House Passes Reform Bill by Close Vote, Next Steps for Senate
By a vote of 220-215, the Affordable Health Care for America Act, HR 3962, passed the House of Representatives. The bill passed following approval of an amendment by several representatives and sponsor Rep. Bart Stupak (D-Mich.) to add language restricting federal funding and coverage of abortion except in the cases of rape, incest and life endangerment of the mother. The Catholic Health Association (CHA) supported the House for passing legislation largely consistent with health reform principles outlined in the CHA Vision for U.S. Health Care. The House legislation included insurance reforms to expand access to coverage, particularly those with pre-existing health conditions. A provision in the bill would allow documented immigrants to participate in the bill's insurance subsidies and exchange. The bill expanded coverage overall to an estimated 97 percent of the public through measures providing subsidies to purchase insurance. The Senate is still waiting on a Congressional Budget Office score of the merged legislation sent last week by Majority Leader Harry Reid (D-Nev.). Debate on the bill there will not take place until at least the end of next week, if not later.

House Vote on Health Reform Likely this Week
Last week, House Speaker Nancy Pelosi released a healthcare reform bill that includes a public option and a historic expansion of Medicaid. The bill will cost just under $900 billion over 10 years without increasing the deficit for at least 20 years, House Democrats said. The bill would cover an additional 35 to 36 million people and would require everyone to sign up by 2013 for insurance through their employer, a government program or a purchasing pool called an exchange. One change expected to be revealed is that some of the benefits in the bill, which mostly were set to take effect in 2013, have been moved up so that Americans would see the benefits of the legislation more quickly.

Speaker Nancy Pelosi could hold a vote on the final House of Representatives healthcare reform legislation this week. The likely day for a vote is Thursday, because this would allow Pelosi to keep her pledge to allow members three days to study the final legislation. No Republicans are expected to vote for the legislation. Complicating efforts are the fiscally conservative Blue Dog Democrats who have asked the Congressional Budget Office for an explanation of its assertion that the bill will reduce the deficit over time, and the Progressive Caucus, who may demand an up-or-down vote on a robust public option with rates tied to Medicare.

Senate Reform Bill Passes Finance Committee
Last week, the Senate Finance Committee approved its amended health reform legislation by a vote of 14-9. Sen. Olympia Snowe (R-ME), the lone Republican voting for the measure, emphasized that she still opposes the so-called public option, but also believes the private insurance market must yield a system in which health coverage becomes more widely accessible and affordable. Concerns remain that the Finance Committee legislation would leave approximately 25 million people uninsured.  

CBO Estimates Potential Cost Savings from Tort Reform
At the request of Sen. Orrin Hatch (R-UT), the Congressional Budget Office (CBO) estimated implementing a package of proposed national tort reforms that could reduce U.S. spending on healthcare by an estimated 0.5% a year. Tort reform could affect costs for healthcare directly by lowering premiums for medical liability insurance and indirectly by reducing the use of diagnostic tests and other healthcare services. CBO Director Douglas Elmendorf noted that recent research has provided additional evidence to suggest that lowering the cost of medical malpractice tends to reduce the use of healthcare services.

Senate Health Reform Update
The Senate Finance Committee concluded its mark on October 2 and adopted more amendments to improve affordability. Last week, the Committee considered 145 amendments, but a vote was not taken on all amendments. Republican and Democratic amendments focused on a wide variety of issues including Medicare Advantage, drug price negotiation, the public option, immigration, abortion, affordability provisions and the excise tax on insurance companies. Some improvements of note in the bill include an amendment sponsored by Senator Stabenow (D-MI) that will ensure mental health parity in health plans offered through the exchange. Senators Schumer (D-NY) and Rockefeller (D-WV) introduced two separate amendments that would have required a public health insurance option. The Rockefeller amendment was defeated 15-8 with five Democrats voting against it and the Schumer amendment was defeated 13-10 with three Democrats voting against it. While there currently is no public plan in the Senate Finance version of the bill, the U.S. Senate Committee Health, Education, Labor and Pensions (HELP) bill does include it. More amendments are expected on the public plan option when the bill hits the Senate floor. The Congressional Budget Office now needs to score this final amended bill. The Finance Committee reconvened on October 6. A  final vote is expected by the end of  next week. Democratic leaders in the Finance and HELP Committees will need to merge parts of the two bills where the committees have overlapping jurisdiction. Senate Majority Leader Reid (D-NV) intends to bring the bill to the Senate floor during the week of October 12. Floor debate could last a number of weeks.

Senate Finance Committee to Mark Up Bill
Last week, Senate Finance Chair Max Baucus introduced the chairman's mark for health reform legislation, scheduling a mark up of the bill for this week. While many of the provisions in the America's Healthy Future Act were previously released, some further details became available including requirements for tax-exempt hospitals. According to the Catholic Health Association, the mark's provisions support the reporting requirement in the new IRS Form 990 Schedule H, including requirements for community health needs assessments, financial assistance policies and collection practices, and limitations on charges. The mark did not initially win the support of any committee Republicans, but member Olympia Snowe praised the effort in a press release without endorsing the bill. Baucus also pledged to address concerns among some Senate Democrats that the bill does not adequately provide for affordable options for low-income persons while outlining an individual mandate for health coverage.

Mark Up to Begin in House Energy and Commerce Committee
This week, the House Energy and Commerce Committee will resume its mark up of the Tri-Committee house health reform legislation. The committee only will be considering amendments that had been filed prior to the August recess; no new amendments will be considered. Following the resumed mark up, the bills approved in all three committees will be merged into one bill by the House Rules Committee.

President to Address Congress on Health Reform
President Obama plans to address Congress today, only a day after lawmakers return from their August break, to spell out in detail his vision for overhauling healthcare. The move signals that Democrats have all but given up hope for a bipartisan breakthrough by Senate Finance Committee negotiators, because that committee, the only one seeking across-the-aisle compromise, had been given a September 15 deadline. Democrats have long pressed the president to offer a more specific plan and the timing immediately after the recess may help encourage those supporters and dispel any advantage opponents gained during the recess.

Medicare Explains H1N1 Vaccine Coverage
According to the Centers for Medicare & Medicaid Services (CMS), Medicare will pay healthcare providers the same rate to administer the H1N1 flu vaccine as the seasonal flu vaccine. The program will pay for both H1N1 and seasonal vaccination and for administering more than one dose of vaccine, if medically necessary for the beneficiary, according to CMS. The program will not pay physicians and other providers for the H1N1 vaccine itself, since it will be available to them for free. The Centers for Disease Control reports 36 deaths among children with H1N1 flu as of August, two-thirds of whom had high-risk medical conditions.

Senate Democrats Plot New Strategy, Consider Reconciliation to Pass Health Bill
Senate Democrats are increasingly considering using budget reconciliation – which would need a simple majority of 51 votes – to pass healthcare reform without Republican support. After consulting experts in Senate rules and procedure, the Democrats said they were increasingly confident that they could legislate creation of a public plan in a way that would withstand challenges expected from Republicans. Sen. Joe Lieberman, I-Conn., said President Obama should reconsider his timetable for a push at reform.

Obama Appeals To Doubters: Healthcare Plan a "Moral Obligation"
Last week, President Obama called getting healthcare reform done a "core ethical and moral obligation" to cover all Americans and lower costs. President Obama made his comments to a group of multi-denominational pastors, rabbis and other religious leaders. The administration encouraged Republicans to take part in the negotiations. The White House and congressional Democrats face long odds, and no guarantee of a bill at the end of the process.

House Reform Bill Moves Forward
A compromise agreed to late last week between the House leadership and the conservative "Blue Dog" Democrats allowed the Energy and Commerce Committee to resume marking up and ultimately approving H.R. 3200, the America's Affordable Health Choices Act, on July 31. Under the agreement, House leaders agreed to accept public plan language included in the Senate Health, Education, Labor and Pensions Committee bill, which allows the Health and Human Services Secretary to negotiate public plan rates with providers instead of relying on Medicare formulas. Several amendments were added to the bill, including some to address concerns over abortion coverage and comparative effectiveness research. Two approved amendments explicitly prohibit the government from using comparative effectiveness research to deny or ration care under any public plan.

Senate Finance Bill Still Has No Agreement
Senate Finance Committee Chairman Max Baucus (D-MT) announced July 30 that health reform negotiations underway among a bipartisan group of committee members would not be concluded prior to the scheduled Senate recess beginning August 10. The announcement, following remarks by Ranking Member Charles Grassley (R-IA) that many disagreements remain between Republican and Democratic committee members, delays introduction of the expected Finance Committee health reform bill until September 15.

Senate Vote on Reform Delayed
Senate Majority Leader Harry Reid (D-NV) announced last week that the full Senate would not have an opportunity to vote on health reform legislation prior to adjourning in August, moving the debate into the fall. The delay is due to the continuing negotiations among certain members of the Senate Finance Committee, being led by Chairman Max Baucus (D-MT). While Baucus agreed that the committee would not be able to pass legislation and combine it with the bill already passed by the Health, Education, Labor and Pensions Committee before August, he did express determination to introduce legislation and hold a committee vote prior to adjourning on August 7.

Vote in the House May Bypass Energy and Commerce Mark Up
The Energy and Commerce committee leadership did not reach a final agreement with the conservative "Blue Dog" Democrats on the committee for changes to the Tri-Committee bill. The Blue Dogs reached a tentative agreement with the White House and other House leaders to include provisions giving a newly-formed Independent Medicare Advisory Council authority to set payment rates for the Medicare program outside of the current congressional process. With the Energy and Commerce mark up postponed without a rescheduling, and the Ways and Means and Health and Education Committees already passing the bill, it is becoming more likely that the House leadership may bypass the Energy and Commerce mark up altogether and bring the bill directly to the floor. However, given the delay on the Senate side, that is not likely to happen prior to the August recess.   

Healthcare Reform Update
Last week, the House Ways and Means, Energy and Commerce, and Education and Labor committees all held hearings. In the Senate, Finance Committee Chairman Max Baucus announced that his committee had identified options for achieving 95% healthcare coverage for a price tag of below $1 trillion. The Finance Committee has not yet released details, but continues to negotiate financing provisions. The Senate Health, Education, Labor and Pensions committee continued marking up its version of a bill, delaying the release of final legislative language for providing a public health insurance option in the bill. Both Democrat and Republican members of the House Energy and Commerce Subcommittee on Health voiced opposition to the president’s proposal to cut $106 billion in Disproportionate Share Hospital (DSH) payments over 10 years to help pay for healthcare reform. The American Hospital Association strongly opposes the cuts, maintaining that the president’s proposal overlooks the critical role that the Medicare and Medicaid DSH programs play in supporting a broad range of services for hospitals' most vulnerable patients.

CHA Submits Comments on Proposed Requirements for Not-for-Profit Hospitals
Recently, the Catholic Health Association (CHA) sent comments to the Senate Finance Committee regarding its third and final health reform options paper, Financing Comprehensive Health Care Reform: Proposed Health System Savings and Revenue Options. CHA’s comments addressed proposals in the paper to establish certain requirements for not-for-profit hospitals, including community needs assessments and establishing minimum levels of annually provided charity care. CHA informed the Committee that these and other requirements for tax exempt hospitals were not necessary due to the increasing use of established community benefit guidelines. CHA also noted that the issue of community benefit is much greater than simply focusing on charity care.

House Advances Health Reform Legislation
The House Ways and Means Committee Chairman recently released a four-page outline of draft health reform legislation. The House proposal would establish a health insurance exchange and introduce administrative simplification and standardization to reduce administrative costs across health plans and providers. House leaders expect to send legislation to the House floor prior to the August recess.

Congress Passes Legislation Authorizing FDA to Regulate Tobacco
Last week, both the House and Senate passed legislation to authorize the Food and Drug Administration (FDA) to regulate tobacco products. The legislation would allow the FDA to regulate nicotine levels, bar flavor additives in tobacco products and require new warning labels on cigarette packages and advertising. President Obama is expected to sign the bill.

Hospitals Respond to Senate Healthcare Reform Proposals
The Senate Finance Committee recently released its third options paper outlining proposals to finance health reform efforts. Proposed options include capping the tax exclusion for employer-sponsored health coverage and itemized deductions for medical expenses. Health savings accounts and flexible spending accounts also are mentioned as targets for modification or elimination and "lifestyle" taxes on alcoholic and sugar-based beverages are being considered. The financing options paper also examines not-for-profit hospitals and proposes a possible excise tax for those that do not meet certain charity care requirements.

Prior to release of the paper, Catholic Health Association (CHA) president and CEO Sr. Carol Keehan, DC, met with Senate Finance Committee Chair Max Baucus after the chairman solicited CHA's thoughts on the proposed changes to the health delivery system. Sr. Carol reported that the conversation resulted in a positive exchange of ideas that reinforced CHA's health reform principles and commitment to enacting health reform this session of Congress.   

Last week, the American Hospital Association (AHA) submitted its formal comments to the Senate Finance Committee proposal. In its comments, AHA commended the committee for attempting to find fiscally responsible options for financing reform and emphasized its support for options that look to new revenue streams. However, AHA expressed concerns about proposals to reduce hospitals’ Medicare payments, especially regarding provisions relating to reductions in payments to disproportionate share hospitals and indirect medical education, along with changes that would undermine the community benefit standard for not-for-profit hospitals.

The financing paper is the last of three issued by the committee to spur discussion before it marks up comprehensive healthcare reform legislation next month. Previous papers addressed options for reforming the healthcare delivery system and expanding health coverage.