Washington Highlights: June 16,
2006
Contents
Prior Issues
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AAMC Submits Comments on Inpatient Proposed Rule
The AAMC June 12 submitted comments
on the fiscal year (FY) 2007 Medicare hospital inpatient proposed
rule, published in the Federal Register April 25. Two primary issues
were addressed: the diagnosis-related group (DRG) weighting and
classification system proposed changes, as well as a purported "clarification"
that would largely exclude the time residents spend in didactic
activities from the resident counts used in the calculation of direct
graduate medical education (DGME) and indirect medical education
(IME) payments.
In the inpatient rule, the Centers for Medicare and Medicaid Services
(CMS) propose to move from a "charge-based" DRG weighting
methodology to a "cost-based" methodology in FY 2007.
In FY 2008 or earlier, CMS plans to increase the 526 current DRGs
to 861 "consolidated severity adjusted DRGs" (CS-DRGs).
According to the accompanying press release, these proposals represent
the "first significant revision of the Inpatient Prospective
Payment System (IPPS) since its implementation in 1983." Both
of these changes are budget-neutral (i.e., there are no "savings"
for the Medicare program), but they have major redistributional
impacts across hospitals.
These proposed changes were not entirely unexpected. In 2005, the
Medicare Payment Advisory Commission (MedPAC) had recommended similar
changes. This past February, Senate Finance Committee Chair Charles
Grassley (R-Iowa) and Ranking Member Max Baucus (D-Mont.) urged
CMS to move forward in FY 2007 with significant changes.
In its lengthy comment letter, the association espouses several
overarching "principles." The AAMC:
- Supports a move from charge to cost-based DRG weights so long as they
improve the payment system;
- Supports refining the current DRG system to better reflect patient
severity and complexity;
- Urges postponement of the proposed cost-based weights for one year
to allow for further work;
- Endorses simultaneous implementation of cost based weights and refined
DRGs; and
- Urges a significant transition period to address the large swing in
dollars that will result from these changes.
Both MedPAC and congressional committees have also written letters
to CMS providing their views of the DRG proposals (see
related article).
"Clarification" on the proposed rule states that resident
training in non-hospital sites must be related to patient care if
a hospital wishes to count that time for DGME and IME payment purposes.
Resident time spent in didactic activities that often occur in associated
medical schools, such as educational conferences, journal clubs,
and seminars, would be specifically excluded.
In its comment letter, the AAMC strongly opposes the purported
clarification and urges the agency to maintain the policy set forth
in a 1999 CMS letter that defined patient care activities broadly,
allowing hospitals to count resident time in didactic activities.
CMS addressed this assertion, stating, "implying that didactic
time spent in non-hospital settings could be counted for direct
GME and IME...was inaccurate." CMS notes that time spent in
these activities could be counted for DGME purposes if they occur
in a hospital; however, the counting prohibition applies for IME
payments regardless of where the educational activity occurs.
The final inpatient rule is required by statute to be published
by Aug. 1.
Information:
Karen Fisher, Senior Associate Vice President
AAMC Health Care Affairs
kfisher@aamc.org
(202) 862-6140
Ways and Means Leadership, MedPAC Weigh-In on
IPPS Proposed Rule
A May 30 letter from House
Ways and Means Committee Chair Bill Thomas (R-Calif.) to CMS Administrator
Mark McClellan, M.D., praises the agency for addressing "serious
inaccuracies in the Medicare hospital inpatient payment system,"
as outlined in the FY 2007 inpatient proposed rule (see
related article). Chairman Thomas urges CMS to implement both
cost-based weights and severity-adjusted DRGs in FY 2007, rather
than over 2 years, as suggested in the proposed rule. While Chairman
Thomas acknowledges that the proposed methodology for cost-based
weights contains "technical problems," he considers them
"fixable problems" that should not prevent implementation
in FY 2007.
A June
12 letter from the Medicare Payment Advisory Committee (MedPAC)
to Administrator McClellan echoes Chairman Thomas' belief that both
changes should be implemented by Oct. 1. Similarly, MedPAC has concerns
about the proposed methodology and offers specific options for correcting
the flaws. While Chairman Thomas' letter is silent on the need for
a transition period, MedPAC supports a transition period of "2
to 4 years."
House Ways and Means Health Subcommittee Chair Nancy Johnson (R-Conn.)
also weighed-in on the IPPS proposed rule in a June
12 letter to Administrator McClellan. While Chairwoman Johnson
states that the proposed rule "moves in the right direction,"
she too advises that "there are concerns that need to be addressed"
before implementation of a final rule. Like Chairman Thomas and
MedPAC, Chairwoman Johnson supports the simultaneous implementation
of both changes. However, she advises that the changes "may
require a transition period," and encourages CMS "to consider
transition options." Her letter also criticizes CMS for the
lack of public access to the severity-adjusted DRG software.
Information:
Christiane Mitchell, Senior Legislative Affairs Manager
AAMC Government Relations
cmitchell@aamc.org
(202) 828-0526
House Appropriations Panel Approves HHS Funding
Bill
The House Committee on Appropriations June 13 approved its FY 2007
Labor-HHS-Education spending bill. The committee endorsed the funding
levels approved by the Labor-HHS-Education Appropriations Subcommittee
June 7 [see Washington Highlights,
June 9].
The committee report accompanying the bill notes that the bill
includes $25 million for extramural facilities construction grants
through the National Center for Research Resources (NCRR). The committee
"encourages NCRR to give special consideration to applications
… from potential grantees in states who are under-represented
with regard to NIH awards and to projects at historically minority
institutions that have developed a comprehensive plan to address
the disproportionate impact of cancer in minority communities."
Facilities for research on infectious agents and countermeasures
are also eligible to compete for this funding.
The bill includes language (section 204) that amends the salary
cap on extramural grants from NIH, AHRQ and SAMHSA to Executive
Level II ($165,200 in 2006). The current cap is at Executive Level
I ($183,500).
The House bill also includes a provision (section 220) requiring
all NIH-funded authors to deposit an electronic version of their
final, peer-reviewed manuscripts in the National Library of Medicine's
PubMed Central "as soon as practical but no later than 12 months
after the official date of publication.
Also included in the report, the committee recommends that within
the $11.9 million appropriated for Title VII Centers of Excellence
(COE), one third of the funds is to be set aside for Hispanic COEs.
Furthermore, the committee rejects the President's proposed rescission
to the Title VII student loan programs, which would recall "the
federal portion of all the liquid assets of such fund."
The Appropriations Committee adopted an amendment by Rep. Joanne
Emerson (R-Mo.) that would prevent the $2.1 billion reduction (over
5 years) in Medicaid provider taxes assumed by the President's budget
proposal. The President's proposal reduces from 6 percent to 3 percent
the level of provider taxes eligible for a federal match under the
Medicaid program.
Information:
Dave Moore, Senior Associate Vice President
AAMC Government Relations
dbmoore@aamc.org
(202) 828-0525
Erica Froyd, Director, Public Health and Research Legislative Affairs
AAMC Office of Governmental Relations
efroyd@aamc.org
(202) 828-0525
President Signs FY 2006 Supplemental
The President June 15 signed a FY 2006 Emergency Supplemental Appropriations
bill (H.R.
4939), following the Senate's approval (98-1) of the accompanying
conference report earlier that day. The House June 13 voted 351-67
in favor of the measure. Conferees whittled the $108.9 billion Senate
version to more closely resemble the House's $91.9 billion measure.
The conference report adheres to the President's $94.5 billion proposal,
including $2.3 billion for pandemic flu preparedness, $70.4 billion
for military operations in Iraq, and $19.8 billion in hurricane
recovery funds. Senate Appropriations Subcommittee on Labor, HHS,
and Education Chair Arlen Specter (R-Pa.) was the lone dissenting
vote in the Senate
A "deeming resolution" attached to the bill limits the
Senate's discretionary spending for FY 2007 to $873 billion, a point
of contention among Senate Democrats and some moderate Republicans.
Senators Specter and Mike DeWine (R-Ohio) did not support the measure
in conference because it did not include $7 billion in "advance
appropriations" for health and education programs.
Conference negotiators seemed to be at an impasse until three Democrats
crossed the party line and tipped the majority in favor of the measure.
Sen. Mary Landrieu (D-La.) explained that Louisiana benefits from
the hurricane relief funds in the bill, while Sen. Daniel Inouye
(D-Hawaii) cited urgency in ensuring military operations are adequately
funded. Sen. Diane Feinstein (D-Calif.) also supported the supplemental
in conference. Sen. Inouye indicated that he received assurances
from Senate Appropriations Committee Chair Thad Cochran (R-Miss.)
that "every effort would be made" to include $7 billion
in advance funding.
The conference report also includes language that repeals the single-holder
rule, which restricts consolidation under the Federal Family Educational
Loan Program (FFELP). The single-holder rule prohibits borrowers
whose FFELP loans are currently with a single lender from consolidating
with different lenders. This law would be repealed upon enactment
of the supplemental.
Information:
Tannaz Rasouli, Legislative Analyst
AAMC Government Relations
trasouli@aamc.org
(202) 828-0525
House Oversight Committee Investigates NIH Tissue
Policies
The House Energy and Commerce Subcommittee on Oversight and Investigations
held two days of hearings June 13 and 14 on NIH policies and practices
regarding human tissue samples. The hearings were held in conjunction
with the release of the report from a year-long bipartisan subcommittee
staff investigation into an NIH intramural scientist who allegedly
received payments from a pharmaceutical company in return for human
tissue samples and associated data.
The subcommittee heard from Susan Molchan, M.D., Program Director,
Alzheimer's Disease Neuroimaging Initiative at the National Institute
on Aging, who testified regarding the disappearance of cerebrospinal
fluid samples she obtained in the early 1990s while working as an
intramural scientist at the National Institute of Mental Health
(NIMH) under the supervision of Trey Sunderland, M.D. Her subsequent
unsuccessful efforts to obtain the samples and related data from
the earlier study from Dr. Sunderland when she returned to National
Institute on Aging prompted her to contact the subcommittee.
The subcommittee also heard from NIMH Director Thomas Insel, M.D.,
and Michael Gottesman, M.D., NIH Deputy Director for Intramural
Research, who testified about NIH policies and procedures regarding
human tissue acquisition, storage and transfer. Dr. Gottesman outlined
the steps NIH is taking to clarify policies and procedures for the
transfer and use of stored human tissue samples.
The NIH witnesses also addressed the broader issue of interactions
between NIH intramural scientists and industry. Dr. Insel repeatedly
stressed the need to distinguish between collaborations by intramural
scientists, which are encouraged, and consulting arrangements, which
are prohibited.
In a statement issued June 13, NIH Director Elias Zerhouni, M.D.,
said, "It is important to note that the specific consulting
arrangements in question, had they been known to NIH, would not
have been approved under the present or previous ethics regulations."
He added, "Collaborations among scientists that involve human
tissue samples are common and essential for science. There are,
however, stringent rules in place to protect the participants who
donated their samples, and to ensure that there is full informed
consent."
Informtion:
Dave Moore, Senior Associate Vice President
AAMC Government Relations
dbmoore@aamc.org
(202) 828-0525
House Appropriations Subcommittee Increases Funding
For NSF
The Science-State-Justice-Commerce Subcommittee of the House Appropriations
Committee June 14 passed by voice vote its spending bill, including
$6 billion for the National Science Foundation (NSF). The NSF figure
is equal to the administration's request, and represents a $439
million (8 percent) increase over the FY 2006 enacted level. Within
that amount, research and related activities are also funded at
the proposed level, receiving $4.67 billion, an increase of $334.5
million (7.7 percent).
The increases correspond with the President's American Competitiveness
Initiative (ACI) to promote research, education, and innovation
in the physical sciences. Though the subcommittee allocation represents
only a 4.6 percent increase over FY 2006, the spending bill fully
funds ACI. The bill also eliminates $1.3 billion in member projects
by limiting overall earmarks to $387 million.
While the ACI effort received praise from subcommittee Chairman
Frank R. Wolf (R-Va.) and Ranking Member Alan B. Mollohan (D-W.Va.),
Rep. Mollohan also indicated that he intends to seek more funding
for life science programs at NSF. The full committee is scheduled
to mark up June 20, with floor consideration scheduled for the week
of June 26.
Information:
Tannaz Rasouli, Legislative Analyst
AAMC Government Relations
trasouli@aamc.org
(202) 828-0525
House Committee Approves Health Bills
The House Committee on Energy and Commerce June 15 passed the "Children's
Hospital GME Support Reauthorization Act of 2006" (H.R.
5574), which reauthorizes the Children's Graduate Medical Education
program through 2011. The bill adds an annual reporting requirement
and payment reduction penalties for noncompliance. Reports should
include the types of pediatric resident training programs that the
hospital sponsored, the number of full-time equivalent resident
training positions, and the number of residents who end up working
in the hospital or state where they trained.
The committee June 15 also approved the "Health Centers Renewal
Act of 2006" (H.R.
5573), which reauthorizes the Community Health Centers programs
through 2011 and outlines a specific appropriation level for each
year: $1.963 billion for FY 2007, $1.999 billion for FY 2008, $2.015
billion for FY 2009, $2.041 billion for FY 2010, and $2.041 billion
for FY 2011.
Information:
Erica Froyd, Director, Public Health and Research Legislative Affairs
AAMC Office of Governmental Relations
efroyd@aamc.org
(202) 828-0525
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