HEALTH CARE BRIEFING: Democrats Target Private Equity Firms

By Brandon Lee

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Private equity-backed health-care companies would face new restrictions on getting funds through Medicare’s advance payment program under a $196.5 billion funding bill that won the House Appropriations Committee’s approval yesterday.

The appropriations bill to fund the departments of Health and Human Services, Labor, and Education would direct the federal government to restrict Medicare advanced payments to private equity-owned organizations that have laid off or furloughed employees. It would also require the government to report every 90 days to Congress on organizations that received early payments from Medicare this year.

Any group seeking new advanced payments from Medicare would need to disclose if a private equity firm owns it and the amount of money going to providers controlled by such firms.

Revamps of Medicare’s advance payment program have been drawing attention from both Democrats and Republicans, after hospitals and doctors took almost $100 billion in pre-payments from the federal government that they will have to repay with interest. The appropriations measure, however, is the first attempt to restrict where these funds go.

If it becomes law, the appropriations language could shed a light on firms such as KKR & Co., Blackstone Group and Welsh Carson Anderson & Stowe, which all have added to their health-care portfolios in recent years by acquiring staffing groups and health services companies. Alex Ruoff has more.

  • The appropriations bill, which the committee voted 30-22 to approve, offers the Department of Health and Human Services $96.4 billion in discretionary funding for the year starting Oct. 1, a $1.5 billion increase from the current fiscal year. It would also send $24.4 billion to state and local health agencies amid the coronavirus pandemic.
  • The committee also approved an amendment from House Progressive Caucus Co-Chairman Mark Pocan (D-Wis.) that would require insurers to report on compliance with federal mental health parity laws, Andrew Kreighbaum reports.

Congressional Virus Efforts

Senate GOP Preps Stimulus Plan: Senate Republicans will finish their own plan for a new round of coronavirus stimulus as early as next week and only then will open negotiations with Democrats as the last stimulus begins running dry and a resurgence of coronavirus cases threatens the U.S. Majority Leader Mitch McConnell (R-Ky.) said he is working with the administration on draft legislation. Read more from Erik Wasson, Laura Litvan, and Laura Davison.

Democrats Urge $25 Billion for Vaccine: Senate Democrats released a report yesterday pitching safety and accessibility policies for a Covid-19 vaccine. They outlined eight areas for action, including seeking $25 billion in new emergency funding for research and development and ensuring a vaccine is provided at no cost. “We can’t afford any more mistakes that put people’s lives in jeopardy and waste time we don’t have,” Patty Murray (D-Wash.), the top Democrat on the Health, Education, Labor, and Pensions Committee, said in a statement, Victora Hodges reports.

  • Chairman Lamar Alexander (R-Tenn.) appeared to shoot down the idea in a statement. The U.S. is “developing safe and effective vaccines for a new virus faster than at any other time in our history,” he said in an emailed response to the Democrats on his committee.
  • Groups pushing for Congress to restrict what drugmakers can charge for Covid-19 vaccines and medicines said Democrats should go further than only trying to make them free. “If Congress doesn’t take away monopoly control over prices,” companies will still be able to hike prices and charge Medicare, Medicaid and insurers “exorbitant prices that get shifted to the rest of us” through premiums and taxes, said Margarida Jorge, campaign director for Lower Drug Prices Now.

Immigration Detention Facility Infections: More than 3,000 detainees, 280 contractors, and at least 45 Immigration and Customs Enforcement employees assigned to detention facilities have tested positive for Covid-19, according to House Homeland Security Subcommittee Chairwoman Kathleen Rice (D-N.Y.) at a hearing yesterday. At least two detainees and five contractors have died of complications from Covid-19 after they were exposed at ICE detention facilities, according to Rice, Shaun Courtney reports.

Hahn Pressed on Accuracy of Tests: House Energy and Commerce Chairman Frank Pallone (D-N.J.) and Reps. Anna Eshoo (D-Calif.) and Diana DeGette (D-Colo.) asked FDA Commissioner Stephen Hahn to answer their questions regarding the agency’s work to determine the accuracy of Covid-19 diagnostic and serological tests. Read the letter here.

House to Mark Up Health Measures: The House Energy and Commerce Committee tomorrow will consider 30 bills, including several health-related measures. The legislation will “expand access to care, strengthen mental health parity, provide mental health support to first responders and enhance the viability and transparency of the Strategic National Stockpile,” Chairman Frank Pallone (D-N.J.) said in a statement. See the list of bills here.

Today’s Hearings on the Hill:

More on the Pandemic

White House Defends Trump-Fauci Relationship: The White House sought to repair Trump’s frayed relationship with Anthony Fauci, the U.S.’s top infectious disease expert, with press secretary Kayleigh McEnany saying Fauci and Trump work well together, despite public criticism levied by the president and officials at the White House. Officials over the weekend circulated a dossier to reporters of guidance Fauci had prescribed earlier in the pandemic that was subsequently reversed. Last week, Trump publicly criticized Fauci in two interviews. Read more from Justin Sink.

L.A. Plans Virtual Classes in the Fall: Los Angeles, home to America’s second-largest school district, and San Diego said they will start the academic year with online classes amid the resurgent coronavirus. “The health and safety of all in the school community is not something we can compromise,” Austin Beutner, superintendent of the Los Angeles Unified School District, said in a statement. “Last week was the worst yet in the Los Angeles area,” he said. Instruction will start Aug. 18 in L.A. and Aug. 31 in San Diego. Read more from Brian Eckhouse.

  • Both districts’ decisions came a day after Trump’s top education official downplayed the risk of reopening schools in the fall—a top priority for the president, who has suggested that federal funding could be pulled from schools that don’t comply. Trump would also be willing to boost aid for state and local governments that reopen schools, his senior economic adviser said yesterday. Read more from Josh Wingrove.
  • In New York, schools will be approved for opening if their region is in Phase 4 and the daily infection rate remains 5% or lower over a 14-day average, Gov. Andrew Cuomo (D) said. The state will maintain a safety valve after it determines during the first week of August which schools can open, he said yesterday. Read more from Keshia Clukey.
  • Mike Ryan, head of the World Health Organization’s emergencies program, said the best way to open up schools is to do so once countries succeed in combating the spread of the disease. Maria Van Kerkhove, the WHO’s lead officer on Covid-19, said not enough is known about the role of children in transmission, but several recent studies suggest children over 10 are more susceptible to infection than those under 10. Read more.

10 Million to Lose Employer Health Coverage: Over 10 million Americans are estimated to lose health insurance coverage due to the coronavirus pandemic’s economic fallout, according to a study published yesterday by the Robert Wood Johnson Foundation. Projections show that about 3 million of those people will regain employer-sponsored insurance by being added onto a family member’s policy, the study found, while another 2.8 million people will enroll in Medicaid and 600,000 will enroll through the individual marketplace. Find the study here.

More Headlines:

What Else to Know Today

Juul Launches Fight Against Black Market: Juul Labs launched an aggressive legal effort to stop what it says is a “seemingly endless stream” of black market cartridges for its e-cigarettes. The vaping company filed a patent-infringement complaint at the International Trade Commission in Washington, naming more than four dozen companies it says have been importing copycat cartridges for the e-cigarettes. Juul is seeking a blanket order that would stop imports of any unauthorized cartridges.

The complaint—as well as some four-dozen patent-infringement lawsuits filed in federal courts around the U.S. over the past few days—are part of what the San Francisco-based company paints as a push to curb sometimes dangerous products. Juul’s chief executive K.C. Crosthwaite has vowed to mend the image of the embattled company, which was at the heart of a debate over whether e-cigarettes should exist at all. Read more from Susan Decker.

More Headlines:

To contact the reporter on this story: Brandon Lee in Washington at blee@bgov.com

To contact the editors responsible for this story: Giuseppe Macri at gmacri@bgov.com; Zachary Sherwood at zsherwood@bgov.com; Michaela Ross at mross@bgov.com

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