House leaders spent last night negotiating the final details of the $1.75 trillion Build Back Better Act. The House plans to vote on the legislation today following two hours of debate.
WSC will provide a summary of provisions that are of specific importance to our clients shortly. In the meantime, we have included a full summary provided by Bloomberg Government.
Text of the Build Back Better Act
Managers Amendment with Negotiated Changes
More than $550 billion would be spent on climate programs, a new family leave program would be created, and Medicare would be able to negotiate some drug prices under the Rules Committee Print of H.R. 5376 posted Nov. 3.
The bill, which represents a large portion of President Joe Biden’s economic agenda, would also increase certain taxes on high-income individuals, expand subsidies under the Affordable Care Act, and make the child tax credit permanently refundable while extending a boosted credit for one year.
The version headed to the floor for a vote Nov. 5 would be modified automatically by a manager’s amendment from Budget Committee Chairman John Yarmuth (D-Ky.), that includes compromises on drug pricing and the state and local tax deduction that are reflected in the summary below.
The measure is being considered using the budget reconciliation process that allows passage of legislation with simple majorities in both chambers, though provisions must meet budget conditions in the Byrd rule or can be removed in the Senate through points of order.
A Joint Committee on Taxation estimate said several of the tax provisions in the measure released Nov. 3 would raise roughly $1.48 trillion in revenue from fiscal 2022 through 2031. The estimate doesn’t include other offsets, such as those related to drug pricing, increased revenue from stepped-up IRS enforcement, or other fees that would be imposed.
A preliminary cost estimate from the White House said the bill would reduce the deficit by a net $36.3 billion over 10 years. The drug pricing provisions would reduce spending by $250 billion and increased IRS enforcement would increase revenue by $480 billion.
A simple majority would be required for the House to pass the bill, which will pave the way for members to clear a separate bipartisan infrastructure bill (H.R. 3684) that would reauthorize surface transportation programs for five years and provide additional spending to address climate change, replace lead pipes, and enhance the power grid.
The timing for Senate consideration of the reconciliation bill isn’t clear, as moderate Democratic Sens. Joe Manchin (W.Va.) and Kyrsten Sinema (Ariz.) haven’t officially expressed their support for the measure.
The measure would raise $1.48 trillion in revenue over 10 years by increasing taxes on corporations and high-income individuals, according to the Joint Committee on Taxation.
Changes to corporate and international taxes would include:
Individual tax changes would include:
The measure also would make changes to retirement plan rules for high-income taxpayers with more than $10 million in retirement account balances, including prohibiting contributions and requiring minimum distributions above that level.
IRS Enforcement: the measure would provide $44.9 billion in additional fiscal 2022 funding to the Internal Revenue Service for tax enforcement, including for digital asset monitoring. It would specify that the IRS funding boost isn’t intended to increase taxes on individuals making less than $400,000.
SALT Cap: As modified by the manager’s amendment, the measure would increase the $10,000 cap on the state and local income tax deduction to $80,000 through 2030. It would return to $10,000 for 2031 and then expire. Republicans’ 2017 tax law (Public Law 115-97) imposed the cap on the amount of individual property and income or sales tax payments individuals can deduct from their federal taxes through 2025.
CTC and EITC: The measure includes tax provisions designed to aid certain households, such as:
Green Energy: The measure includes a variety of green energy tax incentives that would cost $300.5 billion over 10 years.
It would structure various credits as tiered incentives, providing either a “base rate” or a “bonus rate” of five times the base amount for projects that meet certain prevailing wage and apprenticeship requirements. An additional increased credit amount could be claimed in certain cases if projects comply with domestic content requirements, such as ensuring that any steel, iron, or manufactured product was produced in the U.S.
The new structure would apply to several new and existing credits, including:
Several other existing tax incentives would be extended through 2031, including the:
Electric Vehicles: The measure would establish new incentives for electric vehicles, including:
The measure also would:
Drug Pricing: The measure would direct the Health and Human Services Department to establish a “Drug Price Negotiation Program” to negotiate a maximum price of high-cost prescription drugs for Medicare Parts D and B beginning 2025.
As modified by the manager’s amendment, the measure would require HHS to identify 100 drugs without competition that have been on the market for seven years and biologics that have been on the market for 11 years, and that have the highest spending under Medicare. HHS would select as many as 10 drugs from that list for negotiation in 2025 and as many as 20 drugs by 2028, plus insulin.
The modified measure would specify that the maximum price wouldn’t apply until nine years after a drug has been on the market and 13 years for biologics, reflecting additional time that would be included for negotiations.
The price ceiling would be based on how long the drug has been on the market, including 75% of the average manufacturer price for those 9 to 12 years old and 40% for those more than 16 years old.
Drugmakers that don’t successfully negotiate would face an excise tax of as much as 95% depending on how long it’s not compliant. Those that charge more than the negotiated maximum price would pay a civil monetary penalty of as much as 10 times the difference in prices.
The measure would provide $300 million annually through fiscal 2031 to implement the negotiation program.
Inflation Rebates: Drugmakers would have to repay the government the difference in profits above the cost of inflation on Part B and D drugs if they raise the price of a drug above inflation, beginning July 1, 2023. Drugmakers that don’t provide the rebates would face a penalty up to 125% of the rebate amount.
Insulin Coverage: Beginning in 2023, the measure would require private health plans to cover at least one of each type of insulin. They couldn’t apply a deductible and copays would be $35 a month or 25% of the plan’s negotiated price, whichever is less. Cost-sharing would also be limited to $35 under Medicare.
Other Drug Provisions: The measure would also:
Hearing Benefits: The measure would expand Medicare coverage to provide hearing benefits beginning in 2023. The benefit would include hearing assessment services and hearing aids, which would be covered once every five years and would have to be provided through a written order from an audiologist or other health professional.
ACA Premium Tax Credits: The measure would extend through 2025 the temporary expansion of Affordable Care Act (ACA) health insurance premium tax credits under Public Law 117-2. The larger credits for those with household income between 100% and 400% of the federal poverty level (FPL) and expanded eligibility to those above 400% of the FPL are scheduled to expire after 2022.
It would also continue allowing those who receive unemployment compensation to be eligible through 2022 for premium tax credits for those at 150% or less of the FPL.
Medicaid Expansion: The measure would close the Medicaid coverage gap for lower-income individuals in states that didn’t expand the program under the Affordable Care Act by temporarily expanding the tax credits to those below 100% of the FPL, through 2025.
Those states would have their uncompensated care and disproportionate share hospital payments reduced, which the summary said would reflect lower rates of uncompensated care.
The measure also would increase the federal medical assistance percentage (FMAP) for the expansion population to 93% from 2023 through 2025, from 90%.
Cost-Sharing Subsidies: The measure would increase the ACA’s cost-sharing reductions for beneficiaries earning as much as 138% of the poverty line so that the insurer’s share is 99% of total costs for 2023 through 2025. Insurers are currently responsible for 94% of costs for those between 100% and 150% of the FPL. The measure would provide such sums as necessary for HHS to reimburse insurers for 12% of total allowed costs in those years.
The measure would provide additional benefits to those populations in 2024 and 2025, including nonemergency medical transportation and family planning services currently available through Medicaid. HHS would reimburse insurers for those costs.
It also would extend cost-sharing reductions for those receiving unemployment compensation for one year, through 2022.
Reinsurance Program: The measure would provide $10 billion annually for fiscal 2023 through 2025 for an “Improve Health Insurance Affordability Fund” for states to make reinsurance payments to health insurers for high-cost enrollees or to reduce out-of-pocket costs.
The Centers for Medicare and Medicaid Services would provide the reinsurance payments to insurers in states that didn’t expand their Medicaid programs under the ACA to cover most low-income adults for 2023 through 2025.
Medicaid Coverage: The measure would increase the Medicaid FMAP by 6 percentage points for states that expand home and community-based services and would provide an 80% FMAP for administrative costs. If a state adopts an HCBS model promoting self-directed care it would be eligible for a further 2 percentage point increase over six quarters.
It also would:
CHIP: The measure would permanently authorize the Children’s Health Insurance Program (CHIP). It would also require states to extend continuous CHIP and Medicaid coverage to all pregnant and postpartum individuals for one year after birth and to all children for one year after enrollment. It would also permanently extend the option to simplify enrollment in Medicaid and CHIP for children.
Health Funding: The measure would provide:
Paid Leave: The measure would provide as many as four weeks of paid leave for the birth or adoption of a child, to care for a family member with a serious health condition, or for an employee’s own serious health condition that prevents them from working. Eligible workers would be entitled to the benefit within a one-year period, starting in 2024.
The benefit amount would be tied to an individual’s average weekly earnings and hours. The rates would be about 90% of the first $15,080 in annualized earnings, 73% for annualized earnings of as much as $34,248, and 53% for annualized earnings of as much as $62,000. The amounts would be indexed to wage growth.
States with preexisting paid leave programs would receive grants to cover the equivalent costs of the benefits, and employers would receive grants to cover 90% of their paid leave benefits for as many as four weeks. Those who receive paid leave from an employer or a state program wouldn’t be eligible for the separate federal benefit.
The measure would provide such sums as may be necessary to pay benefits and grants. The Social Security Administration would receive $1.5 billion in fiscal 2022 and $1.59 billion annually after that, indexed to wage growth, for program administration.
Workforce Support: The measure would provide funding for several workforce development initiatives at the Labor and Education departments, including:
The measure also would provide $270 million for DOL to award formula grants to eligible states to support employers in paying workers with disabilities at least the state minimum wage or the prevailing wage under federal law. Currently, employers who hold “special certificates” can pay those workers subminimum wages.
Labor Violations: The measure would address civil penalties for various labor violations, including:
Volunteer and Service Organizations: The package would provide $6.92 billion to support climate resilience and mitigation projects funded by the Corporation for National and Community Service. The Labor Department would receive $4.28 billion for employment and training activities in jobs related to climate resilience and mitigation
The measure would provide another $3.2 billion for grants to increase the living allowances and improve benefits for AmeriCorps participants. An additional $600 million would similarly go to the Volunteers in Service to America program, and $400 million would go to grants for similar state-run programs.
Pell Grants: The measure would increase the maximum Pell grant by $550 and extend eligibility for Pell Grants and other financial aid programs to those under the Deferred Action for Childhood Arrivals policy or other temporary protected status, through 2030. It also would exclude Pell Grants from income for tax purposes.
Funding: The measure would provide:
Tax Credit: The measure would create a 40% tax credit for cash contributions made to public universities for research infrastructure projects. The Education Department would allocate credit amounts through schools that would be capped at $50 million a year per institution, for a total of $500 million in credits annually through 2026.
Child Care: The measure would provide $100 billion for the first three years and then such sums as needed for the next three years for new child care entitlement program, which would end after fiscal 2027.
It would cap child care costs at a maximum of 7% of family income, using a sliding scale that would apply to those up to 250% of the state median income. Those earning less than 75% of the state median would pay nothing and qualify immediately, while those families up to 250% of state median income would qualify in the fourth year of the program.
States would have to ensure child care staff receive a living wage, at a minimum, and equivalent wages to elementary educators with similar qualifications.
For the first three years states would receive funds based on the Child Care & Development Block Grant formula. Beginning 2025, states would receive such funds as necessary to cover 90% of costs. In states that don’t participate, localities would receive grants and expanded Head Start awards.
Universal Preschool: The measure would also provide more than $18 billion for fiscal 2022 through 2024, then such sums as necessary through fiscal 2027, to provide free preschool to all three- and four-year-olds. Federal funding would cover 100% of state expenditures in the first three years, then gradually decreases to about 64% of costs by 2027.
States would have to ensure that preschool programs provide a living wage and salaries equivalent to elementary school staff. Localities would also receive grants and expanded Head Start awards in states that don’t participate.
Child Nutrition: The measure would provide funding for child nutrition programs and other activities to address child hunger, including:
The measure would provide:
Housing Tax Credit: The measure would increase Low-Income Housing Tax Credit (LIHTC) state allocations, with set amounts through 2025 and inflationary increases in future years.
It would temporarily allow the credit to cover a project without affecting state caps if at least 25% of the building and land are financed by tax-exempt bonds, instead of 50%.
Projects intended to serve extremely low-income individuals could receive a 50% increase in the basis used for the LIHTC. States would get a separate allocation for those projects.
The measure also would establish a neighborhood homes credit for developers to rehabilitate residences in certain lower-income areas. The credit could cover as much as 35% of either the development cost or 80% of the national median sales price for new homes, whichever is less. States would be subject to ceilings on the amount of available credit based on a formula taking population into account, and state agencies would allocate credit amounts on a competitive basis.
Tribal Communities: The measure would temporarily establish a $175 million New Markets Tax Credit allocation for low-income communities in tribal areas, which would be used for projects that serve or employ tribe members.
Tribal areas could also qualify as “difficult development areas,” which are eligible for a 30% basis increase for the LIHTC.
Flood Insurance: The measure would wipe out $20.5 billion in debt owed by the Federal Emergency Management Agency for money it borrowed to pay claims through the National Flood Insurance Program. It also would provide $600 million for flood mapping and $600 million for FEMA to offer flood insurance discounts to policyholders with household incomes that aren’t more than 120% of area median income.
U.S. Territories: The measure would create a new economic activity credit for businesses in U.S. territories, set at 20% of qualified wages and allocable benefits expenses paid to employees and capped at $50,000 in wages per employee. The credit would be 50% for certain small businesses with a wage maximum of $142,800 per worker. It would sunset after 2031.
Income Exclusions: The measure would exclude the following from gross income for tax purposes:
Funding for clean energy and environmental initiatives would include:
The bill would direct the Interior Department to award leases for wind generation and transmission in offshore areas in the Atlantic Ocean and the eastern Gulf of Mexico, as well in offshore areas near U.S. territories.
Revenue raisers and other provisions aimed at the oil and gas industry would:
The bill also would set the length of new coal leases at 10 years, or five years if commercial quantities aren’t being produced.
Methane Fee: The measure would establish a fee on methane emissions from the oil and gas industry. It would apply to emissions from onshore and offshore production, processing, transport, and storage operations that exceed thresholds for each segment of the industry as defined in the bill.
The fee would start at $900 per ton of methane exceeding the relevant threshold in calendar year 2023. It would increase to $1,200 per ton in 2024 and $1,500 per ton for subsequent years.
The bill would provide $775 million for Environmental Protection Agency costs to implement the fee, including for grants, loans, and other support for monitoring, compliance, and reducing emissions.
It also would provide several billion dollars through the Commodity Credit Corporation for environmental quality and stewardship incentives and “such sums as are necessary” for payments to farmers and land owners who adopt cover crop practices during the 2022 through 2026 crop years.
The legislation would provide:
The bill would direct the Homeland Security Department to grant applications for “parole” to immigrants living in the U.S. illegally who arrived before Jan. 1, 2011, and have resided in the country continuously since then. Individuals who are inadmissible because of criminal activities, national security risks, human smuggling, or certain other reasons wouldn’t be eligible.
Applicants would have to complete background checks and pay a fee. Individuals paroled under the bill would receive employment and travel authorization and would be eligible for driver’s licenses or other state-issued identification cards. Parole would be granted for five years or until Sept. 30, 2031, whichever is earlier. DHS couldn’t revoke parole unless the individual has become disqualified based on the policies in place when they were granted parole, and extensions would have to be granted through Sept. 30, 2031.
The bill wouldn’t award permanent residency, and those paroled under the bill wouldn’t be counted against the annual caps on the number of green cards that can be issued.
The measure would roll over and convert unused employer-sponsored green cards to family-sponsored visas each year, allowing for additional immigrant visas to be issued when the numerical cap on employer-sponsored immigration visas isn’t reached — as happened during the Covid-19 pandemic. Any unused family- and employer-sponsored green cards from fiscal 1992 through 2021 would be made available going forward.
The bill would allow individuals selected in the annual diversity green card lottery — which awards immigration visas to individuals from countries underrepresented in U.S. immigration — from fiscal 2017 through 2021, but who weren’t granted visas due to Trump-era executive orders or the Covid-19 pandemic, to reapply and be granted green cards.
Individuals whose green card applications have been approved but are awaiting sufficient numbers of visas to become available could pay a $1,500 fee to apply to the the Homeland Security Department to adjust their status to lawful permanent residency.
Those with approved green card applications who haven’t been able to obtain visas for more than two years due to per-country or worldwide caps on family- or certain employer-sponsored green cards could apply for exemptions. Application fees would be $2,500 for family-sponsored visas, $5,000 for most employer-sponsored visas, and $50,000 for investor immigrant visas.
The measure also would create supplemental fees for several types of visa petitions and other applications related to immigration status.
It would provide $2.8 billion to U.S. Citizenship and Immigration Services to address visa processing backlogs.
Trade: The measure would reauthorize Trade Adjustment Assistance (TAA) programs for four years and provide $1.7 billion annually for the programs, including $300 million annually through fiscal 2025 for new grants to help communities affected by global trade.
The measure would also:
Homeland Security: The measure would provide the following for the Homeland Security Department:
VA Funding: : The measure’s funding for the Veterans Affairs Department would include:
Research: The measure’s funding for science and technology programs would include:
SBA: The measure would include the following amounts for the Small Business Administration:
Tribal Funding: The bill would also provide funding for tribal needs, including:
USPS & GSA: The measure would provide $6 billion for the U.S. Postal Service to purchase electric delivery vehicles and related infrastructure, and $3 billion for the General Services Administration (GSA) to procure electric vehicles.
Other funding for the GSA would include:
Supply Chains: The measure would provide $5 billion to support the Commerce Department’s manufacturing supply chain resilience efforts. Funding would be used to map and monitor supply chains, establish best practices, deploy advanced technology, and provide grants to boost supply chain resilience.
It also would provide $500 million to support domestic industrial base capabilities that are essential to national defense.
Justice Department & Enforcement: The bill also would provide
Aging Network: The measure would provide $1.2 billion to fund Older Americans Act programs, including home and community-based supportive services, nutrition programs, and family caregiver support.
Insular Areas: It also would provide $1 billion for infrastructure in U.S. territories.
SSI for Territories: The measure would extend the Supplemental Security Income program for lower-income individuals or those who have disabilities to Puerto Rico, Guam, the U.S. Virgin Islands, and American Samoa beginning in 2024. They are currently prohibited from participating.
Communications: The measure would provide:
House leaders spent last night negotiating the final details of the $1.75 trillion social policy bill. The House plans to vote on the legislation today following two hours of debate.
Democrats’ proposed home health care program has shrank to $150 billion, sparking concern it may not be enough to meet its supporters’ lofty goals.
The plan to expand Medicaid’s home and community-base care services, which help people with disabilities and the elderly remain in their homes and avoid long-term care facilities, once stood at $400 billion. Backers as recently as last week were hoping for $250 billion over the next 10 years.
The trimmed-down proposed investment means the federal government will be able to offer less money to states to entice officials to embark on long-term plans to boost pay for home health workers and cut down their waiting lists for people seeking these services.
“It’s not where we wanted to land,” Sen. Bob Casey (D-Pa.), one of the main sponsors of the home health legislation, said Thursday. “But, it’s a number we can work with.”
The lower price tag was included in the latest version of Democrats’ tax and social spending package (H.R. 5367), released last week. Democrats are still negotiating over some elements of the bill.
Backers of the package in labor unions, who’ve spent months rallying support for it, called a framework released by the White House last week a first-of-its-kind investment in home care.
“This is a commitment to working people, with an historic investment in home care workers and care services,” Mary Kay Henry, international president of the Service Employees International Union, said in a statement. Read more from Alex Ruoff.
Pelosi Leading Talks to Include Drug Price Cuts: Speaker Nancy Pelosi (D-Calif.) is leading an effort to add a plan to cut prescription drug prices to Biden’s $1.75 trillion economic plan, and lawmakers are optimistic a deal can be reached. The emerging plan could allow Medicare to negotiate drug prices for the first time, and talks continue on what categories of drugs would be subject to the cost-cutting negotiation power.
To do that and not lose votes, Democrats will likely have to drop or modify a proposed 95% excise tax on drug companies that was originally proposed to force them to lower prices for younger patients not part of Medicare. The changes to drug prices appear to have a better shot than another liberal priority, paid family leave. But already, leading proponents of that policy are signaling they will not be able to convince Sen. Joe Manchin (D-W.Va.) to go along with it.
The number of hospitals mandating the Covid-19 vaccine for their workers has leveled off since the Biden administration announced all health-care workers at facilities paid by Medicare and Medicaid would need to get the jab.
Hospitals have been trailblazers for mandating vaccines in the workplace, requiring the shot for their staff well in advance of state and federal orders.
Health-care workers are at higher risk of getting and transmitting the coronavirus, and vaccine mandates have been one of several tools some hospitals have implemented to keep their staff safe.
Houston Methodist was one of the first health systems to announce a vaccine mandate in April, sparking two lawsuits from employees that reinforced their legality. Hospital vaccine mandates went from a few dozen to a few thousand in August, following the Texas court’s dismissal of the suit, the full FDA approval of a vaccine, and the delta variant surge.
But since then, new mandates have since stagnated to 42% of hospitals, according to the American Hospital Association. Hospitals, in the absence of forthcoming guidance from the Centers for Medicare & Medicaid Services, no longer want to jump ahead with their own requirements, said AHA Vice President for Quality and Patient Safety Policy Nancy Foster.
“The announcement that the rule is coming may have had a chilling effect on people taking action,” Foster said.
After the Biden administration’s announcement, the CMS encouraged unvaccinated health-care workers to “begin the process immediately.” The agency’s rule is being reviewed by the White House. The timeline hospitals will have to implement mandates once the rule comes out remains to be seen.
Many hospitals are still drowning in Covid-19 patients and a backlog of patients with other illnesses. “They don’t want to act in a way that they may have to alter a few weeks later,” Foster said. “They want one consistent message, and one consistent approach with their staff.”
The Office of Management and Budget recognizes that “there’s a particular need to get it right from the beginning,” Foster said following a meeting with the regulatory office.
The CMS rule (RIN 0938-AU75) is going through a shortened process in light of the public health emergency. It will take effect immediately once it’s published in the Federal Register. Usually, an agency would propose a rule, the Office of Management and Budget would invite public comment, and the agency would incorporate feedback in a final rule.
The AHA would like the rule to clarify whether it supersedes a forthcoming vaccine mandate rule for large employers being developed by the Labor Department’s Occupational Safety and Health Administration. “Hospitals need clarity and simplicity,” and the CMS rule is “better fitted to the health-care setting,” Foster said.
The association has also asked the CMS for clarity on whether the agency’s rule will override state legislation surrounding vaccine mandates. “Don’t make the hospitals figure it out. You tell us what is what,” Foster said.
Foster said she expects the CMS’s rule to accommodate religious exemptions, which have become a divisive issue in court.
VIDEO : President Biden’s vaccine mandate rule for companies, the likely legal challenges and what to expect next.
“What we really want as an organization is for the vast majority of health-care workers to be vaccinated,” Foster said.
The rule could reduce absenteeism for staff members, limiting the need for health-care workers to quarantine if they were exposed to the virus.
But it will likely also exacerbate staffing shortages that are already reducing access to care, Foster said. “There may be parts of the country where a larger portion of the staff chooses not to get the vaccine, and that will create real problems,” Foster said.
More federal aid flowed to hospitals that were in a strong financial position before the pandemic than went to hospitals with weaker balance sheets, researchers found.
A new analysis underscores concerns about how federal aid was allocated to health care institutions under the Provider Relief Fund, a $175-billion program that has drawn sharp criticism for giving so much money to the wealthiest U.S. hospitals.
The study, published Friday in JAMA Health Forum, shows that more money flowed to hospitals that were in a strong financial position before the pandemic than went to hospitals with weaker balance sheets and smaller endowments.
Small rural hospitals, called critical access hospitals, received lower levels of funding, according to the study, by researchers at the RAND Corporation, a nonprofit group. Those rural facilities often operate under extremely tight budget constraints, and some have closed or been acquired over the course of the pandemic.
More aid also flowed to those hospitals caring for the greatest number of Covid patients, many of which were large academic medical centers and big hospitals.
“There were large differences in how much each hospital got in funding,” Christopher M. Whaley, one of the study’s authors, said in an interview.
The analysis of 952 hospitals found that 24 percent received less than $5 million, while 8 percent got more than $50 million. Overall, the small rural hospitals received 40 percent less funding than their larger and more prosperous counterparts.
The researchers did not take into account $24 billion that was specifically targeted to rural and safety-net hospitals in underserved areas, which may have helped these organizations.
Congress authorized the aid to cushion losses sustained by hospitals during the pandemic, as patients stayed away and facilities could not perform lucrative surgeries and procedures.
But some of the hospitals that received hundreds of millions of dollars in federal funds went on buying sprees during the Covid crisis, gobbling up weaker hospitals and physician groups. A few large chains, including HCA Healthcare and the Mayo Clinic, chose to return at least some of the money.
The havoc caused by the Delta variant has further strained many hospitals, overwhelming intensive care units and forcing some to renew delays in elective treatments.
A September report commissioned by the American Hospital Association predicted a third of will have operating losses in 2021. Hospitals say they are treating sicker patients, many of whom delayed care earlier in the pandemic, and are paying more for staff, supplies and drugs.
Dr. Whaley said the larger flow of money to hospitals in strong financial shape calls into question “the purpose of having these financial resources,” noting some institutions have massive endowments and sizable assets. In contrast, rural hospitals receiving the least aid were already under financial strain when the pandemic hit.
“Policymakers should continue to ensure that these types of hospitals are sufficiently funded, potentially with additional rounds of funding,” the researchers wrote.
Lawmakers who crafted last year’s law addressing surprise billing are once again at odds over policy particulars after the Biden administration issued a rule to implement the law in a manner that some say revives a congressional dispute.
Certain members on Capitol Hill and influential voices in the health care industry that spent millions trying to influence the law are pushing the Biden administration to amend its surprise billing policies before the law takes effect on Jan. 1. But policy experts say the rule is unlikely to change significantly.
Congress spent two years creating and debating legislation to shield patients from so-called surprise medical bills. Lawmakers agreed that patients shouldn’t receive such bills, but the primary hurdle was how to resolve payment disputes between health plans and providers. Now some lawmakers, doctors and hospital groups say an interim final rule outlining how those disputes will be decided doesn’t adhere to the legislation, which was enacted as part of a 2020 year-end spending law.
“There is bipartisan concern about the rules that have been released because they clearly do not match not just the intent but the letter of the law on surprise medical bills,” Texas Rep. Kevin Brady, the Ways and Means Committee’s top Republican, said on an Oct. 13 press call.
Other lawmakers, including two top committee leaders who were closely involved in the negotiations, say the rule by the Health and Human Services, Labor and Treasury departments and the Office of Personnel Management does meet Congress’ intent and should take effect in January.
“This rule implements the No Surprises Act just as we intended and will save countless patients from being left with an exorbitant bill for care they thought was covered by their insurance,” Washington Democrat Patty Murray, who chairs the Senate Health, Education, Labor and Pensions Committee, said in a statement.
While industry groups rallied behind the effort to end surprise medical bills, lawsuits are expected.
The surprise billing regulations “will be aggressively litigated, and such litigation likely will not be resolved until the highest court willing to hear appeals renders its verdict on the permissibility of the rulemakings,” Spencer Perlman, a managing partner at investment and consulting firm Veda Partners, wrote to investors.
At issue are the parameters an arbiter should consider when determining payment for a surprise bill that a health plan and provider cannot determine on their own.
The law directs the arbiter to look at a range of factors when determining the ultimate outcome. But the recent interim final rule dictates the in-network median payment rate should be the default payment amount — an outcome closer to the policy that Murray and Energy and Commerce Chairman Frank Pallone Jr., D-N.J., preferred.
Pallone is working on a letter responding to the interim final rule, after praising the rule upon its release.
“I’m sure they’re glad about it,” Sen. Bill Cassidy, R-La., said of Murray and Pallone in an interview. “This circumvents the compromise we’re all forced to agree to and goes closer to where they wanted it to end up.”
Brady and Ways and Means Chairman Richard E. Neal, D-Mass., both advocated last year for an arbitration process for surprise medical bills that did not rely on the median in-network rate. The lawmakers said such a policy would favor insurance companies. Now that the Biden administration’s final rule relies on a median in-network rate for surprise billing disputes, Neal and Brady are asking HHS to revisit and adjust the regulation.
Brady said he and Neal want to meet with HHS Secretary Xavier Becerra to discuss their concerns.
“I feel confident HHS can get it right, but we are going to have to sit down and talk with them to make sure that they are following intent in the timetable we set,” Brady told reporters.
“Patients can’t afford a delay, and this law must go into effect in January,” Hassan said.
In contrast, the insurance industry says the interim final rule encourages health care providers to join insurance plans and would not result in premium increases for consumers.
“This is the right approach to encourage hospitals, health care providers and health insurance providers to work together and negotiate in good faith,” said Matt Eyles, president and CEO of America’s Health Insurance Plans.
Cassidy accused the administration of putting its thumb on the scale in favor of insurance companies and said that such favoritism could cause providers to file a lawsuit and delay the surprise billing ban’s implementation — an approach he does not support.
Perlman told investors that he anticipates litigation on surprise billing rule-making could take a long time.
“Depending on the outcome of legal disputes a new round of regulations may be promulgated, meaning the final resolution of these debates could potentially be years away,” Perlman’s investor note states.
If an outside group wanted to halt the rule-making process, it could try to make an Administrative Procedures Act claim against the agencies, arguing that using an interim final rule rather than the usual rule-making process was hasty and illegal, said Loren Adler, associate director of the University of Southern California-Brookings Schaeffer Institute for Health Policy.
But Adler said if such a lawsuit were to happen, the case in favor of an interim final rule would likely win because the law gave the administration only one year to implement the surprise billing law.
“I would be absolutely shocked if [courts] delayed implementation of the law. That seems just like not what any administration or lawmaker would want,” Adler said.
The interim final rule asks for comment on several policy details, so the agencies eventually will have to issue a final rule and could make changes. A final rule could be issued before the end of the year.
The agencies “indicated their clear intention to do the rule, the way that they wrote it, and I suspect there’s not a lot of interest in trying to take a different approach,” said Jack Hoadley, a research professor emeritus at the Georgetown University Center on Health Insurance Reforms.
At issue are parameters an arbiter should consider when determining payment a health plan and provider can’t determine on their own
Hospitals taxed by the pandemic over the last 20 months have a new problem: Labor strife and a wave of resignations have people waiting longer for care.
Months of marathon shifts, an onslaught of verbal and even physical abuse from patients and the public, and perennial complaints over low pay and staffing shortages are stirring unrest at a particularly critical moment in the pandemic.
There have been at least 30 strikes of health care workers so far this year, according to a tracker from Cornell University’s School of Industrial and Labor Relations. More than a half million health care workers quit in August, the last month for which data is available. That’s the most in a single month in more than 20 years.
The resignations and strikes hit as hospitals are dealing with the Delta variant, an influx of chronically ill patients who postponed care last year and, in many states, bracing for the colder months when Covid cases are expected to rise and flu season grips the nation.
The labor issues also come amid a broader staffing crunch that has forced health systems in regions hit hard by the Delta variant to rely evermore on expensive traveling nurses, the National Guard or state officials loosening licensing requirements to expand the pool of possible staff.
The frustration is translating into organized walkouts across the country. Thousands of workers are striking in some of the nation’s largest health systems, from Kaiser Permanente on the west coast to Catholic Health in Buffalo, N.Y. On Monday, 250 nurses in Chicago’s Community First Medical Center voted to go on strike.
Multiple employees contacted by POLITICO said health care workers feel like they’ve gone from “heroes to zeroes” in the eyes of the public, making it harder to tolerate the underlying stresses of the job.
“It got to the point where seeing signs outside the hospitals — “Heroes Work Here” — appeared a little hollow,” Denise Duncan, president of United Nurses of California/Union of Health Care Professionals, told POLITICO. “It’s almost like it’s been forgotten.”
Health care workers who spoke with POLITICO say they had hoped to capitalize on the public goodwill they banked at the outset of the health crisis and seize this moment while demand for their services has never been higher. While they acknowledge they may incur public scorn for walking off the job in the middle of the pandemic, they say they have no choice but to exert what leverage they have.
Even when they were feted with flyovers and salutes in the depths of the pandemic, they said they never got the protective equipment they needed. Now, on top of being burned out from nearly two years of fighting Covid, they’re being targeted threatened with physical violence.
“We’re drowning here,” said Mike Pineda, a senior transport technician at Sutter Delta Medical Center in Antioch, Calif., and a steward for the hospital’s SEIU-UHW union, which recently went on strike, accusing management of understaffing and fostering a difficult work environment.
“The wear and tear on everyone got to the point where people became frustrated,” Pineda said. “People would take leaves of absence because [their] body is just burnt out.”
Many staff members in Antioch — and across the country — say worker shortages mean it takes longer to admit people from the emergency room, and an increased risk of infections and accidents as fewer nurses care for more patients.
In a statement, Sutter Health said labor issues were largely avoided across its system, but acknowledged “longstanding staffing issues.”
The United Nurses of California/Union of Health Care Professionals last week voted to authorize its 21,000 members to strike at Kaiser Permanente in Southern California over what they say is low pay and benefits particularly for new employees.
Another 3,400 Kaiser workers in Oregon, members of the Oregon Federation of Nurses and Healthcare Professionals, also voted to strike over similar concerns. Negotiations with management are ongoing.
Whether it’s because of low staffing, inadequate pay or workplace conditions, health care employees, more than ever, are looking to wring concessions from management.
“From our members, I’ve never heard the word ‘strike’ uttered so many times, whether they’re covered by a contract or not. Whether they’re in negotiations or not,” said Jamie Lucas, the Executive Director of the Wisconsin Federation of Nurses and Health Professionals. “They’re fed up. The reasons have always been there, but there’s a new realization that they have the upper hand.”
While the vaccine mandates hospitals recently imposed have triggered some isolated walkouts and strike threats, leaders in the industry say the unrest is mainly fueled by the way the pandemic has exacerbated unacceptable working conditions.
“It’s not fair to blame staff shortages on the vaccination requirements,” said President Randi Weingarten with the American Federation of Teachers, which represents tens of thousands of health workers around the country. “The lion’s share of people willingly got their shots. This unrest preceded and predated Covid and it has to do with terrible pay and working conditions.”
Hospital executives acknowledge that staffing issues have been a longstanding problem that was made exponentially worse by Covid-19, which exposed the fragility of the health care system. The Biden administration’s promised surge of federal personnel was far short of what was needed. States that didn’t get staffing help received supplemental funding but couldn’t find enough doctors and health workers to fill gaps at hospitals.
“We are seeing a record number of resignations in some areas,” said Shereef Elnahal, the CEO of University Hospital in Newark, N.J., with burnout from “unprecedented” patient loads and higher wages offered by staffing firms as factors.
Elnahal said emergency department staffing was particularly hard-hit during the pandemic and he suspects staffing shortages nationwide are behind the recent spikes in hospital-acquired infections.
The demand for employees has created what amounts to a bidding war among hospitals over traveling nurses, with the hospitals paying up to $10,000 a week to staffing agencies for temporary nurses to fill shifts. That can create the uncomfortable scenario of employees working side-by-side with temporary workers who are commanding a higher wage. It can also lead to some permanent staff leaving their hospital position to become traveling nurses, aggravating the staffing crisis.
Health care workers and those who represent them say that for most of last year, they operated in emergency mode, with a just-get-through-it mentality. Covid has dragged on so long, that those working on the front lines say they can’t take it any longer.
“You can do anything for a week, but not when it looks like there’s no light at the end of the tunnel,” said Mark Wietecha, CEO of the Children’s Hospital Association. “No one thought we’d still be in this place in October of 2021.”
Lawmakers are struggling to push widely supported legislation that would end the “telehealth cliff” through a logjam created by their intense focus on President Joe Biden‘s more divisive priorities.
Senators have been pulling all-nighters to find common ground on the Democratic spending package that could expand Medicare and Medicaid, alongside negotiating Biden’s infrastructure bill, raising the U.S. debt ceiling, keeping the government from shutting down, and finding the time to breathe.
“There’s not much oxygen in the room, even for an issue of agreement,” said Kyle Zebley, vice president of public policy for the American Telemedicine Association.
Telehealth use has skyrocketed during the pandemic, increasing access to care amid nationwide health-care staffing shortages. Doctors and other medical providers can initiate telehealth treatment with a patient who is in their home due to the passage of the CARES Act, which provided Covid-19 relief across many sectors. Medicare wouldn’t reimburse providers for those visits in the past because of payment rules in the Social Security Act, except if patients were in rural areas or if the visits originated in specific qualifying sites like hospitals.
These waivers will expire when the public health emergency ends, creating a “telehealth cliff” if Congress doesn’t enact legislation to make the pandemic flexibilities permanent, Zebley said.
“People are sort of underestimating the shock that will occur across communities if we don’t deal with this cliff,” Sen. Brian Schatz (D-Hawaii) said at a recent hearing of a Senate Commerce, Science, and Transportation panel.
Only a fifth of Medicare beneficiaries live in rural areas, so the end of the waivers would vastly reduce access to telehealth services for the rest of the population. “Patients stand to lose significantly,” Zebley said.
“There’ll be an incredible disruption in my ability to take care of my patients when we reach this cliff,” Sterling Ransone, president of the American Academy of Family Physicians, said at the hearing.
Telehealth has allowed Ransone to make more house calls than he did before the pandemic and keep many of his patients out of the hospital. “This is a big cost savings for our entire health-care system,” he said.
If the waivers run out, “I will be doing a lot of work for services for which I’m not going to be reimbursed,” Ransone said.
Telehealth has also been lauded as a solution to address the staffing shortages in the health-care industry. Disparities in access to care, especially access to specialists, can be ameliorated if a patient can choose from all of the doctors in the U.S., rather than just the doctors nearby.
The CONNECT for Health Act (S. 1512), introduced April 29, is the leading piece of telehealth legislation and has bipartisan support from 59 senators. If passed, the bill would remove the geographic restrictions on telehealth usage.
“Everybody has accepted that we need to move forward on telehealth,” Rep. Brett Guthrie (R-Ky.) said at a recent webinar.
Lawmakers lack the motivation to make the temporary waivers permanent because the public health emergency is likely to last into 2022, Zebley said.
States have been using a similar “kick the can down the road approach” to “delay making a final decision on what stays permanent,” said Mei Kwong, executive director of the Center for Connected Health Policy.
While telehealth is widely believed to have improved access to care, some advocates urge caution about its adoption post-pandemic.
“I don’t think telehealth is going to replace in-person medicine,” Rep. Brad Schneider(D-Ill.) said at a webinar.
It may not be the right decision for every medical appointment or every practice area, so the decision should be left up to each individual patient and doctor, Ransone said.
Telehealth can also increase the risk of fraudulent behavior. Providers can “see a lot of patients on a large scale in various locations in a much shorter period of time than in-person visits,” said Katherine Driscoll, of counsel at Morrison & Foerster LLP. Driscoll prosecuted health-care fraud when she was an assistant U.S. attorney in the U.S. Attorney’s Office for the Eastern District of Pennsylvania. “The numbers or instances of fraud can be on a much larger scale than in-person visits.”
VIDEO : Telehealth Is Booming During Covid. Is it Here to Stay?
Some telehealth policies are progressing via the Centers for Medicare & Medicaid Services’s physician fee schedule, which determines how much doctors and specialists are reimbursed by Medicare.
Telehealth treatment for mental health care is expected to remain available through Dec. 31, 2023, under a proposed rule (RIN 0938-AU42) by the Biden administration that will soon be finalized.
The Social Security Act requires patients to have an in-person visit every six months, which will limit the number of patients who can benefit from this kind of care. Some lawmakers are trying to eliminate the in-person requirement for mental health services (S. 2061).
Pieces of other telehealth bills could also “be slipped into reconciliation or the infrastructure bill,” Kwong said, but so far, there have been no signs that lawmakers will do so.
As for the major telehealth legislation, “I don’t think that Congress is going to act” until there is a certain end date to the public health emergency, Zebley said.
Oncologists are looking to Congress for relief after having little luck in convincing the Biden administration to change the mandatory radiation oncology model that the American Society for Radiation Oncology says will hurt more than half of forced participants.
CMS Innovation Center Director Liz Fowler recently disagreed with the radiologists’ take on the demo, and said it is a solid model.
“In some cases, they may see an increase, but that’s not who we’re necessarily hearing from. But I also understand — and I have done many meetings on that issue and I understand where they’re coming from and their concerns — but I also think that the model is a solid one and hopefully will lead to positive results for patients,” Fowler told reporters Tuesday (Oct. 5).
The Trump-era, mandatory radiation oncology demonstration introduced last year hasn’t changed much under the new administration’s proposed 2022 hospital outpatient prospective pay rule, released July 19.
The proposed demonstration would provide bundled payments for a 90-day episode of care to certain radiotherapy providers and suppliers furnishing radiotherapy for: anal cancer, bladder cancer, bone metastases, brain metastases, breast cancer, cervical cancer, CNS tumors, colorectal cancer, head and neck cancer, lung cancer, lymphoma, pancreatic cancer, prostate cancer, upper gastrointestinal cancer and uterine cancer. Providers in randomly selected locations across the country would participate in the mandatory model.
The American Society for Radiation Oncology says Fowler isn’t hearing from the oncologists who are set to gain more money under the program because there are so few.
ASTRO says HHS’ estimated impact supports the advocates’ findings that only 15% of physician group practices participating in the mandatory demo and 20% of participating hospital outpatient departments will see their pay increase. More than 60% of participating physician group practices and 72% of hospital outpatient departments will see a pay cut.
Radiation oncologists will have to wait for the Biden administration to finalize its hospital outpatient prospective pay rule to find out whether their push to reduce the discount factors in the model has ultimately been successful.
In the meantime, ASTRO is gathering support from lawmakers to counter the administration if it decides to keep the deep cuts to radiation oncologists’ pay under the mandatory model and Medicare Physician Fee Schedule.
“We know that physicians overall — not just radiation oncology — are facing a huge cliff in terms of numerous cuts and we’ve been pleased to see that Congress has been very responsive to those concerns,” Dave Adler, ASTRO’s vice president for advocacy, said. “We hope that Congress will support physicians broadly and, of course, support radiation oncology physicians and prevent these cuts from making it through, and for the RO model, to reduce those discount factors, not kill the model.”
Lawmakers have previously interfered with the model, stepping in at the end of 2020 to delay the model’s start date until Jan. 1, 2022. CMS originally agreed to give providers until July 1, 2021 after pushback from oncologists. — Dorothy Mills-Gregg (dmillsgregg@iwpnews.com)
Bram Sable-Smith and Andy Miller
The San Leandro Hospital emergency department, where nurse Mawata Kamara works, went into lockdown recently when a visitor, agitated about being barred from seeing a patient due to covid-19 restrictions, threatened to bring a gun to the California facility.
It wasn’t the first time the department faced a gun threat during the pandemic. Earlier in the year, a psychiatric patient well known at the department became increasingly violent, spewing racial slurs, spitting toward staffers and lobbing punches before eventually threatening to shoot Kamara in the face.
“Violence has always been a problem,” Kamara said. “This pandemic really just added a magnifying glass.”
In the earliest days of the pandemic, nightly celebrations lauded the bravery of front-line health care workers. Eighteen months later, those same workers say they are experiencing an alarming rise in violence in their workplaces.
A nurse testified before a Georgia Senate study committee in September that she was attacked by a patient so severely last spring she landed in the ER of her own hospital.
At Research Medical Center in Kansas City, Missouri, security was called to the covid unit, said nurse Jenn Caldwell, when a visitor aggressively yelled at the nursing staff about the condition of his wife, who was a patient.In Missouri, a tripling of physical assaults against nurses prompted Cox Medical Center Branson to issue panic buttons that can be worn on employees’ identification badges.
Hospital executives were already attuned to workplace violence before the pandemic struck. But stresses from covid have exacerbated the problem, they say, prompting increased security, de-escalation training and pleas for civility. And while many hospitals work to address the issue on their own, nurses and other workers are pushing federal legislation to create enforceable standards nationwide.
At Research Medical Center in Kansas City, Missouri, security was called to the covid unit, said nurse Jenn Caldwell, when a visitor aggressively yelled at the nursing staff about the condition of his wife, who was a patient.
In Missouri, a tripling of physical assaults against nurses prompted Cox Medical Center Branson to issue panic buttons that can be worn on employees’ identification badges.
Caldwell said she had been a nurse for less than three months the first time she was assaulted at work — a patient spit at her. In the four years since, she estimated, she hasn’t gone more than three months without being verbally or physically assaulted.
“I wouldn’t say that it’s expected, but it is accepted,” Caldwell said. “We have a lot of people with mental health issues that come through our doors.”
Jackie Gatz, vice president of safety and preparedness for the Missouri Hospital Association, said a lack of behavioral health resources can spur violence as patients seek treatment for mental health issues and substance use disorders in ERs. Life can also spill inside to the hospital, with violent episodes that began outside continuing inside or the presence of law enforcement officers escalating tensions.
A February 2021 report from National Nurses United — a union in which both Kamara and Caldwell are representatives — offers another possible factor: staffing levels that don’t allow workers sufficient time to recognize and de-escalate possibly volatile situations.
Covid unit nurses also have shouldered extra responsibilities during the pandemic. Duties such as feeding patients, drawing blood and cleaning rooms would typically be conducted by other hospital staffers, but nurses have pitched in on those jobs to minimize the number of workers visiting the negative-pressure rooms where covid patients are treated. While the workload has increased, the number of patients each nurse oversees is unchanged, leaving little time to hear the concerns of visitors scared for the well-being of their loved ones — like the man who aggressively yelled at the nurses in Caldwell’s unit.
In September, 31% of hospital nurses surveyed by that union said they had faced workplace violence, up from 22% in March.
Dr. Bryce Gartland, hospital group president of Atlanta-based Emory Healthcare, said violence has escalated as the pandemic has worn on, particularly during the latest wave of infections, hospitalization and deaths.
“Front-line health care workers and first responders have been on the battlefield for 18 months,” Garland said. “They’re exhausted.”
Like the increase in violence on airplanes, at sports arenas and school board meetings, the rising tensions inside hospitals could be a reflection of the mounting tensions outside them.
William Mahoney, president of Cox Medical Center Branson, said national political anger is acted out locally, especially when staffers ask people who come into the hospital to put on a mask.
Caldwell, the nurse in Kansas City, said the physical nature of covid infections can contribute to an increase in violence. Patients in the covid unit often have dangerously low oxygen levels.
“People have different political views — they’re either CNN or Fox News — and they start yelling at you, screaming at you,” Mahoney said.
“When that happens, they become confused and also extremely combative,” Caldwell said.
Sarnese said the pandemic has given hospitals an opportunity to revisit their safety protocols. Limiting entry points to enable covid screening, for example, allows hospitals to funnel visitors past security cameras.
Research Medical Center recently hired additional security officers and provided de-escalation training to supplement its video surveillance, spokesperson Christine Hamele said.
In Branson, Mahoney’s hospital has bolstered its security staff, mounted cameras around the facility, brought in dogs (“people don’t really want to swing at you when there’s a German shepherd sitting there”) and conducted de-escalation training — in addition to the panic buttons.
Some of those efforts pre-date the pandemic but the covid crisis has added urgency in an industry already struggling to recruit employees and maintain adequate staffing levels. “The No. 1 question we started getting asked is, ‘Are you going to keep me safe?'” Mahoney said.
While several states, including California, have rules to address violence in hospitals, National Nurses United is calling for the U.S. Senate to pass the Workplace Violence Prevention for Health Care and Social Service Workers Act that would require hospitals to adopt plans to prevent violence.
“With any standard, at the end of the day you need that to be enforced,” said the union’s industrial hygienist, Rocelyn de Leon-Minch.
Nurses in states with laws on the books still face violence, but they have an enforceable standard they can point to when asking for that violence to be addressed. De Leon-Minch said the federal bill, which passed the House in April, aims to extend that protection to health care workers nationwide.
Destiny, the nurse who testified in Georgia using only her first name, is pressing charges against the patient who attacked her. The state Senate committee is now eyeing legislation for next year.
Kamara said the recent violence helped lead her hospital to provide de-escalation training, although she was dissatisfied with it. San Leandro Hospital spokesperson Victoria Balladares said the hospital had not experienced an increase in workplace violence during the pandemic.
For health care workers such as Kamara, all this antagonism toward them is a far cry from the early days of the pandemic when hospital workers were widely hailed as heroes.
“I don’t want to be a hero,” Kamara said. “I want to be a mom and a nurse. I want to be considered a person who chose a career that they love, and they deserve to go to work and do it in peace. And not feel like they’re going to get harmed.”
Democrats want to beef up enforcement of rules meant to make it easier to access mental health services using insurance. Business groups say the move won’t work and is a ploy to pay for Democrats’ wide-reaching social spending agenda.
Tucked into a once-$3.5 trillion domestic spending package is a provision empowering the government to fine health plans and employers that violate federal laws requiring access to mental health care that’s on par with other medical care. Health plans now get cited for violating the law and agree to come into compliance and reimburse beneficiaries.
Supporters of the new fines say they’ll give the Labor Department an effective tool to expand mental health coverage. Parity between mental health and other health services has been lacking for decades, often leaving people without adequate coverage for the help they need.
Lawmakers on both sides of the aisle say improving mental health parity in insurance plans is a key to tackling the ongoing opioid overdose crisis in the U.S. Americans are struggling to find mental health and substance use treatment services they can afford since so many services are out of network.
“A crucial part of this mission is ensuring that our mental health and substance use disorder parity laws are being enforced,” Rep. Brian Fitzpatrick (R-Pa.) said recently.
The push to cut more than $1 trillion from Democrats’ social spending bill and possibly scrap a planned expansion of Medicare presents the biggest test to date of the Congressional Progressive Caucus’ clout.
The 96 members, who account for nearly half of the House majority, showed their strength last month by delaying a bipartisan infrastructure bill until party leaders finish work on the social policy package H.R. 5376 (117). But the coming weeks could prove much tougher, with Speaker Nancy Pelosi intent on trimming the number of programs in the bill and cutting back on how long certain others will be funded to pare the $3.5 trillion price tag to a figure that centrist Democrats would support.
Progressive Caucus Chair Pramila Jayapal (D-Wash.) is making the case that adding dental, vision and hearing benefits to traditional Medicare will address pressing health needs for seniors and yield political dividends for Democrats in the midterm elections. The message, which the lawmakers delivered on a Zoom call with White House officials last week, is being amplified by outside groups, including the Service Employees International Union, Indivisible and the Working Families Party.
“We have no intention of backing down,” Jayapal said on a call with advocates Tuesday night. Addressing the possibility of fewer health programs in the bill, she said, “A lot of people have asked: ‘Isn’t something better than nothing?’ And the answer, quite simply, is no. Because when it comes down to something rather than nothing, it’s the same people who are forced to settle for nothing over and over and over again.”
Progressives are closing ranks behind Medicare expansion because it represents the best chance of getting a sliver of their “Medicare for All” vision into law. But in the process, they’ve drawn criticism from fellow Democratsthat the benefits would flow to the wealthy at the expense of poor people and communities of color on Medicaid, along with threats from health industry groups that it could raise seniors’ premiums. The program’s cost of more than $350 billion over a decade, according to some estimates, has also made it a big target for cuts as leadership tries to muster the votes to pass the package in the face of what’s expected to be unanimous Republican opposition.
In a new letter to committee leaders obtained by POLITICO, Rep. Jared Golden(D-Maine), a key centrist, said he supports the Medicare benefits proposal in principle but thinks the current House version is “underdeveloped,” and reliant on “budget gimmicks” like delayed implementation.
The progressives argue Congress still can control costs by authorizing the new Medicare benefits for only a few years, in the belief that they would prove so popular that future Congresses would have to renew them. Meanwhile, centrists like Golden and Sen. Joe Manchin (D-W.Va.) are insisting that any benefits be means-tested so they’re limited to the poorest Americans — a non-starter for many on the left who say it would undermine a basic tenet of social insurance. And depending how low Manchin and others force down the top-line cost of the bill, the Medicare expansion could be dropped entirely.
“We’re having to move from snips to chops,” said one senior Democratic aide.
Pelosi’s Democratic leadership wants the party to invest more money in fewer programs in the social spending package — particularly in extending Affordable Care Act subsidies and extending Medicaid coverage to more low-income people in a dozen conservative-led states that haven’t already expanded their programs.
“The consensus in the caucus is that whatever we have in the package, we have to do it very well, instead of spreading things so thin that you don’t end up with the impact that you want across the country,” said Rep. Anna Eshoo (D-Cal.), who chairs the health subcommittee of House Energy and Commerce.
Democratic lawmakers and aides said the envisioned Medicare expansion is the likeliest to drop out in its entirety because of its high cost and the difficulty of rolling it out quickly — a key factor since Democrats are planning to campaign on the new programs next year as they fight to maintain their slim congressional majorities.
Even the House’s $3.5 trillion plan proposed delaying the start of dental coverage until 2028, and Rep. Mark Pocan (D-Wis.), who formerly led the Progressive Caucus with Jayapal, acknowledged the difficulty of making it available much sooner.
“Some of these are going to be tougher to move up considerably,” he said.
The slow rollout is also a sore point for those members who are depending on the bill’s programs to help them hold onto their seats in swing districts.
“I don’t want this to be some amorphous thing where we say to someone who is 68 years old: ‘You might never see the benefit of this but guess what, we passed it for the next generation,’” said Rep. Susan Wild (D-Pa.). “That doesn’t do it politically and it doesn’t do it for the people we’re here fighting for.”
Some outside advocates and lobbyists say that, if forced to choose, Democrats are more likely to prioritize Medicaid in must-win swing states — like Florida, Georgia and North Carolina — and Affordable Care Act subsidies for millions nationwide as they keep their eyes on their electoral prospects.
Also threatening the expansion plan is the Democrats’ ongoing inability to agree on a plan to lower drug costs, which they’re counting on to at least partially fund the pricey benefits expansion.
To make the math work, some lawmakers have suggested punting the Medicare benefits proposal until next year. They could also only include the dental benefit, which many argue is the most pressing health need of the three, or vision and hearing, which are far cheaper.
“We might see them split up,” House Budget Chair John Yarmuth (D-Ky.) told reporters. “Although I don’t think [Medicare expansion advocate] Bernie [Sanders] wants to do that.”
The progressives, emboldened by their ability to tie the fate of the infrastructure bill H.R. 3684 (117) to the social spending package, say they’re ready to withhold support again if the Medicare benefits are slashed in the forthcoming negotiations.
Sanders, the Senate Budget chair, this week called the inclusion of dental, vision and hearing “not negotiable.” And Pocan told POLITICO that it was evident in the Zoom call with the White House that they’re being taken seriously.
“They realize that if there was anyone willing to put some real capital out there and hold back our votes, it’s us,” he said.
New vision, dental, and hearing benefits under Medicare must be included in Democrats’ social spending package if it’s going to win support from progressives, lawmakers said yesterday.
“This to me is not negotiable,” Bernie Sanders (I-Vt.) told reporters when asked if cutting the added benefits is a red line for progressives. Progressive Caucus Chair Pramila Jayapal (D-Wash.), said her coalition shares this sentiment.
Factions of the Democratic party are jockeying to maintain what they consider to be core elements of the evolving social spending bill, which contains the bulk of President Joe Biden’s economic agenda. Congressional leaders are aiming to cut or reduce areas of the once-$3.5 trillion spending package to win the support of key moderates. One of those moderates, Sen. Joe Manchin (D-W.Va.) has said he doesn’t support adding new benefits to Medicare without first addressing the program’s long-term solvency.
The policy also faces stiff opposition from the insurance industry. The proposed new benefits under Medicare come with a $358 billion price tag.
House Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer say they’re aiming to pass the $1.2 trillion infrastructure bill and a larger package stuffed full of Democrats’ child care, health care and climate change priorities by Oct. 31, when a short-term extension of highway funding is set to run out.
Coincidentally, Oct. 31 is the day before the much-anticipated United Nations climate summit kicks off in Glasgow, where administration officials are eager to show off legislation that would establish credibility in negotiations with foreign governments. White House press secretaryJen Psaki told reporters last month that Biden expected the reconciliation bill — much of which is focused on fighting climate change — would “move forward in advance of that.”
(Asked about it on Tuesday, Psaki said Biden would tout the administration’s commitment to combating climate change in Glasgow “regardless of where the package stands.”)
And two days later, Virginians will head to the polls to elect a new governor in a contest lawmakers and the White House are watching closely. Former Democratic Gov. Terry McAuliffe has implored Democrats in Washington to pass the infrastructure bill by Election Day.
Can Democrats really pass two massive bills in the next 18 days?
“Yes,” Rep. Gerry Connolly (D-Va.) told The Early yesterday evening. “Will it is a different matter. But can it? Yeah. We’re experts at coming right up against the edge and pulling a miracle.”
Pelosi herself has claimed that the expiration of highway funding is the only reason the Oct. 31 deadline matters. So that suggests this deadline might slip as easily as the old Sept. 27 one, when the speaker pledged to moderates that the infrastructure deal would hit the floor.
“That’s what we’re interested in,” she told reporters on Tuesday when pressed on whether the tandem infrastructure bills needed to be passed prior to Virginia’s Election Day. “It has nothing to do with anything else.”
The speaker is getting some pushback over an idea that she outlined a “Dear Colleague” letter on Monday: that most of her caucus would rather “do fewer things well” than keep everything currently included in the House’s $3.5 trillion reconciliation package.
Rep. Pramila Jayapal (D-Wash.) told reporters Tuesday night if the reconciliation bill’s top line number must come down, the Congressional Progressive Caucus favors reducing the number of years programs are funded versus slashing the group’s priorities.
House Democratic leadership, however, is split on the best path forward, according to Rep. John Yarmuth (D-Ky.), who said that became apparent during a House leadership meeting last week.
“I would say the group was split pretty much in half,” Yarmuth, who announced his retirement on Tuesday, told reporters. “The half that wanted — and I’m in that half — who thinks it might be better to focus on a few things, couldn’t agree on what the few would be, and so it’s gonna be difficult either way. But my guess is that we’ll probably try to keep all the elements and pare them down.”
Jayapal says that it’s still ultimately up to Sens. Joe Manchin (D-W.Va.) and Kyrsten Sinema (D-Ariz.). to make the next move on a compromise reconciliation package.
“It all depends on the two senators who don’t agree with the 98 percent,” Jayapal stated. “We’re waiting on them to come back to us and tell us what’s their counterproposal. The sooner that they come back to us, the better.”
If progressives ultimately agree to slim reconciliation to roughly $2 trillion — a figure Biden has floated as a potential compromise — there remain major points of contention.
During a conference call with reporters on Tuesday, Sen. Bernie Sanders (I-Vt.) said he wouldn’t budge on expanding Medicare benefits to include dental, vision and hearing, which Manchin has resisted.
“These provisions should have been included in the original Medicare bill — they were not,” said Sanders. “The time is now. This to me is nonnegotiable.”
Forward progress: The House did accomplish one big thing on Tuesday night by raising the debt limit for seven weeks until Dec. 3, a measure President Biden is soon expected to sign. But that new deadline is also when the federal government is set to run out of money again, setting up a special holiday-edition fiscal cliff.
Select committee tings: The House select committee investigating the Jan. 6 attack on the Capitol is prepared to move criminal contempt charges expeditiously in the case that top Trump White House officials do not comply with subpoenas.
Committee members said on Tuesday that the committee is united in moving aggressively to enforce the congressional subpoenas issued to Mark Meadows, Kash Patel, Stephen Bannon and Dan Scavino.
“We’ll see if they show up,” Chairwoman Liz Cheney (R-Wyo.) told reporters last night. “If they show up we’ll be prepared.”
Bannon said he is refusing to comply with a subpoena from the committee while Patel and Meadows have been “engaging” with investigators. But lawmakers did not say whether two of the former president’s advisers are confirmed to appear for their depositions scheduled for the end of the week.
“I think we are completely of one mind that if people refuse to respond to questions without justification that we will hold them in criminal contempt and refer them to the Justice Department and unlike the last four years, we expect the Justice Department to adhere to the principle that no one is above the law,” said Rep. Adam Schiff (D-Calif.), who is serving on the select committee.
Next steps: “The criminal contempt statute outlines the process by which the House or Senate may refer the non-compliant witness to the Department of Justice (DOJ) for criminal prosecution,” according to a 2019 Congressional Research Service report.
Less than two weeks after House Democrats missed a deadline to hold a vote on the infrastructure bill, the party is staring down another one.
Medicare managed-care plans say they’ll have to increase premiums and reduce benefit offerings if Democrats cut their program reimbursements to help pay for new dental, vision, and hearing benefits in traditional Medicare.
Because these Medicare Advantage plans receive higher payments for beneficiaries with more ailments and higher expected medical costs, plan providers typically record all possible medical diagnoses, which often results in overpayments, according to the Medicare Payment Advisory Commission. In 2019, the commission estimates that MA plans received nearly $9 billion in excess payments due to this “coding intensity.”
As Democrats work to trim their $3.5 trillion reconciliation package to accommodate leery party moderates, recent research suggests that tweaking some of the Medicare Advantage payment formulas could save billions of dollars in overpayments that could help pay for the proposed benefit expansion.
Excluding the cost of the new benefits from the “benchmarks” that Medicare uses to determine Medicare Advantage payment rates would save roughly $147 billion over 10 years, according to an analysis by Matthew Fiedler of the USC-Brookings Schaeffer Initiative for Health Policy. That’s 41% of the estimated $358 billion that the three benefits would cost over 10 years, according to a 2019 Congressional Budget Office estimate.
The Medicare Advantage benchmark is the highest amount Medicare will pay an MA plan to provide hospital and outpatient coverage. It’s a rate against which plans submit bids for coverage, benefits, and payments to the Centers for Medicare & Medicaid Services.
The benchmark rate reflects the equivalent cost of care in fee-for-service Medicare, which reimburses for all covered services provided to beneficiaries. Medicare Advantage plans receive a set monthly payment to cover each enrollee’s projected cost of care.
Most MA plans already offer some level of dental, hearing, and vision coverage as a supplemental benefit, although the level of coverage isn’t uniform and varies greatly from plan to plan.
In 2019, Medicare spent $321 more per MA plan enrollee than for those covered by traditional Medicare, according to a recent study by the Kaiser Family Foundation. The higher cost was due, in part, to extra supplemental benefits that are unavailable to beneficiaries in fee-for-service Medicare, the report said.
This year, Medicare payments to MA plans average an estimated 104% of fee-for-service spending, up 1 to 2 percentage points from 2020, according to the Medicare Payment Advisory Commission. “The 2021 estimate incorporates about 3 percentage points of uncorrected coding intensity,” the commission noted in its March report to Congress.
But insurers say cutting MA plan payments to help finance a mandatory, program-wide expansion of benefits would cause plans to hike premiums and reduce other supplemental benefits, like transportation to appointments and in-home meals. That would hold true whether the cuts stemmed from inaction on the benchmark rate, as Fiedler has suggested, or from deeper reimbursement offsets to account for coding intensity.
Medicare already reduces payments to MA plans by 5.9% because of coding intensity by MA plan providers who submit a larger number and more severe diagnoses codes per patient than their counterparts in fee-for-service Medicare, said Tom Kornfield, a senior consultant at Avalere Health.
If Medicare increased the coding intensity payment reduction to 7% or 9% to help finance dental, hearing, and vision benefits, MA premiums would increase anywhere from about $9.30 per month to nearly $25 per month, on average, across all plans, according to an Avalere analysis commissioned by America’s Health Insurance Plans. Supplemental benefit offerings could decrease by $30 to $44 per month, the study found.
If Congress adds the new Medicare benefits without an upward adjustment of the MA benchmark rate, those plans would receive 48% to 73% fewer rebate dollars, according to a Wakely Consulting Group analysis funded by AHIP. That represents nearly $700 to $1,056 a year in lost supplemental benefits, which rebate dollars help fund.
Those lost supplemental benefits help close disparity gaps for vulnerable beneficiaries and address social factors that adversely affect patient outcomes. Higher MA premiums could also slow Medicare’s push for greater health equity, since MA plans have a disproportionate share of lower-income and minority beneficiaries. About 57.5% of MA plan members are enrolled in coverage with no premiums.
Forty percent “of Medicare Advantage enrollees make less than $25,000 per year. Increasing premiums or lowering benefits could have a devastating impact on the affordability of this critical lifeline to helping America’s seniors get and stay healthy,” said a statement from Matt Eyles, AHIP’s president and CEO.
Groups like the Better Medicare Alliance have also urged Congress to “ensure additional benefits are structured in a way that fully reflect the cost of adding dental, vision, and hearing to Medicare in the benchmark calculation.”
While plans would get fewer rebate dollars if benchmarks weren’t adjusted, Fiedler disagreed with the magnitude of the estimated reductions in the AHIP study. “They would receive fewer rebate dollars, though much of the reduction in payments would be reductions in plans’ profit margins,” Fiedler said.
The most recent data from 2019 show MA plans had an average profit margin of 4.5%, the Medicare commission reported.
So the industry’s argument that a reduction in rebate dollars means fewer supplemental benefits isn’t “necessarily true because the rebate dollars currently being spent on dental, hearing and vision would be freed up for other uses,” Fiedler said.
Medicare Advantage has been a frequent target of lawsuits and government investigations focusing on improper payments related to questionable patient diagnoses.
Last month, the Department of Health and Human Services Office of Inspector General called for greater oversight of 20 MA plans that received a disproportionate share of $9.2 billion in enhanced payments in 2016 that were based on potentially suspect patient diagnoses. And in 2020, the OIG found $2.6 billion in payments to 438 MA plans in 2017 stemmed from patient diagnoses that were unrelated to any other clinical services.
House Speaker Nancy Pelosi (D-CA) said at her Tuesday (Oct. 12) press conference that Congress will mostly be funding policy priorities for a shorter period of time in a smaller reconciliation package, coming just one day after she sent a Dear Colleague letter saying members requested Congress include fewer, but better-funded, policies in the package.
Pelosi on Tuesday again emphasized a need to aide home health workers in the reconciliation package.
She also said the House will only vote on whatever iteration of the package can pass the upper chamber, which reports indicate will likely be the $2 trillion range.
Sens. Joe Manchin (D-WV) and Kyrsten Sinema (D-AZ) repeatedly have said they won’t support a $3.5 trillion reconciliation bill as called for earlier by Democratic leaders, leaving the White House and congressional leaders scrambling to decide how to fit their health care priorities into a shrinking package.
Pelosi’s seemingly contradictory comments over the last two days reflect differences among Democrats over whether to include scaled-back versions of all the health policies or to instead pick a few to robustly fund and leave others out. Senate Budget Committee Chair Bernie Sanders (I-VT) and the Congressional Progressive Caucus continue to advocate adding dental, vision and hearing benefits to Medicare, while other key House Democrats push to close the Medicaid coverage gap and to extend the enhanced Affordable Care Act tax credits.
A new top-line for the partisan reconciliation package has yet to be reached, but President Joe Biden has asked Congress to consider something closer to $2 trillion.
The White House reportedly has been advocating for cutting funding for policies across the board to bring the package’s cost down, and Sen. Bob Casey (D-PA) told Inside Health Policy Thursday that the goal in the Senate also seems to be to include each policy but at a lower level of funding.
Pelosi’s Monday (Oct. 11) letter to representatives seemed to be at odds with the White House and Senate’s positions on how to cut down the package.
“Overwhelmingly, the guidance I am receiving from Members is to do fewer things well so that we can still have a transformative impact on families in the workplace and responsibly address the climate crisis: a Build Back Better agenda for jobs and the planet For The Children!” Pelosi’s Monday letter said.
But Pelosi indicated Tuesday that the House hasn’t yet made any firm decisions about how to craft a smaller package. She told reporters that with fewer dollars to work with, choices will have to be made.
“Some members have written back to me and said I want to do everything, so we’ll have that discussion,” she said.
“Mostly we would be cutting back on years and something like that, but those are decisions that we have to” make, Pelosi said.
In response to a question from a CNN reporter about whether Congress could strike from the package proposals like Medicare expansion, universal pre-K, the child tax credit expansion, tuition-free community college and more, Pelosi said she hopes not.
She also mentioned the “transformative nature” of policies in the package that would help families, specifically highlighting home care reforms. The House has proposed investing $190 billion in Medicaid home- and community-based services in reconciliation, but Pelosi suggested last month that she’d be in favor of a higher number in the final bill.
House Speaker Nancy Pelosi said at her Tuesday (Oct. 12) press conference that Congress will mostly be funding policy priorities for a shorter period of time in a smaller reconciliation package.She also said the House will only vote on whatever iteration of the package can pass the upper chamber, which reports indicate will likely be the $2 trillion range.
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