HEALTH CARE BRIEFING: Stimulus Plan to Unveil Lab Testing Prices

Providers of coronavirus tests will have to publish their prices under a sweeping economic stimulus deal the Senate passed last night.

Lawmakers are concerned that efforts to make coronavirus tests free for many Americans could increase the cost of the tests, putting added costs on many of the same employers that the stimulus legislation is supposed to rescue from a slumping economy.

The stimulus bill agreed upon would also require all providers to publish a “cash price” for the tests, a move aimed at keeping providers from dramatically raising the cost of coronavirus tests once insurers offer to cover them at no cost.

Publishing the “cash price”—what a person could pay rather than going through their health insurance—of the tests could allow employers, who pay for the bulk of private insurance coverage, to nudge their workers away from providers that charge high rates for the tests, supporters say.

“Having these prices could at least help employers try to use cash incentives or something else to steer patients to low-cost providers,” Katy Talento, a health-care benefits consultant and former White House adviser who has advocated for more pricing transparency in the health industry, said.

Photographer: George Frey/Bloomberg
A technician prepares to process vials into a Covid-19 testing device.

But some economists argue publishing prices will do little to change how people who are potentially infected with the new coronavirus will behave because both lawmakers and insurers have largely ended cost-sharing for patients through an earlier measure passed this month in Congress.

“Given that the test is free for patients wherever they get it, they have no reason at all to care about the ‘cash price’,” according to Loren Alder, associate director of the USC-Brookings Schaeffer Initiative for Health Policy. Alex Ruoff has more.

The Senate approved a historic $2 trillion rescue plan to respond to the economic and health crisis caused by the coronavirus, putting pressure on the Democratic-led House to pass the bill quickly and send it to President Donald Trump for his signature.

The massive legislation passed on a 96-0 vote just before midnight after days of intense negotiations between Senate Republicans and Democrats, who demanded changes to the bill introduced last week by Senate Majority Leader Mitch McConnell (R-Ky.).

The package includes an unprecedented injection of loans, tax breaks and direct payments for major corporations and individual taxpayers to help the U.S. economy get through an abrupt shutdown as people avoid social interaction and businesses close to keep from spreading the coronavirus. More than 69,000 people in the U.S. have been infected with the deadly respiratory disease, and some economists warn that unemployment could hit 30%.

The House is scheduled to vote on the legislation Friday. Trump urged Congress to act “without delay” and said he would sign the legislation immediately. Read more from Steven T. Dennis, Mike Dorning, Billy House and Laura Litvan.

House Speaker Nancy Pelosi (D-Calif.) told news outlets last night the bill will not pass under unanimous consent, so leadership was considering a voice vote or another alternative as most members are currently outside of Washington D.C.

Read a copy of the bill text from McConnell’s office here, a summary of the bill from Senate Appropriations Committee Republicans here and a summary from Senate Appropriations Democrats here.

Senators recessed until April 20 after passing the $2 trillion package, but could come back for further votes with 24-hours notice, McConnell said on the Senate floor last night.

Read the BGOV Bill Summary on the emergency funding measure (H.R. 748) by Adam Schank and Loren Duggan.

Read more on the health-related provisions in the stimulus package below:

  • Health-care providers could tap into $100 billion meant to bolster finances during the outbreak, but rural hospitals argue they won’t get a fair share of the fund. The deal would create the $100 billion program to provide direct aid to health-care facilities—such as hospitals, nonprofits and public health institutions—to cover costs related to tests and care for Covid-19 patients,, Ruoff reports.
  • The National Institutes of Health and the Centers for Disease Control and Prevention would receive an additional $945 million to combat Covid-19 under the deal, bringing the agency’s total influx of coronavirus funds to nearly $1.8 billion. The funding for the NIH builds on the $836 million the agency received in the first coronavirus measure enacted March 6. Read more from Jeannie Baumann.
  • The stimulus would offer more than $45 billion in critical aid for states and localities to combat the virus through the Federal Emergency Management Agency Disaster Relief Fund and grants programs under the measure. The relief fund reimburses state and local expenses for medical responses and personal protective equipment, among other costs incurred under disaster declarations. Read more from Shaun Courtney.
  • The deal also carries a temporary tax waiver that would make it cheaper for spirits producers to make hand sanitizer. The Distilled Spirits Council of the United States, a trade group representing major and craft liquor producers, pushed Congress to waive an alcohol excise tax for the use of undenatured alcohol—used to make alcoholic beverages—in hand sanitizer. Read more from Kaustuv Basu.

Extended Absence Post-Vote: Senate leaders are discussing a plan to, after the stimulus vote, leave Washington for ‘several weeks’ amid growing concern about the risks posed by the coronavirus, Senate Minority Whip Dick Durbin (D-Ill.) said. Durbin didn’t offer details of the length of the recess but suggested that the chamber will be out the week of March 30 and beyond. The Senate was previously scheduled to be in session next week before leaving by April 3. Read more from Nancy Ognanovich.

Cuomo Says Deal Isn’t Enough: Meanwhile, New York Gov. Andrew Cuomo (D) said the stimulus plan would be “terrible” for his state, the current epicenter of the outbreak in the U.S. The agreement includes $3.8 billion for New York state and $1.3 billion for New York City, he said, calling it a “drop in the bucket.” Lost tax revenue may cost New York state as much as $15 billion, he said, Christian Berthelsen and Keshia Clukey report.

Research, Testing & Treatment

Home Test Kit Makers Scrutinized: Companies making at-home testing kits for Covid-19 have until tomorrow to respond to questions about their unauthorized products. The FDA has warned consumers that it hasn’t authorized any kits that Americans could buy to test themselves for the virus. Everlywell, Carbon Health, and Nurx have advertised such at-home tests. The House Oversight and Reform Consumer Policy Subcommittee on Tuesday sent letters to the three companies, demanding details on how much they’ve charged for the kits, how many they’ve sold, and if they intend to destroy consumer samples. Jacquie Lee has more.

  • Meanwhile, Austrian nuclear scientists are closing in on a new coronavirus test that may dramatically lower both the cost and time that it requires to diagnose people for the illness. With test kits shortages in many countries, some individuals have turned to private labs to genetically detect the virus. That process could cost up to $400 in some facilities. But the International Atomic Energy Agency thinks that it can produce tests costing 10 euro that yield a diagnosis in hours, a spokesperson says. Jonathan Tirone has more.

Georgia Urged to Reopen Sterilizer Plants: Georgia is coming under pressure from the White House to lift its restrictions on companies that sterilize with the carcinogenic gas ethylene oxide, amid growing demand for medical equipment to fight the pandemic. After a call with several U.S. agencies, the Environmental Protection Division of Georgia said today that it has modified a legal settlement with one of the companies, Becton Dickinson & Co., allowing it to sterilize more medical devices with ethylene oxide. Read more from Amena H. Saiyid.

Converting Hotels to Hospitals: The U.S. Army Corps of Engineers is urgently seeking commercial companies that know how to convert hotels into hospital space, as coronavirus infections rise in populous areas like New York City, and as hotels sit empty amid the pandemic. The Army Corps’s contracting office in Little Rock, Ark., is putting out feelers in a draft request for proposals for firms that can turn hotel space into an acute alternate health care facility in support of treatment for patients. Read more from Roxana Tiron and Robert Levinson.

FEMA Expected to Direct Supplies: The Trump administration is expected to soon direct how manufacturers will distribute crucial medical supplies — including protective gear and ventilators — to combat the coronavirus outbreak, alleviating what U.S. governors have complained is a chaotic marketplace for the products. The Federal Emergency Management Agency will take charge of allocating the supplies nationwide, according to three people familiar with the matter, under a clause of the Defense Production Act. The law gives the government vast powers to direct industrial production in crises, but Trump has repeatedly said he’s reluctant to use it. Read more from Shira Stein.

U.S. Among Worst Hit Globally as Coronavirus Deaths Top 1,000: More than 1,000 people in the U.S. have died from the novel coronavirus, according to data compiled by Johns Hopkins University, making it one of the worst-affected countries in the global pandemic.

The U.S. has the sixth-highest death toll among nations, the data shows. Italy has suffered the most fatalities from the virus worldwide, with more than 7,500 deaths as of Thursday. China, Spain, Iran and France have also seen more than 1,000 deaths each. Globally, over 470,000 people have been infected while more than 21,000 have died. The U.S. has a total of about 69,000 confirmed cases. Read more from Rachel Chang.

More Headlines:

Prevention Efforts & Quarantine

Conflicting Emergency Decrees in U.S.: The limits of who has what emergency powers is being challenged by the pandemic as states restrict visitors and order residents to stay at home and as Trump mulls the lifting of precautions over the objections of governors. Authorities can demand quarantines and the closure of businesses, Lawrence Gostin, a Georgetown University public health professor, said. That would remain in force even if the president decides to urge the lifting of restrictions, as he suggested Tuesday he might do next month. The president “implies he has legal power to order back to work. Untrue,” Gostin said.

Trump’s assertion of powers he lacks is only one potential flashpoint exposed in the collision between the pandemic and the American political system. From the White House down to governors and mayors, officials are creating a patchwork of orders restricting commerce, travel, or public gatherings. Some of those laws being brought into play date to the early 20th century—long before air travel on a commercial scale, or the CDC. Read more from Todd Shields, Chris Dolmetsch, and Malathi Nayak.

Gottlieb Warns of Fast Re-Openings: The U.S. could see up to 100,000 Covid-19 cases in a matter of days, and limits on public movement shouldn’t be lifted by Easter as Trump has suggested, according to his former FDA commissioner, Scott Gottlieb. “There’s some difficult days ahead, but hopefully we won’t have the tragic consequence that Italy did,” Gottlieb, now a fellow with the American Enterprise Institute think tank, said in an online health forum sponsored by the Wall Street Journal. Gottlieb said he hoped the spread of the disease in the U.S. would more closely resemble that in South Korea or in Germany. Sara Hansard has more.

Medicare Costs Amid Covid-19: A new analysis from the National Association of ACOs (NAACOS) estimates the ongoing Covid-19 pandemic could cost Medicare between $38.5 billion and $115.4 billion over the next year, Alex Ruoff reports. The final number will depend on factors such as severity of the disease and hospitalization rates.

The analysis, some of the first to be developed on the subject, shows the pandemic will place a hardship on health-care organizations that participate in payment models, like ACOs, that hold providers accountable for patients’ health-care spending. More ACOs today are being held at risk, meaning they face penalties if spending rises above pre-set spending targets. A similar burden will be placed on Medicare Advantage plans.

Medicaid Proposal Withdrawn: Health-care advocates are welcoming the Trump administration’s withdrawal of a proposed Medicaid rule that could have left some people without health-care coverage during the growing coronavirus crisis.The proposed rule was expected to require state Medicaid programs to crack down on ineligible program beneficiaries. Read more from Christopher Brown.

More Headlines:

What Else to Know

Texas Sued for Abortion Ban During Crisis: Abortion clinics sued Texas’s Republican governor and attorney general for outlawing abortions as non-essential procedures that divert scare medical supplies needed to fight the coronavirus pandemic. Doctors and clinic operators face fines and jail time for providing even non-surgical, medication abortions, according to a legal challenge filed yesterday in federal court in Austin, Laurel Brubaker Calkins reports.

Split Decision on ‘Observation Status’: Medicare patients who were admitted to a hospital and then changed to “observation status” after a utilization review must be given an opportunity to challenge their reclassification, a federal court in Connecticut said. HHS Secretary Alex Azar must establish a procedure for the Medicare patients to protest hospitals’ decisions, the U.S. District Court for the District of Connecticut ruled.

The long-running class action suit involves a dispute over Medicare’s obligation to pay for hospitalizations and long-term care for elderly patients. The outcome will affect how much money Medicare beneficiaries must pay out-of-pocket for their care. Medicare Part A, free for most beneficiaries, pays for hospitalizations for admitted patients, but it doesn’t pay for those deemed to be on observation status. Read more from Mary Anne Pazanowski.

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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