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Government Relations Update – November 29, 2011

Pennsylvania Issues


  • Health Insurance Exchanges:  The federal healthcare reform law, known as the Patient Protection and Affordable Care Act (PPACA), creates statewide health insurance exchanges by 2014 for individuals and small businesses to compare health insurance plans and rates.  If a state fails to create an exchange in accordance with PPACA, the federal government will design one for it.  Pennsylvania previously accepted about $3.4 million from the federal government to explore the feasibility of creating an exchange.  

    Following months of committee meetings and public hearings, the Pennsylvania Department of Insurance announced on November 22, 2011 that it will develop a statewide exchange.   Although Pennsylvania joined 25 other states in a lawsuit to overturn the individual mandate requirement included in PPACA, Governor Corbett (R) believes that the Commonwealth must be prepared for the commencement of PPACA if the United States Supreme Court upholds the law.  The Hospital Association of Pennsylvania (HAP) asserts that hospitals must retain the right to freely negotiate with insurance providers participating in the exchange to ensure competitive reimbursement rates.  Otherwise, a system could be created in which the rates are not adequate to provide access to quality care.


  • S.B. 1333:  Breast Cancer Screening .  Pennsylvania law currently requires insurers to cover all costs associated with a mammogram every year for women 40 years of age or older and any mammogram based on a physician’s recommendation for women under 40 years of age.  On November 9, 2011, Senator Bob nsch (R-Bucks, Lehigh, Montgomery , Northampton ) introduced legislation requiring health insurers to also provide coverage for ultrasound screening and magnetic resonance imaging if determined necessary by a medical professional.  Senators Boscola (D-Lehigh, Northampton , Monroe) and Argall (R-Berks, Schuylkill ) serve as co-sponsors of the legislation, which has been assigned to the Senate Banking and Insurance Committee.  The Pennsylvania Breast Cancer Coalition supports the bill.  HAP is reviewing the legislation. 


  • Secretary of Health:  On November 11, 2011, representatives from St. Luke’s Hospital & Health Network met with Eli N. Avila, M.D., J.D., M.P.H., who serves as the Secretary of Health for the Commonwealth of Pennsylvania .  Secretary Alia also toured St. Luke’s Hospital – Anderson Campus with his staff and spoke at the grand opening for the campus.
  • Municipal Election Update:  On November 8, 2011, Representative Doug Reichley (R-Berks, Lehigh) was elected to the Lehigh County Court of Common Pleas.  Councilman Peter Schweyer (D) and Councilwoman Jeanette Eichenwald (D) were reelected to the Allentown City Council.  Allentown City Councilman Michael Donovan did not seek reelection, and his seat was secured by former Councilman and City Controller Frank Concannon (D).  In Bethlehem Township , Commissioner Thomas Nolan (R) was reelected to a second term.  Incumbent Commissioner Arthur Murphy (D) was defeated by land developer Martin Zawarski (R).   Commissioner Jerry Batcha did not seek reelection, and his seat was secured by Phil Barnard (R), the plant manager at Bay Insulation in Easton . 

New Jersey Issues


  • Election Update:  State Senator Michael Doherty (R) and Assemblymen Erik Peterson (R) and John DiMaio (R) were reelected to the New Jersey legislature.  In Phillipsburg , Mayor Harry Wyant (R) secured his fourth term as Mayor.  Phillipsburg Town Councilman James Stettner (D) was also reelected.  Phillipsburg Town Councilman David DeGerolamo did not seek reelection, and his seat was filled by John Lynn (R).  

Federal Issues


  • National Deficit Reduction Plan:  As previously reported, Congress passed the much anticipated debt ceiling relief bill on August 2, 2011, which will raise the nation’s debt ceiling in several steps until 2013 and reduce the federal budget by about $2.1 trillion over the next ten years.  The first stage of the bill requires $917 billion in federal spending reductions over the next ten years in exchange for a $900 billion increase in the national debt ceiling.  The second stage of the bill required a special joint committee of Congress to recommend by late November an additional $1.2 trillion to $1.5 trillion in additional spending cuts to be implemented over ten years.  However, the committee was unable to reach agreement on spending cuts, which means that the debt ceiling will increase by $1.2 trillion, and $1.2 trillion in mandatory spending reductions - evenly divided between defense and non-defense spending - will be implemented, too.  While dicaid funding will remain intact, dicare funding will be reduced by 2% beginning in 2013.

    Many healthcare advocates were hopeful that the committee would develop a solution to the 29.5% payment decrease under the dicare physician fee schedule planned to take effect on January 1, 2012 as a result of the sustainable growth rate (SGR) formula, but the committee failed to do so.  Although the dicare Payment Advisory Commission ( dPAC) recommended a permanent solution to the SGR problem, it is more likely that Congress will approve another short term delay to the payment cut.  HAP continues its advocacy efforts to address this issue.
  • Centers for dicare & dicaid Services (CMS):  On April 19, 2010, President Obama nominated Dr. Donald Berwick as the Administrator of CMS and the lead figure to implement PPACA, but Congress failed to timely confirm Dr. Berwick following the nomination.  On July 7, 2010, President Obama bypassed Congress and used the “recess appointment” process to name Dr. Berwick to the position until the conclusion of the 111th Congress on January 3, 2012.  Republican leaders voiced displeasure with the President’s decision to circumvent the normal confirmation process and pledged to block the confirmation at the end of this calendar year.  Rather than face likely defeat in the confirmation process, Dr. Berwick announced his resignation on November 23, 2011, effective as of December 2, 2011.

    President Obama immediately announced his intent to nominate Marilyn Tavenner to succeed Dr. Berwick.   Ms. Tavenner has served as Principal Deputy Administrator of CMS since February 2010 and as Acting Administrator of CMS from February to July 2010.  Previously, Ms. Tavenner served as the Secretary of Health and Human Resources for the Commonwealth of Virginia .  Before entering government service, Ms. Tavenner spent nearly 35 years working with healthcare providers in increasing levels of responsibility, including almost 20 years in nursing, three years as a hospital CEO and 10 years in various senior executive level positions for Hospital Corporation of America (HCA).  She has served as a board member of the American Hospital Association and as president of the Virginia Hospital Association.  Ms. Tavenner holds a B.S. in nursing and an M.A. in health administration, both from the Virginia Commonwealth University
  • St. Luke’s Hospital –Anderson Campus:  On November 21, 2011, Senator Robert P. Casey (PA-D) toured St. Luke’s Hospital – Anderson Campus.  Prior to the tour, Senator Casey met privately with Rick Anderson, Jane George, Ed Nawrocki and Robert Wax to discuss issues impacting the Network.


  • PPACA Appeals:  On November 14, 2011, the United States Supreme Court announced that it will hear the case brought by 26 states challenging the constitutionality of PPACA.  Oral arguments are expected by March 2012, and a decision could be announced by the summer as the presidential campaign enters its crucial final months.  The case was previously heard by the United States Court of Appeals for the 11th Circuit, which determined that the mandate overstepped Congressional authority and that it must be severed from PPACA.   The 11th Circuit is the only circuit court thus far to conclude that the individual mandate is unconstitutional.  The Supreme Court could uphold the law, strike down just some or all of it, or determine that a decision is premature since the individual mandate is not yet effective.