Meanwhile, freshman Sen. Ted Cruz (R-Texas), a Tea Party stalwart, has promised a filibuster that would essentially block the House bill from being considered on the Senate floor. But that's appearing more unlikely, especially after Senate Minority Leader Mitch McConnell (R-Ky.) urged his fellow senators on Tuesday to support passage of the House's continuing resolution. After the Senate votes, the measure would then return to the House, where the lower chamber will have little time to consider the legislation before the current fiscal year ends on Sept. 30.
Sen. John McCain (R-Ariz.), who said last week that it's “not rational” to think the Senate will defund the 2010 healthcare law, released a joint statement with Sen. Lindsey Graham (R-S.C.) on Monday that said the continuing resolution to fund the government should include an amendment that repeals the ACA's medical device tax, which the lawmakers referred to as an “egregious” tax that has increased healthcare costs for consumers and punished researchers and manufacturers. That tax raises $30 billion over 10 years and is an important source of funding for the ACA, including paying for insurance subsidies for low and moderate-income Americans.
Referring to the proposal to repeal the medical device tax, Dan Holler, communications director for Heritage Action, the lobbying arm of the conservative Heritage Foundation, said Senate Republicans “would have to have Harry Reid's buy-in to do that because Reid can block every single amendment being offered—and he will.”
Sources also say there's a possibility that the Senate bill will fund government departments, programs and agencies through mid-November, as opposed to the Dec. 15 date that the House approved last week.
“I think what makes a short-term resolution more likely is, one, you don't have the votes for a long-term thing,” said Darrell McKigney, vice president at the Farragut Square Group, a healthcare consulting firm. “And, two, if you tell people who want to fight on this, 'Drop the fight for now and we'll re-fight it again in two to three months,' you give them another bite at the apple.”
Although the Treasury Department has not released a hard date on when the nation will reach its debt ceiling, lawmakers and analysts are looking to mid-October. Anna Howard, Medicare reimbursement and health policy director at the law firm Drinker Biddle & Reath, said the “magic date is on or around Oct. 18,” and it's notable that both chambers of Congress and the White House must consider two big deals within weeks of each other.
“I don't think we're going to face a government shutdown,” Howard said. “But it also has not escaped individuals' attention that as much as we're focused on a government shutdown, we have to turn around and compromise again. It will be interesting to see how much the parties involved are willing to trade off issues.”
While the House has not introduced debt-ceiling legislation, a proposal from a House leadership office began to circulate on Monday. Among the core principles of that proposal is a one-year increase to the nation's debt limit through Dec. 31, 2014, and a one-year delay to all taxes, mandates and benefits included in the healthcare reform law. That's unlikely to fly in the Senate.
The proposal also calls for major healthcare changes that have been floated by Republicans in earlier debt-reduction proposals as a way to achieve tens of billions in federal savings over a decade. Some of these proposals would be strongly resisted by providers. The House leadership proposals include an increase in Medicare means testing, expected to yield about $56 billion in savings over 10 years, a reduction in the Medicaid provider tax ($11 billion), and medical liability changes ($49 billion). According to the blueprint, the proposal also would reduce disproportionate share payments by $4 billion over 10 years, although it did not specify if those cuts would come from Medicare DSH payments, Medicaid DSH payments, or a combination of the two. A source familiar with the House negotiations said it would come from both programs. And the House draft proposal this week also would eliminate the ACA's prevention and public health fund, a measure that would be strongly opposed by many Democrats.
Even though negotiations on all of these fiscal matters continue with an uncertain outcome, McKigney of the Farragut Square Group said he still doesn't expect the government to shut down. “You will end up with something short, simple and clean and you can promise people a chance to fight again in the new year,” he said.
He also expects sequestration that Congress agreed to in the Budget Control Act of 2011 to continue next year. That means Medicare providers would continue to see a 2% reduction in payments.
“The industry isn't expecting to get it back, Republicans don't want to give it back, Democrats don't want to give it back because if they give it back, they have to take away something else,” McKigney said. “Nobody wants to do that.”
Follow Jessica Zigmond on Twitter: @MHjzigmond