FY 2012 Budget

Last Monday, the President released his FY 2012 budget , setting off a debate in congress over the fiscal health of the country. The budget proposal includes $62 billion in mandatory health care savings that would be used to pay for two years of a Medicare “doc fix.” The $62 billion used to fund the doc fix is pulled from various sources including $18 billion in savings from a reduction in Medicaid provider taxes and $12.9 billion in savings from the pharmaceutical industry. The ten year budget estimate for a doc fix is $369.8 billion.

The budget also includes an additional $250 million  to provide incentives for state medical malpractice reform and increases funding for NIH and FDA. It also includes funding for the implementation of PPACA but freezes funding for most discretionary programs.

Medical Liability Reform

The House Judiciary Committee last week concluded a markup on HR 5, which seeks to enact medical liability reform on the national level. The legislation, which caps some compensatory damages, establishes a statute of limitations for filing medical malpractice suits and limits attorneys’ fees in health care lawsuits, was approved by the committee on a party-line vote of 18-15. The committee adopted only one amendment during the markup which eliminates a provision that would allow juries to hear evidence of “collateral source benefits,” such as workers’ compensation payments or long-term disability insurance payments and strikes a provision that would prohibit providers of collateral source benefits from recovering any amounts paid after a court award is made to the plaintiff. The amendment was offered by Rep. Robert Scott (D-VA). No Republicans attempted to amend the legislation during the markup.

The House Energy and Commerce committee, which has dual jurisdiction of HR 5, will consider the legislation in the coming weeks.

1099 Reporting Provision

The House Ways and Means committee approved two pieces of legislation this week that repeal the 1099 provision originally passed as part of PPACA. One of the bills, HR 705, offsets the cost of the repeal by recapturing more overpayments to consumers who purchase health coverage through state-based health insurance exchanges. Democrats oppose this offset, claiming that it amounts to a tax increase on the middle class. Both bills move to the full House for a vote. If one passes, it must be reconciled with the Senate-passed repeal which uses a different source of funding for the offset.