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.


Budget Impasse Bleeds into Deadline to Increase Federal Debt Limit

October 17, just ten days from today, is the date that Treasury Secretary Jack Lew has set as the deadline the Administration says the current federal limit of $16.669 trillion will be reached. He said Republicans are “playing with fire” if the debt ceiling is not raised and that, lacking congressional action, the nation’s creditworthiness will be jeopardized resulting in another recession. It was clear after last week’s meeting at the White House between President Obama and the top House and Senate leaders that the President had not moved off his position that the fiscal year (FY) 2014 appropriations measure move forward without conditions, i.e. repeal of Patient Protection and Affordable Care Act (PPACA) related provisions, and that the debt limit also be increased without additional extraneous matters. Nonetheless, the House passed another continuing resolution (CR), House Joint Resolution 59, which limited the changes to the health law to a one-year delay in the individual mandate and mandated non-subsidized exchange coverage for the President, Vice President, members of congress and leadership/committee staff and which also requested a conference with the Senate. The refusal of the President and Senate Democrats to negotiate over the CR and House Republicans to pass a “clean” CR resulted in the federal government shutdown beginning last Tuesday. The stalemate did not recede over the weekend, thus setting up a very contentious session when Congress returns at noon today. House Republicans did attempt to persuade the public that their intent was not to shut down the federal government by passing a series of bills to fund certain critical parts of the government, including pay for the military (which was enacted). However, Senate Majority Leader Harry Reid (D-NV) stated his and other Democrat leader's opposition to taking up agency specific appropriations considered in the House, including the following health-related measures: H.J.Res.72, the Veterans Benefits Continuing Appropriations Resolution for FY 2014 (passed); H.J. Res. 73 which would fund the National Institutes of Health (NIH) at current levels for FY 2014 (passed); and H.J. Res. 77 which would fund the Food and Drug Administration (FDA) at current levels for FY 2014 (passed rule to allow floor consideration sometime this week). The press of the debt limit deadline has moved the discussion among a number of House Republicans from one of merely passing the FY 2014 CR focusing on putting a dent in PPACA to one of how to address both the CR and debt limit, perhaps as one omnibus measure. House Budget Committee Chairman Paul Ryan (R-WI) is reportedly readying a measure that would condition the House debt ceiling bill with a “down payment” on reforms to entitlement spending (e.g. Social Security and Medicare) and a commitment to tax reform (together with, perhaps, some fee-based revenue increases). It is possible that the House budget initiative may result in alleviating the effects of sequestration by introducing offsets in long-term entitlement spending, particularly given pressure from the House Committee on Armed Services to ease the cuts scheduled for defense and to substitute annual spending increases of about 2%. Senator Orrin Hatch (R-UT) and other Senate Finance Committee Republicans also weighed into the debt ceiling debate in a letter to the Treasury Secretary that focuses on encouraging the enactment of “meaningful” reforms to federal health spending which is projected to far exceed economic growth. Although the Senate has resisted a CR laden with changes to the PPACA, there appears to be growing sentiment among some House and Senate Democrats to consider a repeal of the PPACA’s tax on medical devices as the debt ceiling deadline looms closer. As the shutdown continues, Health and Human Services (HHS) agencies have been forced to curtail their activities: e.g. the FDA will halt most laboratory research programs, some compliance and enforcement activities and routine inspections of some industry establishments; the Centers for Disease Control and Prevention (CDC) will halt its assistance programs for state and local health programs and suspend its annual seasonal influenza program; the Health Resources and Services Administration (HRSA) will delay the quarterly registration period for providers and pharmacies and halt payments for the Children’s Hospitals Graduate Medical Education Program; the NIH will stop accepting new patients in the agency’s clinical trials; and Medicare websites will not be updated, although mandatory Medicare and PPACA programs and payments will continue relatively unaffected due to funding outside the annual appropriations process. If the House-passed measure to pay all federal employees retroactively is enacted, it is possible that federal operations could soon be restored.

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