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Government Relations Update – November 12, 2013

Pennsylvania Issues


Act 86 of 2013: Breast Density Screening Notification. On November 1, 2013, Governor Tom Corbett (R-PA) signed into law a bill requiring facilities to provide patients with information regarding breast density when completing mammograms. Senator Bob Mensch (R-Bucks, Lehigh, Montgomery, Northampton) sponsored the bill. The Pennsylvania Breast Cancer Coalition and the Hospital & Healthsystem Association of Pennsylvania (HAP) supported the bill, asserting that dense breast tissue can hide abnormalities and complicate early detection of breast cancer. Pennsylvania is the eleventh state to pass a breast density notification law, joining a controversial movement led by breast cancer survivors who discovered they had dense breasts only after being diagnosed with advanced cancers missed by mammograms. Many groups, including the American College of Radiologists and the American Cancer Society, have expressed concerns about breast density notification legislation. They argue that assessment of breast density is subjective and that there is no consensus whether it warrants additional screenings, such as ultrasound or MRI. The legislation is effective as of January 31, 2014.


Medical Assistance Modernization Act: The Medical Assistance Modernization Act of 2010, also known as Act 49, authorized the Pennsylvania Department of Public Welfare to impose a statewide assessment based on net operating revenues derived from inpatient services provided by licensed acute care hospitals in Pennsylvania. HAP supported the passage of Act 49, since it served as a mechanism for the Commonwealth to secure additional federal matching funds, which were then distributed in part to hospitals through increased medical assistance payments and retained in part by the Commonwealth in its General Fund. The Act originally became effective on July 1, 2010 and has generated $339 million for the Commonwealth's General Fund and $1.4 billion for Pennsylvania hospitals through June 30, 2013.

As part of its recent budget, Pennsylvania reauthorized Act 49 (now referred to as Act 55 of 2013) for an additional three year period ending June 30, 2016.

Tobacco Settlement Funds: As reported previously, under the 1998 settlement with four of the largest tobacco manufacturers, 46 states and the District of Columbia will receive an estimated $206 billion over 25 years. States receive their portion of the payment based on tobacco sales. Pennsylvania receives about $300 million annually and uses the funds exclusively for health care, including support for medical assistance programs, reimbursement to hospitals for uncompensated care costs and funding for cancer research and tobacco cessation programs.

Fifteen states, including Pennsylvania, became involved recently in a settlement payment dispute with the tobacco companies. More specifically, the tobacco companies argued that Pennsylvania failed to properly enforce settlement provisions involving the taxation of nonparticipating manufacturers. On September 11, 2013, an arbitration panel ruled that Pennsylvania's payments for 2014 will be reduced from $300 million to $120 million. In response, Pennsylvania Attorney General Kathleen Kane filed a motion on November 4, 2013 in the Philadelphia Court of Common Pleas seeking to overturn the ruling.


Pennsylvania General Election: The Pennsylvania General Election was held on November 5, 2013. Lehigh County voters selected Tom Muller (D) to serve as its next county executive. Mr. Muller has served as the County's Director of Administration for the past seven years and previously served as the Chief Operating Officer of Binney & Smith and the Executive Vice President of Victaulic Corp. In Northampton County, current Mayor of Bangor John Brown (R) was elected as the Northampton County Executive. He will become the first Republican to hold the seat since 1997. He defeated Bethlehem Mayor John Callahan (D) for the position by securing 53% of the vote. Allentown Mayor Ed Pawlowski (D) was reelected to a third term in office, and Bethlehem City Councilman Bob Donchez (D) was elected as the new Mayor of Bethlehem.

New Jersey Issues


United States Senate Special Election: On October 16, 2013, Newark Mayor Cory Booker (D) was elected to the United States Senate. The seat, which was originally held by Senator Frank Lautenberg (D-NJ), had been occupied by an interim appointee, Senator Jeff Chiesa (R-NJ), since shortly after Senator Lautenberg's death in June. Senator Booker was sworn into office on October 31, 2013 and will serve until January 2015. He will need to run again in November 2014 to serve a full six-year term.

New Jersey General Election: On November 5, 2013, New Jersey voters reelected Governor Chris Christie (R-NJ) to a second term in office. The Governor defeated Democratic challenger State Senator Barbara Buono (D-Middlesex) by a margin of 60% to 40%. Residents also elected candidates for all 80 seats in the General Assembly and all 40 seats in the State Senate. State Senator Michael Doherty (R-Warren, Hunterdon, Somerset) and Assemblymen Erik Peterson (R-Warren, Hunterdon) and John DiMaio (R-Warren, Hunterdon) were successful in their reelection efforts despite opposition. Warren County Freehold Jason Sarnoski was elected to a second three year term in office. Phillipsburg Councilmen Todd Tersigni (D), Randy Piazza (R) and Bernie Fey (R) were reelected to their seats on town council.

Federal Issues


H.R. 2775: Continuing Appropriations Act of 2014. As reported previously, the United States constitution requires Congress to pass a spending plan by September 30th of each year in order to keep the federal government operational for the federal fiscal year commencing on October 1st. As part of the spending bill for the federal fiscal year commencing on October 1, 2013, House Republicans demanded the elimination of all funding for the Patient Protection and Affordable Care Act (PPACA). Senate Democrats refused to pass a spending bill without maintaining the funding for PPACA. As a result, Congress was unable to agree on a federal spending plan by the deadline, and, on October 1, 2013, the federal government shut down operations for first time in 17 years. The Treasury Department also warned that the United States would default on its loans if it failed to raise the federal borrowing limit by October 17, 2013. On October 17, 2013, President Obama (D) signed into law a bill to end the federal government shutdown until January 15, 2014 and to raise the federal borrowing limit until February 7, 2014. Congressmen Cartwright (D-17-PA), Dent (R-15-PA), Fitzpatrick (R-8-PA) and Lance (R-7-NJ) voted in favor of the bill. Senators Casey (D-PA), Chiesa (R-NJ), and Menendez (D-NJ) supported the measure in the Senate. Senator Toomey (R-PA) opposed the bill.