Washington Highlights: September
28, 2007
Congress Clears Funding Extension
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Congress has approved a short-term funding extension to keep government
programs running through Nov. 16. The House approved the measure
(H.J.Res
52) on Sept. 26 by a 404-16 vote. The Senate passed the measure
Sept. 27 by a 94-1 vote.
Known as a continuing resolution (CR), the measure funds programs
at the FY 2007 levels. It is necessary because no FY 2008 appropriations
bill has been completed and the federal fiscal year starts Oct.
1. The House has passed all 12 FY 2008 bills; the Senate has passed
4 and is expected to pass the FY 2008 Defense spending bill (H.R.
3222) before a weeklong Columbus Day recess.
President Bush has repeatedly threatened to veto most of the FY
2008 spending bills because Democrats' plan to spend $23 billion
more than the $933 billion the President requested in his FY 2008
budget.
The CR also includes short-term extensions of funding that falls
outside the appropriations process, including for the State Children's
Health Insurance Program (SCHIP).
Information:
Dave Moore, Senior Director
AAMC Government Relations
dbmoore@aamc.org
(202) 828-0525
Battle over SCHIP Reauthorization Continues
The House Sept. 25 (265-159) and the Senate Sept. 27 (67-29) cleared
a State Children's Health Insurance Program (SCHIP) reauthorization
package (H.R.
976), largely based on an Aug. 2 Senate-passed bill [see Washington
Highlights, Aug. 3].
In anticipation of the votes, AAMC President Darrell G. Kirch,
M.D., Sept. 25 sent key House and Senate negotiators a letter
expressing support for H.R. 976. The AAMC supports "continued
and expanded" SCHIP funding to "preserve and enhance healthcare
access for millions of low-income children." The letter explains
that this issue is particularly important to AAMC members organizations
"which care for a disproportionately large segment of low-income
children."
The AAMC letter also raises concerns about looming reductions in
Medicare physician payments. The short-term physician payment relief
in the AAMC-supported House-passed SCHIP bill (H.R.
3162) was not included in the final reauthorization agreement.
Dr. Kirch states, "We look forward to working with you to secure
passage and enactment of legislation that will replace the next
two years of Medicare physician payment cuts (15 percent reduction)
with positive updates."
President Bush is expected to veto the SCHIP agreement shortly.
To assure continued funding of SCHIP (which expires Sept. 30), the
House and Senate included a temporary extension of current program
funding levels in the Continuing Resolution (CR) (see
related story). Under the CR, SCHIP is funded through Nov. 16.
Information:
Christiane Mitchell, Director, Federal Affairs
AAMC Government Relations
cmitchell@aamc.org
(202) 828-0526
AAMC Submits Comments on Medicare Hospital Outpatient
Rule
The AAMC Sept. 14 submitted comments
on the Medicare hospital outpatient prospective payment system (OPPS)
proposed
rule, published by the Centers for Medicare and Medicaid Services
(CMS) in the Aug. 2 Federal Register. The policy changes
will take effect Jan. 1, 2008.
The AAMC urges CMS to delay the implementation of the Hospital
Outpatient Quality Reporting Program because the Jan. 1, 2008, deadline
to begin submitting data does not allow enough time for hospitals
and vendors to coordinate the data collection and submission process.
This is compounded by the fact that CMS is planning further testing
of the proposed measures, which ultimately delays the point at which
measure specifications can be finalized.
The rule includes a new packaging approach that would broaden the
OPPS payment groupings - ambulatory payment classifications (APCs)
- by combining 7 categories of what CMS considers "ancillary
and supportive" services that are currently billed separately
into the primary service. The AAMC letter urges CMS (before finalizing
the changes) to ensure that the proposed packaging methodology is
transparent, is clearly understood by the hospitals affected, and
leads to accurate payment for packaged services. If the agency decides
to move forward with the new packaging proposal, the AAMC recommends
that CMS exclude observation services at this time.
The AAMC urges CMS to rescind its proposal that would require hospitals
to report pharmacy overhead charges separately from the associated
drug and biological charges. While intended to help gather data
on pharmacy overhead costs, CMS's proposed methodology for the collection
of pharmacy overhead charges will result in poor data and impose
an undue administrative burden on hospitals. The AAMC has offered
to work with CMS to develop ways in which reliable pharmacy overhead
charge data can be obtained without imposing an undue burden on
hospitals.
As it has in the past, the AAMC urges CMS to conduct a comprehensive
analysis to determine the need for a teaching adjustment for outpatient
payments. In the 2006 final rule CMS asserted that "such studies
are especially warranted when hospitals experience a negative increase
in payments." Although major teaching hospitals are not experiencing
a negative increase in payments, AAMC believes that an analysis
is warranted because Medicare outpatient margins are significantly
lower for major teaching hospitals than for other non-teaching hospitals.
For example, according to an internal analysis of 2004 hospital
Medicare cost reports, the average outpatient margins were minus
20.2 percent for major teaching hospitals, minus 10.1 percent for
other teaching hospitals and minus 11.8 percent for non-teaching
hospitals.
Information:
Diana Mayes, Specialist
AAMC Health Care Affairs
dmayes@aamc.org
(202) 828-0498
Jennifer Faerberg
AAMC Division of Health Care Affairs
jfaerberg@aamc.org
(202) 862-6221
Congress Passes Legislation Relieving IPPS Cuts
Slated for Oct. 1
The House Sept. 26 and Senate Sept. 27 passed the "TMA, Abstinence
Education, and QI Programs Extension Act of 2007" (H.R.
3668), which would prevent the Centers for Medicare & Medicaid
Services (CMS) from fully implementing $20 billion in prospective
payment cuts to Medicare hospital inpatient services over the next
5 years. As part of the FY 2008 inpatient prospective payment system's
(IPPS) final rule, the cuts are scheduled to begin Oct. 1 as an
offset to payment increases associated with coding changes that
CMS believes will occur with the change from the current DRG system
to "Medicare-severity" DRGs (MS-DRGs). The President is
expected to sign the bill.
H.R. 3668 would reduce the prospective payment cuts in FYs 2008
and 2009 by half to 0.6 and 0.9 percent, respectively. The bill
also gives CMS the authority to recoup any further "overpayments"
starting in FY 2010. However, if no coding "creep" occurs,
the bill directs CMS to pay back these amounts starting in FY 2010.
According to the American Hospital Association, the bill would
restore $2.5 billion to hospitals over the first 2 years and $7
billion over 5 years, assuming no additional retrospective adjustments
are made.
The congressional action follows earlier action taken by the House
to delay the rule [see Washington
Highlights, July 20].
In addition, nearly 40 members of Congress Sept. 21 sent a letter
to House Speaker Nancy Pelosi (D-Calif.) urging her to find an avenue
to pass a IPPS relief bill before the rule's Oct. 1 implementation
deadline. The letter was spearheaded by Rep. Jason Altmire (D-Pa.).
HR 3668 also includes several other provisions, such as a 6 month
delay in Medicaid's tamper-resistant prescription pad rule (see
related story) and an extension of Medicaid's Transitional Medical
Assistance program, the Abstinence Education program, and Medicare's
Qualifying Individual program. It also extends a Web-based asset
verification program from the Social Security Administration to
the Medicaid program.
Information:
AAMC Government Relations
House, Senate Pass Legislation that Delays Required
Use of Tamper Resistant Pads for Medicaid Prescriptions
A bill (H.R.
3668) passed by the House Sept. 26 and Senate Sept. 27
will delay by 6 months the Oct. 1 requirement that all written,
non-electronic prescriptions under Medicaid be executed on tamper-resistant
pads. The President is expected to sign the bill into law.
The tamper resistant pad requirement was included in section 7002(b)
of the FY 2007 Supplemental Appropriations (P.L.
110-28), signed into law May 25. The tamper resistant pad requirement
applies to all outpatient drugs, including over-the-counter drugs
in States that reimburse for such items.
Information:
AAMC Government Relations
AAMC, FOVA Urge Conferees' Approval of $500 million
FY 2008 VA Research Appropriation
The Friends of VA Medical Care and Health Research (FOVA) Sept.
27 sent a letter
to conferees of the FY 2008 "Military Construction and Veterans
Affairs Appropriations Act" (H.R.
2642, S.
1645), urging acceptance of the Senate's $500 million appropriation
for VA research. The AAMC is a member of FOVA's executive committee.
The letter commends both the House and Senate for their proposed
increases for the VA Medical and Prosthetics Research program. FOVA
supports a final conference agreement of $500 million, a $53.8 million
(12.06 percent) increase over FY 2007. The House included $480 million
for VA research.
The letter also reiterates the need for dedicated funding for research
facility improvements. The current unbalanced system, in which research
competes with other medical services for basic infrastructure support,
has "lead to an accumulation of necessary research facility
upgrades including improved ventilation, electrical supply, plumbing,
and space configuration." Congress has recognized this deficiency
in past years, but has yet to appropriate dedicated funds for research
infrastructure. For FY 2008, FOVA recommends a $45 million allocation
for research facilities improvement under the minor construction
account.
Information:
Matthew Shick, Senior Legislative Analyst
AAMC Government Relations
mshick@aamc.org
(202) 862-6116
HHS Releases First Report on Personalized Health
Care
The Department of Health and Human Services (HHS) Sept. 19 released
its first report
on personalized health care, including an inventory of Public Health
Service programs and resources, which may herald an age when standards
of care will be tailored to individual patients. As described by
HHS, "the report, 'Personalized Health Care: Opportunities,
Pathways, Resources,' presents a long-range plan for achieving much
more individualized treatment for patients, especially by using
genetic information and health information technology." The
report was initiated at the direction of HHS Secretary Mike Leavitt.
Information:
Stephen Heinig, Lead Science Policy Analyst
AAMC Biomedical Health Sciences Research
sheinig@aamc.org
(202) 828-0488
President Signs FDA Overhaul
The President Sept. 27 signed the "Food and Drug Administration
Amendments Act of 2007" (H.R.
3580), which Congress had approved one week earlier [see Washington
Highlights, Sept. 21].
The measure reauthorizes drug and device user fees, provides greater
incentives for pediatric drug testing, and requires reporting of
clinical trial results.
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
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