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.


President Surprises With Entitlement Reform in FY 2014 Budget Recommendations

Although two-months late, the Obama administration is set to forward its fiscal year 2014 budget recommendations to Congress this Wednesday. Of note, the proposal is expected to eliminate the effects of the $1.2 trillion over ten-year cuts under the Budget Control Act (BCA) mandate and replace the across-the-board cuts with $1.8 billion in other deficit reduction measures. The White House said that Medicare spending will be reduced by about $400 billion by reducing provider reimbursements, increasing Medicare premiums and providing for the negotiation of drug discounts under Part D. Social Security cash benefits and possibly other federal pensions would see a trimming by switching from the current Consumer Price Index (CPI) to a “chained CPI” annual increase methodology, thus saving about $130 billion. The Administration let it be known that the overall spending and revenue increases, the latter amounting to about $680 billion, are a total tax/spending “cohesive package” and that congressional Republicans should not consider them just an opening hand with the revenue increases to be negotiated down or out. The Administration also said that Medicare “vouchers” would be a non-starter. Unlike the House Republican budget resolution which would bring federal spending into balance by 2023, the President’s proposal would bring the deficit down to about 1.7% of GDP at the end of the ten-year period. House Speaker John Boehner (R-OH) shot down the President’s plan, saying that “….at some point we need to solve our spending problem, and what the President has offered would leave us with a budget that never balances.” In related news, the House Ways and Means Committee announced that it will hold a series of hearings on entitlement reform, including such Medicare reforms as raising the eligibility age and making higher-income seniors pay more for their care.

Treasury to Help Community Health Centers

After receiving a $300 million increase and avoiding sequester cuts under the FY 2013 continuing resolution, community health centers are slated to receive additional support. The Department of Treasury’s Community Development Financial Institutions (CDFI) Fund has sponsored a partnership with a network of community development financial institutions, the Opportunity Finance Network, to find new sources of financing with the help of a non-profit adviser to allow CHCs to expand in medically underserved communities.

Upcoming Legislation to Expand Pediatric Research

House Majority Leader Eric (R-VA) announced that Reps. Tom Cole (R-OK) and Gregg Harper (R-MS) will soon be introducing legislation, the Kids First Research Act, which would direct about $100 million over ten years to increase pediatric research. The funding would be made budget neutral by eliminating the public funding of presidential campaigns.

Republicans Call on HHS for More PCIP Funding

At a House Energy and Commerce Subcommittee on Health hearing last week, Chairman Joe Pitts and other Republicans alluded to their support for high-risk pools, including the PPACA’s Pre-Existing Condition Insurance Plan (PCIP) program as the preferred means to help individuals having pre-existing conditions obtain health insurance coverage. Previously House Republicans called for the Department of Health and Human Services (HHS) to redirect other HHS funding to continue the funding of the PCIP program. HHS halted new enrollments under the program in the face of the limited $5 billion allotted to PCIP under the PPACA and the program’s termination in 2014 when state health insurance exchanges and the federal default exchange will take their place in covering individuals with pre-existing conditions. A witness from the American Enterprise Institute (AEI) testified that the PCIP program should be extended after this year as a back-stop to the possible failure of health insurance exchanges to meet the needs of those with pre-existing conditions.

Federal Enforcement of PPACA Market Reforms

The HHS Center for Consumer Information and Insurance Oversight (CCIIO) announced that the agency will enforce the PPACA’s market reforms, including pre-existing condition and rating rules, in the individual and small group markets in six states. The insurance authorities in Alabama, Arizona, Missouri, Oklahoma, Texas and Wyoming told CMS they lack the legal authority to regulate the federal law’s provisions. The federal regulation in Arizona is limited to the Preferred Provider Organizations (PPO) market. The federal rules and enforcement would likely be found to override any conflicting state authority with respect to the PPACA market reforms. HHS left the door open to regulatory collaboration with the state insurance departments even if they do not have enforcement authority.

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