Washington Highlights: March 28,
2008
Medicare Trustees Report Issues Funding Warning
for Second Consecutive Year
Contents
Prior Issues
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The Medicare Board of Trustees March 25 released its annual report
on the current status and projected financial condition of the Medicare
program, triggering a funding warning for the second consecutive
year.
The trustees report that hospital insurance (Medicare Part A) spending
this year will begin exceeding tax revenues received by the federal
government and the hospital insurance trust fund will be depleted
by 2019, as predicted in the 2007 report. According to the trustees,
the rapid increase in health care costs is due to continued growth
in the volume and medical intensity of services, an aging population,
and the introduction in 2004 of the Medicare prescription drug benefit.
Pursuant to the 2003 Medicare Modernization Act (MMA, P.L.
108-73), a funding warning is triggered when the trustees make
a determination in 2 consecutive annual reports that general revenue
will make up more than 45 percent of total Medicare financing within
a 7-year period. A funding warning first was issued last year because
the trustees found that in both 2006 and 2007 general revenues would
exceed 45 percent of total Medicare financing by 2012 and 2013 respectively.
The warning was issued again in this year's report because the trustees
determined that once again general revenues will exceed the 45 percent
threshold. When a funding warning is issued, the MMA requires that
the Administration make a proposal to bring the funding level below
45 percent. Congress is required to consider - but does not necessarily
have to take action on - the Administration's proposals.
In response to last year's funding warning, the President's FY
2009 budget request proposed to reduce program spending by charging
higher-income beneficiaries more for their Medicare prescription
drug coverage, introducing more efficiency and consumer control
to the program, and capping medical malpractice awards [see Washington
Highlights,
Feb. 8]. The President also has proposed reductions in provider
payments once spending exceeds the 45 percent threshold.
Upon release of the report, Secretary of Health and Human Services
Mike Leavitt responded,
"We need to act quickly and effectively to address Medicare's
fiscal health, including enacting the steps proposed in the President's
budget, which would postpone the insolvency date of the Part A trust
fund for ten years."
The statement also included Treasury Secretary and Managing Trustee
Henry Paulson's warning that "If we do not take action soon
to reform Social Security and Medicare, the coming demographic bulge
will jeopardize the ability of these programs to support people
who depend on them. Without changes, rising costs will drive government
spending to unprecedented levels, consume nearly all projected federal
revenues and threaten America's future prosperity."
However, House Ways and Means Health Subcommittee Chair Pete Stark
(D-Calif.) also released a March
25 statement, noting, "The trigger is an arbitrary threshold
designed to scare people into thinking we can't afford to continue
Medicare as an entitlement. The fact is that we can't afford not
to."
Information:
Diana Mayes, Specialist
AAMC Health Care Affairs
dmayes@aamc.org
(202) 828-0498
Karen Fisher, Sr. Director, Health Care Affairs
AAMC Health Care Affairs
kfisher@aamc.org
(202) 862-6140
Committee to Probe Breakdowns in NIH Security
Rep. John D. Dingell (D-Mich.), chair of the House Committee on
Energy and Commerce, and Rep. Bart Stupak (D-Mich.), chair of the
Subcommittee on Oversight and Investigations, announced
March 24 they are opening an investigation into operations within
the Department of Health and Human Services (HHS) and the National
Institutes of Health (NIH) following the theft of a government laptop
containing sensitive medical information of 2,500 patients enrolled
in an NIH study.
The Washington Post reported March 24 that the laptop was
stolen from the locked trunk of the car of a researcher employed
by the National Heart, Lung, and Blood Institute (NHLBI) on Feb.
23, but the NIH did not send letters notifying the patients until
March 20. The patients' personal and medical information contained
on the laptop was not encrypted, in violation of the government's
data-security policy.
"The stunning failure to act, by both NIH and HHS, raises
troubling questions," said Dingell. He noted the committee
will seek "information to determine what safeguards are in
place, where the system broke down and how best to fix it."
He added the committee will examine whether NIH Institutional Review
Boards (IRBs) "have policies in place to address this type
of security breach."
According to a March 24 statement
by NHLBI Director Elizabeth G. Nabel, M.D., the information on the
laptop pertained to about 2,500 participants in a cardiac MRI study
conducted between 2001 and 2007 and included each participant's
name, birth date, hospital medical record number, and data contained
in MRI reports such as measurements and diagnoses. The laptop contained
no additional medical information on participants beyond the MRI
reports and no additional information such as social security numbers,
addresses, phone numbers, or any financial information.
Information:
Dave Moore, Senior Director
AAMC Government Relations
dbmoore@aamc.org
(202) 828-0525
Representatives Introduce Bill Requiring Drug
Company Payment Disclosures
Representatives Peter DeFazio (D-Ore.) and Pete Stark (D-Calif.)
March 13 introduced the "Physician Payments Sunshine Act"
(H.R.
5605), which will require drug and medical device manufacturers
to disclose their payments to physicians. The legislation will require
drug, device, or medical supply manufacturers that receive payments
through Medicare, Medicaid, or the State Children's Health Insurance
Program (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 also must
submit annual summaries of the information reported.
The bill requires companies with $1 million or more in annual gross
revenues to report the name of the physician, the address of the
physician's office, 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, has a significant
ownership interest in, or to an organization in which the physician
has a significant professional membership interest in, the company
must report the entity and its primary place of business or headquarters.
The bill also requires the companies to disclose any payments to
fund research (such as lab-based or health services research) or
general funding for clinical trials (but only those trials that
must be posted on clinicaltrials.gov). Companies that knowingly
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, 2009, 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.
In addition, the measure places a limitation on tax deductions
for advertising by manufacturers of drugs and medical devices. The
bill stipulates that any manufacturer that incurs during the taxable
year a penalty related to its quarterly transparency reports, lose
its previously allowed tax exemption for marketing.
This legislation is similar, but not identical to, legislation
(S.
2029) introduced in the Senate by Senators Chuck Grassley (R-Iowa)
and Herb Kohl (D-Wis.) in Sep. 2007 [see Washington
Highlights,
Sept. 14, 2007]. A side-by-side
comparison of the bills is available online.
The House bill currently has 11 cosponsors, and has been referred
to the Committee on Energy and Commerce and the Committee on Ways
and Means. The corresponding bill in the Senate has 5 cosponsors
and has been referred to the Committee on Finance.
Information:
Abigail Schopick, Legislative Analyst
AAMC Government Relations
aschopick@aamc.org
(202) 828-0525
AAMC Issues Medical Home Position Statement
The AAMC March 25 issued a formal position
statement on the "medical home" model of care, which
is intended to help patients navigate the health system and access
preventive and acute care in a coordinated manner. The position
statement was developed and proposed by the AAMC Advisory Panel
on Health Care, composed of representatives from within and outside
the AAMC.
The statement describes that in the medical home model of health
care delivery, the ongoing relationship between care provider and
patient is essential. Additionally, the medical home ensures around-the-clock
access to medical consultation, respect for a patient's cultural
and religious beliefs, and the comprehensive coordination of a patient's
care among providers and community services.
The AAMC position statement affirms the following principles:
- Every person should have access to a medical home - a provider
or team of providers to help patients navigate the system -
with which there is a continuous relationship.
- Further research and evaluation of the medical home model
is needed, and more evidence must be gathered on how best to
implement the model.
- Payment for the medical home model should recognize and reward
providers appropriately for prevention, care delivery, and coordination.
- Health care providers should be trained to understand and
implement the medical home model within a team environment.
- The AAMC should work with medical schools and teaching hospitals
to develop a better understanding of how the medical home model
can be adopted in academic and community settings.
In its 2006 Statement
on the Physician Workforce, the AAMC called for an expansion
of medical education and training in the U.S. to ensure that human
resources are available to care for a growing population of aging
and chronically ill citizens. However, the Association and its members
have issued the "medical home" statement as part of their
recognition that adequate human resources are only the first step
to improving the health of communities; and that patients must be
able to access effective care for both prevention and treatment.
Information:
Atul Grover, M.D., Ph.D., Chief Advocacy Officer
AAMC Government Relations
agrover@aamc.org
(202) 828-0410
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