Washington Highlights: April 29,
2005
Congress Approves
FY 2006 Budget
Contents
Prior Issues
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Congress April 28 approved the conference agreement on the FY 2006
budget resolution (H.Con.Res.
95). The House passed the conference report (H.Rept. 109-62)
by a 214 to 211 vote while the Senate approved it 52 to 47.
Reconciliation instructions within the final budget agreement direct
committees to identify $34.7 billion in savings through cuts to
mandatory spending over the next five years. On the House side,
the Energy and Commerce Committee is directed to identify $14.7
billion in savings over five years, up to $10 billion of which (although
none in 2006) could come from the Medicaid program according to
senior committee staff. The Ways and Means Committee must identify
$1 billion in savings from programs under its jurisdiction, and
the Education and the Workforce Committee must find $12.7 billion
in savings over five years, $7 billion of which may be found either
through cuts to student loans or through savings generated as part
of the Higher Education Act reauthorization process. Despite an
earlier vote in the Senate to remove reconciliation instructions
for the Finance Committee, the final budget agreement requires the
Committee to reduce spending by about $10 billion over five years.
The budget resolution includes a Sept. 16 deadline for committees
to submit their plans for cutting mandatory spending programs.
For discretionary funding, the conference agreement adopts the
House recommendation to adopt the Administration's proposed $843
billion in budget authority for FY 2006, plus $50 billion in supplemental
funding for ongoing military operations in Iraq and Afghanistan.
The Senate had approved an amendment adding an additional $5.4 billion
in discretionary funding for education.
Information:
Christiane Mitchell, Senior Legislative Analyst
AAMC Government Relations
cmitchell@aamc.org
(202) 828-0526
(Medicaid)
Jonathan Fishburn, Director, Research, Education and Veterans' Legislative Affairs
AAMC Government Relations
jfishburn@aamc.org
(202) 828-0525
(Higher Ed)
Dave Moore, Senior Director
AAMC Government Relations
dbmoore@aamc.org
(202) 828-0525
CMS Proposes To Increase Post Acute Care Transfers
in FY 2006 Inpatient Rule
The Centers for Medicare and Medicaid Services (CMS) April 25 posted
on its Web site the Medicare hospital inpatient prospective payment
system proposed rule
for FY 2006. It is scheduled to be published in the Federal Register
on May 5.
Unlike past years, there are no major proposals affecting Direct
Graduate Medical Education (DGME) or Indirect Medical Education
(IME) payments. However, a key provision would increase the number
of diagnosis-related groups (DRGs) that would be subject to the
post-acute care transfer policy from 30 to 223. Under this policy,
patients in these DRGs that are discharged to a post-acute care
facility prior to the DRG's average length of stay would be viewed
as "transfers" and the hospital would be paid less than
the full DRG payment. According to the American Hospital Association,
if finalized, this policy would result in an $880 million payment
reduction for hospitals.
On the GME front, CMS proposes minor positive changes to the initial
residency period determinations for residents pursuing specialties
that require a clinical base year of training and who only match
to the second year specialty program, and resident limit affiliation
agreements involving new teaching hospitals. The rule is silent
on the nonhospital site resident training issue.
In other areas, the proposed rule would:
- Implement the full market basket payment update of 3.2 percent,
as set forth in law, for those hospitals that submit data on 10
quality measures;
- Reduce the labor share of the standardized amount, which is
the portion of the Medicare payment adjusted for geographic wage
differences, from 71.7 to 69.7 percent; and
- Increase the outlier threshold from $25,800 to $26,675.
Those policies that are included in the final rule, to be published
by August 1, will go into effect October 1, 2005. Comments on the
proposed rule are due June 24, 2005.
Information:
Karen Fisher, Sr. Director, Health Care Affairs
AAMC Health Care Affairs
kfisher@aamc.org
(202) 862-6140
MedPAC Discusses Physician Service Volume Increases;
Makes Medicare Advantage Recommendations
At its April 22-23
meeting, the Medicare Payment Advisory Commission (MedPAC) discussed
a letter from the Centers for Medicare and Medicaid Services (CMS)
informing the Commission that the estimated physician payment update
for 2006 would be -4.3 percent. MedPAC previously has recommended
a physician payment increase of 2.7 percent for 2006.
Focusing on Medicare spending in 2004, the CMS letter noted that
spending grew 15.2 percent, further widening the gap between actual
physician spending and the sustainable growth rate (SGR) target.
Increase in service volume is the driving factor of the growth -
the largest seen since 1992 when the fee schedule was first implemented.
A MedPAC analysis reveals that the highest growing volume services
were minor procedures and imaging, both experiencing an 18 percent
increase in volume per beneficiary between 2003 and 2004. Several
Commissioners noted that these increases were also being seen in
the private sector.
MedPAC also approved a number of recommendations that would reduce
payments for Medicare Advantage (MA) plans, including recommending
that the managed care bidding benchmarks be based on 100 percent
of fee-for-service costs, a reduction of about 7 percent according
to MedPAC staff. The Commission also recommended that IME payments
be excluded from the rate calculations, ending a perceived "double"
IME payment by Medicare since teaching hospitals currently receive
IME payments associated with Medicare managed care enrollees directly
from the Medicare program.
Other topics discussed at the meeting included:
- Mandated critical access hospital report;
- Changes in the Medicare physician resourced-based relative
value system from from 1992-2002;
- Physician and hospital resource use; and
- Patient selection and hospital profitability under Medicare.
MedPAC's next public meeting is September 8-9.
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
House Panel Passes Legislation Removing Physician
Group Limits on Patients Receiving Substance Abuse Treatment
The House Energy and Commerce Health Subcommittee April 27 passed
by voice vote AAMC endorsed legislation, H.R.
869, removing the current statutory limit on physician group
practices that treat substance abuse patients. H.R. 869 was introduced
by Rep. Mark Souder (R-Ind.) on February 16. The bill is expected
to receive full committee consideration shortly. The House Judiciary
Committee also has jurisdiction over the legislation.
The 106th Congress passed into law the Drug Addiction Treatment
Act (DATA) 2000 to expand treatment options for patients addicted
to opiates. A limit of 30 patients per treating physician was included
in the legislation to address concerns about potential abuse or
diversion of the treatment medications. In addition to the limit
per physician, DATA also contained language that imposed a 30-patient
cap on group practices as well as amending the Controlled Substances
Act. H.R. 869 clarifies that group practices would not be limited
to 30 patients, while still limiting each provider within the group
to 30 patients seeking treatment for their drug addictions.
In addition to the AAMC, H.R. 869 has been endorsed by 39 provider
and patient groups. Furthermore, the AAMC, along with Kaiser Permanente,
the American Medical Group Association, and the Alliance of Community
Health Plans, sent an April 25 letter
to Energy and Commerce Committee Chairman Joe Barton (R-Texas) in
support of the legislation.
Information:
Lynne Davis Boyle, Assistant Vice President
AAMC Government Relations
ldavisboyle@aamc.org
(202) 828-0526
NRC/IOM Issue Stem Cell Research Guidelines
The Committee on Guidelines for Human Embryonic Stem Cell Research
of the National Research Council and the Institute of Medicine April
26 issued a report
that provides guidelines for the responsible practice of human embryonic
stem (hES) cell research.
The Committee was asked to develop guidelines to encourage responsible
practices in hES cell research - regardless of source of funding
- including the use and derivation of new stem cell lines. The key
recommendations of the report include:
- All institutions conducting hES cell research should establish
an Embryonic Stem Cell Research Oversight (ESCRO) committee to
provide local oversight of all issues related to derivation and
research use of hES cell research. The committee would not substitute
for an IRB, but rather provide an additional level of review and
scrutiny. The ESCRO would also review basic hES cell research
using pre-existing anonymous cell lines that do not require IRB
review.
- Regardless of the source of funding, an IRB should review the
procurement of gametes, blastocysts, or somatic cells for the
purpose of generating new hES cell lines, including the procurement
of blastocysts in excess of clinical need from infertility clinics;
blastocysts made through in vitro fertilization specifically for
research purposes; and oocytes, sperm, and somatic cells donated
for development of hES cell lines through nuclear transfer.
- IRBs may not waive the requirement for obtaining informed consent
from any person whose somatic cells, gametes, or blastocysts are
used in hES cell research. When donor gametes have been used in
the IVF process, resulting blastocysts may not be used for research
without consent of all gamete donors.
- To facilitate autonomous choice, decisions related to the production
of embryos for infertility treatment should be free of the influence
of investigators who propose to derive or use hES cells in research.
Whenever it is practicable, the attending physician responsible
for the infertility treatment and the investigator deriving or
proposing to use hES cells should not be the same person.
- No cash or in kind payments may be provided for donating blastocysts
in excess of clinical need for research purposes.
- Women who undergo hormonal induction to generate oocytes specifically
for research purposes (such as for nuclear transfer) should be
reimbursed only for direct expenses incurred as a result of the
procedure, as determined by an IRB. No cash or in kind payments
should be provided for donating oocytes for research purposes.
Similarly, no payments should be made for donations of sperm for
research purposes or of somatic cells for use in nuclear transfer.
- A national body should be established to assess periodically
the adequacy of the guidelines proposed in this document and to
provide a forum for a continuing discussion of issues involved
in hES cell research.
AAMC President Jordan J. Cohen, M.D., issued a statement
following the report's release, saying the Committee, "has
issued a thoughtful report suggesting guidelines for institutional
oversight of the nascent field of human embryonic stem cell research….
The guidelines address the conduct of human embryonic stem cell
research and sustain the historic delegation of primary oversight
of research activities to local institutional panels that are best
positioned to assess and monitor research conducted on their campuses.
The report's careful integration of the responsibilities of the
proposed institutional embryonic stem cell research oversight panel
with those of the institutional review board and other university
research oversight committees is commendable and should reassure
the public that this contentious area of research will remain subject
to critical and careful scrutiny."
Information:
Tony Mazzaschi, Interin Chief Scientific Officer, Senior Director
AAMC Scientific Affairs
tmazzaschi@aamc.org
(202) 828-0059
Committee's Investigation of Hospital Billing
Practices Continues
House Energy and Commerce Committee Chairman Joe Barton (R-Texas)
and Oversight and Investigations Subcommittee Chair Ed Whitfield
(R-Ky.) sent an April 26 letter to 10 hospital systems seeking additional
information on the complexity of hospital invoices and how hospital
chargemasters or "list" prices directly or indirectly
affect patients.
According to the letter,
the committee is requesting information related to "the manner
in which [hospital] charges are presented, explained and understood
by the medical consumer through patient billing records." In
addition, the committee is seeking information on how hospital chargemaster
rates impact out of network patients as well as patient claims made
by property/casualty insurers.
Hospitals receiving this request include Ascension Health, Inc.
of St. Louis; Adventist Health of Roseville, Calif.; Catholic Health
East of Newton Square, Pa.; Sutter Health of Sacramento, Calif.;
New York-Presbyterian Healthcare System at Columbia Presbyterian
Medical Center in New York City; HCA of Nashville, Tenn.; Catholic
Health Initiatives of Denver; Mayo Health System of Rochester, Minn.;
Tenet Healthcare Corp. of Santa Barbara, Calif.; and Catholic Healthcare
West of San Francisco.
In a press release Chairman Barton stated, "Today, some patients
are confronted with prices that can be grossly out of line and with
statements that might as well be in a foreign language…. I
want consumers to be empowered with the information they expect
and ought to have. They also deserve a pricing structure that is
fair…. We need to know how close we are to those goals and
to determine what, if any, changes may be necessary to protect consumers"
and "ensure more Americans have access to affordable, quality
health care."
Information:
Lynne Davis Boyle, Assistant Vice President
AAMC Government Relations
ldavisboyle@aamc.org
(202) 828-0526
GAO Publishes Rehabilitation "75 Percent" Report
The Government Accountability Office (GAO) April 22 issued a report
on the "75 percent rule" for inpatient rehabilitation
facilities (IRF). The study was requested by Congress in the conference
report accompanying the Medicare Modernization Act.
Under the 75 percent rule, in order to be qualified as an IRF and
receive higher Medicare payments based on the rehabilitation prospective
payment system, at least 75 percent of a facility's patients must
require intensive rehabilitation treatment for one of 13 specified
conditions. GAO found that in 2003, only 6 percent of facilities
currently with IRF status were in compliance with the 75 percent
rule. Hospitals had requested that the number of conditions be increased
to reflect current practices regarding rehabilitation treatment.
The report recommends that the Centers for Medicare and Medicaid
Services (CMS) Administrator take three actions:
- Ensure that fiscal intermediaries conduct targeted reviews
for medical necessity for IRF admissions;
- Conduct additional activities to encourage research on the
effectiveness of intensive rehabilitation and the factors that
predict patient need for intensive inpatient rehabilitation; and
- Refine the conditions list to define more precisely those subgroups
of patients in need of IRF services, possibility using functional
status or other factors.
Information:
Karen Fisher, Sr. Director, Health Care Affairs
AAMC Health Care Affairs
kfisher@aamc.org
(202) 862-6140
Senators Introduce Bipartisan Cloning Bill
Senators Orrin Hatch (R-Utah), Dianne Feinstein (D-Calif.), Arlen
Specter (R-Pa.), Edward Kennedy (D-Mass.), and Tom Harkin (D-Iowa)
April 21 re-introduced legislation to ban human reproductive cloning
but to allow somatic cell nuclear transplantation (SCNT), sometimes
called "therapeutic cloning," to move ahead with federal
oversight.
The "Human Cloning Ban and Stem Cell Protection Act of 2005"
(S.
876), makes it a crime, punishable by up to 10 years in prison
and fines of $1 million or three times any profits made, whichever
is greater, on any person who clones or attempts to clone a human
being. The bill permits nuclear transplantation to be conducted
on unfertilized eggs for up to 14 days, under strict ethical and
federal regulation. The bill requires that all egg donations be
voluntary, prohibits large payments to women to induce egg donations,
and prohibits the purchase or sale of unfertilized eggs, including
eggs that have undergone nuclear transplantation. The bill also
requires informed consent by egg donors and review of any nuclear
transplantation research by an ethics board, and mandates safety
and privacy protections. The exportation of eggs that have undergone
nuclear transplantation to any foreign country that does not ban
human cloning also is prohibited.
The Coalition for the Advancement of Research (CAMR), which includes
the AAMC among its 90 members, has endorsed S. 876. In an April
21 letter to the bill's sponsors, CAMR noted, "CAMR supports
a ban on reproductive cloning; it is unsafe and unethical. Given
the scientific potential of SCNT and regenerative medicine, however,
we strongly support the bill's effort to allow for this research,
which may provide essential tools allowing scientists to develop
the promise of embryonic stern cell research…. [T]herapeutic
cloning is about saving and improving lives."
Information:
Dave Moore, Senior Director
AAMC Government Relations
dbmoore@aamc.org
(202) 828-0525
Minority Health Advisory Committee Members Announced
Department of Health and Human Services (HHS) Secretary Mike Leavitt
April 22 announced the appointment of eight members to serve on
the Advisory Committee on Minority Health. The committee advises
HHS on improving the health of racial and ethnic minority groups
and on the development of goals and specific program activities
for the department's Office of Minority Health.
The committee members are as follows: Leo MacKay, Ph.D., chief
operating officer, ACS State Healthcare in Atlanta (Chairman); Joseph
Kevin Villagomez, M.A., counseling psychologist, Department of Public
Health, Saipan, Commonwealth of the Northern Mariana Islands; Cheryl
Killion, B.S., M.S., M.A., Ph.D., research associate professor,
Center for Minority Family Health, Hampton, Virginia; Edna M. Berastain,
M.B.A., executive director of Latinos/as, Contra SIDA, Hartford,
Connecticut; Inam Ur Rahman, M.D., president and founder of the
Diabetic Clinic, Honolulu, Hawaii; Kermit C. Smith, D.O., M.P.H.,
former chief medical officer, Indian Health Service, Tucson, Arizona;
Adrienne Laverdure, M.D., medical director of Family Health, Peter
Christensen Health Center, Lac Du Flambeau, Wisconsin; and Valerie
Romero-Leggott, M.D., assistant professor/director of Cultural &
Ethnic Programs, University of New Mexico, Albuquerque.
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