December 2, 2011

December 2, 2011

Newsletter of the American Thoracic Society's Washington Office

1150 18th Street NW
Suite 300
Washington, D.C. 20036
Telephone:(202) 296-9770
advocacy@thoracic.org

SGR Fix Likely Part of “Must Pass” Legislation

With the recent collapse of the Super Committee effort, attention in Congress now turns to completing several “must pass” pieces of legislation, including a temporary fix of the sustainable growth rate factor (SGR). Unless Congress acts, Medicare payments to Part B providers will be cut by 27.4% starting January 1, 2012. Congress and the physician community have faced this situation every year since 2000.

With the exception of 2002, Congress has acted, usually at the 11th hour (or beyond) to avert the SGR cuts. This year, it appears Congress will again attempt to attach a one or two year SGR fix to the “must-pass” legislation that typically is considered in the waning days of the Congressional session. While there is broad bipartisan support for Congress to intervene, there is not yet consensus in Congress on how to fund the approximately $20 billion need to pay for a one-year SGR fix.

The ATS and the rest of the physician community will continue to demand that Congress take immediate action to avert the SGR crisis.

BUDGET

Congressional Super Committee Fails to Produce Deficit Plan

Last week, the congressional “Super Committee” issued a statement acknowledging that it had failed to produce a plan to reduce the federal budget deficit by its November deadline. The joint House-Senate committee of 12, chaired by Sen. Patty Murray (D-WA) and Rep. Jeb Hensarling (R-TX), could not reach a compromise between increased revenue vs. spending cuts.

Now that the Super Committee has not produced a plan, the Deficit Reduction legislation enacted earlier this year mandates across the board spending cuts of $500 billion each for defense and domestic program spending over ten years, beginning on January 1, 2013. If sequestration cuts are not averted before January 2013, health programs such as the NIH and CDC will be significantly impacted. Medicaid, veterans benefits (but not veteran’s health care), food stamps and other safety net programs are exempt from sequestration.

Medicare is slated for a 2% payment cut for providers, which may affect patient access. The Medicare program’s administrative expenses are subject to the funding cuts that would be applied to the Centers for Medicaid and Medicare Services.

The Congressional Budget Office has estimated that discretionary health programs would be slated for cuts of up to 7.8% in 2013. This could amount to a funding cut of up to $2.4 billion for the NIH, reducing funding from $30.7 billion in FY2011 to $28.3 billion, which would put NIH funding back to FY2006 funding levels. In January, after what was to be the deadline for passage of the Super Committee’s package, the White Office of Management and Budget will be drafting a sequestration order that will detail specific reduction levels for all programs beginning in 2013.

Election year politics may significantly alter the plan set out in Deficit Reduction legislation, however. Both parties are extremely reluctant to impose these significant reductions on their favored spending areas during an election year. Spending cuts in both areas will have an impact on the U.S. economy. Although the President has stated his opposition to altering the schedule for sequestration cuts, it is likely that Congress will take action during 2012 to delay implementation of the cuts, avert some program cuts or a combination of both.

Along with the lost opportunity to set a plan for deficit reduction, Congress has also lost the opportunity to enact a permanent fix to the Medicare sustainable growth rate formula problem. Physicians now face a 27% cut in Medicare reimbursement on January 1, 2012 unless Congress enacts a temporary fix. Congress now has just a few weeks to enact an SGR fix before the scheduled December holiday recess, along with a number of other important end of year issues, including the FY2012 appropriations bills.

CLEAN AIR

EPA Proposes New Boiler MACT Rule

This week, the Environmental Protection Agency issued proposed rules to reduce mercury and other emissions from industrial boilers. Based on industry concerns, EPA had earlier issued and then immediately reconsidered final rules for reducing pollution from industrial boilers. The rules issued this week incorporate industry input and are expected to be finalized in 2012.

EPA estimates that of the 1.5 million industrial boilers operating in the U.S., 1.2 million are already in compliance with the proposed rule. Of the remainder, EPA projects nearly 200,000 will meet the proposed standard with annual maintenance work and that only 5,500 boilers will be required to install pollution control equipment.

“The American Thoracic Society supports the final Boiler MACT rule issued today by the Environmental Protection Agency to reduce mercury and other air pollutants from industrial boilers,” said ATS President Nicholas Hill, MD. “Implementation of this rule will reduce the levels of mercury, heavy metals and particulate matter that communities across the United States are exposed to. These reductions will reduce asthma exacerbations, emergency room visits and hospitalizations and reduce premature mortality.”

ADMINISTRATION

CMS Administrator Steps Down

This week, the Administration announced that Donald Berwick MD will be stepping down as CMS Administrator. The Administration has nominated CMS Deputy Administrator Marilynn Tavenner to lead CMS.

The position of CMS Administrator requires Senate confirmation. Dr. Berwick incurred the ire of many Senators when President Obama appointed Berwick during a Congressional recess, effectively doing an end run around the Senate confirmation process. With his recess appointment about to expire, 42 Senate Republicans signed a letter saying they would not vote to block Dr. Berwick’s nomination.

Originally a critical care nurse, Ms. Tavenner worked in hospital administration and as the Virginia Medicaid director before becoming the CMS Deputy Administrator.

 

 

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The Washington Letter is written by the American Thoracic Society government relations office and emailed to all ATS members living in the United States. The letter keeps clinicians, scientists, and patients abreast of legislative, judicial, and regulatory issues in pulmonary, critical care, and sleep medicine. Each week's edition is archived on the ATS Web site, www.thoracic.org. If you have any questions or one more information about becoming involved in advocacy, please contact the ATS Washington office at 202-296-9770.