Washington Highlights: November
19, 2004
Congress Moves
to Finish FY 2005 Spending Bills
Contents
Prior Issues
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House and Senate negotiators continue to work on the final details
for an omnibus spending package that includes the Labor-HHS-Education
(H.R.
5006/S.
2810) and VA-HUD-Independent Agencies (H.R.
5041/S.
2825) appropriations for FY 2005. It appears that the GOP leadership
and the White House have reached an agreement to add about $4 billion
in additional funding to several Administration and leadership priorities.
Reportedly, $1.2 billion will be added for veterans' medical care
and about $1 billion will be added to programs in the Labor-HHS-Education
appropriations bill. However, to keep the overall package within
the spending limit negotiated by the White House and Capitol Hill
early this year, the additional funds will be offset by an estimated
0.75 percent across-the-board cut of non-defense programs.
Funding totals for individuals programs were not available at press
time. Several reports have suggested the overall increase for the
NIH, after the across-the-board cut, will be about $550 million
(2 percent) over the FY 2004 level. This is about $200 million less
than the President's FY 2005 budget request, which was endorsed
by the House Appropriations Committee. Senate appropriators had
pushed for a $1.1 billion (4 percent) increase in NIH funding.
To date, only 4 of the 13 regular appropriations bills for the
fiscal year that began Oct. 1 have been enacted. The remaining programs
have been funded under a continuing resolution that expires Nov.
20.
The foreign operations appropriations bill (H.R.
4818) will be the legislative vehicle for the omnibus spending
package, which is expected to include at least 8 of the 9 outstanding
bills. There continues to be a question of whether the energy and
water bill will be included in the final package. The leadership
hopes to file the conference report Nov. 18 and schedule a vote
in the House the following day. The schedule for Senate action is
less clear, with a Senate vote possibly occurring on Nov. 20.
Information:
Dave Moore, Senior Director
AAMC Government Relations
dbmoore@aamc.org
(202) 828-0525
Congress Approves VA Physician Pay Bill
The House of Representatives Nov. 17 passed by voice vote S. 2484,
the "Department of Veterans Affairs Health Care Personnel Enhancement
Act of 2004," also known as the VA physician pay bill. The
Senate approved the bill on Oct. 5 and the President is expected
to sign the bill. The AAMC and the American Medical Association
(AMA) Sept. 27 sent a joint letter to the Senate urging support
of the legislation [see Washington
Highlights, Oct. 1].
The legislation introduces a three-tiered compensation system comprised
of base pay, market pay and performance pay. Base pay will be set
according to a VA physician's longevity in the VA health care system
and will include automatic pay increases every two years. The initial
range for base pay will range from $90,000 to $132,000 and be indexed
to increase at the same rate as other federal employees. Market
pay will be defined through "pay bands" based on the individual
physician's specialty and assignment. These bands will be determined
by the Secretary of Veterans Affairs following consultation with
at least two national surveys every two years. Under the performance
pay tier, individuals will now be eligible to receive up to $15,000
or 7.5 percent of their salaries, whichever is smaller, for meeting
specific goals or performance objectives set by the Secretary. A
controversial provision in the original bill that prohibited Chiefs
of Staff from receiving any compensation or benefits from the affiliate
did not make it into the final legislation. The new pay system will
go into effect on Jan. 1, 2006.
Information:
Jonathan Fishburn, Director, Research, Education and Veterans' Legislative Affairs
AAMC Government Relations
jfishburn@aamc.org
(202) 828-0525
IME Adjustment Included in New Medicare Psychiatric
Facility PPS
Psychiatric teaching hospitals and psychiatric units of acute care
teaching hospitals will receive additional payments under the new
Medicare inpatient psychiatric prospective payment system (PPS), according
to the final
rule published in the Federal Register [69
FR 66922] on Nov. 15. The new payment system was mandated by the
Balanced Budget Relief Act of 1999 and will replace the current cost-based
payment system. The PPS becomes effective Jan. 1, 2005, with a three-year
phase in period.
Unlike the Medicare inpatient PPS, which pays hospitals on a per
case basis, under the psychiatric PPS, facilities will receive a
payment for each day of a patient's stay. This "per diem"
payment will be adjusted for each facility based on its geographic
location (a wage index adjustment, with facilities in rural areas
receiving an additional adjustment), whether the facility has a
full service emergency department, and if it is a teaching facility.
Teaching facilities will receive an approximate five percent increase
to their per diem payments for every 10 percent increase in the
facility's resident to average daily census (RADC) ratio. The use
of RADC to measure teaching intensity parallels the teaching adjustment
under Medicare's capital PPS, but differs from the intern/resident-to-
bed ratio (IRB) used for the inpatient PPS. CMS rejected comments
to include a disproportionate share adjustment, stating that their
regression analyses did not support such an adjustment.
Psychiatric PPS per diem payments will also be adjusted depending
upon the age of the patient treated as well as the patient's diagnosis
and presence of certain co-morbidities. Outlier payments will also
be available for facilities that treat extraordinarily high cost
patients.
The new payment system will also provide stop-loss payments during
the three-year transition period for facilities that experience
significant payment losses under the PPS.
Information:
Karen Fisher, Senior Associate Vice President
AAMC Health Care Affairs
kfisher@aamc.org
(202) 862-6140
MedPAC Continues Specialty Hospital Discussions
At its Nov. 16-17 meeting, members of the Medicare Payment Advisory
Commission (MedPAC) discussed
a number of staff analyses that examined potential differences between
physician-owned specialty hospitals and community hospitals. These
analyses build upon those that have been presented at previous meetings
in preparation for MedPAC's mandated report on specialty hospitals,
which is due to the Congress by March 2005.
The analyses presented indicate that specialty hospitals tend to
transfer patients that are more severely ill and with higher relative
costs compared with other hospitals. These hospitals also tend to
have higher costs per discharge than community hospitals (although
this difference was not statistically significant), but also shorter
lengths of stay. Staff indicated more work would need to be done
to understand the factors affecting the higher costs of specialty
hospitals.
Other analyses, focusing on heart hospitals, indicated that while
these hospitals seemed to be capturing market share from their community
counterparts, the community hospitals continued to have profits
in line with national averages through 2002.
Commissioners will discuss draft policy recommendations on specialty
hospitals at MedPAC's Dec. 9-10 meeting.
In other areas, the Commission also approved a report, due in January
2005, on physician requirements for outpatient physical therapy
(PT) services. The report recommends that Congress not change the
current requirements, which include physicians reviewing PT plans
of care every 30 days and reevaluating patients after 60 days.
Other topics discussed at the November meeting included:
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Physician pay for performance (see related article);
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Medicare financing: moving toward value-based purchasing;
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Physician volume report;
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Mandated reports on cardiothoracic surgeons' practice expense/certified
registered nurse first assistants;
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Retiree health benefits; and
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A home health update.
Information:
Karen Fisher, Senior Associate Vice President
AAMC Health Care Affairs
kfisher@aamc.org
(202) 862-6140
MedPAC Addresses Physician Pay for Performance
At the Medicare Payment Advisory Commission's (MedPAC) Nov. 16-17
meeting,
commission staff presented a feasibility study on implementing pay-for-performance
measures for physician services. The purpose of the analysis is to
determine if it is feasible to base some amount of physician payment
under Medicare Part B on quality. It was suggested that criteria for
developing quality measures include consideration of: use of well-accepted,
evidence based measures when available; burden of data collection;
availability of risk adjusters if necessary and opportunities for
provider improvement.
Types of measures to consider can be divided into four categories:
structural, process, outcomes, and patient experience. Structural
measures may include physician certification or identifying presence
of information technology infrastructure. Process and outcomes measures
involve adherence to guidelines for select diseases (i.e., HbA1C
testing for diabetes patients.) Patient experience measures would
record patient satisfaction using survey tools. For each of these
categories, the committee discussed whether established, accepted
measures were available, what types of physicians would be measured,
and what data needs to be collected or is currently available for
reporting the measurement.
There was continuing discussion about the breadth of implementation
of measures (e.g., will a measure be applied to all physicians or
selected specialties and are measurements at the provider or the
group level), however, there was general consensus among MedPAC
members that pay-for-performance measures should be implemented.
Information:
Denise Dodero, Associate Vice President
AAMC Health Care Affairs
ddodero@aamc.org
(202) 828-0493
Congress Approves Extension of J-1 Visa Waiver
Program
The House of Representatives Nov. 17 approved S.
2302, legislation extending for two years the authority of states
to provide up to 30 waivers per year for international medical graduates
that complete residency training in the U.S. on J-1 visas to remain
in this country in return for providing primary health care services
in federally-designated health professional shortage areas. Without
such waivers, J-1 visa physicians would be required to return to
their home countries for two years before returning to the U.S.
The legislation also includes authority for each state to offer
up to 5 waivers to physicians who would not be serving in designated
shortage areas. Under the bill, J-1 visa physicians that convert
to H-1B visa status during their waiver period would not count against
the statutory cap on H-1B visas. The Senate approved S. 2302 on
Oct. 11 and President Bush is expected to sign the bill.
Information:
Jonathan Fishburn, Director, Research, Education and Veterans' Legislative Affairs
AAMC Government Relations
jfishburn@aamc.org
(202) 828-0525
Bush Nominates Spellings as Next Secretary of
Education
President Bush Nov. 17 formally announced the nomination of Margaret
Spellings to the next Secretary of Education, replacing Roderick
Paige, Ph.D., who resigned on Nov. 15. Ms. Spellings currently serves
as Assistant to the President for Domestic Policy. She previously
served as a senior advisor to President Bush when he was Governor
of Texas, and as political director of his 1994 gubernatorial campaign.
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