The Obama administration on Thursday released new guidance to help small businesses claim the tax credits they're eligible for under the healthcare reform law.

According to the administration, the new guidance "addresses small business questions about which firms qualify by clarifying that a broad range of employers meet the eligibility requirements," including:

• Employers that pay for a portion of their employees' healthcare costs through a broad range of contribution arrangements. This includes firms that pay more to help older workers cover the higher premiums and firms that allow employees a choice of coverage;
• Religious institutions that provide coverage through denominational organizations. While the credit is for employers that fully insure in most cases, denominational organizations that self-insure their coverage can qualify for the credit; and
• Certain small employers that cover their workers through multi-employer healthcare and welfare plans. This is true as so long as 100 percent of the cost of coverage for all employees covered by the multi-employer plan is paid from employer contributions and not by employees.

In addition, the guidance includes a one-page form (Form 8941) and instructions to help small businesses claim the credit when they file their 2010 taxes.

The Democrats' law created a tax credit that could save small businesses as much as $40 billion by 2019, according to the Congressional Budget Office. Both for-profit and nonprofit organizations may qualify for the tax credit, but not the self-employed.

Eligible firms will get a 35 percent tax credit for their healthcare costs. To qualify for the full credit, businesses must have fewer than 25 employees, pay average annual wages below $50,000, and pay for most of their employees' health coverage.

The incoming chairman of the House Budget Committee said he'll vote against the debt-reduction plan.

Two years after Congress passed a law setting comprehensive limits on lead in children's products, the government needs to address other heavy metals in such products, the American Academy of Pediatrics (AAP) testified Thursday morning.

As a result of lead limits established by the Consumer Product Safety Improvement Act (CPSIA) of 2008, manufacturers have begun adding cadmium, a known carcinogenic, to children's products, said Dr. H. Garry Gardner before a Senate Commerce subcommittee on consumer protection.

"This is clearly a case of abiding by the letter but not the spirit of the law — Congress hardly intended for companies to substitute one poison for another," Gardner said.

The AAP recommended that eight heavy metals in American Society for Testing and Materials's voluntary toy safety standards should undergo rigorous review by the Consumer Product Safety Commission (CPSC). Any standards issued as part of the review should apply to all children's products and not just toys, the AAP said.

The AAP also asked the CPSC to consider requirements for secure closures on devices containing small, powerful magnets that can result in major damage to the esophagus and possibly death. Nearly 8,700 "button battery" incidents were reported between 1990 and 2008, of which 62 percent involved children under the age of six, Gardner testified.

Premiums for employer-sponsored family health insurance increased an average of 41 percent between 2003 and 2009, while deductibles jumped on average 77 percent per person, according to a Commonwealth Fund report released Thursday morning.

The biggest increase in employer-based premiums for family coverage was seen in Louisiana (59 percent) over the past six years, while Delaware experienced the smallest increase (21 percent). In 2009, premiums were highest in Alaska, Connecticut, Massachusetts, Vermont, Wisconsin and Wyoming, where annual costs surpassed $14,000 for a family. The lowest average premium costs ranged between $11,000 and $12,000 for 11 states.

Meanwhile, more workers are paying deductibles — more than half (52 percent) faced a deductible in 2003, while 74 percent faced one in 2009.

If premium increases maintain their current pace, families will pay on average $23,342 by 2020, according to the report, which analyzed the impact of implementing healthcare reform. However, if the Patient Protection and Affordable Care Act is successful in slowing premium increases by 1 percentage point per year, average annual family premiums would decrease nearly $2,300 by 2020, the report said.

“If implemented well, provisions in the Affordable Care Act — including some starting this year, such as tax credits for small businesses to provide coverage, dependent coverage for young adults up to age 26, and elimination of co-payments for preventive care — have the opportunity to reverse these unsustainable increases and ensure that families in every state have access to affordable, comprehensive health insurance,” said Commonwealth Fund President Karen Davis.

Welcome to The Hill's evening roundup of the day's health policy news and advance look at tomorrow's schedule.

Wednesday's health news

Second chance on food safety: Senate Democrats say an error in the food-safety bill passed Tuesday can be resolved in time to send the legislation to President Obama by the end of the year.

Two senior leadership aides confirmed that the bill the Senate approved, 73-25, inadvertently contained tax provisions that, under the Constitution, must originate in the House of Representatives. That means the bill must be passed a second time by the Senate, giving critics such as Sen. Tom Coburn (R-Okla.) another chance to block it.

House Majority Leader Steny Hoyer (D-Md.) indicated Wednesday the House was prepared to move on the Senate bill. "I presume they'll be able to pass it," he said. "It passed pretty handily in the Senate." http://bit.ly/h9tkJS

GOP senators say mini-med waivers show problem in reform: Problems implementing coverage requirements for so-called "mini-med" plans are indicative of larger issues rampant in the healthcare reform law, Senate Commerce Committee Republicans said during a hearing Wednesday afternoon.

Republicans took issue with the number of waivers Health and Human Services Secretary Kathleen Sebelius issued to employers offering low-value, mini-med plans.

"This thing is said to have reduced the deficit, but we’re seeing all sorts of unintended consequences with this healthcare reform law," said Sen. John Ensign (R-Nev.).

Commerce Committee Chairman Jay Rockefeller (D-W.Va.) came out against the mini-med plans, saying they are misleading and do not provide substantial coverage. He said they provide ample evidence that healthcare reform is needed to make sure all Americans are offered meaningful coverage.

"More than a million Americans wake up and go to work every day thinking they have health insurance," Rockefeller said. "But they don’t. They don’t have the kind of comprehensive health insurance that protects you from financial ruin if you get sick." http://bit.ly/hNEJQA

Deficit commission urges SGR, CLASS Act reforms: The final report from President Obama’s deficit commission urged immediate reforms to the formula for physician payments and a long-term-care insurance program created earlier this year.

The report, released Wednesday morning, recommended freezing the sustainable growth rate (SGR), which determines doctors’ Medicare pay, through 2013. It also called for reforming or repealing the Community Living Assistance Services and Support (CLASS) Act, created by healthcare reform to provide long-term-care insurance through employers.

The commission also recommended expanding the powers of the controversial Independent Payment Advisory Board, which Republicans have promised to repeal. A vote on the commission's plan is expected Friday.

The single-payer advocates with Physicians for a National Health Program also criticized the proposal — especially the proposed increase in out-of-pocket spending for Medicare beneficiaries.

"Medicare is not the cause of rising healthcare costs but its victim," said congressional fellow Margaret Flowers. "The real culprit for skyrocketing costs is our irrational, fragmented, market-based model of paying for health care, which chiefly benefits the private health insurance industry and Big Pharma, not patients or physicians. The commission co-chairs are silent on this matter." http://bit.ly/hNjKv0

AHA asks for antitrust guidance on care integration: The AHA urged antitrust agencies to provide timely and clear guidance on care coordination arrangements among hospitals and other caregivers during a House Judiciary subcommittee hearing. AHA general counsel Melinda Hatton said patients will benefit from having a less fragmented system in which providers and hospitals work together to coordinate care.

The best way to do this within legal parameters is "to issue user-friendly, officially backed guidance that clearly explains to caregivers what issues they must resolve to embark on a clinical integration program without violating antitrust laws," Hatton said. http://bit.ly/gLE1C4

In more AHA news: The association is encouraging members to reach out to new members of Congress. A new document will help guide members' conversations with lawmakers.

DEA nominee advances despite nursing-home drug concerns: Sen. Herb Kohl (D-Wis.) allowed Michele Leonhart, President Obama's nominee to head the Drug Enforcement Agency, to clear the Judiciary Committee. But Kohl said he'd block her nomination as long as DEA doesn't address the issue of nurses being barred from ordering painkillers for the nursing home patients they care for.

"I will not hold her nomination in the Committee today," Kohl said Wednesday, "but I do intend to hold her nomination on the Senate floor until we have made more progress towards our goal of ensuring that nursing home residents get timely access to the prescription drug care they need. The most recent suggestions I have received from the Department of Justice require waiting for all 50 states to take action and that is unacceptable. Every day nursing-home patients continue to suffer from agonizing pain and we need an interim solution as soon as possible."

Red flags rule flagged: The Senate approved bipartisan legislation Tuesday night that removes a requirement for small businesses, including healthcare organizations, from installing identity theft monitoring programs.

Egging them on: The Food and Drug Administration gave approval Tuesday to Wright County Egg to ship eggs again for the first time since two of their hen houses were associated with a multi-state outbreak of salmonella.

Save your pennies: People turning 65 this year will need upwards of $150,000 in savings to cover health costs in retirement, a new report says. http://bit.ly/ieSlUX

On the agenda for Thursday

GOP maneuver delays nutrition vote: Republicans used their last chance to amend the bill to offer a motion that would require criminal background checks for childcare workers and would have removed the federal mandate for paid meals in schools. When Democrats saw that the poison-pill amendment was headed for passage, they pulled the bill off the floor, a Democratic aide said. The aide said the background-check provision, which drew support from Democrats, would be dealt with separately and that the legislation could be brought back up as early as Thursday. http://bit.ly/h0nRD5

FTC proposes online privacy guidelines: The House Energy and Commerce Subcommittee on Commerce, Trade and Consumer Protection will hold a hearing on a new Federal Trade Commission proposal to establish a "do not track" registry allowing consumers to block websites and services from tracking their online browsing tendencies.

The recommendations could have implications for how marketers track health information. The FTC said congressional action would likely be needed to implement its recommendations.

House asks for Senate vote on 9/11 benefits: A bipartisan group of 29 House members penned a letter urging Senate leaders not to filibuster a bill that provides healthcare benefits to 9/11 first responders.

The bill, which passed the House 268-160 in September, provides medical monitoring, treatment and compensation to thousands of responders who were exposed to Ground Zero toxins.

Around the Web

Reform not to blame after all, union says: A New York healthcare workers union that dropped coverage for 6,000 children backed away from previous claims it dropped the coverage because of healthcare reform provisions, The Wall Street Journal reports. http://on.wsj.com/ei4ycO

Sacrifices ahead for doctors: Efforts to rein in health costs will require new team-based healthcare payment and delivery approaches, which would demand sacrifices from hospitals, doctors and insurers, according to the Boston Globe. http://bit.ly/eCkM5u

Soaring health costs examined: The Atlantic takes a look at why the United States's healthcare costs pulled far ahead of other countries in 1980. http://bit.ly/hDYGdu

Democrats pulled the bill because of a GOP amendment but promise it will come up for another vote.

Problems implementing coverage requirements for so-called "mini-med" plans are indicative of larger issues rampant in the healthcare reform law, Senate Commerce Committee Republicans said during a hearing Wednesday afternoon.

Republicans took issue with the number of waivers Health and Human Services Secretary Kathleen Sebelius issued to employers offering low-value, mini-med plans. Sebelius has issued more than 100 exemptions to mini med plans, which often fall below the restricted annual limits required by healthcare reform. The law phases out use of annual dollar limits over the next three years until 2014, when they will be banned for most plans.

"We need to be very careful in treading on this ground and look at yet another piece of the healthcare reform bill that may have gone so far overboard to throw the baby out with the bathwater," said ranking member Sen. Kay Bailey Hutchison (R-Texas).

Sen. John Ensign (R-Nev.) said healthcare reform is already proving to cost more than expected.

"This thing is said to have reduced the deficit, but we’re seeing all sorts of unintended consequences with this healthcare reform law," said Ensign. 

Committee chairman Sen. Jay Rockefeller (D-W.Va.), who opposes mini-med plans, described the waivers as a temporary fix and said they will not be necessary when state insurance exchanges, required by healthcare reform, become operative in 2014. Despite defending the waivers, Rockefeller continued to denounce the low-value plans as providing "a false sense of security" to employees.

"It lets them think they have health insurance when they really don’t," Rockefeller said. "By the time they realize they don’t have health insurance, it's too late.”

Calling federal healthcare spending “our single largest fiscal challenge over the long-run,” President Obama’s deficit commission’s final report urged for immediate reforms to the formula for physician payments and a long-term care insurance program created earlier this year.

The report, released Wednesday morning, recommended freezing the sustainable growth rate (SGR), which determines doctors’ Medicare pay, through 2013 and providing a 1 percent cut in 2014. It further recommended that the Centers for Medicare and Medicaid Services develop an improved payment formula that encourages care coordination and pays doctors based on quality, instead of quantity, of services. The recommendations come as the healthcare industry urges Congress to delay a scheduled 23 percent cut in Medicare pay until at least the end of 2011.

The commission also recommended repealing or reforming the Community Living Assistance Services and Supports (CLASS) Act, established in healthcare reform to provide long-term care insurance through employers. Although the law said the program was sustainable for 75 years, the deficit commission said it is viewed as “financially unsound.” However, it noted that repealing the CLASS Act will increase the deficit over the next decade because the program’s premiums are collected up front and benefits are not paid out for five years.

To offset the costs of the SGR fix and lost receipts from the first decade of the CLASS Act, the commission identified $400 billion in savings from 2012 to 2020 through numerous actions, including: increasing funding and authority to combat Medicare fraud; reforming Medicare cost-sharing rules; extending Medicaid drug rebate to dual eligibles in Part D; reducing excess payments to hospitals for medical education; accelerating home health savings in healthcare reform; reforming medical malpractice and more.

The commission set a long-term goal for establishing a global budget for total healthcare spending that limits growth to GDP plus 1 percent starting in 2020.

The commission also recommended expanding the powers of the controversial Independent Payment Advisory Board (IPAB), which was created by healthcare reform. According to the recommendations, the IPAB should be allowed to make recommendations for: cost-sharing and benefit design and to look beyond Medicare; adjusting the federal-state responsibility for Medicaid; establishing a robust public option in the healthcare exchanges; raising the Medicare retirement age; and moving toward some type of all-payer system. Republicans have promised an effort to repeal the IPAB, which they criticize as providing too much power to “unelected, unaccountable bureaucrats.”

The deficit commission chairmen have already acknowledged they might not have the votes to support the final draft. A vote is expected Friday.

Senate Democrats say an error in the food-safety bill passed Tuesday can be resolved in time to send the legislation to President Obama by the end of the year.
 
Two senior leadership aides confirmed the bill the Senate approved, 73-25, inadvertently contained tax provisions that, under the Constitution, must originate in the House of Representatives. That means the bill must be passed a second time by the Senate, giving critics such as Sen. Tom Coburn (R-Okla.) another chance to block it.
 
Yet the aides said another vote can be successfully held before 2011.
 
"We are confident that we can work with our House colleagues to find a path forward and get this bill to the president before the end of the year," one of the aides said.

While the changes themselves might not be too complicated, the Senate will have a much tougher time passing the bill again. Coburn is expected to object to passage by unanimous consent, as he has in the past, and Senate Republican leaders say their caucus won't vote on any bills until the expiring tax cuts are dealt with.

House Majority Leader Steny Hoyer (D-Md.) indicated Wednesday the House was prepared to move on the Senate bill.

"While we think our bill was much better, we're prepared to pass a bill along the lines that they passed," he said. "Unfortunately, they passed a bill which is not consistent with the Constitution of the United States.

"It has to be a House bill, because it has revenues in it. ...That's a constitutional requirement. ....The Senate knows this rule, and should follow this rule. ...Nobody ought to be surprised by this rule."

Hoyer said he met Wednesday morning with Sen. Tom Harkin (D-Iowa), the sponsor of the Senate version, about the constitutionality question. 

"I'm hopeful that we will pass that back to the Senate in a corrected version. ... I presume they'll be able to pass it — it passed pretty handily in the Senate."

Hoyer said he's also spoken with the chief proponents of the bill — including Reps. John Dingell (D-Mich.), Rosa DeLauro (D-Conn.), Henry Waxman (D-Calif.) and Dennis Cardoza (D-Calif.) — who had been pushing for the stronger House version. The implication was that those lawmakers have agreed to accept something weaker, like the Senate bill.

— This post was updated at 1:46 p.m.