Washington Highlights: January 13,
2006
Contents
Prior Issues
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NIH Revises FY 2006 Grant Funding Policy
The National Institutes of Health (NIH) Jan. 9 issued a notice
detailing its revised grant funding policy to reflect the recently
enacted appropriations for the agency. Following passage of the
FY 2006 Labor, Health and Human Services, and Education appropriations
bill, NIH, like most other domestic discretionary accounts, was
subject to a 1 percent across-the-board cut. NIH's share of this
cut is approximately $286 million and has established the following
financial policies:
- Non-competing awards for every research project grant (RPG)
will be awarded at a level of 97.65 percent of the amount indicated
for the FY 2006 budget period in the Notice of Grant Award for
the previous budget year. The amounts indicated for future budget
periods will also be adjusted by the same factor.
- Non-competing awards previously issued in FY 2006 at reduced
levels up to 80 percent of the amount previously indicated (when
NIH was operating under a continuing resolution) will be revised
to provide a restoration of funds to the 97.65 percent level.
Amounts indicated for future budget periods will be adjusted as
well.
- The amounts provided for competing RPGs will be managed to
an average award amount equal to FY 2005 levels. FY 2006 policy
includes the provision of a 3 percent escalation factor in the
amounts indicated for future years on competing RPG awards, which
are not based on modular applications.
Questions regarding adjustments applied on individual grant awards
should be directed to the NIH institute or center grants management
specialist identified on the Notice of Award.
Information:
Tony Mazzaschi, Interin Chief Scientific Officer, Senior Director
AAMC Scientific Affairs
tmazzaschi@aamc.org
(202) 828-0059
CMS Describes Plans for Physician Payments
Centers for Medicare and Medicaid Services (CMS) Director of the
Center for Medicare Management Herb Kuhn Jan. 6 sent a letter to
House Ways and Means Committee Chair Bill Thomas (R-Calif.) describing
CMS plans related to physician payments and claims processing. The
delay in final Congressional action on the Housend Senate-passed
Deficit Reduction Act (S. 1932) resulted in a 4.4 percent cut to
physician payments effective on Jan. 1, 2006 [see Washington
Highlights, Dec. 23].
CMS has indicated that physicians and other Part B providers should
not hold claims.
The letter to Rep. Thomas states that upon enactment of the pending
legislation, which will update payments to zero percent effective
Jan. 1, CMS will immediately issue nstructions to carriers and fiscal
intermediaries instructing them to automatically reprocess claims
that were already processed at the negative 4.4 percent update.
Providers will not need to resubmit claims.
CMS acknowledges that the changes in the physician update will
impact co-payments and deductibles. CMS states "accordingly,
standing alone, short-term routine waivers of the additional, retroactive
cost-sharing amount would not seem to constitute an improper beneficiary
inducement. For more specific guidance, the OIG should be consulted."
Finally, CMS indicated that it will re-open the physician participation
enrollment period for 45 days on or shortly after enactment of the
legislation.
Information:
Denise Dodero, Sr. Director, Health Care Affairs
AAMC Health Care Affairs
ddodero@aamc.org
(202) 828-0493
MedPAC Approves Update Recommendations for Hospital
and Physician Payments
At its Jan. 10-11 meeting,
the Medicare Payment Advisory Commission (MedPAC) approved final
recommendations on Medicare payment updates for 2007, to be published
in its March 2006 Report to the Congress.
On the hospital front, despite a projected negative overall Medicare
margin of -2.2 percent in 2006, the commission recommended an update
to the hospital inpatient and outpatient payment rates equal to
the increase in the hospital market basket (an inflation measure)
minus 0.45 percentage points. The 0.45 percentage point reduction
represents half of an estimate of productivity growth in the general
economy for 2007 that the commission expects the hospital industry
to achieve. The hospital industry had hoped that the commission
would recommend a full market basket update, given the low overall
Medicare margins.
As part of their presentation, MedPAC staff noted that most of
the indicators of Medicare payment adequacy to hospitals are positive,
including increased access to capital, increased number of hospitals,
and service volume increases. Commissioner Ralph Muller pointed
out that these indicators likely are due to higher payment rates
made by private payers and mask the inadequacy of payments on the
Medicare side, as reflected by the negative overall Medicare margins.
In response, Chair Glenn Hackbarth noted that the legislative mandate
requires that MedPAC review payment policies affecting "efficient"
hospitals rather than average hospitals. He felt strongly that,
in spite of negative margins, Medicare should pay hospitals based
on the costs and performance of efficient hospitals to encourage
a competitive environment. According to MedPAC staff's findings,
hospitals with lower occupancy, higher costs and higher cost growth
are generally not competitive in their own markets and tend to have
consistently negative margins, thereby pulling the industry-wide
margin down by more than two percentage points.
For physician services, MedPAC recommended to update payments for
physician services by the projected changes in input prices less
the productivity expectation growth for 2007. MedPAC estimates price
inflation of 3.7 percent and productivity growth of 0.9 percent,
which would make the update 2.8 percent. Along with this recommendation,
MedPAC will comment in its report that it does not support the physician
fee cuts scheduled through 2011 and considers the current volume
control formula, known as the sustainable growth rate or SGR, to
be a "flawed, inequitable mechanism." The commission also
will mention its concern that physician cuts could threaten beneficiary
access, especially to primary care.
In addition to the physician update, MedPAC also made several recommendations
to better value services in the physician fee schedule. Specifically,
MedPAC recommended creating a panel of experts to assist the Centers
for Medicare and Medicaid Services (CMS) in identifying overvalued
(with respect to physician work) services and to review update recommendations.
This panel also would assist CMS in identifying services that appear
to have "substantial changes in length of stay, site of service,
volume, practice expense or other factors that may indicate changes
in physician work." Other recommendations include an interim
review for newer services, where the work load might change after
a few years, and a periodic review of all services.
Other physician issues included a staff work plan to evaluate alternatives
to the SGR formula; listening to an expert panel on physician resource
use measurement; and a staff update on care coordination analysis.
In other areas, with the exception of dialysis services - for which
the commission recommended a market basket less a productivity expectation
update - MedPAC recommended that CMS eliminate payment updates in
2007 for rehabilitation and skilled nursing facilities, home health
agencies, and long term care providers. MedPAC's next public meeting
is Mar. 9-10, 2006.
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
AAMC Notes Slow Pace of "Harmonization" In Human
Subjects Requirements
In a Jan. 11 comment letter
to the Office for Human Research Protections (OHRP), the AAMC supported
recently proposed guidance on reporting and reviewing adverse events
and other unanticipated problems in human subjects research, but
took issue with the slow pace of federal efforts to coordinate or
"harmonize" requirements across different agencies. More
than six years ago, AAMC noted, then-Secretary of Health and Human
Services Donna Shalala called for harmonization of disparate regulations
and requirements on human subjects research between the National
Institutes of Health (NIH) and the Food and Drug Administration
(FDA). "Although we are given to understand that both agencies
are making efforts to harmonize and are preparing suitable guidance,"
the AAMC letter states, "disappointingly little has been accomplished
to date."
The AAMC commended the clarity of the OHRP draft and its use of
examples to guide assessment and reporting of adverse events. But
even the OHRP document notes that NIH and FDA may have separate
requirements and directs anyone needing assistance "to contact
these agencies directly." The letter strongly endorses trans-agency
harmonization of requirements and regulations, and recommends agencies
identify where requirements overlap and areas that are the unique
purview of a particular agency.
Information:
Howard Dickler, Director
AAMC Biomedical Health Sciences Research
hdickler@aamc.org
(202) 828-0567
NIH Issues NRSA Stipend Levels
The National Institutes of Health (NIH) Jan. 9 issued a notice
establishing the stipend levels for FY 2006 Ruth L. Kirschstein
National Research Service Awards (NRSA) for undergraduate, predoctoral
and postdoctoral trainees and fellows. The stipend levels for postdoctoral
trainees with zero and one year of experience are increased by 4
percent. Stipend levels for predoctoral trainees and other postdocs
remain at the FY 2005 levels. The level of training related expenses
on institutional training grants and the institutional allowance
for individual fellows is also being held flat. These stipend levels
apply to all competing and non-competing NRSA awards made with FY
2006 funds.
The stipend levels for FY 2006 are:
Predoctoral: $ 20,772
Postdoctoral (Years of Experience):
0 $ 36,996
1 $ 38,976
2 $ 41,796
3 $ 43,428
4 $ 45,048
5 $ 46,992
6 $ 48,852
7 or more $ 51,036
Information:
Jodi Lubetsky, Staff Associate
AAMC Biomedical Health Sciences Research
jlubetsky@aamc.org
(202) 828-0485
AAMC Submits Recommendations On Graduate and Post-Doctoral
Training Principles
The AAMC Jan. 11 submitted its comments
on principles for support of graduate and postgraduate education
proposed by the National Science and Technology Council's (NSTC)
Committee on Science. The NSTC is a cabinet-level council of principals
from within the Administration and federal science agencies that
advises the President on coordination of science policy and resources.
The "proposed principles for federal support of graduate and
postdoctoral education and training in science and engineering"
were announced in the Nov. 16, 2004, Federal Register, and
developed in response to comments from universities on the difficulties
created by variations in federal agency policies on fellowship and
traineeship stipends, allowances for educational costs and other
matters. The NSTC's proposed principles include: broad support for
federal science and engineering; quality education and training
for graduate students and post-docs; and federal agencies should
act in partnership with academic and non-federal organizations and
collaborate with one another in areas of common interest.
In its comments, the AAMC expressed support for the principles,
but called for greater specificity on how these principles should
be implemented, with emphasis on the development of data bases and
performance measures. "Current data sources are often several
years out of date and significantly undercount researchers with
degrees from outside of the U.S., or who hold M.D. but not Ph.D.
degrees," the AAMC noted. The federal government also can help
in assuring that measures of quality are included in developing
training programs, including the development of methodologies for
assessing the quality of training on NIH research project grants
and similar mechanisms (73 percent of graduate students and 80 percent
of postdocs are supported on such grants).
AAMC further endorsed recommendations by an internal NIH working
group to increase stipend support and other compensation for graduate
students and postdocs consistent with training and experience. "[A]ll
graduate students and postdoctoral scholars, regardless of funding
source, should be guaranteed access to affordable health insurance
and other benefits," AAMC commented, adding that "Levels
of support should be frequently monitored to be sure they are adequate."
Information:
Jodi Lubetsky, Staff Associate
AAMC Biomedical Health Sciences Research
jlubetsky@aamc.org
(202) 828-0485
Howard Dickler, Director
AAMC Biomedical Health Sciences Research
hdickler@aamc.org
(202) 828-0567
AHRQ Releases Disparities And Quality Reports
The Agency for Healthcare Research and Quality (AHRQ) Jan. 9 released
the 2005 National Health Disparities and National Health Quality
Reports. These annual
reports, issued for the third time, measure quality and disparities
in four key areas of health care: effectiveness, patient safety,
timeliness, and patient centeredness.
Released at the National Leadership Summit on Eliminating Racial
and Ethnic Disparities in Health, the disparities report notes that
while racial disparities in access to care for many minorities are
narrowing, the majority of disparities for both quality and access
are growing wider for Hispanics. The quality report finds that overall
quality of care for all Americans improved at a rate of 2.8 percent,
the same increase shown in last year's report.
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