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Government Relations Update - January 22, 2013

Pennsylvania Issues


Nurse-to-Patient Staffing Ratios: On January 7, 2013, Representative Phyllis Mundy (D-Luzerne) announced plans to reintroduce legislation which would require certain nurse-to-patient staffing ratios in various units of Pennsylvania hospitals. Senator Mundy asserts that higher staffing levels would result in fewer hospital acquired infections, improved patient care, and shorter hospital stays. The Hospital & Healthsystem Association of Pennsylvania (HAP) opposes mandatory nurse ratios since they would create new administrative burdens on hospitals and reduce the ability of hospitals to adjust to changing staffing needs. Similar bills have been introduced in previous legislative sessions, but they remained in committee and did not receive floor consideration.


State Budget: On December 19, 2012, Secretary of the Budget Charles Zogby released the mid-year budget briefing, which indicated that revenues for the current state fiscal year were slightly better than expected. Secretary Zogby projected a positive net balance of $485 million for the current state fiscal year, representing a $185 million net improvement compared to the state budget. However, Secretary Zogby cautioned that substantial state pension obligations, together with increased Medical Assistance costs, prison expenses and debt service requirements, will make the 2013-2014 state budget process extremely difficult, especially given Governor Corbett's (R) pledge not to implement any new taxes. The Governor expects to introduce his 2013-2014 proposed state budget to the General Assembly on February 5, 2013. HAP has been meeting regularly with the Governor to emphasize the important role of hospitals and to urge the Governor to avoid funding reductions to the Department of Public Welfare.


State Legislature: Newly elected state legislators were inducted into office on January 1, 2013. Although three additional Democratic Senators were elected, Republicans retain control of the Senate by a margin of 27 to 23. Senator Joseph Scarnati (R-Cameron, Clearfield, Elk, Jefferson, McKean, Potter, Tioga, Warren) was elected to serve a fourth term as the President Pro Tempore. Republicans hold a 111 to 92 majority in the House of Representatives, and Representative Sam Smith (R-Armstrong, Indiana, Jefferson) was elected to serve a second term as the Speaker of the House.

Legislative Visit: On January 18, 2013, Senator David Argall (R-Berks, Carbon, Lehigh, Monroe, Northampton, Schuylkill) and Representatives Michael Schlossberg (D-Lehigh), Daniel McNeill (D-Lehigh, Northampton) and Steve Samuelson (D-Lehigh, Northampton) attended a breakfast meeting at The Medical School of Temple University/St. Luke's Hospital & Health Network. Staff members from the offices of Senators Toomey (R-PA) and Casey (D-PA) also attended, together with staff members from the offices of Senator Lisa Boscola (D-Lehigh, Northampton, Monroe) and Representative Justin Simmons (R-Lehigh, Northampton). Dr. Joel Rosenfeld, Chief Academic Officer and Senior Associate Dean, provided an overview of the medical school. Two current second year medical school students also met with the legislators and discussed their experiences.

New Jersey Issues


S. 2258: Repealing Annual Public Meeting Requirements for Hospitals. On October 15, 2012, Senator Steven V. Oroho (R-Sussex, Warren, Morris) introduced legislation to repeal the 2008 New Jersey law requiring hospitals to hold annual meetings, which was intended to promote hospital accountability and transparency. The law stipulates that the meetings must be attended by the hospital's chief executive officer and chairperson, at least 25% of the trustees and an assistant commissioner or representative from the New Jersey Department of Human Services. Senator Oroho asserts that the meetings are ineffective, poorly attended and a waste of hospital dollars. Supporters of the law argue that removing the requirement eliminates an opportunity for dialogue between a hospital and its community. The New Jersey Hospital Association (NJHA) opposes the 2008 law and supports the repeal bill. The bill has been referred to the Senate Health, Human Services and Senior Citizens Committee for consideration. Identical legislation was introduced in the Assembly on the same day by Assemblyman Gary Chiusano (D-Sussex, Warren, Morris).

Federal Issues


Medicare Payment Advisory Commission (MedPAC): MedPAC is an independent Congressional agency established by the Balanced Budget Act of 1997 to advise Congress on issues affecting the Medicare program. On January 10, 2013, MedPAC held a public meeting to discuss provider reimbursement issues and unanimously agreed to recommend a one percent increase in Medicare payments for hospital inpatient and outpatient services and no increase in Medicare payments for ambulatory surgical centers and long term care hospitals for the upcoming federal fiscal year. MedPAC also analyzed the adequacy of current bundled payment rates for outpatient dialysis services and unanimously agreed to recommend no increase for the upcoming federal fiscal year. The American Hospital Association (AHA) urged Congress to adopt the increase for hospital inpatient and outpatient rates and argued against any further payment reductions to hospitals in the upcoming debt ceiling debates.

Health Insurance Portability and Accountability Act (HIPAA) Final Rule Issued: On January 17, 2013, the Office for Civil Rights (OCR) of the Department of Health and Human Services released the final rule modifying the privacy, security, breach and enforcement rules under the Health Insurance Portability and Accountability Act of 1996 (HIPAA). The final rule implements the statutory requirements of the Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH) and the Genetic Information Nondiscrimination Act of 2008 (GINA). Among other things, the final rule: (1) makes business associates, such as contractors and subcontractors, directly liable for compliance under HIPAA; (2) increases penalties for noncompliance based on the level of negligence with a maximum penalty of $1.5 million per violation; (3) enhances privacy protections by strengthening the limitations on the use and disclosure of protected health information (PHI) for marketing and fundraising purposes; (4) expands an individual's rights to receive electronic copies of his/her health information and to restrict disclosure to a health plan concerning treatment for which the individual has paid out-of-pocket; and (5) requires a covered entity to modify and redistribute notice of privacy practices. The final rule has a required compliance date of September 23, 2013. Premier and the AHA are in the process of reviewing the final rule in order to provide a full analysis to their members.