Washington Highlights: February
13, 2009
Congress Prepares Economic Package for President
Contents
Prior Issues
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The House Feb. 13 voted, 246-183, to approve the conference agreement
for a $787 billion economic recovery package, with the Senate expected
to approve it later the same day. House and Senate negotiators Feb.
12 reached agreement on the American Recovery and Reinvestment Act
(H.R.
1).
The conference agreement includes $311 billion in discretionary
funding, including the following programs of interest to academic
medicine.
National Institutes of Health: The conference agreement
provides $10 billion for NIH. Of this amount, $8.2 billion is appropriated
to the Office of the Director, with $7.4 billion designated for
transfer to the Institutes, Centers, and Common Fund. The conference
agreement adopts the Senate guidance that, to the extent possible,
the $800 million retained in the Office of the Director "shall
be used for purposes that can be completed within two years, with
priority placed on short-term grants that focus on specific scientific
challenges, new research that expands the scope of ongoing projects,
and research on public and international health priorities."
The conferees also included legislative language that excludes the
NIH funds in the recovery package from the set-aside requirements
of the Small Business Innovation Research and Small Business Technology
Transfer programs.
The conference agreement also provides $1.3 billion for the National
Center for Research Resources (NCRR), with $1 billion for "competitive
awards for the construction and renovation of extramural research
facilities" and $300 million for "shared instrumentation
and other capital equipment." The conference agreement includes
a House proposal to waive non-Federal match requirements for extramural
facilities and a statement that the conferees "expect NCRR
will give priority to those applications that are expected to generate
demonstrable energy-saving or beneficial environmental effects."
In addition, the conference agreement also provides $500 million
for the Buildings and Facilities account to be used for construction
and renovation of NIH intramural buildings.
Agency for Healthcare Research and Quality: The conference
agreement provides $700 million to AHRQ for comparative effectiveness
research; of that funding, $400 million is to be transferred to
the NIH Institutes, Centers, and the Common Fund, to conduct or
support comparative effectiveness research. Additionally, $400 million
is provided to support comparative effectiveness research at the
discretion of the Secretary of Health and Human Services.
Health Professions: The conference agreement provides $500
million to the Health Resources and Services Administration (HRSA)
for health professions workforce development through scholarships,
loan repayment, and grants to training programs for equipment. An
accompanying explanatory statement allocates $300 million of this
funding for the National Health Service Corps (NHSC), with $75 million
to remain available through Sept. 30, 2011, for "extending
service contracts and the recapture and reallocation of funds in
the event that a participant fails to fulfill his or her term of
service." The conference agreement also designates 20 percent
of NHSC funds for field operations.
The remainder of the HRSA health professions funding is to be allocated
to "all the disciplines trained through the primary care medicine
and dentistry program, the public health and preventive medicine
program, the scholarship and loan repayment program, the scholarship
and loan repayment programs authorized in Title VII (Health Professions)
and Title VIII (Nurse Training) of the PHS Act, and grants to training
programs for equipment." Additionally, funds may be used to
coordinate cross-state telemedicine activities.
National Science Foundation: The conference agreement provides
$2.5 billion for research and related activities at the NSF, including
$300 million for the major research instrumentation program and
$200 million for academic research facilities modernization.
Department of Energy's Office of Science: The conference
agreement provides $1.6 billion for the Department of Energy's Office
of Science.
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
Matthew Shick, Senior Legislative Analyst
AAMC Government Relations
mshick@aamc.org
(202) 862-6116
Recovery Package Includes Medicare and Medicaid
Relief, HIT Incentives
The conference agreement on the American Recovery and Reinvestment
Act (ARRA, H.R.
1), contains several Medicare and Medicaid provisions of particular
interest to medical schools and teaching hospitals, including:
- An AAMC-supported restoration of the Fiscal Year (FY) 2009 Medicare
capital IME adjustment ($191 million). According to the report
language accompanying the legislation, the conferees "expect
the hospital community to seek a permanent fix in the annual IPPS
rulemaking cycle."
- A non-binding "Sense of the Congress" that the Secretary
of Health and Human Services (HHS) "should not promulgate
as final" the Medicaid proposed rules regarding GME and cost
limits/units of government (the "IGT rule").
- In FY 2009, a temporary and retroactive 2.5 percent increase
in Medicaid disproportionate share hospital (DSH) allotments.
In FY 2010, Medicaid DSH allotments will reflect a 2.5 percent
increase over FY 2009 levels. After FY 2010, allotments will be
determined as though the temporary increases did not occur ($460
million).
- A temporary and retroactive 6.2 percent across-the-board increase
in the federal medical assistance percentage (FMAP, also known
as the "Medicaid match"). The increase will apply from
Oct. 1, 2008 through Dec. 31, 2010. Additional quarterly FMAP
increases (ranging from 5.5 percent to 11.5 percent) will be available
to states with significant growth in unemployment. A state's FMAP
level may not exceed 100 percent, and states must comply with
existing "prompt pay" requirements under Medicaid ($86.6
billion).
- An estimated $17.2 billion in Medicare and Medicaid incentive
payments for hospitals and "eligible professionals"
to promote the "meaningful use" of electronic health
record technology (EHRs). New language clarifies that the eligibility
of professionals "will be based on the setting in which a
provider furnishes services rather than any billing or employment
arrangement between a provider and hospital or other provider
entity." The use of EHRs will become linked to Medicare's
hospital and physician quality reporting programs, and starting
in 2015, non-adopters will face payment reductions. Additionally,
the ARRA appropriates $2 billion in grants and loans that would
be available through the HHS Office of the National Coordinator
for Health Information Technology. These funds include matching
grants for demonstration projects to develop curricula integrating
certified EHRs in the clinical education of health professionals.
Information:
Christiane Mitchell, Director, Federal Affairs
AAMC Government Relations
cmitchell@aamc.org
(202) 828-0526
Economic Recovery Package Increases Health Information
Privacy Requirements
The conference agreement for the American Recovery and Reinvestment
Act (H.R.
1) expands current health information privacy protections in
parallel with efforts to increase widespread adoption and acceptance
of health information technology.
Among other provisions, the agreement:
- Extends privacy requirements of the Health Insurance Portability
and Accountability Act (HIPAA) to "business associates"
of covered entities that access protected health information;
- Limits remuneration for protected health information used for
research to the costs of preparation and transmittal of the data.
The agreement further directs the Secretary of Health and Human
Services to review the implications of limiting the costs charged
for public health and research activities;
- Directs the Secretary to require through rulemaking that written
fundraising communications provide an opportunity for the recipient
to "opt out" of receiving such communications;
- Requires providers employing electronic health records to maintain
a log of disclosures of a patient's protected health information,
and to provide access to that log upon a patient's request; and:
- Grants state attorneys general the authority to bring a civil
action as a means of enforcing the HIPAA Privacy Rule.
Unlike similar provisions in both the House and Senate versions
of the bill, the final conference agreement does not direct the
Secretary of Health and Human Services to review and restrict activities
that fall under the HIPAA Privacy Rule's definition of "health
care operations."
AAMC President and CEO Darrell G. Kirch, M.D., in a Feb. 11 letter
urged conferees to consider the "unintended negative effect
[of increased privacy restrictions] on the day-to-day operations
of all providers," particularly with respect to "ongoing
quality assessment and improvement, public health and research,
and philanthropic activities."
Information:
Tannaz Rasouli, Senior Legislative Analyst
AAMC Government Relations
trasouli@aamc.org
(202) 828-0525
IRS Issues Final Report on Exempt Organization
Hospital Study
The Internal Revenue Service (IRS) Feb. 12 issued a report
that discusses the results from a study initiated in 2006 of nonprofit
hospitals. The report is based on the responses to questionnaires
sent to a sample of more than 500 nonprofit hospitals. Twenty nonprofit
hospitals also were examined regarding their executive compensation
practices. Among the report's key findings on community benefit
were the following:
- The average and median percentages of total revenues reported
as spent on community benefit were 9 percent and 6 percent respectively.
- Uncompensated care was the largest reported expenditure, except
for a group of 15 hospitals reporting large medical research expenditures.
- After uncompensated care, medical education and training (23
percent), research (15 percent) and community programs (6 percent)
made up the next largest categories of community benefit expenditures.
For executive compensation, the IRS found that the average and
median total compensation amounts paid to top management were $490,000
and $377,000, respectively. For the 20 hospitals examined based
on high compensation amounts, the average and median compensation
were $1.4 million and $1.3 million, respectively.
Information:
Ivy Baer, Director & Regulatory Counsel
AAMC Health Care Affairs
ibaer@aamc.org
(202) 828-0490
Senate Budget Committee Holds Health Reform Hearing
with CBO Director Elmendorf
The Senate Budget Committee Feb. 10 held a hearing on health care
reform specifically examining key issues
and budget options
included in two reports released by the Congressional Budget Office
(CBO) in December [see Washington
Highlights, Dec.
19, 2008]. CBO Director Douglas W. Elmendorf in his opening
statement
noted Congress faces two major policy goals: "expanding health
insurance coverage" and "making the health care system
more efficient." Additionally, he noted, "In order to
make the health care system more cost-effective: patients and providers
both need stronger incentives to control costs as well as more information
about the quality and value of the care provided."
In his opening remarks,
Budget Committee Chair Kent Conrad (D-N.D.) suggested more steps
are needed to curb increasing health care costs, citing a number
of payment reforms identified in the CBO health care reports. Chairman
Conrad said, "It is important to remember that making these
reforms does not mean lowering the quality of health care. In fact,
research suggests that some areas of the country that spend less
on health care actually provide better health care."
Information:
Travis W. Crytzer, Legislative Analyst
AAMC Government Relations
tcrytzer@aamc.org
(202) 828-0418
IOM Report Examines Impact of HIPAA Privacy Rule
on Research
A Feb. 4 Institute of Medicine (IOM) report
concludes that the provisions of the Health Insurance Portability
and Accountability Act (HIPAA) Privacy Rule affecting research do
not protect privacy as well as they should and constitute an impediment
to important health research. The report, Beyond the HIPAA Privacy
Rule: Enhancing Privacy, Improving Health Through Research,
calls for a new approach to protecting privacy in health research
that would include exemption of research from the HIPAA Privacy
Rule. The proposed new approach is designed to enhance privacy protections
while eliminating significant constraints on research that currently
exist under the Privacy Rule. The report further recommends that
if national policymakers choose to continue to rely on the Privacy
Rule to govern the use of protected health information in research,
they should make substantial changes in it as well as its associated
guidance regarding health research. The AAMC has urged for several
years that the Privacy Rule hinders certain kinds of health research
and that its provisions should be substantially modified.
Information:
Susan Ehringhaus, Sr. Director & Regulatory Counsel
AAMC Biomedical Health Sciences Research
sehringhaus@aamc.org
(202) 828-0543
On the Hill . . .
Sen. Judd Gregg (R-N.H.) Feb. 12 withdrew his nomination as Secretary
of Commerce. In a statement, he described "irresolvable conflicts...
on many critical items of policy" such as the stimulus package and
the Census. He will continue to serve in the Senate.
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