The House is on break for August but the Senate is staying in DC, except for the week of Aug. 6. In this latest edition of legislative update, Marilyn M. Singleton, MD, JD looks at what happened in the House before they left town and what health care legislation the Senate has on its plate as we speed toward the midterm elections.
Legislation Recently Passed by at Least One Chamber
Note: (For action steps you can take to improve the pending HSA legislation, particularly the provisions related to Direct Primary Care, see https://aapsonline.org/dpc.)
On July 25, 2018 H.R. 6199, Restoring Access to Medication and Modernizing Health Savings Accounts Act of 2018, passed the House essentially on party lines 277/142. This bill combined parts of several HSA-related bills (H.R. 6199, 6301, 6305, 6317, 6317, 6128, 5858). A section-by-section of the bill is below:
Sec 1. Short Title; Table of Contents
Sec. 2. First Dollar Coverage Flexibility for High Deductible Health Plans Health plans can provide coverage for services before the deductible is met up to $250 a year for an individual and $500 a year for family coverage. This change will allow insurers to provide coverage for and incentivize the use of high-value services that can reduce health care costs more broadly, such as primary care visits and telehealth services.
Sec. 3. Treatment of Direct Primary Care Service Arrangements Under this proposal, a Direct Primary Care (DPC) service arrangement would not be treated as a health plan that would disqualify an individual from contributing to an HSA. For this purpose, a DPC arrangement is an arrangement under which an individual is provided primary care services by primary care practitioners and the sole compensation for such care is a fixed periodic fee that does not exceed an aggregate of $150 a month for an individual and $300 a month for a family. In addition, the fees for the arrangement are treated as qualified medical expenses.
Sec. 4. Certain Employment Related Services Not Treated as Disqualifying Coverage For Purposes of Health Savings Accounts. This section allows employers to offer free or discounted services at on-site or retail medical clinics without disqualifying an HDHP enrollee from contributing to an HSA so long as significant medical care benefits are not provided.
Sec. 5. Contributions Permitted If Spouse Has A Health Flexible Spending Account Under current law, Flexible Spending Accounts (FSAs) can be used to reimburse expenses for an individual and their spouses and dependents. This eligibility for FSA benefits disqualifies an otherwise eligible FSA enrollee’s spouse from contributing to an HSA, even when each spouse is covered under a separate health plan. This provision allows an otherwise eligible FSA enrollee’s spouse to maintain an HSA, so long as the aggregate expenses actually reimbursed from the FSA are limited exclusively to what the FSA enrollee would have been entitled to absent the spouse.
Sec. 6. FSA And HRA Terminations or Conversions to Fund HSAs Employees are able, at the employer’s discretion, to convert their FSA and Health Reimbursement Account (HRA) balances into an HSA contribution upon enrolling in a high deductible health plan with an HSA. The conversion amount is capped at $2,650 for an individual and twice that for family coverage. Any conversion taking place during the same year as the FSA or HRA contribution was made will count towards an enrollees’ HSA contribution for that taxable year.
Sec. 7. Inclusion of Certain Over-The-Counter Medical Products as Qualified Medical Expenses Removes Obamacare’s restriction on over-the-counter medicines for all tax-favored health accounts and adds “menstrual care products,” defined as a tampon, pad, liner, cup, sponge, or similar product used by women with respect to menstruation or other genital-tract secretions, as a qualified medical expense for the purposes of these accounts.
Sec. 8. Certain Amounts Paid for Physical Activity, Fitness, And Exercise Treated as Amounts Paid for Medical Care Qualified sports and fitness expenses are treated as qualified medical expenses up to a limit of $500 a year for an individual and $1,000 a year for a joint return. This includes amounts paid for membership at a fitness facility, participation or instruction in a program of physical exercise or physical activity, or safety equipment for use in a program of physical exercise or physical activity.
On July 25, 2018, H.R. 6311, Increasing Access to Lower Premium Plans and Expanding Health Savings Accounts Act of 2018 introduced by Rep. Peter Roskam (R-IL), combined several other HSA bills (H.R. 6306, 6305, 6309, 6313, 6314). This bill expands access and use of Health Savings Accounts (HSAs) and lowers premiums on health care plans. A section-by-section of the bill is below:
Section 1. Short Title; Table of Contents
Sec. 2. Carryforward of Health Flexible Spending Arrangement Account Balances This provision allows Flexible Spending Account (FSA) balances to be carried over to the succeeding plan year so long as the balance in an account does not exceed three times the annual FSA contribution limit.
Sec. 3. Individuals Entitled to Part A of Medicare By Reason of Age Allowed to Contribute to Health Savings Accounts. This provision allows working seniors that are covered by an HSA-eligible High Deductible Health Plan (HDHP) and enrolled in Medicare Part A to contribute to an HSA.
Sec. 4. Maximum Contribution Limit to Health Savings Account Increased to Amount of Deductible and Out-Of-Pocket Limitation Under current law, annual HSA contributions are limited. In 2018, the limit is $3,450 for an individual and $6,900 for family coverage. These limits are updated annually for inflation and are significantly less than the combined legal limit on annual out-of-pocket and deductible expenses. This provision would allow HSA-eligible individuals to contribute an amount equal to the combined annual limit on out-of-pocket and deductible expenses under their HSA-qualified insurance plan, which is $6,650 for an individual and $13,300 for a family in 2018.
Sec. 5. Allow Both Spouses to Make Catch-Up Contributions to the Same Health Savings Account Under current law, if both spouses are HSA-eligible and age 55 or older, they must open separate HSA accounts for their respective “catch-up” contributions (an extra $1,000 annually). This provision would allow both spouses to deposit their catch-up contributions into one account.
Sec. 6. Special Rule for Certain Medical Expenses Incurred Before Establishment of Health Savings Account Under current law, taxpayers may use HSA funds only for qualified medical expenses incurred after the establishment of the HSA, which might occur after the establishment of the associated HDHP. If, for example, the taxpayer purchases an HDHP and then immediately incurs medical expenses before opening the HSA, the taxpayer may not use tax-favored HSA funds to pay the expenses. This provision would treat HSAs opened within 60 days after gaining coverage under a HDHP as having been opened on the same day as the HDHP. This would allow for a reasonable grace period between the time coverage begins through an HDHP and the establishment of an HSA.
Sec. 7. Allowance of Bronze and Catastrophic Plans in Connection with Health Savings Accounts Under this provision, a new pathway for HSA eligibility is created by allowing health plans qualified as “bronze” and catastrophic or “copper” to be eligible plans for the purpose of making HSA contributions.
Sec. 8. Allowing All Individuals Purchasing Health Insurance in The Individual Market the Option to Purchase A Lower Premium Copper Plan Under current law, only those under age 30 or those that qualify for a hardship exemption are able to purchase catastrophic or “copper” health plans and the risk pool for catastrophic enrollees is segregated from the rest of the market. This section amends the law to allow anyone to purchase a lower-premium catastrophic plan and combines the risk pool with the rest of plans in the market.
Sec. 9. Delay of Reimposition Of Annual Fee on Health Insurance Providers The annual fee on health insurers shall not be in effect for calendar years 2020 and 2021.
House Repeals ACA’s Medical Device Tax
On July 24, 2018, H.R. 184, the Protect Medical Innovation Act of 2018, introduced by Rep. Erik Paulsen (R-MN), passed the House and goes to the Senate. H.R. 184 amends the Internal Revenue Code to repeal the excise tax on the sale of a medical device by a manufacturer, producer, or importer. Effective in 2013, the Affordable Care Act imposed a 2.3% excise tax on the manufacturer’s price of certain medical devices intended for consumption in the United States. Imports are taxed, but exports, certain products defined in statute, and products that are directly available for retail sale to consumers are exempt from the tax. The tax was in effect from 2013 through 2015, but the Consolidated Appropriations Act of 2016 temporarily suspended the tax for 2016 and 2017. The suspension was extended for another two years (2018 and 2019) in 2017. The Joint Committee on Taxation estimates that H.R. 184 will reduce revenues by $22.45 billion over the FY 2019-2028 period.
- 916, the Ensuring Patient Access to Substance Use Disorder Treatments Act of 2018, introduced by Sen. Bill Cassidy, MD (R-LA), passed the Senate and was put on the House schedule. S. 916 would allow pharmacists to dispense medication-assisted treatments to doctors, rather than directly to patients, in an attempt to improve dispensing of implantable and injectable therapies developed to make abuse, misuse, and diversion more difficult.
Under the Controlled Substances Act (CSA), pharmacists can only dispense medication-assisted treatments directly to a patient. The legislation would change the CSA to allow pharmacists to dispense these treatments directly to doctors, who can then administer the treatment to the patient in an office-setting, and ensure the patient is also receiving behavioral therapy and counseling.
Behavioral Therapists Incentivized to Use EHR
On June 12, 2018, H.R. 3331, passed the House and is on its way to the Senate. This bill authorizes the Center for Medicare and Medicaid Innovation to test a program offering incentive payments to behavioral health providers (clinical psychologists, nurse practitioners, clinical social workers) that adopt and use certified electronic health record technology. Recall that the Meaningful Use program was introduced as part of the 2009 Health Information Technology for Economic and Clinical Health (HITECH) Act, to encourage health care providers to show “meaningful use” of a certified Electronic Health Record (EHR). In doing so, eligible providers who do so receive incentive payments, but behavioral health providers were not included in the definition of eligible providers. Individual physicians and other eligible health care professionals can each receive up to $44,000 through the Medicare Meaningful Use program or up to $63,750 through the Medicaid Meaningful Use program, depending upon when they begin attesting to the program’s requirements.
Legislation Recently Introduced
Charity Care Deduction
On July 16, 2018, H.R. 5856, the Good Samaritan Charitable Physicians’ Services Act of 2018, was introduced by Rep. Daniel Webster (R-FL) and referred to the House Energy and Commerce and Ways and Means Committees. The bill would allow as a deduction for the taxable year the amount equal to (1) in the case of a direct primary care physician, an amount equal to the sum of (a) the fee (as published on a publicly available website of such physician) for physicians’ services that are qualified charity care furnished by such taxpayer during such year, and (b) for each visit by a patient to such physician during which qualified charity care is furnished, half of so much of the lowest subscription fee of such physician that is attributable to a month, and (2) in the case of any other individual, the unreimbursed Medicare-based value of qualified charity care furnished by such taxpayer during such year.
The bill also limits the liability of a physician under Federal or State law in any civil action for any harm caused by an act or omission of such physician, or attending medical personnel supporting such physician, if such act or omission (1) occurs in the course of furnishing qualified charity care and (2) was not grossly negligent.
HSA for Seniors
On June 28, 2018, H.R. 6283 was introduced by Rep. Robert Latta (R-OH) and referred to the House Ways and Means Committee. This bill amends the Internal Revenue Code to allow Medicare-eligible individuals who are age 65 or older to contribute to health savings accounts if their entitlement to Medicare benefits is limited to hospital insurance benefits under Medicare Part A. Here, beneficiaries do not have to be working. (See H.R. 6311 above granting contribution to working seniors)
Full text: https://www.govtrack.us/congress/bills/115/hr6283/text
Discharge of Medical Debt
On April 12, 2018, H.R. 5493, Medical Debt Tax Relief Act, was introduced by Rep. Sam Johnson (R-TX) and referred to the House Ways and Means Committee. This bill amends the Internal Revenue Code to exclude from gross income the discharge of medical indebtedness. The bill applies to the discharge of debt incurred by the taxpayer for expenses of the taxpayer or the spouse or a dependent of the taxpayer for: (1) diagnosis, cure, mitigation, treatment, or prevention of disease; (2) the purpose of affecting any structure or function of the body; (3) transportation primarily for and essential to medical care, or (4) long-term care services.
Stop Subsidizing Direct-to-Consumer Drug Ads
On March 1, 2018, S. 2478, the End Taxpayer Subsidies for Drug Ads Act, was introduced by Sen. Claire McCaskill (D-MO) and referred to the Senate Finance Committee. This bill amends the Internal Revenue Code to prohibit tax deductions for expenses relating to direct-to-consumer advertising of prescription drugs.
“Direct-to-consumer advertising” is any dissemination, by or on behalf of a sponsor of a prescription drug product, of an advertisement that is: (1) in regard to the drug product, and (2) primarily targeted to the general public.
Full text: https://www.govtrack.us/congress/bills/115/s2478/text
- 2676, the Saving Lives Through Proper Notification of Overdoses Act, introduced by Sen. Bill Cassidy, MD (R-LA) requires the Department of Health and Human Services to annually notify health care providers about health information that may be disclosed under federal privacy laws to families and caregivers during emergencies, including overdoses. The notification may be included in other (already required) training materials for health care providers relating to permitted disclosures of patients’ mental or substance use disorder treatment information.
More Federal Control
While not specifically related to medical care (although physicians are often subject to non-competes), this bill is disturbing federal intrusion into our freedom to contract. Non-compete agreements and the like can be onerous, but at the very least it is a state contracts law issue. Federal control is a mindset and many legislators feel that any perceived injustice can be corrected by yet another federal law.
On March 1, 208, S. 2480, the End Employer Collusion Act, was introduced by Sen. Cory Booker (D-NJ) and referred to the Health, Education, Labor, and Pensions Committee. This bill makes it unlawful for any entity to enter into a restrictive employment agreement, or to enforce or threaten to enforce a restrictive employment agreement. A “restrictive employment agreement” is any agreement between two or more employers that prohibits or restricts one employer from soliciting or hiring another employer’s employees or former employees.
The bill allows aggrieved individuals to bring a civil action for actual and punitive damages, plus attorney’s fees, against an entity that enters into, or threatens to enforce, a restrictive employment agreement.
The bill grants the Federal Trade Commission the power to enforce the requirements of this bill.
Full text: https://www.govtrack.us/congress/bills/115/s2480/text