Government Relations Update – April 3, 2012

Pennsylvania Issues

Legislation

H.B. 1880: Professional Nurse Staffing Standards. As previously reported, State Representative William F. Adolph, Jr. (R-Delaware) introduced legislation on September 29, 2011 which would require each Pennsylvania hospital to develop, implement and monitor a professional nurse staffing plan for each hospital unit based on patient acuity, patient volumes, the experience of the nursing staff and support services available to the nurses. The plan would be developed by a professional nurse staffing committee, and the majority of the committee members would be professional nurses currently providing direct patient care in the hospital selected by their peers to serve on the committee. Hospital and nursing administration and the elected chairperson of the professional nurse staffing committee would determine other staff to be represented on the committee. Representatives Julie Harhart (R-Lehigh, Northampton) and Justin Simmons (R-Lehigh, Northampton) serve as co-sponsors of the bill, which has been referred to the House Committee on Health. SEIU Healthcare Pennsylvania, the Pennsylvania State Nurses Association, the American Nurses Association and other regional nursing associations support the bill. The Hospital Association of Pennsylvania (HAP) opposes the bill since it would create new administrative burdens on hospitals while limiting their ability to adjust staffing to meet changing patient needs. HAP communicated these concerns to Representative Adolph and recommended the following modifications to the bill: (1) the nurse staffing committee would serve only in an advisory capacity; (2) hospitals would determine the method to select members of the committee; and (3) exemptions would be permitted for hospitals that have achieved certain nursing designations, such as the Magnet Program or the Pathway to Excellence Program through the American Nurses Credentialing Center. St. Luke’s continues to communicate our concerns with the bill to HAP and Representative Simmons.

H.B. 2175: Capital Facilities Debt Enabling Act. Pennsylvania’s Redevelopment Assistance Capital Program (RACP) is a major conduit used by the commonwealth to finance community development projects across Pennsylvania. Pennsylvania currently borrows more than $4 billion to pay for the program, including a significant number of projects approved by Governor Rendell during the final few weeks of his term. The program is currently administered by the Office of the Budget. On March 26, 2012, the House passed a bill which would immediately prevent the approval of additional RACP projects until the outstanding debt for the program is reduced to $3 billion. In addition, the bill would adopt public meeting and advance notification requirements for RACP projects under consideration and would prohibit approval of new projects between a gubernatorial election date and inaugural date. Representative Mike Turzai (R-Allegheny), who serves as the sponsor for the bill, asserts that the RACP process must be transparent. Representatives Clymer (R-Bucks), Day (R-Berks, Lehigh), Emrick (R-Northampton), Hahn (R-Northampton), Harhart (R-Lehigh, Northampton), Knowles (R-Schuylkill), and Simmons (R-Lehigh, Northampton) serve as co-sponsors of the bill, which has been forwarded to the Senate Finance Committee for consideration.

Miscellaneous

Pennsylvania Primary Election: The Pennsylvania Primary election will be held on April 24, 2012. Voters will select party candidates for President, Unites States Congress and several statewide and local races. Senator Casey (D-PA) faces challenger Joseph Vodvarka, a small business owner, in the primary election for United States Senate. Former State Representative Sam Rohrer, businessman Steven Welch, former legislative assistant Marc Scaringi, coal mine owner Tom Smith, and former veteran and business owner David Christian are the candidates for the Republican nomination for Senate.

New Jersey Issues

Legislation

S.782: New Jersey Hospital Disclosure and Public Resource Protection Act. On March 15, 2012, the New Jersey Senate approved legislation requiring each for-profit hospital to disclose the following information to the Department of Health and Senior Services and on each hospital’s web site: audited annual and unaudited quarterly financial statements; a list of all payments from the hospital to any entity owned or managed by any owner, board member or officer of the hospital; a list of all compensation, including salaries, benefits, bonuses, and deferred compensation, paid to each board member and officer of the hospital; a chart that identifies all legal entities related to or affiliated with the hospital; a list of investors in the hospital; a list of all joint ventures involving the hospital; the amounts paid to any affiliates for management or consulting services; and a description of major plant or facility expansion projects at the hospital, including the project location, scope, timeline for completion, and estimated cost of and sources of funding for construction. Senator Loretta Weinberg (D-Bergen) sponsored the bill, which passed in the Senate by a vote of 32 to 4 with 4 members not voting. Senator Michael Doherty (R- Hunterdon, Warren) voted against the legislation, arguing that it would require additional and unnecessary reporting requirements. The bill has been sent to the State Assembly Health and Senior Services Committee for consideration.

Federal Issues

Advocacy

Patient Protection and Affordable Care Act (PPACA): On March 28, 2012, the United States Supreme Court concluded three days of oral arguments regarding the Patient Protection and Affordable Care Act (PPACA). During the first day, the court examined whether it should defer ruling on the constitutionality of PPACA prior to the effectiveness in 2014 of the individual mandate requiring the purchase of health insurance. The second day was devoted to arguments regarding the constitutionality of the individual mandate. On the final day of oral arguments, the court considered whether the remainder of PPACA can be upheld if the individual mandate is stricken. Many legal experts have concluded that the court will not defer its ruling until 2014 and instead find that the individual mandate is unconstitutional. If the court determines that the individual mandate is unconstitutional, the court will also need to decide whether the remainder of PPACA can survive or whether the entire bill must be overturned, given the importance of the individual mandate to PPACA. A ruling is expected this summer during the height of the 2012 presidential campaign.

Federal Budget: Republican leaders in the House introduced a budget plan to dramatically reduce federal spending over the next ten years, and the House approved the plan on March 29, 2012. The plan would restructure the Medicare program by permitting individuals who are currently 55 and younger to opt out of the Medicare system and purchase private insurance with a federal subsidy. The plan would also convert Medicaid into a block-grant program controlled by states. Other federal spending programs, such as Pell grants and farm subsidies, would experience significant reductions. The three highest individual tax rates and the corporate tax rate would be reduced to 25%, and the six individual tax brackets currently in effect would be restructured into two individual tax brackets. The President and Senate Democrats strongly oppose the plan, which they claim would assist wealthy taxpayers while crippling vital programs. HAP opposes the plan, since half of the proposed savings would come from reductions to health care providers. Although the plan has little chance of becoming law, it establishes a sharp divide for the upcoming budget deliberations.

Medical Malpractice Reform: On March 22, 2012, the House passed a medical liability reform package, including caps on damages, as part of a legislative package that eliminates the Medicare Independent Payment Advisory Board (IPAB). PPACA created IPAB as a cost-containment mechanism for Medicare. IPAB would be required to adopt cuts in healthcare spending if healthcare costs exceed a certain formula, which has drawn comparisons to the sustainable growth rate formula that has been problematic in determining the Medicare physician fee schedule. While many Democrats and Republicans support the elimination or restructuring of IPAB, the introduction of caps on damages will likely lead the Senate to oppose the bill.