1. State Network Council Meting Salina, KS August 29, 2011 View from Washington

2. Paul Muraca Regional Executive Phone: 800-981-9826 Email: pmuraca@aha.orgpmuraca@aha.org Who am I?

3. 1.Funding the government in FY 2011 Continuing Resolutions on Appropriations Vehicle for reducing discretionary spending 2.Debt limit extensions Vehicle for longer term deficit reduction 3.Expiring provisions – H.R. 4994 of 2010 Taxes Unemployment compensation benefits Medicare physician payment cuts “Must Do” Measures

6. Where We Are Stage 1 Immediate budget reductions of $917 billion...extends debt limit by $900 billion to February/March –No cuts in Medicare, Medicaid and Social Security (except fraud and abuse initiative) –No new revenues

7. Stage 2 ThanksgivingSpecial bipartisan congressional committee to make additional $1.5 trillion in deficit reduction recommendations by Thanksgiving –Guaranteed up-or-down vote (and no filibuster) on recommendations if majority of panel support them by Christmas –Enforcement process…debt limit extended by another $1.5 trillion thru 2012 IF:  Recommendations of special committee adopted with resolution of disapproval; OR  Congress passes a Balanced Budget Amendment; OR  Automatic across-the-board cuts…sequester o f $1.2 billion evenly divided between defense and domestic programs: o No revenue o Medicaid exempt o Medicare and Social Security “benefits” exempt o Special rules for Medicare providers and insurers (2 percent or $137 billion over 9 years starting in 2013…$45 billion from hospitals) Where We Are

8. Special Committee Options Medicaid…total of $100 billion Provider taxes (assessments) Blending rates (FMAP) Medicare…total of $250 billion IME ($14 billion) Bad debt ($14-26 billion) Rural adjustment cuts ($14-16 billion)Rural adjustment cuts ($14-16 billion) Post acute care services ($50 billion) Medicare IPPS coding adjustments ($4 billion) Expansion of IPAB

9. Increase retirement age ($125 billion) Means-testing ($38 billion) Reform and increase copays for Part A & B ($110 billion) Medigap restrictions ($53 billion) Home health copays ($40 billion) SNF copayments ($50 billion) Special Committee Options

10. Advocacy Agenda Rural Hospital Leadership Coalition and Caucus Reorganizing − House: Mike Thompson, D-CA and Cathy McMorris Rogers, R-WA − Senate: Tom Harkin, IA and Pat Roberts KS Legislative Priorities Medicare extenders Independent Payment Advisory Board Provider taxes as allowable costs Physician Supervision of Outpatient Services 101% to CAH for Medicare Advantage CAH Flexibility Act pending, need CBO Score CRNA pass through and standby for CAHs

11. Questions or Comments? Paul Muraca AHA Regional Executive 800-981-9826 pmuraca@aha.org