Washington Highlights: May
4 , 2007
Members of Congress Support NIH Budget Increase
Contents
Prior Issues
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A total of 186 members of the House of Representatives signed an
April 27 letter to House Appropriations
Chair David Obey (D-Wis.) and Ranking Member Jerry Lewis (R-Calif.)
supporting a 6.7 percent increase in each of the next 3 years for
the National Institutes of Health (NIH). The letter, organized by
Reps. Edward Markey (D-Mass.), Dave Reichert (R-Wash.), Chris Shays
(R-Conn.), Henry Waxman (D-Calif.), Janice Schakowsky (D-Ill.),
and Chris Smith (R-N.J.), notes that since FY 2003, the NIH budget
has failed to keep pace with biomedical inflation. The impact of
this loss of purchasing power "has been so severe that many
researchers are struggling to secure funding for their research
and some young investigators have decided to abandon research or
do their work outside the United States." The letter goes on
to warn, "Many of the benefits of the doubling will be lost
unless FY 2008 is the beginning of an annual commitment by the Congress
to provide adequate funding for health research."
The AAMC, as part of the Ad Hoc Group for Medical Research, has
endorsed the 6.7 percent recommendation for NIH for each of the
next 3 years.
Information:
Dave Moore, Senior Director
AAMC Government Relations
dbmoore@aamc.org
(202) 828-0525
CMS Publishes Nonhospital Residency Training Final
Rule
Imbedded in the long term care hospital final
rule published May 1 on the Centers for Medicare and Medicaid
Services (CMS) website is the final rule modifying CMS policies
and regulations regarding Medicare direct GME (DGME) and indirect
medical education (IME) reimbursement for residents training in
nonhospital sites. The Medicare statute authorizes teaching hospitals
to receive DGME and IME payments associated with residents training
in nonhospital sites, such as physicians' offices, if they incur
"all or substantially all" of the training costs. The
final rule will be published May 11 in the Federal Register and is effective with hospital cost reporting periods beginning
on or after July 1, 2007.
In 1999, CMS issued a regulation defining "all or substantially
all" of the training costs as the residents' stipends and benefits
plus physician supervisory costs. Since that time, CMS and the academic
medical community have diverged in their views about how to handle
"volunteer" physicians in determining whether there are
physician supervisory costs. Relying on its interpretation of the
"all or substantially all" statutory language, in a Q
and A document published in 2005, CMS stated that "the issue
of concern is not volunteerism, but whether there is a cost to the
non-hospital site for supervising the residents." The academic
medical community's view has been that if the physicians are volunteering
their time, there are no supervisory costs.
The final rule reiterates the Agency's 2005 position regarding
volunteer physicians, stating that in situations in which a teaching
physician receives a predetermined salary that does not vary with
the number of patients he or she treats, that salary is presumed
to reflect some level of payment for supervision, which is a cost
that the hospital must incur. However, the final rule does modify
the regulatory definition of "all or substantially all"
of the nonhospital site training costs to be 90 percent of the residents'
stipends and benefits plus physician supervisory costs at the nonhospital
site. The prior standard requires hospitals to incur 100 percent
of these amounts.
The 2005 Q and A document also specified that the level of supervisory
costs is determined by the teaching physician's salary and the amount
of time that he or she spends on supervisory activities that do
not involve patient care. Many teaching hospitals and nonhospital
settings were frustrated with these requirements because they imposed
significant compliance difficulties in a) obtaining actual physician
salary data, and b) computing the amount of physician time spent
supervising that does not involve patient care activities.
In recognition of these administrative hurdles, the proposed rule
had given hospitals the option of using actual data or proxies for
physician salary and nonpatient care-related teaching time. For
example, teaching hospitals would have the option to use national
physician salary data in calculating supervision costs. The proposal
also would establish a "presumptive" level of time for
supervising physician evaluation and didactic activities that hospitals
and supervising physicians could use in calculating supervisory
costs, rather than determining actual time levels for each physician
at each site.
The final rule retains many of the provisions retained in the proposed
rule, but does make some changes. For example, the final rule allows
for the proration of physician supervision time when residents do
partial week rotations. The final rule also provides flexibility
to modify the hospital/nonhospital written agreements through June
30 of each academic year to reflect changing rotation arrangements
and other situations. However, the final rule does not reduce the
presumptive supervision time proxy of three hours, nor does it modify
CMS's current positions regarding physician group practices and
global agreements between teaching hospitals and medical schools.
In the final rule, CMS did express a willingness to look into a
number of issues that were raised in the comments received, particularly
the three hour per week physician supervision proxy and the use
of physician work hours rather than nonhospital site hours of operation.
Information:
Karen Fisher, Sr. Director, Health Care Affairs
AAMC Health Care Affairs
kfisher@aamc.org
(202) 862-6140
AAMC Supports Tobacco Tax Increase to Fund SCHIP
Reauthorization
The AAMC signed an April 27 patient advocacy and provider group letter to
the House and Senate Budget Committee leadership expressing strong
support for Senate budget resolution (S.
Con Res. 21) language that urges consideration of a federal
tobacco tax increase to fund State Children's Health Insurance Program
(SCHIP) reauthorization. While both the Senate- and House-passed
(H.
Con Res. 99) budget resolutions include reserve funds for SCHIP
reauthorization, the House language does not propose a tobacco tax
increase.
Information:
Christiane Mitchell, Director, Federal Affairs
AAMC Government Relations
cmitchell@aamc.org
(202) 828-0526
CMS Issues Inpatient Psychiatric Facilities Rates
The Centers for Medicare and Medicaid Services (CMS) April 30 issued
a notice updating the prospective payment rates for Medicare inpatient psychiatric
facilities (IPFs) beginning July 1, 2007. The notice was published
May 3 in the Federal Register.
The IPF PPS went into effect on January 1, 2005. CMS is waiting
for sufficient claims data to be submitted under the new system
so that it can conduct an analysis to determine whether to implement
changes to the current system. Until that time, the agency will
publish a notice - rather than issue a rule - each spring that updates
the IPF PPS rates, but does not contain any policy changes.
IPF PPS payment rates will be updated by 3.2 percent. However,
according to the financial impact table, the average increase in
payments for major teaching psychiatric facilities will be only
1.3 percent, while payments for non-teaching psychiatric facilities
will increase by 3.1 percent. The teaching hospital impact is primarily
due to the effects of the transition from a cost-based payment system
to a prospective payment system. Most IPFs will be entering the
third year of a transition blend, whereby 25 percent of reimbursement
will be cost-based while 75 percent will be based on the prospective
payment system.
For 2008, CMS retains the current teaching adjustment of 5.15 percent
to the federal per diem base rate. With regard to payment for high-cost
cases, CMS is increasing the fixed-dollar loss threshold amount
in the outlier calculation from $6,200 to $6,488, in order to maintain
the proposed two-percent outlier policy.
Information:
Diana Mayes, Specialist
AAMC Health Care Affairs
dmayes@aamc.org
(202) 828-0498
GAO Issues Report on Medicaid Financing Policies
The Government Accountability Office (GAO) April 30 released a report recommending
that the Centers for Medicare and Medicaid Services (CMS) provide
greater transparency in its evaluations of state Medicaid financing
arrangements. According to the report Medicaid Financing: Federal
Oversight Initiative is Consistent with Medicaid Principles but
Needs Greater Transparency, "concerns have been raised"
by various entities, that CMS policies "have not been implemented
consistently from state to state." The GAO concludes that CMS
has not issued written guidance on acceptable financing methods,
and has "not always provided...clear written explanations for
its determinations."
Requested by Senate Finance Committee Chair Max
Baucus (D-Mont.) and Ranking Member Charles
Grassley (R-Iowa), the GAO report recommends that CMS "explain
its determinations in writing to states and interested parties."
It also urges CMS to issue guidance "to clarify allowable financing
arrangements." GAO suggests that the Jan. 18 Medicaid proposed
rule on cost limits [see Washington
Highlights, Jan.19]
is "one of the many avenues" to issue such guidance.
In light of the GAO's concerns regarding the inconsistent application
of CMS policies, Sen. Baucus April 30 stated that the Jan. 18 proposed
rule "should be put on hold" until the Finance Committee
determines "the best way to manage concerns about financing
arrangements." The FY 2007 Supplemental Appropriations conference
agreement includes a one-year delay of the proposed rule. In contrast,
Sen. Grassley April 30 stated that the report underscores the need
to prevent "questionable payment schemes." According to
Sen. Grassley, delaying the proposed rule facilitates the "irresponsible
use of Medicaid resources."
Information:
Christiane Mitchell, Director, Federal Affairs
AAMC Government Relations
cmitchell@aamc.org
(202) 828-0526
HHS Establishes BARDA Office
The Department of Health and Human Services (HHS) April 26 announced the establishment of an office to manage the Biomedical Advanced
Research and Development Authority (BARDA) created in the Pandemic
and All-Hazards Preparedness Act (P.L.
109-417). The BARDA office will oversee Project BioShield and
will coordinate all federal research, development, and procurement
of bioterrorism and pandemic countermeasures. Programs previously
in the HHS Office of Public Health Emergency Medical Countermeasures
also will be under the purview of the BARDA director, who will report
to the HHS Assistant Secretary for Preparedness and Response.
HHS Secretary Mike Leavitt stated BARDA "will help further
the department's efforts to bridge the gap between the National
Institutes of Health's research and development programs and Project
BioShield."
President Vetoes FY 2007 Supplemental Appropriations
Bill
President Bush May 1 vetoed a $124.2 billion FY 2007 emergency
spending bill (H.R.
1591), objecting to provisions related to the Iraq war and $21
billion in unrelated domestic spending. An override attempt in the
House May 2 failed (222-203) to garner the required two-thirds majority.
The measure also included provisions to delay implementation of
Medicaid rules regarding cost limits and restricting graduate medical
education payments; eliminated FY 2007 SCHIP shortfalls; and provided
additional FY 2007 funding for VA research, pandemic flu preparedness
and biodefense [see Washington
Highlights, April 27].
Information:
Christiane Mitchell, Director, Federal Affairs
AAMC Government Relations
cmitchell@aamc.org
(202) 828-0526
Matthew Shick, Senior Legislative Analyst
AAMC Government Relations
mshick@aamc.org
(202) 862-6116
Tannaz Rasouli, Senior Legislative Analyst
AAMC Government Relations
trasouli@aamc.org
(202) 828-0525
President Nominates CMS Administrator, HHS
Deputy Secretary
President Bush May 3 announced his intention to nominate Kerry N. Weems, M.B.A., to be Administrator
of the Centers for Medicare and Medicaid Services (CMS), and Tevi
David Troy, M.A., Ph.D, to be Deputy Secretary of Health and Human
Services (HHS).
A 24-year veteran of HHS, Mr. Weems has served as Deputy Chief
of Staff at HHS since March 2005, prior to which, he served as Acting
Assistant Secretary for Budget, Technology, and Finance and Chief
Financial Officer. In a May 3 statement, HHS Secretary Mike Leavitt
described Mr. Weems as "a leader in this department's efforts
to accelerate adoption of health information technology and better
financial management systems, which will be a valuable asset to
CMS."
Dr. Troy currently serves at the White House as Deputy Assistant
to the President for Domestic Policy. His prior posts in the Administration
include serving as Special Assistant to the President and Deputy
Cabinet Secretary, and he has also held positions at the Department
of Labor and as policy director for former Sen. John Ashcroft (R-Mo.).
Secretary Leavitt lauded Dr. Troy's "innovative think[ing]
on such important issues such as health IT, public health and childhood
obesity, food and drug safety, welfare, and family and community
services."
Both nominations require Senate confirmation.
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