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Election 2016 Likely to Result in End of ACA as We Know It, But Employers and Plan Sponsors Should Stay Course for Now

Over the past five years or so, Republican Congressmen have repeatedly taken steps to repeal President Obama’s landmark legislative effort – the Patient Protection and Affordable Care Act (the “ACA”). However, those efforts either failed to advance in Congress or were vetoed by President Obama. Tuesday’s Presidential and Congressional election, in which Donald Trump was elected President and Republicans maintained a Congressional majority in both houses, puts the future of the ACA in jeopardy. Indeed, President-elect Trump and Congressional leaders have already confirmed that repeal of the ACA is a top priority.

Although the ACA is certainly in the crosshairs, the path to outright repeal is not so clear. Republicans have majority control in both chambers of Congress, but they do not have a filibuster-proof supermajority in the Senate. This means that unless Congress changes procedural rules, Democratic Senators can effectively block though filibuster any blanket repeal of the ACA.

So what other options do Congress and President-elect Trump have? First, Congress could invalidate many of the ACA’s revenue-related provisions through budget recollection legislation. This is not a novel approach to effect healthcare legislation – the ACA itself was a product of budget reconciliation legislation passed after Democrats lost their Senate supermajority in 2010. Budget reconciliation legislation cannot be held-up by filibuster, but the subject of the legislation must be related to revenue. Non-revenue related provisions can be struck from this type of legislation.

In 2015, the Republican-controlled Congress passed budget reconciliation legislation to invalidate many of the ACA’s revenue-related provisions. Although that legislation was vetoed by President Obama, it might be used as a template for new legislation once President-elect Trump takes office. Here are some key parts of the 2015 legislation:

The individual and employer mandates (and associated reporting requirements) would be repealed.
Expansion of Medicaid to electing States would be repealed.
The availability of premium and cost-sharing subsidies on the public insurance Marketplace would be repealed.
Taxes, such as the “Cadillac Tax”, medical device tax and increased Medicare taxes on high-earners would all be repealed.

Other ACA market reforms, such as first-dollar coverage of preventive healthcare, prohibition on preexisting condition exclusions, prohibition of annual and lifetime limits on certain benefits, and required coverage of dependents through age 26, are generally not related to revenue and probably cannot be included in budget reconciliation legislation.

Second, President-elect Trump could take immediate action to impact agency enforcement of various aspects of the ACA. For example, President-elect Trump could issue a directive to agencies to stop all enforcement of regulations currently in effect under the ACA. In addition, incoming Presidents often take immediate action to stop regulatory efforts in process. This means that proposed and pending regulations would never become effective. At the moment, regulations related to expatriate healthcare coverage and opt-out payments are currently proposed and regulations related to the Cadillac Tax are being drafted. In addition, recently proposed regulations would expand Form 5500 filing requirements to include attestations regarding compliance with the ACA. Presumably, those regulatory efforts would end.

Moreover, a significant part of the ACA’s enforcement infrastructure is found in sub-regulatory guidance – there are 34 interpretive FAQs alone – meaning that there are opportunities for the new administration to take action without significant procedural hurdles. One could surmise that the days of expansive interpretations of the ACA in sub-regulatory guidance are over and, in some cases, prior sub-regulatory guidance would be reversed.

To the extent that the ACA is limited or eliminated by these actions, there is then the question of what stands in its place. Throughout his campaign, President-elect Trump has made clear that he intends not just to repeal the ACA, but also replace it with something new. Concrete details are lacking at the moment, but the following are possible components of his replacement plan:

A cap on the employer deduction for health coverage provided to employees.
Individuals without employer-provided health coverage would receive a tax credit against the cost of coverage purchased on the individual market. The tax credit would not be an advanced premium credit, but would instead be taken in full when filing income tax returns.
Expansion of health savings accounts, including increased contribution limits, and improved price transparency from healthcare providers.
Insurance companies would be able to sell policies across state lines.
Provide block grants to states for Medicaid.
Allow consumer access to imported drugs meeting safety standards.

Ultimately, it is far too early to know exactly what President-elect Trump and the Republican-controlled Congress will do with respect to the repeal of the ACA and the enactment of new health care reform or what the impact of any of those changes will be. Even if the ACA is ultimately repealed in full or in part, it is unlikely to happen on “day one.” Therefore, at least for the time being, employers and plan sponsors should continue operating their health plans in compliance with the ACA.

ARTICLE BY Robert M Projansky, Steven D Weinstein & Damian A Myers of Proskauer Rose LLP

A New Regulatory Paradigm For The SEC Following the Election?

Many are speculating on the future of federal securities regulation as a result of the election of Donald J. Trump and the concomitant Republican control of both houses of Congress. Broc Romanek, for example, asks whether Michael S. Piwowar will become the SEC’s next Chairman. Broc notes that Commissioner Piwowar is an economist, not a lawyer. Since the SEC is concerned with financial regulation, a background in economics should be a strong plus.

Since I’ve already seen signs of holiday decorating in the stores, I’ve drawn up my own short wish list for whomever takes the helm of the SEC.

The SEC should fundamentally change its approach to evaluating regulations. When considering the adoption of any new substantive regulation, the fundamental question must always be “Why is this regulation necessary?” A regulation isn’t necessary simply because someone thinks it is a good idea or constitutes a perceived “best practice”. A regulation is necessary only when it can be demonstrated that there is some market impediment that can only be removed by government intervention. It seems that regulations are too often adopted in reverse. It is tantamount to a doctor, knowing that a drug has proved beneficial in some cases, prescribes it to her patients without first making a diagnosis. If a market impediment exists, then the regulatory effort should be directed at removing the impediment not imposing additional requirements.

The SEC should ask Congress to repeal Section 16(b) liability. When Congress enacted Section 16 more than four score years ago, it was recognized that it was a “crude rule of thumb”. Given the rapidity of modern trading, the arbitrary six month period seems positively quaint. The calculation of profits under the rule can be bizarre. In some cases, persons are liable even when they recognized no overall economic profit. Congress enacted the rule to deter insider trading, but many persons who are guilty of trading on the basis of material non-public information aren’t even subject to the rule. In practice, the rule has become an economic boon to a few lawyers and a technical trap for many. At eighty plus years, Section 16(b) has had a good run, but now is time for it to leave the stage.

The SEC should abandon and repudiate its attempts to co-opt attorneys. Attorneys are their clients’ advisers and advocates. They are not gatekeepers as the SEC has on occasion supposed. The SEC should amend its attorney conduct (Part 205) rules to eliminate the purported ability of lawyers to disclose client confidences to the SEC. See Conflicting Currents: The Obligation to Maintain Inviolate Client Confidences and the New SEC Attorney Conduct Rules, 32 Pep. L. Rev. 89 (2004) and this post. The SEC should also amend its whistleblower rules to eliminate the possibility of attorneys obtaining whistleblower awards. See SEC Condemns Breach Of Client Confidences While Offering Possible Bounties For Breaches.

Allow companies to pick their reporting periods. There has been much debate about whether publicly traded companies suffer from short-termism. Although short-termism may have multiple causes, the SEC’s rigid requirement of quarterly financial information pressures companies to focus on short-term results. Why not let companies pick their own reporting periods? This will allow companies to telegraph to the market whether they are focused on short-term or long-term performance. To those who say that this is a bad idea, I say why not let the market decide? If investors think that semi-annual or annual reporting is inadequate, then companies making those choices will be undervalued and will incur higher costs of capital. Some companies might even elect to report more frequently than every quarter (e.g., bi-monthly). The beauty of this approach is that it is transparent and allows the market to achieve equilibrium at the optimal time for each issuer.

Allow companies to decide whether they will be subject to routine SEC review. It is hard to assess the efficacy of SEC staff review of filings. I’m sure that the SEC believes that staff review improves disclosure and that may well be the case. One way to test that position, is to allow companies to elect whether to have their filings be subject to SEC staff review. These elections would be public. Investors could then decide whether SEC review reduces risk through enhanced disclosure (because companies will do a better job because they know they are subject to review and/or because the staff’s comments result in improved disclosure). The efficacy of review should be reflected in differences in the cost of capital.

Readers will note that repeal of the Dodd-Frank Act is not on my wish list. That is the subject of this blog by Cydney Posner at Cooley LLP. As a final note, this is my personal wish list and it does not necessarily represent the wish list of my firm, partners, or any my firm’s clients.

ARTICLE BY Keith Paul Bishop of Allen Matkins Leck Gamble Mallory & Natsis LLP

US Voting Leave Laws: What Employers Need to Know

With the general election days away, employers should familiarize themselves with their state’s voting leave laws.

Voting leave laws vary across the country. A number of states, however, do not have specific laws permitting time off to vote. These states include: Connecticut, Delaware, Florida, Idaho, Indiana, Louisiana, Maine, Michigan, Mississippi, Montana, New Hampshire, New Jersey, North Carolina, Oregon, Pennsylvania, Rhode Island, South Carolina, Vermont, Virginia, Washington, and the District of Columbia.

Generally, states with voting leave laws grant an employee two hours off work, in order to vote, without experiencing loss of pay. An employee who has sufficient hours to vote outside his or her working hours is generally not eligible to take time off work to vote without experiencing loss of pay. Some states may fine employers who violate an employee’s statutory right to take time off work to vote.

Below is a summary of states’ voting leave laws:

Alabama: An employee may take up to one hour off work to vote, upon reasonable notice to his or her employer, unless the employee’s hours of employment begin at least two hours after the polls have opened or end at least one hour before the polls close. The employer may specify the hours when an employee may take off work to go vote. (Code of Ala. § 17-1-5)

Alaska: An employee may take off as much working time as necessary to vote, without loss of pay. If, however, an employee’s working hours begin either two hours after the polls have opened or two hours before the polls close, the employee is considered to have sufficient time outside working hours within which to vote and may not take time off to vote without incurring loss of pay. (Alaska Stat. § 15.15.100)

Arizona: An employee may take time off work to vote, upon notice to the employer prior to election day, if there are less than three consecutive hours between the opening of the polls and the beginning of the employee’s work shift or between the end of the employee’s work shift when the difference between work shift hours and opening or closing of the polls provides a total of three consecutive hours. The employee shall not experience loss of pay for work time taken to vote and the employer may specify the hours when an employee may take off to vote. Employers refusing an employee’s right under this statute or subjecting an employee to a penalty or reduction of wages is guilty of a class 2 misdemeanor. (A.R.S. § 16-402).

Arkansas: Employers must schedule employees’ work hours in such a way that each employee has an opportunity to go vote. An employer’s failure or refusal to comply with this statute may result in a fine of no less than $25 and no more than $250. (A.C.A. § 7-1-102).

California: An employee without sufficient time outside working hours may take off as much time as necessary at the beginning or the end of a work shift in order to vote. An employee may not lose pay for less than two hours taken off to vote. (Cal. Elec. Code § 14000).

Colorado: With notification to the employer prior to Election Day, an employee may be absent from work for up to two hours in order to vote without incurring loss of pay. The employer may specify the hours when the employee may be absent, but the employee may request that the hours be at the beginning or end of the work shift. An employee with three or more off-duty hours between the time of opening and closing of the polls may not take time off work to vote without incurring loss of pay. (C.R.S. 1-7-102).

Georgia: Upon reasonable notice to the employer, an employee may take off up to working hours to vote unless the employee’s working hours beginning at least two hours after the opening of polls or end at least two hours before polls close. The employer may specify during which hours an employee may take off work to vote. (O.C.G.A. § 21-2-404).

Hawaii: An employee may take off work up to two hours to vote without incurring loss of pay. If an employee fails to vote after taking time off for that purpose, the employer, upon verifying that fact, may deduct appropriate wages or salary from the employee for the period during which the employee was absent from employment for purposes of voting. An employer who refuses an employee’s privileges conferred by this statute may be subject to a fine of not less than $50 and not greater than $300. (HRS § 11-95).

Illinois: Upon notice to an employer prior to Election Day, an employee may take off up to two hours from work to vote without loss of pay if the employee’s working hours begin less than 2 hours after polls open and less than 2 hours before polls close. The employer may specify the hours when the employee may take off work to vote. (10 ILCS 5/17-15).

Iowa: With a written request made prior to Election Day, an employee, without three consecutive off duty hours between the time of the opening and closing of polls, may take such time off work as necessary to grant the employee a total of three consecutive hours to vote, without loss of pay. (Iowa Code § 49.109).

Kansas: An employee may be absent from work for no more than two consecutive hours between the time of opening and closing of polls. If polls are open before the employee is scheduled to begin work or after ending work, but the period of time the polls are open is less than two consecutive hours, then the employee can only take off as much time to grant the employee two consecutive hours to vote. (K.S.A. § 25-418).

Kentucky: An employee, having applied for leave prior to Election Day, may take up to four hours off work, between the time of opening and closing the polls, to vote without loss of pay. The employer may specify the hours during which an employee may take off work to vote. (KRS § 118.035).

Maryland: An employee may take up to two hours off work to vote if the employee does not have two continuous off-duty hours during the time that polls are open. The employer shall pay the employee for up to two hours taken off work to vote. (Md. Election Law Code Ann § 10-315).

Massachusetts: An employee in a manufacturing, mechanical, or mercantile establishment may take time off work during the two hours after the opening of polls, upon application for leave of absence during such period. (ALM GL ch. 149 § 178).

Minnesota: An employee may be absent from work for the time necessary to cast a ballot and return to work on that same day without loss of pay. An employer hindering an employee’s right under this statute is guilty of a misdemeanor. (Minn. Stat. § 204C.04).

Missouri: Upon request made prior to Election Day, an employee may take off three hours from work between the time of opening and the time of closing the polls for purposes of voting. The employer may specify the hours when the employee may take off work to vote. (§ 115.639 R.S. Mo.).

Nebraska: An employee who does not have two consecutive off-duty hours in the period between the time of the opening and closing of the polls may take off work two consecutive hours to cast a ballot and without loss of pay. The employer may specify the hours during which the employee may take off work to vote. (R.R.S. Neb. § 32-922).

Nevada: If it is impracticable for an employee to vote before or after his or her hours of employment, an employee may be absent from his or her place of employment at a time designated by the employer to provide for enough time to vote. An employee shall not experience loss of pay for time taken off to vote. (Nev. Rev. Stat. Ann. § 293.463).

New Mexico: An employee may take off work up to two hours for the purpose of voting without loss of pay unless the employee’s work shift begins two hours after polls open or ends three hours before polls close. An employer refusing an employee’s right granted by this statute is guilty of a misdemeanor and may be punished by a fine not less than $50 and not more than $100. (N.M. Stat. Ann. § 1-12-42).

New York: An employee without four consecutive off-duty hours either between the opening of the polls and the beginning of his or her working shift, or between the end of his working shift and the closing of the polls, may take as much time off from work to vote. An employee may take off up to two hours of work without loss of pay. An employee seeking to take time off work to vote must notify the employer between two to ten days before the election requiring time off work. No less than ten working dates before an election, employers must post in the workplace a conspicuous notice notifying employees of their rights under the statute. Such notice shall be posted until the close of polls on Election Day. (NY CLS Elec § 3-110).

North Dakota: Employers are encouraged, but not required, to establish a program to grant employees time off work to vote when the employee’s regular work schedule conflicts with the polls opening and closing time. (N.D. Cent. Code, § 16.1.01-02.1).

Ohio: Employers cannot discharge or threaten to discharge an employee for taking a reasonable amount of time off work to vote on Election Day. An employer who violates this section may be fined not less than $50 and no more than $500. (ORC Ann. 3559.06).

Oklahoma: Upon oral or written notice by the employee prior to Election Day, an employer must grant an employee two hours off from work, during the period when polls are open, to allow the employee to vote. The employer may select and notify the employee of the work hours that may be taken off to vote. Employees taking time off work to vote shall not experience loss of pay or other penalty, for such absence. An employer failing to comply with this statute may be guilty of a misdemeanor and may subject to a fine between $50 and $100. (26 Okl. St. § 7-101).

South Dakota: An employee without two consecutive off duty hours during the time polls are open may take off two hours from work in order to vote without loss of pay. The employer may specify the hours during which the employee may take off work to vote. An employer refusing an employee’s right under this section is guilty of a Class 2 misdemeanor.

Tennessee: An employee, upon notice to the employer before noon of the day before Election Day, may take off three hours from work during the time the polls are open, without loss of pay, in order to vote, unless the employee’s work shift begins three hours after polls open or ends three hours before polls close. The employer may specify the hours during which the employee may be absent. (Tenn. Code Ann. § 2-1-106).

Texas: An employer may not bar an employee from taking time off from work on Election Day for the purpose of voting. An employer in violation of this statute may be guilty of a Class C misdemeanor. (Tex. Elec. Code § 276.004).

Utah: Upon application prior to Election Day, an employer must allow an employee to take off from work up to two hours, between the time the polls open and close, in order to vote upon. An employee who has three or more consecutive off duty hours between the times polls open and close is not eligible to take time off work under this statute. An employer violating an employee’s rights under this statute is guilty of a class B misdemeanor. (Utah Code Ann. § 20A-3-103).

West Virginia: Upon written request made to the employer at least three days prior to Election Day, an employee may take off up to three hours from work in order to vote. An employee shall not experience loss of pay for time taken off work to vote. An employee with three or more off duty hours between the hours of the opening and the close of polls on Election Day may not take time off work to vote without loss of pay. (W. Va. Code § 3-1-42).

Wisconsin: Upon notification to the employer prior to Election Day, an employee may take off up to three hours from work to vote. The employer may specify the hours when the employee may take off work to vote and the employee shall not experience loss of pay. (Wis. Stat. § 6.76).

Wyoming: An employee may take off one hour from work in order to vote without loss of pay. (Wyo. Stat. § 22-2-11).

ARTICLE BY Ingrid Cepero of Squire Patton Boggs (US) LLP

Amid Hours of Debate and Insult, Campaign Finance Gets 85 Seconds

All but ignored during the previous two presidential debates, campaign finance appeared ready to have its moment in the sun during the final televised bout. Within two minutes of the debate’s opening, former Secretary of State Hillary Clinton, the Democratic nominee, raised the issue of the landmark 2010 Supreme Court decision that allowed a flood of money from outside groups to pour into elections.

Clinton promised to appoint justices “that will stand up and say no to Citizens United, a decision that has undermined the election system in our country because of the way it permits dark, unaccountable money to come into our electoral system.”

Then, crickets.

Hillary Clinton, Donald Trump, Debates — *Photo credit: Ethan Miller, Getty Images News*

Republican nominee Donald J. Trump, who attacked Clinton on Twitter earlier this month as “the single biggest beneficiary of Citizens United in history,” passed on the issue, instead using the question to pledge his support for gun rights and opposition to abortion.

The debate encapsulated the two candidates’ approaches to the issue of money in politics during the general election campaign. Across three debates spanning four-and-a-half hours, Clinton and Trump have spent a grand total of one minute and 25 seconds on a subject that an overwhelming number of Americans consider to be a major threat to the nation’s democratic traditions. A poll last year found that 85 percent of Americans believe the system of campaign financing requires either a complete rebuilding or fundamental changes. The two candidates have so far raised more than a half-billion dollars on their presidential bids.

Trump, who launched his campaign with a grandiose promise to pay for his own presidential bid, has used the issue of money in politics occasionally to jab at Clinton, mostly claiming she used her office to encourage donations to her family’s eponymous charitable foundation or her presidential campaign.

The billionaire mogul has sought to tie Clinton to unpopular bankers, claiming during the debate that her advertisements were paid for by her “friends on Wall Street that gave so much money because they know you’re going to protect them.” Meanwhile, Trump has claimed: “By self-funding my campaign, I am not controlled by my donors, special interests or lobbyists. I am only working for the people of the U.S.!”

Even so, Trump, who said last year he “loved the idea of campaign finance reform,” has soft-pedaled earlier critiques of money in politics. He was criticized last month for hiring David Bossie, a long-time Clinton critic who helped orchestrate the Citizens United battle, as his deputy campaign manager. His campaign also is currently the subject of a complaint alleging that two former campaign staffers went to work for a super PAC boosting his campaign without going through a mandatory 120-day “cooling-off” period.

Hacked emails published recently by WikiLeaks show how the Clinton campaign staff turned supportive super PACs into integral parts of her campaign, despite FEC rules prohibiting coordination between candidates and outside groups. A July 2015 campaign memo, posted by a hacker known as Guccifer 2.0., laid out plans for collaborating with Correct the Record, a super PAC created by a longtime ally. The memo recommended that the Clinton campaign “work with CTR… to publicize specific GOP candidate vulnerabilities.”

While the Clinton campaign has confirmed its chairman’s personal email account was hacked, her team has not corroborated the authenticity of the emails that Wikileaks has been posting online daily.

Wednesday night’s forum also featured a pointed question about ethics, with moderator Chris Wallace asking Clinton about her pledge to “avoid even the appearance of a conflict of interest” involving her family’s foundation while she was Secretary of State. Wallace referred to a recent ABC report that found individuals considered “FOB,” or friends of Bill Clinton, were given special attention by the State Department when they offered to provide assistance in Haiti in the aftermath of a devastating earthquake in 2010.

“Everything I did as Secretary of State was in furtherance of our country’s interests and our values,” said Clinton, who chose to talk about her family foundation’s efforts to help millions of people get access to HIV/AIDS medication, rather than explain any potential ethical issues.

When Trump questioned the foundation’s work in Haiti — which was scrutinized by The Nation in 2011 — Clinton said that the foundation had “raised $30 million to help Haiti after the catastrophic earthquake,” adding that “we’re going to keep working to help Haiti because it’s an important part of the American experience.”

Clinton said she would “be happy to compare what we do with the Trump Foundation,” noting that Trump had used his charity’s money to purchase a six-foot-tall portrait of himself. The Washington Post reported that the Donald J. Trump Foundation had spent $20,000 to buy the artwork, and “may have violated IRS rules against ‘self-dealing.’”

When Trump said his foundation’s money “one hundred percent goes to different charities,” Wallace asked him about a report that he had used the charity’s funds to settle a number of lawsuits involving his for-profit businesses.

“No, we put up American flag, and that’s it,” Trump responded. “They put up the American flag. We fought for the right in Palm Beach to put up the American flag.”

One of the lawsuits did involve the height of a flagpole at Trump’s golf course in Palm Beach, Florida. The Post found that Trump also used his charity to pay a settlement in New York. Both of the expenditures could violate self-dealing rules, the paper wrote.

Earlier this month, New York’s attorney general, Eric Schneiderman, ordered the Trump Foundation to stop raising money in his state, following a report that the charity did not obtain the required certification to solicit donations there.

This article was written by Frank Bass. Andrew Perez contributed reporting. Read the original article here: Amid Hours of Debate and Insult, Campaign Finance Gets 85 Seconds

Dynamic Political and Public Policy Landscape in DC on Pharmaceutical Issues

The post-election period — from the lame duck congressional session to the first 100 days and beyond of a new Administration and Congress — is expected to be a time of extraordinary, if not unprecedented, public policy debate on issues that impact pharmaceutical/life sciences companies and interest groups. These issues present both significant threats and possible opportunities to all stakeholders.

On the positive side, the 114th Congress has unfinished business in the form of the House’s 21st Century Cures Act and the Senate’s companion package of Medical Innovation bills, provisions of which are intended to streamline FDA review and approval processes as well as authorize key programs such as the Precision Medicine Initiative. And Prescription Drug User Fee (PDUFA) reauthorization is also right around the corner. These positive developments could come at a cost to the life sciences industry, however, with growing indications that a proverbial perfect storm is brewing in the U.S. on issues surrounding pharmaceutical pricing. The presidential candidates, who find little else on which to agree, have criticized drug prices and espoused strong support for proposals — including ones that would allow HHS to directly negotiate with manufacturers and the importation of lower-priced drugs from Canada and elsewhere — that are anathema to industry. As shown in the pending Medicare Part B national demonstration project, presidential administrations, in addition to the bully pulpit, have used their perceived regulatory authority to elevate the executive branch role in the drug pricing debate in the absence of congressional action, and we would expect that to continue in the next Administration.

Furthermore, recent developments suggest that whoever the next president is might find willing partners in both parties on Capitol Hill on pharmaceutical pricing-related issues, regardless of the outcome of the general election in Congress. As evidenced in recent high profile oversight and investigations hearings, criticism of the pharmaceutical industry has become bipartisan fodder. Members on both sides of the aisle have to answer a growing chorus from their constituents who seek relief from high drug prices. While Republicans historically provided some level of firewall for efforts to fend off price controls and other adverse policy prescriptions, the reservoir of political capital with the GOP is arguably less deep post enactment of the Affordable Care Act. At the same time, there are fewer moderate Democrats who in the past helped defend the industry.

Growing public opinion and ongoing critical publicity around drug prices contribute to a political environment that is more likely to result in active consideration of a variety of unfavorable legislative proposals in the drug pricing space. To date, there has been a veritable menu of bipartisan options offered, which include, among many others, requiring greater transparency by manufacturers who raise prices above a certain percentage, allowing the government to directly negotiate prices with manufacturers, importation of lower priced drugs, reduction of the data exclusivity for biologics, policy changes to encourage even greater utilization of generics, reform of patient assistance programs, and curtailing of certain practices in patent settlement agreements and REMS programs.

Momentum for any or all of these proposals might further increase if Congress and the Administration pursue a deficit reducing budgetary deal or other policy priorities that must be paid for with policy changes affecting the Medicare program. The prospect for action on anti-industry proposals is further enhanced by the reality that congressional authorization of the industry supported PDUFA will be on tap in 2017. Because PDUFA is considered “must-pass” legislation, it is recognized as a prime moving vehicle to which any number of healthcare-related proposals might be attached. It remains uncertain whether pharmaceutical pricing and access will continue to be more of a rhetorical subject or if the rhetoric translates into significant changes in federal policy. What is virtually certain is that this debate will rage on in the months ahead and that the outcome could have major ramifications for industry — whether or not new laws are ultimately enacted.

Against this backdrop, it is imperative that stakeholders follow the anticipated fast-moving developments, understand the substantive implications and political prospects for various proposals, and, where appropriate, engage in informed advocacy on Capitol Hill with the Administration and the public.

ARTICLE BY Gary A. Heimberg & Joan L. Kutcher of Covington & Burling LLP

Election 2016: Trump on Antitrust

While antitrust policy and enforcement has not received much attention from Donald Trump on the campaign trail, Mr. Trump has made a few notable statements regarding antitrust law that provide hints as to potential antitrust enforcement priorities for a Trump administration. Mr. Trump’s history as both a plaintiff and defendant in antitrust litigation is also notable and unprecedented.

In his 2011 book Time to Get Tough: Making America #1 Again, Mr. Trump addressed the Organization of the Petroleum Exporting Countries (OPEC) specifically in the context of antitrust law. Under the heading “Sue OPEC” Mr. Trump wrote:

We can start by suing OPEC for violating antitrust laws. Currently, bringing a lawsuit against OPEC is difficult. . . . The way to fix this is to make sure that Congress passes and the president signs the “No Oil Producing and Exporting Cartels Act” (NOPEC) (S.394), which will amend the Sherman Antitrust Act and make it illegal for any foreign governments to act collectively to limit production or set prices. If we get it passed, the bill would clear the way for the United States to sue member nations of OPEC for price-fixing and anti-competitive behavior. . . . Imagine how much money the average American would save if we busted the OPEC cartel.

More recently, in a May 2016 interview with Sean Hannity, Mr. Trump made a notable reference to antitrust law in connection with a discussion of Jeff Bezos and Amazon:

[Jeff Bezos is] using the Washington Post for power so that the politicians in Washington don’t tax Amazon like they should be taxed. He’s getting absolutely away. He’s worried about me and he’s, I think he said that to somebody, it’s in some article, where he thinks I would go after him for antitrust, because he’s got a huge antitrust problem because he’s controlling so much, Amazon is controlling so much of what they’re doing. And what they’ve done is, he-he bought this paper for practically nothing, and he’s using that as a tool for political power against me and against other people and, I’ll tell you what, we can’t let him get away with it. . . . So what they’re doing is that he’s using that as a political instrument to try and stop antitrust, which he thinks I believe he’s antitrust, in other words what he’s got is a monopoly and he wants to make sure I don’t get in. So, it’s one of those things. But I’ll tell you what, I’ll tell you what, what he’s doing is wrong and the people are being, the whole system is rigged – you see a case like that, the whole system is rigged. . . he’s using the Washington Post, which is peanuts, he’s using that for political purposes to save Amazon in terms of taxes and in terms of antitrust.

In addition to his statements, there is also Mr. Trump’s personal history as an antitrust litigant to be considered. In January 2016, former FTC Chairman Bill Kovacic was quoted as observing that “Donald Trump is the only presidential candidate in my lifetime to be a plaintiff in an antitrust case.

Indeed, as detailed in the American Bar Association’s Antitrust Source earlier this year, Mr. Trump was involved in three significant antitrust proceedings in the late 1980s and early 1990s. First, in 1988, Mr. Trump paid a $750,000 civil penalty to settle charges brought by the US Department of Justice (DOJ) and Federal Trade Commission (FTC) that he had violated the Hart-Scott-Rodino Antitrust Improvements Act (HSR Act) by acquiring stock in two companies without making timely HSR filings. Around the same time, Mr. Trump, as one of the owners of the New Jersey Generals US Football League team, was involved in a private antitrust suit against the National Football League (NFL)—a case that resulted in a jury verdict that the NFL had willfully acquired or maintained monopoly power in a market consisting of major league professional football in the United States, in violation of Section 2 of the Sherman Act. Damages of $1, trebled to $3, were awarded. US Football League v. Nat’l Football League, 842 F.2d 1335 (2d Cir. 1988). Finally, Mr. Trump, in connection with his Atlantic City casinos, was sued by Boardwalk Properties, Inc. on numerous grounds including allegations that he had attempted to monopolize casino gambling and had conspired to suppress competition. After a lengthy legal battle, Mr. Trump prevailed.

While we can only speculate as to how a Trump administration would approach antitrust policy and enforcement, Mr. Trump’s commentary regarding Amazon suggests that he would not be shy about pressing for aggressive investigation and potential enforcement action against those he perceives to be running afoul of antitrust laws. While it appears likely that Amazon would find itself under the microscope of a Trump administration, it is unknown whether Mr. Trump would direct enforcement towards other particular domestic companies or industries. It is also uncertain if Mr. Trump would maintain the Obama administration’s increased rate of merger challenges.

With respect to international enforcement, Mr. Trump’s comments on OPEC, coupled with his campaign focus on trade issues, suggest that he would be in favor of aggressive antitrust enforcement actions focused on foreign companies—and, potentially, against foreign governments (though some of Mr. Trump’s strategies may first require legislative action by US Congress before they can be pursued). Mr. Trump’s litigious history on both sides of antitrust laws demonstrates his familiarity and experience with the legal system, and further suggests that a President Trump would not hesitate in pressing for antitrust action against foreign actors. Mr. Trump underscored this point in Time to Get Tough favorably quoting a former Reagan and Bush advisor who, commenting on antitrust enforcement against OPEC, stated “isn’t starting a lawsuit better than starting a war?”

It is possible that a President Trump would ultimately do little to shake up the antitrust enforcement status quo, given other pressing national and international issues that have been focal points of the Trump Campaign. On the other hand, it is equally possible that, given his comments and litigation history, Mr. Trump would adopt a very aggressive antitrust investigation and enforcement policy against perceived wrongdoers, resulting in antitrust issues becoming central to a Trump administration’s economic and trade policies.

ARTICLE BY Emre N. Ilter of McDermott Will & Emery

Three Employee-Friendly Bills That May Be Affected By Upcoming Elections

In the past few years, Democratic members of Congress have introduced several decidedly pro-employee bills, none of which have yet passed, but which may be impacted by the elections in November. Such bills were first introduced in the 113th Congress when Republicans controlled the House of Representatives and Democrats controlled the Senate. Versions of these bills were reintroduced in the 114th Congress, although Republicans control both the House and the Senate. The November election not only will decide the next President, but also may change the balance of power in both houses of Congress.

Healthy Families Act

Would allow employees of an employer with 15 or more employees to earn 7 days of sick time per year after 60 days of employment.
113th Congress: Introduced to the House and Senate on March 20, 2013. Co-sponsored by 134 Democrats in the House and 23 Democrats in the Senate.
114th Congress: Introduced to the House and Senate on February 12, 2015. Co-sponsored by 145 Democrats in the House and 31 Democrats and 2 Independents in the Senate.

Family and Medical Insurance Leave Act

Would create a trust fund within Social Security to collect fees and provide compensation to employees on FMLA.
113th Congress: Introduced to the House and Senate on December 12, 2013. Co-Sponsored by 101 Democrats in the House and 6 Democrats in the Senate.
114th Congress: Introduced to the House and Senate on March 18, 2015 with 134 Democrats co-sponsoring in the House and 20 Democrats and 1 Independent co-sponsoring in the Senate.

Family and Medical Leave Enhancement Act

Most recent version of this Act would extend FMLA coverage to employees at worksites with 15-49 employees, including part-time workers. The Act would also protect (1) parental involvement leave to participate in school activities or programs for children or grandchildren and (2) parental involvement leave to care for routine medical needs including: (a) medical and dental appointments of an employee’s spouse, child, or grandchild, and (b) needs related to elderly individuals, such as nursing and group home visits.
A version of this bill has been introduced to Congress each session since 1997.
The most recent version was introduced to the House on June 16, 2016 with 7 Democrats co-sponsoring.

Following the elections later this year, employers should be on the lookout for versions of these bills being reintroduced, potentially in a political climate where they have a stronger chance of passing.

ARTICLE BY LaToya Alexander of Polsinelli PC

Trump Trump Trump Trump Trump Trump Everywhere All the Time, Including in Workplace

D donald trum larry king onald Trump has become part of the national conversation. Not a single day goes by now without Mr. Trump filling up at least one news cycle. His recent success reminds me of a fantastic exchange in Private Parts when a researcher is explaining Howard Stern’s improbable success to the infamous Pi … let’s just call him Phil Vomitz:

Researcher: The average radio listener listens for eighteen minutes. The average Howard Stern fan listens for – are you ready for this? – an hour and twenty minutes.

Phil Vomitz: How can that be?

Researcher: Answer most commonly given? “I want to see what he’ll say next.”

Phil Vomitz: Okay, fine. But what about the people who hate Stern?

Researcher: Good point. The average Stern hater listens for two and a half hours a day.

Phil Vomitz: But… if they hate him, why do they listen?

Researcher: Most common answer? “I want to see what he’ll say next.”

Not surprisingly, not a single day also goes by without a workplace water-cooler (or better yet, chat room) conversation about Mr. Trump (or any of the other presidential candidates.) It can run the spectrum from some friendly banter among co-workers, to a serious dialogue about the issues facing this country, all the way to a heated disagreement coupled with threats of violence. And it begs the question: how can employers respond to employee political speech in the workplace? This post addresses that issue.

Few Laws Exist Protecting Employee Political Speech in Private Workplaces

Generally private employers can take adverse actions against employees based on their political speech, unless (i) the employer operates in a state or city that specifically protects employees against discrimination because of political speech, or (ii) the employees are subject to a collective bargaining agreement that does the same. (The story is quite different for public sector workers, but we do not address them here.)

Many workers live in jurisdictions that provide at least some protection against political speech discrimination – typically in the form of protecting an employee’s political activities, expressions and/or affiliations. But those laws come in all shapes and sizes, so employers must proceed carefully before banning political speech or disciplining an employee. For example, Washington D.C.’s human rights law limits its reach to actual or perceived political affiliations only, while Seattle’s law is a bit broader, extending to one’s “political ideology.” Wisconsin protects those declining to attend a meeting or to participate in any communication about political matters.

More often than not, these laws protect workers from discrimination because of their political activities outside instead of inside the workplace. For example, with limited exceptions, Colorado law prohibits employers from firing someone because of their lawful off-duty activities, which includes engaging in political speech, and it also prohibits employers from making any rule prohibiting employees from engaging or participating in politics or running for office. New York’s law protects employees engaging in certain “political activities” outside the workplace, during off hours, but it contains an exception where the employee’s activities would create a “material conflict of interest related to the employer’s trade secrets, proprietary information or other proprietary or business interest.”

There is no federal law that specifically protects employees from discrimination or retaliation because of their political activities, affiliations or expressions. And the First Amendment is not much of a help as it only protects a person’s right to free speech from government interference, not from interference by private employers.

Therefore, unless you live in a jurisdiction that protects you, if the boss overhears you in the cafeteria campaigning for Team Trump or going haywire for Hillary, he or she can generally send you packing.

Political Speech May Invoke the Protections of Other Laws, However

Of course, it’s a bit more complicated than the above analysis indicates, and will only become more so as the primary, and then general election, season unfolds. To explain, consider the following hypothetical.

Employees A and B are talking in the break room about the upcoming Democratic debate. Employee A says to Employee B that Hillary is the only candidate who can deliver on increasing the minimum wage, and “maybe they’ll stop underpaying us here if that happens.” Employee B disagrees emphatically, placing his bet on Bernie Sanders as the only viable candidate to get the job done, and eventually the conversation turns uncomfortably vocal such that Employee C, an older Hispanic woman, cannot help but overhear Employee B comment to Employee A that he fully expects Hillary Clinton to play the female victim card to stave off criticism about her e-mail scandal. Employee D, who supervises Employees A, B and C, chimes in and enthusiastically sides with Employee B stating that women always do this, and that Employee A should really stop griping about her wages if “she knew what was good for her.” Employee E, a senior executive, then gets in on the conversation by professing his love for Trump, including by echoing his views on immigration and in particular, Mexican immigrants, and then he goes on to say that he thinks Hillary is just too old to assume the Commander in Chief Position. Meanwhile Employees F, G, and H are sitting there stunned with their turkey sandwiches in hand, saying to themselves “awwwwwkward!”

This hypothetical, drawn directly from The Cat in the Hat Comes Back: Workplace Edition, shows that while the employer doesn’t necessarily have a political speech problem on its hands, it may instead have sex, age, race and national origin discrimination and/or NLRA interference complaints coming its way – just from one spirited election-related conversation in the break room. Yes, politically-related conversations often invoke passionate feelings on both sides of the aisle on issues ostensibly about public policy, but they also often touch on issues that may relate to someone’s membership in a protected class, leaving employers vulnerable to discrimination and other claims.

Potential Employer Responses to Political Speech in the Workplace

As we head into Super or SEC Tuesday and the (17-month+ long!) election season plods along, you should be asking yourself what level of political discourse do you want in your workplace. Do you want everyone to keep their political opinions to themselves or do you want to encourage robust debate or somewhere in between? Discussion of politics and campaigning in the workplace puts you on tricky terrain, and may lead to conflict among your employees and thus, wherever you fall on this spectrum, consider addressing these issues in your code of conduct or in your handbook, including more specifically in your anti-discrimination/harassment, complaint reporting, non-solicitation/distribution and social media and electronic use policies. In doing so, remain mindful of certain laws like the state and local laws mentioned above and the National Labor Relations Act, which restrict your ability to limit certain politically-based conversations/activities in the workplace.

If you will tolerate political discussions in the workplace, consider whether it’s necessary during this election season to conduct workplace professionalism training seminars for all staff members to reduce the likelihood that a healthy debate will turn into a contentious or inappropriate one. Or consider distributing an election-focused one-pager with helpful talking points. For example, it may remind employees that a politically-laced, yet well-intentioned conversation, even between the best of friends, can quickly turn contentious, and thus, even though you are not banning such conversations, you are asking your employees to think twice before engaging in one. Or if the employees do engage in such a conversation, they should be sensitive to others’ beliefs and should not pressure anyone into discussing politics at work. It also should remind them to utilize your complaint reporting mechanisms if a problem does arise from such a conversation.

Overall, employers should aim for outcomes where employees can engage in a dialogue about important issues, whether in person or electronically, during non-working hours while remaining respectful of others’ points of view and aware of key discrimination and labor laws. Employees should also understand that they may be subject to discipline for failing to meet your standards of conduct regarding political discourse. Taking this approach should allow employers to create realistic workplace social conditions, maintain employee morale, and reduce their exposure to a lawsuit.

Article By Michael S. Arnold of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

The New Balance of Power: What the 114th Congress Means for Business

As the now-lame-duck U.S. Congress convenes for its final legislative session of 2014, the 114th U.S. Congress is gearing up for action. Officeholders on both sides of the aisle are preparing for the shift to Republican control of both the Senate and House of Representatives, and are anticipating renewed debate on a broad range of issues. This collection of On The Subject articles examines what we can expect from the new Congress and how upcoming legislative efforts may—and may not—affect businesses in the United States and around the world.

Following the election of November 2014, here are the before and after numbers:

BEFORE THE ELECTION

AFTER THE ELECTION

HOUSE

234 Republicans

201 Democrats (includes 1 currently
vacant R seat, 2 currently vacant D
seats)

HOUSE

At least 244 Republicans (net gain of at
least 12, largest R majority since 1928)

At least 184 Democrats
7 races still pending

SENATE

55 Democrats (including 2 Independents
who caucus with Ds)

45 Republicans

SENATE

53 Republicans (net gain of at least 8,
more likely 9)

46 Democrats
Still pending – Louisiana runoff on
December 6

The Democrats were delivered a serious and important rebuke by the voters. Even attractive, younger incumbent Democratic senators, such as Senator Kay Hagan of North Carolina or Senator Mark Begich of Alaska, who ran “perfect” races lost their seats. Rising stars, including Senator Mark Warner of Virginia, barely returned.

The new Senate will be solidly controlled by the Republicans and the House will have a much larger Republican majority. For Speaker John Boehner (R-OH), who previously could be held hostage by a dozen of his own members, the larger majority will allow him to lead more and follow less.

But the Senate Democrats, diminished in number, will remain a brake on Republican legislative ambitions. Under current legislative rules, it still requires 60 votes on most contentious legislative issues. This requires the Republicans to maintain their party discipline, and pick up the remaining votes on the Democratic side. For many reasons, Democrats historically have demonstrated they are unlikely to exhibit the same remarkable level of party discipline that Republicans were able to achieve while in the minority from 2012 through 2014. A handful of Democrats represent “red states,” such as Senator Joe Manchin of West Virginia, and often can be approached by Republican counterparts. Former Democratic governors, including the above-mentioned, now-chastened Senator Warner and Senator Tom Carper of Delaware, are by temperament and deportment willing to find common cause to legislate.

For these and many other reasons, now that roles are reversed we believe Republicans will have more success in legislating and avoiding Democratic filibusters, the Republican versions of which so frustrated Senate Democrats in the last Congress. But as the 2014 election becomes more remote, those Senators who “cross over” most often will have an even more complex task, especially if Republican hardliners stop most or all Senate confirmations, as some have threatened.

So what does this mean for business? While oceans of ink and terabytes of data are being spilled over the answer, here are 10 areas where you should look for change:

ARTICLE BY

McDermott Will & Emery

Special Edition Health Care Law Update – November 11, 2014

Elections Wrap Up, Lame Duck Preview, and a Changing Congress

In this ML Strategies Special Edition Health Care Update, we bring you a detailed look at two of the most pressing health care policy topics facing policymakers:

Sorting out Congressional leadership changes post-midterm elections and looking ahead to the upcoming Lame Duck session of Congress; and
Monitoring the rapidly escalating effort to combat the Ebola epidemic.

Impact of Midterm Elections

On November 4th, voters cast their ballots giving the Republican Party control of the upcoming 114th Congress. Looking ahead to the new Congress, there will be some significant changes to the leadership on Committees of jurisdiction. While leadership will not be officially decided until Congress convenes in January, some predictions are below.

Senate Finance Committee: Senator Orrin Hatch (R-UT) will chair the Committee. As Chairman, Hatch is expected to focus on tax reform and is likely to advance his bill S. 232, to repeal the Affordable Care Act’s (ACA) excise tax on medical devices as part of this process. Hatch can also be expected to push for additional transparency from the Department of Health and Human Services (HHS) and support policy changes to the ACA such as we have seen the House pass in the 113th Congress. Senator Ron Wyden (D-OR) will be the ranking member. Hatch and Wyden have a strong working relationship and share interest in tax reform. Wyden is also a strong supporter of the ACA and is unlikely to support repealing or replacing the health care law, be they partial or wholesale proposals. On the whole, Democrats will likely have to cede at least two seats to the Republicans, meaning they will have to drop at least one member from the committee.
Senate Health, Education, Labor and Pensions (HELP) Committee: Senator Lamar Alexander (R-TN) is expected to chair the HELP Committee. Alexander will likely turn first to Ebola, should there be lingering issues unresolved after the Lame Duck. Alexander and the Committee’s current chair, Senator Tom Harkin (D-IA), introduced a bill to accelerate the development of Ebola treatments and vaccines. Alexander will also try to chip away at the ACA. In the past, he has said the Committee will vote early in the next Congress to repeal the ACA, though he conceded that the law will stay in effect as long as President Obama is in office. Alexander is more optimistic about tweaks to the ACA. Among his top priorities are addressing wellness, passing a 40 hour work week bill, and tackling small business insurance.

The Democrats have yet to pick their ranking member. As Senator Barbara Mikulski (D-MD) will opt for the ranking membership of the Appropriations Committee, Senators Patty Murray (D-WA), Bernie Sanders (I-VT), and Bob Casey (D-PA) could all be the lead Democrat on the Committee. The subcommittee chairs will likely be Senator Mike Enzi (R-WY) for Children and Families, Senator Richard Burr (R-NC) for Primary Health and Aging, and Senator Johnny Isakson (R-GA) for Employment and Workplace Safety.

House Energy and Commerce Committee: Representative Fred Upton (R-MI) will continue to chair the Committee. His agenda will resemble that in the 113th Congress, promoting the 21st Century Cures Initiative, which, among other things, promotes accelerated discovery of cures, streamlined development of drugs and devices, and greater use of health care technology to offset rising health care costs. He will also likely continue to try and reign in various provisions of the ACA. Other than the law’s repeal, which the Committee will likely take up at the start of the next Congress, Upton may seek to scuttle the employer mandate and the medical device tax. In addition, he may seek to overhaul or even dismantle the Independent Payment Advisory Board (IPAB), which would administer provider cuts unilaterally if certain spending thresholds are surpassed. Upton recently released the Committee’s record of success webpage and outlined several priorities for the new Congress, including building on the work already done on the 21st Century Cures Initiative.

On the Democratic side, with Representatives Henry Waxman (D-CA) and John Dingell (D-MI) retiring, Representative Frank Pallone (D-NJ) is in line to be ranking member. However, Minority Leader Pelosi has been a strong advocate for Representative Eshoo to take the Ranking Membership. With top slots opening up on other committees because of midterm losses, some congressional analysts believe that Pallone could end up moving back to the Natural Resources committee in place of Rep. Peter DeFazio (D-OR), who is likely to become Ranking Member on the House Transportation and Infrastructure Committee, following the loss of current Ranking Member Nick Rahall (D-WV). Of the 10 or so House Democrat losses, including Representatives John Barrow (D-GA) and Brad Schneider (D-IL), that are official, the majority of them have indicated explicitly, or have been characterized by others, as Pallone supporters- so it will be interesting to see how that plays out if it comes down to the last few votes.

House Ways and Means Committee: Representatives Paul Ryan (R-WI) and Kevin Brady (R-TX) are jockeying for the chairmanship, but it is widely believed that Representative Ryan will most likely prevail. Like Senator Hatch, Ryan will focus on tax reform. He will inherit Chairman Camp’s template, which he’ll likely keep with some changes. This effort could very well effect the health care community should Ryan join Senator Hatch in an attempt to repeal the medical device tax. Ryan will also address health care, separate from taxes, including holding hearings to critique the law and to demand more transparency and build on efforts in the 113th Congress to pursue Medicare fraud, waste, and abuse legislation. Representative Sander Levin (D-MI) is expected to remain the Ranking Member. However, House Democrats are eyeing Representative Chris Van Hollen (D-MD) to rejoin the committee. A budget expert with a strong grasp on tax policy, Van Hollen could serve as a vocal counterweight to Ryan, reprising a role he played opposite Ryan on the Budget Committee.

Lame Duck Preview

President Obama, who began his presidency with a Democratic majority in the Congress, will now round out his last two years in office with a Republican majority. This leaves the upcoming Lame Duck session as the last opportunity for the president and his Democratic colleagues in the Senate to set the legislative agenda.

Among one of the items most likely to pass is the FY 2015 appropriations legislation. With no appropriations legislation finalized prior to recessing for elections, Congress approved a short-term Continuing Resolution (CR) funding the Federal government at Fiscal Year 2014 levels through December 11, 2014. Before the CR expires, the Lame Duck Congress will likely pass either: 1) another short-term CR running through February or March 2015; 2) a long-term CR for the remainder of the fiscal year ending on September 30, 2015; or 3) an Omnibus appropriations bill setting new spending levels for FY15. Additionally, in the days after the midterm election, President Obama submitted an emergency funding request of $6.18 billion for the fight against Ebola and will push Congress to pass the request during the Lame Duck.

The Lame Duck offers some hope of passing a permanent solution to the Medicare physician payment formula, also known as the “SGR” or the “Doc Fix.” Looking to vehicles such as tax extenders or an omnibus spending bill, Congress still must determine how to pay for reforming the SGR. Members of the House GOP Doctors Caucus wrote to House leadership requesting that Congress take up SGR reform before the end of the year. The letter notes that the Lame Duck is a unique opportunity to bring much-needed stability to the Medicare program that will benefit seniors and physicians alike and requested more discussions on offsetting an SGR repeal.

While stakeholders and experts remain skeptical that such an effort would be successful, lawmakers are pulling out all the stops to engage industry to support a potential SGR fix this year. However, the current temporary extension of the SGR patch continues through March 2015, meaning that action could slip to next year.

Should Congress attempt to push through a comprehensive SGR bill in the Lame Duck, this would provide a vehicle for other Medicare proposals that are kicking around the House Ways and Means Committee—including Representative Brady’s draft fraud, waste, and abuse package, Protecting Integrity in Medicare Act of 2014 (PIMA), and Medicare extenders. Representative Brady reportedly wanted to introduce PIMA in the Lame Duck and, if there is bipartisan interest, pass the legislation under suspension. However, there has been no groundwork laid for this package in the Senate, so passing the package without a larger vehicle (such as SGR) may be unlikely.

Ebola Epidemic and Lame Duck Response

On November 4th, President Obama convened his national security and public health teams to discuss Ebola preparedness at home and the whole-of-government approach to contain the epidemic at its source in West Africa. The President’s advisors noted HHS’ efforts to ensure U.S. hospitals and the broader health system are prepared to identify, isolate, and treat patients. The team also discussed the screening of individuals traveling from the affected West African countries and the monitoring requirements these individuals are subject-to upon arrival in the U.S. There was consensus that, despite initial signs of progress in Liberia, the international community must continue to attack the problem aggressively at the source of the epidemic in West Africa.

Following this meeting, the Obama Administration announced it is seeking $6.18 billion through an emergency funding request to Congress to enhance efforts to address the Ebola crisis. The White House has requested $2.43 billion for HHS, including $1.83 billion for the Centers for Disease Control (CDC) to prevent, detect, and respond to the Ebola epidemic, $333 million for the Public Health and Social Services Emergency Fund (PHSSEF) for health worker training, manufacturing of synthetic therapeutics and vaccines, and modeling and genetic sequencing of the Ebola virus, $238 million for the National Institutes of Health (NIH) to conduct clinical trials of investigational vaccines and therapies, and $25 million for the Food and Drug Administration (FDA) to regulate Ebola vaccines and therapeutics. The Administration is also requesting $1.98 billion for USAID to scale up foreign assistance in West Africa, $127 million for the Department of State to support UN Mission for Ebola Emergency Response (UNMEER)operations, and a $1.54 billion contingency fund.

The President communicated this request to Congress in a November 5th letter to congressional leadership requesting that Congress consider his Administration’s $6.18 billion emergency appropriations request to implement a comprehensive strategy to contain and end the Ebola outbreak at its source in Africa, enhance domestic preparedness, speed procurement and testing of vaccines and therapeutics, and accelerate global capability to prevent spread of future infectious diseases. President Obama urged expeditious consideration of the proposal.

As we enter the Lame Duck, Congress is expected to tackle Ebola as a priority when it reconvenes. On November 12th, the Senate Appropriations Committee will hold a hearing on the U.S. Government response to the Ebola outbreak. Witnesses will include HHS Secretary Sylvia Matthews Burwell, CDC Director Dr. Tom Frieden, National Institute of Allergy and Infectious Diseases (NIAID) Director Dr. Anthony Fauci, DHS Secretary Jeh Johnson, Deputy Secretary of State for Management and Resources Heather Higginbottom, USAID Assistant Administrator for Democracy, Conflict, and Humanitarian Assistance Nancy Lindborg, Assistant Secretary of Defense for Special Operations and Low Intensity Conflict Michael Lumpkin, and Joint Chiefs of Staff Deputy Director for Political-Military Conflict James Lariviere.

On the heels of the Appropriations Committee hearing, the House Foreign Affairs Committee will hold a November 13th hearing to examine international and U.S. efforts to combat the Ebola epidemic in West Africa. The hearing, “Combating Ebola in West Africa: the International Response,” will feature witnesses including: USAID Administrator Rajiv Shah, State Department Deputy Assistant Secretary for the Bureau of African Affairs Bisa Williams, DOD Assistant Secretary of Defense for Special Operations and Low-Intensity Conflict Michael Lumpkin, DOD Deputy Director for Politico-Military Affairs (Africa) Major General James Lariviere, and DOD Joint Staff Surgeon Major General Nadja Y. West.

As Congress turns its attention to the Administration’s response, the FDA continues to work with industry to develop a vaccine to combat Ebola. Outlining a plan at an American Society of Tropical Medicine and Hygiene conference last week, Dr. Luciana Borio, head of the FDA’s Ebola response team, said the FDA is taking a “novel” approach and will test multiple drugs at once in an umbrella study with a single comparison group. This plan is intended to accelerate the testing process as patients will be paired with a drug and with someone from a comparison group to look for patterns.

* * *

Implementation of the Affordable Care Act

In-Patient Hospitalization Guidance: HHS and the Internal Revenue Services (IRS) released guidance stating that group health plans must cover hospitalizations in order to satisfy minimum value under the ACA. The guidance, which will be followed up by proposed regulations, states the agencies “believe that plans that fail to provide substantial coverage for in-patient hospitalization services or for physician services” do not meet minimum value requirements.

Other Federal Regulatory Initiatives

CMS Innovation Center Webinar: On November 10th, the Centers for Medicare & Medicaid Services (CMS) Innovation Center will hold a webinar to provide an update on the work of the Center and the models being tested to improve care for patients, communities, and lower costs. Dr. Patrick Conway, CMS Deputy Administrator for Innovation and Quality and CMS Chief Medical Officer, will be the lead presenter in the webinar.

New Members of the Health IT Policy Committee: HHS Secretary Burwell announced the appointment of a new member to the Health Information Technology Policy Committee (HITPC) and renewed appointments for three members of the Health IT Standards Committee (HITSC). The new appointment is Anjum Khurshid, director of the health systems division of the Louisiana Public Health Institute.

HHS Survey on Health Coverage: The HHS Assistant Secretary for Planning and Evaluation (ASPE) released the findings of a survey of health insurance coverage for 2013 and 2014. Among other things the survey finds that, as of June 2014, 10.3 million nonelderly Americans, age 18 to 64, gained health insurance coverage since the beginning of the ACA open enrollment.

HRSA Awards Mental Health and Substance Abuse Funding: The Health Resources and Services Administration (HRSA) announced $51.3 million in ACA funding to support 210 health centers in 47 states to establish or expand behavioral health services for nearly 440,000 people.

ONC Data Sheds Light on Attestation Rates: The Office of the National Coordinator for Health IT (ONC) released a data analytics update on the 2014 attestation experience. The update shows that 4,656 doctors and other eligible providers and 258 hospitals had attested to Stage 2.

CDC Releases Monitoring Guidance for Ebola: The CDC released updated monitoring and movement guidance defining four risk levels based on degree of exposure to Ebola. The guidance helps to ensure a system is in place to quickly recognize symptoms that may necessitate a person be routed to medical care.

Other Health Care News

Study of Marketplace Insurance Premiums: The Robert Wood Johnson Foundation and the Urban Institute released a study of public filings from 17 states and Washington, DC of marketplace insurance premiums in early approval states. The report finds that premium increases will be low, with 10 states increasing only 5 percent, 2 states increasing more than 5 percent, and 6 states seeing premium reductions.

Specialty Providers Press NAIC on Access: The Alliance of Specialty Medicine sent a letter to the National Association of Insurance Commissioners (NAIC) regarding draft policy models for individual and small group market health insurance coverage. The Alliance urged NAIC to ensure consumers have access to specialists without suffering high out-of-pocket costs.

WHO Recommends Overdose Policies: The World Health Organization, estimating that 69,000 people die a year from opioid overdose, advised that those likely to witness an overdose incident, such as family members, should be given access to the opioid antidote naloxone and trained in its use. The FDA approved use of naloxone injectors for family use in April 2014.

Survey of ICD-10 Preparation: The American Health Information Management Association and the eHealth Initiative released a survey of health delivery organizations and clinicians finding that 65 percent of respondents indicated that they could begin end-to-end testing prior to the fourth quarter of 2015 but that there remain concerns that revenue will decrease during the first year of ICD-10 compliance.

Georgetown University Survey of Children’s Insurance: Georgetown University’s Center for Children and Families found that in 2013, for the first time in five years, children’s health uninsured rates did not drop. The 2013 rate was 7.1 percent, compared to 7.2 percent in 2012. Since 2008, the number of uninsured children has shrunk from 6.9 million to 5.2 million.

Upcoming Congressional Hearings

Senate

On November 12th, The Senate Appropriations Committee will hold a hearing on the U.S. Government response to the Ebola outbreak.

House

On November 13th, the House Committee on Foreign Affairs will hold a hearing titled, “Combating Ebola in West Africa: The International Response.”

ARTICLE BY

Joseph P. Hammang, PhD

Alexander Hecht

Andrew J. Shin

Abby Matousek

Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

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