Government Relations Update – December 14, 2010

State Issues

Legislation

• H.B. 47 (Act 73 of 2010): The Sudden Infant Death Syndrome Education and Prevention Program Act. On October 19, 2010, Governor Rendell signed a bill into law requiring the Department of Health (DOH) to distribute informational materials concerning Sudden Infant Death Syndrome (SIDS) and Sudden Unexplained Death to Infants (SUDI) to hospitals, birthing centers and certain health care practitioners by December 18, 2010. Providers are required to distribute these materials to all parents of newborns prior to hospital discharge. Act 73 also requires a written statement to be signed by parents indicating that the parents received, read and have an understanding of the materials provided. Within the next week, hospitals will receive a letter from DOH with instructions for distribution of the SIDS/SUDI information. Representatives Beyer (R-Lehigh, Northampton ), Brennan (D-Lehigh, Northampton ), Freeman (D-Northampton) and Reichley (R-Berks, Lehigh) served as co-sponsors of the legislation. Supporters of the legislation believe that education will lead to a decrease in the number of infant deaths. HAP opposed the legislation since it creates new administrative burdens for hospitals.

Miscellaneous

• 2009-2010 Legislative Session: The 2009-2010 legislative session concluded after producing only 226 news laws, ranking it as the least productive of the past 12 legislative sessions. By comparison, 433 new laws were enacted during the final session of the former Ridge/Schweiker administration. The total number of new laws signed by Governor Rendell during his eight years in office is significantly less than the administrations of Governor Tom Ridge and Governor Robert Casey. The 2011-2012 legislative session begins on January 4, 2011 under the leadership of Governor Tom Corbett (R).

Federal Issues

Legislation

• H.R.4994: Medicare and Medicaid Extenders Act of 2010. Congress approved legislation last week to avert for one year the expected 25% decrease in Medicare physician payments scheduled to take effect on January 1, 2011. President Obama is expected to sign the bill into law later this week. As previously reported, St. Luke’s would have experienced an estimated annual payment reduction of $6.2 million without legislative action. The American Medical Association (AMA) praised Congress for passing the bill, but the AMA urged legislators to enact a more permanent solution. Surveys conducted by organizations lobbying on behalf of physician groups contend that up to 43% of doctors who currently treat Medicare patients will stop accepting these patients if the scheduled reductions are ever implemented. Congressmen Dent (R-15), Holden (D-17) and Murphy (D-8) voted in favor of the legislation.
• Constitutional Challenges to PPACA: The United States Supreme Court has held that the commerce clause of the Constitution allows Congress to regulate “activities that substantially affect interstate commerce.” As previously reported, there are nearly two dozen legal challenges to PPACA, and Federal district judges are now being forced to decide whether the failure to obtain insurance can be defined as an “activity.” On December 13, 2010, Judge Henry E. Hudson of the Federal District Court in Richmond , Virginia ruled that the law was unconstitutional since the individual mandate to buy health insurance “exceeds the constitutional boundaries of congressional power.” Two other district judges upheld the law earlier this year. Most commentators expect the issue will eventually be decided by the United States Supreme Court, but that decision could take two years. In the meantime, it is unclear how, or if, hospitals, states and insurance companies will implement PPACA given the inconsistent rulings.

Advocacy

• President Obama’s Fiscal Commission Rejects Final Recommendations: On February 18, 2010, President Obama created the National Commission on Fiscal Responsibility by executive order. The commission was charged with addressing the nation’s fiscal challenges and identifying policies for improvement. As previously reported, the co-chairs released draft recommendations on November 10, 2010, which included cuts to domestic and military spending, an increase to the Federal gasoline tax, elimination of certain tax breaks and an increase in the retirement age for social security. The proposal also called for reductions in federal spending on graduate and indirect medical education, elimination of the Medicare bad debt program, which provides additional funding to hospitals treating seniors unable to pay their bills, reductions to the Medicare Advantage program and decreased disproportionate share payments to hospitals. The commission asserted that these recommendations would reduce the federal deficit by nearly $4 trillion over the next decade. The report required approval by 14 of the 18 commission members in order to be presented to Congress. The report received the approval of only 11 commission members, which means that the report will not be presented. President Obama praised the work of the commission and announced his intent to incorporate certain elements of the report into his proposed budget for federal fiscal year 2012.

Miscellaneous

• House Republican Reorganization: On December 10, 2010, the House Republican Caucus announced the appointment of Congressman Charlie Dent (R-15) to the House Appropriations Committee for the 112^th Congress. The Appropriations Committee is considered one of the most powerful committees in Congress, since it determines annual funding levels for departments and agencies within the federal government. The Appropriations Committee also plays a critical role in the budget process through its review of budget requests by federal agencies. Congressman Dent is one of only nine Republicans added to the committee, which will decrease in size from 60 to 50 members in the new Congress. Congressman Dent will also be the first Republican from the Commonwealth of Pennsylvania to serve on the committee since the 110^th Congress. In accepting the appointment, Congressman Dent stated that he would use the opportunity to restore fiscal discipline in Congress and ensure that federal dollars are spent wisely. St. Luke’s Hospital – Bethlehem Campus, St. Luke’s Hospital – Allentown Campus and St. Luke’s Riverside Hospital are within Congressman Dent’s district.

Local Issues

Advocacy

• Allentown Income Tax Increase: On December 1, 2010, Allentown City Council approved a 35% increase to the City of Allentown ’s earned income tax. The tax applies both to Allentown residents and to individuals who work in the city but reside elsewhere. Councilwoman Eichenwald (D) defended the tax increase, claiming that it was necessary to fund increasing pension obligations, which have doubled since 2006. PPL publically criticized the legislation, asserting that it will hurt efforts to attract new employees and creates a disincentive for companies to relocate into or to remain in the city. Councilmen D’Amore (D), Schlossberg (D) and Schweyer (D) voted against the bill, while Councilmen Donovan (D), Guridy (D) and O’Connell (D) and Councilwoman Eichenwald (D) supported the legislation. Residents and nonresidents who work in the city earning $50,000 a year will experience a $175 increase in their earned income tax beginning in 2011. Allentown is now one of only 16 Pennsylvania municipalities balancing its budget by taxing the income of employees who live outside the municipality. Mayor Pawlowski (D) favored the increase and supported council’s passage of the bill.