House Committee to Release Draft of "21st Century Cures" Legislation

House Energy and Commerce Health Subcommittee Chairman Joe Pitts (R-PA) announced that the committee will release by January a draft of legislation based on the hearings and feedback taken in connection with the committee’s 21st Century Cures initiative. The measure is intended to help overcome barriers, such as the time and expense involved, in developing new drugs and other treatments.

FY 2016 Budget

The Director of the Office of Management and Budget (OMB) recently hinted that the President will likely include relief from the sequestration spending cuts for certain non-defense categories in his fiscal year (FY) 2016 budget recommendations to Congress in order to improve economic growth. The Budget and Accounting Act of 1921 requires the President to submit his budget request for the upcoming fiscal year no later than the first Monday of February (e.g., Monday, February 2, 2015).

Republicans Ramp Up Criticism of PPACA as Election Nears

The Senate Budget Committee ranking member Jeff Sessions (R-AL) released a staff report which estimates that the Patient Protection and Affordable Care Act (PPACA) will increase the federal deficit by $130 billion over FY 2015-2024. The staff used recent data from the Congressional Budget Office (CBO), but an economic model that differs from the CBO model. They said that repealing the health law would cost $180 billion over FY 2015-2024. Sen. Lamar Alexander (R-TN) added that the Administration “should admit Obamacare is a failure and start working with Republicans to repair the damage it has done, putting in place policies that move us step by step toward more freedom, more choices and lower costs….” In another strike at the law, Senators John Cornyn (R-TX) and Ted Cruz (R-TX) filed a brief with the U.S. District Court for the District of Columbia contending that the court erred in a prior ruling that the PPACA was not a revenue measure that should have originated in the House of Representatives rather than the Senate. They said they want to uphold the constitution even though “it may seem odd that sitting Senators would speak out in support of enforcing restrictions on the authority of their own chamber….” Also, Judicial Watch filed a lawsuit which alleges that members of Congress and congressional staffers who enrolled in health care coverage under the District of Columbia’s “small business exchange” did so illegally because their offices are not small businesses as defined under the law. On a positive note, the Centers for Medicare and Medicaid Services (CMS) reported that all counties in states that have chosen to forego state-run exchanges in favor of the federal website Healthcare.gov will have health insurers offering coverage in 2015. CMS also announced that up to $114 million is being made available to 75 Medicare accountable care organizations (ACOs) under the ACO Investment Model. The agency said the action will provide “up front investments in infrastructure and redesigned care process to help eligible ACOs continue to provide higher quality care. This will help increase the number of beneficiaries, regardless of geographic location, that can benefit from lower costs and improved health care through Medicare ACOs.” The funding will be recouped through an offset of an ACO’s earned shared savings.

Republicans Question CMS Oversight of Medicaid Spending

Senator Orrin Hatch (R-UT) and House Energy and Commerce Committee Chairman Fred Upton (R-MI) sent a letter to CMS Administrator Marilyn Tavenner asking her to respond by November 24th about what they say are “troubling uses” of the PPACA’s method giving “presumptive eligibility” that allows state residents who think they are eligible for Medicaid based on their income to temporarily enroll until their eligibility can be verified. They objected to Massachusetts’s use of the method and request for an extension for 2015, stating that “We believe it an inappropriate use of federal Medicaid funds to temporarily enroll thousands of individuals in Medicaid, especially since CMS knows that many of these individuals are not eligible for Medicaid coverage.” The members also asked CMS for information on whether reported financial problems in Puerto Rico could lead to inappropriate Medicaid spending. In related news, the U.S. Treasury Department reported that Medicaid spending in FY 2014 rose to $301 billion from $265 billion in the prior fiscal year. Also, Medicare spending rose to $606 billion in FY 2014 from $591 billion in FY 2013. PPACA individual tax credit subsidies amounted to about $13 billion from January through September 2014. Despite the overall increase in federal health care spending the Treasury Department said that the federal deficit for the fiscal year declined as a percent of the gross domestic product (GDP).

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