Republican Senators Susan Collins and Olympia Snowe provided crucial votes for the majority, enabling them to suspend debate and ultimately win passage on the amended bill. The Congressional Budget Office scored the bill as being deficit-neutral over the ten year window in part to a number of revenue-raising provisions including cuts in the food stamp program and international tax credits, as well as recessions to a wide variety of other programs. Although many of these cuts drew criticism, the bill is being praised by many states that are desperately in need of the Medicaid funds.

In wake of the Senate’s passage of the bill, House Democratic leadership announced that it would be calling members back into session this week in order to consider the legislation. House Majority Leader Steny Hoyer announced that the House will meet in pro forma session today and again at 10 a.m. on Tuesday to “vote on the bill and send it to the president for his signature.” Although many members may be reluctant to vote for another spending measure in such proximity to the upcoming elections, the fact that both of the major provisions in the bill have already been passed through the House on two separate occasions bodes well for its chances this time around.

After the final vote on the Medicaid bill, the Senate was also able to achieve passage of Senator Blanche Lincoln’s bill to reauthorize federal children’s nutrition programs, as well as a prescription drug disposal bill. Senators are scheduled to return to Washington on September 13, and will begin consideration of competing amendments to a small business bill soon thereafter. The amendments, offered by Senators Mike Johanns and Bill Nelson, would adjust IRS vendor-purchase tax reporting requirements included in the health care overhaul law. In addition, the Johanns amendment would eliminate a preventive care trust fund and decrease the requirements for mandatory health coverage beginning in 2014.

Last week also saw the release of the annual Medicare and Social Security Trustees Report, which depicted an overly optimistic view of the future of Medicare, although the validity of that report has been questioned given that the authors were all members of the current administration.

State challenges to the health care reform law also received a boost last week as a federal court rejected the administration’s request to dismiss the Virginia lawsuit questioning the law’s constitutionality. Additionally, voters in Missouri overwhelmingly supported a measure to repeal the individual mandate created in the reform law, becoming the first state to overturn a central element of the law. This could be the first in a string of such actions taken by individual states in the coming months, as there continues to be growing anxiety over the implementation of state-based insurance exchanges.

Several members of the Committee voiced their concern that multi-campus hospitals are not eligible for seperate electronic health record (EHR) incentive payments for each qualifying hospital. 

Mr. Tony Trenkle, Director of the Office of E-Health Standards and Services at the Centers for Medicare & Medicaid Services (CMS), addressed the interest from stakeholders that CMS accommodate multi-campus hospitals with a single CMS Certification Number (CCN) to allow each campus within the hospital to receive a separate EHR incentive payment. He stated that CMS carefully reviewed the comments and met with interested stakeholders, including the two largest hospital associations, the American Hospital Association and the Federation of American Hospitals, to hear their concerns with the policy described in the proposed rule. Taking this input as well as the legislative language of the Recovery Act into account, Mr. Trenkle explained that CMS came to the conclusion in its Final Rule that historically, a subsection (d) hospital has been treated as an entire institution and not each campus that is under the CCN.  Therefore, he stated that allowing each campus of one hospital to be considered its own hospital for purposes of EHR incentive payments, but not for other purposes, would inappropriately distinguish EHR incentives from other payment and program participation policies without clear statutory direction to do so.  To avoid this inconsistent treatment, Mr. Trenkle confirmed that CMS must have a consistent definition of a hospital for all policies, including EHR incentive payments, unless otherwise specified by law.  Finally, he noted that more specificity for future stages of meaningful use would be given in subsequent rulemakings.

The multi-campus hospital issue was discussed by several members, both Republicans and Democrats, of the House Energy and Commerce Committee.  Rep. Zach Space (D-OH) stated that numerous hospitals are going to be impacted by the multi-campus hospital regulation, and he specifically noted that the largest hospital in his district stands to lose about $2 million.  He inquired whether it will make it more difficult to adopt the very technology that the law is designed to promote.  Mr. Trenkle stated that the decision is based on existing policy and the provider number is based on how a hospital chooses to organize itself, consistent with the payment policy in other Medicare programs.  He explained that absent clear statutory intent, CMS does not intend to change, but the agency is committed to working with Congress. 

In response, Rep. Space introduced a bill (H.R. 6072), co-sponsored with a group of thirty bipartisan Members, including Committee Chairman Henry Waxman (D-CA), Rep. Michael Burgess (R-GA), Rep. Marsha Blackburn (R-TN), and Health Subcommittee Chairman Frank Pallone (D-NJ) that clarifies the eligibility for all qualified hospitals that are part of a larger multi-campus hospital system with one CMS provider number.   The legislation was referred to the House Ways and Means Committee and the Energy and Commerce Committee.  The American Hospital Association voiced strong support for the bill.

Dr. Zawistowich most recently served as the Acting Deputy Director of the Office of Consumer Information and Insurance Oversight at the Department of Health and Human Services. She previously worked at the Centers for Medicare and Medicaid Services as well as at the Maryland State Department of Health and Mental Hygiene. 

On July 21, Democratic Rep. Lynn Woolsey introduced H.R. 5808 to amend the Affordable Care Act (ACA) to include a public plan option. The Congressional Budget Office CBO issued a letter to House Ways and Means Health Subcommittee Chairman Pete Stark noting that the bill would reduce the budget deficit by $53 billion over 10 years. The letter also states that the cost of insurance under a public plan option would be 5-7 percent lower on average. 

Including a public plan option in health care reform legislation was a controversial issue that did not ultimately have traction in the Senate’s Patient Protection and Affordable Care Act. The House-passed health care reform bill included a public plan option.  The rates under the Affordable Health Care for America Act would be negotiated and could not be less than Medicare rates, but not higher than the average rates of other health benefit plans. Rep. Woolsey’s legislation would set reimbursement rates under the public plan option as equal to Medicare plus 5 percent. Although the legislation has 128 co-sponsors, the House is unlikely to move the bill during this session of Congress. 

The National Association of Insurance Commissioners convened last week to develop a recommendation to HHS regarding the definition of medical loss ratio, which would serve determine the types of insurance spending that should count as medical spending. NAIC was charged with this role in the Affordable Care Act, which requires large group health insurance plans to spend 85 percent of premium dollars on clinical services and activities related to quality of care. The NAIC hopes to present a recommendation to HHS by mid to late August; although, its work could continue into September. Secretary Kathleen Sebelius must certify the Commissioners work. NAIC has also been tasked with developing standard insurance benefits and enrollment forms and regulations for the state-based exchanges.

Last week, the White House announced President Obama’s recess appointment of Donald Berwick as CMS Administrator. Dr. Berwick is a pediatrician and professor at Harvard University and the founder the Institute for Healthcare Improvement. He launched the“100,000 Lives” campaign to reduce the number of deaths attributable to medical errors in hospitals. He has previously served as Vice Chair of the U.S. Preventive Task Force, member of the Board of Trustees of the American Hospital Association, Chair of the National Advisory Council of AHRQ. Dr. Berwick was sworn in on July 12.   

The Constitution provides an exception to the Senate confirmation process for nominations. When the Senate is in recess, the President may make a temporary appointment known as a “recess appointment” without Senate approval. President Obama is making the appointment during a recess in the middle of a session, so Dr. Berwick’s appointment will expire at the end of the following session or at the end of the first session of the 112^th Congress. President Obama has made 15 recess appointments, not including Donald Berwick.

Senate Minority Leader Mitch McConnell, along with Republican Senators John Barrasso, Pat Roberts and Tom Coburn have objected to President Obama’s move noting that confirmation hearings had not been scheduled to allow for consideration of the nominee. Senate Finance Committee staff have responded to the announcement noting that Republicans have urged Leadership to expedite Dr. Berwick’s confirmation hearing and hold his hearing before Supreme Court Justice nominee Elena Kagan’s hearing.    

Republicans on the Senate Finance Committee sent a letter to Chairman Baucus requesting a hearing on the appointment of Dr. Berwick. The letter requests a chance for Dr. Berwick “to present his qualifications for the position in the usual process” so as not to create “a shadow over his legitimacy and authority to serve as Administrator during a critical time for CMS.”  Republican members of the House Ways and Means Committee also urged a hearing with Dr. Berwick.

The Office of Management and Director Peter Orszag has announced that his last day at his post will be July 30.  President Obama announced that he will appoint Jack Lew as the new OMB Director. Mr. Lew currently serves as an aide to Secretary of State Hillary Clinton and previously worked as the budget director for former President Bill Clinton. Given the current budget deficit, the new OMB Director will certainly continue the focus on reducing the deficit.         

The Chairmen of the National Commission on Fiscal Responsibility, former Republican Senator Alan Simpson of Wyoming and Erskin Bowles, former chief of staff to President Bill Clinton, spoke to the National Governor’s Association and relayed that Congress must examine any and all proposals to contain entitlement programs, particularly Medicare and Medicaid. The Commission is required to develop a plan by December 1 to reduce the deficit. 

Prior to the August recess, the Senate is expected to consider the “Small Business Lending Fund Act” (H.R. 5297), which was introduced by Rep. Barney Frank (D-MA) to address the impact of the financial crisis on small businesses. The Senate will also consider the House-amended war supplementing spending bill before it adjourns. The House amended the Senate-passed bill to include Senator Herb Kohl’s (D-WI) legislation, the “Preserve Access to Affordable Generics Act,” which would ban agreements between brand name and generic drug manufacturers. Senator Kohl has called such agreements “one of the most egregious tactics used to keep generic competitors off the market leaving consumers with unnecessarily high drug prices.” The Generic Pharmaceutical Association, however, expressed opposition to the amendment noting that such agreements have, at times, allowed generic drugs to come to market before the patents of the name brand drugs expire.

HHS Secretary Kathleen Sebelius stated the regulations move Americans toward a 21^stcentury health care system with patients and doctors regaining control.  Dr. Donald Berwick, new Administrator of the Centers for Medicare and Medicaid Services (CMS), stated that EHRs are the future of health care and it will bring tremendous benefits to ensure patient safety, reduce costs and improve access.  Dr. Richard Blumenthal, Director of the Office of the National Coordinator for Health Information Technology (ONC), explained that in his practice as a primary care physician he saw how the use of EHRs prevented tragic errors in providing prescription drugs and duplicating x-rays.  He noted while they may be small victories, but if spread across the health care system, it would greatly bend the cost curve down.

In an HHS press release, the following key changes in the final rules were noted:

• Greater flexibility for eligible professionals (EPs) and hospitals in meeting and reporting certain objectives for demonstrating meaningful use;
• An objective of providing condition-specific patient education resources for both EPs and eligible hospitals and the objective of recording advance directives for eligible hospitals;
• A definition of a hospital-based EP is one who performs substantially all of his or her services in an inpatient hospital setting or emergency room only; and
• Critical Access Hospitals (CAHs) are within the definition of acute care hospital for the purpose of incentive program eligibility under Medicaid.

Dr. Blumenthal also noted that overall achievement levels were reduced, for example, EPs will only have to electronically prescribe 40 percent of medications, down from 75 percent in the proposed rule.

Dr. Berwick is a pediatrician and professor at Harvard University and the founder of the Institute for Healthcare Improvement. He launched the “100,000 Lives” campaign to reduce the number of deaths attributable to medical errors in hospitals.  He has previously served as Vice Chair of the U.S. Preventive Services Task Force, a member of the Board of Trustees of the American Hospital Association, and Chair of the National Advisory Council of the Agency for Healthcare Research and Quality (AHRQ).

The Constitution provides an exception to the Senate confirmation process for nominations. When the Senate is in recess, the President may make a temporary appointment known as a “recess appointment” without Senate approval. President Obama is making the appointment during a recess in the middle of a session, so Dr. Berwick’s appointment will expire at the end of the following session or at the end of the first session of the 112^th Congress. 

President Obama has made 15 recess appointments, not including Dr. Berwick.

Senate Minority Leader Mitch McConnell (R-KY), along with Senators John Barrasso (R-WY), Pat Roberts (R-KS) and Tom Coburn (R-OK), objected to President Obama’s move and noted that confirmation hearings were not scheduled to allow for consideration of the nominee. Senate Finance Committee staff responded that Republicans have urged Leadership to expedite Dr. Berwick’s confirmation hearing and hold it before Supreme Court Justice nominee Elena Kagan’s hearing.

The House amended and passed a Senate-approved war supplementing spending bill before it adjourned. The House amended the bill to include Senator Herb Kohl’s legislation, the “Preserve Access to Affordable Generics Act,” which would ban agreements between brand name and generic drug manufacturers. Senator Kohl has called such agreements “one of the most egregious tactics used to keep generic competitors off the market leaving consumers with unnecessarily high drug prices.” The Generic Pharmaceutical Association, however, expressed opposition to the amendment noting that such agreements have, at times, allowed generic drugs to come to market before the patents of the name brand drugs expire.

Last week, the Centers for Medicare and Medicaid Services released the 2011 Physician Fee Schedule Proposed Rule. CMS estimated that without Congressional action, physician payments would be cut by 23 percent beginning on December 1 and reduced by an additional 6.1 percent beginning January 1, 2011. Congress is almost certain to have a lame duck session in which Members will pass another short-term SGR fix.

If you missed the Capital Thinking Radio Show with Kevin O’Neill last week, listen to the podcast on demand. 

Join us as we examine the hurdles of turning the new health care bill into a reality with advocacy leaders John Jonas and Julie Black.

On June 24, the House passed the “Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010,” which will increase Medicare reimbursement to physicians by 2.2 percent through November 30, 2010.  President Obama signed the legislation into law on June 25.  Amy Hall, Director of the Office of Legislation at the Centers for Medicare and Medicaid Services (CMS) issued a notice to Hill staff explaining that Medicare physician “claims containing June 2010 dates of services which have been paid at the negative update rates will be reprocessed as soon as possible.”  The notification indicated that contractors have been instructed to stop processing claims with the 21 percent cut and to hold claims for services provided in June until the 2.2 percent update is loaded into the claims processing systems.      

After eight weeks of consideration of various versions of the “American Jobs and Closing Tax Loopholes Act of 2010” (H.R. 4213) that would extend the Medicaid FMAP funding increase, COBRA insurance, and unemployment benefits, the Senate continues to be in a holding pattern.  Senate Majority Leader Harry Reid most recently failed to get 60 Senators to support cloture on June 24.  Senator Ben Nelson voted with Republicans to block the measure.   The majority has not signaled whether it will try to pass another version this week, but it is the last week Congress is in session before the week-long July 4^th recess.

HHS has two major deadlines mandated by the health reform law, the Affordable Care Act, this week – the Department must establish high-risk pools and launch a health insurance web portal by July 1.  Thirty-one states have agreed to run their own high-risk pools, while 20 states will have pools administered by the federal government.

This week the House Education and Labor Committee will hold a hearing on H.R.5504, the “Improving Nutrition for America’s Children Act.”  The bipartisan bill aims to improve the meals children eat both in and out of schools, as well as support community efforts to reduce childhood hunger.  Additionally, the legislation establishes nutrition standards for all foods sold in schools.  The Senate Agriculture Committee has already marked-up its version of a child nutrition reauthorization bill, which awaits floor time.