Notable Departures of the 113th Congress

With the midterm elections just over six months away there are a number of notable retirements in Congress. To date nine Senators and 49 Representatives have decided to not run for reelection.

Notable in these retirements are the years of seniority and institutional knowledge leaving both chambers. A number of important Members will be leaving at the end of the 113th Congress.

Senator Tom Harkin (D-IA):

Harkin of Iowa will be retiring after five terms in the Senate. He is the current Chairman of the important Senate Health, Education, Labor, and Pension (HELP) Committee. This committee is responsible for overseeing the aforementioned including all discretionary health policy –anything that is not Medicare/Medicaid related. He is also an appropriator serving as chair of the Labor, Health and Human Services subcommittee tasked with funding those important agencies and programs. This dual role of authorizing legislation and appropriating the funds for those authorized programs have helped to make him an effective leader in the Senate.

Representative Dave Camp (R-MI):

Camp of Michigan will be retiring after 12 terms in the House. He is the Chairman of the powerful House Ways and Means Committee. This Committee has the constitutional privilege of introducing any revenue generating legislation giving the Chairman a significant amount of discretion over federal legislation in both chambers. In addition to taxation and some trade matters the Ways and Means Committee has oversight over all mandatory health policy meaning most matters dealing with Medicare or Medicaid.

Senator Tom Coburn, M.D. (R-OK):

Dr. Tom Coburn of Oklahoma will be leaving the Senate early, due to a medical condition, having served two years into his second term.  “Dr. No,” as he is sometimes affectionately called, has adopted the role of dogged watchdog of the purse-strings. He has used the many rights and privileges he has as a Senator to demand cuts and request that legislation meet “pay-go” and statutory budget restrictions.

Representative Henry Waxman (D-CA):

Waxman of California will be leaving after serving 20 terms in the House of Representatives across nine Presidential terms. In addition to a wealth of institutional knowledge he is taking with him, he is one of the strongest Democratic voices on climate change. As Chairman of the important Energy and Commerce Committee, Mr. Waxman overseas energy policy as well as health policy from the FDA, to public health programs to Medicaid and some Medicare policy. He was instrumental in helping then-Speaker Nancy Pelosi with crafting and aiding the passage of the Affordable Care Act in the House in late 2009.

Representative George Miller (D-CA):

Miller of California is another important leader who will be leaving at the end of the 113th Congress.  Also from California and having served 20 years like Mr. Waxman, Representative Miller leaves the Chairmanship of the House Education Labor and Workforce Committee. In addition to chairing an important committee he is close friends with Minority Leader Nancy Pelosi. The chamber will lose an able member of the leadership.

The Power of the Executive Branch – Obama Administration – More, Less, or the Same?

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.

Congressional Fiscal Triple Play or Strike Out?

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.

Nine days – that’s it!

Nine days!  Nine days for what you might ask?  The House of Representatives is scheduled to be in session for only nine daysbefore the end of the fiscal year.  The Senate is not exactly overlapping the House and they have scheduled 16 days in session scheduled.

As a refresher, by the end of the fiscal year, September 30th, the House and Senate are supposed to have passed their versions of a budget, reconciled the differences, and sent allocations to the Appropriations Committees.  The Appropriations Committees and their subcommittees then drafts bills (12 of them) funding government programs, send them to the House and Senate floors, pass them, reconcile any differences, send those reconciled bills back to the House and Senate floors, pass them, and then hopefully the President signs them.

So, where are we?  The House and Senate never agreed to a budget so while they skipped a few steps early in the process.  The Appropriations Committees in each chamber did mark up some of the 12 appropriations bills; some even made it the floor.  However, the two chambers are working off very different spending limits.  Most bills will not make it to the floor, some cannot even make it out of committee, much less the rest of the process.  So we are heading for a continuing resolution (CR) – legislation to fund the government on a temporary basis (although sometimes that temporary basis turns into an entire year) at the previous year’s level of funding.

The question now is how long the CR will cover or how long the government will be funded on this short-term basis.  The rumblings from the House Republicans seem to lean toward a shorter CR (say, two months), which would push the short-term CR’s deadline close to talks around the debt limit.  Reports are that Senate Democrats seem to favor a longer-term CR.  Somehow we knew they would not agree.  Oh well, they have nine days in September to figure it out…

Important Upcoming Dates

With the fiscal cliff package passing on New Year’s Day, some key deadlines and dates shifted. Below are important dates for the next three months on Capitol Hill. Check back here as these dates get closer for information on the President’s budget, the contuining resolution (CR) expiration and everything in between!

Important Upcoming Dates

  • Inauguration: January 21
  • State of the Union: January 29 (tentative)
  • January 31: Treasury Secretary Tim Geithner plans to leave the Administration by end of the month
  • President’s statutory deadline to submit budget to Congress: February 4
  • U.S. defaults on debt obligations: estimated end of February/early March
  • Sequestration takes effect: March 1
  • Current CR expires: March 27

Entitlement Reform: Possible Changes to Medicare & Medicaid

With all the talk in Washington about deficit reduction and efforts to craft a “grand bargain,” entitlement “reform” or changes to entitlement programs, such as Medicare and Medicaid, are on the table.  Taken together, Medicare, Medicaid, and the Children’s Health Insurance Programs are an estimated 21% of the federal budget while Social Security is approximately 20%.[i]  According to the Pew Research Center, beginning January 2011 and for the next 19 years, 10,000 people a day are turning 65 – making them eligible for entitlement programs, such as Medicare and Social Security.[ii]  In turn, this demographic reality will cause those slices of the federal budget pie to grow at break-neck speed, unless the Congress does something to stem the tide.  Hence, the growing bipartisan interest in discussing entitlement reform.

So, what does that really mean?  One usual favorite for reducing entitlement spending being touted is cracking down on “fraud, waste, and abuse,” which supporters say could potentially save billions each year (though the independent Congressional Budget Office (CBO) tends to think otherwise).  In addition to that old stand-by, here is a sampling of some of the other changes to Medicare and Medicaid currently under consideration:

–     Reforming Medicare cost-sharing rules

–     Restricting first-dollar coverage in Medicare supplemental insurance (Medigap)

–     Extending Medicaid drug rebates to dual eligibles in Medicare Part D

–     Cutting Medicare payments to hospitals for bad debts

–     Accelerating Medicare home health savings in health reform

–     Eliminating state Medicaid provider tax (a mechanism used by a majority of states to increase their federal Medicaid matching funds)

–     Placing dual eligibles in Medicaid managed care

–     Block granting the Medicaid program

–     Moving some or all of Medicare into a “Premium Support” program

–     Combining Medicare Part A&B deductibles

–     Expanding use of competitive bidding under Medicare

–     Bundling Medicare payments (e.g., moving away from fee-for-service)

–     Increasing the eligibility age for Medicare

–     Increasing means-testing for high-income Medicare beneficiaries

House Chairmen Selected for 113th Congress

House Republicans took an organizing step forward for the 113th Congress by selecting Committee Chairmen this week. Many of the key players did not change – Fred Upton (Michigan) is still at the helm of Energy and Commerce Committee, Harold Rogers (Kentucky) will be in charge of the full Appropriations Committee, Paul Ryan (Wisconsin) will lead Budget, and Dave Camp (Michigan) will continue to head up Ways and Means. One big change is with Rules Committee leadership – David Dreier (California) is moving on and Pete Sessions (Texas) will be taking over. It also is notable that with Ileana Ros-Lehtinen (Florida) leaving the top spot on the Foreign Affairs Committee due to term limits, there will be no women leading House Committees.

Even though there is great speculation about Subcommittee Chairs (particularly the Labor, Health, and Human Services Appropriations Subcommittee), they have yet to be announced.

In addition, the House Republican Steering Committee today approved Republican committee assignments for some committees.

New Republican Appropriations Committee members:

Rep. Jaime Herrera Beutler (WA-3)

Rep. Chuck Fleischmann (TN-3)

Rep. Jeff Fortenberry (NE-1)

Rep. David Joyce (OH-14)

Rep. Thomas Rooney (FL-16)

Rep. David Valadao (CA-21)

New Republican Energy & Commerce members:

Rep. Gus Bilirakis (R-FL)

Rep. Renee Ellmers (R-NC)

Rep. Ralph Hall (R-TX)

Rep. Bill Johnson (R-OH)

Rep. Billy Long (R-MO)

New Republican Ways & Means members:

Tim Griffin (AR)

Mike Kelly (PA)

Tim Scott (SC)

Todd Young (IN)

Year Since the Debt Ceiling Deal: What’s Next?

Do you remember where you were when last year’s debt deal was sealed?  Few people remember the exact date of the debt ceiling deal made last summer or where they were; I happen to know the date and where I was because it was August 2nd, which is my birthday.  My husband says I get better with age – consensus is that the debt deal does not.  Nothing much usually happens in August; there are no federal holidays, lots of people go away on their summer vacations, and generally things in Washington are very quiet.  Well, last August 2nd, the nation’s – and some say the world’s – economy came to the brink and was saved (at least temporarily) due to the bipartisan deal on the debt ceiling, formally known as The Budget Control Act of 2011.

This measure was the result of months of debate, disagreement, dissent, and generally serves as a textbook illustration of the current dichotomy in political views.  The deal was like most compromises – imperfect and both sides feel they got some wins and some losses.  Members of Congress built in a fail-safe trigger – if the “supercommittee” (remember that?) couldn’t come to agreement on what to cut and how much, then automatic across-the-board reductions in spending would go into effect beginning January 1, 2013.  Now, five months away from that deadline most Members of Congress have buyer’s remorse.  The Act applies equal amounts of cuts to both defense and what those inside the Beltway call “non-defense discretionary programs,” which in English means everything that is not defense, not interest on the debt, and not entitlement programs (e.g., Medicaid, Social Security) that were carved out or whose cuts (e.g., the Medicare) were capped under the deal.  The Centers for Budget and Policy Priorities (CBPP) estimate the Budget Control Act will result in cuts of approximately $109 billion per year, or $984 billion through 2021, for both the defense and “non-defense discretionary”.

Congress just achieved bipartisan agreement on a six-month deal on regular order annual appropriations to avert a government shutdown and get us past the election and push that debate into the next session of Congress – leaving the big ticket hot potato political and budgetary issues (read: problems) for the Lame Duck session.  Somehow between the November 6th election and New Year’s Eve Congress has to tackle the impending sequestration, expiring tax cuts,  fixing the reimbursement for physicians who treat Medicare patients (aka, “the doc fix” or SGR), raising the debt ceiling, etc.  There is not much bipartisan agreement on remedies to any of these issues but there is one thing both sides can agree upon now – no one should be buying airline tickets home for the holidays quite yet.

No Matter the Outcome of the Supreme Court’s Review of Health Reform – The Health Care Community Should Consider Five Illustrations of “The New Normal”

Since last November – 365 days from the 2012 election to be exact – at the invitation of various health care providers, I have been going around the country giving a “crystal ball speech” about the future and outcomes of government spending, health reform, and the election.  Whether I speak to an audience in Chicago, San Francisco, New Orleans, or Florham Park, New Jersey, the most frequently asked questions I receive are: “What will the Supreme Court do?” and “Is there any hope that they can get something done and start to agree in Washington?”  The answer I give to the former is my favorite answer to give:  “It depends.”  The answer I offer to the latter is “I hope so – and if I didn’t think so I wouldn’t keep doing what I do.”

In all seriousness, there are four separate but related questions before the Supreme Court and a number of different combinations and permutations that can result from the court’s deliberations and determinations.  Tens of thousands if not millions of people are making their guesses and sometime in June we expect we will know who is correct.  In the meantime, I offer these five examples of the new playing field for those in health care:

1.  We are in a period of fiscal contraction – call it austerity, compression, retraction, or budget tightening – these are not times of Congress taking steps to expand programs or increase funding.  As such, it is important to recognize this fiscal and political reality and modify your expectations, requests, and approaches to policy makers accordingly.

2.  So goes the economy, so goes provider reimbursement.  The nation’s tax base is at an all-time low – meaning the available pie is shrinking – while entitlement spending grows, especially within federal health care programs (Medicare, Medicaid, VA).  Using baseline FY 2010 estimates from the Office of Management and Budget, entitlement spending is approximately 60% of the budget while non-defense discretionary funding is 15% and defense spending is 20% (remaining 5% is interest payments).  It is a basic math issue:  We cannot balance the budget only paring down the smaller, non-entitlement parts of the pie.  So, if your interests are in the entitlement slices, expect those – at some point – to shrink.

3.  Health care has become a “pay-for” for health care.  When I first arrived in Washington more than 20 years ago, most Members of Congress did not want to pit members of the same community against one another or pick among their children – hence the holistic approach to the doubling of the National Institutes of Health (NIH) budget.  Those also were much better economic times.  Now given current circumstances and the fact that health care spending is crowding out other parts of the budget, Congress is looking and finding money from within other areas of health care to pay for things like the “doc fix.” This trend likely will continue … Indefinitely.

4.  Innovation in care delivery is the key to survival.  The days of paying for volume are over.  Patients, insurers, and the government want value and quality and providers need to respond to the marketplace.  Those leading the field in innovative care delivery models and real outcomes based, patient-centered care – that measurably decrease costs – will do well from both private and public payor perspectives.

5.  Don’t necessarily fear the sequestration – some alternatives could be worse.  See items one, two, and three above.  Don’t get me wrong – it’s bad … And depending on where you reside and in which pieces of the pie, it’s really bad … for non-defense discretionary spending the estimates are 10% cuts across-the-board, and for Medicare (the reimbursement side of the equation) cuts are capped at 2%, but for many providers 2% poses a threat to their ability to maintain access to care.  But it could be – and can get – way worse.  Taking a page out of the earlier example of doubling the NIH playbook of collaborative advocacy, the health community is banding together with other communities (e.g., energy, environment, education, transportation) and those in the non-defense discretionary spending slice of the pie to work together to protect funding.

While the crystal ball remains cloudy with respect to the Supreme Court, the future of health care spending generally is pretty clear:  public and private payors will want more for less and somehow, as a nation, we have to get health care costs and spending under control.  The reality of current and long-term fiscal projections is that the intense budgetary pressures on the country will have as much – if not a greater – impact on the future of health care than anything those nine cloaked justices decide in June.

FY 2013 Spending Process – Off to the Races or Already Hitting Road Bumps

The FY 2013 appropriations process got underway this week in the House and elicited a veto threat from President Obama. House Budget Committee Chair Paul Ryan (R-WI) developed a budget that exceeds the cuts enacted by the Budget Control Act of 2011 (otherwise known as the “debt ceiling deal”). The Hill reports that the White House announced Wednesday that barring a change to the GOP proposed spending levels, the President will veto their funding bills.

Meanwhile, on the Senate side, Majority Leader Reid (D-NV) has indicated he does not plan to bring a budget proposal to the Senate floor for a vote as the spending caps and allocations for the 12 different appropriations measures were predetermined by the Budget Control Act.

It is expected that House and Senate Appropriations Subcommittees will begin to consider appropriations bills in short order. The Labor, Health, and Human Services (LHHS) bill will not be one of the first to be considered since it is notoriously controversial due to many competing priorities and limited funds.

The regular order budget and appropriations process first involves the development – and passage by House and Senate – of a budget proposal, which outlines overall spending by broad categories (e.g., defense, health). The Congressional budget does not require the signature of the President. Then, the 12 Appropriations Subcommittees in both the House and Senate receive their particular allocation; from there, each subcommittee decides specific line-item funding amounts for the departments, agencies, and programs under their respective jurisdiction. The bills are marked-up and passed at the subcommiittee and full committee levels and brought forward for full House/Senate consideration. Since the chambers typically pass very different bills, each of the 12 spending measures goes to a conference committeee where differences are worked out and a single, uniform measure is developed and then sent back to both the House and Senate for final passage. Once a spending bill is enacted by both chambers it is sent to the President for signature or veto. The annual appropriations process is supposed to be wrapped-up by September 30, the end of the federal fiscal year. However, Congress typically misses this deadline. Given that this is an election year, it is expected that most – if not all – 12 appropriations bills will be on the growing list of matters to be considered during the lame-duck session.