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CQ HealthBeat: Camp Says War Savings Might Be Outside Scope Of Conference Committee
The chairman of the conference committee that’s working to avert a looming cut in Medicare physician payment rates said Thursday that suggestions about using war savings to pay for a long-term “doc fix” likely are outside the scope of the panel’s deliberations. But Rep. Dave Camp, chairman of the Ways and Means Committee, also said that he doesn’t yet want to discuss any ways of paying for policy debated by the panel, which is also considering extensions of unemployment insurance and a Social Security payroll tax cut that were included in a House-passed bill (Norman, 2/2).

Kaiser Health News: Capsules: Using War Savings For ‘Doc Fix’ Complicated By Congressionial Rules
While hospitals, physicians and some members of Congress want to use war savings as a way to get rid of Medicare’s sustainable growth rate formula, congressional rules could complicate things. Even if there’s enough support for the idea among Republicans — and it’s unclear there is, especially in the House – there’s the issue of ‘scope,’ or what’s currently included in the House and Senate bills (Carey, 2/3).

Politico Pro: War Fund Fix Gains Steam, Faces Obstacles
Injecting the war savings into the SGR mix gave new life to an idea left for dead in December — permanently doing away with the dysfunctional Medicare physician pay formula once and for all. But the idea still faces obstacles — political and procedural. Which can turn out to be the same thing. Members of the payroll/SGR conference committee are definitely considering ways of tapping into the Overseas Contingency Operations funds. And physician and hospital groups are behind the idea, which would be less painful for them than the options that have been on the table. But not everyone — including some top Republicans and conference committee Chairman Dave Camp — is sold. And budget rules also make it anything but a slam-dunk. CBO Director Douglas Elmendorf this week said that war savings would not count as an offset for SGR repeal under pay-go rules (Feder and DoBias, 2/2).

Modern Healthcare: Shall They Beat Their Swords Into Medicare Doctor Pay?
A House GOP lawmaker on Wednesday sounded open to the idea of using unspent war funds as a way to pay for a long-term fix to Medicare’s contentious sustainable growth rate formula. Earlier Wednesday, the House-Senate negotiating committee responsible for devising long-term solutions to a middle-class payroll tax holiday, unemployment insurance, the SGR, and extensions for certain Medicare programs met for the second time. Some committee members during and after the meeting highlighted an earlier-proposed idea of using potential spending reductions from Overseas Contingency Operations funds to pay for a long-term SGR fix (Zigmond, 2/2).

Politico Pro: Lieberman, Coburn Fight War Savings For SGR
Sens. Joe Lieberman and Tom Coburn released a letter Thursday afternoon in which they blast the idea of using war savings as an offset for repealing Medicare’s physician payment formula. The letter from Lieberman (I-Conn.) and Coburn (R-Okla.) says in part, “The funds allocated for OCO or ‘war savings’ are not real, and every member of Congress knows this. “While our colleagues may be well-intentioned, we believe this approach is financially misguided and will undoubtedly increase our nation’s debt and deficit in real terms,” the letter states (Feder, 2/2).

In other Capitol Hill action –

The New York Times: To Fix Image, Republicans In House Think Small
Unpopular and divided, the once mighty House Republicans are laboring to repair their image and frame a new agenda. Members are still struggling to sing from the same legislative hymnal. Many want to do bigger things, like a tax code overhaul and changes to the Medicare program. Others, including Mr. Cantor, knowing they will get no help from Senate Democrats, seem to favor more incremental steps (Steinhauer and Weisman, 2/2).

CQ HealthBeat: GOP Lawmakers Ask AARP To Recommend Medicare Changes
GOP members of the House and Senate challenged AARP on Thursday to join their efforts to overhaul Medicare, as House Republicans investigate the powerful advocacy group for possible financial conflicts of interest. The 18 lawmakers — all medical providers — wrote to AARP chief executive A. Barry Rand that politics must be put aside in order to find ways to financially bolster Medicare, and they asked the group to identify detailed policy proposals that it would support (Ethridge, 2/2).

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The New York Times: Mayor Of Providence Seeks Urgent Steps In City’s Financial Crisis
Mayor Angel Taveras, a Democrat, outlined plans to reduce pensions for retired municipal workers and vowed to appeal a recent state court ruling preventing the city from forcing its retirees to switch to the federal Medicare health insurance program when they turned 65. He also called for bigger contributions from major tax-exempt universities and hospitals in Providence (Bidgood and Goodnough, 2/2).

The Associated Press/Washington Post: Mayor Says Providence Could Face Bankruptcy Without Retiree Benefit Cuts, Nonprofit Payments
Mayor Angel Taveras painted a bleak picture Thursday of the city’s finances, saying Providence faces “devastation” and could go bankrupt if retiree benefits aren’t cut and tax-exempt institutions like Brown University don’t pay more in lieu of taxes. Taveras said he cut a projected $110 million deficit for the current fiscal year to less than $30 million but that the city is on track to run out of money by June. He said taxpayers and city workers have already sacrificed — taxes and fees have gone up, several schools were closed and there are 200 fewer people on the city’s payroll compared to a year ago — and he called on retirees and nonprofit hospitals and universities to do the same (2/2).

Des Moines Register: State Workers Should Pay $2,400 A Year In Health Premiums, Republicans Say
Iowa’s state employees would pay $2,400 a year in health care premiums under a budget proposal released today by House and Senate Republicans. The proposal, however, has little chance of being enacted for the upcoming fiscal year because of legal limitations between the state and union employees, Republicans conceded. … Most state employees – including lawmakers and their families – pay no health care premium (Clayworth, 2/2).

The New York Times: As Fiscal Cloud Lifts, Mayor Offers A Budget Free Of Tax Increases Or Broad Layoffs
Mr. Bloomberg said costs that the city could not control, like those of pensions, health care, Medicaid and debt service, would increase by $2 billion, or 7.5 percent. But he said he would balance the budget in part by drawing on money from a health care reserve fund and money expected from the sale of new taxi medallions. City expenditures would shrink by $437 million (Chen, 2/2).

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Reuters: Insight: Deficits, The U.S. Election And Politics Of Fear
With the public shaken by high unemployment, some voters worry aggressive measures to shrink deficits could leave people in the cold. Obama frequently paints the Republican vision of government as “you’re-on-your-own” economics. He says Republicans would “gut” funding for Medicare, the federal program that pays for elderly health care and which is often flagged as the top threat to long-term budget sustainability. … Polls suggest this approach could have some bite. When Americans were asked in a Pew poll late last year to choose between fixing the deficit and keeping Medicare unchanged, they favored Medicare by a wide margin (Lange and MacInnis, 2/2).

Meanwhile, more reports from the GOP presidential primary campaign trail -

Boston Globe: Romney Shifted On ‘Conscience’ Issue
Mitt Romney accused President Obama this week of ordering “religious organizations to violate their conscience,” referring to a White House decision that requires all health plans – even those covering employees at Catholic hospitals, charities, and colleges – to provide free birth control. But a review of Romney’s tenure as Massachusetts governor shows that he once took a similar step. In December 2005, Romney required all Massachusetts hospitals, including Catholic ones, to provide emergency contraception to rape victims, even though some Catholics view the morning-after pill as a form of abortion (Jan, 2/3).

The Associated Press: Santorum Warns Voters Of Country’s Likely Demise
Rick Santorum’s campaign slogan could very well be one word: doomsday. To hear him tell it, the United States will collapse under the weight of its health care system and basic freedoms will be history. … On the health care overhaul, Santorum warns: “Be careful what you do … because once the government creates a right, it can tell you how to exercise that right” (Elliott, 2/3).

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Los Angeles Times: Health Law Delivers $2.1 Billion In Savings On Drugs For Seniors
In the first full year of the new healthcare law, 3.6 million people in the government Medicare program saved $2.1 billion on prescription drugs in 2011, the Obama administration announced Thursday (Levey, 2/2).

The Wall Street Journal’s Health Blog: Obama Says Seniors Have Saved On Medicare ‘Doughnut Hole’
Part of the law was intended to fill the gap in prescription-drug coverage, the so-called doughnut hole, when Medicare beneficiaries have to pay up to $4,550 out of pocket for drugs after their costs pass $2,840 for the year. Under the law, drug companies have to offer discounts on brand-name and generic drugs for Medicare beneficiaries after they reach the gap. Discounts increase annually until 2020, when the hole is supposed to be filled entirely. In 2010, the first year when the discounts were in effect, seniors also got a $250 rebate check if they hit the doughnut hole (Radnofsky, 2/2).

Modern Healthcare: Reform Shrinking ‘Doughnut Hole’: HHS
About 3.6 million Americans with Medicare who reached the “doughnut hole” saved about $604 on their prescription drugs in 2011, according to data from HHS. … HHS reported Thursday that the Patient Protection and Affordable Care Act—which provides a 50% discount on brand-name prescription drugs, and, in 2012, a 14% discount on generics—saved those 3.6 million beneficiaries about $2.1 billion on their prescription-drug costs last year (Zigmond, 2/2).

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