Washington Highlights: September
14, 2007
Contents
Prior Issues
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AAMC, Health Professions Groups Hold Title VII
Capitol Hill Day
Health professions leaders representing the range of disciplines
supported by the Title VII and VIII programs Sept. 12 participated
in a Congressional advocacy day, organized by the Health Professions
and Nursing Education Coalition (HPNEC).
Participants visited more than a dozen congressional offices to
urge Congress to provide full funding for the health professions
training programs, which were cut by 51 percent 2 years ago.
A lunch briefing for participants and Congressional staff featured
presentations by Title VII and VIII grantees who shared firsthand
accounts of what the programs have accomplished. Angela Jackson,
M.D., Director of the Boston University Medical Center Primary Care
Residency Training Program, and Anthony Miller, M.Ed., PA-C, Program
Director of Shenandoah University's Division of Physician Assistant
Studies, offered their perspectives on how funding cuts will impact
the primary care pipeline in their communities. Evelyn Simpkins,
M.D., described how her participation in a Health Careers Opportunity
Program (HCOP) at the Michigan State University College of Human
Medicine led to a fellowship in adolescent medicine at the Johns
Hopkins School of Medicine. Karen Capen Stearns, R.N., C.C.R.N.,
spoke of how Title VIII helped guide her career path in nursing.
The AAMC coordinates HPNEC, which is an alliance of more than 70
national organizations representing providers, institutions, and
community partnerships dedicated to educating the nation's health
personnel.
Information:
Tannaz Rasouli, Legislative Analyst
AAMC Government Relations
trasouli@aamc.org
(202) 828-0525
AAMC Comments to IRS on Schedule H and Form 990
The AAMC Sept. 12 submitted a comment letter
to the Internal Revenue Service (IRS) on proposed revisions to Form
990, which must be completed by all not-for-profit entities seeking
tax-exemption, and on a new form (Schedule H) for hospitals to report
on their community benefit and other activities.
The AAMC reminded the IRS that Revenue Ruling 69-545, which established
the standards for tax exempt hospitals, recognized education and
research as tax exempt purposes. The letter noted that "while
the 21st century teaching hospital has changed in many ways from
its progenitors, the commitments to education, research, and patient
care remain just as strong and continue to reaffirm that it merits
its tax exempt status."
The AAMC also proposed revisions to the worksheets on education
and research that are to be used for completing Schedule H. The
IRS has said that it expects to finalize the forms by the end of
this year and that they will be used for the 2008 tax reporting
year. The AAMC commented that "revisions of the magnitude proposed
. . . may require more time to finalize than has been suggested."
Information:
Ivy Baer, Director & Regulatory Counsel
AAMC Health Care Affairs
ibaer@aamc.orc
(202) 828-0490
Group Letter Urges Senate to Include Physician
Relief in SCHIP Agreement
The AAMC and 130 physician organizations sent a Sept. 10 letter
to all Senators urging that the pending conference agreement on
State Children's Health Insurance Plan (SCHIP) reauthorization include
2 years of positive Medicare physician updates. Although the House-passed
SCHIP reauthorization bill (H.R.
3162) provides a positive 0.5 percent update in both calendar
year (CY) 2008 and CY 2009, the Senate bill does not. Without legislative
action, Medicare expects to reduce physician payments by 10 percent
in CY 2008 and 5 percent in CY 2009.
The sign-on letter expresses concern that postponing physician
payment legislation "until later this year" will put Medicare
providers and beneficiaries "in an untenable position of uncertainty
about Congress' commitment to provide needed relief." Stating
that "Congress has the chance to break with business as usual,"
the letter advises that "the time for action is now."
Information:
Christiane Mitchell, Senior Legislative Affairs Manager
AAMC Government Relations
cmitchell@aamc.org
(202) 828-0526
Senate Letter to President Bush Opposes SCHIP
Regulatory Clarifications
Senators Gordon Smith (R-Ore.), Robert Menendez (D-N.J.), and 42
of their Senate colleagues signed a Sept. 10 letter
to President Bush opposing the Administration's new regulatory "clarifications"
related to State Children's Health Insurance Program (SCHIP) expansions.
The Centers for Medicare and Medicaid Services (CMS) outlined the
clarifications (minimum enrollment levels and certain "crowd-out
procedures') in an Aug. 17 letter
to state health officials [see
Washington Highlights, Sept. 7].
The bipartisan Senate letter urges President Bush to withdraw the
new requirements, or "[a]t the very least...propose this policy
as a formal rule...with a notification and comment period."
Information:
Christiane Mitchell, Senior Legislative Affairs Manager
AAMC Government Relations
cmitchell@aamc.org
(202) 828-0526
AAMC Comments on NCRR Strategic Plan
In response to a request for input on the NIH National Center for
Research Resources' (NCRR) 2009-2013 strategic plan, the AAMC Sept.
10 sent a letter
recommending that NCRR re-dedicate itself to providing balanced
support for shared facilities and other collaborative resources.
The AAMC describes the NCRR as serving "a unique role in creating,
supporting and sustaining research resources and infrastructure
that broadly serve biomedical research, which is distinct from the
topical focuses of most other NIH institutes and centers."
The Association argues that access to shared resources will become
especially important in the future, as research institutions look
to collaborate in response to constrained NIH budgets. "Regional
resources and national hubs connected by informatics networks will
become especially important to the nation's biomedical research
infrastructure," the letter states, noting that several NCRR
programs, such as the Clinical and Translational Science Awards
(CTSAs), animal research facilities, and the Biomedical Informatics
Research Network (BIRN), are already "exemplars" of the
potential effectiveness of such collaboration.
NCRR's schedule for developing its next strategic plan also was
discussed at its advisory council meeting
Sept 11. NCRR Director Barbara Alving, M.D., discussed the status
of the Administration's budget request ($1.11 billion) for FY 2008.
Sherine Gabriel, M.D., professor of Medicine and Epidemiology at
the Mayo Clinic, presented on current training and career development
programs at institutions that received the first round of CTSAs.
Dr. Gabriel described signs of progress and innovation in training
interdisciplinary clinical researchers among the 12 initial awardees,
but she noted that many trainees remain apprehensive about whether
stable career paths will be available to them. She noted for example,
the difficulty students encounter finding appropriate journals to
publish interdisciplinary clinical and translational research. Steven
Hirschfeld, M.D., Ph.D., Associate Director for Clinical Research
at the National Institute of Child Health and Development, presented
on regulatory obstacles in IRB review of pediatric research.
Information:
Stephen Heinig, Senior Research Fellow
AAMC Biomedical Health Sciences Research
sheinig@aamc.org
(202) 828-0488
District Court Invalidates IRS FICA Rule
The U.S. District Court for the District of Minnesota Aug. 3 granted
the Mayo Foundation's motion for summary judgment
against the United States. Mayo sued the federal government for
a refund of Federal Insurance Contributions Act (FICA) taxes withheld
from medical residents' stipends in 2005. Mayo contended that the
regulations issued by the IRS in 2004 that govern whether FICA taxes
must be paid under the Student Exception were invalid. The Court
agreed, saying that the regulatory requirements imposed by the IRS
were contrary to the plain meaning of the statute.
Under the IRS regulations, qualification for the student exception
requires that an individual be "employed" by a "school,
college, or university" and that the individual qualify as
a "student." In the regulation the IRS added a "primary
function test" to the standard that defines "school, college,
or university" so that the primary function of the "employer"
must be education. The Court found that the term "school, college,
or university" in the statute is "not ambiguous,"
so that if a primary function test is to be used as a standard for
defining these terms, Congress must amend the law.
Mayo also argued that the term "student" is not ambiguous,
so that the IRS's addition of a full-time employee exception - whereby
no one who works more than 40 hours per week is considered a student
- is inconsistent with the statute and congressional intent. Again,
the Court agreed and stated that the IRS-imposed requirement "denies
'student' status to medical residents even though the services they
provide are primarily for educational purposes and essential to
becoming fully qualified physicians."
It is unclear whether this decision will have any affect on the
IRS regulations for institutions located outside of Minnesota. Other
institutions that believe their residents should not pay FICA taxes
should consult with tax counsel on possible next steps.
Information:
Ivy Baer, Director & Regulatory Counsel
AAMC Health Care Affairs
ibaer@aamc.orc
(202) 828-0490
House Passes Patent Reform Bill
The House Sept. 4 passed, 220-175, the "Patent Reform Act
of 2007" (H.R.
1908). The legislation is intended to improve clarity and objectivity
in patent law, lessening cause for protracted litigation, and to
bring aspects of the U.S. patent system into harmony with those
of other nations. Key provisions of the bill include switching from
a "first-to-invent" to a "first-inventor-to-file"
standard for establishing priority for an invention and extending
a post-grant review process within the Patent and Trademark Office
that permits third parties to contest a patent's validity.
The bill as passed includes revisions that were requested by a
coalition of university associations, including the AAMC, seeking
to secure public benefits from university technology transfer [see
Washington Highlights, May 18]. The university associations
were successful in defeating a provision that sought to expand "prior
user right" that unduly favored trade secrecy over open disclosure
in the patent system.
In a Statement of Administration Policy, the White House Sept.
6 announced its overall approval of H.R. 1908, except notably for
the bill's provision on the apportionment of damages, which also
was the source of much of the debate on Capitol Hill. For patent
reform to be enacted into law this year, it is likely that the damages
provisions will be revised in conference. A companion bill, S.
1145, has been approved by the Senate Judiciary Committee.
Information:
Stephen Heinig, Senior Research Fellow
AAMC Biomedical Health Sciences Research
sheinig@aamc.org
(202) 828-0488
Susan Ehringhaus, Associate General Counsel, Regulatory Affairs
AAMC Biomedical Health Sciences Research
sehringhaus@aamc.org
(202) 828-0543
Matthew Shick, Legislative Analyst
AAMC Government Relations
mshick@aamc.org
(202) 828-0525
Grassley, Kohl Introduce Bill to Require Public
Database of Drug Company Payments to Doctors
Senators Charles Grassley (R-Iowa) and Herb Kohl (D-Wis.) introduced
legislation Sept. 6 to require drug and medical device manufacturers
to disclose their payments to physicians. The "Physician Payments
Sunshine Act" (S.
2029) requires manufacturers of drugs, devices, or medical supplies
for which payments are made under Medicare, Medicaid, or SCHIP to
disclose to the Secretary of Health and Human Services, on a quarterly
basis, anything of value given to doctors, such as payments, gifts,
honoraria, or travel. Companies must also submit annual summaries
of the information reported.
The bill requires companies with $100 million or more in annual
gross revenues to report the name of the physician, the address
of the physician's office, any facility with which the physician
is affiliated, the value and the date of the payment or gift, its
purpose, and what, if anything, was received in exchange. If a payment
or other transfer of value was provided to an entity that the physician
is employed by, has tenure with, or has an ownership interest in,
the company must report the entity and its primary place of business
or headquarters. Companies that fail to report are subject to penalties
ranging from $10,000 to $100,000 for each violation.
The bill also requires the Secretary to establish no later than
June 1, 2008, procedures to ensure that the information and summary
reports submitted are readily accessible to the public through an
internet website that is easily searchable, downloadable, and understandable.
Senators Claire McCaskill (D-Mo.), Chuck Schumer (D-N.Y.), Amy
Klobuchar (D-Minn.) and Ted Kennedy (D-Mass.) are original cosponsors
of S. 2029, which is based on similar state initiatives in Minnesota,
Vermont, Maine and West Virginia.
Senator Grassley is Ranking Member of the Committee on Finance,
where he has conducted oversight of educational grants awarded to
doctors by drug companies. Senator Kohl chairs the Special Committee
on Aging, which held a hearing in June to examine the financial
relationship between physicians and the pharmaceutical industry.
Information:
Dave Moore, Senior Associate Vice President
AAMC Government Relations
dbmoore@aamc.org
(202) 828-0525
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