind those surprise ER bills

Turns out there's one company behind a lot of the high emergency room bills that are making patients miserable. The New York Times reports that EmCare, a company that helps hospitals staff their emergency rooms with physicians, is charging a lot of the higher billing codes that result in big bills for patients.

Why it's happening: EmCare physicians aren't part of the insurance networks hospitals use, so patients get charged out-of-network rates. The Times cites a study by Yale researchers that found one insurer's out-of-network doctor's bills shot up when EmCare entered a hospital. (EmCare said the study was "fundamentally flawed and dated.")

Why it matters: Hospital patients are understandably angry when they get the surprise bills. But the story suggests that hospital executives who use physician-staffing companies like EmCare aren't always aware that it's happening.

What we're watching today: The Senate votes to start the health care debate. Or not. Also, HCA earnings call, 10 a.m. Eastern.

What we're watching this week: Senate Aging Committee hearing on progress toward a cure for Type 1 diabetes, Wednesday. House Energy and Commerce health subcommittee hearing on Medicare Advantage Special Needs Plans, Wednesday.

Lots more earnings calls: Anthem, Wednesday before markets open; Gilead Sciences, Wednesday after markets close; Zimmer Biomet, Thursday before markets open. And Biogen and Alexion Pharmaceuticals will have "strategic updates" in addition to earnings.

Let us know what we can do better: david@axios.com, baker@axios.com.