Senate Passes Infrastructure

The Senate has recently passed a bipartisan infrastructure package with some major health policies, including a delay to a controversial rebate rule and the resumption of sequester payment cuts. The legislation includes new funding for various projects involving roads, broadband access, and other infrastructure areas. The package would be reinstall starting in 2022 a 2% payment cut to all Medicare payments to providers.

According to the American Hospital Association and the American Medical Association, “extending sequestration imposes a destabilizing element to health care access in the face of years of experience with cost increases that are not adequately accounted for in Medicare payments”. But the bill would restart the cuts next year and run them through 2031. This would add roughly $8 billion to help pay for the infrastructure package.

This would get rid of the safe harbor for Part D rebates and replace it with a new safe harbor for point-of-sale discounts. Former Health and Human Services Secretary, Alex Azar, said the rule would get rid of the “kickback” that drugmakers have to pay to get on the Part D formulary for pharmacy benefit managers and insurers.

The legislation does prioritize some healthcare requirements, such as the federal government can only purchase personal protective equipment from domestic manufacturers. It also calls for any contract to buy PPE to run for at least two years. And now that the Senate has completed the bipartisan package, Democrats will turn to craft a package with the aim to expand hearing, dental, and vision benefits to Medicare and give the program the power to negotiate lower drug prices.