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Congress reconsiders 1099 reporting requirement

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WASHINGTON — The so-called 1099 mandate in the health care reform law could hinder pharmacists, the National Association of Chain Drug Stores has warned Congress.

The requirement for companies to issue 1099 tax forms to any vendor with which they do $600 or more in business will force pharmacies “to spend inordinate amounts of time and human resources on additional paperwork,” NACDS said in a statement for a House Small Business Committee hearing.

“This will take away from the time that pharmacies and pharmacists have to help patients address their medication and other health care needs,” the statement said.

The House committee hearing followed the Senate’s passage of an amendment introduced by Sen. Debbie Stabenow (D., Mich.) that would eliminate the mandate. The vote was 81 to 17.

NACDS president and chief executive officer Steve Anderson wrote to Stabenow thanking her for helping ensure “that American pharmacies can continue to focus on their patients.”

President Barack Obama has for months asked legislators to repeal the mandate, but Republicans and Democrats have clashed over how to make up for the $19 billion that would be lost in taxes. Stabenow’s amendment would offset the loss with unobligated funds — except from Social Security.

Another provision of reform under scrutiny is a workers’ long-term-care insurance program that critics have called fiscally unsound. The Department of Health and Human Services (HHS) is contemplating raising the income requirement for being in the program and letting its insurance premiums be raised over time, officials said this month.

The provision, known as the Class Act, is intended to insure workers who become unable to care for themselves, mainly because of injury or illness. Workers in the program would get $50 a day or more to cover services such as home health care, transportation and nursing home facilities. The program is not due to begin until at least 2012, and workers must participate for five years before they are eligible for benefits.

Deficit hawks have targeted the Class Act, saying it will be a money loser once it starts paying out benefits. President Obama’s bipartisan deficit commission last year advocated repealing or reworking the program, saying it will be unsustainable if it doesn’t produce more revenue.

HHS Secretary Kathleen Sebelius has stood by the program, while saying she and Obama recognize that it is “far from perfect.” She added, “Many of the changes that were debated and proposed to the reform bill that would have improved the program’s financial stability were not included in the final legislation.”

Sebelius’ comments exemplify the White House’s willingness to back some changes in the health care law while insisting it is better to fine-tune it than discard it. Republicans maintain the elections gave them a mandate to throw out reform. With their repeal effort having stalled, they are seeking alternative means to negate the law, such as cutting off funding and pressing court challenges.

Democrats have wanted to avoid giving up the Class Act because it was embraced by the late Massachusetts Sen. Edward Kennedy. Backers say the program won’t add to the deficit because the law contains a mechanism that shuts it down if it’s not self-sustaining over the long term.

As it stands, the program is open to workers who have earned about $1,100 a year or more for at least three years during the five-year enrollment period. The administration concedes that figure may be too low and could result in so many workers drawing benefits that the program would collapse.


ECRM_06-01-22


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