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Congress Passes PCORI Renewal, DSH Delay, Extenders, and Tax Policies

December 19, 2019

Congress Passes PCORI Renewal, DSH Delay, Extenders, and Tax Policies

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Tannaz Rasouli, Sr. Director, Public Policy & Strategic Outreach
Len Marquez, Senior Director, Government Relations
Matthew Shick, Sr. Director, Gov't Relations & Regulatory Affairs

Included in the Further Consolidated Appropriations Act, 2020 (H.R. 1865) that funds federal agencies for the remainder of fiscal year (FY) 2020 (see related story) are provisions that renew the Patient-Centered Outcomes Research Institute (PCORI), delay the Medicaid Disproportionate Share Hospital (DSH) cuts, and extend other health programs and tax policies. The Senate Dec. 19 voted 71-23 to send the package to the president, following House approval by a vote of 297-120 on Dec. 17.

Upon passage in the Senate, AAMC President and CEO David J. Skorton, MD Dec. 19 issued a statement  saying, “we applaud lawmakers for renewing the Patient-Centered Outcomes Research Institute for another decade, which will enable patients and providers to access the best evidence on the health care decisions they face daily. As we celebrate this bipartisan, bicameral success, we look forward to working with lawmakers to quickly address the Medicaid Disproportionate Share Hospital (DSH) payment reductions now scheduled to go into effect on May 22, 2020.”

The legislation includes a 10-year reauthorization of the Patient-Centered Outcomes Research Trust Fund (PCORTF), which funds PCORI. The legislation modifies the PCORTF financing mechanism slightly by expanding mandatory appropriations that finance the PCORTF in exchange for discontinuation of the previous transfer from the Medicare trust fund. Current fees on private and self-insured plans, which also finance the PCORTF, remain in place through FY 2029, as do existing transfers from the PCORTF to PCORI, the Agency for Healthcare Research and Quality, and the Department of Health and Human Services Assistant Secretary for Preparedness and Evaluation.

Under the bill, the Government Accountability Office (GAO) will have the option to appoint two additional members representing private payers — for a maximum of five seats — to PCORI’s Board of Governors, and members of the institute’s methodology committee will be appointed by the Board rather than GAO. GAO will also include additional oversight measures in the report it is required to issue every five years.

The measure requires PCORI to include research on maternal mortality and intellectual and developmental disabilities among its national priorities, and to balance priorities between short- and long-term opportunities. Additionally, lawmakers direct PCORI to design research, as appropriate, to take into consideration “the full range of clinical and patient-centered outcomes” relevant to various stakeholders, including “the potential burdens and economic impacts of the utilization of medical treatments, items, and services on different stakeholders and decisionmakers respectively.”

The PCORI reauthorization closely resembles provisions of a proposal released Dec. 6 by Senate Finance Committee Chair Chuck Grassley (R-Iowa) and Ranking Member Ron Wyden (D-Ore.), as well as legislation introduced by four Senate offices in November (S. 2897). Legislation to reauthorize PCORI also had been advanced by both the House Ways and Means Committee (H.R. 3439) and the House Energy and Commerce Committee (H.R. 2328), with few changes to the statute [see Washington Highlights, July 19].

The consolidated appropriations bill also included a provision to postpone the scheduled Medicaid Disproportionate Share Hospital (DSH) cuts through May 22, 2020. Additionally, the package included short-term extenders for a number of expiring health care programs through May 22, 2020, including the National Health Service Corps, Community Health Centers, and the Teaching Health Center Graduate Medical Education program.

An amendment consisting of tax fixes and extenders was also included in the large spending bill. This included a fix to the “kiddie tax” by no longer taxing non-tuition scholarships and grants (such as room and board) at the same rate as trusts and estates, and it also included a repeal of the “parking tax” that taxed nonprofit, tax-exempt universities and hospitals on qualified transportation benefits [see Washington Highlights, Dec. 13]. 

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