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.


Will Congress Give a Last Minute Push to Avoid Fiscal Cliff?

The President and House Speaker John Boehner were unable to come up with a compromise last week on fiscal matters and the Speaker resorted to a maneuver in the House to present the Senate with legislation to alter the sequestration math and to give a nod (so-called “Plan B”) to the President’s demand to raise taxes on high-income individuals.  

On a 215-209 vote, the House did pass H.R. 6684, the Spending Reduction Act of 2012, which in general would replace the Budget Control Act (BCA) mandated spending cuts with other cuts to raise about $200 billion in savings over ten years.  The bill would leave in place the 2% cut in Medicare spending beginning in 2013 as well as the BCA’s level of cuts to NIH and various other programs.  Among other things (see Appendix), the legislation includes a reduction from 6% to 5.5% in the cap on taxes states can levy on Medicaid providers and certain medical malpractice claim limitations.  

Upon passage of H.R. 6684, the House turned to H.J. Res. 66, Speaker Boehner’s “Plan B” legislation which would allow income tax rates to rise on those with annual income of $1 million or more.  The White House issued a statement that the President would veto this bill absent a final agreement on taxes and spending while Senate Majority Leader Harry Reid said he would not take up the bill in that body.  The House recessed until December 27th after it became apparent there were not enough Republican votes to pass the bill.  Speaker Boehner said the Democrats’ plan “is to slow-walk us over the fiscal cliff….’  He also said that it is now up to the President to work with Senate Majority Leader Reid to develop legislation to avert the fiscal cliff.  

In an indication that negotiations may not be over, on Friday the President said he spoke with both the Speaker and the Senate Majority Leader and called on them to develop a proposal “in the next few days” to prevent a tax increase on middle class Americans and to extend unemployment insurance for two million Americans.  Because the number of Republican votes in the House remains uncertain for any particular deal, it is possible that Senate Democrats and Republicans may attempt to gather the 60 votes necessary to pass a compromise and force the Speaker to take up the legislation and pass it with both Republican and Democrat votes, or be blamed for leading the country over the fiscal cliff.  With few legislative days left in the session, it is also possible that Congress could kick the can into the early weeks of next year.

Medicare Physician Payment Cut Caught in Fiscal Cliff Crosshairs

The lack of an agreement on fiscal matters has left the Centers for Medicare and Medicaid Services (CMS) in a bind as to what actions to take on the impending 26.5% cut in Medicare physician payments beginning in January.  CMS sent a notice to physicians on December 19th stating that, in the absence of legislative action, the agency can hold claims for 14 days pending any congressional action to avoid the cuts.  CMS said another notice will be forthcoming before January 11th with an update on congressional and agency actions.  Although the House Ways and Means Committee is considering a stand-alone bill to avoid the cut, it is uncertain how that bill will fare if, as expected, the cuts are offset by other federal health program spending reductions.  Apparently the budget deal proposed by the President would have provided for a one-year “doc fix” for 2013 and a promise to adopt a permanent fix as part of further negotiations on a grand fiscal bargain next year.

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