With help from Sarah Karlin, Paul Demko and Rachana Pradhan

TV JOURNALISTS’ SLAYING: ‘AFTERMATH OF FAILED MENTAL HEALTH SYSTEM’ — Rep. Tim Murphy, who has been pushing mental health reform legislation for several years, attributed Wednesday’s deadly shooting of the two Virginia journalists to “the aftermath of a failed mental health system” and said he is calling on House leaders to take up his reform bill when Congress returns from August recess. Reporter Alison Parker and cameraman Adam Ward of Roanoke-based WDBJ were shot and killed during an on-air broadcast by a former coworker. “All the signs pointed to serious mental illness, but there was no framework in place to prevent it from reaching this moment of tragedy,” Murphy, a clinical psychologist by training, told PULSE.

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Murphy has made several attempts to get his legislation through the House Energy and Commerce Committee, but he’s still hopeful that 2015 could be the year. As Pro reported earlier this summer, E&C Chairman Fred Upton has vowed to make mental health reform a committee priority. And momentum is also building in the Senate; Sens. Chris Murphy and Bill Cassidy introduced a bipartisan measure before recess. It’s not clear, however, if or when either chamber will seriously consider the bills. “How many more people will die before Congress takes action?” Rep. Murphy asked Wednesday. “We are clearly dealing with the aftermath of a failed mental health system. I’m calling on leadership to advance my Helping Families in Mental Health Crisis Act as soon as we get back in September.” 

— Separately, Democratic frontrunner Hillary Clinton responded to the shooting by urging lawmakers to take action on gun violence. The POLITICO story: http://politi.co/1NVgcKb

NEW THIS A.M.: ARE HOSPITALS DODGING READMISSIONS PENALTIES? — Rather than reducing readmissions by improving care coordination and quality, hospitals are relabeling patient visits as "observation stays" or sending returning patients to the emergency department to avoid the hefty fines implemented under Obamacare, according to a Health Affairs blog post to publish today. The co-authors of the post, who examined aggregated 2014 hospital data from Medicare, say their findings cast doubt on the Obama administration's many cheers for falling readmission rates.

— But the American Hospital Association says the post “makes sweeping assertions” and “trivializes” the efforts facilities are making toward reducing unnecessary readmissions. Harvard professor Ashish Jha agrees that the post is "unduly harsh" but says it does a good job highlighting the longstanding problem of using a utilization measure as a proxy for examining quality. You can read the blog post here, live later this morning: http://bit.ly/1MVuq0z And the Pro story: http://politico.pro/1JnW1ne

GOOD THURSDAY MORNING and welcome to PULSE, where we are now suspicious that surgeons may be superhumans after reading about a new study from the University of Toronto. It found that going without sleep the night before a surgery doesn’t affect doctors’ performance. Researchers said the odds of having a surgery-related problem were 22.2 percent when the doctor had been treating patients between 12 a.m. and 7 a.m. compared to 22.4 percent when the doctor had received a sufficient night’s sleep. We would like to state for the record that this is not the case for PULSErs. Read about the study here: http://reut.rs/1Jk7ZvR

“Don’t wake me, I plan on sleeping in, Don’t wake PULSE, I plan on sleeping in.”

AND A QUICK PULSE HEADS UP — Your daily morning dose of PULSE will be taking its own August recess next week. Look for the tipsheet to return to your inboxes on Tuesday, Sept. 8. But feel free to keep sending along those tips and scoops to behley@politico.com and @emershon@politico.com

HAPPENING TODAY: FDA EXPECTED TO OK NEXT PRICEY CHOLESTEROL MED — Amgen should receive word from FDA today that its new cholesterol-lowering drug Repatha is ready to be sold to U.S. patients — an approval that could shine yet another spotlight on sky-high drug prices. When Sanofi and Regeneron snagged the first approval for the new class of drugs known as PCKS9s last month, they priced the biologic at $14,600 annually, a staggering sum compared to the cost of generic statin meds that are the current standard of care for lowering bad cholesterol levels.

— We’ll be watching for the pricetag Amgen puts on the drug as well as for any deals that payers strike to lower the cost of PCSK9s. Express Scripts, for example, thinks payers are in a good position to push pricing down because of drugs were approved barely a month apart.

— We’ll also track for which patients FDA labels the drug. If Amgen snags a wider indication than that given to Sanofi and Regeneron, it could heighten fears of the impact these new meds could have on the health system. Our story on round one, ICYMI: http://politico.pro/1haTLq8

SCOOPLET: IDAHO'S NOT GOING TO APPEAL OVER 20-WEEK ABORTION BAN — A county prosecutor in Idaho tells POLITICO that he won’t go to the Supreme Court to try to keep the state’s ban on abortion after 20 weeks of pregnancy. The restriction was knocked down by an appeals court earlier this year, and Idaho had until today to file the appeal to the justices or allow the lower court ruling to stand. Bannock County prosecutor Stephen F. Herzog cited the apparent uphill battle to win in the Supreme Court, which earlier this year declined to review a similar appellate ruling against a 20-week abortion ban in Arizona.

NEW MEXICO BLUE EXITS EXCHANGE AFTER RATE FIGHT — Blue Cross Blue Shield of New Mexico will not compete for individual customers on the state’s exchange in 2016. The insurer, which captured roughly two-thirds of customers this year, has opted to pull out of the marketplace after the state’s insurance department rejected its proposed rate increases. The New Mexico Blue said it lost $19.2 million last year on its 35,000 exchange customers and that it would need significant rate hikes to stem the financial bleeding.But its parent company, Health Care Service Corp., and Superintendent of Insurance John Franchini had very different takes on what that meant. Franchini said that the only detailed proposal offered by the New Mexico Blue would have raised rates by an average of more than 50 percent; regulators were willing to sign off on increases of 24 percent. By contrast, HCSC insisted that its final offer would have boosted premiums by just over 11 percent.

— The bottom line for most exchange customers is that they’ll need to shop for new plans when open enrollment starts on Nov. 1, with four other insurers competing for their business. “We are now focused on helping our members understand the changes to their insurance going forward,” Kurt Shipley, the New Mexico Blue’s president, said in a statement. “As we approach open enrollment this fall, we will work with the [Office of the Superintendent of Insurance] health care providers and other stakeholders to make sure our members have the support they need to make informed choices and experience peace of mind during this transition.

FLORIDA BATTLE BREWING OVER NEW HOUSE COMMITTEE ON HEALTH CARE — House Speaker Steve Crisafulli announced on Wednesday that he was creating a 15-member select committee that would be charged with looking at “affordable health care access.” Crisafulli, in a memo to House members, said that the panel would “explore policy options to reduce the cost of health care for consumers and improve the transparency of health care information.” He said it also would also have the same duties as a standing committee, meaning it can draw up and vote on bills to be considered by the full House. House Republicans have expressed support for changes to state law to improve health care access — like making it easier for hospitals to compete against each other and easing restrictions on who can administer health care to patients. But those ideas aren’t popular in the state Senate, which means a fight between the two chambers is on the horizon, POLITICO Florida’s Christine Sexton reports.

A PRO CLARIFICATION — Pro reported on Wednesday that premiums on individual Obamacare plans in Florida will increase by an average of 9.5 percent next year. To clarify, the figures reported are for all individual plans that meet the coverage requirements of the ACA, not just those sold through the state's exchange. ICYMI: http://politico.pro/1NBwsTH

ARIZONA'S MEDICAID EXPANSION OFFSET GETS THE GREEN LIGHT — The state is financing its Medicaid expansion with a hospital assessment, and though Republicans have argued that the provider fee is a tax that wasn’t properly approved by the Legislature, an Arizona court ruled to the contrary Wednesday. (A primer reminder: In Arizona, a tax needs a two-thirds majority vote to pass, a tally that the Medicaid expansion didn't reach.)

— The Maricopa County Superior Court said expansion was not unconstitutional and rejected the challengers’ argument that the hospital assessment should be considered a tax because the HHS secretary treats such assessments in that manner. The Goldwater Institute, which is representing the legislators, plans to appeal the decision to the Arizona Court of Appeals. The full decision: http://politico.pro/1MVwQMJ

READY FOR MANDATORY BUNDLED PAYMENTS? — That's the question posed in a new NEJM op-ed from Brandeis professor Robert Mechanic. And his answer, at least tentatively, is yes. (That's despite some relatively widespread, if muted, criticism of the mandatory-ness of the proposal by providers.) Mechanic sees the program as a more straightforward, less risky version of CMS's other bundled payment initiatives — and he notes that if CMS has to choose a test procedure, hip and knee replacements are a very good one. Still, the proposal isn't without issues, he acknowledges, writing that the agency needs to do more to adjust risk. It also might address especially expensive outlier cases, he suggests, since those could drastically affect how a hospital performs in the program. His detailed perspective: http://bit.ly/1MVr2mm

PROTEST OVER SANGER AT THE NATIONAL PORTRAIT GALLERY — A handful of anti-abortion groups and church leaders will hold a press conference today at the National Portrait Gallery in Washington, demanding that it take down the bust of Planned Parenthood founder Margaret Sanger. Ahead of the press conference, one of the groups, Ministers Taking a Stand, sent a letter to the head of the museum accusing Sanger of “supporting eugenics to rid the nation of those she deemed ‘defective’ and ‘feeble-minded,’ by stopping the growth of their populations, particularly blacks and other minorities,” according to a press release.

WHAT WE'RE READING

Insurers are getting quite a few of those big proposed premium increases past regulators, the Wall Street Journal reports: http://on.wsj.com/1EXJwdV

Sen. Marco Rubio seemed to discount reconciliation as a way to repeal Obamacare at a town hall Wednesday, Roll Call reports: http://bit.ly/1fHj2GQ

Gay teen men are at a high risk for HIV — but just 30 percent have been tested for the virus and nearly half don't know where to go for a test, a new study shows. More from the Journal of Adolescent Health: http://bit.ly/1LxBZY8

Business groups are now calling for an investigation into the medical funding industry, which profits off medical settlements and which was the subject of a Reuters investigation last week: http://reut.rs/1LC8UxJ. And the Columbia Journalism Review takes a look at how Reuters got that story: http://bit.ly/1IdtSLv

Moody's upgraded its outlook for nonprofit hospitals for the first time since 2008. More from Modern Healthcare: http://bit.ly/1LCb5Bt

FUTURE OF THE IoT: What’s Washington’s role in the Internet of Things? What are the cyber-security risks? In our first POLITICO-McKinsey & Company Working Group for the Agenda, we convened a group of high-level voices to determine how — or if — Washington will be involved in the future of the IoT. Find out what the experts said in the debut findings report from the Agenda: http://politi.co/1VcJNmD