Washington Highlights: November
4 , 2005
Contents
Prior Issues
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Senate Passes Budget Reconciliation Bill
The Senate Nov. 3 passed a budget reconciliation package (S.
1932) that would produce $35 billion in savings from mandatory
spending programs over 5 years. The bill calls for $70 billion in
gross savings but also provides for an additional $35 billion in
new spending. The Senate passed the reconciliation package 52 to
47 after spending much of the day voting on amendments to add funding
to health and education programs. Most of these amendments were
rejected because they failed to receive the 60 votes needed to overcome
a budget point of order.
The Senate approved, 54-45, an amendment by Sen. Jeff Bingaman
(D-N.H.) that would decrease scheduled FY 2006 reductions in the
Federal Medical Assistance Percentage (FMAP) for 30 states. According
to Sen. Bingaman's office, the amendment would restore approximately
$613 million in federal payments to the following states: Alabama,
Arizona, Arkansas, Delaware, Florida, Georgia, Idaho, Kansas, Kentucky,
Louisiana, Maine, Michigan, Mississippi, Montana, Nevada, New Mexico,
North Carolina, North Dakota, Oklahoma, Oregon, Rhode Island, South
Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, West Virginia,
Wisconsin, and Wyoming. Ten Republicans voted in favor of the amendment:
Lincoln Chafee (R.I.), Tom Coburn (Okla.), Susan Collins (Maine),
John Cornyn (Texas), Pete Domenici (N.M.), Kay Bailey Hutchison
(Texas), James Inhof (Okla.), Lisa Murkowski (Alaska), Olympia Snowe
(Maine), and Arlen Specter (Pa.).
The Senate also adopted an amendment by Sen. Michael Enzi (R-Wyo.)
to add $2.6 billion in new education spending, including $900 million
to reduce loan origination fees for college students from the current
3 percent to 2 percent and a measure by Sen. Gordon Smith (R-Ore.)
to allocate $450 million to states for a demonstration project providing
Medicaid coverage for HIV.
While Sen. Snowe had filed an amendment (S.A. 2402) regarding residency
training in non-hospital settings, she was unable to offer the amendment
before final passage. The amendment, supported by the AAMC and 14
other organizations, was co-sponsored by Senators Collins, Rockefeller
(D-W.Va.), and Durbin (D-Ill.). S.A. 2402 would have ensured that
CMS regulations and guidance no longer impede the ability of teaching
programs to train resident physicians in ambulatory and rural settings.
Specifically, the amendment clarified that supervising physicians
in non-hospital settings would be allowed to volunteer their teaching
time. The amendment also would have ensured that any teaching costs
associated with supervising physicians who are not volunteers would
be based on negotiations between the hospital and the nonhospital
setting, rather than a complicated formula requiring unreasonable
administrative burdens on both the teaching programs and nonhospital
training settings.
The Senate bill must now be reconciled with the House version,
which was approved by the House Budget Committee Nov. 3 and will
be considered by the full House the week of Nov. 7
Information:
Dave Moore, Senior Director
AAMC Government Relations
dbmoore@aamc.org
(202) 828-0525
White House Issues Veto Threat over Medicare
Provision in Senate Budget Reconciliation Bill
The White House Nov. 1 threatened to veto the Senate budget reconciliation
package (S.
1932) unless a provision repealing the Medicare Advantage "stabilization
fund" is stripped from the bill. The Senate passed its budget
reconciliation bill on Nov. 3. The veto threat was included in its
"Statement of Administration Policy" (SAP)
for S. 1932.
Overall, the SAP supports the passage of the Senate bill, but expresses
"significant concerns" with several Medicare provisions,
including the elimination of the Medicare Advantage Regional Plan
Stabilization Fund. The communication states, "If the final
bill is presented to the President that limits the choices of seniors,
takes away their prescription drug coverage, or cuts the Stabilization
Fund to increase Medicare spending, the President's senior advisors
will recommend that he veto the bill."
The SAP also calls attention to the "significant number and
cost of provisions that would increase Medicare spending,"
including the extension of the current Medicare Dependent Hospital
Program payment methodology; the extension of hold-harmless payments
for certain facilities under the outpatient prospective payment
system; and the freeze on the implementation of the rule used to
determine whether a hospital or unit qualifies as an inpatient rehabilitation
facility.
With regard to the Senate Medicaid provisions, the SAP "supports
the goals" of many provisions but prefers approaches that are
less burdensome to implement or are more consistent with the President's
budget. For example, the SAP expresses disappointment that the bill
does not include the President's FY 2006 budget proposals related
to the integrity of the Medicaid program, including phase-down of
the broad-based health care-related tax from 6 percent to 3 percent;
disallowance of State Medicaid payments not retained by governmental
entities; and cost-limited reimbursement of governmental providers.
In reference to the Senate's Katrina relief provision, the Administration
prefers its Section 1115 Demonstration Project that many states
are already using to provide health care to displaced individuals,
stating, "the Administration believes that we can meet the
needs of States without setting the precedent of guaranteeing 100
percent Federal medical assistance percentage (FMAP)."
Information:
Lynne Davis Boyle, Assistant Vice President
AAMC Government Relations
ldavisboyle@aamc.org
(202) 828-0526
House Budget Committee Approves Reconciliation
Package
The House Budget Committee Nov. 3 reported out its budget
reconciliation package, following the mark-up of the bill by
the House Committees on Ways and Means and Energy and Commerce last
week [see Washington Highlights,
Oct. 28]. The House is expected to take up the bill the week
of Nov. 7.
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
Administration Plan for Hurricane Offsets Targets
HHS Loan, Construction Programs
An Administration plan to offset a portion of the costs of hurricane
relief would affect Department of Health and Human Services (HHS)
funding for student loans and construction. President Bush Oct.
28 sent to Congress a proposal
to rescind $2.3 billion "from lower-priority programs and excess
funds."
The proposal would rescind $130 million from various HHS programs,
including an estimated $100 million from the federal portion of
the liquid assets of student loan revolving funds at institutions
participating in the Health Professions Student Loan (HPSL), Primary
Care Loan (PCL), Loans for Disadvantaged Students (LDS), and Nursing
Student Loan programs. The proposal would recall only the federal
capital contribution of the liquid assets of the fund. Participating
schools would retain any institutional contributions to the revolving
fund. Amounts collected would be canceled and are estimated at $100
million. By Sept. 30, 2006, schools would be required to return
the federal portion of the liquid assets of the student loan revolving
funds to the Secretary of HHS. The Secretary will determine the
relative federal and institutional shares of the fund on June 30,
2006. Participating schools would be prohibited from making new
loans until they had repaid the federal portion of the liquid assets
of their revolving fund.
The Administration also proposes to rescind $15 million from the
unobligated balances in the National Institutes of Health's Buildings
and Facilities account, which funds construction and renovation
on the NIH's Bethesda campus and other intramural research sites,
and $7 million from the Centers for Disease Control and Prevention's
Individual Learning Accounts. The rescission package also includes
$7.6 million in unobligated balances in the Health Resources and
Services Administration, from the Health Centers Loan Guarantee
Program ($6.9 million), Construction Facilities Improvement Program
($281,000), and the Nursing Education Loan Repayment Program ($430,000).
In issuing the rescission package, the President reiterated his
call for Congress to reduce both "non-security" discretionary
spending below last year's levels and to "achieve the maximum
amount of mandatory savings through reconciliation legislation."
Information:
Dave Moore, Senior Director
AAMC Government Relations
dbmoore@aamc.org
(202) 828-0525
AAMC Comments on Biomedical Research Regulatory
Burdens
The AAMC Nov. 3 sent a comment letter
to the Department of Health and Human Services (HHS) in response
to its request for comments on federal health care regulations that
could be coordinated and simplified to reduce costs and burdens
and improve the translation of biomedical research into medical
practice. The AAMC's comments included references to problems with
administrative simplification provisions of the Health Insurance
Portability and Accountability Act (HIPAA) and the National Provider
Identification (NPI) implementation, the failure of HHS to act on
recommendations for reform of several of the HIPAA Privacy Rule's
provisions that most negatively affect research, and the need for
harmonization of the discrete regulations governing protection of
human research subjects as administered, respectively, by the HHS
Office for Human Research Protections and the Food and Drug Administration.
Information:
Susan Ehringhaus, Sr. Director & Regulatory Counsel
AAMC Biomedical Health Sciences Research
sehringhaus@aamc.org
(202) 828-0543
President Introduces Pandemic Flu Strategy; Senators
Propose Spending Plans
The President Nov. 1 unveiled a $7.1 billion strategy to prepare
for a possible avian flu pandemic
and called upon Congress to provide emergency funding. The administration's
proposed strategy includes $2.8 billion to accelerate the development
of cell-based technology used to make influence vaccine; $1.5 billion
to purchase 20 million doses of the existing flu vaccine; $1 billion
to stockpile antivirals; $800 million to develop new vaccines; and
$644 million to promote local, state and federal preparedness.
The Senate already has approved $8 billion in pandemic flu funding
as an amendment to the FY 2006 Labor, Health and Human Services,
and Education Appropriations bill (H.R.
3010). The amendment, sponsored by Sen. Tom Harkin (D-Iowa),
would provide $3.3 billion for vaccine development; $3.1 billion
to stockpile antivirals; $750 million to boost hospital surge capacity;
and $185 million for the Centers for Disease Control and Prevention
to manage an outbreak. A similar amendment was not attached to the
House-passed version of the Labor, Health and Human Services spending
bill.
Senate Majority Leader Bill Frist (R-Tenn.) and Senate Budget Chair
Judd Gregg (R-N.H.) announced Nov. 1 plans to offer an amendment
to the budget reconciliation bill (S. 1932) to provide $3.9 billion
to combat avian flu and other pandemics, but the amendment was dropped
from consideration to avoid a bidding war with the much larger Harkin
amendment. The Frist-Gregg amendment would have directed $2.8 billion
to development for development and stockpiling of antivirals and
vaccines; $577 million to enhance surveillance; and $577 million
to improve local, state and federal preparedness. The amendment
also would have provided additional liability protections to companies
who manufacture avian flu countermeasures, as proposed in the president's
plan.
Information:
Erica Froyd, Director, Public Health and Research Legislative Affairs
AAMC Government Relations
efroyd@aamc.org
(202) 828-0525
House Health Subcommittee Chairs Introduce Health
IT Legislation
Chair Nancy Johnson (R-Calif.) and House Energy and Commerce Subcommittee
on Health Chair Nathan Deal (R-Ga.) Oct. 27 introduced legislation
that includes an AAMC-supported strategy to expedite provider adoption
of health information technology. Specifically, the "Health
Information Technology Promotion Act of 2005" (H.R.
4157) includes Stark/Anti-Kickback exceptions for hospitals
and other entities that provide physicians with "hardware,
software, license, right, intellectual property, equipment, or other
information technology used primarily for the electronic creation,
maintenance, and exchange of clinical health information to improve
health care quality or efficiency."
The legislation also codifies the Office of the National Coordinator
for Health Information Technology (ONCHIT), requires the ONCHIT
certification of health information technology products, and directs
the Secretary of Health and Human Services (HHS) to make recommendations
to Congress regarding how variations in state privacy laws might
interfere with the electronic exchange of clinical health information.
If Congress fails to act on such recommendations, the Secretary
may establish a uniform federal standard that would preempt state
privacy laws regarding the transmission of electronic health information.
Also under H.R. 4157, HHS must adopt the ICD-10 code set for transactions
occurring after Oct. 1, 2009.
Information:
Christiane Mitchell, Senior Legislative Analyst
AAMC Government Relations
cmitchell@aamc.org
(202) 828-0526
Medicaid Commission Discusses Long-Term Reforms
The Medicaid Commission met Oct.
26-27 to continue its discussions surrounding Medicaid program
reforms. At the meeting, Governors Jeb Bush (R-Fla.) and Joe Manchin,
III (D-W.Va.) were sworn in as voting members.
The meeting included presentations by Charles J. Milligan, Jr.,
Executive Director, Center for Health Program Development and Management,
University of Maryland, who offered an in-depth look at the potential
for program savings and quality improvement. Mr. Milligan highlighted
the complexity of the task, particularly in light of Medicaid's
interaction with the Medicare program. He also addressed the difficulty
of cost-containment, given the program's expanding scope and mission.
The commissioners also heard from various state Medicaid program
directors, who suggested a variety of program improvements. Gayle
Sandlin, Director of the State Children's Health Insurance Program
(SCHIP) at the Alabama Department of Public Health and Roy Jeffus,
Director of the Division of Medical Services from the Arkansas Department
of Human Services, offered their SCHIPs as potential models for
Medicaid reform, while Anthony Rodgers, the Director of Arizona
Health Care Cost Containment System offered Arizona's managed care
program as another potential model. Medicaid Commissioner Melanie
Bella, Vice President for Policy, Center for Health Care Strategies,
Inc., stressed the importance of disease management during her presentation,
and suggested it as a vehicle for improving program efficiencies.
She also urged better coordination with the Medicare program.
Public comments focused on the need to maintain current benefit
levels and promote home and community-based long term care services.
Other comments emphasized the need for consumer protections related
to the purchase of long-term care insurance in the private market.
The meeting concluded with several commissioners suggesting that
Medicaid should develop national standards for outcomes, as well
as avoid block grant models. At the next meeting (not yet scheduled),
they will continue to review reform proposals and seek input from
beneficiary advocacy groups.
Information:
Christiane Mitchell, Senior Legislative Analyst
AAMC Government Relations
cmitchell@aamc.org
(202) 828-0526
Diana Mayes, Specialist
AAMC Health Care Affairs
dmayes@aamc.org
(202) 828-0498
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