Washington Highlights: October 21,
2005
Contents
Prior Issues
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Senator Grassley Releases Budget Reconciliation
Proposal
Senate Finance Committee Chair Charles Grassley (R-Iowa) Oct. 20
released his reconciliation proposal that nets $10 billion in savings
over 5 years from the Medicare and Medicaid programs. The mark includes
a number of Medicare spending proposals that would benefit hospitals
and physicians, such as a 1 percent update to Medicare physician
payments in 2006, a permanent moratorium on limited service hospitals,
and a delay on the "75 percent rehab" rule. While the majority
of the Medicaid savings proposals do not directly impact hospitals
and physicians, half of the Medicare savings are attributed to the
implementation of a Medicare value-based purchasing program for
providers. The Senate Finance Committee is expected to mark up the
proposal Oct. 24.
Medicaid - The Grassley proposal would net a $4.3 billion
reduction over 5 years to the Medicaid program through $7.5 billion
in cuts and $3.3 billion in spending. Included in the proposed program
cuts are:
- prescription drug reimbursement reforms (minus $4.5 billion
over 5 years);
- restrictions on asset transfers related to long-term care benefits
(minus $305 million over 5 years); and
- additional fraud and abuse efforts, including the development
of state False Claims Acts and the establishment of a Medicaid
Integrity Program within HHS (minus $512 million over 5 years).
Proposals that would increase Medicaid and State Children's Health
Insurance Program (SCHIP) spending include, but are not limited
to:
- providing 100 percent federal matching assistance for patient
care provided to Katrina victims that are Medicaid beneficiaries
($1.9 billion over 5 years);
- allowing states the option to extend Medicaid to disabled children
of families whose income is at or below 300 percent of the poverty
level ($834 million over 5 years);
- "program improvements" to address SCHIP program shortfalls
such as redistributing unspent SCHIP allotments;
- prohibiting HHS approval of Section 1115 waivers that use SCHIP
funding to cover non-pregnant childless adults; and
- allowing states a portion of their SCHIP allotments for outreach
activities to increase enrollment and coordinate with other public
and private health insurance programs.
Medicare - The Grassley mark would net $5.8 billion in spending
cuts over 5 years to the Medicare program through reductions of
$18.6 billion and $12.8 billion in Medicare spending. The two major
areas of spending cuts are $11.4 billion in reductions over 5 years
to the Medicare Advantage program and $4.5 billion in savings over
5 years associated with reducing Medicare provider payments to create
a quality pool to reward providers who meet quality thresholds and
attainment as determined by the Secretary.
Key Medicare spending proposals that would affect providers include:
- a one-year Medicare physician payment update of 1 percent, which
averts the projected negative 4.4 percent physician update in
Calendar Year (CY) 2006 ($10.8 billion over 5 years);
- a two-year freeze of the implementation of the "75% Rehabilitation
Rule" ($105 million over 5 years); and
- a one-year extension of the outpatient therapy caps ($710 million
over 5 years).
The mark also includes two proposals that would provide additional
funding to rural hospitals ($184 million over 5 years).
Pay for Performance, Limited Service Hospitals - Beginning
in FY 2007, for hospitals not reporting quality data, their Medicare
market basket would be reduced by 2 percent. Hospitals would be
eligible for quality payments based on certain thresholds of quality
performance or quality improvement, as determined by the Secretary.
The quality payment pool would be funded through a reduction in
the amount of money dedicated to outlier payments. From FY 2007
to FY 2011, the amount of money dedicated to the outlier pool would
decrease as the quality payment pool would increases. The money
would be taken out of the outlier pool beginning in FY 2007 and
paid to hospitals in beginning 2008, resulting in a continuous one-year
lag in quality payments.
Physicians would see a two-phase system. Beginning in 2007 and
thereafter, physicians would be required to report quality data.
Those physicians who do not submit required data would receive an
update to the conversion factor minus two percentage points. Beginning
in 2009, a quality payment pool for physicians would be created
by a phased-in reduction to the conversion factor from 1 percent
in 2009 to 2 percent in 2013. Like hospitals, physicians would also
likely see a one-year lag in receiving the previous year's quality
payments.
The proposal also permanently extends the moratorium on new physician-owned
limited service hospitals.
Information:
Lynne Davis Boyle, Assistant Vice President
AAMC Government Relations
ldavisboyle@aamc.org
(202) 828-0526
Christiane Mitchell, Senior Legislative Analyst
AAMC Government Relations
cmitchell@aamc.org
(202) 828-0526
Republican Leaders Postpone House Vote on Budget
Cuts
Uncertain they had sufficient votes to pass the proposal, House
GOP leaders have delayed a floor vote scheduled for Oct. 20 on an
amendment to the FY 2006 budget resolution (H.Con.Res.
95) to require an additional $15 billion in mandatory spending
cuts to offset partially the costs of hurricane relief efforts.
In the face of disagreements over whether to include defense spending
and growing opposition from appropriations committee members, the
leadership Oct. 18 backed away from including in the amendment a
vote on an across-the-board reduction of discretionary spending,
first proposed by House Budget Committee Chair Jim Nussle (R-Iowa).
Republican leaders now intend to bring a non-binding proposal to
the House floor the week of Oct. 24 that would include all four
elements of the budget-cutting plan endorsed Oct. 6 by House Speaker
Dennis Hastert (R-Ill.). Hastert called for an increase in mandatory
spending cuts from $34.7 billion to $50 billion, an across-the-board
cut in discretionary spending, additional rescissions of unspent
appropriations, and deauthorizing 98 programs that the House has
not funded. Although the language for the new budget amendment has
not been finalized, it reportedly will include a commitment to implement
across-the-board cuts later in the negotiations on spending bills
rather than identifying a specific percentage now.
Information:
Dave Moore, Senior Director
AAMC Government Relations
dbmoore@aamc.org
(202) 828-0525
AAMC Urges Increase in NIH Funding
Stating, "Now is not the time to weaken this nation's commitment
to the medical research that provides hope for the improved health
and well-being of all Americans," the AAMC joined more than
270 other scientific and professional societies, patient groups
and other health organizations in an Oct.
18 letter urging the Senate to pass an FY 2006 appropriation
of $29.4 billion for the National Institutes of Health (NIH).
The letter states, "Continued medical progress will be jeopardized
unless the Congress passes the FY 2006 Labor-HHS-Education appropriations
bill (H.R.
3010)…Failure to pass the bill in a timely fashion places
at risk $900 million in new research funds to continue the quest
for more effective treatments, diagnostics and preventive measures
for diseases that collectively affect millions of Americans."
The Senate Appropriations Committee July 14 approved its version
of H.R. 3010, providing $29.4 billion for NIH in FY 2006, an increase
of $1.05 billion (3.7 percent). The House version of H.R. 3010,
passed June 24, includes $28.5 billion, a $142 million (0.5 percent)
increase.
Information:
Dave Moore, Senior Director
AAMC Government Relations
dbmoore@aamc.org
(202) 828-0525
NIH Launches Major Initiative To Transform Clinical
And Translational Research
The National Institutes of Health (NIH) released Oct. 12 a Request
for Applications (RFA) for "Institutional
Clinical and Translational Science Awards" (CTSAs), which
would create major, innovative "homes" for integrating
and supporting clinical and translational science programs. The
new program, to be administered by the National Center for Research
Resources (NCRR), is an NIH Roadmap Initiative and is designed to
spur the transformation of clinical and translational research to
speed up the deliver of new treatments to patients. NIH plans to
provide approximately $30 million in FY 2006 for four to seven CTSAs.
CTSAs will replace current NIH funding for existing university-based
clinical research programs, including general clinical research
centers (M01s), K30 and K12 grants under NCRR, and K12s and T32s
under the Roadmap. Letters of intent are due Feb. 27, 2006, and
applications are due Mar. 27. NIH also released an RFA for planning
grants for CTSAs and will provide $11.5 million for this purpose.
At the Oct. 17 pre-submission meeting, Barbara Alving, M.D., interim
director of NCRR, and other members of the CTSA Project Team answered
questions on the new initiative. They indicated that NIH plans to
fund approximately 60 CTSAs over the next several years plus incremental
funding of $120 million is anticipated. It was emphasized that institutions
should definitely not "cut and paste" together their existing
MO1, K30, K12, and T32 grants, but rather should create an innovative
and transformative plan to support all aspects of clinical and translational
science.
Information:
Howard B. Dickler, M.D., Director
AAMC Division of Biomedical and Health Sciences Research
hdickler@aamc.org
(202) 828-0567
Senate Committee Reports Reconciliation Bill,
Attaches Higher Ed Reauthorization
The Senate Committee on Health Education, Labor, and Pensions Oct.
18 approved by a vote of 15 to 5 a budget reconciliation bill that
identifies $15 billion in savings. The committee also attached its
version of the Higher Education Act reauthorization bill (S.
1614) to the reconciliation bill. The bill redirects $8 billion
to new student grant programs created under S. 1614, which was approved
by the committee Sept. 8 [see Washington
Highlights, Sept. 9]. The remaining $7 billion in savings
is dedicated to federal deficit reduction.
Attaching the reauthorization bill to reconciliation increases
the chances of Senate passage of reauthorization since reducing
the federal deficit is a priority of GOP leadership. However, passage
of the higher ed reauthorization legislation by the full Congress
depends on the decision of Rep. John A. Boehner (R-Ohio), Committee
on Education and the Workforce Chair, to attach the House's reauthorization
bill (H.R.
609) to reconciliation.
Information:
Matthew Shick, Senior Legislative Analyst
AAMC Government Relations
mshick@aamc.org
(202) 862-6116
Senate Committee Approves Biodefense Measure
The Senate Health, Education, Labor and Pension (HELP) Committee
Oct. 18 approved the Biodefense and Pandemic Vaccine and Drug Development
Act (S.
1873) by voice vote. Sponsored by Bioterrorism and Public Health
Preparedness Subcommittee Chair Richard Burr (R-N.C.), the measure
seeks to build upon the Project Bioshield program, which was created
to encourage biotech companies to develop bioterrorism countermeasures.
The bill would create the Biomedical Advanced Research and Development
Agency (BARDA) within the Department of Health and Human Services
to coordinate bioterrorism countermeasure development.
An amendment to the bill would transfer the U.S. Army's National
Pathology Center to the National Institutes of Health (NIH), following
an assessment by the Secretary of Health and Human Services of which
functions performed at the center overlap with NIH. The center is
slated to be closed by the Department of Defense Base Realignment
and Closure Commission.
Although the committee approved the bill, there remain outstanding
issues to be resolved, including liability protections for manufacturers
and first responders and compensation for people injured by vaccines
and other drugs. HELP Committee Chairman Michael Enzi (R-Wyo.) vowed
to address these differences and finalize the bill by Oct. 20, with
the intent of bringing the bill to the Senate floor as early as
the week of Oct. 24.
Information:
Erica Froyd, Director, Public Health and Research Legislative Affairs
AAMC Government Relations
efroyd@aamc.org
(202) 828-0525
OHRP Seeking Comments on Adverse Event Reporting
Draft Guidance
The Department of Health and Human Services Office for Human Research
Protections (OHRP) requested Oct.
14 on its Web site public comment on its Oct. 11 draft guidance
document for institutional review boards (IRBs), investigators,
research institutions, and others entitled "Guidance on Reporting
and Reviewing Adverse Events and Unanticipated Problems Involving
Risks to Subjects or Others." The draft guidance seeks to clarify
when to report adverse events and unanticipated problems to appropriate
institutional and federal officials, an area of uncertainty and
frustration for IRBs and institutions.
The draft guidance claims to be the first among several promised
initiatives intended to develop a comprehensive and harmonized approach
to the reporting of adverse events and unanticipated problems to
the relevant federal agencies. Nonetheless, the draft points out
areas where compliance with more than one approach will still be
necessary. Comments must be submitted by Jan. 13, 2006.
Information:
Susan Ehringhaus, Sr. Director & Regulatory Counsel
AAMC Biomedical Health Sciences Research
sehringhaus@aamc.org
(202) 828-0543
Howard B. Dickler, M.D., Director
AAMC Division of Biomedical and Health Sciences Research
hdickler@aamc.org
(202) 828-0567
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