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What’s Happening With the “Fiscal Cliff”? Premier’s Blair Childs Explains

December 10, 2012
by Mark Hagland
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Premier health alliance’s Blair Childs offers perspective on the challenges facing healthcare in the current budget talks

Anyone who’s been paying attention since the November 6 federal elections is aware that President Barack Obama and Republicans in Congress, represented by Speaker of the House of Representatives John Boehner, have been engaged in complex negotiations over the so-called “fiscal cliff”—a shorthand media term for a constellation of effects related to the U.S. federal budget, if action is not taken in Congress by the end of December. Among the issues to be worked out within the federal government are what to do about the expiration of the Bush tax cuts, as well as across-the-board spending cuts set to be triggered by the Budget Control Act of 2011.

One industry leader who has been following the current developments in this rapidly changing situation very closely has been Blair Childs, senior vice president for public affairs at the Charlotte-based Premier healthcare alliance. An exceptionally thoughtful and well-connected advocacy director, Childs has continued to try to educate members of Congress and their staffs about the implications for healthcare providers in the various legislative choices they might make. The Washington, D.C.-based Childs spoke on Dec. 10 with HCI Editor-in-Chief Mark Hagland regarding the latest developments in the current situation, and his perspectives on the implications for healthcare. Below are excerpts from that interview.

What are the latest developments in the “fiscal cliff” negotiations? And what should our readers understand about what’s at stake here?

I think there are very few people in Washington, even in the points of decision-making, who understand all the pieces of legislation that are affected by this fiscal cliff thing. There are smaller things like the Postal Service, that are affected, too. Really, the scope of this is huge.

Blair Childs

Will something get done before the end of  this month/ the end of the year?

It depends on what you mean by “getting something done.” I think something will be done; it’s just a question of how complete an agreement it will be. I don’t think it’s possible that they can get a complete agreement, meaning specific changes to the entitlement programs, specifics having to do with Medicare, Medicaid, other federal programs, by the end of the month. Instead, if they have to get something done, it’s more likely the tax piece that they’ll get worked out.

This morning, Chuck Todd said on the MSNBC network that if some kind of agreement is worked out between the White House and Congress, at least the broad framework of the agreement would have to be hammered out by December 17, in order for the legislative details to be worked out, and for the legislation to be voted on before the year-end recess. What are your thoughts on that assertion?

Yes, when you think about all the tax issues that come into play starting the first of next year, that’s probably pretty accurate. But that’s where I think that perhaps they could get something done on taxes, while deciding at a broad level on, say, x amount of dollars in entitlement reform, and x amount of dollars in domestic spending savings, and x amount of sequestration resolved; and then they could then decide what to do on the AMT [alternative minimum tax], the Bush tax cuts, and the payroll tax questions, leaving it to the committees to work out the details in Congress. There are just so many variables here, it really is mind-boggling.

It’s hard for me to imagine that they could resolve the “doc fix” situation [the ongoing criss over the Medicare program’s sustainable growth rate, or SGR, formula, and ongoing “patches” legislated in order to avert physician reimbursement cuts under the SGR] before January 1. Your thoughts?

They might be able to do a three-month or six-month fix again. But I do think it’s very possible that they might try to fix the SGR formula next year for the long term. I think we’re looking at the next Congress doing about what they did in the last Congress, meaning, not much—fighting over spending and taxes. Now, they might come up with a major framework [on federal spending], and the question is whether they put into that framework, fixing the SGR long-term. And that’s where they might come up with a six-month solution and then ask the committees to report out a bill that creates a long-term fix to the SGR.

One of the things that’s been reported, including by the Washington Post, has been a proposal for further legislation, beyond what’s contained in the Affordable Care Act [ACA], on avoidable readmissions, as one of the possible changes to Medicare. What have you heard?

Yes, I think the area where there’s a real need to focus attention in that area, is in the post-acute care side. And I do think there’s been quite a bit of attention there about, do we need some sort of beefed-up program, most likely for skilled nursing facilities.

That’s what they were referring to in the media reports we’ve seen?