Washington Highlights: August 1,
2008
Contents
Prior Issues
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House, Senate Sign-On Letters Urge CMS to Preserve
Capital IME Adjustment
On July 24, 210 House members (including over 45 Republicans) signed
a letter to
Centers for Medicare and Medicaid Services (CMS) Acting Administrator
Kerry Weems, urging him to withdraw a proposal to eliminate the
Medicare indirect medical education (IME) adjustment made under
the capital reimbursement system [see Washington
Highlights, June 6]. Reps.
Jim Marshall (D-Ga.) and Peter King (R-N.Y.) circulated the letter.
Sens. Charles Schumer (D-N.Y.), Hillary Clinton (D.N.Y.), and Arlen
Specter (R-Pa.) circulated a similar letter, which was sent to Acting
Administrator Weems on July 28. The letter was signed by 48 of their
Senate colleagues, including 12 Republicans. Both letters state
that the IME adjustment "is an essential component of the revenue
stream that enables teaching hospitals to serve their communities
and the nation in critical ways." They advise that eliminating
the adjustment "would result in significant losses to our teaching
hospitals."
Information:
Travis W. Crytzer, Legislative Analyst
AAMC Health Care Affairs/Government Relations
tcrytzer@aamc.org
(202) 828-0418
Congress Passes Higher Education Act Reauthorization
The House and Senate July 31 approved the final conference agreement
of the Higher Education Act (HEA) reauthorization, a bill 7 years
in the making. While the "Higher Education Opportunity Act
of 2008" (H.R.
4137) includes many provisions of importance to medical education,
Congress failed to reinstate the"20/220 pathway" of the
economic hardship deferment. The bill creates new loan forgiveness
programs, expands workforce shortage grants, increases Perkins loan
limits, requires State maintenance of education funding, and provides
for regulation and oversight of the student financial aid community.
The AAMC supported many of these provisions in a May 15 comment
letter on the conference of the House and Senate HEA reauthorization
bills [see Washington Highlights,
May 16].
Economic Hardship Deferment
Under the "20/220 pathway" of the economic hardship deferment,
qualifying medical residents are able to postpone repayment of their
federal student loans for up to three years without accruing interest
on the subsidized portion of those loans. The College Cost Reduction
and Access Act of 2007" (P.L. 110-84, CCRAA) eliminated this
pathway effective July 1, 2009. The AAMC supported reinstatement
of this pathway throughout HEA reauthorization [see Washington
Highlights, March 16].
Following July 1, 2009, medical residents will not qualify for economic
hardship deferment, but will still be able to postpone repayment
under Forbearance for their entire residency training. Medical resident
also will have the option of making small monthly payments under
the income-based repayment program created by P.L. 110-84.
Public Service Loan Forgiveness Clarified
Effective July 1, 2009, a new loan forgiveness program established
by the CCRAA will absolve Direct student loans for borrowers who
work 10 years in certain "public service" jobs and make
loan payments during that time. Among other professions, public
service will include all 501(c)(3) employers, "faculty teaching
in high-needs areas as determined by the Secretary," and service
at private organizations providing "public health" or
"emergency management" services. H.R. 4137 clarifies the
definition of public health to include "full-time professionals
engaged in health care practitioner occupations and health care
support occupations, as such terms are defined by the Bureau of
Labor Statistics."
Grants and Loan Forgiveness in Areas of National Need
H.R. 4137 could expand medical schools' access to grants for Graduate
Assistance in Areas of National Need (GAANN). Under the new definition,
the Secretary of Education, in consultation with appropriate Federal
and nonprofit agencies and organizations, including the National
Science Foundation, the Department of Defense, the Department of
Homeland Security, the National Academy of Sciences, and the Bureau
of Labor Statistics, will designate areas of national need based
on the following criteria:
- the extent to which the interest in the area is compelling;
- the extent to which other Federal programs support post baccalaureate
study in the area concerned;
- an assessment of how the program may achieve the most significant
impact with available resources; and
- an assessment of current and future professional workforce
needs of the United States.
The AAMC believes that health professions education programs, such
as medicine and nursing, should qualify for GAANN institutional
grants in light of their expected workforce shortages.
H.R. 4137 also creates a new loan forgiveness program for service
in areas of national need. Under this program, "public sector
employees" and "medical specialists" are eligible
for up to $10,000 in loan forgiveness over 5 years. Public sector
employment includes "full-time professionals engaged in health
care practitioner occupations and health care support occupations."
Medical specialists are defined as residents that have been accepted
to, or currently participate in, an ACGME-accredited graduate medical
education training program or fellowship that requires more than
5 years of total graduate medical training and has fewer U.S. medical
school graduate applicants nationwide than the total number of positions
available under these programs or fellowships.
The bills prohibits participants in the loan forgiveness program
for service in areas of national need from receiving additional
repayments for the same service under the new public service loan
forgiveness program.
Perkins Loan Funding and Limits
A Federal Perkins loan is a low interest (5 percent) loan available
to medical students with exceptional financial need. H.R. 4137 reauthorizes
the Perkins loan program through FY 2015 at $300 million, a $50
million (20 percent) increase over the current authorization level.
The bill also increases the annual Perkins loan limit for graduate/professional
students from $6,000 to $8,000 and provides a corresponding increase
in the aggregate (lifetime combined graduate and undergraduate)
loan limit for graduate/professional students from $40,000 to $60,000.
Maintenance of State Funding
H.R. 4137 includes a State "maintenance of effort" provision
that requires a state's funding to public and private educational
institutions to match (in the aggregate) the average annual support
for the previous 5 academic years. Public institutions funding is
defined as non-capital and non-direct research and development expenses
or costs by such State. Private institutions funding is defined
as funds provided by the State for student financial aid for paying
costs associated with postsecondary education.
Financial Aid Oversight
H.R. 4137 provides for regulation and oversight of the financial
aid community. Among other provisions, the conference agreement:
- Requires institutions to develop and administer a code of conduct
for their financial aid offices;
- Requires institutions to disclose all relationships with lenders;
- Requires "preferred lender lists" to include at least
three unaffiliated lenders and the process that was used to develop
the list;
- Prohibits financial aid administrators who participate on lender
advisory boards from receiving compensation for such activities,
and requires such administrators to report lender support provided
for travel and related activities;
- Prohibits staffing of campus financial aid offices by lenders
or their employees, excluding services provided in exit interviews
for borrowers;
- Bans all gifts, opportunity pools, and revenue-sharing between
lenders and institutions, with the exception of favorable loan
benefits/terms, informational material, professional training
programs, and exit/entrance interview services by lenders (under
the direction of the institution's financial aid administrator);
and
- Requires certain lender disclosures in private education loan
applications, solicitations, and approvals.
Information:
Matthew Shick, Senior Legislative Analyst
AAMC Government Relations
mshick@aamc.org
(202) 862-6116
AAMC Submits Language to Democratic Platform
In a July 31 letter
to the chairs of the Democratic Party Platform Committee, AAMC President
and CEO Darrell G. Kirch, M.D., asked the committee to consider
including language noting the "enormous contributions"
made by medical schools and teaching hospitals "to the nation's
health and well being by educating a diverse workforce of future
physicians and biomedical scientists; promoting discovery and innovation
through biomedical, behavioral, and health services research; applying
new knowledge to alleviate suffering, rehabilitate injury, and prevent
disease and premature death; and fulfilling this nation's obligation
to provide health care to its poorest and sickest members."
The letter states, in part, "At the same time that medical
schools and teaching hospitals educate medical professionals, advance
research, and provide quality health care for all Americans, they
support the health of their local communities by sponsoring critical
community programs and services that are not widely offered by other
medical facilities, including nutrition and geriatric programs,
HIV/AIDS and substance abuse services, and crisis prevention programs.
And as fonts of new medical knowledge and technologies, they are
engines of economic development, generating new businesses and jobs."
In addition, the letter calls for the party to support "a
sustained federal investment in the continuum of public health activities
within the U.S. Public Health Service to improve health and protect
Americans against the health challenges of the 21st Century."
In particular, the letter notes that NIH has lost more than 10 percent
of its purchasing power, when adjusted for inflation, since 2003
and states, "Sustained, predictable growth in the NIH budget
is essential if our nation is to maintain its position as the world
leader in medical research."
The letter concludes by urging the Democratic Party to continue
to promote policies that strengthen medical school's and teaching
hospital's core missions of medical education, patient care, and
medical research.
A similar letter is being submitted to the Republican Platform
Committee.
Information:
Dave Moore, Senior Director
AAMC Government Relations
dbmoore@aamc.org
(202) 828-0525
Byrd Releases Details on Second Supplemental,
Includes $500 Million for NIH
Senate Appropriations Committee Chair Robert Byrd (D-W.Va.) July
30 released details of a $24.1 billion supplemental spending measure
he hopes to take to the Senate floor in September. Byrd had planned
to mark up the supplemental July 24 but postponed committee action
due to "uncertainty" regarding the Senate schedule for
debate on the oil and gas drilling issue as well as housing, energy,
defense authorization, and tax extenders legislation.
In a statement
outlining what is described as a "stimulus supplemental,"
Chairman Byrd stated, "During the past several days, I have
been working diligently with members of the Senate Appropriations
Committee in the hopes of reaching an agreement to mark up an important
second supplemental appropriations bill. It is my desire to provide
funding for critically needed investments in our infrastructure,
for energy and economic recovery, and to alleviate the effects of
natural disasters."
The "Chairman's Mark" includes $1.28 billion for "Investments
in Science and the Environment," including $500 million for
the National Institutes of Health, $150 million for science programs
at the Department of Energy, and $26 million for the Centers for
Disease Control and Prevention for combating infectious diseases.
House Speaker Nancy Pelosi (D-Calif.) also has expressed interest
in enacting an economic stimulus package totaling at least $50 billion
prior to Congress adjourning this year. President Bush and congressional
Republicans have been less receptive to the idea of a second stimulus
or supplemental package.
Informaton:
Dave Moore, Senior Director
AAMC Government Relations
dbmoore@aamc.org
(202) 828-0525
House Passes FY 2009 VA Spending Bill
The House Aug. 1 passed the Military Construction and Veterans
Affairs FY 2009 spending bill (H.R.
6599). The bill provides $40.3 billion for VA medical care,
a $3.9 billion (10.6 percent) increase over the FY 2008 appropriated
levels. H.R. 6599 also includes $500 million for the VA Medical
and Prosthetic Research Program, a $20 million (4.2 percent) increase
over FY 2008 and $58 million more than the President's request.
Within the medical care budget, H.R. 6599 provides $30.9 billion
for VA Medical Services, a $2.7 billion (9.8 percent) increase over
the FY 2008 comparable level. The House rejects the President's
proposal to consolidate the VA Medical Administration account into
the VA Medical Services account. Instead, the bill appears to create
a new VA Medical Support and Compliance account in place of Medical
Administration. For the new account, the House provides $4.4 billion,
$338 million (8.32 percent) over FY 2008, according to House Report
110-775 accompanying the spending measure. H.R. 6599 also includes
$5 billion for VA Medical Facilities, a $769 million (18.1 percent)
increase over FY 2008. The House bill does not include any designated
funds for research facilities improvements within the VA Medical
Facilities or VA construction accounts.
The full Senate Appropriations Committee July 17 approved its version
of the VA spending bill with $40.6 billion for VA medical care and
$526.8 million for the VA research [see Washington
Highlights, July 18].
For FY 2009, the Friends of VA Medical Care and Health Research
(FOVA) coalition recommends $42.8 billion for VA medical care, $555
million for VA research, and an additional $45 million within the
minor construction account dedicated for VA research facilities
improvements. The AAMC is a member of the FOVA executive committee.
Informaton:
Matthew Shick, Senior Legislative Analyst
AAMC Government Relations
mshick@aamc.org
(202) 862-6116
Senate Panel Reauthorizes SBIR/STTR Programs,
Increases Agency Set-asides
The Senate Committee on Small Business and Entrepreneurship July
30 unanimously passed
the "SBIR/STTR Reauthorization Act of 2008" (S. 3362)
to reauthorize the Small Business Innovation Research (SBIR) and
Small Business Technology Transfer (STTR) programs for 14 years.
The bill is cosponsored by Senators John Kerry (D-Mass.) and Olympia
Snowe (R-Maine), the chair and ranking member, respectively, of
the committee.
The bill increases the percentages of federal science agency budgets
used to fund these programs. The bill increases the SBIR set-aside
from its current 2.5 percent to 3.5 percent in FY 2019, beginning
in FY 2010 and increasing by 0.1 percentage point a year. This provision
does not apply to the Department of Health and Human Services (HHS),
which must expend "not less than 2.5 percent of the extramural
budget for research or research and development of the department''
on small business concerns.
The bill also increases the STTR set-aside from 0.3 percent to
0.4 percent for FYs 2010 and 2011; 0.5 percent for FYs 2012 and
2013; and 0.6 percent for FY 2014 and each fiscal year thereafter.
This provision does apply to HHS.
The bill includes a compromise that would allow limited investment
in the SBIR program by majority-owned venture capital (VC) firms.
The bill permits NIH to award up to 18 percent of its SBIR dollars
to companies that are majority owned and controlled by multiple
VCs and the other ten SBIR agencies to award up to 8 percent of
their SBIR dollars to this class of firms.
The bill also establishes an advisory board at the National Academy
of Sciences consisting of the Directors of the NIH and SBIR program,
senior agency managers at the NIH, university and industry experts,
and other program stakeholders to provide regular assessments of
program management and effectiveness. Half of the board shall be
SBIR awardees. This section also encourages the creation of a pilot
program, not to exceed 1 percent of SBIR dollars at NIH, to support
innovation in program management and to enhance the development
of cures and treatments. It also encourages NIH to reduce the time
period between Phase I and Phase II to no more than six months to
the greatest extent practicable. Finally, the section requires NIH
to conduct regular internal and external evaluations of its SBIR
and STTR programs and to incorporate data collection methods in
order to set operational benchmarks for success. This section sunsets
after 5 years.
The House passed its version of the "SBIR/STTR Reauthorization
Act" (H.R.
5819) on April 23 after rejecting an effort to increase the
SBIR and STTR set-asides [see Washington
Highlights, April 25].
On the Hill...
Following a July 29 indictment on 7 felony counts of making false
statements on Senate financial disclosure forms, Senator Ted Stevens
(R-Alaska) stepped down as Ranking Member of the Commerce, Science,
and Transportation Committee; the Defense Appropriations Subcommittee;
and the Homeland Security and Governmental Affairs Subcommittee
on Disaster Recovery. In accordance with Senate Republican Conference
rules, committee leaders indicted for a felony are required to surrender
their posts until the case is resolved. In the interim, the full
conference July 30 affirmed Senator Kay Bailey Hutchison (R-Texas)
to serve as Ranking Member of the Commerce, Science, and Transportation
Committee; full Appropriations Committee Ranking Member Thad Cochran
(R-Miss.) to fill the Defense Subcommittee post; and Senator Pete
Domenici (R-N.M.) to assume the Homeland Security Subcommittee role.
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