Lawmakers worked to complete their legislative “to do” list during the lame duck session of Congress, including tax relief legislation, a continuing resolution to keep the government running into next year in the absence of regular FY 2011 appropriations bills, and a host of other end-of-session priorities. In health-related news, such priorities included a one year patch to prevent deep reimbursement cuts from impacting physicians. In addition, two legal challenges to the new healthcare reform law also made headlines last week.

LAWMAKERS AGREE ON YEAR-LONG “DOC FIX”:

Following the enactment of a one-month fix in order to prevent looming Medicare cuts to physicians for the month of December, Congress moved swiftly to clear a longer-term solution.

On December 8, the Senate passed legislation – H.R. 4994 – by unanimous consent that would freeze current reimbursement rates for physicians for all of 2011, averting a 25 percent rate cut that was scheduled to take effect on January 1. The legislation would also extend several expiring Medicare programs, including protections for rural doctors and hospitals.

Following Senate passage, the House acted quickly, approving H.R. 4994 by an overwhelming vote of 409-2 on December 9. It was then presented to President Obama, who signed the measure into law on December 15.

Members of Congress from both parties praised the 2011 fix, but also reiterated their call for a long-term solution in order to provide doctors with more stability in their reimbursements and ability to serve Medicare patients. Stakeholders and patient groups reacted similarly, with the American Medical Association vowing to work closely with Congress in order “to develop a long-term solution to this perennial Medicare problem for seniors and their physicians.”

HEALTHCARE LAW FACES LEGAL CHALLENGES:

On December 13, U.S. District Court Judge Henry E. Hudson struck down a key component of the new healthcare reform law (Public Laws 111-148 and 111-152) – the individual mandate that all Americans have health insurance coverage. The case was filed by the Commonwealth of Virginia against the federal government, and in his ruling, Hudson said that the individual mandate “exceeds the constitutional boundaries of congressional power.”

Supporters of the law were quick to focus on the fact that the ruling left the remainder of the law intact, but also pointed out that the law would not work without the individual mandate because people could then wait until they were sick to purchase health insurance, driving up costs exorbitantly.

The following day, Justice Department officials rejected the attempt by Virginia to bypass the appellate process, stating that the federal government intends to file an appeal. Virginia Attorney General Kenneth Cuccinelli had been making requests to skip the appellate courts in order to bring his challenge directly to the U.S. Supreme Court. Cuccinelli had said that he would expect the case to take a year to make its way through the appellate process and another year before a decision could be expected from the Supreme Court.

The legal spotlight on healthcare reform shifted to Florida later in the week, as oral arguments were held in the lawsuit filed by 20 states against the federal government over Public Laws 111-148 and 111-152. In addition to the constitutionality of the individual mandate, the Florida suit is different in that it goes after the expansion of the Medicaid program as well.

The new law provides for Medicaid coverage for all children and adults under age 65 whose households earn up to 133 percent of the federal poverty level, and states will have to cover 10 percent of costs for the newly eligible beginning in 2020. Such an expansion will add an estimated 16 million to Medicaid rolls by 2019.

The states that brought suit contend that the Medicaid expansion will bankrupt them, and that it exceeds the spending powers of Congress by “unduly coercing and commandeering” the states. However, defenders of the Medicaid expansion that were present in the courtroom noted that there appeared to be a strong likelihood that District Court Judge Roger Vinson would deny the Medicaid argument.

The court session lasted three hours on December 16, and Vinson did not indicate when he would issue a ruling – though he did say it would be as quickly as possible.

NEXT STEPS:

As lawmakers recess for the holidays and as the 112th Congress prepares to convene in early January 2011, we continue to follow news from Capitol Hill. In addition, we continue to monitor HHS and other agencies, as the implementation of healthcare reform advances and other related matters arise. We will bring you timely updates as new developments occur.