Government Relations Update – April 29, 2013

Pennsylvania Issues

Legislation

H.B. 1190: Hospital Licensure. On April 15, 2013, Representative Bryan Cutler (R-Lancaster), a former X-ray technologist and manager of support services for Lancaster General Hospital, introduced legislation to exempt hospitals from routine licensure renewal surveys conducted by the Pennsylvania Department of Health (DOH). If enacted, the bill would require the DOH to recognize reports of national accreditation organizations as acceptable for meeting licensure requirements, as long as the organization’s standards are equal to or more stringent than those of the DOH. Hospitals not meeting accreditation criteria would still be subject to the current licensing requirements of the DOH. In addition, the DOH would maintain full authority to inspect a hospital based on patient complaints. Representatives Michael Schlossberg (D-Lehigh) and Ryan Mackenzie (R-Berks, Lehigh) serve as co-sponsors of the bill, which has been assigned to the House Appropriations Committee. The Hospital & Healthsystem Association of Pennsylvania (HAP) strongly supports the bill.

S.B. 5: Community-Based Health Care Program. As previously reported, Governor Tom Corbett (R) included $5 million in his proposed 2013-2014 state budget to support community based health care clinics located in rural and underserved areas throughout Pennsylvania, since these clinics provide uninsured patients with a centralized site for medical care. On March 19, 2013, the Senate unanimously passed legislation sponsored by Senator Erickson (R-Chester, Delaware) to spend $4 million to develop and expand community based health care clinics in accordance with the Governor’s proposal. Senators Dave Argall (R-Berks, Carbon, Lehigh, Monroe, Northampton), Pat Browne (R-Lehigh, Monroe, Northampton) and Bob Mensch (R-Bucks, Lehigh, Montgomery, Northampton) serve as co-sponsors of the legislation, which has been sent to the House and referred to the Health Committee.  HAP supports the bill.

Advocacy

State Tax Revenues: The Commonwealth collected $4.2 billion in General Fund revenues in March, which was $69.4 million or 1.6%, less than budgeted. The year-to-date collections are currently $20.3 billion, which is $35.5 million, or 0.2%, better than budgeted. However, all three of the state’s major taxes – sales, personal and corporation taxes –have produced less revenue year-to-date than anticipated.

Miscellaneous

St. Luke’s Hospital-Allentown Campus: On April 18, 2013, City of Allentown Director of Community & Economic Development Sara Hailstone, Lehigh County Director of Administration Tom Muller and Representatives Michael Schlossberg (D-Lehigh) and Ryan Mackenzie (R-Berks, Lehigh) attended a press conference at St. Luke’s Hospital – Allentown Campus to announce the opening of the new parking deck.

New Jersey Issues

Miscellaneous

New Jersey Primary Election: The New Jersey primary election will be held on June 4, 2013.  Voters will select party candidates for the State Senate and State Assembly. Incumbent State Senator Michael Doherty (R-Warren, Hunterdon, Somerset) does not have a primary opponent, although he will face Democratic challenger Ben Auletta in the November general election. Likewise, Assemblymen Erik Peterson (R-Warren, Hunterdon) and John DiMaio (R-Warren, Hunterdon) do not have primary opponents, but they will face Democrats John Valentine and Ralph Drake, respectively, in the general election.

Federal Issues

Legislation

S.744: Border Security, Economic Opportunity, and Immigration Modernization Act. On April 16, 2013, Senator Charles Schumer (D-NY) introduced a comprehensive immigration bill which would legalize the approximately 11 million out-of-status immigrants who live in the United States. The proposed bill contains a number of provisions that would significantly impact the health care industry.  While the bill prohibits out-of-status immigrants from accessing public benefits during their transitional period, the ability to work legally means they would have access to private insurance.  Further, after they transition to full citizenship, these immigrants would have the same access to public health benefits as other United States citizens. Senator Robert Menendez (D-NJ) serves as a co-sponsor of the bill, which has been assigned to the Senate Judiciary Committee. HAP and the American Hospital Association (AHA) have not commented on the bill.

S.739: National Nursing Shortage Reform and Patient Advocacy Act. On April 16, 2013, Senator Barbara Boxer (D-CA) re-introduced legislation requiring hospitals to maintain a minimum nurse-to-patient staffing ratio. The bill would prevent hospitals from imposing mandatory overtime requirements to meet these ratios and would include new whistleblower protections for nurses who report violations of the staffing standards. In addition, the bill would require hospitals to post the staffing requirements and keep records showing actual nurse-to-patient ratios maintained by the hospitals.  The proposal would also allow the federal government to audit and impose penalties as high as $25,000 for failure to comply.  The Senator asserts that the bill would improve the quality of patient care. The legislation is supported by the California Nurses Association/National Nurses United and the American Federation of State, County and Municipal Employees (AFSCME).

H.R. 1250: Medicare Audit Improvement Act of 2013. The Recovery Audit Contractor (RAC) program was authorized by the Medicare Modernization Act of 2003 as a Medicare demonstration project intended to identify and recover improper Medicare payments made to healthcare providers. The RAC program was made permanent by the Tax Relief and Health Care Act of 2006 and was later extended to the Medicaid program through the Patient Protection and Affordable Care Act (PPAPCA). The RAC program has been criticized by providers faced with redundant audits, unmanageable medical record requests and inappropriate payment denials. In addition, RAC auditors are frequently paid on a contingency basis, causing some of them to be overly aggressive. According to the AHA, hospitals are successfully overturning 75% of all RAC denials. On March 19, 2013, Congressman Sam Graves (R-6-MO) re-introduced legislation to reform the RAC program. The bill would limit documentation requests permitted by RAC auditors and require RAC auditors to pay penalties for repeated failures to meet program guidelines. The Congressman introduced similar legislation during the previous Congress, but the bill was not considered before the session ended. The bill has been assigned to the House Committee on Ways and Means and the House Committee on Energy and Commerce. The AHA, HAP and the New Jersey Hospital Association support the legislation.

Advocacy

Section 501(r) of the Internal Revenue Code: PPACA imposed new standards for not-for-profit hospitals to maintain their tax-exempt status, including requirements to conduct periodic Community Health Needs Assessments (CHNA), establish and publicly disclose financial assistance policies, limit charges to needy individuals and follow reasonable billing and collection practices. PPACA imposes a $50,000 excise tax for each year that a tax-exempt hospital fails to satisfy certain of these requirements. Additionally, income derived from non-compliant hospital facilities is subject to unrelated business income tax. PPACA requires the Internal Revenue Service (IRS) to adopt rules implementing these standards, and, on April 9, 2013, the IRS issued its proposed rules.