Congress is now on recess for the month of August although party leaders remain focused on the selection of the 12 member “debt commission” charged with cutting $1.5 trillion from the deficit over the next 10 years by the end of the year.

The committee is nearly assembled with 9 of the 12 members having been announced.  From the Senate leaders selected Democrats Patty Murray (WA), Max Baucus (MT), John Kerry (MA) and Republicans Jon Kyl (AZ), Pat Toomey (PA) and Rob Portman (OH).  In the House: Republicans Jeb Hensarling (TX), Dave Camp (MI) and Fred Upton (MI) were nominated to serve.  House Democrats have not yet been selected, and must do so by August 16.

Once finalized, the committee will begin its work looking for spending reductions.  The commission must agree upon an adequate level of savings by November 23 when it will then seek support of the full Congress.  Congress must vote to approve the cuts by December 23 in order for the debt ceiling to be raised again.  However, should the committee fail to agree on cuts or successfully sell their proposal to Congress, then an automatic across-the-board cut will go into effect.  This would trigger an automatic $1.2 trillion cut to the federal budget.  Medicare cuts would be capped at 2 percent and Medicaid would be exempted from the cuts.

IHA continues to monitor the ongoing work in Washington, D.C. hospital advocates should stay tuned to the IHA Policy Blog for continuing coverage as more details unfold.

With less than two weeks to strike a deal or face a default on the nation’s $14 trillion debt, Congressional leaders are scrambling to piece together a package of program cuts and revenue options can be accepted by Senate Democrats, the White House and conservative House Republicans.

This week the so-called “Gang of Six” released a new proposal that is gaining traction.  Members include Senators Saxby Chambliss (R-GA), Tom Coburn (R-OK), Kent Conrad (D-ND), Mike Crapo (R-ID), Dick Durbin (D-IL) and Mark Warner (D-VA).

Their plan to seeks to reduce national deficit by nearly $4 trillion over 10 years and proposes billions in cuts from Medicare and Medicaid.  A few of members of the Gang of Six have yet to formally sign off on the framework but President Obama, after reviewing the proposal, added his support saying that proposal is on the right track concerning this issue.

The proposal seeks a two-part process with $500 billion in initial cuts followed by a process for congressional committees to pass a larger deficit reduction measure within 6 months.  Committees would be responsible for finding additional discretionary cuts and $800 – $900 billion in entitlement savings, as well as $1.1 trillion in new revenues.

The plan is unlikely to emerge in the short-term discussion of how to address the debt ceiling by August 2, though it could set up a series of short-term extensions giving Congress time to work on a larger measure.

The proposal comes on the heels of a party-line vote in the House this week on the bill referred to as the “cut, cap, and balance” legislation.  The 234-190 vote was backed by the freshmen “tea-party” caucus, even though it’s been widely reported that the legislation is dead on arrival in the Senate and faces a White House veto.

IHA has issued a series of Action Alerts urging Congress to protect hospital payments under Medicare and Medicaid as negotiations continue:

Prospective Payment System Hospitals – Take Action Here
Critical Access Hospitals – Take Action Here
Rural Prospective Payment or “Tweener” Hospitals – Take Action Here

President Obama, in response to the House Republican budget plan, released his administration’s proposal that seeks to reduce the deficit by $4 trillion over the next decade.

Though the proposal is merely a framework, early analysis shows that of the $4 trillion in sought reductions, at least one quarter of the savings the president is requesting comes from reductions in government health care spending, in particular the Medicare and Medicaid programs.  These programs have come to the forefront of discussions when dealing with the national debt, which is currently more than $14 trillion.

The president’s plan seeks to achieve Medicare and Medicaid savings of $480 billion by 2023 and an additional $1 trillion over the following decade (2023-2033).

The plan would:

• Strengthen the power of the controversial Independent Payment Advisory Board
• Reform the Medicaid program’s Federal-State Partnership
• Make changes to Medicare’s prescription drug program
• Reduce costs by improving patient safety
• Reduce abuse in the Medicare and Medicaid programs

The White House has released more detail here.

The proposal comes in response to the House Republican proposal that would make more fundamental changes to the Medicare program — while the president’s proposal aims to make changes to the program as it exists today.  House Budget Committee Chair Paul Ryan (R-WI) stands by his committee’s proposal and came out yesterday critical of the Obama plan.

On the Ryan plan, the president said, “I will not allow Medicare to become a voucher program that leaves seniors at the mercy of the insurance industry with a shrinking benefit to pay for rising costs.”

It is unclear at this time which, if any, of the presidents’ or the House Republican proposal will gain enough traction to move forward, but even on first look of the side-by-side comparision of the proposals one can easily see stark differences that will add to the overall difficulty of compromise on these tough issues.

IHA will continue to evaluate the proposals and monitor their progress.

Late this week the U.S. Senate failed its second attempt to gain the 60 needed votes to pass the so-called “Jobs Bill.”  The bill contains important health care related provisions that have been scaled back from the original proposal.

Senators Ben Nelson (D-NE) and Joe Lieberman (I-CT) voted with all Senate Republicans to block the $120 billion bill.  The measure failed having only received 56 “aye” votes.

Of key concern for hospitals is the enhanced Medicaid funding in the bill that would extend the increased federal share of Medicaid dollars for states.  Iowa’s state budget currently relies on nearly $150 million that would cease to exist should the Senate not pass this legislation.

In addition the bill contains an temporary patch for physician Medicare payments that are currently in limbo.  A flawed payment mechanism in the Medicare program causes physicians to face huge annual cuts that, until now, had been prevented by Congress.  Physician Medicare claims have been held by the Centers for Medicare & Medicaid Services for the past week and will likely have to be held longer.

IHA supports this legislation and urges the Senate to take final action to ensure appropriate funding for state budgets and fix the physician payment cuts.

Iowa’s already-struggling mental health care system has taken another hit , as Ellsworth Municipal Hospital (EMH) in Iowa Falls announced that, within the next two months, it would be closing its inpatient behavioral health service and its chemical dependency program. 

This was not an easy decision for EMH leaders to make.  Only a handful of mental health programs like these exist in Iowa and the services at EMH are heavily used by patients from all over the state.  In fact, only 15 percent of the hospital’s inpatient behavioral health patients come from Hardin County.  This is no surprise; after all, 83 of Iowa’s 99 counties are considered mental health professional shortage areas.  With only about seven practicing psychiatrists for every 100,000 residents, Iowa ranks 47^th in the nation for access to mental health care. 

In Iowa Falls, EMH has done all it could to keep its inpatient program functioning.  The hospital streamlined the program, reduced staff and discontinued its transportation program.  But because of lagging reimbursement, particularly from Medicare and Medicaid, the program has been a drain on overall hospital finances.  This is a problem for all Iowa hospitals offering behavioral health services, but the impact is much greater for small facilities like EMH, which do not have the patient volume to make up for the losses.  This is why only a handful of these small hospitals offer any kind of behavioral health program (inpatient or outpatient). 

The good news for people in and around centrally located Hardin County is that inpatient behavioral health services in Des Moines and Waterloo are relatively close by.  For much of the rest of Iowa, particularly in the western half of the state, the distances are much greater.

What needs to be done?  IHA is advocating for programs that would attract more psychiatrists to the state, such as student loan repayment programs.  Expanding telemedicine services through high-speed Internet would allow more patients to utilitize online counseling rather than having to travel to urban areas where behavioral health programs and practitioners are concentrated.  IHA has been steadfast in pushing to keep the state’s mental health institutes in Cherokee, Clarinda, Independence and Mount Pleasant open – Iowa needs more access to mental health services, not less. 

IHA also continuously advocates for increasing Medicare and Medicaid payments to hospitals and doctors.  Hospitals lose millions of dollars each year because these programs do not cover the full cost of care.