Hart Health Strategies provides a comprehensive policy briefing on a weekly basis. This in-depth health policy briefing is sent out at the beginning of each week. The health policy briefing recaps the previous week and previews the week ahead. It alerts clients to upcoming congressional hearings, newly introduced bills, regulatory announcements, and implementation activity related to the Patient Protection and Affordable Care Act (PPACA) and other health laws.


Fiscal Cliff Negotiations Go to Back Room

Conversations continue between House Speaker John Boehner and President Obama in an attempt to bring the two parties together on tax and spending policies in order to avert the fiscal cliff. Given the limited number of legislative days remaining in the lame-duck session, one approach being discussed is for the House to pass legislation to extend the Bush-era tax cuts and for the Senate to amend the bill by repealing the cuts for the “wealthy” which then would result in a House/Senate conference to duke out the remaining details to alleviate the upcoming sequestration cuts to federal discretionary spending and avert the 27% cut in Medicare physician payments in 2013.

This procedure would likely stimulate some compromises on taxes and spending given that some Republicans have said they could go along with tax rate increases for the wealthy (e.g. Rep. Steven LaTourette) and some Democrats have indicated they could go along with some changes to Medicare (e.g. Sen. Sheldon Whitehouse).

This and other strategies could extend the negotiations even past Christmas and, in this regard, House Majority Leader Eric Cantor gave notice that the House will remain in session until a deal is reached.

Failure to reach agreement would trigger major cuts to federal health programs, for example: a 2% reduction in Medicare payments would total $11 billion in FY 2013; NIH would incur a cut of $2.5 billion; CDC would incur a cut of $490 billion; and the FDA would incur a cut of about $318 billion.

A Republican alternative to the President’s initial offer ($400 billion in ten-year cuts in federal health spending) would be increased to $600 billion (by among other things, raising the Medicare eligibility age from 65 to 67 and targeting higher-income beneficiaries for cost savings). The White House rejected the Republican alternative which also includes $800 billion in new revenue to be raised by unspecified changes in tax deductions.

If a House/White House deal cannot be reached soon, it is likely that a conference committee could bring into focus the views of other leaders who have shown some willingness to negotiate. For example, Senator Dick Durbin said he thinks that including more means testing under Medicare would be a reasonable means to make such federal programs more progressive. On the other hand, numerous outside groups have voiced their strong objections to major changes in federal health programs and Social Security. For example, the National Association of Insurance Commissioners is poised to oppose suggestions that Medigap policies be limited or eliminated as a means to help reduce health care spending.

Senate Passes Defense Authorization Bill

After the Senate’s passage of S. 3254, the FY 2013 Defense Authorization Act, the House will take up the House-counterpart this week and proceed to conference. Among other things, the legislation would preserve the military’s disease-specific research funding but does not include the President’s requested enrollment fee changes to the TRICARE program that would raise $12.9 billion through FY 2017.

CLIA Legislation Signed into Law

President Obama signed into law H.R. 6118, The Taking Essential Steps for Testing (TEST) Act of 2012, which gives CMS the discretion whether or not to revoke a clinical laboratory’s CLIA certificate when the lab refers proficiency testing samples to another lab. The new law (Pub. L. 112-202) also gives CMS alternative sanctions in such cases.

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