POLICY BRIEFINGS


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.


THIS WEEK'S BRIEFING - JULY 29, 2013


Budget Impasse Continues into August Recess


With Congress scheduled to recess after this week until after Labor Day, it appears that the stress lines are growing between Republicans and Democrats over the level of fiscal year (FY) 2014 spending that should be approved before the new fiscal year starts October 1st. The House continues to operate off its own budget resolution which would continue spending at the sequestration level of $967 billion while Senate appropriators seek to modify sequestration and target spending at the higher $1.058 billion under the budget resolution adopted in that chamber. The White House would also like to ease the bite of sequestration and pointed to the CBO estimate that cancelling the BCA mandate would increase GDP growth by .7% and increase employment by 900,000. Republican leaders in the House and Senate upped the ante last week by insisting that any budget agreement include a measure which would defund the implementation of the PPACA. Senator Mike Lee (R-UT) has circulated a letter seeking support for this move while citing the Administration’s one-year delay of the PPACA’s employer mandate as justification to suspend the entire law. This element is non-negotiable for the White House and Senate Democrats and raises the specter of a September stalemate which could threaten another government shutdown. Republicans also seek to use the upcoming need to increase the federal debt limit as leverage to modify Democrat spending demands and, possibly, force negotiations into a broader discussion which would curtail Medicare/Medicaid/cost-of-living adjustment (COLA) entitlement spending. As to the latter possibility, the White House and eight Republican senators, led by Senator Johnny Isakson (R-GA), are reportedly in discussion about possible Social Security COLA adjustments and increased Medicare premiums for higher-income beneficiaries. With only a limited number of legislative days in September to enact FY 2014 spending levels, it looks almost certain that Congress will pass a short-term continuing resolution (CR) after the recess in order to continue federal spending to allow more time for budget negotiations. Despite the impasse, the House and Senate recognize the need to fund defense operations in a timely fashion and, in this regard, the Senate Appropriations Committee is scheduled this week to conclude a markup of the FY 2014 Defense appropriations bill. Also, the House passed H.R. 2397, the FY 2014 Defense appropriations bill on a 315-109 vote. The bill provides $512.5 billion in non-war funding. Of note, this is a decrease of $5.1 billion below the FY 2013 enacted level and $3.4 billion below the President’s request while exceeding the sequestration level by about $28.1 billion. Signaling the hurdles that remain over arriving at the levels of domestic spending to be allowed in FY 2014, the House Appropriations Labor/Health and Human Services (HHS)/Education Subcommittee abandoned a scheduled markup of its appropriations bill which would result in an overall 23% cut in spending over this year’s level.


Medicare Physician Payment Reform Legislation Advances


The House Energy and Commerce Health Subcommittee approved and sent H.R. 2810 to the full committee for a markup of the bill this Tuesday and Wednesday. In general, the bill would replace the current sustainable growth rate (SGR) formulation under the Medicare Part B physician payment system with an alternative which would make payments beginning in 2019 based on how a provider performs on certain quality of care measurements (a 1% increase for scores above a designated midrange level and a 1% decrease for scores below the mid-range level). Physician payments would increase by a fixed 0.5% during the 5-year phase-in period. The bill also offers incentives to encourage care coordination and medical homes. Specific provisions to pay for the legislation were not included and a resolution of the cost issue will likely have to wait until the House Ways and Means Committee marks up the legislation which was jointly referred to this committee. Whether the bill will be taken up in the House as separate legislation or as part of a larger budget package has yet to be determined.


Republicans Continue Assault on PPACA Implementation


This week the House will take up H.R. 2009, the “Keep the IRS Off Your Health Care Act”, which would prohibit the Secretary of the Treasury, or any delegate of the Secretary, from implementing or enforcing any provisions of or amendments made by the Patient Protection and Affordable Care Act (PPACA) or the Health Care and Education Reconciliation Act (HCERA) of 2010. In addition, both the House Energy and Commerce and Ways and Means Committees will hold hearings on the implementation of the PPACA this Thursday. At a hearing to examine the delay by the Administration of the PPACA’s employer mandate held by the House Education and the Workforce Subcommittee on Health, Employment, Labor and Pensions and Subcommittee on Workforce Protections, a small-business restaurant chain testified that the automatic enrollment in plans must be eliminated, the definition of small business simplified, and the 30-hour definition of full-time worker be increased (in general, businesses and a number of labor unions say it should be increased to 40 hours to avoid incentives for businesses to decrease employees’ hours). Subcommittee Chairman Phil Roe (R-TN) said the one-year delay in the employer mandate “does not alter the fact the law is fatally flawed. Regardless of when the employer mandate is implemented, it will destroy jobs and force Americans to accept part-time work.” Supporters of the law said that the delay is “much ado about very little….”, and that members should work together to help improve the law. At another hearing held by the Senate Small Business and Entrepreneurship Committee, a small restaurant owner testified that he will drop his employer health plan and pay the penalty because his cost will be significantly less than having to expand coverage to all employees (many working over 30 hours). Republican leaders of the House Ways and Means Committee also sent a letter to the Treasury Secretary asking for further information on the delay. In addition, a letter was sent to HHS Secretary Kathleen Sebelius from seven Republican leaders of the Senate Health, Education, Labor and Pensions (HELP) and House Energy and Commerce committees asking that the premium prices filed with the department from health insurers seeking to offer coverage under the 34 federally facilitated marketplaces (FFMs) be publicly disclosed to help consumers plan better before the exchanges open in October. The House Ways and Means Committee will also take Treasury/Internal Revenue Service (IRS) to task on Wednesday for their action to allow federal premium tax credits to apply to individuals under the FFMs. There is a question as to whether the PPACA, as written, allows for such credits to be offered under exchanges that are not fully operated by the states.



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SERVICES




BRIEFING ARCHIVE


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