Washington Highlights: March 18,
2005
House, Senate Approve
Budget Resolutions; Senate Strikes Medicaid Cuts, Adds NIH Funds
Contents
Prior Issues
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The House (H.
Con. Res. 95) and Senate (S.
Con. Res. 18) March 17 voted to approve differing versions of
an FY 2006 budget resolution by votes of 218-214 and 51-49, respectively.
Before final approval, the Senate adopted amendments striking proposed
cuts to the Medicaid program and adding funds for the National Institutes
of Health (NIH) and higher education. This sets up what is likely
to be a contentious conference committee as legislators try to reconcile
differences between the two plans.
The Senate budget resolution contained language that required the
Finance Committee, which has jurisdiction over the Medicaid program,
to identify $15 billion in savings over 5 years. Sponsored by Sen.
Gordon Smith (R-Ore.), along with Sens. Jeff Bingaman (D-N.M.),
Norm Coleman (R-Minn.), Max Baucus (D-Mont.), Lincoln Chafee (R-R.I.),
Mike DeWine (R-Ohio), and Olympia Snowe (R-Maine), the amendment
(S. Amdt 204) struck these proposed cuts from the resolution, and
created a reserve fund to establish a Bipartisan Commission on Medicaid
to review the program and make recommendations to improve service
delivery, quality of care, and cost-efficiencies. The amendment
passed 52-48. Republicans voting in favor of the amendment included
Sens. Smith, Coleman, Chafee, DeWine, and Snowe, as well as Sens.
Susan Collins (R-Maine) and Specter. All Democrats voted in support
of the amendment.
During floor remarks related to the amendment, Sen. Smith discouraged
his colleagues from placing "budget ahead of policy."
He urged them against acting too fast, and in "a way that will
do real human damage to those who can not fend for themselves."
Preceding the vote on S.Amdt. 204, the Senate voted to reject (49-51)
"Sense of the Senate" language (S.Amdt. 229) that had
been offered by Majority Leader Bill Frist (R-Tenn.). While the
amendment stated that the Finance Committee could not report a reconciliation
bill that would cap Federal spending on Medicaid, the provisions
were non-binding in nature. In anticipation of the vote on S.Amdt.
204, the AAMC sent a March
14 letter to all Senators urging them to vote in support of
the amendment.
The Senate partially responded to the Administration's proposal
to cut nearly a $1 billion from discretionary health programs by
passing, 63-37, an amendment offered by Sen. Arlen Specter (R-Pa.)
to add $1.5 billion to Budget Function 550 for the NIH. The Specter
amendment also added $500 million for education programs. The Senate
also adopted 51-49 an amendment offered by Sen. Edward Kennedy to
add $5.4 billion for higher education, offset by eliminating various
tax loopholes. Specifically, the Kennedy amendment calls for increasing
the maximum amount of a Pell Grant award to $4,500, and provides
additional funds to maintain several higher education programs targeted
for severe cuts or elimination in the President's budget request
including the Perkins Loan Program, TRIO and Gear Up. Sen. Kennedy
also intended to offer an amendment adding $3.5 billion to Function
550 for public health but ultimately withdrew the amendment.
Information:
Christiane Mitchell, Senior Legislative Analyst
AAMC Government Relations
cmitchell@aamc.org
(202) 828-0526
Dave Moore, Senior Director
AAMC Government Relations
dbmoore@aamc.org
(202) 828-0525
NIH to Create Office of Portfolio Analysis and
Strategic Initiatives
Stating the agency needs a new organization to "complement
the existing process for determining scientific initiatives,"
NIH Director Elias Zerhouni, M.D., March 17 outlined for a congressional
panel plans for an Office of Portfolio Analysis and Strategic Initiatives.
He told the House Energy and Commerce Subcommittee on Health the
office will be charged with evaluating the NIH research portfolio
"to ensure that urgent public needs are addressed in a timely
way and that a sound decision support system is established based
on rigorous and uniform sources of evidence." He predicted
that more effective analysis and management of the NIH research
portfolio will lead to even greater progress against disease. Dr.
Zerhouni's appearance before the subcommittee was the latest in
a series of hearings on how NIH sets research priorities that is
preparatory to the panel drafting NIH reauthorization legislation.
Dr. Zerhouni highlighted several challenges facing NIH as it determines
research priorities:
- A shift in the burden of illness from acute to chronic diseases;
- The continued acceleration of research;
- Insufficient information on the human and financial costs of
disease; and
- The convergence of science, erasing disease boundaries.
He said his intent in creating the new office is to have a transparent
process and better decision-support tools that will enhance accountability
to the Congress, scientists, patients, and the public at large.
Dr. Zerhouni explained to the subcommittee the evolution of the
NIH organizational structure. He also described how NIH maintains
a research portfolio that balances public health needs and scientific
opportunities and emphasized the continued importance of investigator-initiated
ideas and the two-tiered peer review process in determining research
priorities.
Full Committee Chair Joe Barton (R-Texas) identified three changes
that he suggested would help Dr. Zerhouni to better manage resources
and increase research investments at the NIH. The first is to expand
the authority of the NIH Director, specifically "to allow the
Director to transfer a greater percentage of funds between Institutes
and Centers and increase the working budget of the Office of the
Director to fund more extensive portfolio management projects as
well as cross-cutting research initiatives."
Chairman Barton also suggested the committee should consider creative
approaches, such as "budget clusters" for allocating resources
throughout the NIH. He noted, "Congress has created over 60
separate research programs at NIH with authorizations that no longer
exist or are set to expire…. The Appropriations Committee allocates
funding through 26 line items, aligned primarily with Institute
and Center designations. Responsible budget planning requires Congress
to evaluate whether the current funding allocations and mechanisms
meet the scientific demands of the NIH."
Recommending a new, more transparent reporting system, Chairman
Barton also called on Congress to "eliminate unnecessary reporting
requirements such as reports on specific diseases" and "instead
require reports that comprehensively track research progress in
broad areas of interest."
Several subcommittee members made statements or asked questions
either supporting or opposing human embryonic stem cell research.
Other members took the opportunity to ask Dr. Zerhouni questions
on specific disease issues such as cancer, spinal cord injury, pulmonary
hypertension and pain management.
Information:
Dave Moore, Senior Director
AAMC Government Relations
dbmoore@aamc.org
(202) 828-0525
House Panel Addresses Performance-Based Payments
for Physicians
The House Ways and Means Subcommittee on Health held a March
15 hearing to consider options for integrating quality and efficiency
measures within Medicare's physician payment methodology.
National Quality Forum (NQF) President Kenneth Kizer, M.D., M.P.H.,
urged the Subcommittee to make performance-based payments "a
top national priority" and advised "Medicare should lead
in this area." Herb Kuhn, director of the CMS Center for Medicare
Management, concurred. When asked how to potentially structure a
payment system that accounted for quality, Mr. Kuhn reported that
the agency's current pay-for-performance initiatives indicate, "even
small financial incentives can spur provider interest in quality
of care projects."
Testifying on behalf of the Society of Thoracic Surgeons, Jeffrey
Rich, M.D., warned against a budget-neutral payment system that
created "winners and losers." Such a system, Dr. Rich
explained, would actually impede quality improvement initiatives
by discouraging open communication, information-sharing and collaboration
among providers. In its March 2005 Report to Congress, the
Medicare Payment Advisory Commission (MedPAC) recommended a budget-neutral
"quality incentive payment policy" for physicians participating
in the Medicare program.
According to Peter Lee, president and CEO of the Pacific Business
Group on Health, performance-based payments should be "a substantial
portion of our payments to physicians and hospitals." Mr. Lee
testified that, when seeking outcomes and efficiency improvements,
"many researchers have observed that … small percentages
… are woefully inadequate." Mr. Lee stated that the proportion
of payments tied to quality should be "in the range of the
20% currently being paid in the United Kingdom." Lee called
for the implementation of quality and cost-efficiency measures that
are endorsed by the NQF. He also urged implementation of an "NQF-endorsed
standard ambulatory patient-experience survey" within the next
two years.
Information:
Christiane Mitchell, Senior Legislative Analyst
AAMC Government Relations
cmitchell@aamc.org
(202) 828-0526
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