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September 9, 2011 News Headlines

Medicare, Medicaid at Risk as Congress, President, Super Committee Hit the Ground Running

The risk for significant reductions to Medicare and Medicaid ramped up yesterday as Congress returned from August recess, the new deficit reduction “Super Committee” met formally for the first time, and the President implored Congress to pass a $447 billion jobs package for which he promises a set of deficit reduction measures, including cuts to Medicare and Medicaid.

HANYS is urging the Administration and Congress to protect employment sectors where growth is occurring, including hospitals and health systems, which are powerful economic engines in communities across the nation. HANYS is urging health care providers to contact their members of Congress to speak with members of the Super Committee about the importance of protecting hospitals and health systems. 

Established by the August 2011 debt ceiling deal, the Super Committee is tasked with developing a deficit reduction package of at least $1.2 trillion from 2012 through 2021 by November 23. If a Super Committee agreement does not pass Congress by December 23, automatic, across-the-board cuts—50% to defense and 50% to non-defense spending, including up to 2% to Medicare providers—will go into effect, starting 2013 through 2021.  Medicaid and Social Security would be exempt from the across-the-board cuts.  

Opening statements and the rules of the road were the order of the day at the Super Committee’s meeting yesterday.  Many members revisited proposals from previous deficit reduction commissions and efforts, all of which called for cuts to Medicare—including to Graduate Medical Education and rural and small community hospital programs—and Medicaid. The Super Committee will meet again next week. 

Yesterday, the President delivered a speech to a joint session of Congress, rolling out his $447 billion American Jobs Act (AJA), a package of tax cuts and infrastructure programs and support for teachers and the unemployed. Sixty percent of the package would be tax cuts, 40% spending measures.

The President called on the Super Committee to increase its required savings target to cover the full cost of AJA. While he provided no specific examples, the President emphasized how “modest” reform to Medicare and Medicaid should be pursued. The White House will release specific proposals in the coming days. HANYS will analyze the Medicare and Medicaid deficit reduction proposals the President releases.  HANYS is concerned about the nature of such “reform” and the potential to harm health care providers and patients. 


HANYS believes that reducing Medicare and Medicaid payments to hospitals and health systems as part of a “jobs” package is the precise opposite of what must be done to protect and grow new jobs. Health care remains one of the few healthy employment sectors during this era of high unemployment. Together, New York hospitals generate nearly $108 billion for state and local economies each year and support more than 686,000 jobs through direct employment and ripple-effect job creation and economic activity.  Contact: Susan Van Meter

U.S. Senate HELP Committee Approves Measure to Preserve Pediatric Training

The U.S. Senate Health, Education, Labor, and Pensions (HELP) Committee approved S. 958, the Children’s Hospital GME Support Reauthorization Act, which would reauthorize the Children’s Hospitals Graduate Medical Education (CHGME) program at the current funding level of $330 million annually through federal fiscal year (FFY) 2016.

The CHGME program supports 56 hospitals nationwide and trains more than 5,000 medical residents each year. Children’s hospitals rely on annual appropriations, rather than standard Medicare Graduate Medical Education (GME) payments, to help defray the cost of training new doctors. The CHGME program’s current funding is due to expire on September 30.

Earlier this year, in his federal fiscal year (FFY) 2012 budget proposal, President Obama proposed eliminating the CHGME program.  HANYS opposed the President’s proposal, and joined the National Association of Children’s Hospitals and Related Institutions (NACHRI) and more than 135 organizations in sending letters to House and Senate appropriators to encourage them to maintain funding for CHGME in FFY 2012 appropriations.

The House Energy and Commerce Committee approved a similar reauthorization measure, H.R. 1852, in July.  The legislation awaits floor consideration in both houses, but final passage is expected.  Contact: Chelsi Stevens

After Long Wait, Court Invalidates New York Union Neutrality Law a Second Time

On September 7, the U.S. District Court for the Northern District of New York ruled that the New York “Union Neutrality” law is pre-empted by federal labor laws and declared that the state is “permanently enjoined from implementing or enforcing that statute.”

The law, Part 211-a of New York’s Labor Law, was enacted in 2002 following years of lobbying by labor groups. The law prohibited employers from using any funds received from the state to encourage or discourage unionization or to pay consultants, attorneys, and others for advice on collective bargaining issues.

HANYS and several other organizations filed suit in federal court challenging the law’s validity. In 2006, the New York District Court ruled that the law was invalid.  On appeal, however, the decision was reversed by the Second Circuit Court of Appeals, which sent the case back to the District Court for further evaluation.

Parallel litigation involving a similar California law moved through the federal courts. In 2008, the U.S. Supreme Court struck down the California law, declaring that it impermissibly attempted to regulate activity that federal labor law shields from any regulation, federal or state.

The new decision by the New York District Court relies heavily on the Supreme Court decision. The Court stated that “§ 211-a imposes a targeted negative restriction on employer speech about unionization. Because § 211-a regulates in a zone protected and reserved for market freedom, it is pre-empted by the National Labor Relations Act.” Contact: Mark Thomas

Medicare Hospital Revenue Forecaster Helps Providers Budget for Medicare

This week, HANYS distributed the Medicare Hospital Revenue Forecaster® to hospitals. The Forecaster is offered to members as a free hospital-specific Medicare budgeting tool, to be used as the primary basis for a budget or to verify hospitals’ own in-house tools.  The Forecaster is an interactive Microsoft Excel model that aids Prospective Payment System (PPS) hospitals and Critical Access Hospitals (CAHs) in preparing Medicare reimbursement budgets.  Member hospitals received an e-mail instructing them how to download the model from a secure Web site.

To predict hospital-specific annual payments, the Forecaster builds on historic cost report data and adds changes in Medicare rules and rates for Inpatient, Outpatient, Skilled Nursing Facility, Inpatient Rehabilitation, Inpatient Psychiatric, and Home Health PPSs; swing beds; and rural health clinics for both PPS hospitals and CAHs.  Both historic information and all Medicare payment formulae are already programmed, leaving hospitals more time to spend on hospital-specific changes in utilization and services.

The Forecaster automatically breaks down PPS changes to show which are due to volume, changes in case mix, federal rate, and wage index changes, etc.  Default assumptions are clearly marked and can be altered for scenario testing.

For more information on the Medicare Hospital Revenue Forecaster, contact Kelly Price, Manager, DataGen, at (518) 431-7629 or at kprice@hanys.orgContact: Melanie Graham