Washington Highlights: March 17,
2006
Contents
Prior Issues
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Senate Approves Specter-Harkin Amendment to Increase
Health, Education Funding
The Senate March 16 approved, by a vote of 51 to 49, the FY 2007
budget resolution (S.
Con. Res. 83). By a vote of 73 to 27, the Senate passed an amendment
offered by Senators Arlen Specter (R-Pa.) and Tom Harkin (D-Iowa),
the chair and ranking member of the Senate Labor-HHS-Education Appropriations
Subcommittee, respectively, to provide an additional $7 billion
in discretionary spending over the budget resolution approved March
9 by the Senate Budget Committee [see Washington
Highlights, March 10].
The Specter-Harkin amendment would provide an additional $7 billion
in funding for priority health and education programs, including
NIH, CDC, HRSA, vocational education, K-12 and higher education.
The Senate also approved an amendment by Sen. Richard Burr (R-N.C.)
to create a reserve fund for pandemic influenza preparedness planning
after rejecting an amendment by Sen. Kent Conrad (D-N.D.) that would
have increased funding for pandemic flu preparedness by $5 billion.
The Senate also defeated an amendment by Sen. Edward Kennedy (D-Mass.)
that would have added $6.3 billion to the discretionary spending
cap to increase education funding. The Senate also defeated a Conrad
amendment to require offsets for tax cuts and new mandatory spending
programs.
The budget resolution establishes an $873 billion spending cap
for discretionary programs in FY 2007 and includes a controversial
reconciliation instruction to open the Arctic National Wildlife
Refuge to energy exploration. Confronted with increasing resistance
from Senators concerned about election year impacts, Senate leaders
abandoned plans to seek further reductions in Medicare and other
mandatory spending or to increase tax cuts further.
The House will not take up its version of the budget resolution
until after next week's recess.
Information:
Dave Moore, Senior Director
AAMC Government Relations
dbmoore@aamc.org
(202) 828-0525
Hospital Groups Urge Passage of Children's GME
Legislation
The AAMC joined fellow associations in a March 13 letter
to leaders of the House Energy and Commerce Committee, urging swift
mark-up and passage of legislation to reauthorize the federal Children's
Hospitals Graduate Medical Education (CHGME) payment program. The
American Hospital Association and National Association of Children's
Hospitals also signed onto the letter.
Referring to bipartisan support for the "Children's Hospitals
Education Equity and Research Act" (H.R.
1246), the letter also urged rejection of "the administration's
proposal to cut funding for the program by two-thirds and limit
the remaining funds only to financially weak hospitals." The
letter states, "the [administration's] proposal ignores the
CHGME program's purpose of providing comparable federal GME support
to independent children's hospitals, its success in strengthening
children's hospitals ability to contribute to the future workforce
of physicians who care for children, and the impact of the virtual
elimination of the program on hospitals that face numerous challenges."
The Senate passed its version (S.
285) of the CHGME reauthorization last July.
Information:
Lynne Davis Boyle, Assistant Vice President
AAMC Government Relations
ldavisboyle@aamc.org
(202) 828-0526
AAMC Criticizes OMB Proposed Risk Assessment
Standards
The AAMC urged the Office of Management and Budget (OMB) in a March
10 comment letter
to restrict the reach of proposed new standards for risk assessments
in federal agencies. The OMB announced Jan. 17 its "proposed
bulletin" for risk assessments in the Federal Register,
continuing the Administration's avowed efforts to improve the quality
and reliability of statistical and other information used or released
by the federal government. The latest proposed bulletin would, in
addition to setting standards, provide for additional levels of
review and certification for risk assessments that influence major
decisions in the private or public sectors.
"Our chief concern," the AAMC noted in its comments,
"is that announcements or other actions important to public
health not be subject to protracted delay, managerial impediments,
or, frankly, 'second-guessing' by other individuals or agencies."
The Association offered the example of a decision by a data safety
and monitoring board to interdict a clinical trial based on clear
evidence of asymmetric benefit or risk; such determinations, once
made, must be acted on decisively.
The AAMC argued that the final risk assessment bulletin should
include a provision parallel to the recent OMB Information Quality
Guidelines on Peer Review, wherein "time-sensitive health and
safety disseminations" are specifically excluded from the requirements
laid out in that bulletin. In general, the AAMC believes that a
final bulletin should defer to the judgment of the U.S. Public Health
Service's leadership "on the timeliness or urgency of making
decisions based on the adequacy of a risk assessment, in consideration
with all other factors."
Public comments on the OMB bulletin are due June 15. OMB has also
asked the National Academies to review the proposed risk assessment
standards.
Information:
Stephen Heinig, Lead Science Policy Analyst
AAMC Biomedical Health Sciences Research
sheinig@aamc.org
(202) 828-0488
Thomas Blasts OIG for Failure to Regulate Provider
Pricing
In a March 10 letter to Department of Human Health and Services
(HHS) Secretary Michael Leavitt, House Ways and Means Committee
Chairman Bill Thomas (R-Calif.) urged that a 2003 proposed rule
by the HHS Office of Inspector General (OIG) to define "excessive
charges" be finalized to ensure "the integrity of the
Medicare Trust Fund and the success of the President's recent initiative
to increase health care price transparency."
The letter states, "It is unacceptable that the OIG refuses
to move forward on this rule. The OIG apparently choose to sacrifice
the interests of taxpayers over those who wish to keep real prices
shrouded in order to gouge the public, employers and insurers."
The OIG has the authority to exclude from Medicare an individual
or entity that has submitted a bill "for items or services
furnished substantially in excess of the individual's or entity's
usual charges." The OIG proposed to define the terms "substantially
in excess" and "usual charges" 3 times-- in 1990
and 1997, and most recently in 2003. In 1997, the OIG noted that
the increasing use of fee schedules could limit the application
of the law which applies when a claim is made on a charge or cost
basis.
However, in the preamble to the 2003 proposed rule, the OIG wrote,
"the fee schedule is not an entitlement, but a cap on the amount
that Medicare will pay for the item or service." The OIG also
noted that in many cases Medicare payments may be "substantially
more than the payments that providers have agreed to accept from
most or all of their other third party payers." This situation
prompted the OIG to propose the 2003 rule that, once again, was
strongly opposed by the provider community.
In its comment letter, the AAMC strongly opposed the 2003 proposed
rule for the following reasons: (1) the OIG does not have the authority
to promulgate such a rule; (2) the rule does not reflect Congressional
intent; (3) the rule is unworkable, burdensome, and would cause
institutions to incur huge expenses; and (4) one consequence of
the proposed methodology would be the elimination of sliding scale
fees that often are used by hospitals that treat large numbers of
indigent patients.
Information:
Lynne Davis Boyle, Assistant Vice President
AAMC Government Relations
ldavisboyle@aamc.org
(202) 828-0526
Ivy Baer, Director & Regulatory Counsel
AAMC Health Care Affairs
ibaer@aamc.org
(202) 828-0490
MedPAC Focuses on "Efficient" Provider
At its March 9-10 meeting,
the Medicare Payment Advisory Commission (MedPAC) focused on two
factors, efficiency and cost-effectiveness, as important determinants
in a provider pay-for-performance mechanism.
MedPAC continued its work to identify efficient providers, as defined
by a combination of quality and resource use. For physicians, MedPAC
discussed methods to attribute "episodes of care," (groups
of claims data related to a specific condition) to individual physicians.
The pilot project which used a national sample of beneficiaries
will be re-run using full data for six markets, so that the Commission
can evaluate the issues of implementing a reporting system. For
hospitals, MedPAC staff unveiled their analysis of potential methodologies
for using quality indicators to study quality of care, but did not
focus on resource use at this time.
MedPAC also discussed potential methods to revise the practice
expense (PE) component of the physician fee schedule to more accurately
reflect costs. PE accounts for approximately 42 percent of Medicare
payments to physicians. Options presented include updating practice
cost database through surveys and re-assessing underlying assumptions
for incorporating the cost of equipment.
MedPAC staff also presented a summary of their research on coordinating
care for chronically ill patients and suggested two models to implement
care coordination in Medicare fee-for-service. Both models would
pay for care coordination, using an at-risk fee, and a separate
fee to either the provider or the provider organization. For integrated
entities, the integrated entity would provide the coordination.
For smaller entities, an external care management firm would provide
the coordination of care. MedPAC also observed that current patient
evaluation and management codes might need to be revised to account
for time spent with complex patients.
Continuing its work from last spring, MedPAC's expert panel presented
an analysis designed to assess the opportunities and challenges
of using cost effectiveness in Medicare. The panel noted that in
spite of the variation found in the methods used, there are numerous
studies in the cost-effectiveness literature that can provide estimates
of the costs and clinical benefits of services - particularly those
that are high profile and high cost. A discussion of the challenges
of obtaining cost-effectiveness information and using it for reimbursement
purposes followed the presentation. Members agreed that cost-effectiveness
information should not necessarily be used to deny coverage of services,
but rather pay differentially depending on the cost-benefit analysis.
Because much of the challenge lies in setting service payment levels,
Commissioners are looking at various ways in which to tackle it
by, among other things, taking a look at other countries' experiences
in this arena.
Another issue that surfaced during the discussion was the challenge
of obtaining cost-effectiveness information when the literature
does not provide a clear indication of the effectiveness of care.
To that end, three questions would need to be resolved: who would
sponsor the research, who would conduct it and who would fund it.
Particularly with regard to the last question, the issue of a public/private
partnership was debated.
MedPAC's next public meeting is April 19-20.
Information:
Mary Patton, Senior Specialist
AAMC Health Care Affairs
mpatton@aamc.org
(202) 862-6297
Diana Mayes, Specialist
AAMC Health Care Affairs
dmayes@aamc.org
(202) 828-0498
House Approves Higher Ed Extension
The House March 14 approved a fourth extension of the Higher Education
Act, as the current extension is scheduled to expire March 31 [see
Washington Highlights,
Dec. 23, 2005]. House Education and Workforce Chair Howard "Buck"
McKeon (R-Calif.) sponsored the "Higher Education Extension
Act of 2006" (H.R. 4911), which will extend the reauthorization
deadline to June 30. The Senate is expected to pass the bill.
Information:
Matthew Shick, Senior Legislative Analyst
AAMC Government Relations
mshick@aamc.org
(202) 862-6116
President Nominates von Eschenbach to Head FDA
President Bush March 15 nominated Andrew von Eschenbach, M.D.,
to be Commissioner of the Food and Drug Administration (FDA). He
has served as acting head of the agency since September 2005, while
also serving as Director of the National Cancer Institute.
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