August 18, 2021
On August 11, 2021, the U.S. Senate passed a $1 trillion infrastructure bill on a strong bipartisan vote of 69-30. It is intended to rebuild roads and bridges, bring lead-free drinking water and reliable broadband to more regions of the country, require domestic production of personal protective equipment, build a nationwide electric vehicle charging network and invest in new electric transmission lines to carry clean energy. In a major win for medicine, Senators eliminated the proposal to use unspent COVID-19 Provider Relief Funds to pay for the infrastructure package. The California Medical Association (CMA) told leaders that many physician practices were still recovering and with the new Delta variant surge, more assistance was needed to sustain physicians for the long-term.
Several other health care related provisions were used to partially fund the infrastructure package.
- Extends Medicare “sequestration” provider payment cuts from 2030 to 2031.
- Delays the prescription drug rebate rule. The bill establishes a moratorium (until January 1, 2025) on the implementation of the prescription drug rebate rule, which originally eliminated the anti-kickback safe harbor protection for prescription drug rebates. (This provision is likely to be made permanent in the human infrastructure budget resolution.)
- Requires drug manufacturers refund unused single-dose containers and single-use packs. The infrastructure legislation also includes a new requirement for drug companies to refund Medicare for leftover medicine when vials contain more of a physician-administered drug than a patient needs. While many medications are typically dosed based on a patient’s weight or specific clinical need, most pharmaceutical manufacturers produce only a single-dose vial size. In turn, a significant amount of medication is being discarded from these uniformly sized vials, leading to waste of the unused drugs and unnecessary payments. Companies that do not comply will be subject to civil monetary penalties equal to the amount the manufacturer would have rebated plus an additional 25% of the amount owed.
$3.5 trillion Budget Reconciliation Legislation: “Human Infrastructure”
The U.S. Senate also adopted a budget resolution that paves the way for the Democrats’ $3.5 billion budget reconciliation “human infrastructure” bill. While the U.S. House of Representatives is expected to return from its August recess on August 23, 2021, for one week to pass a similar budget resolution, House Speaker Nancy Pelosi is not expected to bring up the Senate infrastructure bill and the final budget resolution until late September because there is still wide disagreement between centrists and liberals within the House Democratic Caucus.
The Senate budget resolution includes the following health care provisions:
- Adds new dental, vision, and hearing benefits to Medicare
- Expands Home and Community-Based Services
- Extends the Affordable Care Act Expansion from the American Rescue Plan (making permanent the increased tax credits and cost-sharing subsidies for families on the cliff)
- Incentivizes states that have refused to expand ACA Medicaid coverage
- Reduces patient spending on prescription drugs by allowing Medicare to negotiate drug prices
- Repeals the Trump-era Medicare rebate rule
- Congress would use the projected cost-savings from eliminating the rebate rule and allowing Medicare to negotiate drug prices to pay for the new Medicare benefits, home-based services, Medicaid expansions for non-expansion states and the ACA improvements.
CMA is urging Congress to include the ACA improvements, the prescription drug negotiation bill, permanent telehealth payment parity and modernization, additional GME funding, and EHR/HIT infrastructure assistance for small physician practices in the final budget resolution.