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.


Biden Debt Reduction Talks Collapse, Setting Stage for Big Three Negotiations

Last week House Minority Leader Eric Cantor and Senate Minority Whip Jon Kyl walked out of the deficit reduction talks headed by Vice President Biden, thus ratcheting up the stakes for President Obama to reach a compromise on spending and revenue legislation that can lead to an increase in the federal debt limit in both the House and Senate.  House Speaker John Boehner said that any deal including “tax increases” will not pass muster in the House.  Meanwhile it appears that congressional Democrats have raised their negotiating leverage by demanding “revenue enhancements” be at least 25% of any package including spending reductions.  If the discussions between the President and Senate Majority Leader Harry Reid and Speaker Boehner reach an impasse the most likely result will be for Congress to pass a one or two-month debt ceiling increase to allow for negotiators to reach a longer term deficit reduction package which would “kick the can” beyond the 2012 elections.  Virginia Senator Mark Warner said he would release within two weeks the $4 trillion deficit reduction package that his abbreviated “Gang of Five” has been negotiating for months.  It appears that there is an undercurrent of bipartisan support in the Senate for such a longer-term solution to the federal debt problem which would help calm the financial markets.  However, a majority of Democrats are unlikely to sign onto a deal that would take on full-scale entitlement reform, including Medicare or Social Security, before the 2012 elections.  Thus, the President, Speaker Boehner and Senator Reid are likely to focus on achieving agreement on a two year package of $2.4 trillion in deficit reductions which can pass before the new fiscal year begins this October.  During hearings on federal health program issues last week, it appears that Democrats, led by Senate Finance Committee Chairman Max Baucus, may be open to some easing of the PPACA’s Medicaid “state maintenance-of-effort requirements” which have been demanded by Republicans and many governors.  Although such changes may not amount to major reductions in the federal deficit, inclusion of MOE changes, along the lines of Senator Orrin Hatch’s bill (S. 868), in a deficit reduction package could add grease to congressional Republican acceptance of a two-year debt ceiling increase.  Senator Baucus also indicated that Medicare changes may be necessary for the solvency of the program, but that such changes should not come “at the expense of beneficiaries.”

New PPACA Claims Appeals Rules Delayed Until Next Year

HHS/DOL/Treasury issued an amendment to the agencies’ interim final rule spelling out terms for plan internal and external claims appeal and review standards.  They said that “non-grandfathered” plans will have until January 2012 to conform with the new rules, thus giving states more time to enact changes that would apply to health insurance issuers.  Under the new rules, the time limit for completing reviews was extended to 60 days from 45 days while beneficiaries would have only two months rather than four months to file complaints.

June 27, 2011: | Page 1 Page 2 Page 3



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