Washington Highlights: September
2, 2005
Contents
Prior Issues
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AAMC Testifies on CY 2006 Proposed Physician Fee
Schedule
At the Aug. 22 quarterly meeting of the Practicing Physicians Advisory
Council (PPAC), Albert Bothe Jr., M.D., Associate Dean and Executive
Director, University of Chicago Practice Plan, and past-chair of
AAMC's Group on Faculty Practice Steering Committee and chair of
its Subcommittee on Legislative and Regulatory Issues,
testified on behalf of the AAMC on the CMS' 2006 proposed
rule on the physician fee schedule. Specifically, Dr. Bothe
addressed the proposed decrease in physician payments. He also enumerated
principles for CMS' consideration as it strives to develop quality
performance improvement activities for physicians.
AAMC's testimony expressed concern with the Sustainable Growth
Rate (SGR) update system. The proposed physician payment rule, published
Aug. 1, projects a minus 4.3 percent update to the overall conversion
factor used to calculate payments. In addition, AAMC encouraged
CMS to consider several points as it searches for ways to incorporate
quality measures into the Medicare program. AAMC testimony reiterated
several principles key to performance improvement programs. AAMC
also highlighted that CMS needs to consider the impact on multispecialty
group practices if multiple measures across all specialties are
implemented concurrently or rapidly. Finally, the testimony noted
that CMS should give careful consideration to potential consequences
of methodologies for attributing care to physicians/physician groups
and to consider possible unintended consequences of attribution
models that could lead to over- or under-provision of services to
beneficiaries.
The meeting covered a variety of topics, including the 2006 proposed
payments for physicians and outpatient services; updates on the
Medicare Part D drug benefit program, the National Provider Identifier
(NPI) application process and the competitive acquisition program
(an alternative program for physicians who are having difficulty
acquiring physician-administered medications at average sales price
plus 6 percent). PPAC members also heard about two quality programs:
the Surgical Care Improvement Project (SCIP) and the Alliance for
Cardiac Care Program (ACE).
PPAC is a mandated advisory body to the Department of Health and
Human Services that provides input on regulatory and carrier manual
issues relevant to physicians.
Information:
Mary Patton, Senior Policy Analyst
AAMC Division of Health Care Affairs
mpatton@aamc.org
(202) 862-6297
Denise Dodero, Sr. Director, Health Care Affairs
AAMC Health Care Affairs
ddodero@aamc.org
(202) 828-0493
Medicaid Commission Recommends Proposals to Reduce
Spending
The Medicaid Commission Aug. 18 completed the first requirement
of its two-part charge by recommending a series of short-term proposals
that would reduce Medicaid spending by $11 billion over the next
five years. The group officially offered these recommendations in
a Sept. 1 report
to the Secretary of Health and Human Services and Congress. These
recommendations will likely guide the Senate Finance and House Energy
and Commerce Committees in identifying the savings required under
the FY 2006 budget resolution.
Most of the commission's proposals would achieve programmatic savings
through changes to the program's prescription drug reimbursement
formula. Commission members also recommended several other revisions
to the Medicaid program, including changes aimed at reducing the
abuse of loopholes associated with the transfer of assets required
for Medicaid eligibility.
The commission is chaired by former Tennessee Governor Don Sundquist,
with former Maine Governor Angus King serving as Vice Chair. The
commission is to issue a second set of long-term recommendations
by Dec. 31, 2006.
Information:
Christiane Mitchell, Senior Legislative Analyst
AAMC Government Relations
cmitchell@aamc.org
(202) 828-0526
Lynne Davis Boyle, Assistant Vice President
AAMC Government Relations
ldavisboyle@aamc.org
(202) 828-0526
NIH Announces Final Conflict of Interest Rules
The National Institutes of Health (NIH) Aug. 25 announced
final ethics regulations for its employees, including a ban
on outside consulting with "substantially affected organizations"
such as pharmaceutical, biotechnology or medical device manufacturing
companies, health care providers and insurers, and supported research
institutions. The new standards were published in the Aug. 31 Federal
Register [70
FR 51559].
The new rules take into account staff concerns and public comments,
including those from the AAMC, about the reporting of certain financial
interests, stock divestiture, outside activities, and awards. Among
the final regulations are a requirement that senior-level NIH employees
and their spouses divest financial holdings "in a substantially
affected organization in excess of $15,000"; a limit on the
amount and type of monetary awards that employees can receive from
outside sources; and strengthened reporting requirements.
Effective immediately, the final regulations allow, subject to
prior approval, compensated outside activities with scientific organizations,
certain service on data and safety monitoring boards and scientific
or grant review committees, and some Grand Rounds lectures. The
final regulations also enable NIH staff under certain conditions
to engage in compensated outside academic activities, such as teaching
courses at universities, writing general textbooks, performing scientific
journal reviews or editing, and providing general lectures to physicians
and scientists as part of a continuing professional education program.
Information:
David Korn, M.D., Senior Vice President
AAMC Biomedical Health Sciences Research
dkorn@aamc.org
(202) 828-0509
Susan Ehringhaus, Sr. Director & Regulatory Counsel
AAMC Biomedical Health Sciences Research
sehringhaus@aamc.org
(202) 828-0543
NIH Issues New Criteria for Inclusion of Practice
Plan Effort, Compensation in Grant Calculations
The National Institutes of Health (NIH) Aug. 4 published revised
criteria related to the inclusion of practice plan compensation
in Institutional Base Salary (IBS). The NIH notice provides institutions
with additional flexibility and clarity regarding the inclusion
of practice plan effort and compensation in the calculation of IBS
related to NIH grants.
The previous criteria published in the NIH Grants Policy Statement,
provided that for investigators with university and clinical practice
plan appointments, compensation from both sources may be considered
the base salary if the following criteria are met: 1) Clinical practice
compensation must be guaranteed by the university; 2) Clinical practice
effort must be shown on the university appointment form and must
be paid through the university; and 3) Clinical practice effort
must be included and accounted for on the university's effort report.
Under the revised criteria, "For investigators receiving compensation
from the institution (grantee/contractor) and separately organized
clinical practice plans, compensation from such sources may be included
in the institutional base salary (IBS) budgeted and charged to NIH
sponsored agreements if all of the following criteria are met:
- Clinical practice compensation must be set by the institution.
- Clinical practice activity must be shown on the institution's
payroll or salary appointment forms and records approved by
the institution.
- Clinical practice compensation must be paid through or at
the direction of the institution.
- Clinical practice activity must be included and accounted
for in the institution's effort reporting and/or payroll distribution
system.
- The institution must assure that all financial reports and
supporting documents associated with the combined IBS and resulting
charges to NIH grants are retained and made available to Federal
officials or their duly authorized representatives consistent
with the requirements of 45 CFR Part 74.53 (A-110 Subpart C
53)."
The notice provides further clarity by noting, "Set by the
institution means that the grantee/contractor institution must be
in a position to document and certify that the specified amount
of clinical practice compensation is being paid in essentially the
same manner as other specified amounts of the committed IBS (compensation)
of the investigator. Further, this requires that the IBS not vary
based on the specific clinical services provided by the investigator
within the periods for which total IBS is certified by the grantee
institution."
Questions on interpreting this new NIH policy should be directed
to the NIH Office of Policy for Extramural Research Administration,
301-435-0938 (phone); 301-435-3059 (fax); grantspolicy@mail.nih.gov.
Information:
Tony Mazzaschi, Interin Chief Scientific Officer, Senior Director
AAMC Scientific Affairs
tmazzaschi@aamc.org
(202) 828-0059
Susan Ehringhaus, Sr. Director & Regulatory Counsel
AAMC Biomedical Health Sciences Research
sehringhaus@aamc.org
(202) 828-0543
Denise Dodero, Sr. Director, Health Care Affairs
AAMC Health Care Affairs
ddodero@aamc.org
(202) 828-0493
OIG Advisory Opinion on Hospital's Donation of
Building to a Medical School
On Aug. 9 the HHS Office of Inspector General (OIG) issued Advisory
Opinion No. 05-11 that discusses whether a hospital's proposed
donation to a state-affiliated medical school of a medical office
building that will be used to relocate the school's existing family
medicine clinic violates the Anti-kickback Law. Under the proposed
donation, building ownership will revert to the hospital if the
building is not used for the stipulated purpose.
While the OIG found that the arrangement has the potential to violate
the law, it concluded that it would not impose sanctions against
either the hospital or medical school. The reasons for this favorable
opinion are that the proposed donation will: (1) confer a community
benefit on the clinic's patients, most of whom are either Medicaid
beneficiaries or uninsured, and (2) continue a common mission that
the university and hospital have shared for 30 years - training
physicians for, and providing quality care to, people of the state.
Also of importance is that the university has certified that it
will take steps to insulate physician judgment and income from pressure
to refer to the parent hospital, including:
- The university will not require or encourage the physicians
to refer patients to the hospital or any other institution.
- The university will not track referrals made by the physicians.
- Compensation paid to the university physicians (including,
without limitation, salaries and bonuses) will not be related
to the volume or value of referrals by the physicians. The compensation
will be consistent with fair market value in arm's length transactions.
- On an annual basis, the university will provide written notice
of the limitations described above to all university physicians
affiliated with the medical school.
Finally, the university will own, operate, and maintain the building
and the hospital will not be involved in any decisions related to
it.
Although the decision only applies to the entities that requested
it, the OIG's opinion provides useful guidance on elements that
may pass muster if other institutions wish to engage in a similar
arrangement.
Information:
Ivy Baer, Director & Regulatory Counsel
AAMC Health Care Affairs
ibaer@aamc.org
(202) 828-0490
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