With help from Kathryn Smith and Jennifer Haberkorn

LATE-BREAKING: DOJ ASKS COURT TO DISMISS OKLAHOMA LAWSUIT — The Obama administration late on Monday asked an Oklahoma court to toss a lawsuit challenging whether Americans can get tax subsidies through federally run health insurance exchanges. Oklahoma Attorney General Scott Pruitt filed suit in September, arguing that the Obama administration is violating the letter of the Affordable Care Act by writing rules that allow consumers to get tax subsidies through exchanges that will be fully or partially run by the federal government in 2014. The Justice Department wrote Monday that Oklahoma “seeks to take federal tax credits from its own residents.” Justice Department lawyers said Oklahoma doesn’t have the standing, or right, to challenge the law because it’s not a citizen who is subject to the individual mandate or employer responsibility, nor is it eligible for the tax subsidies. The motion: http://politico.pro/TCsY77. The POLITICO Pro story: http://politico.pro/QDlCjc

--ON EVE OF WHITE HOUSE VISIT, FALLIN SLAMS OBAMACARE – If Oklahoma Gov. Mary Fallin gets a chilly reception on Pennsylvania Avenue on Tuesday, when she’s due to join other governors to chat with President Barack Obama about the fiscal cliff, don’t be surprised. Fallin’s press office disseminated her monthly column Monday, a 600-word indictment of the health care law and a pledge to continue trying to dismantle it in court. After explaining her rationale to oppose any sort of cooperation with the Obama administration in implementing the law, Fallin writes, “Moving forward, it is important for the state of Oklahoma to pursue two actions simultaneously. The first will be to continue support for Oklahoma Attorney General Scott Pruitt’s ongoing legal challenge of PPACA. General Pruitt’s lawsuit raises different constitutional questions than previous legal challenges, and both he and I remain optimistic that Oklahoma’s challenge can succeed.” The second, she said, is to find state-based solutions to rein in health care costs. http://bit.ly/TIzVji

COUNTEROFFER: GOP LEADERS SUGGEST HIGHER MEDICARE ELIGIBILITY AGE — It’s a central element of a proposal to avert the fiscal cliff Republicans offered Monday that promises to wring $600 billion from federal health care spending and shrink the deficit by $2.2 trillion overall. The proposal, signed by House Speaker John Boehner, Majority Leader Eric Cantor, Budget Committee Chairman Paul Ryan and others, would also ask wealthier seniors to pay more for Medicare and would tweak Medicaid payments to states. The plan draws on testimony from Erskine Bowles to last year’s failed deficit reduction supercommittee. In a letter to President Obama, the leaders wrote, “[W]e recognize it would be counterproductive to publicly or privately propose entitlement reforms that you and the leaders of your party appear unwilling to support in the near-term.” Rather, they said, their plan “is exactly the kind of imperfect, but fair middle ground that allows us to avert the fiscal cliff without hurting our economy and destroying jobs. We believe it warrants immediate consideration.” Pro’s story on the GOP Medicare age proposal: http://politico.pro/TDYCQA.

--AND THE WHITE HOUSE SHOOTS IT DOWN – Didn’t take very long, either. A few hours after Republicans launched their latest salvo in the talks, a White House spokesman called it a retread of previously offered vague proposals that would end up sticking it to the middle class. “The Republican letter released today does not meet the test of balance. In fact, it actually promises to lower rates for the wealthy and sticks the middle class with the bill," White House communications director Dan Pfeiffer said. http://politi.co/UkXct0. The latest update on fiscal cliff talks from POLITICO’s Jake Sherman: http://politi.co/Uc68yp.

Welcome to Tuesday PULSE, where it’s looking more and more like it’ll take a Hanukkah miracle and all 12 days of Christmas to break the fiscal cliff stalemate. Here’s a question for the Jack Lew types: how much does it add to the deficit for Congress and the West Wing to keep the lights on from Christmas to New Year’s Day?

“Oh, what a night — late December back in '63, what a very special PULSE for me.”

TODAY ON POLITICO PRO:

--STUDY: HOSPICES’ OWN POLICIES MAY DETER ENROLLMENT — Hospices scratching their heads over lack of enrollment may need to look in the mirror. A Health Affairs study by researchers from Mt. Sinai School of Medicine, Yale and Johns Hopkins suggests nearly eight in 10 hospices have at least one restrictive enrollment practice that might deter patients with complex or costly illnesses. http://politico.pro/UbXK1Q

--HHS RULE ON PREMIUMS WELCOMED BY INSURERS – Pro’s Brett Norman reports that new rules from HHS intended to stabilize health premiums during the first three years of insurance exchanges were largely welcomed by insurers. http://politico.pro/SCesvs

--WAYS AND MEANS OVERSIGHT POST AWAITS OUTCOME OF LOUISIANA RUNOFF –Leadership of a Ways and Means panel with a key role overseeing the Affordable Care Act will remain in flux until Saturday, awaiting the outcome of a Republican congressional runoff in Louisiana. http://politico.pro/YIK71X

--STUDY FINDS MEDICARE ADVANTAGE HMO ENROLLEES MORE EFFICIENT — Medicare Advantage HMO enrollees appear to use health services more efficiently than those enrolled in traditional Medicare, a new Health Affairs study concludes. http://politico.pro/Vh7mt1

** A message from America’s Health Insurance Plans (AHIP): The ACA imposes a new $100 billion sales tax on health insurance that will increase the cost of coverage for people purchasing coverage on their own, small employers, Medicare Advantage beneficiaries, and Medicaid managed care programs. www.AHIP.org/affordability **

WAL-MART-HUFFPO HEALTH CARE FEUD ESCALATES – The retail giant went on the offensive Monday, shredding The Huffington Post for a weekend story that cast the giant retailer’s health care practices in an uncomfortable light. The company took exception to the HuffPo piece’s suggestion that it was pushing new employees onto the public health care rolls by “denying health insurance to newly hired employees who work fewer than 30 hours a week, according to a copy of the company’s policy obtained by The Huffington Post.” “I’m not sure where to begin addressing a story riddled with inaccuracies,” Wal-Mart spokesman Randy Hargrove said in an emailed response to the story, which was also sent to HuffPo. “This story reinforces our company’s decision to no longer participate in The Huffington Post’s one-sided rhetoric.”

--Hargrove first questioned the reporting of the policy at all, noting that Wal-Mart updated its health care practices nearly a year earlier, a move covered by “multiple news organizations.” He also countered the story’s suggestion that a portion of the chain’s 1.4 million workers would be driven to enroll in Medicaid. “Since the policy has been in place, a higher percentage of associates signed on for our health care benefits for 2013. Why? Because our health care plans are affordable.” ICYMI, the initial HuffPo piece: http://huff.to/TBS0Cs

--Per POLITICO’s Dylan Byers, a Huffington Post spokesman defends the story: “We stand behind our story. The policy we write about in our story takes effect Jan. 1, 2013, according to the first page of the Wal-Mart benefits book we obtained. The benefits book for the previous year has different standards, as we explain in our story.”

LUNG ASSOCIATION URGES STATES TO ADD ANTI-SMOKING HELP – The association says next year will be crucial for anti-tobacco efforts — and the federal government’s track record is not so hot. “The federal government has missed several opportunities since the enactment of the ACA to grant smokers access to more cessation treatments,” the report states, noting that HHS has not yet defined the tobacco cessation element in the preventive services essential benefit. The association encourages states to step up as they define their benchmark EHB plans. As of now, only Indiana and Massachusetts offer comprehensive services to everyone on Medicaid. The association’s report: http://bit.ly/Wvbjf3

CDC: MENINGITIS, RELATED CASES CLIMBING – A national outbreak of illness related to tainted drugs from a Massachusetts-based compounding facility has sickened 541, up from the 510 cases reported last week, according to the CDC. The case count — now updated each Monday — shows that of the 541 cases, 361 included fungal meningitis and 153 were “spinal” or “paraspinal” infections. The death toll held from a week earlier at 36, with the bulk of fatal cases in Michigan, Tennessee and Indiana.

WHAT WE’RE READING

A legislative committee exploring implementation of the ACA in Florida held its first hearing, and it didn’t disappoint — fireworks, fierce debate and partisan bickering. The Palm Beach Post reports: http://bit.ly/QDkD2o

Alabama hospitals are putting the heat on Gov. Robert Bentley to expand the state’s Medicaid program, according to Alabama Media Group: http://bit.ly/VhlfHZ

The AARP finds itself fighting a two-pronged battle to preserve major entitlement programs — the one for its members and the one for its bottom line. The Washington Post reports: http://wapo.st/SIarUF

Washington Monthly’s Greg Anrig blogs about the prospect of states sabotaging the Affordable Care Act: http://bit.ly/VgVO9J

UMass Memorial Hospital, penalized for failing to meet Medicare standards on preventable readmissions, is employing a new type of software to help solve the problem, The Wall Street Journal reports: http://on.wsj.com/TCCLtL

A Tennessee skilled nursing facility pressured therapists to provide expensive treatments, costing Medicare millions of dollars in fraudulent payments. The WSJ report: http://on.wsj.com/Yt9pSQ

United for Medical Research has posted an infographic on the potential impact of the fiscal cliff on National Institutes of Health research funding: http://bit.ly/RxtvIf

** A message from America’s Health Insurance Plans (AHIP): The Affordable Care Act’s new health insurance tax is the largest industry-specific tax in the law. The Joint Committee on Taxation estimates that the health insurance tax will exceed $100 billion over the next ten years. The tax will start at $8 billion in 2014, increasing to $14.3 billion in 2018, and will continue to increase each year. One study found that the tax will increase premiums by nearly 3% or $2,150 over the next 10 years for individuals purchasing coverage on their own and more than $2,700 for those who get their coverage through a small employer. The health insurance tax adds a financial burden on families and small businesses at a time when they can least afford it, and it should be repealed.

It’s time for affordability. To learn more, visit www.AHIP.org/affordability **