Washington Highlights: September 17, 2004

Senate Bill Boosts NIH, Title VII Funding

Contents Senate Bill Boosts NIH, Title VII Funding MedPAC Discusses Mandated Reports on Specialty Hospitals; Physician Payments AAMC Urges Action on Patient Safety Bill Quality Forum Begins Informed Consent Project Acting NSF Director Tapped for Permanent Position Prior Issues September 10, 2004 September 3, 2004 August 27, 2004 August 6, 2004 July 30, 2004 Archive

The Senate Appropriations Committee Sept. 15 approved additional funding for the National Institutes of Health (NIH) and the Title VII health professions education programs beyond what is included in the appropriations bill passed by the House last week. The committee unanimously approved its FY 2005 Labor-HHS-Education spending bill (S. 2810, S. Rpt. 108-345).

For NIH, the Senate bill includes $28.9 billion, an increase of $1.1 billion (4 percent) over the current year and about $373 million more than the House-passed bill (H.R. 5006) and the President's budget request. The Senate bill provides the National Center for Research Resources (NCRR) with level funding of $119 million for extramural research facilities construction; the administration had proposed eliminating the program. The Senate bill retains the salary cap for extramural grants from NIH, the Agency for Healthcare Research and Quality (AHRQ) and for the Substance Abuse and Mental Health Services Administration (SAMHSA) at Executive Level I.

The Senate bill provides $303 million for the Title VII health professions education programs, an increase of $9.3 million (3.2 percent) above FY 2004, and $34 million than in the House bill. Title VII programs are funded at FY 2004 levels except for training in primary care medicine and dentistry, which is increased by $9 million (11 percent), and health professions workforce information and analysis, which is increased by $277,000 to $999,000. The Senate bill includes $162 million for Title VIII nursing education programs, $20 million (14.1 percent) over the current year's level.

For the National Health Service Corps, the Senate bill provides $173.1 million, which is $3.2 million (1.9 percent) above the FY 2004 level and the House bill. The Senate bill includes $303.3 million for Children's Hospitals GME, an increase of $88,000 over the current year's level. The Senate bill also includes a provision that states funds made available to HRSA "may be used to continue operating the Council on Graduate Medical Education…."

For AHRQ, the Senate bill includes $318.7 million, an increase of $15 million over the current year and the House bill. The committee report directs that $260.7 million is for research on health costs, quality and outcomes (HCQO), $15 million more than in FY 2004. Within this total, the committee directs AHRQ to devote $84 million to determining ways to reduce medical errors, $4.5 million more than the comparable FY 2004 level. The committee also directs AHRQ to devote $15 million of the HCQO total to research on outcomes, comparative clinical effectiveness and appropriateness of prescription drugs and other health care items as authorized in Section 1013 of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA).

The Senate bill provides $503.6 million to HRSA for bioterrorism activities, $39 million less than FY 2004. This includes $475.9 million for hospital preparedness and $27.7 million for curriculum development and training.

For the Centers for Disease Control and Prevention (CDC), the Senate bill provides $4.539 billion, an increase of $171 million (3.9 percent).

The bill includes a provision prohibiting the Centers for Medicare and Medicaid Services (CMS) from implementing the so-called "75 Percent Rule" that would reduce Medicare payments for some rehabilitation hospitals. Committee report language directs the Secretary of Health and Human Services to contract with the Institute of Medicine to study and make recommendations on a clinical consensus on how to "modernize the Medicare criteria used to distinguish an inpatient rehabilitation facility from an acute care hospital and other providers of intensive medical rehabilitation, and the appropriate medical necessity criteria for determining clinical appropriateness of inpatient rehabilitation admissions." The report is due no later than Oct. 1, 2005.

Although the Senate bill provides $142.3 billion in discretionary spending for FY 2005, about $200 million less than the House-passed bill, the Senate committee used various accounting maneuvers to provide additional funds above the House-approved levels. For example, the committee shifted $3.2 billion in mandatory Supplemental Security Income payments to low-income elderly, blind and disabled individuals to FY 2006, freeing up more money under the FY 2005 cap. However, it is not clear whether this additional funding will remain in the final House-Senate conference agreement as House conservatives are already objecting to such efforts to circumvent the spending caps.

Also complicating the final fate of the bill is the issue of overtime regulations. The Senate committee adopted, 16-13, an amendment by Senator Tom Harkin (D-Iowa) to block the Administration's new rules on overtime eligibility standards, which became effective Aug. 23. The House attached a similar amendment to its bill last week. The White House has threatened to veto the bill if the amendment is included in the final conference agreement on the bill.

Information:
Dave Moore, Senior Director
AAMC Government Relations
dbmoore@aamc.org
(202) 828-0525
Erica Froyd, Director, Public Health and Research Legislative Affairs
AAMC Government Relations
efroyd@aamc.org
(202) 828-0525
Jonathan Fishburn, Director, Research, Education and Veterans' Legislative Affairs
AAMC Government Relations
jfishburn@aamc.org
(202) 828-0525

MedPAC Discusses Mandated Reports on Specialty Hospitals; Physician Payments

At its Sept. 9-10 meeting, the Medicare Payment Advisory Commission (MedPAC) held discussions on a number of upcoming reports that were mandated by last year's Medicare Modernization Act (MMA). Foremost among these are reports on physician-owned specialty hospitals and the Medicare physician payment system.

MedPAC staff reported preliminary data and findings on specialty hospitals in preparation for its report, which is due in March 2005. The presentations included an overview of federal laws governing physician investments in health care facilities, a description of markets in which specialty hospitals are located and findings from site visits to three markets with specialty hospitals.

According to MedPAC, preliminary analysis of 2002 data showed a total of 48 specialty hospitals, all of which are for-profit, and the majority of which are orthopedic. The majority of specialty hospitals are located in just four states: Kansas, Oklahoma, South Dakota and Texas. Only one is a teaching hospital, and only about half have an emergency department.

MedPAC's mandated activities related to physician payments includes a study of resource-based practice expense (PE) relative value units (RVUs) and weights. Preliminary findings from the study were presented at the September meeting. The PERVUs are one component used in resource based relative value system (RBRVS) to determine payments to physicians. The other components include physician work RVUs (WRVUS) and professional liability RVUs (PLIRVUs). Prior to 1999, PERVUs were based on physicians' historical charges.

As a result of BBA, resource based RVUs were phased in from 1999-2002. Implementation was budget neutral. PERVUS include six categories of expenses (direct expenses: clinical labor, medical equipment and medical supplies and indirect expenses: administrative labor, office expenses and other expenses). Consistent with Center for Medicare and Medicaid Services' (CMS) impact analysis, MedPAC found that some specialties experienced gains while others did not. Payments increased the most for dermatology and urology, and decreased the most for thoracic surgery and gastroenterology. Draft conclusions indicate that changes in service volume do not seem to be related to PERVU or payment changes and that physician participation in Medicare remained high and unchanged during the transition period. Next steps include updating data sources - since CMS has relied upon the American Medical Association's (AMA) Socioeconomic Monitoring System Survey (SMS) and data are no longer available from this source - and exploring alternative methods to calculate practice expense.

Other topics discussed at the September meeting included:

• Hospital charging practices;
• Certified registered nurse assistants;
• Trends in beneficiaries use of post acute care services; and
• Benefits design and cost sharing in Medicare advantage plans.

Information:
Karen Fisher, Sr. Director, Health Care Affairs
AAMC Health Care Affairs
kfisher@aamc.org
(202) 862-6140
Denise Dodero, Sr. Director, Health Care Affairs
AAMC Health Care Affairs
ddodero@aamc.org
(202) 828-0493

AAMC Urges Action on Patient Safety Bill

The AAMC and over 80 organizations, including the American Hospital Association, American Medical Association, and numerous specialty societies, state hospital associations, and state medical societies, have signed a group letter that will be sent to House Speaker Dennis Hastert (R-Ill.), urging him to take "the necessary steps" to "promptly move" patient safety legislation (H.R. 663) before the end of September.

The "Patient Safety and Quality Improvement Act" was passed by the House on Mar. 12 and was amended and passed by the Senate on July 22. The bill includes provisions that establish a voluntary and confidential reporting system for submitting data in support of patient safety initiatives.

The letter states that "H.R. 663 would significantly advance an environment in which health care professionals and organizations can report and analyze health care errors and share their experiences with others in order to prevent similar occurrences ... without jeopardizing the regulatory and oversight functions of state and federal governments, or patients' rights to information relating to their care."

Quality Forum Begins Informed Consent Project

The National Quality Forum (NQF) held a Sept. 10 workshop to begin its Informed Consent project, which focuses on improving patient safety through the informed consent process. Special attention will be given to low literacy and limited English proficiency populations during this work. The Forum will address this issue by examining providers that have implemented the following NQF endorsed safe practice:

Ask each patient or legal surrogate to recount what he or she has been told during the informed consent discussion. Additional specifications include:

• Use informed consent forms written in simple sentences and in the primary language of the patient;
• Engage the patient in a dialogue about the nature and scope of the procedure covered by the consent form;
• Provide an interpreter or reader to assist non-English speaking patients, visually or hearing-impaired patients, and low literacy patients;
• Convey the higher risk associated with sub optimal volumes for select high-risk surgeries and procedures as specified in NQF safe practice 2 (e.g., CABG, angioplasty)

The project will identify strategies that providers have used for implementing the practice along with barriers they have encountered. The workshop focused on the results of a case study conducted by the Forum, which examined hospitals that were early adopters of the NQF endorsed practice along with hospitals that have yet to adopt the practice.

The early adopters in the case study included three hospitals in different states. Each of the institutions cared for large, diverse populations that were medically underserved. These institutions found that the NQF endorsed practice yielded many benefits and did not add much work for the hospital staff. However, they noted the need to standardize provider education and use of the practice. For patients with limited English proficiency there was concern about the availability of qualified translators and any subjective interpretations that could occur.

The second part of the study examined 18 hospitals in 12 states that have yet to adopt the practice. All of these institutions have diverse patient populations. The interview data showed that many providers often overestimated the costs and time burden of using the endorsed practice. There was also concern about the volume-outcome specification included in the practice, and questions were raised about developing a plan to get the institution to adopt the practice.

The Forum plans to publish the workshop proceedings, along with the analytic case study and a user's guide for providers who wish to implement the practice.

Information:
Jeff Patyk, Staff Specialist
AAMC Health Care Affairs
jpatyk@aamc.org
(202) 828-0498

Acting NSF Director Tapped for Permanent Position

President Bush Sept. 15 announced his intention to nominate Arden Bement, Jr., Ph.D., to serve the remainder of a six-year term as Director of the National Science Foundation (NSF). The term ends Aug. 2, 2010. Dr. Bement has served as Acting Director of the NSF since February. He also currently serves as Director of the National Institute of Standards and Technology (NIST), a position he has held since December 2001.