WSHA Inside DC
The Washington State Hospital Association advocates on behalf of member hospitals at the state and national level. Inside D.C. provides members with a periodic perspective on the latest developments from WSHA federal lobbyist John Flink and staffer Jacqueline Barton True.
Congress this month pivoted from its singular focus on COVID-19 to President Biden’s next priority: infrastructure.
The president outlined a $2.25 trillion plan – called the American Jobs Plan (AJP) – that will be the starting point for this debate. It includes $621 billion for traditional infrastructure projects – i.e. roads, bridges, ports, Amtrak, public transit, airports and water quality. It also calls for broadband expansion, $400 billion to expand access to home- and community-based health care, addressing climate change and much more. The cost of the package would be offset by tax changes over the next 15 years.
Significantly, there is no funding for capital improvements to hospitals, something WSHA and the American Hospital Association are advocating for.
The road forward is likely to be hair-raising. The president said he wants this package to be bipartisan, whether that is realistic in the current political environment is unclear. Republicans were quick to express opposition to tax hikes and the overall size of the package. Some centrist Democrats have also expressed misgivings. Meanwhile, the progressive wing of the party does not think the president goes far enough.
Complicating matters is Democrats’ need to pick up at least 10 Republican votes in the Senate to pass a bill through “regular order.” Without the votes, they will be forced to use the reconciliation process they used for the American Rescue Plan. This would allow them to pass a bill with just 51 votes, but also restricts what can be included in the measure.
House Speaker Nancy Pelosi (D-CA) and Senate Majority Leader Chuck Schumer (D-NY) would like to see passage before the August recess. We will see if that is possible.
WSHA’s priorities for infrastructure include capital financing for hospital modernization, broadband expansion, behavioral health investment and workforce development.
Sequestration. Meanwhile, the other business of government goes on. President Biden recently signed into law legislation that would eliminate the two percent cut to all Medicare payments known as sequestration through the end of 2021. The entire Washington State congressional delegation supported this legislation.
The legislation also makes technical changes to the rural health clinic (RHC) provisions that were included in the Consolidated Appropriations Act, 2021 (CAA). Under the CAA, the payment rate for RHCs – including provider-based RHCs – certified after December 31, 2019 be capped at $100 per visit beginning April 1, 2021. The rate will increase over time based on the Medicare Economic Index but will remain well below typical provider-based RHC rates.
The bill changes the December 31, 2019 date to December 31, 2020 and includes RHCs that have applied for Medicare enrollment as of that date.
These provisions do not address a fundamental problem with the CAA’s RHC changes: the reduction in reimbursement for provider-based RHCs that was included to offset reimbursement increases for free-standing RHCs. WSHA has addressed this issue with our delegation and will continue to push for resolution.
President’s Budget. The president also recently released a 60-page FY 2022 budget outline totaling $1.52 trillion for domestic discretionary programs, a 16 percent increase over FY 2021.
It does not include tax proposals or mandatory spending programs like Medicare and Social Security, which will be included in a formal budget request the White House will release later this spring. The detailed proposal will also include specific policy proposals and economic projections. Today’s outline does not reflect the spending called for in Biden’s $2.3 trillion infrastructure plan.
Biden’s budget outline calls for an almost 25 percent increase in discretionary funding for the Department of Health and Human Services. This includes a $1.6 billion increase for the Centers for Disease Control and Prevention, a $9 billion increase for the National Institutes of Health, a $3.9 billion increase for programs that address the opioid crisis, and a sharp increase in funding for the Indian Health Service. Details about rural health and workforce development programs are not available.
The administration is also requesting $65 million more than the 2021 funding level for ReConnect, the rural e-connectivity program within the US Department of Agriculture, to provide grants and loans for broadband deployment in unserved areas.
It is important to remember that the president’s budget is only a proposal. Congress sets actual spending levels, so much is likely to change in the months ahead. The House Appropriations Subcommittee on Labor-Health and Human Services-Education, on which Rep. Jaime Herrera Beutler serves, has already begun hearings. Its Senate counterpart, chaired by Sen. Patty Murray, is expected to do so soon. Subcommittees could begin deciding actual spending levels as early as May.
Health Policy. A broader health policy debate is beginning to play out in Washington, D.C. On one side are those who advocate building on the Affordable Care Act (ACA) to expand health insurance coverage. Making the coverage expansions in the American Rescue Plan permanent is their first objective.
On the other side, progressive Democrats are pushing more far-reaching proposals, such as Medicare-for-All, sponsored by Rep. Pramila Jayapal; creating a public option within the ACA’s health insurance marketplaces; and lowering the Medicare eligibility age to 60 or 55 and expanding benefits to include dental, vision and hearing.
This argument is likely to play out as the administration prepares another economic proposal – the American Families Act –to address health care, childcare, and other issues.
One of the ACA expansion options – creating a public insurance plan within the ACA market places – was the topic of a recent Congressional Budget Office (CBO) analysis.
Creating a public insurance option could help contain the ACA market’s provider pay rates and lower administrative costs, CBO said, but it would be “disruptive” to the market. The report noted that both ACA and employer health plans pay roughly twice as much as Medicare for hospital care and a quarter more to doctors.
In this Congress, legislation has been introduced in the House (HR 1227) and Senate (S 386) to create a public option. These bills would peg reimbursement rates to Medicare rates, increasing the growing gap between the cost of providing care and Medicare reimbursement.
Confirmation Hearings. Finally, the Senate continues to move through the process of confirming President Biden’s appointments to key health care positions. The Senate has already confirmed Xavier Becerra to be the HHS Secretary and Rachel Levine to be assistant secretary.
The Senate Finance Committee, on which Sen. Maria Cantwell serves, has held hearings for two more health officials: Andrea Palm, Biden’s choice for deputy secretary at the Department of Health and Human Services (HHS) and Chiquita Brooks-LaSure to head the Centers for Medicare & Medicaid Services (CMS). Both have extensive experience in federal health policy and are likely to be confirmed.
If you have questions, please contact Jacqueline Barton True at jacquelineb@wsha.org.
