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.


House Passes Legislation to Delay PPACA Individual Mandate/SGR Reform Consideration

The House voted 250-160 (with 27 Democrats voting aye) to pass H.R. 4118, legislation that would delay until 2015 the Patient Protection and Affordable Care Act’s (PPACA) penalty under the tax code for a failure to obtain minimum health insurance coverage. The President quickly threatened to veto the bill if passed by the Senate. Of note the Congressional Budget Office (CBO) released a cost estimate of the legislation which said the measure would reduce spending by $9.4 billion over ten years (2014-2024) because the resulting lower enrollment of about 1 million persons would shrink the amount of PPACA individual subsidies granted over the ten year period. Majority Leader Cantor (R-VA) also announced that the House of Representatives will take up H.R. 4015, the “SGR Repeal and Medicare Provider Payment Modernization Act of 2014,” on Wednesday or later in the week. House Republicans are considering pairing the SGR bill with the revenue generated by delaying the individual mandate. The CBO estimates that the SGR legislation will cost $138.4 billion over ten years (2014-2024). The Senate has yet to indicate how it will offset the cost of the SGR bill, but new Senate Finance Committee Chairman Ron Wyden (D-OR) publicly stated that he has not ruled out payment cuts to hospitals as a means to offset the cost of reform. Also, on Tuesday the House will take up under suspension H.R. 1814, the “Equitable Access to Care and Health (EACH) Act” and will later take up H.R. 3973, the “Faithful Execution of the Law Act of 2014” and H.R. 4138, the “ENFORCE the Law Act of 2014.”

President Obama's Budget Would Reduce HHS Spending

During several committee hearings held to review the Administration’s $3.901 trillion budget recommendations for fiscal year (FY) 2015 and beyond, Republicans called the measure “Dead on Arrival”. Senator Orrin Hatch (R-UT) said that the proposal “fails to include any substantial reforms to the greatest driver of our debt: Medicare, Medicaid and Social Security.” The U.S. Department of Health and Human Services (HHS) discretionary spending would amount to about $77.1 billion, a reduction of $1.3 billion from FY 2014, a total that HHS Secretary Kathleen Sebelius said was “written to the target” spending under the Bipartisan Budget Act of 2013. Several changes to health programs are estimated to save $400 billion over ten years. Among the proposed changes to achieve Medicare savings: $52.8 billion by increasing premiums under Medicare Part B and Part D for higher-income beneficiaries; $6.8 billion by reducing reimbursements for Part B drugs from 106% of ASP to 103%; $117.3 billion by aligning Medicare drug payment policies with Medicaid drug rebate policies for low-income beneficiaries; $97.9 billion by reducing the market-basket updates for inpatient rehabilitation facilities (IRF), long term care hospitals (LTCH) and home health agencies (HHA) by 1.1%; $720 million by prohibiting critical access hospital (CAH) designation for facilities that are less than 10 miles from the nearest hospital; $14.6 billion by reducing payments for graduate medical education (GME) by 10% and giving HHS the authority to set standards for teaching hospitals to encourage the training of primary care residents. Also, $12.9 billion would be saved by lowering the target rate that triggers recommendation savings from the Independent Payment Advisory Board (IPAB). Among the proposed changes over ten years to achieve Medicaid and Children’s Health Insurance Program (CHIP) savings: $5.4 billion by extending the FY 2014 boost in primary care physician reimbursements through calendar year (CY) 2015; $770 million by permanently extending “express lane” eligibility for children applying for CHIP; $1.6 billion by extending transitional medical assistance for newly employed Medicaid enrollees through CY 2015; $3.1 billion by providing home and community based services to children and youths eligible for psychiatric residential treatment facilities; and $3.3 billion by rebasing future disproportionate share hospital (DSH) allotments after 2023.

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