Washington Highlights: May 18, 2007
Congress Clears Budget Resolution
Contents
Prior Issues
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The House and Senate May 17 passed the FY 2008 budget resolution
conference agreement (S.
Con. Res. 21), which was hammered out by conferees a day earlier.
The conference agreement assumes $54.965 billion for Function 550
discretionary health spending, $2.9 billion (5.5 percent) above
last year and $3 billion (5.8 percent) above the President's request.
It sets the overall non-defense discretionary spending cap at $450
billion, which is $23 billion above the final FY 2007 level and
$21 billion above the President's request.
The House approved the conference agreement by a vote of 214 -
209, while the Senate cleared it 52-40. Both chambers cleared their
respective bills in March [see
Washington Highlights, March 30]. The White House has
threatened to veto individual spending bills that exceed the President's
request.
The budget agreement does not call for cuts in Medicare or Medicaid
provider payments. It includes reconciliation instructions requiring
the Senate HELP Committee and House Committee on Education to identify
$750 million in savings, presumably from changes to student loan
policies. In a trade off for these cuts, the budget agreement also
includes procedural protections that allow the Senate to reauthorize
certain higher education programs (including those affecting student
loans) through the budget reconciliation process, which bars amendments
and filibusters and allows a bill to pass with a simple majority
(51 votes).
The budget agreement includes several non-binding, deficit neutral
reserve funds for FY 2007 through FY 2012 in support of:
- State Children's Health Insurance Program legislation (up
to $50 billion for the maintenance or expansion of state programs);
- Legislation to delay the January 18 proposed rule on Medicaid
cost limits/units of government and prohibit proposals to reduce
Medicaid GME funding;
- "Medicare improvements" including physician payment
increases that would not impact beneficiary premiums, as well
as improvements in provider quality and efficiency. The improvements
also allow the Senate to reform the hospital area wage index;
- Solutions to encourage physicians to "train in primary
care residencies and attract more physicians... to States that
face a shortage of health care providers;"
- Incentives or "other support" for the adoption
of health information technology; and
- Incentives to comply with "best practices" or other
clinical guidelines.
The budget resolution also sets aside $383 million in FY 2008 for
health care fraud and abuse initiatives.
The House Appropriations Subcommittees are marking up appropriations
bills immediately, beginning with the Homeland Security Appropriations
bill on May 18. The Labor, Health and Human Services, and Education
Appropriations Subcommittee is scheduled to take up its bill after
the Memorial Day recess.
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
Matthew Shick, Senior Legislative Analyst
AAMC Government Relations
mshick@aamc.org
(202) 862-6116
AAMC Testifies Before House Panel on Medicare
Hospital Payments
The AAMC May 15 testified
at a House Ways and Means Health Subcommittee hearing
on the importance of Medicare's special payments to teaching hospitals.
The AAMC was represented by Stanley Brezenoff, president and chief
executive officer of Continuum Health Partners, a four-hospital
system in New York City. Mr. Brezenoff, also representing Greater
New York Hospital Association, urged the committee to oppose the
President's proposals to eliminate teaching hospitals' indirect
medical education (IME) payments for treating Medicare Advantage
beneficiaries and all Medicaid funding for graduate medical education.
He told the committee that the timing of these proposed cuts could
not be worse in light of the nation's physician shortage and teaching
hospitals' current financial conditions.
The hearing focused on issues related to payment accuracy and legislative
and regulatory payment refinements for the Medicare inpatient and
outpatient hospital prospective payment system. It also addressed
home health, long-term care hospital, inpatient rehabilitation facility,
and skilled nursing facility payment systems.
Also testifying from the hospital community were Rich Umbdenstock
president and CEO of the American Hospital Association, and Chip
Kahn, president of the Federation of American Hospitals. Both encouraged
lawmakers to reject cuts proposed by the President's FY 2008 budget
as well as $25 billion in "unwarranted" and "unnecessary"
cuts to hospital services included in the proposed FY 2008 inpatient
rule.
Citing the committee's plan to be involved with the reauthorization
of the State Children's Health Program (SCHIP) and legislation fixing
Medicare physician payment reductions, Chairman Pete Stark (D-Calif.)
encouraged the provider panel to help the committee "sort the
wheat from the chaff" in determining fair payment adjustments
to providers. In his opening statement, Chairman Stark stated that
"no program or payment system, no matter how big or small,
is above review. Everything is on the table in terms of refinement
and other adjustments."
Specifically, Chairman Stark asked the hospital and post-acute
care panel to comment on their experience related to the Medicare
Advantage program and to offer suggestions within the program that
could be cut. Mr. Brezenoff replied that teaching hospitals do get
less money from Medicare Advantage plans than Medicare fee-for-service
and urged the committee to review what the plans were doing with
the extra payments they receive. He also suggested that one area
of savings could be the IME payment included in the Medicare Advantage
rate, since teaching hospitals already receive a direct payment
from Medicare when they treat Medicare Advantage enrollees.
In addition to commenting on the President's FY 2008 proposals
that specifically impact teaching hospitals, the AAMC/GNYHA written
testimony:
- Opposes the Medicare Payment Advisory Commission's recommendation
to reduce the Medicare Indirect Medical Education adjustment;
Supports lifting the Medicare resident cap;
- Urges Congress to work with CMS to clarify in statute that
the Medicare statute is intended to support all resident training
time; and
- Supports the implementation of a stabl
AAMC Government Relations
e and equitable Medicare
physician payment formula.
Information:
AAMC Government Relations
AAMC Testifies at VA Under Secretary for Health
Nomination Hearing
AAMC President Darrell G. Kirch, M.D., May 16 testified
before the Senate Committee on Veteran Affairs in support of Michael
J. Kussman, M.D.'s nomination as Department of Veterans Affairs
(VA) Under Secretary for Health. In his statement, Dr. Kirch praised
VA's academic affiliations and Dr. Kussman's work with the VA-AAMC
Deans Liaison Committee. In particular, he lauded the VA's decision
to increase support for graduate medical education with an additional
2,000 residency positions over the next 5 years. Dr. Kirch also
stressed the importance of the VA Medical and Prosthetic Research
program in preserving the success of these affiliations and urged
Dr. Kussman, the Administration, and Congress to increase funding
for VA research.
The hearing
focused on Dr. Kussman's role in overseeing the transition of veterans
from the Department of Defense into the VA system. Chairman Daniel
Akaka (D-Hawaii) stated, "With each passing day, more and more
servicemembers are returning with serious traumas and injuries,
which for some will mean a lifetime of care from VA… From my
vantage point, VA was not prepared to deal with the types of injuries
stemming from this war. Capacity must be rebuilt. And the next Under
Secretary will have this challenge."
The committee is scheduled to vote May 22 on Dr. Kussman's nomination.
Information:
Matthew Shick, Senior Legislative Analyst
AAMC Government Relations
mshick@aamc.org
(202) 862-6116
House Approves New Supplemental Appropriations
Bill
The House May 10 approved, 221-205, a new FY 2007 emergency supplemental
spending bill (H.R.
2206), days after the President vetoed a previous version due
to provisions related to the Iraq war [see
Washington Highlights, May 4]. As in the previous version,
the supplemental includes provisions to delay implementation of
Medicaid rules regarding cost limits and restricting graduate medical
education programs; eliminates FY 2007 State Children's Health Insurance
Plan shortfalls; and provides additional FY 2007 funding for VA
research, pandemic flu preparedness and biodefense.
The Senate May 17 approved by voice vote a placeholder measure
- expressing support for the armed forces, but not including appropriations
or other provisions - to begin conference negotiations. Senate conferees
include Majority Leader Harry Reid (D-Nev.), Minority Leader Mitch
McConnell (R-Ky.), Sen. Robert Byrd (D-W.Va.), Sen. Thad Cochran
(R-Miss.), and Sen. Daniel Inouye (D-Hawaii). Though the President
again has threatened a veto, House and Senate leadership are working
with the White House to reach agreement on the more contentious
provisions.
Information:
Tannaz Rasouli, Senior Legislative Analyst
AAMC Government Relations
trasouli@aamc.org
(202) 828-0525
AAMC Comments on Patent Reform Legislation
The AAMC and 4 leading educational organizations May 16 released
a consensus
position on the "Patent Reform Act of 2007" introduced
in both the House (H.R.
1908) and Senate (S.
1145). The House Judiciary Subcommittee on Courts, the Internet,
and Intellectual Property May 16 approved H.R. 1908 by a voice vote.
A manager's amendment is expected as the bill moves to the full
committee.
The consensus position addresses the major provisions that affect
university research, teaching, and technology transfer operations.
The authoring organizations include the AAMC, the Association of
American Universities (AAU), the American Council on Education (ACE),
the National Association of State Universities and Land-Grant Colleges
(NASULGC), and the Council on Governmental Relations (COGR).
The associations support the goals of the legislation to add greater
clarity to the patent system by replacing certain subjective elements
(which may lead to lengthy and expensive litigation) with more objective
standards and to improve the overall quality of patents issued in
the United States. These goals are in line with the recommendations
of a 2004 report
issued by the National Research Council (NRC). The academic associations
also recognize the critical role of the patent system in promoting
technology transfer from universities, medical schools and research
organizations, a mission that has become stronger since the 1980
Bayh-Dole Act.
Among the major provisions of the associations' consensus statement
are the following:
- First Inventor to File: The associations do not oppose the
proposed change from the current "first to invent"
system in the United States to a "first (inventor) to file"
system. However, given the duties of university faculty to publish
and otherwise communicate research discoveries broadly, the
associations call for several conditions in the proposed system
including a stronger "grace period" than is reflected
in the current bills within which an inventor's or collaborators'
publications would not count as prior art disqualifying a patent,
an inventor's oath (currently in both bills), and continuation
of provisional applications (also included in the bills);
- Post Grant Opposition Procedure: The associations support
an administrative opposition procedure, but oppose a "second
window" opposition that would continue across the life
of a patent;
- Prior User Rights: The associations oppose extension of prior
user rights as proposed in the legislation, or creation of a
new standard for "substantial preparation for commercial
use;"
- The CREATE Act: The associations support provisions of the
proposed legislation that protect inventions arising under research
collaborations (enacted in the 2003 CREATE Act, P.L.
108-453); and
- Experimental Research Exemption: The associations support
inclusion of an experimental use exemption (not included in
the proposed legislation) as recommended by the 2004 NRC report.
Information:
Stephen Heinig, Lead Science Policy Analyst
AAMC Biomedical Health Sciences Research
sheinig@aamc.org
(202) 828-0488
Susan Ehringhaus, Sr. Director & Regulatory Counsel
AAMC Biomedical Health Sciences Research
sehringhaus@aamc.org
(202) 828-0543
AAMC Criticizes Homeland Security "Chemical Facility"
Rule
In a May 9 comment letter
to the Department of Homeland Security (DHS), the AAMC criticized
a new rule
that could include universities and academic medical centers among
a broad definition of "chemical facilities," subjecting
them to more stringent security requirements. The interim final
rule on "Chemical Facility Anti-Terrorism Standards,"
published in the April 9 Federal Register, includes for the
first time an appendix listing "chemicals of interest"
and threshold quantities that would make an organization possessing
such substances subject to the rule.
The AAMC argued that the list broadly includes many chemicals found
at universities and academic medical centers, although often in
relatively small amounts distributed within laboratories across
their campuses. If considered in aggregate, the volume of these
chemicals would make the university a "chemical facility"
subject to extra security requirements. The AAMC noted that such
requirements, which may be effective for an industrial facility,
would be far less effective in the environment of a research university.
Moreover, the requirements for inventorying and assessing risk of
these materials would also be far more burdensome to administer
for academic institutions than was estimated in the rule.
The Association asked the DHS specifically to exempt universities,
medical schools, and affiliated hospitals from the rule, and to
extend the deadline for comments beyond the 30 days originally provided
to permit institutions time to comment on new sections of the rule.
Information:
Stephen Heinig, Lead Science Policy Analyst
AAMC Biomedical Health Sciences Research
sheinig@aamc.org
(202) 828-0488
AAMC Comments on CMS Proposed Clinical Research
Policy Revisions
The AAMC May 8 submitted comments
to the Centers for Medicaid and Medicare Services (CMS) on proposed
revisions to the Clinical Research Policy (CRP). This policy governs
the Medicare payment eligibility requirements for clinical trials
in which Medicare beneficiaries are enrolled. The proposed policy
contains many requirements supported by the AAMC, such as mandatory
registration on ClinicalTrials.gov.
In its comment letter, the AAMC suggests additional clarifications-such
as less cumbersome requirements about what must be discussed in
the protocol-that will allow CMS to issue a clear, understandable
policy to help allay institutions' fears of inadvertently submitting
an incorrect bill to Medicare for the items and services covered
by the CRP.
Information:
Ivy Baer, Director & Regulatory Counsel
AAMC Health Care Affairs
ibaer@aamc.org
(202) 828-0490
House Panel Authorizes New VA Research Centers
The House Committee on Veterans Affairs (VA) May 15 approved the
"Traumatic Brain Injury Health Enhancement and Long-Term Support
Act of 2007" (H.R.
2199), among a slate of 6 veterans health care bills. Of particular
importance to academic medicine, H.R. 2199 authorizes up to 5 new
VA traumatic brain-injury (TBI) research centers, as well as education
and training of health care professionals. TBI is broadly recognized
as the signature injury of the Iraq and Afghanistan wars.
The bill, sponsored by VA Health Subcommittee Chair Michael Michaud
(D-Maine), is based in part on a bill (H.R.
1944) introduced April 19 by Rep. Jason Altmire (D-Pa.). H.R.
2199 authorizes $10 million for FY 2008 and $20 million for each
of FYs 2009-2011. Additionally, the VA is instructed to allocate
funds from the VA Medical Services and the VA Medical and Prosthetics
Research accounts as necessary.
VA facilities wishing to host the proposed centers must develop
"an arrangement with an accredited medical school that provides
education and training in traumatic brain injury care." The
bill will establish a peer review panel to "assess the scientific
and clinical merit of proposals."
The bill is expected to reach the House floor before the Memorial
Day recess, according to a committee aide.
Senate VA Committee Chair Daniel Akaka (D-Hawaii) April 26 introduced,
a similar bill, the "Veterans Traumatic Brain Injury Rehabilitation
Act of 2007" (S.1233),
to establish an education, research, and clinical care program for
severe TBI. For this program, S. 1233 authorizes $15 million for
FY 2008 through FY 2012. The bill also requires the VA to collaborate
with institutions that receive grants for TBI research from the
National Institute on Disability and Rehabilitation Research of
the Department of Education.
Senator Barack Obama (D- Ill.) May 2 introduced the "Homecoming
Enhancement Research and Oversight (HERO) Act" (S.
1271), which requires a joint study by the VA, the Department
of Defense, and the National Academy of Sciences on the physical
and mental health needs of Iraq and Afghanistan veterans.
Information:
Matthew Shick, Senior Legislative Analyst
AAMC Government Relations
mshick@aamc.org
(202) 862-6116
Subcommittee Considers Options for Improving
Physician Efficiencies
A May 10 hearing
of the House Ways and Means Subcommittee on Health focused on strategies
to ensure the appropriate volume and intensity of Medicare physician
services. In his opening statement,
Subcommittee Chairman Pete Stark (D-Calif.) remarked that "a
solution to curb growth in volume and intensity of physician services
still eludes us." He urged a closer review of "promising
strategies" to "more efficiently reward appropriate medical
care."
Testifying on behalf of the Government Accountability Office (GAO),
Health Care Director Bruce Steinwald recommended that CMS use claims
data to "profile" the efficiency of individual physicians.
As outlined in the April 30 GAO report
"Medicare: Focus on Physician Practice Patterns Can Lead to
Greater Program Efficiency," CMS could then provide individual
physicians with reports comparing their practice efficiency with
that of their peers. The GAO encouraged Congress to link such an
approach with "financial or other incentives" to "curb
inefficiencies."
Herb Kuhn, acting deputy administrator of the Centers for Medicare
and Medicaid Services (CMS), reported that the agency was "in
the early stages of a long-term effort to properly measure physician
resource use." According to Kuhn, an efficiency-based payment
system would require extensive analysis before implementation. Advising
that such an approach poses "significant technical and operational
challenges," Kuhn reported that CMS was "exploring the
possibilities" of compiling quality data via existing clinical
databases and registries. "Such use," Kuhn explained,
"could decrease the burden of quality reporting...while increasing
the quality and usefulness of the data."
Also testifying was American Academy of Family Physicians President
Rick Kellerman, M.D., who advocated for payments that support the
delivery of coordinated care via "medical homes." Medicare
Payment Advisory Commission Chair Glenn Hackbarth reiterated the
Commission's recommendations for Medicare physician payment reform
[see
Washington Highlights, March 2]: revising payments for
"misvalued services"; measuring quality and resource use;
better coordinating/managing care; focusing on primary care; and
"bundling" payments for hospital and physician services.
Information:
Christiane Mitchell, Director, Federal Affairs
AAMC Government Relations
cmitchell@aamc.org
(202) 828-0526
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