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Government Relations Update - June 26, 2012

Pennsylvania Issues


S.B. 1466: General Fund Act: As previously reported, Senator Jake Corman (R-Centre, Juniata, Mifflin, Perry, Union), Chairman of the Senate Appropriations Committee, introduced a 2012-2013 state budget proposal on May 8, 2012 that would have increased spending by $500 million as compared to the Governor's original budget proposal. The bill would have mostly restored funding to higher education, basic education and county-run human services programs. In addition, the proposal would have fully restored hospital supplemental payments for obstetrics and neonatal services, as well as payments to burn centers, critical access hospitals and trauma centers. Finally, Department of Public Welfare (DPW) program funding would have been slightly restored. On May 22, 2012, the House Appropriations Committee, under the leadership of Appropriations Chairman William Adolph (R-Delaware), passed the Senate bill without amendments. On June 21, 2012, the Governor and legislative leaders announced a state budget framework that would increase spending by $550 million compared to the Governor's original budget proposal and would include the restorations included in the Senate proposal, without the adoption of any new taxes. The latest proposal requires House and Senate approval, which is expected prior to the constitutional deadline of June 30th.


H.B. 1820: Employee Overtime. The Pennsylvania Minimum Wage Act (PMWA) requires that employers pay overtime at a rate of 1½ times the normal rate of pay after 40 hours of work for covered employees. Many hospitals, nursing homes and similar employers throughout the country have elected to pay their employees pursuant to an "8 and 80" overtime rule, under which employees are paid overtime for all hours worked in excess of eight in a single day and all hours worked in excess of 80 in a two week period. Section 7(j) of the Federal Fair Labor Standards Act (FLSA) specifically allows this practice for hospitals. A decision in March 2010 by a judge in the Philadelphia Court of Common Pleas called that practice into question. On August 22, 2011, Representative Sheryl Delozier (R-Cumberland) introduced legislation to amend the PMWA by specifically permitting employers to utilize the overtime arrangement described in Section 7(j) of the FLSA. On June 11, 2012, the House passed the bill with every representative voting in favor, except for Representatives Freeman (D-Northampton) and Samuelson (D-Lehigh, Northampton). The bill has been sent to the Senate for consideration. The Hospital & Healthsystem Association of Pennsylvania (HAP) supports the bill and is urging the Senate to approve it before the summer recess.

S.B. 8: Pennsylvania Health Information Technology Act. As reported previously, on February 13, 2012, Senator Mike Folmer (R- Berks, Chester, Dauphin, Lancaster, Lebanon) introduced legislation to establish the Pennsylvania Health Information Partnership Authority. The Authority would be responsible for developing a sustainable health information exchange for sharing electronic health records and patient information throughout Pennsylvania. The Authority would consist of 19 members appointed by the Governor and legislative leaders and would be authorized to use the $17 million in federal stimulus funds provided by the American Recovery and Reinvestment Act of 2009 (ARRA) to create the exchange. Senator Lisa Boscola (D-Lehigh, Monroe, Northampton) serves as a co-sponsor of the legislation. The Senate unanimously passed by the bill on June 12, 2012. The bill has been assigned to the House Health Committee for consideration. HAP supports the bill.

Act 54 of 2012 (HB 1400): Primary Stroke Designation Act. As reported previously, on May 24, 2011, former Representative Douglas Reichley (R-Berks, Lehigh) introduced legislation directing the Department of Health to designate Primary Stroke Centers (PSCs) for the care and treatment of stroke patients. Pursuant to the bill, emergency medical service providers would be required to transport stroke patients to the closest PSC. St. Luke's Hospital - Allentown Campus and St. Luke's University Hospital - Bethlehem Campus were certified as PSCs by the Joint Commission in 2007. The House and Senate previously passed the bill. On May 29, 2012, the bill was signed into law by Governor Corbett. HAP and the American Hospital Association (AHA) supported the bill, which takes effect on July 28, 2012.


HAP Achievement Awards: On June 15, 2012, HAP announced that St. Luke's University Hospital - Bethlehem Campus and St. Luke's Hospital - Miners Campus would receive Achievement Awards from HAP for innovation, creativity and commitment to patient safety. On June 22, 2012, Carolyn Scanlon, President & CEO of HAP, presented the award to St. Luke's University Hospital - Bethlehem Campus. St. Luke's Hospital - Miners Campus will receive its award in August. HAP began its Achievement Award program in 1978 as an opportunity to recognize the innovation of certain health care organizations within Pennsylvania.

New Jersey Issues


A-2751: Healthcare Disclosure and Transparency Act. On May 10, 2012, Assemblyman Gary Schaer (D-Passaic) introduced legislation requiring physicians and hospitals to disclose to a prospective patient, prior to providing non-emergent services, whether such services are in-network or out-of-network with respect to the patient's health benefits plan, as well as the estimated charges for the services. On June 18, 2012, the bill was approved by the Assembly Financial Institutions and Insurance Committee and will now proceed to the General Assembly for full consideration. The New Jersey Hospital Association (NJHA) and the Medical Society of New Jersey oppose the measure, since the bill would limit the personal responsibility of patients and create an undue burden on healthcare providers.

Federal Issues


H.R. 5943: Rural Hospital Access Act of 2012. The Centers of Medicare & Medicaid Services (CMS) define a Medicare Dependent Hospital (MDH) as one that: (1) is located in a rural area; (2) has 100 or fewer beds: (3) is not classified as a sole community hospital; and (4) attributes at least 60% of its inpatient days or discharges to Medicare beneficiaries. St. Luke's Hospital - Miners Campus is one of 13 Pennsylvania hospitals and 200 hospitals across the country designated as a MDH. CMS has historically paid MDHs an increased rate to offset their inpatient operating costs. Some MDHs have also qualified for a low-volume hospital payment adjustment by CMS for hospitals experiencing a significant volume decrease. Unfortunately, these programs are scheduled to expire on September 30, 2012. On June 8, 2012, Congressman Tom Reed (R-29-NY) introduced legislation to extend the programs for twelve months, with Congressman Holden (D-17-PA) as a co-sponsor. Similar legislation has been introduced in the Senate by Senators Schumer (D-NY) and Grassley (R-IA). HAP and the AHA support the legislation. Jane George has contacted Senators Casey (D-PA) and Toomey (R-PA) to obtain their support for the extension.

H.R. 436: Protect Medical Innovation Act. On January 25, 2011, Congressman Paulsen (R-3-MN) introduced legislation to repeal the 2.3% excise tax on the sale of medical devices mandated by the Patient Protection and Affordable Care Act (PPACA). The tax is scheduled to begin in 2013 and is estimated to raise nearly $30 billion in tax revenue over the next 10 years. Congressman Paulsen claims that the excise tax would increase the cost of medical devices, cause the loss of manufacturing jobs, and limit the development of new technologies. On June 7, 2012, the House passed the bill with every Republican member and 37 Democrats voting in favor of the legislation. Congressmen Dent (R-15-PA), Fitzpatrick (R-8-PA), Holden (D-17-PA) and Lance (R-7-NJ) voted in favor of the bill. Senate Majority Leader Reid (D-NV) has stated that he will not introduce the bill to the Senate floor for a vote. The President also opposes the bill and has threatened to veto it if presented to him. HAP did not express a position on the legislation, although HAP has raised concerns that the cost of the excise tax could be passed through to hospitals.