Congress Continues Work on Federal Legislation Impacting Healthcare, Hospitals

Posted on December 15, 2017

This article was updated at 3:30 p.m. Dec. 18

As the 2017 congressional calendar winds down, members of the U.S. House and Senate are continuing to work on proposals that could have a significant impact on Michigan patients, hospitals and the healthcare community.

Federal Tax Reform

Negotiators for the U.S. House and Senate have reached a deal on the Tax Cuts and Jobs Act, which aims to simplify the U.S. tax code. Negotiators have been working on a compromise on points of difference between the House and Senate versions of the bill. The bill is expected to go before a vote of the U.S. Senate and House the week of Dec. 18, where it is anticipated that the bill will receive the votes necessary for passage.

On a positive note, the final draft of the bill allows individual deductions for large healthcare expenses, even though an earlier House-approved version of the bill would have eliminated that deduction, and the bill preserves tax-free private activity bonds, an issue important to the hospital community. However, negotiators opted to keep the following provisions from previous versions of the bill despite advocacy efforts by the American Hospital Association (AHA), the MHA and member hospitals. 

  • The bill eliminates penalities associated with the individual mandate outlined in the Affordable Care Act, esentially repealing the measure.
  • The bill eliminates hospitals' ability to do advanced refunding of bonds, which hospitals use to refinance outstanding debt at lower interest rates. Hospitals will now have to find new avenues to refinance debt that was previously addressed using this method.

As the MHA recently reported, the Congressional Budget Office estimates that "repealing" the individual mandate would result in the loss of health insurance coverage for millions of Americans and an increase in health insurance premiums.

The MHA remains concerned that the bill could have another major cost to patients and hospitals, as it would trigger a sequestration order that would result in billions in mandatory spending cuts to Medicare, the ACA and other programs under a 2010 pay-as-you-go law that bars adding to the national debt. Congress could pass a new law to avoid the cuts, but that could be difficult in the current political climate.

340B Drug Discount Program

The AHA is leading an effort to urge Congress and the administration to take immediate action on H.R. 4392. The proposal would prevent the Centers for Medicare & Medicaid Services (CMS) from reducing Medicare payments for hospital outpatient drugs under the 340B program by nearly 30 percent, a ruling that is slated to take effect Jan. 1. MHA members received Dec. 15 a detailed impact analysis of how the CMS rule will impact their individual hospitals. This information could be helpful when making final contacts with members of Congress, asking them to include a solution to the 340B pricing rule before the Congress goes on its winter recess.

CHIP Funding

The question of whether federal funding for the Children’s Health Insurance Program (CHIP) will be included in a short-term government funding bill remains unanswered in Washington. The program, which provides low-cost health coverage to children who are not eligible for Medicaid, covers 9 million children across the nation, 116,000 of whom are in Michigan. In Michigan, the program is financed with both federal and state dollars, so a cut in federal funding would shift the program’s financial support entirely to the state. The MHA continues to encourage members of Michigan’s congressional delegation to address CHIP funding as soon as possible. The state is expected to suffer a shortfall in CHIP funding beginning in March 2018.Featured in the MHA Monday Report. Click to view the full edition.

The MHA thanks members for their work advocating on these issues during the past few months. Updates to these measures will be posted to the MHA Newsroom if and when they become available. Members with questions should contact Laura Appel at the MHA.

Tags: ACA, Medicare, 340B Drug Pricing Program, federal tax reform, CHIP

Posted in: Top Issues - Healthcare

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