Washington Highlights: December
16, 2005
Contents
Prior Issues
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House Approves HHS Spending Bill
The House of Representatives Dec. 14 narrowly approved a revised
conference agreement on the FY 2006 Labor-HHS-Education appropriations
bill (H.R.
3010 - H.
Rept. 109-337). The final vote on passage was 215-213, with
12 Republicans voting against the bill. No Democrats voted in favor
of the conference report, which provides $142.5 billion in discretionary
funds, about 0.1 percent less than last year's bill.
The Senate is expected to attach the conference report to the Defense
appropriations bill, the last FY 2006 spending bill to be approved.
Senate Labor-HHS-Education Subcommittee Appropriations Chair Arlen
Specter (R-Pa.) had indicated he would have voted against a stand
alone Labor-HHS-Education appropriations bill as a protest to its
inadequate funding level if his vote was not needed for passage.
Specter tried to get additional funds into the bill by having $2.2
billion in home heating subsidies classified as emergency funding,
but the House refused to go along with his proposal.
The House rejected an earlier version of the bill last month when
22 Republicans joined all House Democrats to defeat the conference
agreement [see Washington Highlights, Nov.
18]. The revised conference agreement shifts $180 million in
funds, including $90 million more for rural health initiatives.
Several Republicans who opposed the earlier conference report because
of its lack of funding for rural health programs voted for the revised
agreement. The revised conference agreement adds $28.5 million for
rural health outreach grants, bringing that total to $39.3 million;
and restores $8.8 million for rural health research.
No additional money was added to the NIH, which remains at $28.617
billion, a 0.9 percent increase.
The revised conference agreement adds $52.7 million to the Title
VII health professions programs, bringing the total to $146.7 million,
which is a $153 million (51 percent) cut below last year. The revised
conference agreement still eliminates funding for Health Education
Training Centers (HETCs), geriatric and rural training, workforce
information and analysis, and health administration programs. Money
was restored to the following programs:
- $12 million added to Scholarships for Disadvantaged Students, returning
it to the FY 2005 level;
- $602,000 added to Faculty Loan Repayment, returning it to the FY 2005
level;
- $13 million added to primary care medicine and dentistry for
a 53 percent cut below last year; and
- $27 million more for Area Health Education Centers (AHECs), returning
it to last year's level.
The increases were offset by reductions to the CDC's vaccine fund,
which will be funded in a separate bill, and cuts in administrative
costs associated with the new Medicare prescription drug program.
The funding levels in the revised conference agreement will still
be subject to a government-wide across-the-board cut that is expected
to be about 1 percent.
The bill is notable in that for the first time in recent memory
lawmakers agreed to forgo congressional earmarks to sustain ongoing
programs.
Information:
Dave Moore, Senior Director
AAMC Government Relations
dbmoore@aamc.org
(202) 828-0525
Erica Froyd, Director, Public Health and Research Legislative Affairs
AAMC Government Relations
efroyd@aamc.org
(202) 828-0525
House and Senate Resume Budget Reconciliation Talks
With the Senate's return to session Dec. 12, Congress began "pre-conference"
discussions on FY 2006 budget reconciliation legislation, including
the Medicare and Medicaid provisions. While negotiators were hopeful
that they could wrap up discussions for a weekend vote, House and
Senate differences over Medicaid, Medicare physician payment, and
other non-health care items, such as opening up Alaska's Arctic
National Wildlife Refuge to drilling lease sales, might make it
difficult for Congress to pass budget reconciliation legislation
by year's end.
Referring to the prospects for a conferenced budget bill, House
Majority Leader Roy Blunt (R-Mo.) Dec. 13 stated, "I don't
think it has to happen and I'd hate for our friends on the Senate
side to believe we thought it had to happen."
Meanwhile, Senate Finance Committee Chair Charles Grassley (R-Iowa),
House Ways and Means Committee Chair Bill Thomas (R-Calif.), and
House Energy and Commerce Committee Chair Joe Barton (R-Texas) reportedly
met throughout the week to hammer out differences between the Medicare
and Medicaid provisions of the House and Senate passed budget reconciliation
bills.
In conjunction with the Chairs' pre-conference negotiations, seven
Senators wrote a Dec. 13 letter to Senate Majority and Minority
Leaders Bill Frist (R-Tenn.) and Harry Reid (D-Nev.) urging them
to "hold firm in defending the Senate's policies regarding
Medicaid." The letter was signed by Republican Senators Gordon
Smith (Ore.), Olympia Snowe (Maine), Susan Collins (Maine), Arlen
Specter (Pa.), Norm Coleman (Minn.), Lincoln Chafee (R.I.), and
Mike DeWine (Ohio). The Senate Dec. 14 agreed (75-16) to a "motion
to instruct" the yet-to-be named conferees regarding Medicaid.
Offered by Finance Committee Ranking Member Max Baucus (D-Mont.),
the non-binding motion instructs the conferees "not to report
a conference report that would … in any way undermine Medicaid's
Federal guarantee of health insurance coverage" to children,
pregnant women, disabled and elderly individuals, the mentally and
chronically ill, and other Medicaid beneficiaries.
AAMC President Jordan Cohen, M.D., sent a letter
Dec. 13 to the House and Senate leadership and the health care committee
chairs and ranking members urging that House Medicaid provisions
on cost-sharing, benefit flexibility and rate setting for out of
network care provided to Medicaid managed care beneficiaries be
rejected in conference. Additionally, the letter urges two years
of positive physician payment updates and a commitment to develop
a permanent solution to the problematic sustainable growth rate
(SGR) methodology that determine payment updates. The letter also
addresses the financing of quality-based payments to hospitals and
physicians, limited service hospitals, and Medicare rehabilitative
services.
The AAMC joined the American Medical Association, American College
of Physicians, American College of Surgeons, and 125 other physician
specialty organizations and state medical societies in signing a
Dec. 14 letter
to Congress, strongly urging them to "ensure that any final
budget reconciliation bill includes provisions that avert pending
Medicare payment cuts for physicians." The letter calls for
two years of positive updates starting in Calendar Year (CY) 2006
and states that methodology must be "replaced with a more equitable
system for physician payments" before implementation of any
performance-based payment system. Specifically, the letter suggests
that Congress provide additional payments in CY 2007 to physicians
who voluntarily report quality measures to CMS and opposes any punitive
payment system "that would result in negative updates for those
who are unable to participate in the voluntary pay-for-reporting
program."
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
AAMC Comments on Occupational Mix Survey Instrument
The AAMC Dec. 12 submitted to the Centers for Medicare & Medicaid
Services (CMS) a comment
letter on the occupational mix survey instrument that hospitals
are required to complete in 2006. The Association recommended a
later deadline for submission of the survey.
The survey
collects hospitals' occupational wage data to calculate an "occupational
mix adjustment" that is applied to the inpatient hospital wage
index. The purpose is to ensure that the wage index reflects only
geographic variations in labor prices, rather than also reflecting
the "mix" of occupations employed by the hospital. Pursuant
to statute, the occupational mix data are collected every three
years. The last survey was conducted in 2003. The data collected
in the 2006 survey are currently scheduled to be incorporated into
the federal fiscal year 2008 hospital wage index.
The survey asks hospitals to report wage and hours data on a number
of occupational wage categories for a six-month period, from Jan.
1-June 30, 2006. The AAMC supported CMS' decision to reduce the
number of occupational categories in the 2006 survey instrument,
as well as the agency's decision to begin collecting wage data from
hospitals, rather than relying on external data sources. However,
the Association strongly urged that hospitals be given 90 days to
submit the surveys, rather than the current deadline of July 31,
arguing that a 30-day time frame was too administratively burdensome
and could result in inaccurate survey submissions.
Information:
Karen Fisher, Sr. Director, Health Care Affairs
AAMC Health Care Affairs
kfisher@aamc.org
(202) 862-6140
MedPAC Discusses Hospital, Physician Payment
Recommendations
At its Dec. 8-9 meeting, the Medicare Payment Advisory Commission
(MedPAC) discussed draft
recommendations regarding Medicare hospital and physician payment
policy. These recommendations are based in a large part on discussions
that the Commission had throughout the fall. Final votes on the
recommendations will occur at the Commission's Jan. 10-11 meeting
and will be published in MedPAC's March 2006 Report to Congress.
In preparation for discussing the draft recommendations for hospital
inpatient and outpatient payment updates, MedPAC staff presented
data on Medicare margins. Hospital aggregate overall Medicare margins,
which include payments and costs for hospital inpatient and outpatient
services as well as other services, have decreased over the years
from 2.2 percent in 2002 to -3.0 percent in 2004. For 2006, MedPAC
staff has projected an overall margin of -2.0 percent. Additionally,
while both inpatient and outpatient margins have been decreasing,
inpatient margins have decreased more dramatically, from 6.1 percent
in 2002 to -0.3 percent in 2004; outpatient margins have remained
consistently - and significantly - negative (-8.6 percent in 2002
and -10.9 percent in 2004). Margins by teaching hospital categories
were not presented.
In accordance with its statutory mandate, which requires that MedPAC
review payment policies affecting "efficient" hospitals,
the Commission has been trying to find a balance between looking
at the average hospital versus the efficient hospital. As a first
try at examining this issue, MedPAC staff presented information
showing that hospitals with positive Medicare margins tend to have
higher patient volume than hospitals with negative Medicare margins.
Staff also noted that hospitals with negative Medicare margins have
had higher Medicare costs per discharge than hospitals with positive
Medicare margins and that this trend has persisted over recent years.
While overall Medicare margins are negative, MedPAC staff reminded
the Commission that other indicators of payment adequacy are positive.
They noted that access to care remains strong, volume of services
is increasing, quality of care is generally improving, and access
to capital is good. Based on all of the information presented, the
draft recommendations for payment updates for both the inpatient
and outpatient prospective payment system for fiscal year 2007 would
be the projected rate of increase in the hospital market basket
less one half of expected productivity growth. The level of the
productivity growth was not discussed at the meeting. Commission
Chair Glenn Hackbarth also noted that the recommendations were only
a "starting point" based on the recommendations that were
approved last year.
MedPAC did not discuss a draft recommendation for the physician
payment update for 2007. Chairman Hackbarth stated that determining
a recommendation is complicated because it is unclear whether Congress
will act to change the 4.4 percent decrease scheduled to go into
effect Jan. 1 and, if so, by how much. Chairman Hackbarth also noted
that he has received inquiries from Congress that question MedPAC's
past physician update recommendations, given that the updates Congress
has authorized have been lower than the Commission's recommendations
and yet MedPAC data have not demonstrated any "discernable
broad negative effect on access [to physicians]." In both 2004
and 2005, Congress implemented a 1.5 percent payment increase, while
MedPAC had recommended 2.5 percent and 2.6 percent, respectively.
Continuing their work on physician payment policy, MedPAC considered
several draft recommendations to revalue physician work, as captured
through the work relative value unit (WRVU), one component of the
physician fee schedule. One recommendation suggested that the Secretary,
"in establishing and reviewing relative value units …
should receive advice from physicians who are representative of
the specialties that most often produce services to Medicare beneficiaries."
Another recommendation suggested creating a panel of experts "to
advise CMS throughout its process of reviewing work relative value
units." The remaining recommendations suggested methodologies
to help CMS identify services to review, including:
- identifying services with markers, such as substantial changes in
length of stay, site of service, volume or practice expense, that
might indicate a change in work effort;
- automatically reducing WRVUs for recently introduced services; and
- ensuring that all services are reviewed periodically
In other areas, the Commission approved final recommendations that
would be part of a mandated report regarding the effects of Medicare
payment changes on access and quality of oncology services that
is due Jan. 1. MedPAC's next public meeting is Jan. 10-11.
Information:
Diana Mayes, Specialist
AAMC Health Care Affairs
dmayes@aamc.org
(202) 828-0498
Mary Patton, Senior Specialist
AAMC Health Care Affairs
mpatton@aamc.org
(202) 862-6297
AHRQ Releases Comparative Effectiveness Review
The Agency for Healthcare Research and Quality (AHRQ) Dec. 14 issued
a review of treatment for gastroesophageal reflux disease, finding
that drugs are as effective as surgery. The report is the first
released under AHRQ's new Effective Health Care Program.
The program, authorized by language in the Medicare Modernization
Act (P.L.
108-173), was created to help patients and health care providers
in selecting among treatments by reviewing existing studies and
comparing the outcomes of different treatments. Nine more comparative
effectiveness reviews examining alternative treatments for significant
health conditions are expected to be released.
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