Government Relations Update - October 16, 2012

Pennsylvania Issues

Miscellaneous

Resignation: On October 4, 2012, Dr. Eli N. Avila, Secretary for the Pennsylvania Department of Health (DOH), resigned his position to pursue other interests. Dr. Avila spoke at the grand opening of St. Luke's Hospital - Anderson Campus on November 11, 2011. Michael Wolf, Executive Deputy Secretary for the DOH, will serve as the Acting Secretary until a successor is named. Prior to joining the DOH in 2011, Mr. Wolf served as the Director of Worldwide Public Affairs and Policy for Pfizer for five years. Mr. Wolf also served former Governor Tom Ridge (R-PA) for eight years, including as the Deputy Secretary for the Office of International Business Development from September 2000 to January 2003. Mr. Wolf is a graduate of Slippery Rock University with a Bachelor of Arts in Political Science and received a Masters of Business Administration with a focus on Global Management from the University of Phoenix.

Pennsylvania General Election: The Pennsylvania general election will be held on November 6, 2012. Pennsylvania residents will elect candidates for all 203 seats in the House of Representatives and 25 seats in the Senate. State Senator Dave Argall (R-29), whose district includes St. Luke's Miners Memorial Hospital, will face former State Representative Tim Seip (D). Every incumbent House member representing the Lehigh Valley has a challenger, except Representatives Harhart (R-Lehigh, Northampton) and Freeman (D-Northampton). Former Allentown City Councilman Michael Schlossberg (D) did not have a primary opponent and will not face an opponent in the general election. He will replace Representative Jennifer Mann (D-Lehigh), who announced in November 2011 that she would not seek reelection following seven consecutive terms in office. Representative Schlossberg's district will include St. Luke's Hospital - Allentown Campus.

New Jersey Issues

Advocacy

Comprehensive Medicaid Waiver: On October 2, 2012, the Centers for Medicare & Medicaid Services (CMS) approved an application from the State of New Jersey to implement a massive New Jersey Medicaid demonstration project beginning on October 1, 2012 and continuing through June 30, 2017. As a result, New Jersey will implement sweeping payment reforms across the $10 billion New Jersey Medicaid program, which serves more than one million poor, disabled and elderly people. As an example, New Jersey will introduce a new managed care system to cover long term care programs for the elderly, whereby insurance companies will be compensated primarily based on outcomes and the number of insured patients. New Jersey also plans to terminate Medicaid fee-for-service payment plans for another 60,000 adults and 40,000 children, which follows the prior mandatory transfer of 200,000 Medicaid patients from fee-for-service plans to managed care plans in June 2011. In addition, New Jersey expects to implement changes to adult daycare programs for the disabled by introducing a variety of home and community support systems as alternatives to living in one of the state's seven developmental centers. The New Jersey Hospital Association (NJHA) supports the initiative, since New Jersey will preserve $128 million in federal aid that New Jersey contributes to hospitals for medical school education and other support programs and gain additional control over expenditures within its Medicaid program.

On October 11, 2012, Department of Health Commissioner Mary O'Dowd met with the NJHA to discuss the state's Delivery System Reform Incentive Payment (DSRIP) model, which the state is promoting in connection with the demonstration project. The DSRIP will reward hospitals which establish programs that improve outcomes for specific chronic diseases or conditions, such as heart disease and diabetes. Participating hospitals are required to submit a performance plan to the New Jersey Department of Health prior to May 1, 2013 to be eligible. CMS must approve the DSRIP models, as well as some other models being created through the demonstration project, before implementation.

Legislation

S.2135: New Jersey Health Benefit Exchange Act. As previously reported, the Patient Protection and Affordable Care Act (PPACA) creates statewide health insurance exchanges by 2014 for individuals and small businesses to compare health insurance plans and rates. If a state fails to create an exchange, the federal government must design one for it. On October 4, 2012, the New Jersey State Senate approved legislation establishing a statewide health insurance exchange. Every Republican senator, including Senator Michael Doherty (R-Warren, Hunterdon), voted against the measure. Governor Christie (R-NJ) vetoed a similar bill in May in advance of the United States Supreme Court decision regarding the constitutionality of PPACA. The Governor has since stated that he wants to consider all options before approving an exchange. The NJHA supports the bill, which is expected to pass the General Assembly within the next few weeks.

Miscellaneous

New Jersey General Election: The New Jersey general election will be held on November 6, 2012. Warren County residents will select a new County Freeholder following the defeat of incumbent Freeholder Everett Chamberlain (R) by Ed Smith (R) during the June primary election. Mr. Smith, who formerly served as Chief of Staff for Senator Doherty, will face Tom Palmieri (D) in the general election. Mr. Palmieri, who won as a write-in candidate, is an insurance agent and a member of the Warren County Economic Development Corporation.

Federal Issues

Advocacy

Lame-Duck Session: Congress concluded its session on September 22, 2012 and is not scheduled to reconvene until November 13, 2012. Congress is then expected to address several previously discussed significant healthcare matters, including the following: (1) the delay of mandatory budget cuts pursuant to the Budget Control Act of 2011; (2) a measure to prevent the scheduled 32% Medicare physician fee schedule reduction; and (3) the continuation of the Medicare Dependent Hospital Program. A failure to address either of the first two items will result in massive funding cuts to healthcare providers.

Miscellaneous

House and Senate Elections: On November 6, 2012, Tom Smith (R) will face incumbent Senator Bob Casey (D-PA) in the general election. Lackawanna County personal injury attorney Matt Cartwright (D) will run against Laureen Cummings (R) for the House seat in the newly defined 17th Congressional District, which now includes St. Luke's Hospital - Anderson Campus, St. Luke's Miners Memorial Hospital and St. Luke's Wind Gap Medical Center. Ms. Cummings is a nurse and small business owner. Congressman Charlie Dent (R-15) will face Richard Daugherty (D) in the 15th Congressional District, which includes St. Luke's Hospital - Allentown Campus and St. Luke's Hospital - Bethlehem Campus. Mr. Daugherty has been the executive director of the Lehigh County Senior Center since 1995. In the 8th Congressional District, Congressman Mike Fitzpatrick (R-8) will face Kathy Boockvar (D), an attorney who previously operated a small law practice. St. Luke's Hospital - Quakertown Campus is located within the 8th Congressional District.

New Jersey State Senator Joseph Kyrillos (R-Monmouth) will face incumbent Senator Robert Menendez (D-NJ) in the general election. Senator Kyrillos has been a member of the New Jersey General Assembly since 1988 and is also a commercial real estate broker. Congressman Leonard Lance (R-7-NJ) will face New Jersey Assemblyman Upendra Chivukula (D-Somerset) in the 7th Congressional District. Assemblyman Chivukula has been a member of the General Assembly since 2002 and currently serves as the Deputy Speaker. St. Luke's Hospital - Warren Campus is located within New Jersey's 7th Congressional District.