Washington Highlights: May 11, 2007
Hospital Associations Urge Rescind of Proposed
Inpatient Cuts
Contents
Prior Issues
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The AAMC May 3, along with the American Hospital Association, Federation
of American Hospitals, National Association of Public Hospitals,
Premier and VHA, sent a letter
urging Centers for Medicare and Medicaid Services (CMS) Acting Administrator
Leslie Norwalk to rescind the following provisions contained in
the Medicare inpatient PPS proposed rule:
- the 2.4 percent reduction in payments to account for purported
coding adjustments;
- the elimination of the 0.8 percent capital PPS update for urban
areas; and
- the elimination of the 3 percent add-on to capital PPS payments
for hospitals in large urban areas.
The proposed rule was published April 13 on the CMS web site and
in the Federal Register May 3. Comments are due June 12.
The proposed
rule would significantly modify the current diagnosis-related
group (DRG) system by replacing the 535 current DRGs with 745 new
"Medicare-Severity" DRGs (MS-DRGs). The purpose of the
change is to have the DRGs more fully account for the severity of
patients' conditions. The current proposal is a continuation of
last year's rulemaking in which CMS proposed a new DRG system but
withdrew it in the final rule as a result of numerous negative comments.
The proposed rule includes a 2.4 percent cut in both FYs 2008 and
2009 to eliminate what CMS asserts will be the effect of coding
or classification changes that do not reflect real changes in the
severity of patients treated. The estimated 5-year impact of the
2-year cuts is $24 billion. The estimated 5-year impact of the two
capital cuts contained in the proposed rule is $1 billion.
The group letter notes that "there is no rational behind imposing
such dramatic cuts to hospital payments . . . they are not mandated;
they are not supported by Congress and they are unnecessary."
Information:
Karen Fisher, Sr. Director, Health Care Affairs
AAMC Health Care Affairs
kfisher@aamc.org
(202) 862-6140
Senators Support NIH Increase, Title VII Restoration
In letters to the Senate Appropriations Committee leadership, Senators
expressed support for an increase in National Institutes of Health
(NIH) funding and restoration of Title VII funding to FY 2005 levels.
In an April 26 letter organized
by Senators Ted Kennedy (D-Mass.), Orrin Hatch (R-Utah), Christopher
Dodd (D-Conn.), and Richard Burr (R-N.C.), 48 Senators requested
a 6.7 percent increase in NIH funding for each of the next 3 years.
The letter, addressed to Senate Appropriations Chair Robert Byrd
(D-W.V.) and Ranking Member Thad Cochran (R-Miss.), and Labor, Health
and Human Services, and Education Appropriations Subcommittee Chair
Tom Harkin (D-Iowa) and Ranking Member Arlen Specter (R-Pa.), notes
that "the extraordinary effort to double our investment in
the NIH has yielded an unprecedented number of scientific advances
that have improved health outcomes and contributed significantly
to the economic growth of this nation." The letter further
notes that "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."
A May 4 letter to
Senators Harkin and Specter urges restoring funding for the Title
VII health professions programs to the FY 2005 level of $300 million.
A total of 39 Senators signed the letter, led by Senators Jack Reed
(D-R.I.) and Pat Roberts (R-Kan.). The letter describes how "dramatically
reduced funding" for the programs has had a "devastating
effect on the country's neediest communities."
Information:
Dave Moore, Senior Director
AAMC Government Relations
dbmoore@aamc.org
(202) 828-0525
Tannaz Rasouli, Senior Legislative Analyst
AAMC Government Relations
trasouli@aamc.org
(202) 828-0525
Medicare Rehab Facility PPS Proposed Rule Published
The Centers for Medicare and Medicaid Services (CMS) May 8 published
in the Federal Register its Medicare inpatient rehabilitation
facility (IRF) proposed
rule for FY 2008. Under the proposed rule, payment rates to
IRFs would be updated by an increase factor equal to the rehabilitation,
psychiatric and long-term care hospital (RPL) market basket of 3.3
percent. If finalized, the policies will become effective Oct. 1.
Comments on the proposed rule are due July 2.
Overall the estimated payments per discharge for IRFs in FY 2008
are projected to increase by 2.4 percent. This is largely due to
a 0.9 percent reduction in the standard payment amount that CMS
is implementing to finance the outlier pool, which accounts for
3 percent of total payments. Because last year's outlier payments
exceeded 3 percent, the proposed rule would increase the outlier
threshold from $5,534 in FY 2007 to $7,522 in FY 2008.
To determine whether a facility qualifies as an IRF, thereby qualifying
for higher PPS payments than inpatient hospitals, CMS is implementing
the 75 percent rule. This standard, when fully phased in, requires
that at least 75 percent of an IRF's patient population has one
of 13 designated medical conditions for which intensive inpatient
rehabilitation services are medically necessary. Many observers
have argued that the 13 conditions are outdated and need to be revised.
The 75 percent rule is being phased in over a 4-year period. Currently,
for providers with cost reporting periods that start on or after
July 1, 2006 and before July 1, 2007, the compliance threshold is
60 percent. It is 65 percent for cost reporting periods starting
on or after July 1, 2007 and before July 1, 2008. The phase-in period
ends with cost reporting periods beginning on or after July 1, 2008,
when the 75 percent threshold goes into effect.
In addition, a provision of the 75 percent rule allowing comorbidities
that meet certain regulatory criteria used in determining the compliance
threshold also is scheduled to expire with the full implementation
of the rule on July 1, 2008. However, the agency is asking for comments
on whether this provision should be continued.
Information:
Diana Mayes, Specialist
AAMC Health Care Affairs
dmayes@aamc.org
(202) 828-0498
House Passes Student Loan Oversight Bill
The House May 9 overwhelmingly passed (414-3) the "Student
Loan Sunshine Act" (H.R.890)
to establish conflict of interest requirements for lenders and institutions
of higher education. The bill is a compromise between Rep. Buck
McKeon's (R-Calif.) "Financial Aid Accountability and Transparency
Act of 2007" (H.R.1994)
and the Democratic version of the "Student Loan Sunshine Act,"
introduced Feb. 7 by House Education and Labor Chair George Miller
(D-Calif.).
Among other provisions, the Sunshine Act would:
- Require institutions to develop and administer a code of conduct
for their financial aid offices;
- Require institutions to disclose all relationships with lenders;
- Ban all gifts, opportunity pools, and revenue-sharing between
lenders and institutions;
- Prohibit financial aid administrators' participation on lender
advisory boards (other college officials may participate without
compensation or reimbursement of expenses);
- Require "preferred lender lists" to include at least
3 unaffiliated lenders and the process that was used to develop
the list; and
- Prohibit staffing of campus financial aid offices by lenders
or their employees, excluding services provided in exit interviews
for borrowers.
Senate Health, Education, Labor, and Pensions Chair Edward Kennedy
(D-Mass.) Feb. 1 introduced his version of the "Student Loan
Sunshine Act" (S.
486). Sen. Kennedy plans to address this issue as part of the
broader Higher Education Act reauthorization.
Information:
Matthew Shick, Senior Legislative Analyst
AAMC Government Relations
mshick@aamc.org
(202) 862-6116
Senate Passes FDA User Fee Bill
After a week of debate and numerous amendments, the Senate May
9 overwhelmingly passed legislation to renew the user fees that
drug companies pay to the Food and Drug Administration (FDA) to
review their products. The vote on the "Prescription Drug User
Fee Amendments of 2007" (S.
1082) was 93-1, with Senator Bernie Sanders (I-Vt.) voting against
it. The Senate HELP Committee approved the bill on April 18 [see
Washington Highlights,
April 20].
The bill reauthorizes the Prescription Drug User Fee Act (PDUFA)
and the Medical Device User Fee Modernization Act (MDUFMA), providing
about $450 million in drug and device user fee revenue to FDA in
FY 2008. Since authority for the user fees expires on Sept. 30,
many observers consider this bill "must-pass" legislation.
As a result, it is being used as a vehicle for a number of provisions
to address drug safety and pediatric drug testing.
The drug safety portion of the bill expands the ClinicalTrials.gov
data bank at the National Library of Medicine to include all phase
II and later drug trials and medical device trials. In addition,
results from clinical trials will be included in the data base after
the drug or device has been approved for marketing. Results information
would first come from existing FDA documents, as well as peer-reviewed
scientific publications. A negotiated rulemaking process would be
used to determine when and how to add results information not captured
in these documents.
Among the amendments the Senate approved were two contradictory
proposals related to drug importation. The Senate May 7 passed an
amendment offered by Senator Byron Dorgan (D-N.D.) to permit drug
importation from other countries after passing an amendment by Senator
Thad Cochran (R-Miss.) that would require the Secretary of Health
and Human Services to certify the safety of imported drugs. Since
the Administration has been unwilling to make such certifications,
the Cochran amendment in effect blocks drug importation.
The Senate leadership also reached an agreement to defer action
on an expedited approval process for generic or follow-on versions
of biotechnology drugs, waiting to add this proposal to the bill
during the House-Senate conference. The Senate HELP Committee is
expected to hold a hearing on the issue in June.
The legislation now moves to the House, where Energy and Commerce
Committee John Dingell (D-Mich.) reportedly will take up the drug
and device user fees as separate bills. Committee members are said
to be discussing whether to include other issues, such as drug safety,
as was done in the Senate bill. Reps. Henry Waxman (D-Calif.) and
Edward Markey (D-Mass.) introduced a free-standing drug safety bill
(H.R.
1561) on March 19.
Information:
Dave Moore, Senior Director
AAMC Government Relations
dbmoore@aamc.org
(202) 828-0525
Tannaz Rasouli, Senior Legislative Analyst
AAMC Government Relations
trasouli@aamc.org
(202) 828-0525
House Panel Examines Department of Education's
Oversight of Student Loans
The House Education and Labor Committee May 10 held a hearing
to examine the "Accountability for the Department of Education's
Oversight of Student Loans." Committee Chair George Miller
(D-Calif.) criticized the department's failure to address the recent
unethical practices brought to light in an investigation by New
York Attorney General Andrew Cuomo. Secretary of Education Margaret
Spellings testified that these incidents were out of the department's
jurisdiction for oversight because they involved private loans as
opposed to those guaranteed or sponsored by the federal government.
In response, Chairman Miller argued that they are irreducibly coupled.
Secretary Spellings also indicated that she would continue to pursue
student loan reform though the regulatory process with her recently
appointed Taskforce on Student Loans. The taskforce was created
after the Department's Negotiating Committee on Student Loans failed
to reach a consensus on proposed regulations. In a March 8 letter,
the AAMC urged that committee "not inadvertently encourage
lenders to circumvent well-established safeguards and market directly
to student without the guidance of trained professionals" [see
Washington Highlights,
March 16].
Information:
Matthew Shick, Senior Legislative Analyst
AAMC Government Relations
mshick@aamc.org
(202) 862-6116
Comparative Effectiveness Bill Introduced
Reps. Tom Allen (D-Maine) and Jo Ann Emerson (R-Mo.) May 7 introduced
the "Enhanced Health Care Value for All Act" (H.R.
2184), which is designed to enhance comparative effectiveness
research on health care items and services. Section 1013 of the
Medicare Modernization Act (P.L.
108-173) authorizes this research at the Agency for Healthcare
Research and Quality (AHRQ). The bill authorizes a $3 billion Health
Care Comparative Effectiveness Research Trust Fund for AHRQ to support
and conduct this research, financed through contributions from Medicare
Parts A and B Trust Funds, the Medicare Prescription Drug Program,
and health plans.
The bill also establishes a Comparative Effectiveness Advisory
Board to recommend how to organize the various types of comparative
effectiveness research, set research priorities, and determine whether
to establish a federally-funded research and development center.
It also creates a Health Services Research Coordinating Council
to identify a national health services research agenda and coordinate
all health services research supported by federal agencies.
Information:
Erica Froyd, Director, Public Health and Research Legislative Affairs
AAMC Government Relations
efroyd@aamc.org
(202) 828-0525
Christiane Mitchell, Director, Federal Affairs
AAMC Government Relations
cmitchell@aamc.org
(202) 828-0526
Rep. Meehan Submits Resignation
Rep. Martin Meehan (D-Mass.) May 9 officially announced his departure
from the House, effective July 1. Rep. Meehan will become chancellor
of the University of Massachusetts at Lowell. He chairs the Armed
Services Subcommittee on Oversight and Investigations and is a member
of the Judiciary Committee. A special primary election will be held
Sept. 4, with a general election on Oct. 16.
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