the American Association of Colleges of Osteopathic Medicine

This analysis was prepared by McDermott+ Consulting, on behalf of AACOM.

This hearing was held on Wednesday, May 24, 2023.

Purpose

The purpose of this markup is for the Energy and Commerce Committee to consider 19 bills, 6 of which were referred from the Subcommittee on Health, listed below.

H.R. 1418, the “Animal Drug User Fee Amendments of 2023”
H.R. 2544, the “Securing the U.S. Organ Procurement and Transplantation Network Act”
H.R. 2666, the “Medicaid VBPs for Patients (MVP) Act”
H.R. 3284, the “Providers and Payers COMPETE Act”
H.R. 3290, “To amend title III of the Public Health Service Act to ensure transparency and oversight of the 340B drug discount program”
H.R. 3561, the “Promoting Access to Treatments and Increasing Extremely Needed Transparency Act of 2023” or the “PATIENT Act of 2023”

Members Present

Chairwoman McMorris Rodgers, Ranking Member Pallone, Representatives Eshoo, Guthrie, Latta, Griffith, Bilirakis, Johnson, Bucshon, Hudson, Walberg, Carter, Duncan, Palmer, Dunn, Curtis, Lesko, Pence, Crenshaw, Joyce, Armstrong, Weber, Allen, Balderson, Fulcher, Pfluger, Harshbarger, Miller-Meeks, Cammack, Obernolte, DeGette, Schakowsky, Matsui, Castor, Sarbanes, Tonko, Clarke, Cardenas, Ruiz, Peters, Dingell, Veasey, Kuster, Kelly, Barragan, Blunt Rochester, Soto, Craig, Schrier, Trahan, Fletcher

Key Takeaways

The Committee advanced all six health care bills it considered today.
H.R. 1418, the “Animal Drug User Fee Amendments of 2023”
- This legislation would amend the Federal Food, Drug, and Cosmetic Act to reauthorize user fee programs relating to new animal drugs and generic new animal drugs.
- H.R. 1418 was passed by a recorded vote of 49 yays and 0 nays.
H.R. 2544, the "Securing the U.S. Organ Procurement and Transplantation Network Act"
- This bill strengths the Organ Procurement and Transplantation Network (OPTN) and will provide HHS with clear authority to expand competition for contracts related to the operation of the OPTN.
- H.R. 2544 was passed by a recorded vote of 48 yays and 0 nays.
H.R. 2666, the “Medicaid VBPs for Patients (MVP) Act”
- This bill would amend title XIX of the Social Security Act to codify value-based purchasing arrangements under the Medicaid program and reforms related to price reporting under such arrangements, and for other purposes.
Rep. Eshoo provided an amendment that was adopted by a unanimous voice vote.
The amendment in the nature of a substitute (AINS) offered by Rep. Guthrie was adopted by a unanimous voice vote.
H.R. 2666, as amended, was passed by a recorded vote of 31 ayes and 19 nays.
H.R. 3284 the “Providers and Payers COMPETE Act.”
- This bill would require the Secretary of HHS to submit an annual report on the impact of certain Medicare regulations on provider and payer consolidation.
- Rep. Burgess proposed an AINS that was adopted with a unanimous voice vote.
- H.R. 3284, as amended, was passed by a recorded vote of 49 yays and 0 nays.
H.R. 3290, “to amend title III of the Public Health Service Act to ensure transparency and oversight of the 340B drug discount program”
- This bill amends title III of the Public Health Service Act to increase transparency and oversight of the 340B drug discount program.
The AINS proposed by Rep. Bucshon was adopted by a unanimous voice vote.
H.R. 3290, as amended, was passed on a partisan basis with a recorded vote of 29 yays and 22 nays.
H.R. 3561, the “PATIENT Act of 2023”
- This legislation seeks to increase price transparency, improve healthcare workforce, provide funding for community health centers, reauthorize DSH payments for hospitals, reauthorize the Special Diabetes Program, and reduce overall health care costs.
- H.R. 3285, the “Fairness for Patient Medications Act” was incorporated into the bill package.
- Three separate AINS, proposed by Rep. Griffith, Rep. Pallone, and Rep. Rodgers were adopted with unanimous voice votes.
- Rep. Fletcher offered an amendment, but it was not adopted.
- H.R. 3561, as amended, was passed by a recorded vote of 49 yays and 0 nays.

Opening Statements

Chairwoman Rodgers (R-WA) opened by discussing the importance of improving the quality of life by lowering health care costs, increasing price transparency, responsibly funding community health centers (CHCs) and diabetes research, preventing harmful cuts to hospitals that serve the most vulnerable patients, training more doctors in communities, and improving the Food and Drug Administration’s (FDA) review of animal drugs used by farmers and pet owners. She stated that these actions make the health care system more patient friendly by increasing access and lowering prices.

Ranking Member Pallone (D-NJ) discussed how the seven health care bills explored today will improve transparency and lower health care costs for the American people. He stated that H.R. 3561, introduced by himself and the Chairwoman, will improve health care transparency, lower costs, and strengthen the healthcare workforce. This legislation reauthorizes CHC funding through the end of 2025 with an increase in funding. The PATIENT Act would prevent cuts to Medicaid disproportionate share hospitals (DSH) which provide essential care for our country’s most vulnerable populations.

Health Subcommittee Ranking Member Rep. Eshoo (D-CA) mentioned that the seven bills from the Health Subcommittee strengthen critical public health programs and increase access to high-quality care, including H.R. 2666, which she and Health Subcommittee Chairman Guthrie (R-KY) introduced. She stated that this bill will be amended today to include technical assistance from the HHS Inspector General with the goals of preventing fraud, waste, and abuse in value-based payments. She also discussed errors, delays, and a lack of accountability in the organ procurement process, which would be addressed by enacting H.R. 2544. She said that the comprehensive price transparency bill would improve all sectors of health care.

Health Subcommittee Chairman Rep. Guthrie (R-KY) stated that these bills advance the goal of promoting greater patient access to quality healthcare and make the system more transparent. He discussed how these bills will drive more competition and choice in the health care system and ensure beloved pets maintain access to essential medications that help them live longer. Each of these bills represents key priorities of the American people. He mentioned that H.R. 2666, the MVP Act, would help vulnerable Americans who need lifesaving, one-of-a-kind treatments, by providing access to the most innovative cures for Medicaid patients living with otherwise incurable, untreatable, life-threatening conditions. He emphasized that decreased prices and increased care can be achieved by implementing policies that foster competition and choice.

Rep. DeGette (D-CO) highlighted three bipartisan measures included in H.R. 3561, a culmination of bills, which reauthorizes funding for the special diabetes program to continue our nation’s ongoing research to better treat, prevent, and eventually cure diabetes. She stated that the funding provided to this program has already led to the discovery of new treatments and technologies that help improve the lives of the more than 37 million Americans living with diabetes.She mentioned how the Supporting Safety Net Hospitals Act would prevent nearly 250 million dollars in cuts to safety net hospitals in her home state of Colorado alone. These hospitals provide care to the most vulnerable in the community. Additionally, she expressed support for the Diagnostic Lab Testing Transparency Act, which will help lower health care costs for those seeking diagnostic lab services by requiring labs to display the cash prices for their services.

Rep. Bilirakis (R-FL) mentioned that these bills will help extend crucial public health programs, reauthorize animal drug user fees, and provide price transparency and competition to address the skyrocketing costs of healthcare.

Rep. Schakowsky (D-IL) discussed health care provider ownership transparency and the advancement of critical legislation that will ensure the funding of CHCs.

Technical Summary of H.R. 1418, Animal Drug user fee amendments of 2023

Representative Greg Pence (R-IN) introduced H.R. 1418 with one co-sponsor on March 7, 2023. This legislation would amend the Federal Food, Drug, and Cosmetic Act to reauthorize user fee programs relating to new animal drugs and generic new animal drugs.

Discussion of H.R. 1418

Rep. Pence (R-IN) moved to strike the last word. He stated that this legislation is critical to ensuring safe and effective drugs for our nation’s livestock industry and farm animals for the next five years.

Rep. Schrier (D-WA) moved to strike the last word. She thanked all those involved with the development of this bill and stated that this bill will allow the FDA, through its Center on Veterinary Medicine, to approve necessary drugs and medications for companion animals and livestock. This will accelerate the development of medications for animals and promote a more streamlined review process, holding the FDA accountable for inspection times.

Amendment to the AINS proposed by Rep. Barragan.

Rep. Barragan (D-CA) introduced a pro-farmer, pro-environment, pro-business, and pr-agriculture amendment that would clarify the FDA’s authority and expectations for new zoo technical animal food substances to reduce the risk of pathogens in animals for human consumption.

Rep. Pence (R-IN) moved to strike the last word and stated that this amendment is not yet ready for consideration at this time. He urged opposition to the amendment.

Ranking Member Pallone (D-NJ) moved to strike the last word in support of the amendment, which will provide new options, not mandates, for novel animal feed to interested farmers, veterinarians, and pet owners.

Rep. Schrier (D-WA) moved to strike the last word and spoke in support of this amendment, as it supports the study of food additives and their potential benefits for animals and their environments.

Amendment to the AINS withdrawn by Rep. Barragan.

VOTES on H.R. 1418

Vote on H.R. 1418 was recorded at 49 yays and 0 nays.

Technical Summary of H.R. 2544 Securing the U.S. Organ Procurement and Transplantation Network Act

Representative Bucshon (R-IN) introduced H.R. 2544 with three co-sponsors on April 10, 2023. This legislation would amend section 372 of the Public Health Service Act to allow for additional flexibilities within the Organ Procurement and Transplantation Network (OPTN).

Discussion of H.R. 2544

Rep. Bucshon moved to strike the last word. He discussed how this bill seeks to improve the OPTN program, which is overseen by HRSA and has a contract with the United Network for Organ Sharing. He stated that thousands of donated organs go to waste each year as the process of matching, harvesting, and transporting is not occurring. This bill encourages a competitive process to choose the best contractors for each OPTN function.

Rep. Kelly (D-IL) moved to strike the last word and stated that thousands of people die each year waiting for organs, and that the problem is even more acute for people of color and those in rural communities. She mentioned that black people are four times more likely to develop kidney failure than white people but are much less likely to receive a life-saving kidney transplant.

VOTES on H.R. 2544

Vote on H.R. 2544 was recorded at 48 yays and 0 nays.

Technical Summary of H.R. 2666, mEDICAID VBPS FOR PATIENTS (MVP) ACT

Chairman Guthrie introduced H.R. 2666 with eight cosponsors on April 18, 2023. This legislation would permit states and pharmaceutical manufacturers to enter into value-based payment arrangements, and to offer alternatives for how to cover high-cost, one-time cell and gene therapies in the Medicaid program by allowing for multiple reporting for a respective drug’s best price, average manufacturer price, and average sales price.

Discussion of H.R. 2666

Rep. Matsui (D-CA) moved to strike the last word. She expressed hesitancy to support this bill, as it is too early to tell how this rule would affect state Medicaid programs and patients, including impacts beyond rare disease.

Rep. Joyce (R-PA) moved to strike the last word. He expressed support for this bill, as the current reimbursement system fails to reflect the value of therapies and does not offer states the needed flexibility to provide adequate coverage for those under Medicaid. This bill would codify Medicaid reporting rules that permit the multiple reporting of best prices, to help states pay for curative cell and gene therapies over time.

Ranking Member Pallone (D-NJ) moved to strike the last word and discussed how the permanent codification of statue could potentially be damaging and said that he would not support this bill. He stated that state Medicaid programs do not need this bill to enter into value-based payment arrangements and that current law already requires that Medicaid covers FDA-approved drugs.

Rep. Guthrie (R-KY) moved to strike the last word. He stated that 40% of Kentuckians are on the Medicaid program and discussed how this bill could ensure the poorest Americans have access to these innovative therapies.

Rep. Eshoo (D-CA) moved to strike the last word. She stated that this bill would bring miraculous services up-to-date and that the Biden Administration has supported related policies. She mentioned that while current law upholds this bill’s intent, the codification of the rule would improve CMS authority by adjusting the calculation of average manufacturer price and average sales price to make sure the measures are not incorrectly lowered by value-based agreements, ensuring state Medicaid plans get a higher minimum rebate and that doctors are reimbursed for providing the drug under Part B.

Rep. Peters (D-CA) moved to strike the last word. He mentioned that these medical breakthroughs are incredible but lose their value if the most vulnerable patients do not have access to them.

Amendment to the AINS proposed by Rep. Guthrie.

Rep. Guthrie shared a personal story about a family friend being diagnosed with sickle cell and how innovative therapies were crucial. This amendment would make technical corrections to the bill. He mentioned how this was a Trump Administration policy but has been continued by the Biden Administration.

Amendment proposed by Rep. Eshoo.

Rep. Eshoo stated that this amendment would make technical changes at the Centers for Medicare and Medicaid Services (CMS) request to clarify their rulemaking authority for the calculation of average manufacturer price and clarifies which discounts from value-based payments should not be counted in the calculation of average sale price.

Ranking Member Pallone mentioned that this bill would make the current rule permanent and said that Medicaid and CHIP Payment and Access Commission (MACPAC) and other organizations are concerned about said permanency. He stated that various organizations would rather see how the existing rule plays out rather than making it permanent.

VOTES on H.R. 2666

Rep. Eshoo’s amendment was adopted by a voice vote.

Amendment to the AINS was adopted by a voice vote.

The vote on H.R. 2666, as amended, was recorded as 31 ayes and 19 nays.

Technical Summary of H.R. 3284 “the Providers and Payers COMPETE Act.”

This bill was introduced by Rep. Burgess. The bill would require HHS, during each of its annual hospital and other provider payment rules like those for inpatient and outpatient care, to consider the implications that its proposals may have on further consolidating the health care system by studying both horizontal and vertical consolidation among both providers and payers.

Discussion of H.R. 3284

Amendment to the AINS proposed by Rep. Burgess (R-TX).

Rep. Burgess (R-TX) stated that this amendment would provide technical assistance from CMS.

Rep. Dingell (D-MI) moved to strike the last word and spoke in support of the AINS. She stated that this will ensure HHS is part of the annual rulemaking process by considering the implications that proposals may have on provider and payer consolidation. HHS would be required to seek a public comment period to better understand the impact for certain proposed rules consolidation and submit an annual report to Congress.

VOTES on h.r. 3284

Amendment to the AINS was adopted by a voice vote.

H.R. 3284 was recorded as 49 yays and 0 nays.

Technical Summary of H.R. 3290, to amend title III of the Public Health Service Act to ensure transparency and oversight of the 340B drug discount program

Representative Bucshon (R-IN) introduced H.R. 3290 with no cosponsors on May 15, 2023. This bill would establish reporting requirements for hospitals participating in the 340B program. Specifically, participating hospitals would be required to report total 340B savings, the covered entity’s respective patient mix, total charity care, and payer shortfall, to the HRSA on an annual basis.

Discussion of H.R. 3290

Amendment to the AINS proposed by Rep. Bucshon.

Rep. Bucshon (R-IN) stated that this amendment would provide technical assistance from HRSA and feedback from multiple stakeholders. He discussed how the 340B drug pricing program is an important tool that helps hospitals and other covered entities meet the health care needs of low-income and uninsured patients. 340B covered entities can purchase drugs for patients at their facilities at substantial discounts. He stated that while he is a strong supporter of the 340B program, the only way for lawmakers to understand what this program looks like in their district is by going to each hospital. He said that more transparency is needed to ensure this program is working the way it was intended to.

Ranking Member Pallone (D-NJ) struck the last word and stated that this legislation may add additional burdens to covered entities while potentially misconstruing the value of the program to patients. He discussed the value and benefits provided by these entities that would not be captured by the requirements of this bill.

Rep. Carter (R-GA) moved to strike the last word and expressed support for the 340B program. He stated that pharmacy benefit managers (PBMs) are pickpocketing 340B programs and CHCs and that without government interference, this will only continue.

Rep. Bucshon (R-IN) stated that proposals from Democrat colleagues is an attempt to undermine this transparency legislation. He expressed the need for 340B hospitals to be clear in where their profits are going.

Rep. Matsui (D-CA) stated that while the bill is seemingly about transparency, it would also create onerous reporting requirements that do not align with the intent of the 340B program. She said that this bill would make the benefits of the program seem far more limited than they really are.

Rep. Joyce (R-PA) moved to strike the last word and spoke in support of this bill. He cited skyrocketing healthcare costs as another reason for further transparency in the 340B program.

Rep. Bucshon(R-IN) discussed how non-profit hospitals already have reporting requirements and stated that this bill would not create additional burdens on 340B covered entities.

Rep. Castor (D-FL) moved to strike the last word and spoke in opposition of the bill. She mentioned how crucial the 340B program is for lowering drug prices and helping vulnerable populations.

Rep. Peters (D-CA) moved to strike the last word and stated that 340B is the second largest drug program funded by the government. He expressed concerns that some entities may use 340B hospital profits in more affluent areas. He called for more transparency of where the money is going and for a full understanding of the program by enacting this bill.

Rep. Dingell (D-MI) moved to strike the last word. She discussed how profits from the 340B program are used to treat vulnerable patients and that this bill will obscure the true value of 340B in communities nationwide.

VOTES on H.R. 3290

Amendment to the AINS was adopted by a voice vote.

Vote on H.R. 3290 was recorded at 29 yays and 22 nays.

Technical Summary of H.R. 3561, The “Promoting Access to Treatments and Increasing Extremely Needed Transparency (PATIENT) Act of 2023”

Chairwoman Rodgers (R-WA) introduced H.R. 3281, the “Promoting Access to Treatments and Increasing Extremely Needed Transparency (PATIENT) Act of 2023,” on May 15, 2023. This legislation represents a package of bipartisan bills that increases price and ownership transparency, reduces health care costs, reauthorizes DSH, and strengthens the health workforce.

Discussion of H.R. 3561

Amendment to the AINS proposed by Chairwoman Rodgers.

Chairwoman Rodgers (R-WA) discussed how this bill package is a product of strong, bipartisan work, that will make health care systems stronger and more patient friendly, by dramatically increasing price transparency, lowering costs, and extending funding for vital public health programs.

Ranking Member Pallone (D-NJ) spoke to the bipartisan nature of this bill package. He stated that it will require hospitals and physician practices to disclose ownership data, including for entities owned by private equity and venture capital firms. It will also provide greater insight into hospital and provider consolidation. He cited the lack of price transparency as a barrier to competition. It also considers a proposal to align payments for drug administration in hospital outpatient departments with the physician fee schedule rate that would require Medicare to pay outpatient hospital departments the same rate as independent physicians’ offices for administering the same intravenous or injected medications. This bill also prevents 16 billion dollars in cuts to Medicaid DSH payments, helping safety net providers serve vulnerable communities.

Rep. Carter (R-GA) moved to strike the last word and expressed support for the amendment. He stated that this bill will protect patients, pharmacists, and taxpayers from the abusive practices of PBMs. This bill would allow pharmacies to be reimbursed at an appropriate rate for dispensing medications to Medicaid patients. He cited that 95% of all Americans live within five miles of a pharmacy and these are the people who care for our country’s most vulnerable patients. Unfair and deceptive acts like spread pricing in the Medicaid Managed Care System lead to the closure of 4% of independent pharmacies every year.

Rep. Guthrie (R-KY) emphasized the importance of these bills as they help strengthen the health care workforce as well as improve transparency.

Rep. Ruiz (D-CA) moved to strike the last word and discussed how this bill extends funding for the graduate medical education (GME) program for six more years and expands the program as well. The GME program helps train providers and encourages them to remain in the area they train.

Rep. Joyce (R-PA) struck the last word and expressed support for the bill, which increases transparency and decreases costs for the end-user of the system. He highlighted H.R. 3237, included as part of the package, which would require hospitals to report to CMS on what services are occurring at each of their outpatient departments through a unique identification number at each facility.

Rep. Schakowsky (D-IL) struck the last word and expressed support for the bill, especially the provision to increase transparency for private equity owned hospitals.

Rep. Castor (D-FL) struck the last word and expressed support for the public health reauthorizations included in the bill, including increased funding for the GME and Public Health Services Corps.

Rep. Tonko (D-NY) struck the last word and expressed concerns regarding site-neutral cuts on hospitals, but stated he would support the bill.

Rep. Clarke (D-NY) struck the last word and stated that she was glad her bill H.R. 2665, the Supporting Safety Net Hospitals Act, was included in this package, as it delays the 8 billion dollars in Medicaid DSH cuts. However, she stated that the pairing of her bill with the site-neutral cuts to hospitals threatens those without access to care.

Rep. Blunt Rochester (D-DE) struck the last word and expressed support for the bill as it includes H.R. 2559, the Strengthening Community Care Act, which she co-authored. She stated that this bill would extend the CHC fund and National Health Service Corps for over two years and include a necessary funding increase.

Rep. Trahan (D-MA) struck the last word and expressed support for the bill. She discussed how the Teaching Health Center GME program helps bolster the health care workforce.

Rep. Fletcher (D-TX) struck the last word and discussed how this bill will help strengthen CHCs.

Amendment to the AINS proposed by Rep. Griffith (R-VA).

Rep. Griffith’s amendment would insert technical changes to include H.R. 3285, the “Fairness for Patients Medications Act,” in the package, which ensures that the insurance companies and PBMs cannot charge patients more than the price that they themselves negotiate for certain drugs. The Secretary of HHS will use existing reporting data to certify highly rebated drugs, as any drug whose rebates discounts equal 50% or more than spending on the drug.

Ranking Member Pallone (D-NJ) stated that this bill will help increase transparency of hospital ownership and provide greater insight into hospital and provider consolidations.

Chairwoman Rodgers (R-WA) discussed the importance of understanding the entire scope of consolidation within the health care system. She said that to do so will require careful, technically sound policy.

Amendment to the AINS proposed by Ranking Member Pallone.

Rep. Pallone’s amendment will extend funding for public health programs for three months by providing funding through calendar year 2025. It will provide additional funds and action for CHCs, the National Health Services Corps, the Special Diabetes Program, and the Special Diabetes for Indians Program.

Rep. Dingell (D-MI) struck the last word and stated that more needs to be invested into these community health services.

Amendment to the AINS proposed by Rep. Fletcher (D-TX).

Rep. Fletcher’s amendment would strike language including provisions that apply the Hyde Amendment to the bill benefitting CHC funding. She shared stories regarding women in Texas who did not receive timely reproductive health care, which led to extreme health consequences. She asked what happens to individuals on Medicaid when they do not have the resources to cover health care issues like those mentioned before.

Chairwoman Rodgers (R-WA) struck the last word and stated that taxpayer dollars should not be used to fund abortions, and that the Hyde Amendment has bipartisan support, specifically for mandatory funding given to CHCs, teaching health centers, and the National Health Service Corps. She stated that Congress has supported the Hyde Amendment in the past.

Rep. Schrier (D-WA) struck the last word and expressed support for Rep. Fletcher’s amendment. She mentioned that just because Congress has historically supported the Hyde Amendment, it does not mean they should continue to, and stated that abortion is a part of routine health care, and this financial burden should not be placed on poor women that are enrolled in Medicaid.

Rep. Bucshon (R-IN) struck the last word and disagreed with the amendment.

Amendment to the AINS proposed by Rep. Schakowsky.

Rep. Schakowsky (D-IL) discussed her proposed amendment, which would require that ambulatory surgical centers report data on their surgical services and help get a picture of what exactly the true costs are, to help determine what Medicare is paying ambulatory surgical centers and whether that amount of money is fair.

Rep. Schakowsky withdrew the amendment to the AINS.

VOTES on H.R. 3561

The amendment to the AINS by Rep. Griffith was adopted with a voice vote.

The amendment to the AINS by Rep. Pallone was adopted with a voice vote.

The amendment to the AINS by Rep. Fletcher was not adopted with a recorded vote of 21 yays and 28 nays.

The amendment to the AINS proposed by Rep. Rodgers was adopted with a voice vote.

The vote on H.R. 3561, as amended, was recorded as 49 yays and 0 nays.