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A Quiet Year Ahead in Washington? Don't Count on It!

01/10/18

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Shoshana Krilow, Vice President, Public Policy and Government Relations

Although the end of 2017 was a race to the finish that narrowly avoided a government shutdown and threatened to keep Congress, staffers and lobbyists in D.C. until Christmas day, there are no signs that 2018 will be any less … eventful.

Traditionally, election years are reasonably quiet, with members of both parties shifting their focus to the upcoming reelection campaigns, and making every effort to avoid controversial policies and difficult votes. So, conventional wisdom would suggest that 2018 will be relatively calm. But, after the last year, would you rely on that to be true? I’m not so sure I would.

Before we get too far ahead into 2018, we have some unfinished business to address. When Congress left town in December, they did what is starting to become a bit more routine than in years past: they avoided key issues and kicked the can down the road on several critical policies and programs. Most significant among these programs is the Children’s Health Insurance Program (CHIP), which although funded through March may actually start to run out of money much sooner. Additionally, while the government is currently open and operational, funding expires again on Jan. 19, leaving very little time for Congress to again make some difficult decisions.

Congress also failed to address several crucial, albeit technical, health care programs. A number of Medicare “extenders,” such as the Medicare Dependent Hospital program and the exceptions process for Medicare therapy caps, were notably absent from the December agreements. Hospitals hoped Congress would also address the looming $2 billion in cuts to Medicaid Disproportionate Share Hospitals or act to prevent $1.6 billion in Medicare cuts to hospitals that participate in the 340B Drug Discount Program, but no such luck. It is possible that Congress could tackle some of these issues in the near future, but recent reports have indicated that they may pass another temporary funding measure, and leave these important health programs to continue facing uncertainty until March, or even beyond.

There is also the small matter of suspending or raising the debt ceiling in the first quarter of the year – which could open the door to conversations around spending on health care programs like Medicare and Medicaid.

And as if that isn’t enough uncertainty, there continues to be an appetite among some Republicans to continue to push to repeal and replace the Affordable Care Act – even after one of the most controversial parts of the law (the individual mandate penalty) was nixed as part of the tax reform package.

Any repeal and replace discussions will likely center around overhauling the Medicaid program and adopting a block grant approach similar to the proposal offered by Sen. Bill Cassidy (R-La.) and Sen. Lindsay Graham (R-S.C.) last year. Under that approach, states would receive block grants in place of existing ACA funding, and they would be given broad latitude in how to use those funds. Another major element of the Graham-Cassidy proposal would be altering how Medicaid funding flows to states by using per-capita allotments or per-person funding caps. If either of these changes are implemented, it would likely mean two things for hospitals: a higher number of uninsured Americans, and reduced Medicaid funding.

Perhaps recognizing the reality of a very narrow 51-49 majority in the Senate, and that tackling controversial issues during an election year is generally not advised, Senate Majority Leader Mitch McConnell (R-Ky.) has sought to tamp down expectations for a big move on health care or entitlement spending.

That’s not to say that addressing health care costs won’t be a focal point, as always. Drug prices continue to be on the agenda and an ongoing examination of the prescription drug industry seems inevitable. Changes to the 340B Drug Discount Program also continue to be possible as competing legislation has been introduced and Congress is showing an inclination to conduct more oversight hearings. Finally, there is the potential for continuation and growth of site-neutral payment policies, which further reduce hospital reimbursements to those of stand-alone physician offices or ambulatory surgery centers.

But the clock is ticking. Most activity will likely come screeching to a halt as soon as August recess rolls around – or more likely even earlier. Then, Congress will turn their focus aggressively toward campaigning for reelection. Every member of the House is up and some are speculating the GOP majority may be in jeopardy. And, after Alabama, it is possible, though perhaps less likely, the Senate MAY also be in play for Democrats. In either case, it’s far too early to predict an outcome – but never too early to predict a heated election cycle ahead.

In any event, we have a full and very busy year ahead. Some policy fights will have a significant impact on hospitals across the country. Hospitals played a critical role in 2017, advocating on behalf of their institutions and the patients they serve during some of the most contentious policy debates in Washington – health care and tax reform. We salute your efforts and continue to rely on you to be our experts in the field with the most important voices in any health policy debate in Washington. As 2018 appears to be no less thrilling, it is critical that we keep up the fight to ensure all Americans have access to high quality health care.

About the author. As vice president of public policy and government relations, Krilow leads Vizient’s government relations, monitoring federal legislative and regulatory developments of importance to Vizient and its members. She has worked as a strategic advisor to health sector clients with a particular concentration on Medicare, the pharmaceutical and insurance industries, and the Affordable Care Act. Krilow also brings deep legislative expertise having spent several years on Capitol Hill, where she worked as a health policy advisor for Representative Marion Berry (D-Ark.) and Senator Joseph Lieberman (I-Conn.).

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