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.


Omnibus FY 2012 Appropriations Package

House and Senate appropriators are finalizing negotiations on a $900 billion omnibus FY 2012 spending bill which will use the Military Construction/VA appropriations measure, H.R. 2055, as the legislative vehicle.  It appears that the perennial stalemate over the Labor/HHS/Education provisions may lead negotiators to include another temporary extension of current spending for these agencies.  Pending agreement on the package, the House is expected to take up the measure this week, given that the current CR expires on December 18th.  If negotiations stall, another week-long CR will likely be passed.

Showdown Over Legislation to End Congressional Session

The Senate has repeatedly rejected several versions of the President’s demand to extend unemployment benefits and the current 2% Social Security payroll tax cut, along with Democrat proposals to pay for the extensions by taxing high income earners.  In response, on Monday the House Rules Committee will hear testimony on H.R. 3630, the Republican version of the end-of-year legislative wrap-up intended to give physicians a reprieve from the 27.4% reduction in 2012 Medicare payments and to extend unemployment benefits (but also gradually reducing the maximum weeks of benefits from 99 to 59 weeks) and the payroll tax cut for one year.  The “Middle Class Tax Relief and Job Creation Act of 2011” (see Appendix I for Speaker Boehner’s partisan explanation) introduced by House Ways and Means Chairman Dave Camp would also:

  • provide a two-year “doc fix” by increasing Medicare physician payments by 1% for each of 2012-13 (at a cost of $38.9 billion over ten years);
  • extend through 2012 the current floor used in calculating the portion of Medicare physician payments that takes into account the geographic areas where doctors practice (at a cost of $500 million over ten years for 54 of 89 geographic regions);
  • extend expiring Medicare payment provisions, including for hospitals, nursing homes and ambulance services (at a cost of $2.8 billion over ten years);
  • extend the patient therapy caps exception process through 2013 and extend it to the hospital outpatient department setting (at a cost of $1.7 billion over 10 years);
  • allow physician-owned hospitals that were under construction but did not have Medicare provider numbers as of December 1, 2010 to open and operate under the whole hospital exemption to the Stark antitrust laws (at a cost of $300 million over 10 years);
  • accelerate a decision on the Keystone XL energy pipeline, requiring, within 60 days, for the permit to be granted unless the President determines the project is not in the national interest;
  • extend 100% business expensing through 2012;
  • implement the EPA Regulatory Relief Act (H.R. 2250) and provisions of the Jumpstarting Opportunity with Broadband Spectrum (JOBS) Act; and
  • extend the $16.5 billion TANF block grant at its current funding levels through FY 2012 along with several reforms. 

The $200 billion ten year cost of the legislation would be partially offset from savings under Medicare, Medicaid and the PPACA as follows:
  • repeal $8 billion in PPACA mandatory funding from the “prevention and public health fund”;
  • require greater repayment of improper taxpayer-funded subsidies under the PPACA ($13.4 billion in savings);
  • gradually increase Medicare premiums for high-income beneficiaries beginning in 2017 ($31 billion in savings); 
  • reduce Medicare payments to hospital outpatient departments for evaluation and management services to the level paid for the services delivered in physician offices($6.8 billion in savings);
  • reduce from 70% to 55% the amount of patient bad debt hospitals can be reimbursed by Medicare ($10.6 billion in savings); and
  • cut Medicaid disproportionate share hospital payments ($4.1 billion in savings). 

Other cost offsets include, among other things:
  • extending the federal pay freeze and changing the co-pay structure for retirees;
  • coordinating with states to prevent Social Security overpayments; and
  • prohibiting millionaires from receiving unemployment and food stamps, among other things. 

The President said he would not agree to legislation containing the provision which includes the Keystone XL energy pipeline mandate.  Also, Senate Majority Leader Harry Reid was quick to discount the House move, stating that “If the House sends us their bill with Keystone in it, they are just wasting valuable time because it will not pass the Senate.”  If this proves to be the case, Speaker Boehner’s plan to adjourn by December 16 or 18 will go by the wayside and extend the current session of Congress for another week or even beyond Christmas.

Other Legislative Action
Last week the House passed H.R. 2405, legislation to reauthorize and revise provisions in the Pandemic and All-Hazards Preparedness Act and the Project BioShield Act of 2004 that provide those protections.  Under the legislation, HHS would be able to utilize up to 30% of the funding allocated for the Project BioShield Special Reserve Fund for medical countermeasures in the event of the various threats.  The bill would also allow the FDA to authorize the use of unapproved medical products to avoid public health emergencies and reauthorize additional public health preparedness programs, such as influenza vaccine tracking and the Medical Reserve Corps.  In addition, the House passed H.R. 1254, the Synthetic Drug Control Act, which amends the Controlled Substances Act to add as schedule I controlled substances, among other things, any material, compound, mixture, or preparation which contains cannabimimetic agents.  The House also passed H.R. 10, the Regulations From the Executive in Need of Scrutiny (REINS) Act of 2011, which would give Congress the final say on whether “major” regulations (with an economic impact over $100 million) could go into effect.  This week the House is expected to consider H.R. 1540, the National Defense Authorization Act for Fiscal Year 2012 which includes authorization provisions for military health programs.

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