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    Columns

    Recent Regulatory Changes and a 2020 Election Update

    As COVID-19 continues to impact the country, legislators and policy makers in Washington are keenly focused on the upcoming national election on Nov. 3.

    Recent Regulatory Changes and a 2020 Election Update
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    Jeffrey J. Kimbell, David C. Rudloff, Caroline P. Tucker, and Matteson L. Beckis, Jeffrey J. Kimbell & Associates Inc.07.21.20
    As COVID-19 continues to impact the country, legislators and policy makers in Washington are keenly focused on both the upcoming national election on Nov. 3 and addressing the healthcare challenges during a pandemic. In particular to the election, the pandemic has complicated all aspects of campaigning, from fundraising, political events, and debates to voting. However, Americans will have the opportunity to have their voices heard in November in an election that has the full potential to shift the power balance in Washington. The Executive Branch continues to enact regulatory changes in response to the virus, with implications across various sectors, including the medical device industry.

    2020 Election Update
    2020 Presidential Race
    This November, the most important race is the White House race, where incumbent President Donald Trump will face presumed Democratic nominee, former Vice President Joe Biden. Four months ago, the election appeared like a whole different race, but after the unprecedented impact of the pandemic and recent civil unrest, the candidates are facing a whole new playing field. President Trump's job approval rating has fallen from a high of nearly 48 percent in late March to a new low of 42.8 percent as of June 24, according to RealClearPolitics polling averages. Furthermore, Biden leads Trump by nearly 10 percent in the general election as of June 24, according to recent polling averages. At his first campaign rally since the beginning of the pandemic, President Trump emphasized he would focus his re-election prospects on reopening and reviving the economy amid the pandemic and tying Biden to left-wing radicals. Biden has remained largely out of public view since the pandemic. He has focused his campaign on national unity and a return to normalcy, drawing a contrast with President Trump's rhetoric and tweets. Though Biden holds a substantial lead in national polling, it is important to remember Hillary Clinton won the popular vote in the 2016 presidential election while losing a handful of key states that tipped the Electoral College to Trump. Considering the polling in the run-up to the 2016 election, it is too soon to count President Trump out as a handful of swing voters in Florida, Wisconsin, Iowa, Michigan, Arizona, and Pennsylvania will likely decide the election. If pressed, today we believe the race tilts toward Biden.

    2020 House Races
    The Democratic Party currently holds a 233-197 advantage in the U.S. House of Representatives and looks poised to keep its majority heading into November. Democrats currently hold a massive fundraising advantage over Republicans, with all 42 members of the Democratic Congressional Campaign Committee—a protection program for incumbents facing competitive re-elections—having at least $1 million in cash on hand. All but two of these candidates have at least twice as much campaign dollars as their Republican opponents. Republicans need to flip only 18 seats to win back the House, but this is further complicated because they now have to compete in 33 open Republican races as the result of 22 Republican retirements, five seeking other offices, two incumbent primary losses, and four vacancies. Some optimism for Republicans is the fact that Democrats are defending 31 districts that were won by President Trump in 2016. Another sign the House could still be competitive was the May 15 special election victory of Republican Mike Garcia for California's 25th congressional district. Garcia defeated Democrat Christy Smith by a margin of 56 percent to 44 percent, flipping a Democratic district formerly held by U.S. Rep. Katie Hill (D-CA). Of note, Hillary Clinton won California's 25th congressional district by seven percentage points in 2016, and Hill won the district by eight points in 2018. Today, we believe the House will remain in Democratic hands.

    2020 Senate Races
    Republicans currently hold a 53-47 majority in the U.S. Senate, but face a competitive election cycle in November. There are 35 Senate seats up for election in 2020, 11 of which are deemed to be competitive seats according to the Cook Political Report. Democrats face an extremely uphill battle to defend incumbent U.S. Sen. Doug Jones (D-AL), who won a special election against highly controversial Republican candidate Roy Moore in 2018. According to Montgomery's Cygnal Research, Republican nominee and former Auburn University head football coach Tommy Tuberville leads Jones by nearly 13 percent in statewide polls.

    Republicans face tough races in Arizona, Colorado, North Carolina, Iowa, and Maine. The Colorado Senate race pits incumbent U.S. Sen. Cory Gardner (R-CO) against popular Democratic Gov. John Hickenlooper. Gardner’s tenure has been marked by moderation and bipartisanship. Still, Colorado has been trending increasingly blue in recent years, as the state has not voted for a Republican president since George W. Bush in 2004. In Arizona, incumbent U.S. Sen. Martha McSally (R-AZ) has yet to have won a statewide election, appointed to her current seat by Gov. Doug Ducey (R) in 2019. McSally was defeated by current Senator Kyrsten Sinema (D-AZ) in 2018, and now faces former astronaut Democrat Mark Kelly, who is leading her in most polls. Another problematic race for Republicans will be four-term U.S. Sen. Susan Collins (R-ME). Collins has manufactured a profile as a moderate over her long career but has also cast recent high-profile votes, such as voting to confirm Supreme Court Justice Brett Kavanaugh, which have upset Democrats and some moderate voters.

    Two swing states won by President Trump in 2016, Iowa and North Carolina, also have competitive races. In Iowa, incumbent U.S. Sen. Joni Ernst (R-IA) faces a tight race against Democrat Theresa Greenfield, according to recent polls, although President Trump won the state by over 9 percent in 2016. In North Carolina, incumbent U.S. Sen. Thom Tillis (R-NC) faces a challenge from Democratic state senator Cal Cunningham. Tillis is no stranger to close races, having won his first Senate race by less than 50,000 votes in 2014. The fate of many of these Republican Senators running in swing states is also tied to President Trump's re-election prospects, and his fading approval numbers from swing voters may hamper these Senators' ability to win over independents and moderate voters. However, as it stands today, we believe that Republican Senators will weather the storm, and the Senate will remain narrowly in Republican hands in November. 

    Today, we believe the GOP will have a net loss of one seat in the Senate, keeping it in GOP control.

    Recent Regulatory Changes
    Since our last update in May, the Department of Health and Human Services and Centers for Medicare and Medicaid Services (CMS) have issued multiple guidance documents in response to the COVID-19 Public Health Emergency (PHE). States, with the support of CMS, continue to provide flexibilities through various means to healthcare providers. As of May 11, all 50 states and the District of Columbia have applied and been approved for a Section 1135 Waiver, which assists states in responding to challenges posed by the COVID-19 PHE. Examples of these flexibilities include waiving Medicaid prior authorization requirements and allowing out-of-state providers to enroll in other states temporarily. Flexibilities granted under Section 1135 Waivers will expire at the conclusion of the COVID-19 PHE.

    CMS has expanded telehealth services for all Medicare beneficiaries, adding over 80 additional services to be furnished via telehealth. These visits are considered the same as in-person visits and are paid at the same rate as regular, in-person visits. CMS Administrator Seema Verma has indicated Medicare telehealth flexibilities could extend beyond COVID-19. And private health systems have also vowed not to return to business as usual when the pandemic ends, committing to increased telehealth visits in the future.

    Of note to the medtech sector, on March 28, CMS announced an Advanced Payment Program (AAP) to provide temporary loans to Medicare providers, as well as medical equipment suppliers. Since expanding the AAP programs, CMS approved more than 21,000 applications totaling $59.6 billion in payments to Part A providers, including hospitals. For Part B suppliers, including doctors, non-physician practitioners, and durable medical equipment suppliers, CMS approved almost 24,000 applications advancing $40.4 billion in payments. On April 26, in light of the $175 billion appropriated to the Provider Relief Fund through the CARES Act, CMS suspended the APP. Funding will continue to be available to hospitals and other healthcare providers on the front lines of the coronavirus response primarily from the Provider Relief Fund.

    Also of note, on April 16, the White House released guidance titled, “Opening Up America Again.” The White House plan allows elective procedures to resume as clinically appropriate on an outpatient basis at certain facilities under Phase 1. In conjunction with the announcement, CMS issued Phase 1 recommendations to safely resume in-person care in areas with low incidence of COVID-19 cases.

    On June 9, CMS provided guidance on the reopening of non-emergent healthcare facilities in states and regions that have moved to Phase 2 of reopening. While the guidance suggests continuing to utilize telehealth and shelter-in-place protocols for individuals at higher risk for severe COVID-19 illness, CMS highlights specific recommendations on topics to ensure patient and clinician safety, including facility considerations, testing and sanitation protocols, personal protective equipment and supplies, and workforce availability. As states and regions throughout the United States experience a decline in cases of COVID-19, CMS is providing these recommendations to ensure non-emergency healthcare resumes safely and patients are receiving needed in-person treatment that may have been postponed due to the PHE.

    If our current MPO update is any indication, the healthcare regulatory environment is in a state of flux and will continue to react and change substantially over the next few months due to COVID-19. We expect Congress and the Administration to continue to make decisions that will have broad implications for the medtech sector and beyond. 


    Jeffrey J. Kimbell is president of Jeffrey J. Kimbell & Associates Inc., which represents 55 clients in the life sciences community seeking legislative and policy remedies in Washington. Founded in 1998, the firm provides strategic solutions to hand-selected clients seeking creation, modification, or proper implementation of public law.

    David C. Rudloff is a senior manager of government affairs at Jeffrey J. Kimbell & Associates Inc.

    Caroline P. Tucker, CPC, is a senior manager of health policy and reimbursement strategy at Jeffrey J. Kimbell & Associates Inc.

    Matteson L. Beckis is a graduate student and fellow of health policy and reimbursement strategy at Jeffrey J. Kimbell & Associates Inc. 
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