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.


The Budget Noose Tightens

The President delivers his State of the Union Address this Tuesday and the Administration will release the President’s FY 2013 budget recommendations on February 6th.

The next budget year spending totals are capped at $1.047 trillion pursuant to the Budget Control Act (BCA), thus laying the groundwork for a partisan fight over spending priorities, particularly over the implementation of the PPACA and spending levels under other federal health programs.  If the FY 2013 appropriations bills are delayed beyond the November election season, any resolution of spending in the new fiscal year during a lame-duck session will be heavily influenced by the results of the Presidential election and whether the House and/or Senate change parties.  The mandated sequestration of $1.2 trillion in defense and non-defense spending mandated under the BCA to begin in January 2013 will hang heavy over any budget compromise prior to the election.  If Congress resorts to passing just a continuing resolution into 2013, the BCA mandates could catapult severe spending cuts into the early months of next year.  However, Medicaid is exempted from the sequestration and Medicare cuts are limited to 2% of program spending.  Although the federal debt ceiling will be raised $1.2 trillion as requested by the President in accordance with the BCA, despite the 239-176 vote by the House last week to disapprove of the increase, an unexpected decrease in federal revenues this year could again bring this issue into focus later this year or early next year. 

The first order of business for Congress is to negotiate a compromise on extending the payroll tax cuts and “doc fix” in their conference on H.R.3630, the Middle Class Tax Cut Act of 2011.  The House/Senate conferees are expected to meet publicly on Tuesday to discuss the method, payfors and period over which to extend the current Medicare physician payment basis which expires at the end of February.  Democrats are hopeful a bi-partisan deal can be struck and enacted by mid-February.  With the push-back to avoid payfors coming from non-physician provider groups, it is likely that the doc fix will not be extended over much more than one-year.

PPACA Exchanges Make Progress

The White House issued a report, 2012 Progress Report: States Are Implementing Health Reform, stating that all states have taken some action toward implementing state health insurance exchanges with 28 states closing in on full implementation before the 2014 effective date.  The report also summarized the actions that 44 states have taken to review premium rates for “excessive” increases.  HHS has granted $730 million in PPACA funding to help 49 states to establish their own state-run exchanges.  States that do not meet the PPACA guidelines will forfeit their rights, and HHS will step in with federally-facilitated exchanges with respect to which HHS is developing IT and operational processes.

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