On October 20, the administration substantially revised the rules regarding accountable care organizations (ACOs). Accountable care organizations are meant to handle care for patients across a full range of settings, including primary-care and specialist offices, hospitals, and nursing facilities in the hopes that it could reduce healthcare related expenditures. Administration officials estimated the program would reduce Medicare spending by up to $940 million over four years.

Last week, the Senate Committee on Health, Education, Labor and Pensions (HELP) approved the Elementary and Secondary Education Reauthorization Act of 2011 on a bipartisan vote of 15-7. The committee reported that the bill would change several aspects of the current federal education law known as the No Child Left Behind Act (NCLB). The bill would replace NCLB’s accountability system, adequate yearly progress (AYP), which applied sanctions to all schools not meeting performance targets, in favor of a federal focus on the lowest-performing schools in a state.

Earlier today it was announced that President Obama is set to sign an executive order directing the Food and Drug Administration (FDA) to act to reduce and prevent prescription drug shortages. He will also announce his support for bipartisan legislation (S 296 and HR 2245) that White House officials say will give the FDA new tools to prevent drug shortages. The House bill would require companies to alert the FDA when they expect shortfalls. Both the House bill and the companion measure in the Senate have bipartisan support.

Last week, the Kaiser Family Foundation released a 50 state survey on Medicaid, noting that although states plan to increase total spending on Medicaid by 2 percent for FY 2012, the state specific share is expected to increase by 29 percent, due to the withdrawal of federal stimulus funds. The two percent increase in spending is primarily the result of a slow national economic recovery as well as other cost containment measures adopted in many states over the last decade. However, respondents in more than half of all states still reported a 50-50 chance of a Medicaid budget shortfall.

On October 27, Department of Health and Human Services Secretary Kathleen Sebelius responded to governors’ request for an administrative solution to the erroneous payments made by state Medicaid programs for benefits that should have been provided by Medicare – referred to as the Special Disability Workload or SDW. In her letter to governors, the Secretary stated that she explored the option to use Medicare and/or Medicaid demonstration authorities to resolve the issue but determined that she does not have the statutory authority to do so.