TRP Health Policy Report
December 8, 2014
Last Thursday, the House voted to bar the executive branch from deferring the deportation of undocumented workers, taking its first direct action against President Obama’s executive actions on immigration. The 219-197 vote was largely symbolic, as Senate Majority Leader Harry Reid (D-NV) has said he won't take up the bill (H.R. 5759) and the White House has threatened a veto. The vote was intended to help Speaker John Boehner (R-OH) move a bill this week that would fund most of the government through next September and avoid a government shutdown. Also on Thursday, the House approved a $585 billion National Defense Authorization Act (NDAA) bill in a 300-119 vote. The legislation (H.R. 3979) now heads to the Senate, where it is expected to be approved before the lame-duck session adjourns on Friday.
Last Wednesday, the House approved a one-year renewal of more than 50 tax breaks that expired at the end of 2013, putting the measure on a path toward President Obama's desk. Passed 378-46, the measure (H.R. 5771) would extend nearly all of the tax breaks until the end of this year, at a cost of almost $42 billion. House members also approved a series of suspension bills and voted 404-17 to pass a measure (the “ABLE” Act, H.R. 647) that would create tax-free savings accounts for people with disabilities. Despite designs on passing a Defense reauthorization, a tax extenders package, and a government funding bill, the Senate spent the week approving more of President Obama’s executive and judicial nominations. With Republicans taking control of the chamber in January, Senate Democrats are working to clear as many of the President’s nominees as possible before the end of the year.
The Week Ahead
This week, the House and Senate will look to wrap up the 113th Congress with a vote to fund most of the government through September 2015. Lawmakers face a December 11 deadline to pass a spending bill or risk a repeat of last year’s government shutdown. To pass the measure, House GOP leaders may need some Democratic votes, partly because a bloc of conservative Republicans is unhappy that the spending bill does not do enough to stop President Obama from shielding millions of undocumented immigrants from deportations. Along with the government funding bill, the Senate will look to complete work on a $577.1 billion defense authorization bill (H.R. 3979). Also on the Senate to-do list is a tax-extenders bill (H.R. 5771) passed by the House last week. In the House, legislators will also take-up a California drought-relief bill (H.R. 5781). Both chambers also hope to finish work on a bill extending terrorism risk insurance. Off the floor, MIT professor Jonathan Gruber, who served as a consultant during the creation of the Affordable Care Act (ACA), will appear before the House Oversight Committee Tuesday morning to discuss his controversial comments about the formation of the health law.
CMS: 2013 Health Spending Grew at Slowest Rate Since 1960
According to a report released by CMS last Wednesday, healthcare spending in 2013 grew by 3.6% – the slowest rate since 1960. The figures represent good news for the Obama Administration in its effort to contain the growth of healthcare costs, though experts disagreed on how much the ACA has played a role. Total medical expenditures in the U.S. reached $2.9 trillion last year, the CMS said in its annual report. The 3.6 percent spending growth for 2013 tracks a CMS estimate from September and is 0.5 percentage point lower than 2012. The total share of the economy devoted to health remained largely the same, at 17.4 percent, while health spending per person was $9,255, up from $8,915 in 2012, the report found. Affordable Care Act supporters were quick to tie the trend to the law's reforms, while actuaries say the relationship between economic growth and health spending is the leading factor.
The report found that spending slowed for private health insurance, Medicare, hospitals, physicians and clinical services and out-of-pocket spending by consumers. However, it accelerated for Medicaid and for prescription drugs, according to the report, published online by the journal Health Affairs. The study found that healthcare spending has grown at historically low rates for the past five years, which is consistent with declines generally seen during economic downturns. Looking ahead, “the key question is whether health spending growth will accelerate once economic conditions improve significantly; historical evidence suggest that it will,” noted the authors, who are from the CMS Office of the Actuary.
They also said that in the near term the health sector will “undergo major changes that will have a substantial impact” on consumers, providers, insurers and sponsors of healthcare. These are the result of the health law’s creation of online marketplaces, its expansion of Medicaid and restraints the law made to the Medicare program, the analysts found. With millions of American gaining coverage this year through the federal health law, many analysts expect that overall health spending will increase in 2014. Still, CMS Administrator Marilyn Tavenner touted the positive numbers, saying, “This report is another piece of evidence that our efforts to reform the health care delivery system are working.”
House Moves to Avoid Government Shutdown
Last Thursday, House Speaker John Boehner (R-OH) vowed to move ahead with a spending bill that averts a government shutdown while keeping some budget leverage over President Obama's recent immigration order. The House is expected to vote this week on a measure tying together 11 spending bills to fund the government through September 2015. To give Republicans an opportunity to target immigration funding next year—when they control both chambers of Congress—funding for the Homeland Security Department would be extended for only a few months, likely until February. At that time, Republicans will be in a better position to restrict spending on immigration-related items since they will control of the Senate and hold an expanded majority in the House. Announced last month, the President’s executive action would allow up to 4.7 million undocumented immigrants to remain in the U.S. without threat of deportation. Republicans have criticized it as an overreach of powers that amounts to a grant of amnesty for lawbreakers.
Last Thursday, the House passed a largely symbolic measure that effectively declares the President’s action illegal. It passed 219-197 on a mostly party-line vote, but Democrats who still control the Senate have no plans to consider it and the White House has promised a veto. According to senior aides, Senate Majority Leader Harry Reid (D-NV) will support the funding bill as long as it does not include an explicit ban on spending for the President’s immigration plan. A small but vocal group of House and Senate conservatives are calling for such a ban as part of a tougher Republican stance against the immigration order, although it raises the threat of a government shutdown. But several Republican lawmakers said Boehner has sufficient support within his party to pass the funding bill with Democratic help while facing little risk of a rebellion in January when he seeks another term as Speaker.
Murphy Plans Revised Mental Health Bill
Last week, Rep. Tim Murphy (R-PA) said he is reviewing his comprehensive mental health legislation, pledging to “revise and revive” his House proposal next year. Murphy said he plans to review the wide-reaching measure (H.R. 3717) to see what needs to be clarified after getting feedback from lawmakers, families and professionals. The goal is to introduce an updated version early next year, he said. While the Energy and Commerce Health Subcommittee held a hearing on the bill in April, the measure stalled after it attracted pushback and Rep. Ron Barber (D-AZ) introduced a competing bill (H.R. 4574) with only Democratic support. Murphy said his Oversight subcommittee, which hosted a number of events on mental health, understood the breadth of the issue, but that the challenge of communicating his message more broadly was apparent at the Health Subcommittee hearing.
Stakeholder groups noted that Murphy’s bill — which attracted 37 Democratic and 76 Republican cosponsors — wasn’t fully embraced by the mental health community as a whole. As a result, analysts noted, the bill lacked the consensus Energy and Commerce Chairman Fred Upton (R-MI) wanted to see before moving the measure forward. While Senate Republicans never introduced a companion to Murphy’s bill, GOP control of both chambers could give it more momentum in the new Congress. House cosponsor Shelley Moore Capito (R-WV) won a Senate seat and another GOP co-sponsor, Bill Cassidy (R-LA) will join her after winning Saturday’s runoff election in Louisiana. Looking ahead, Murphy emphasized that he’ll actively seek Democratic support for the reform measure in the 114th Congress. Barber’s House seat is the subject of a recount, leaving his return to Congress in doubt.
McConnell: Supreme Court Best Chance of ACA ‘Do-Over’
Last Tuesday, incoming Senate Majority Leader Mitch McConnell said the Supreme Court ruling on the Affordable Care Act next summer could be the GOP’s best chance to overturn the 2010 healthcare reform law. The court’s challenge offers a better opportunity to scrap the ACA “as opposed to actually getting the President to sign a full repeal, which is not likely to happen,” the Kentucky Republican said during a media panel discussion. Republicans have widely supported the latest ACA case to head to the Supreme Court, King v. Burwell, which takes issues with language in the law related to healthcare subsidies. If the provisions are struck down, health experts have said it could cut off subsidies for 13 million people and ultimately unravel the law.
McConnell, who has vowed to pick apart the health law piece by piece, said he will start with areas of the law that are “extremely toxic with the American people.” He said the Senate plans to take votes on unpopular parts of the law, such as the medical device tax, the individual mandate, the health insurance tax and the 30-hour mark for full-time work weeks. McConnell has previously said he would allow the Senate to take a vote on repealing the law, though he has acknowledged that the President would stand in the way.
CMS Proposed Rule Delays ACO Penalties by Three Years
Last Monday, CMS proposed changes that would give ACOs participating in the Medicare Shared Savings Program (MSSP) an additional three years before imposing penalties for missing savings targets. CMS officials said the proposed changes aim to discourage participants from dropping out of MSSP. The Accountable Care Organization (ACO) program aims to encourage doctors, hospitals and other healthcare providers to keep patients healthy and coordinate care to reduce healthcare costs and improve outcomes. ACOs can share savings with Medicare when they deliver care more efficiently and meet or exceed performance benchmarks for quality care. Under existing MSSP rules, accountable care organizations (ACOs) face penalties after the first three years in the program unless they volunteer to take on downside financial risk earlier in exchange for larger potential bonuses for meeting the program's goals.
Since the MSSP’s inception, just five of more than 300 Medicare ACOs have chosen to risk the early penalties. According to CMS, just 25% of MSSP ACOs launched in 2012 and 2013 have generated sufficient savings to earn bonuses. Lawmakers have argued that more comprehensive penalties and rewards are needed to speed up changes to the healthcare delivery system. However, hospital officials and providers have supported less risk so they can adequately build a foundation for accountable care at their hospitals. The proposed rule also would create a new risk model it calls “Track 3,” which would offer greater savings for taking on greater risk. ACOs that participate in the new model could keep up to 75 percent of the money they save Medicare, but they would have to pay up to 15 percent for excessive spending.
The Week Ahead
This week, the House and Senate will look to wrap up the 113th Congress with a vote to fund most of the government through September 2015. Lawmakers face a December 11 deadline to pass a spending bill or risk a repeat of last year’s government shutdown. To pass the measure, House GOP leaders may need some Democratic votes, partly because a bloc of conservative Republicans is unhappy that the spending bill does not do enough to stop President Obama from shielding millions of undocumented immigrants from deportations. Along with the government funding bill, the Senate will look to complete work on a $577.1 billion defense authorization bill (H.R. 3979). Also on the Senate to-do list is a tax-extenders bill (H.R. 5771) passed by the House last week. In the House, legislators will also take-up a California drought-relief bill (H.R. 5781). Both chambers also hope to finish work on a bill extending terrorism risk insurance. Off the floor, MIT professor Jonathan Gruber, who served as a consultant during the creation of the Affordable Care Act (ACA), will appear before the House Oversight Committee Tuesday morning to discuss his controversial comments about the formation of the health law.
CMS: 2013 Health Spending Grew at Slowest Rate Since 1960
According to a report released by CMS last Wednesday, healthcare spending in 2013 grew by 3.6% – the slowest rate since 1960. The figures represent good news for the Obama Administration in its effort to contain the growth of healthcare costs, though experts disagreed on how much the ACA has played a role. Total medical expenditures in the U.S. reached $2.9 trillion last year, the CMS said in its annual report. The 3.6 percent spending growth for 2013 tracks a CMS estimate from September and is 0.5 percentage point lower than 2012. The total share of the economy devoted to health remained largely the same, at 17.4 percent, while health spending per person was $9,255, up from $8,915 in 2012, the report found. Affordable Care Act supporters were quick to tie the trend to the law's reforms, while actuaries say the relationship between economic growth and health spending is the leading factor.
The report found that spending slowed for private health insurance, Medicare, hospitals, physicians and clinical services and out-of-pocket spending by consumers. However, it accelerated for Medicaid and for prescription drugs, according to the report, published online by the journal Health Affairs. The study found that healthcare spending has grown at historically low rates for the past five years, which is consistent with declines generally seen during economic downturns. Looking ahead, “the key question is whether health spending growth will accelerate once economic conditions improve significantly; historical evidence suggest that it will,” noted the authors, who are from the CMS Office of the Actuary.
They also said that in the near term the health sector will “undergo major changes that will have a substantial impact” on consumers, providers, insurers and sponsors of healthcare. These are the result of the health law’s creation of online marketplaces, its expansion of Medicaid and restraints the law made to the Medicare program, the analysts found. With millions of American gaining coverage this year through the federal health law, many analysts expect that overall health spending will increase in 2014. Still, CMS Administrator Marilyn Tavenner touted the positive numbers, saying, “This report is another piece of evidence that our efforts to reform the health care delivery system are working.”
House Moves to Avoid Government Shutdown
Last Thursday, House Speaker John Boehner (R-OH) vowed to move ahead with a spending bill that averts a government shutdown while keeping some budget leverage over President Obama's recent immigration order. The House is expected to vote this week on a measure tying together 11 spending bills to fund the government through September 2015. To give Republicans an opportunity to target immigration funding next year—when they control both chambers of Congress—funding for the Homeland Security Department would be extended for only a few months, likely until February. At that time, Republicans will be in a better position to restrict spending on immigration-related items since they will control of the Senate and hold an expanded majority in the House. Announced last month, the President’s executive action would allow up to 4.7 million undocumented immigrants to remain in the U.S. without threat of deportation. Republicans have criticized it as an overreach of powers that amounts to a grant of amnesty for lawbreakers.
Last Thursday, the House passed a largely symbolic measure that effectively declares the President’s action illegal. It passed 219-197 on a mostly party-line vote, but Democrats who still control the Senate have no plans to consider it and the White House has promised a veto. According to senior aides, Senate Majority Leader Harry Reid (D-NV) will support the funding bill as long as it does not include an explicit ban on spending for the President’s immigration plan. A small but vocal group of House and Senate conservatives are calling for such a ban as part of a tougher Republican stance against the immigration order, although it raises the threat of a government shutdown. But several Republican lawmakers said Boehner has sufficient support within his party to pass the funding bill with Democratic help while facing little risk of a rebellion in January when he seeks another term as Speaker.
Murphy Plans Revised Mental Health Bill
Last week, Rep. Tim Murphy (R-PA) said he is reviewing his comprehensive mental health legislation, pledging to “revise and revive” his House proposal next year. Murphy said he plans to review the wide-reaching measure (H.R. 3717) to see what needs to be clarified after getting feedback from lawmakers, families and professionals. The goal is to introduce an updated version early next year, he said. While the Energy and Commerce Health Subcommittee held a hearing on the bill in April, the measure stalled after it attracted pushback and Rep. Ron Barber (D-AZ) introduced a competing bill (H.R. 4574) with only Democratic support. Murphy said his Oversight subcommittee, which hosted a number of events on mental health, understood the breadth of the issue, but that the challenge of communicating his message more broadly was apparent at the Health Subcommittee hearing.
Stakeholder groups noted that Murphy’s bill — which attracted 37 Democratic and 76 Republican cosponsors — wasn’t fully embraced by the mental health community as a whole. As a result, analysts noted, the bill lacked the consensus Energy and Commerce Chairman Fred Upton (R-MI) wanted to see before moving the measure forward. While Senate Republicans never introduced a companion to Murphy’s bill, GOP control of both chambers could give it more momentum in the new Congress. House cosponsor Shelley Moore Capito (R-WV) won a Senate seat and another GOP co-sponsor, Bill Cassidy (R-LA) will join her after winning Saturday’s runoff election in Louisiana. Looking ahead, Murphy emphasized that he’ll actively seek Democratic support for the reform measure in the 114th Congress. Barber’s House seat is the subject of a recount, leaving his return to Congress in doubt.
McConnell: Supreme Court Best Chance of ACA ‘Do-Over’
Last Tuesday, incoming Senate Majority Leader Mitch McConnell said the Supreme Court ruling on the Affordable Care Act next summer could be the GOP’s best chance to overturn the 2010 healthcare reform law. The court’s challenge offers a better opportunity to scrap the ACA “as opposed to actually getting the President to sign a full repeal, which is not likely to happen,” the Kentucky Republican said during a media panel discussion. Republicans have widely supported the latest ACA case to head to the Supreme Court, King v. Burwell, which takes issues with language in the law related to healthcare subsidies. If the provisions are struck down, health experts have said it could cut off subsidies for 13 million people and ultimately unravel the law.
McConnell, who has vowed to pick apart the health law piece by piece, said he will start with areas of the law that are “extremely toxic with the American people.” He said the Senate plans to take votes on unpopular parts of the law, such as the medical device tax, the individual mandate, the health insurance tax and the 30-hour mark for full-time work weeks. McConnell has previously said he would allow the Senate to take a vote on repealing the law, though he has acknowledged that the President would stand in the way.
CMS Proposed Rule Delays ACO Penalties by Three Years
Last Monday, CMS proposed changes that would give ACOs participating in the Medicare Shared Savings Program (MSSP) an additional three years before imposing penalties for missing savings targets. CMS officials said the proposed changes aim to discourage participants from dropping out of MSSP. The Accountable Care Organization (ACO) program aims to encourage doctors, hospitals and other healthcare providers to keep patients healthy and coordinate care to reduce healthcare costs and improve outcomes. ACOs can share savings with Medicare when they deliver care more efficiently and meet or exceed performance benchmarks for quality care. Under existing MSSP rules, accountable care organizations (ACOs) face penalties after the first three years in the program unless they volunteer to take on downside financial risk earlier in exchange for larger potential bonuses for meeting the program's goals.
Since the MSSP’s inception, just five of more than 300 Medicare ACOs have chosen to risk the early penalties. According to CMS, just 25% of MSSP ACOs launched in 2012 and 2013 have generated sufficient savings to earn bonuses. Lawmakers have argued that more comprehensive penalties and rewards are needed to speed up changes to the healthcare delivery system. However, hospital officials and providers have supported less risk so they can adequately build a foundation for accountable care at their hospitals. The proposed rule also would create a new risk model it calls “Track 3,” which would offer greater savings for taking on greater risk. ACOs that participate in the new model could keep up to 75 percent of the money they save Medicare, but they would have to pay up to 15 percent for excessive spending.