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Government Relations Update – July 22, 2014

Pennsylvania Issues


State Budget: On July 10, 2014, Governor Tom Corbett (R-PA) signed the Pennsylvania budget into law ten days after the Commonwealth's constitutional deadline had passed. The $29.1 billion spending plan does not increase taxes, but it does rely on certain one-time fixes to cover a $1.5 billion budget shortfall. In addition, the Governor employed his line item veto authority to strike $72.2 million in spending from the General Assembly's operating expenses as a tool to force the General Assembly to consider pension reform legislation. The final budget contained no changes to healthcare spending or hospital funding compared to the 2013-2014 state fiscal year. Every Lehigh Valley Republican legislator supported the budget, while each Democratic member voted in opposition.


H.B. 1420 (Act 94 of 2014): Pulse Oximetry Screening of Newborns for Congenital Heart Defects. On July 2, 2014, Governor Corbett signed into law a bill requiring Pennsylvania hospitals and freestanding birthing centers to perform pulse oximetry screening for newborn babies. Pulse oximtry is a painless, noninvasive and inexpensive test that measures oxygen saturation in the bloodstream using a beam of light. Results from the test can help determine if a newborn has an undiagnosed, critical congenital heart defect. According to the U.S. Centers for Disease Control and Prevention, roughly seven out of every 1,000 babies born are affected by congenital heart disease. The screening has also been shown to be helpful in earlier detection of other health conditions in newborns, such as sepsis, pneumonia, pulmonary hypertension and respiratory illness. Representatives Rosemary Brown (R-Monroe), Doyle Heffley (R-Carbon), Ryan Mackenzie (R-Berks, Lehigh) and Michael Schlossberg (D-Lehigh) served as co-sponsors of the bill, which passed unanimously in both the House and Senate. The Hospital & Healthsystem Association of Pennsylvania (HAP) supported the legislation.

H.R. 920: Professional Nursing Resolution. On June 24, 2014, Representative Mauree Gingrich (R- Lebanon) introduced a House Resolution directing the Joint State Government Commission (JSGC) to study the issue of nurse staffing ratios in Pennsylvania hospitals. According to the resolution, the odds of a professional bedside nurse making an error during a shift of 12.5 hours or more are three times greater than during a shift of 8.5 hours or less. The resolution directs the JSGC to study and report to the House of Representatives within one year its finding and recommendations on: (1) serious adverse events in hospitals and their connection to nurse staffing levels; (2) the age and gender of nurses and their length of service in the profession; (3) the lengths of shifts and overtime requirements for nurses; (4) the nurse staffing levels that are implemented at varying types of hospitals and for differing shifts and hospital units; and (5) recommended changes to laws, practices, policies and procedures related to nurse staffing that should be implemented. The JSGC is expected to provide the House with information intended to support a proposed professional nurse staffing bill.

On June 27, 2014, the House approved the resolution by a vote of 173 to 29. Representatives Rosemary Brown (R-Monroe), Marcia Hahn (R-Northampton), Doyle Heffley (R-Carbon), Jerry Knowles, (R-Berks, Schuylkill), Ryan Mackenzie (R-Berks, Lehigh), Michael Schlossberg (D-Lehigh), and Justin Simmons (R-Lehigh, Northampton) voted against the resolution's passage.

St. Luke's University Health Network opposes any attempt to implement minimum nurse-to-patient staffing requirements and urged every member of the Lehigh Valley state legislative delegation to vote against the Professional Nursing Resolution. In response to our concerns, HAP has assured its members that it will assist the JSGC with the study to ensure that a fair and accurate report is conducted.


24th State Senate District: The Pennsylvania Primary Election was held on May 20, 2014. State Senator Bob Mensch (R-Bucks, Lehigh, Montgomery, Northampton) was unopposed on the official ballot for the 24th State Senate District, but Jack Hansen received more than 1500 write-in votes and successfully secured the Democratic nomination for the seat. Mr. Hansen currently serves as a Lansdale Borough Councilman and is a retired truck driver. St. Luke's Hospital – Quakertown Campus and the St. Luke's Upper Perkiomen Outpatient Medical Center are located in the 24th State Senate District.

New Jersey Issues


State Budget: On June 30, 2014, Governor Chris Christie (R-NJ) signed the New Jersey 2014-2015 state budget into law. The $32.5 billion budget decreases spending by 1.2% compared to the prior fiscal year, although hospital funding remains unchanged and funding for nursing homes, skilled nursing facilities and assisted living providers received a $12.5 million increase. The New Jersey legislature is expected to begin deliberations on the 2015-2016 budget as early as this fall, and the legislature is expected to reexamine current hospital funding sources for possible reductions. The New Jersey Hospital Association (NJHA) has communicated to its members that the NJHA intends to advocate against any hospital payment reductions.

Federal Issues


S.2501: The Hospital Readmission Accuracy and Accountability Act. On October 1, 2012, Medicare implemented the Hospital Readmission Reduction Program (HRRP) as part of the Patient Protection and Affordable Care Act (ACA). The HRRP program penalizes hospitals with higher than expected readmissions of Medicare patients ages 65 and older with diagnoses of acute myocardial infarction, heart failure or pneumonia. A hospital’s expected readmission rate for each of the HRRP conditions is the national mean readmission rate, risk adjusted for demographic characteristics (for example, age and sex) and severity of illness of the hospital’s patients. The penalty is calculated using a complex formula based on the amount of Medicare payments received by the hospital for the excess readmissions. The penalties are collected from the hospitals through a percentage reduction in their base Medicare inpatient claims payments, up to a cap. The ACA set the penalty cap at one percent of aggregate inpatient base payments for 2013, increasing to two percent for 2014 and three percent for each year thereafter. Although there is widespread support for focusing attention on lowering hospital readmission rates, some experts believe that the HRRP unfairly treats hospitals that care for the sickest and most vulnerable patients. In response, on June 19, 2014, Senator Joe Manchin (D-WV) introduced legislation that would require the Centers for Medicare and Medicaid Services to account for patient socio-economic status when calculating the risk-adjusted readmissions penalties. The bill is supported by Premier, the Association of American Medical Colleges (AAMC), the American Medical Association and the American Hospital Association and has been sent to the Senate Finance Committee for consideration.

S.577: The Resident Physician Shortage Reduction Act. In 1997, Congress placed a cap on the number of medical residencies funded through Medicare at 26,000. According to the AAMC, there will be a physician shortage of 91,500 by 2020 and 130,600 by 2025 if Congress does not increase the cap. On March 14, 2013, Senator Bill Nelson (D-FL) introduced the Resident Physician Shortage Reduction Act, which would increase the cap on the number of federally funded medical residency slots at teaching hospitals. The legislation would provide for 15,000 new residency slots by 2019 at a cost of $1 billion annually. On June 11, 2014, Senator Robert Casey (D-PA) held a press conference at Thomas Jefferson University Hospital to publicize his support for the bill. Senators Casey and Menendez (D-NJ) serve as co-sponsors of the legislation, which has been held in the Senate Subcommittee on Health since its introduction.