Washington Highlights: November
2, 2007
AAMC Testifies
on Proposed Rule Eliminating Federal Medicaid Payments for GME
Contents
Prior
Issues
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Virginia
Commonwealth University (VCU) Health Systems CEO Sheldon Retchin, M.D., M.S.P.H.,
Nov. 1 testified before
the House Oversight and Government Reform Committee on the detrimental impact
of the Medicaid proposed rule to prohibit federal matching payments for graduate
medical education (GME) [see Washington Highlights,
May 25]. The hearing also examined whether the Centers for Medicare and Medicaid
Services (CMS) had the authority to issue a series of recent regulations affecting
Medicaid cost limits and Medicaid payments for outpatient (see
related article), rehabilitation, transportation, and school-based services.
In his testimony, Dr. Retchin warned that any of the proposed cuts will
have a direct and significant impact on the ability of major teaching hospitals
to maintain their unique patient care, education, and research missions, given
their disproportionately large volume of Medicaid services. According to Dr. Retchin,
eliminating the federal match for Medicaid GME payments would further compromise
the educational mission of teaching hospitals "as the U.S. faces a looming
physician shortage." Dr. Retchin stated that the GME proposed rule would
affect healthcare access for all Americans and represented "stunning disregard
for the future viability of our nation's healthcare system." While urging
the passage of AAMC-supported legislation (H.R.
3533) to extend by 1 year the current moratorium on implementation of the
GME proposed rule (as well as the final rule on cost limits and units of government),
Dr. Retchin encouraged Congress to act quickly to halt permanently promulgation
of "this short-sighted policy."
Also testifying before the committee
were New York City Health and Hospitals Corporation President Alan Aviles, National
Association of State Medicaid Directors Chair David Parella, American College
of Emergency Physicians Vice Chair (and University of Texas Medical Branch-Galveston
attending emergency physician) Angela Gardner, M.D., and Government Accountability
Office (GAO) Managing Director for Healthcare Marjorie Kanof, M.D. CMS Director
of Medicaid and State Operations Dennis Smith testified on behalf of the Bush
Administration.
During his testimony, Mr. Smith reiterated the Administration's
position that there was "no explicit authorization" under Medicaid to
"subsidize the training of physicians." According to Mr. Smith, "paying
for [GME] is outside the scope of Medicaid's role, which is to provide medical
care to low-income populations." GAO's Majorie Kanof criticized CMS's lack
of transparency and written guidance in determining which financing arrangements
were allowed under Medicaid. She stated that allowable Medicaid costs are not
clearly defined, and that Congress must pass legislation to resolve the lack of
clarity. Several witnesses and committee members doubted that states could identify
alternative financial sources for lost GME funding.
Additional information
on the hearing, including witness testimony and a webcast, is available on the committee website.
Information:
Christiane Mitchell, Director, Federal Affairs
AAMC Government Relations
cmitchell@aamc.org
(202) 828-0526
Atul Grover, M.D., Ph.D., Chief Advocacy Officer
AAMC Government Relations
agrover@aamc.org
(202) 828-0410
Appropriators Combine
HHS and VA Spending Bills
House and Senate negotiators Nov. 1 approved
a conference agreement on the FY 2008 Labor-HHS-Education Appropriations bill
(H.R. 3043).
Democratic leaders had planned to combine the Labor-HHS bill with the Defense
Appropriations bill (H.R.
3222) and the Military Construction-Veterans Affairs Appropriations bill (H.R.
2642) but decided to remove the Defense bill from the package in response
to Republican opposition. The resulting conference agreement includes $150.7 billion
in discretionary funding in the Labor-HHS bill and $64.7 billion in the Military
Construction-VA bill.
The conference agreement on Labor-HHS includes $30
billion for NIH in FY 2008. This is an increase of $1.1 billion (3.8 percent)
over the FY 2007 level. The conferees added an additional $100 million beyond
what the Senate had proposed. The Senate bill had proposed $29.9 billion, while
the House bill proposed $29.65 billion. The final conference number also includes
the $300 million transfer for Global HIV/AIDS as proposed by both the House and
Senate, so the adjusted number for NIH is $29.7 billion, which is a net increase
of $899 million (3.1 percent).
The agreement includes $212 million for Title
VII health professions training programs, an increase of $27.3 million (14.7 percent)
over FY 2007. The House bill had provided $228.3 million for Title VII, while
the Senate had provided $189.7 million. For Title VIII nursing education programs,
the conference agreement includes $167.7 million, an increase of $18.0 million
(12.0 percent) over FY 2007.
AAMC President Darrell G. Kirch, M.D., sent
an Oct. 31 letter to the
conferees urging them to adopt the Senate recommendation for NIH and the House
recommendation for the Title VII health professions programs.
The conference
agreement includes $131.5 million for the National Health Service Corps (NHSC),
a $5.8 million increase (4.6 percent) over FY 2007, as recommended in the House
bill. The Senate bill had proposed funding NHSC at the FY 2007 level of $125.7
million.
Children's Graduate Medical Education (GME) receives the House-recommended
$307 million in the conference agreement, a $10 million increase (3.4 percent)
over FY 2007. The Senate had recommended $200 million, a $97 million (33 percent)
cut.
The conference agreement provides $334.6 million for the Agency for
Healthcare Research and Quality, a $15.6 million (4.9 percent) increase over FY
2007, and a $5 million increase over the $329.6 million recommended in both the
House and the Senate bills.
The conference report is scheduled to be filed
Nov. 5. A vote on the House floor is tentatively scheduled for Nov. 7, with Senate
action expected shortly after the House vote.
The decision to combine the
Military Construction-VA and Labor-HHS bills is being criticized by Republicans
and will complicate matters as the package goes to the House and Senate for final
passage. President Bush has threatened to veto the Labor-HHS bill because it is
nearly $10 billion above his budget request. The President also opposes combining
the Labor-HHS bill with funding for veterans programs. Senate Republicans reportedly
are considering whether to oppose on procedural grounds combining the bills.
Information:
Dave Moore, Senior Director
AAMC Government Relations
dbmoore@aamc.org
(202) 828-0525
Education Regulations Preserve Economic Hardship Debt-to-Income
Ratio
The Department of Education Nov. 1 published in the Federal Register
(Vol.
72 FR 61960-62011) final regulations, amended to reflect recent changes in
the Higher Education Act (HEA). The new regulations are the product of a year-long
negotiated rulemaking that concluded April 18. The internal Negotiating Committee
on Student Loans, formed April 24 by Secretary of Education Margaret Spellings,
completed the regulations. The final regulations also address certain provisions
of the "College Cost Reduction and Access Act of 2007" (P.L.
110-84) that became effective Oct. 1, 2007.
Of particular importance
to medical residents, the regulations preserve the current definition of the economic
hardship deferment debt-to-income ratio. The debt-to-income ratio allows medical
residents to qualify for economic hardship deferment and postpone payment of their
educational loans for up to 3 years. P.L. 110-84 eliminated this qualifying pathway.
According to a letter from Assistant Secretary of Education Terrell Halaska to House Education and Labor
Ranking Member Howard "Buck" McKeon (R-Calif.), the Department will
continue to offer the economic hardship deferment for borrowers that meet the
debt-to-income ratio qualifying criteria. The letter does not indicate any end
date for the debt-to-income ratio pathway. The letter also states the Department's
intentions to publish a Dear Colleague Letter on this issue. The AAMC supported
postponing the elimination of the debt-to-income ratio in an Oct. 12 letter to Secretary Spellings [see Washington Highlights,
Oct. 19].
The regulations include a change in another provision of the
economic hardship deferment that will increase the debt-to-income ratio by 50
percent, allowing more residents to qualify for the deferment. Previously, a resident's
monthly income less monthly loan payments could not exceed 220 percent of the
federal poverty line for a family of two. Under the new regulations, a resident's
monthly income less monthly loan payments can reach up to 330 percent of the federal
poverty line for the borrower's family size.
Information:
Matthew Shick, Senior Legislative Analyst
AAMC Government Relations
mshick@aamc.org
(202) 862-6116
AAMC Submits Comment Letter
on Medicaid Outpatient Proposed Rule
The AAMC Oct. 29 submitted a comment
letter asking the Centers for Medicare & Medicaid Services (CMS) to rescind
a Sept. 28 proposed rule that would narrow the Medicaid definition of hospital
outpatient services. The proposed rule would result in certain services being
paid at a lower "nonfacility" payment rate even though they might be
provided in the hospital outpatient department. The proposed rule also would change
the outpatient upper payment limit (UPL) calculation to exclude graduate medical
education costs and payments.
The rescission was requested because the
AAMC believes the proposed rule, entitled "Medicaid Program; Clarification
of Outpatient Clinic and Hospital Facility Services Definition and Upper Payment
Limit," violates the 1-year Congressional moratorium that prohibits CMS from
taking any action on implementation of a cost limit on payments to governmental
providers or restrictions on Medicaid graduate medical education payments.
Information:
Karen Fisher, Sr. Director, Health Care Affairs
AAMC Health Care Affairs
kfisher@aamc.org
(202) 862-6140
Physicians Face Sharper Decrease in Payments
The
Centers for Medicare and Medicaid Services (CMS) Nov. 1 released the final
rule for the 2008 Physician Fee Schedule payments. The final update to the
physician fee conversion factor will decrease by 10.1 percent, more than the projected
9.9 percent decrease mentioned in the proposed rule [see Washington
Highlights, July 6]. The formula for
updating the physician fee schedule is set in law and cannot be modified without
legislative action from Congress.
Additionally, CMS confirmed it would fund
2008 physician payment and quality initiatives using the $1.35 billion pool created
in the Tax Reform and Health Care Act of 2006 (TRHCA).
Information:
Denise Dodero, Sr. Director, Health Care Affairs
AAMC Health Care Affairs
ddodero@aamc.org
(202) 828-0493
Mary Patton, Senior Specialist
AAMC Health Care Affairs
mpatton@aamc.org
(202) 862-6297
CMS Releases 2008 OPPS
Final Rule
The Centers for Medicare and Medicaid Services (CMS) Nov. 1
released on its website the calendar year (CY) 2008 Medicare Outpatient Prospective
Payment System (OPPS) final
rule, which includes a 3.3 percent inflation update in base payment rates
for hospital outpatient services. The AAMC submitted comments on the proposed rule [see Washington Highlights,
Sept. 28].
The OPPS final rule requires hospitals to submit 7 quality
measures for the new Hospital Outpatient Reporting Program. Failure to report
these measures will result in a reduction of the CY 2009 annual payment update
by 2 percentage points. The final measure set, which is less than what was originally
proposed, includes 5 emergency department (ED) transfer measures and 2 perioperative
care measures. The program now will be implemented beginning with April 2008 discharges.
CMS
finalized its proposal for 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. Also included in
the final rule is a new type of APC, called a composite APC, that bundles payment
for multiple, significant procedures related to an outpatient encounter or episode
of care into payment for a single APC amount.
In other areas, CMS:
- Finalized its proposal to reduce payment for device dependent APCs if a hospital receives
a partial credit for a replaced device;
- Clarified that a hospital
is not precluded from using physician coding guidelines to code for clinic visits
if the hospital believes that such guidelines adequately describe hospital resources;
and
- Finalized its proposal to pay for separately payable drugs and
biologicals at a rate of ASP plus 5 percent.
Information:
Jennifer
Faerberg, Director, GME Track/Health Care Quality Liaison
AAMC Division of
Health Care Affairs
jfaerberg@aamc.org
(202) 862-6221
Diana Mayes, Specialist
AAMC Health Care Affairs
dmayes@aamc.org
(202) 828-0498
Congress Passes New SCHIP Bill,
President Threatens Veto
The House Oct. 25 and Senate Nov. 1 passed legislation
(H.R. 3963)
to reauthorize the State Children's Health Insurance Program (SCHIP). The bill
is similar to legislation (H.R.
976) vetoed by President Bush on Oct. 3 [see Washington
Highlights, Oct. 5]. In an Oct. 31
Statement of Administration Policy, the White House announced its intent to veto H.R. 3963.
The White House Nov. 1 issued a statement expressing concern about "major flaws" within H.R. 3963. According to
the White House, the new SCHIP bill continues to shift privately covered children
"onto the government rolls, uses taxpayers' dollars to subsidize middle class
families, and raises taxes." The White House advised that "Congress
should get back to work on legislation that covers poor children - and stop using
valuable floor time to make partisan statements .…To relieve the minds of
parents and governors, this program should be extended soon so that poor children
do not lose health care because of partisan politics." SCHIP is currently
funded under a continuing resolution (H.J.
Res. 52) at FY 2007 levels through Nov. 16.
Information:
Christiane Mitchell, Director, Federal Affairs
AAMC Government Relations
cmitchell@aamc.org
(202) 828-0526
Senate Finance Minority Staff Holds Roundtable
on Non-Profit Hospitals
Senate Finance Committee minority staff invited
18 individuals to speak at an Oct. 30 roundtable about hospitals' tax exempt status. Participants included hospital CEOs, consumer advocates, academics, and other experts. They
provided their reactions to a minority staff paper, "Tax-Exempt Hospitals: Discussion
Draft," that was "meant to encourage and foster additional discussion
as the Finance Committee continues to consider possible legislative reform in
this area." Among the discussion draft's recommendations was that "no
hospital can maintain 501 (c)(3) status without dedicating a minimum of 5 percent
of its annual patient operating expenses or revenues to charity care, whichever
is greater."
Many speakers noted that there should not be a "one
size fits all" requirement related to the amount of charity care that a non-profit
hospital should provide. A number of speakers supported requirements that are
flexible and take into account such factors as the needs of a hospital's community,
state initiatives, the hospital's payer mix, and the hospital's own financial
situation. It also was suggested that charity care should not be the sole measure;
community benefit also should include education, research, and other activities
that enhance the health of the community. Many speakers noted that the 5 percent
charity care standard recommended by minority staff is a very high one that few
hospitals are likely to meet.
Senate Finance Committee Ranking Member Chuck
Grassley (R-Iowa) spoke briefly at the roundtable. He said that "I haven't
made any decisions about whether legislation is necessary to address the issues
we've seen regarding non-profit hospitals, but I hope today's roundtable will
bring a better understanding of what are possible solutions. My hope remains that
much can be accomplished with volunteer work."
Information:
Ivy Baer, Director & Regulatory Counsel
AAMC Health Care Affairs
ibaer@aamc.org
(202) 828-0490
CMS
Offers Advice on Residents and NPIs
The Centers for Medicare and Medicaid
Services (CMS) Oct. 25 sent an announcement that advises all residents to obtain a National Provider Identifier (NPI). Under
the Health Insurance Portability and Accountability Act (HIPAA), all providers
are required to have an NPI, which is a unique identification number, as of May
23, 2007 (or May 23, 2008 for small health plans). Medical students and residents
are eligible for NPIs, though many have not obtained one. In the announcement,
CMS encourages residents at teaching hospitals and academic medical centers to
obtain the NPI because:
- An NPI will be required to apply and enroll
as a Medicare provider, and possibly as a provider for other health plans.
- Pharmacies may require an NPI to dispense medications and submit claims
to health plans.
- An NPI may be required on claims for services ordered
or referred by the resident.
- Future employers may require an NPI
as a condition of employment.
Information:
Ivy Baer, Director & Regulatory Counsel
AAMC Health Care Affairs
ibaer@aamc.org
(202) 828-0490
HHS
Releases Progress Report on Preparedness Measure
The Department of Health
and Human Services (HHS) Oct. 29 published a progress
report on implementation of the "Pandemic and All-Hazards Preparedness
Act" (P.L.
109-417), which the President signed in Dec. 2006.
According to the report, the newly created Biomedical Advanced Research and Development
Authority (BARDA), which is tasked with coordinating federal research and development
of bioterrorism countermeasures, has established strategic initiatives for countermeasures
and product advanced research, developed pre-pandemic influenza vaccine stockpiles,
and awarded multiple contracts to advance its missions, among other accomplishments
to date.
HHS also has been implementing changes to existing grant programs,
including the Hospital Preparedness Program. The new requirements include reporting
benchmarks and performance measures, which will factor into FY 2009 award determinations,
as well as a matching fund requirement, beginning in FY 2008. Preparedness training
programs, including the Bioterrorism Training and Curriculum Development Program
(BTCDP), were transferred from the Health Resources and Services Administration
(HRSA) to the HHS Assistant Secretary for Preparedness and Response (ASPR) in
March. HHS expects to release the results of a 5-year evaluation of the BTCDP
to provide grantees and ASPR with a better understanding of the program and its
outcomes.
Information:
Abigail Schopick, Legislative Analyst
AAMC Government Relations
aschopick@aamc.org
(202) 828-0525
President Bush Nominates Veterans
Affairs Secretary
President Bush Oct. 30 nominated retired Lt. Gen. James
B. Peake, M.D., to be Secretary of Veterans Affairs. Currently the Chief Medical
Director and Chief Operating Officer of QTC Management, Inc., Dr. Peake served
as Surgeon General of the U.S. Army from 2000 to 2004, and as Commanding General
of the U.S. Army Medical Department Center and School. His awards and decorations
include the Silver Star, Bronze Star, and Purple Heart. Dr. Peake holds a bachelor's
degree from the United States Military Academy and an M.D. from Cornell University.
If confirmed, he will be the first general and the first physician to head the
Department of Veterans Affairs. He still must undergo background checks and questioning
by the Senate, so final confirmation may take weeks.
HRSA
Announces Advisory Committee Openings, Revised Primary Care Guidance
The Health
Resources and Services Administration Nov. 1 published in the Federal Register
(Vol.
72 FR 61887-61888) an announcement requesting nominations for 7 vacancies
on the Advisory Committee on Interdisciplinary, Community-Based Linkages (ACICBL).
The Advisory Committee provides recommendations annually to the Department of
Health and Human Services, the Senate Committee on Health, Education, Labor, and
Pensions, and the House Committee on Energy and Commerce, on the interdisciplinary
health professions training programs under Title VII. Specifically, HRSA seeks
nominations from schools that have administered awards for Area Health Education
Centers (AHECs), allied health programs, geriatric education programs, and Quentin
N. Burdick rural training programs. Nominations are due Dec. 31.
HRSA also
published in the Nov. 1 Federal Register (Vol.
72 FR 61888) a notice that the program guidance for the Title VII Training
in Primary Care Medicine and Dentistry program has been revised to include competition
for primary care clinician research fellowships within the physician faculty development
program. The original guidance had discontinued competition for the research fellowships
[see Washington Highlights,
Oct. 5].
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