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.


Attempts to Pass FY 2014 Appropriations Bills Collapse

Before recessing until the week of September 9, the House of Representatives refused entreaties by the Senate to go to conference to arrive at a common target for fiscal year (FY) 2014 federal spending, thus leaving only three weeks before the start of the new fiscal year to make decisions on all appropriations bills. Last week the Senate failed to cut off debate on the Transportation/Housing and Urban Development (HUD) spending bill and the House pulled the votes on the Transportation/HUD bill when Republican moderates revolted on the reduced level of spending on this measure as a result of the House’s budget resolution which would cut spending in accordance with the Budget Control Act’s (BCA’s) sequestration mandate. While the White House position is to ameliorate the effects of sequestration on domestic spending as a condition to do the same for military spending, the House has held steady in its position to provide relief only under the Defense bill, as passed. Last week, the Senate Appropriations Committee did report out of committee its $594 billion version of the FY 2014 Defense appropriations bill which would ameliorate the cuts mandated under sequestration. A “gang of eight”, led by Senator Johnny Isakson (R-GA), has engaged the White House on the sequestration issue, but also to help gain agreement on a broader measure which would reduce entitlement spending as well. House Appropriations Committee Chairman Hal Rogers (R-KY) decried the lack of progress in alleviating the full effect of sequestration and the House’s delay in passing bills already approved by his committee. Another hurdle for a quick agreement on FY 2014 appropriations is the effort in the Senate, led by Senator Mike Lee (R-UT) and 13 others, to hold the appropriations process hostage
to a provision that would defund the Patient Protection and Affordable Care Act (PPACA). Neither Senate Minority Leader Mitch McConnell (R-KY) nor House Speaker John Boehner (R-OH) has indicated support for similar moves in either the Senate or the House. However, Speaker Boehner has told his members that he will support a series of targeted votes to take down various pieces of Obamacare, beginning with the measures passed last week (see below). With little prospect of either side budging from their budget positions over the recess, it appears that Congress is on track to pass one or more continuing resolutions (CRs) in September or beyond to keep the government open. Also, the debate over the recent slowdown in health care spending will likely cause congressional parties to take positions on whether and the extent to which further reforms are needed to curb spending under federal health programs. The White House Council of Economic Advisers (CEA) issued a report stating that health care prices rose just 1.1% in the 12 months ending in May, the slowest in nearly 50 years. The report said that structural changes may be driving a large part of the slowdown in price increases as well as utilization. However, at a Senate Budget Committee hearing at least one witness disagreed, stating that the recession was the biggest reason for the slowdown, and that spending may pick up as the economy improves. In a related move, 19 Democrat and Independent Senators sent a letter to the White House asking the Administration to “identify and announce a cost-savings target for health delivery system reforms that reduce federal spending.”

House E&C Committee Reports Medicare Physician Payment Reform Legislation

The House Energy and Commerce Committee voted 51-0 to report H.R. 2810, the Medicare Patient Access and Quality Improvement Act of 2013, which 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 mid-range level and a 1% decrease for scores below the mid-range level). As in the bill advanced by the Health Subcommittee, physician payments would increase by a fixed 0.5% during the 5-year phase-in period. The quality measures used to compare physicians with others in their subspecialty would be based on: care coordination; clinical care; patient experience; patient population; and safety. The U.S. Department of Health and Human Services (HHS) would also be required: to finalize the quality measures for the upcoming year by November 15 of each year; to develop codes for complex chronic care management services and a related fee schedule starting in 2015; give physicians feedback on their performance in meeting the quality measures at least quarterly; collect recommendations from professional groups on payment bundles for chronic care and costly, high-volume services; and expand access to Medicare data. Physicians would also be able to voluntarily leave the fee-for-service system and choose an alternative payment model that emphasizes efficient and quality care, such as: accountable care organizations (ACOs), bundled payment programs; or patient-centered medical homes.

Additional Health Legislation Advances

The House passed: H.R. 367, the Regulations From the Executive in Need of Scrutiny (REINS) Act, which includes an amendment by Rep. Jason Smith (R-MO) that requires any regulation issued under the PPACA to be approved by both the House and Senate before it becomes effective (in general, if both the Senate and House fail to pass a joint resolution approving any “major” regulation within 70 days the rule could not take effect; a major regulation is one that would have an annual economic impact of $100 million or more); H.R. 2009, the Keep the IRS Off Your Health Care Act, which prohibits the Treasury/IRS from participating in any activity related to implementation of the PPACA; and H.R. 2094, the School Access to Emergency Epinephrine Act, which amends the Public Health Service Act (PHSA) to increase the preference given, in awarding certain asthma-related grants, to certain states (those allowing trained school personnel to administer epinephrine and meeting other related requirements). Also, the House Committee on Energy and Commerce passed H.R. 698, legislation amending the PHSA to establish safeguards and standards of quality for research and transplantation of organs infected with human immunodeficiency virus (HIV). In addition, the House Committee on Veterans’ Affairs approved several bills, including: H.R. 813, legislation that would make discretionary programs under the Veterans Administration (VA) subject to advance appropriations beginning in FY 2016 and would require the Government Accountability Office (GAO) to submit annual reviews of the VA’s medical-care budget; H.R. 2072, legislation that would clarify VA accountability and give the agency authority to enter into contracts with medical foster homes to provide care for veterans; and H.R. 1443, legislation that would recognize tinnitus as a mandatory condition for research and treatment by the Department of Veterans Affairs Auditory Centers of Excellence.

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