Washington Highlights: Date
Washington Highlights
Contents
Prior Issues
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Inpatient Final Rule Addresses Resident Limits, Preliminary Year
Issue
The final FY 2005 Inpatient Prospective Payment System (PPS) rule,
including regulations regarding the Medicare resident limit redistribution
program, was published Aug. 2 on the Centers for Medicare and Medicaid
Services (CMS) Web site. The final rule, to be published in the
Federal Register on Aug. 11, also clarifies CMS' policy for hospitals
training residents in specialties that require a broad-based, general
clinical training year (the so-called "preliminary year" issue).
The final rule provides extensive information on the implementation
process for the resident limit redistribution program mandated by
last year's Medicare Modernization Act (MMA). In brief, under this
program, hospitals that are not fully "using" their Medicare
resident caps will have those caps permanently reduced and the cap
slots will be "redistributed" to those teaching hospitals
that can demonstrate a need for them. The final rule addresses criteria
to determine which hospitals will lose resident cap slots as well
as sets forth the application process for hospitals seeking to increase
their resident caps. With limited exception, applications to receive
additional cap slots are due to CMS by Dec. 1, 2004.
The final rule also states that that the "initial residency
period (IRP)" determinations for residents training in specialties
requiring a first year broad-based training program, such as radiology,
dermatology, and anesthesiology, will be determined by that specialty,
rather than the specialty in which the resident meets the broad-based
requirement, if the resident "simultaneously matches"
to both programs. IRPs are used, in part, to determine Medicare
direct GME payments. Under the final rule, residents who simultaneously
match will receive longer IRPs since their residency durations
are longer than the duration of internal medicine, which often
is the residency program used to fulfill the broad-based requirement.
In other areas, the final rule:
- Increases the standardized amounts for hospitals that submit
data on 10 designated quality measures by 3.3 percent (a full
market basket (MB) update). All other hospitals will receive
an increase of 2.9 percent (MB- 0.4 percentage points);
- Sets an outlier payment threshold
of $25,800, down from the current
threshold level of $31,000;
- Implements new metropolitan statistical area (MSA) definitions,
which affect the wage index value hospitals are assigned, and
provides a one-year transition for hospitals adversely affected
by changes in MSA determinations; and
- Incorporates an "occupational mix adjustment" into the wage
index determinations; and
- Provides special payments for four new medical services and
technologies.
Information:
Karen Fisher, Senior Associate Vice President
AAMC Health Care Affairs
kfisher@aamc.org
(202) 862-6140
COGME Recommends Expansion of Physician Workforce
After an extended discussion and some minor modifications, the
Council on Graduate Medical Education (COGME) July 28 endorsed
the
"Physician Workforce Policy Guidelines for the U.S. for 2000
- 2020." The report concludes that the nation is likely to
face a significant shortage of physicians over the next 15 years
and recommends an increase in the number of new physicians being
educated and trained in the US. This marks a significant change
from earlier COGME reports and is the first to call for an increase
in US medical school capacity. COGME also is no longer recommending
that 50 percent of new physicians be in generalist specialties
but rather that the distribution by specialty should be determined
by marketplace demand. The report also strongly endorses the
need for additional data collection and research to guide decisions
on the size and mix of the physician workforce.
Using several models and a variety of assumptions, the report presents
the results of alternative scenarios that would impact on future
supply, demand and need. Under most scenarios the nation will be
facing a shortage of physicians by 2020. The Council endorsed the
following key recommendations in order to address the likely shortage:
- Increase the number of new physicians entering the system from
24,000 to 27,000 per year with no specific target for generalists
and non-generalists;
- Expand US medical school enrollment by 3,000 (15 percent) per
year by 2015;
- Expand funding under Medicare for additional GME slots to accommodate
the increase in US medical graduates;
- Promote efforts to improve productivity, such as information
systems and systems redesign;
- Continue to study, track, and regularly assess the nation's
physician workforce needs; and
- Expand support for programs that address the geographic and
specialty mal-distribution, address needs in under-served areas,
and promote increased physician diversity.
The recommended increase in medical school production is not expected
to meet all of the increase in demand expected by 2020; it is hoped
that improvements in productivity and changes in the delivery system
will help balance supply and demand. Further, the report recognizes
the many uncertainties in forecasting and in the physician marketplace
and therefore recommends a dynamic system to track physician workforce
needs and to adjust the education and training to the nation's evolving
needs.
The report was prepared by Edward Salsberg, director of the AAMC
Center for Workforce Studies, and former executive director of the
Center for Health Workforce Studies at the School of Public Health
at the University of Albany, State University of New York (SUNY).
The Health Resources and Services Administration (HRSA) expects
to publish and disseminate the report in the next few months as
the 16th COGME report.
A report by Rhonda Ray, Ph.D., was also approved by the Council
and will be published as the 17th COGME report. The report, "Update
on Minorities in Medicine," makes recommendations in three
areas: strengthening the pipeline to medical school; strengthening
upstream efforts in medical training; and ensuring cultural competence
in medicine. Specific recommendations focus on programmatic and
research efforts to increase racial and ethnic diversity in medical
schools, residency programs, and across specialties. Recommendations
also address programs and research to encourage more physicians
to practice in underserved areas, strategies for assessing and reinforcing
commitment by academic medical centers to provide care to underserved
populations, and efforts to identify key cultural-competence objectives,
promote cultural-competence training, and determine the connection
between such training and patient outcomes.
Information:
Sunny Yoder, Director of Resident Affairs
AAMC Health Care Affairs
syoder@aamc.org
(202) 828-0497
NIH Declines March-In Petition on Norvir
The National Institutes of Health (NIH) Aug. 4 decided
against a petition by patient and consumer activists to make the
patented HIV-drug, Norvir (trademark for ritonavir) available for
competitive manufacture and pricing. The drug's patents, held by
Abbott Laboratories, grew from research funded in part by the NIH
in the 1980s. Last year, Abbott raised the price of Norvir five-fold.
The Bayh-Dole Act, which encourages recipients of federal research
funds to patent inventions arising from that research, also permits
the government to "march in" and override patent or licensing
rights if the patent holder fails to make the invention available
on reasonable terms, or if there is an appropriate public health
interest. The petitioners, in effect, argued that the affordability
of the patented drug relates to its availability at reasonable terms
under Bayh-Dole.
In a summary statement that ceded no ground to the petitioners'
arguments, the NIH said that neither the available information nor
the statutory and regulatory framework warrant march-in against
Abbott's patents. NIH agrees with views expressed by Bayh-Dole's
authors, including former Sen. Birch Bayh (D-Ind.) himself at a
public meeting on May 25 [see Washington
Highlights, June 4], who
insisted that the text of the legislation makes clear their intent
that the Act indeed should not be used to control the commercial
price of an invention. But recognizing public sentiment that drugs
invented in part with US taxpayer funding should be sold on terms
at least comparable to drug prices in other countries, the NIH put
the issue back on Congress: "The issue of drug pricing has
global implications and, thus, is appropriately left for Congress
to address legislatively."
Information:
Stephen Heinig, Senior Research Fellow
AAMC Biomedical Health Sciences Research
sheinig@aamc.org
(202) 828-0488
OMB Revises Deficit Estimate
A "strong" economic performance during the first quarter
of the year has led the Office of Management and Budget (OMB) to
reduce its estimate of the FY 2004 budget deficit to $445 billion.
The new estimate, which was released July 30 as part of OMB's annual
"mid-session
review," is $76 billion less that the $521 billion deficit
projected by the Administration as part of its FY 2005 budget submission
to Congress. OMB noted a 3.9 percent growth in the real gross domestic
product (GDP) and stated "all indications point to further
solid growth for the remainder of the year."
OMB also increased its estimates of Medicare and Medicaid spending
for FY 2005 through FY 2009. For Medicare, OMB increased its estimate
by more than $67 billion over its February estimate. OMB attributes
the increased estimate to technical changes in the Medicare Advantage
program, an increase in projected prescription drug expenditures,
and updated economic assumptions, including slightly higher medical
inflation.
OMB's current projection for Medicaid spending for FYs 2005-9 is
$18.4 billion higher than its February estimate. OMB cites changes
in economic assumptions, primarily inflationary increases and changes
in GDP growth, and reestimates by the states of their Medicaid spending
as factors contributing to the higher estimate. "Prescription
drugs, home and community-based services, inpatient services, and
managed care payments are Medicaid cost drivers that account for
most of the increase over the February estimates," according
to OMB.
Information:
Dave Moore, Senior Associate Vice President
AAMC Government Relations
dbmoore@aamc.org
(202) 828-0525
AHRQ Advisory Council Addresses Agency Future;
Health IT
The Agency for Healthcare Research and Quality (AHRQ) National
Advisory Council (NAC) met July 30 for the second of three meetings
held each year. Following an update from AHRQ Director Carolyn Clancy,
M.D., NAC Chairman Arthur Garson, Jr., M.D., M.P.H., dean and vice
president of the University of Virginia Medical School, led the
group in a Future Vision Exercise, designed to guide the agency
as it shifts its focus to implementation of evidence-based medicine
and care. Council members identified what AHRQ should accomplish
in the next three years in the areas of safety and quality, efficiency,
and effectiveness.
In the afternoon, Helen Burstin, M.D. and Scott Young, M.D., of
AHRQ presented an update of the health information technology (HIT)
program, which received $50 million in FY 2004 for grants and contracts
to support the development, adoption, and evaluation of HIT in a
variety of health care settings, especially rural and underserved
communities. AHRQ has received 527 applications for the funds. David
Brailer, M.D., Ph.D., the newly appointed National Health Information
Technology Coordinator, spoke about the new Department of Health
and Human Services HIT framework, a ten-year plan to transform the
delivery of health care by building a new health information infrastructure,
including electronic health records and a network to link health
records nationwide.
Information:
Erica Froyd, Director, Public Health and Research Legislative Affairs
AAMC Office of Governmental Relations
efroyd@aamc.org
(202) 828-0525
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