For the 17th time since the Sustainable Growth Rate (SGR) became law as part of the Balanced Budget Act of 1997, last week the Congress passed a short-term “patch” to prevent scheduled cuts from going into effect for physicians who provide care to Medicare beneficiaries. Staving off the more than 20% in payment cuts, on April 1st, President Obama, signed into law the Protecting Access to Medicare Act of 2014. In addition to preventing the scheduled payment reductions from going into effect, the new law continues a 0.5 percent update for physicians through December 31, 2014, and then maintains reimbursement levels for the first quarter of 2015. The SGR, long-recognized by health care providers and policymakers as in serious need of reform, is the formula used by the Centers for Medicare and Medicaid Services (CMS) to control spending and growth related to physician services provided to Medicare beneficiaries. Over the past six months, leaders and members of the House Ways and Means, House Energy and Commerce, and Senate Finance Committee achieved a rare bipartisan, bicameral consensus with respect to how to repeal the SGR and replace it with a more appropriate payment policy. The result of their efforts culminated in the introduction of the SGR Repeal and Medicare Provider Payment Modernization Act of 2014. Despite agreement on the policy, Members of Congress unfortunately were unable to craft a deal with respect to how to pay for the estimated $140-180 billion price-tag. Therefore, with the April 1st deadline looming, Congressional leaders negotiated a smaller package of health care policies, which included a short-term “patch” for the SGR. The policies include (but are not limited to): an extension of the partial enforcement delay for the Medicare so-called “two-midnight rule,” which effects payment for inpatient stays at acute care hospitals; a one-year delay in implementation of the new ICD-10 coding system; additional authorization for the Special Diabetes Program and the maternal, infant, and early childhood home visiting program; a Government Accountability Office study on Children’s Hospital Graduate Medical Education Program; a new program relating to value-based purchasing for skilled nursing facilities; and a new initiative related to quality, safety, and evidence-based care associated with diagnostic imaging. The costs of the bill are paid for through a variety of policy changes, including: extending the two percent Medicare sequestration; revaluing services under the physician fee schedule; reform of Medicare payment for clinical laboratory services; and rebasing of Medicaid Disproportionate Share Hospital payments. Providers continue to urge Congress to take action to enact a permanent fix. Given that the latest “patch” expires March 31, 2015, prior to that date, Congress will need to take action on a permanent fix or enact the 18th patch.
In both Democratic and Republican administrations, the President’s use of executive power and actions – or inaction – by federal agencies have been criticized and scrutinized by members of Congress and the courts. Throughout his presidency, like his predecessors, President Obama has used his executive authority on recess appointments, executive orders, and to implement policy priorities. Federal agencies also have used their power to take actions in response to a deadlocked Congress. In his recent state of the union, President Obama made clear his intention to exercise his executive power to the maximum.
Are you curious about how the Executive Branch – the White House and federal agencies – is exerting power and influence over programs and policies, especially in the context of the current Congress and President Obama’s indication he plans to issue numerous executive orders? My colleagues, Scott Coffina and Charlie Rose, will provide a peek behind the curtain of the Executive Branch and share their respective experiences working in the administrations of George W. Bush and Barack Obama.
Please join us this Tuesday, March 25th – either in person or online – to learn about how interest groups can respond to both threats and opportunities stemming from the power being exerted by the Executive Branch. To RSVP, please click here.
What it means: Each year the President prepares and submits to Congress a budget, outlining his spending and policy priorities for the coming federal fiscal year. Accompanying his budget are narrative explanations from each federal agency which present to Congress, specifically the House and Senate Appropriations Committees, the rationale behind the proposed increases or decreases in spending and/or any suggested changes in policy. These “budget justifications” or “Congressional Justifications” – CJs – also include information about spending for the current federal fiscal year, the prior federal fiscal year, and the upcoming “request” year. The CJs typically provide updates regarding agency programs, initiatives, projects, and activities and report on the status of requests that Congress has made of the agencies in the previous year’s appropriations measure.
Used in a sentence: (http://officeofbudget.od.nih.gov/br.html)
“The NIH Congressional Justification (“CJ”) provides the Senate and House Appropriations Committees detailed estimates and justifications for research and research support activities (infrastructure, administrative, etc.) that NIH would anticipate funding at the President’s Budget Request level.”
Excerpted Example from HHS CJ from FY 2014 Administration on Children, and Families: (https://www.acf.hhs.gov/sites/default/files/olab/fy_2014_cj_final_web_4_25_13.pdf)
“Head Start (+$1.65 billion) – The FY 2014 request for the Head Start program is $9.6 billion, an increase of $1.65 billion from the FY 2012 enacted level. These funds will allow Head Start programs to serve approximately 1,053,000 children by providing new opportunities for working parents to enroll their infants and toddlers in high quality early learning and development programs through the Early Head Start – Child Care Partnership proposal. The Budget supports implementation of new regulations that require low-performing grantees to compete for continued funding. Funding is requested to minimize the disruption of services to Head Start children and families during the transition period to new Head Start provider. The FY 2014 request focuses on improving program quality and ensuring that funds are directed towards the organizations most capable of providing high quality early education that can put children on a path to school success and opportunity.”
Also known simply as a Dear Colleague, this is a type of letter sent by a member(s) of either the House or Senate to other members of that chamber of Congress. Typically, a Dear Colleague asks for members of Congress to support an issue, cosponsor/support legislation, or sign a letter in support of an issue or bill. Dear Colleague letters are an internal Congressional advocacy tool to help make Members of Congress aware of issues, garner additional support, and then seek a particular action either by fellow Members of Congress, the White House, or a federal agency. The letters can be sent electronically or hard copy and advocacy organizations often work with elected officials to have Dear Colleague letters circulated on their issues of concern and priority.
Election year politics already have arrived at the Capitol. Members of the House and Senate in both parties have their eyes on November 4th and are putting forward agendas and proposals to position themselves favorably in the eyes of the electorate. Look and listen for a lot of rhetoric—and possibly some action—on jobs and the economy. With a significant number of Democratic Senate retirements and numerous competitive races, conventional wisdom is that control of the Senate is in play and that Republicans have a solid chance of taking the chamber in the November election. Pundits agree that the House remains solidly in Republican control and the Democrats will remain in the minority for the next two years.
With the budget deal struck by Senator Patty Murray (D-WA) and Representative Paul Ryan (R-WI) late last fall, much of the Congressional work on the budget and federal appropriations already has been predetermined for the year. Treasury Secretary Jack Lew recently announced the nation will hit its debt ceiling on February 27th; so before the deadline, the Congress is expected to enact a measure to increase the nation’s borrowing authority without the previous political jockeying and drama.
Senate Finance Committee Chairman Max Baucus (D-MT) was confirmed as U.S. Ambassador to China late last week—causing a Senatorial game of musical chairs with respect to the chairmanship of numerous committees. The Senate Finance Committee, which has tax policy writing authority, will soon be led by Ron Wyden (D-OR), who has expressed an interest in rewriting the tax code. Changes he wishes to make include increasing the standard deduction, using the tax code to incentivize businesses to invest overseas earnings in domestic infrastructure, and bringing closer in line the taxation of investment income and ordinary income.
The latest in the implementation of the Affordable Care Act: on Monday, February 10th the White House announced it again was modifying the requirement for businesses with between 50 and 99 employees—they now have until 2016 to provide health insurance to full-time workers (those working at least 30 hours a week) or pay a penalty. This requirement already had been delayed a year; such businesses have one more year without being subject to the mandate. Beginning this year, businesses with more than 100 full-time workers are required to offer coverage to at least 70 percent of their full-time workers or face a penalty; starting next year they must offer health care to 95 percent of their full-time workforce.
Meanwhile, Republicans in the House of Representatives are seeking to change the Affordable Care Act definition of full-time workers from 30 hours a week to 40; earlier this week, the proposal gained some momentum with three Democrats signing on as cosponsors of the measure. However, with the Democrats still in control of the Senate, at least through this calendar year, it is highly unlikely such a measure would be brought up for a vote in that chamber. Should the Republicans sweep in November, it is likely that starting in 2015, the President will be sent numerous measures related to repealing or replacing provisions of the Affordable Care Act; if such legislation is attached to other proposals, President Obama will be put in a difficult position of deciding whether or not to enact or veto them. Only time and the election will tell what the future holds with respect to the long term viability of health care reform.
This dewonkify was originally posted on Capitol Health Record on January 15, 2013.
Word: Debt Ceiling
Definition: The statutory authority given by the Congress to the U.S. Treasury to borrow a certain amount of money and/or issue securities to fund the operations of the federal government.
Used in a sentence: “After the Debt-Ceiling Breach: What Day 1 in Default America Might Look Like”
History: According to the Congressional Budget Office, Congress long has restricted the Department of Treasury’s ability to issue debt and has exercised control over the total amount of borrowing. However, until the summer of 2011, raising the debt ceiling traditionally had been a pro forma occurrence without much policy debate or partisanship in the Congress. The “debt ceiling crisis” that occurred in the summer of 2011 was a political debate and battle between Congressional Republicans and President Obama. The Republicans generally were refusing to increase the federal government’s authority to borrow money without taking steps contemporaneously to decrease federal spending. The debate resulted in enactment of the Budget Control Act of 2011, which raised the debt ceiling but also called for reductions in federal spending. This policy debate brought the “debt ceiling” issue into the public forum and introduced the phrase into the vernacular. Click here for more information about the Budget Control Act. (For more history on the debt ceiling, click here.)
What it Means: The U.S. government, through the Department of the Treasury, regularly borrows money to cover the cost of running the government’s operations, as well as to pay for maturing securities, such as treasury notes, bonds, and bills. Treasury notes, bonds, and bills are issued to raise funds to support the federal government’s activities. This borrowing of money is referred to as public debt. The amount of money the U.S. Department of the Treasury is allowed to borrow typically has been controlled – and limited – by the Congress. This restriction on the federal government’s borrowing authority is known as the “debt ceiling” or “debt limit.” When borrowing approaches the authorized amount it is referred to as “hitting the debt ceiling;” the Congress then must act to increase the debt limit or else the government cannot borrow additional funds. Without authority to borrow additional money and pay for maturing securities, the federal government could default, causing it to default on its debts and resulting in significant domestic and international economic disruption.
In the September 24th edition of the Washington Post, Ariana Eunjung Cha highlighted the impact of budget cuts on research funding in her article “Budget Sequester Squeezes Scientific Research.” Cha notes that sequestration, across-the-board cuts that went into effect on March 1, 2013, has delayed research and forced layoffs in research labs across the country.
Earlier this week the House appeared poised to move swiftly to consideration and passage of H.J. Res. 59, the FY 2014 continuing resolution (or C.R.), which would keep the functions of the government operating between the upcoming start of the new federal fiscal year (October 1st) through December 15, 2013. Unlike traditional appropriations measures, which can be hundreds of pages long, this draft stop-gap measure clocks in on the Government Printing Office (GPO) website at a mere 16 pages.
Generally the C.R. maintains virtually everything “at a rate for operations as provided in the applicable appropriations Acts for fiscal year 2013.” In plain English, this means that Congress basically is keeping the lights on for the federal government at the same funding levels as the previous year. However, the bill does contain a number of “anomalies,” which are a means through which Congress can adjust funding levels for specific programs in a C.R. to be higher or lower than the previous year’s funding level. For example, the bill includes two specific line-item appropriations additional funding for both the Department of Interior’s Wildland Fire Management program and the Department of Agriculture’s Forest Service Wildland Fire Management “for urgent wildland fire suppression activities” to help address fires in the west, including Yosemite.
House Republican leaders introduced the funding measure on Tuesday, with plans to bring the measure to the House floor today for a vote. To address requests from a bloc of their members, the House GOP leadership had planned to link the stopgap funding measure to language that would defund implementation of the Affordable Care Act (a.k.a. ACA, health care reform or ObamaCare) in the coming year. The original plan was to have two sequential votes – one on the funding measure itself and a second on a separate resolution eliminating the funding for the ACA; following House passage, both measures would be sent to the Senate for consideration. However, a number of House Republicans have expressed significant concern that such a strategy would allow the Senate to ignore the ACA-related measure, given the chamber is in Democratic control. Given growing concern and opposition within the House Republican ranks, the leadership decided to delay today’s votes and take more time to build support for the legislative and procedural approach. As such, earlier today, House Majority Whip Eric Cantor announced to his members that the previously scheduled recess period for the week of September 23 could turn into a Washington work week as a C.R. must be passed by both chambers and sent to the President for enactment on or before September 30, otherwise the government will shut down. To follow the House legislative activity and calendar, visit: http://www.house.gov/legislative/.
Call it an unholy trinity, a bad hat trick, a fiscal triumvirate, or a three-pronged cluster…no matter how you look at it, Congress has three big fiscal issues to tackle in a very short period of time: the impending October 1 start of the federal fiscal year (FY 2014 for those who like budget speak), the expiration of the nation’s borrowing authority (aka debt ceiling) in mid-October, and those ongoing across-the-board cuts (that kooky “sequestration” we have been living under), which everyone would like to replace or otherwise retire or tweak in some way, shape, or form.
All this and only nine Congressional working days left in the month of September.
Given the truncated timeline, it is likely Congress will enact a short term, stop-gap spending measure (known as a continuing resolution) that generally will keep the government operating until policymakers can (maybe) come to broader agreement on the 12 individual appropriations bills that are supposed to be enacted to fund the federal government. Long gone are the days of “regular order” appropriations, when bills were agreed to by both chambers and signed by the president on – or actually before – September 30. The new “regular” order is enactment of continuing resolutions and missed deadlines.
The additional pressure of the government soon bumping up against the debt ceiling – the Treasury’s borrowing authority – means policymakers are likely to try to link the various fiscal issues together and start horse trading. Although the deficit is smaller than it was at the start of this fiscal year, discretionary and mandatory spending outlays are decreasing, and more is coming into the Treasury than before, overall federal spending still outpaces income and elected officials maintain fundamentally different views regarding the role and size of government. And none of this changes the fact that 10,000 people a day turn 65 and become eligible for Social Security and Medicare – two of the largest slices of the federal pie that are demographically poised to crowd out other spending. So, not to be forgotten in the federal fiscal mix is entitlement reform – but we (like Congress) will tackle that another day.
For now the question remains: will Congress clear the bases with a successful at-bat or strike out? Only time (nine days) will tell.
The word: “Score” or “CBO Score”
Definition: ”Score” or “CBO Score” generally refers to a cost estimate conducted by the nonpartisan Congressional Budget Office (CBO). According to CBO, the agency is required by federal law to undertake a formal cost estimate for most legislative proposals (except appropriations measures) that are passed out of a House or Senate full committee. CBO cost estimates employ certain economic assumptions and require the agency to make particular projections over a period of time, usually 10 years. CBO scores use current federal law as a baseline for its assumptions and the agency does not presume any future modifications that might be made to federal laws, programs, or spending. For example, if scoring Medicare legislation, CBO “takes that legislation as it is written and does not attempt to predict the ways in which the Congress might amend that legislation in the future … in addition to its budget projections that reflect current law, the agency regularly shows the effects of adopting alternative policies that have been discussed by the Congress, so that the budgetary impact of those alternative policies is clear.”
Used in a sentence: ”Sen. Hatch agreed that the reduced CBO score provided a significant opportunity to address the SGR and that Congress needed to act quickly saying, ‘[W]e know from previous years that the CBO score has a tendency to fluctuate.’” “Senate Finance Committee Holds SGR Hearing and Asks Providers for Specific Recommendations,” American Association of Medical Colleges, May 17, 2013
What it Means: The term “score” can be used both as a noun and a verb. For example, it is a common for Congressional staff to ask advocates, “Has CBO scored your bill?” Translated: the staffer is inquiring as to whether a cost estimate has been undertaken on the particular legislation. In this example, the term is being used as a verb. Another common question Members of Congress may ask when being approached to cosponsor legislation is, “What is the CBO score?” In this case, it is being used as a noun and the elected official wants to know the amount of federal spending CBO has estimated as the cost of the proposal.
History: CBO was created in 1974, as part of the Congressional Budget Act of 1974 and it is tasked with undertaking nonpartisan, “independent analyses of budgetary and economic issues to support the Congressional budget process.” In addition to formal cost estimates of bills that are passed out of full committee, the agency – upon request by a committee or member of Congressional leadership – can also undertake a formal cost estimate at other stages of the legislative process. It also is common for CBO to be asked to do an informal “score” of a draft bill or other proposal, to help inform the policymaking process. These “informal” scores typically are kept confidential as they “do not undergo the same review procedures required for formal estimates.” Other entities besides CBO can conduct legislative cost estimates; it is not uncommon for advocacy organizations to hire economic consulting firms to help them “score” legislative proposals to have cost information to share with Congressional offices they are approaching for support. For such “scores” to have any credibility they must utilize CBO’s overall methodology and employ its economic assumptions, projections, and baseline.