The Legislative Update is brought to us by Liz Powell, Esq., MPH, Founder of G2G. Liz is an attorney with 20 years government experience, including as Legislative Director on Capitol Hill. She leads a team of bipartisan professionals that has raised over $50M, run advocacy campaigns and shaped CMS reimbursement for clients.
Here is an update on what is happening in Columbus and around the state. As always, please let us know any questions.
As you know, the election results are in and there are a few surprises. Below is a run-down of results and how will impact the Statehouse. Also, below are insights on legislation of interest impacting the business sales tax, workforce issues, school safety, medical innovation funding, telemedicine, Medicaid and the opioid crisis. Both the House and Senate are expected to recess by June 1st until the General election on November 6th.
Small Business Sales Tax
New Ohio House legislation would allow businesses taking in less than $1 million per year to change the way they pay sales taxes. Right now, businesses must pay sales tax at the time of sale. House Bill 545, introduced by Rep. Steve Arndt (R-Port Clinton), would allow small businesses to pay taxes when they receive the money to save business owners a lot of paperwork and no longer force them to pay taxes before customers actually pay. The bill has had one hearing in the House and is unlikely to move before the June 1st recess.
Medical Innovation Funding
The House overwhelmingly passed legislation that aims to reward those who come up with cures for some of the most debilitating diseases in society today. HB345, known as the CURES Bill, was sponsored Rep. Jim Butler (R-Oakwood). The bill will adopt a multi-state Solemn Covenant of the States that would award prize money for curing diseases based on what states would save by having the diseases cured and not having to treat it over a five-year period.
Butler called the idea “a new novel way of doing government.” He said the only way the idea works is through a compact so that there is a large enough pot that when someone comes forward with a cure, it was worth the effort. As an example, if 10 states join the compact, they could save a combined $12 billion-$25 billion from a cure for Alzheimer’s disease. The bill is now in the Senate for hearings and may be passed before the end of the general assembly.
Rep. Tom Patton (R-Strongsville) introduced House Bill 546, which would require health insurers to provide coverage for telemedicine services on the same basis as in-person services. If passed, insurance companies would not be allowed to exclude coverage for telemedicine services, nor impose a lifetime benefit maximum for such services though it would still allow insurers to bill at different rates for telemedicine. Rep. Patton believes the measure would allow faster access to care and ensure that rural Ohioans who might not have a doctor nearby can use services such as remote patient monitoring. The bill has had one hearing in the House and no companion bill has been introduced in the Senate.
Ohio Medicaid sent a request to the federal government to require Medicaid expansion recipients to work part-time or attend school or job training. Recipients up to age 50 who are able-bodied and do not take care of children, disabled or elderly family members would have to work at least 20 hours a week. Among other concerns, critics of this measure believe people will ultimately be kicked off Medicaid if they can’t complete the paperwork proving they work.
While the Trump administration is encouraging this measure, the federal government has made it known that states will be responsible for job training and placement services, although states can use federal money for administrative costs of the work requirement. Ohio is seeking additional federal funds to be able to provide supportive services to individuals not already receiving such supports including job training and placement. In the application, Ohio Medicaid said they will be ready to begin the program July 1st. However, the federal government must review the application and accept public comments before approval and what was submitted left several details out, stating they were to be determined so the July 1st start date is very unlikely.
OhioCorps, which aims to mentor and prepare for college at-risk high schoolers who come from poverty or homes with drug abuse, passed out of the House in mid-April and is now in the Senate for hearings. The pilot program originally was targeted for Southeast Ohio but lawmakers adopted a substitute to House Bill 508 that will allow students from all regions of the state to be eligible for the program. It would also make an appropriation for this program. We expect the Senate to move this bill to the floor quickly since it has broad bipartisan support.
Addiction Policy Scorecard Assesses State Prevention Efforts
The Health Policy Institute of Ohio (HPIO) compiled and analyzed 193 changes to state addiction policies from 2013 through 2017 in its “Ohio Addiction Policy Inventory and Scorecard,” where it rated measures on their efficacy and adherence to evidence-based criteria.
One change involving the restriction on the quantity of prescription opioids permitted the report found contributed to the decreased number of prescribed opioids in Ohio. For example, 782 million doses of opioids were dispensed in 2011, while 568 million were dispensed in 2017. The institute gave high marks to the Ohio Automated Rx Reporting System (OARRS), a prescription drug monitoring program that tracks patient histories of drug use. The statewide expansion of Medicaid and the state’s efforts to increase access to medication-assisted treatment (MAT) for recovering addicts received praise as well in the report. But despite these successes, Ohio still had the fourth-largest increase in opioid deaths in the nation in 2017 where annual opioid deaths in Ohio increased from 4,000 in September 2016 to 5,231 in September 2017. These deaths appear to be driven increasingly by synthetic opioids like fentanyl. According to HPIO data, deaths from fentanyl and other synthetic opioids in Ohio skyrocketed from fewer than 100 deaths in 2013 to more than 2,300 in 2016, making synthetic opioids the new leading cause of overdose deaths statewide.
The HPIO scorecard identified opportunities for improvement throughout the state’s addiction prevention system, such as expanding treatment capacity and infrastructure, improving methods of outcome measurement and promoting alternative, evidence-based, non-opioid methods for pain management. HPIO also wrote that most prevention efforts are geared toward specific drugs, rather than the underlying drivers of addiction, which are not being adequately addressed.
Ohio’s next congressional map will be drawn under rules meant to limit partisan manipulation after voters overwhelmingly approved (by 75 percent) a state constitutional amendment to reform the process. The vote follows one in 2015 when Ohioans approved similar changes to the process for drawing districts for just the Ohio General Assembly. The new rules for both state and federal map drawing will apply to districts created for the 2022 election, based on population data from the 2020 Census. The amendment is meant to curtail partisan gerrymandering by requiring compact districts and limiting the degree to which counties and other political subdivisions can be sliced up among multiple districts.
U.S. Senate Race
U.S. Rep. Jim Renacci (R-Wadsworth) captured the GOP nomination for U.S. Senate in Tuesday’s election, setting him up to challenge U.S. Sen. Sherrod Brown (D-OH), who is seeking a third term. Renacci pulled off the primary victory with about 47 percent of the vote after deciding earlier this year to abandon original plans for a gubernatorial race and switch to the Senate race following the withdrawal of Treasurer Josh Mandel, who bowed out because of his wife’s health.
Ohio will see a match up on Mike DeWine/John Husted vs. Richard Cordray/Betty Sutton. Attorney General Mike DeWine and Secretary of State Jon Husted took 59 percent of the vote to beat Lt. Governor Mary Taylor in the primary. Former Ohio Attorney General Cordray, who ran the U.S. Consumer Financial Protection Bureau (CFPB), and his running mate former Congresswoman Betty Sutton emerged with roughly 60 percent of the vote, followed by former U.S. Rep. Dennis Kucinich, who garnered around 20 percent. State Senator Joe Schiavoni (D-Boardman) finished with about 10 percent, while former Ohio Supreme Court Justice Bill O’Neill received around 3 percent of the vote. The general election takes place November 6th.
Akron’s Bounce Innovation Hub was recently launched to provide an incubator space for businesses. It is behind schedule in terms of its build-out, but it is gearing up to help local startups in its incubator space succeed — including giving them access to potential investors. Bounce CEO Douglas Weintraub is a founding father of the modern venture capital movement in Northeast Ohio. He was one of the organizers who started Cleveland-based JumpStart Inc., was a founding member of the North Coast Angel Fund and has advised a number of other local investors and funds. Weintraub said he sees bringing investors into Bounce as a key part of his job and one that he began working on immediately after taking the helm on March 5th.
The recommendation by Governor John Kasich of 108 Northeast Ohio (320 statewide) census tracts to be designated federal Opportunity Zones has generated both enthusiasm and disappointment among Northeast Ohio public officials and development professionals. The governor forwarded his recommendations to the U.S. Treasury Department, which is expected to officially certify tracts as Opportunity Zones later this month and set regulations.
The differing opinions on this move are due to the tax incentives for Opportunity Zones (OZ) that help stimulate economic development in low-income urban neighborhoods and rural communities where it is hard to attract capital to grow their economies. The OZ designation can make a big difference in how can rejuvenate communities. The federal New Market Tax Credit program, state and federal historic tax credit programs and the federal Enterprise Zone program all fall into the OZ program. Several earlier targeted investment programs have stimulated valuable investment: University Hospitals Rainbow Center for Women & Children in Cleveland’s Midtown; the Charter Steel Co. expansion in Cuyahoga Heights; and the transformation of the United Building in downtown Akron into a hotel – all have benefited from tax credits.
There is hope that the OZ program will be as successful, in part because it is not as limiting as the tax credit programs, which focused on real estate development and redevelopment. But most observers believe it is too early to tell how attractive an investment vehicle the OZ program will be. The program was created in the recently passed Tax Cuts and Jobs Act of 2017 and implementing regulations aren’t expected until later this spring. Cuyahoga County has 70 of its 252 distressed census tracts among Kasich’s 320 recommended tracts, most in the city of Cleveland. Meanwhile the other tracts include 22 for Summit County, 11 for Lorain County, 2 for Lake County, and 2 for Medina County. The goal was to recommend areas with the greatest need for new jobs and the greatest likelihood of new development.
Cardinal Health Answers To House Energy and Commerce Committee
Cardinal Health based in Dublin, Ohio was one of three called to testify before Congress this week. George Barrett, executive chairman and past CEO of Cardinal Health Inc., apologized Tuesday before a Congressional committee investigating the role of drug distributors in sending millions of doses of opioids to questionable pharmacies, particularly two in rural West Virginia. He was among executives of five pharmaceutical distributors who testified for nearly three hours before the House Energy and Commerce Committee, investigating what it calls “pill dumping” dating back to the mid-2000s.
The committee highlighted shipments of more than 40 million pills over 10 years to three West Virginia stores, two with Family Discount Pharmacy and one Hurley Drug Co. site. The combined populations of the three towns just top 5,000. The distributors have since cut those pharmacies off. Cardinal, other distributors and pharmaceutical manufacturers are defending against hundreds of lawsuits by counties, cities and states. Cardinal was a party in 350 cases as of February. The committee’s letter to Cardinal focused on the periods before cutting off the West Virginia pharmacies, which turned out to be dispensers for notorious “pill mill” pain clinics. For four years before cutting off Family Discount in 2012, Cardinal sent it 3,561 hydrocodone and oxycodone pills a day, the letter said. In 2011 alone, it sent 537,000 pills from those two prescriptions to Hurley, twice the average for a normal retail pharmacy. Cardinal cut off Hurley in 2014.
As he has in the past, Barrett tried to put the painkiller shipments in context of 400 million orders a year, saying that norms for prescribing opioids were different in 2008. He outlined the company’s anti-diversion efforts today, including data analytics and donating supplies of overdose-reversal medication to emergency responders.
Proctor & Gamble Cuts
Procter & Gamble’s lagging sales have shaken investors’ confidence in its turnaround and may force the company to cut more jobs. Shares are down more than 20 percent in 2018 after another underwhelming quarter reported April 19. The company modestly beat expectations but disclosed shrinking profit margins and a softening sales outlook. Local analysts say pressure is mounting on CEO David Taylor. If fourth-quarter results don’t deliver better results and stronger fiscal year 2019 forecast, Taylor might unveil deeper cuts. Local experts believe Taylor has another year to show he can turn the company around but if Procter continues to produce mediocre results, there could be mounting pressure to replace Taylor late this year or next year.
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