Washington Highlights: February
27, 2009
White House Unveils FY 2010 Budget Overview
Contents
Prior Issues
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The Office of Management and Budget Feb. 26 released a "FY
2010 Budget Overview" document,
outlining the Obama Administration's fiscal policies and major budgetary
initiatives. The full, detailed FY 2010 budget is expected this
spring.
The budget overview assumes $675 billion in non-defense discretionary
spending, including $78.7 billion for the Department of Health and
Human Services (HHS), a $1.4 billion (1.7 percent) decrease below
the FY 2009 comparable estimate. The overview notes that the American
Recovery and Reinvestment Act (ARRA, P.L.
111-5) provides an additional $22.4 billion in FY 2009 and FY
2010 spending for HHS [see Washington
Highlights, Feb. 13].
Within the HHS total, the budget overview highlights a number of
health initiatives, including $6 billion for cancer research at
the National Institutes of Health (NIH), "as part of the Administration's
multi-year commitment to double cancer research funding." The
budget overview also "expands research comparing the effectiveness
of medical treatments," to build upon comparative effectiveness
research supported through ARRA, though no specific recommendation
is included.
Additionally, the budget overview recommends $330 million "to
address the shortage of health care providers in certain areas."
Specifically, the document highlights loan repayment programs for
physicians and other health professionals serving in underserved
areas, nursing school capacity, and dental workforce development
grants. The document also notes that "The Budget's new resources
will sustain the expansion of the health care workforce funded in
the Recovery Act."
In addition, the budget overview document emphasizes the role of
investing in science as a means of bolstering the economy, and vaguely
outlines a plan to double over 10 years funding for basic research
through the National Science Foundation (NSF), the Department of
Energy's Office of Science, and the National Institute of Standards
and Technology (NIST). The overview assumes $7.0 billion for NSF
in FY 2010, emphasizing support for early-career researchers, high-risk
research, and climate change research and education.
With respect to education, the budget overview indicates that all
new loans will be originated through the Direct Loan program, while
using private providers to service those loans. The administration
estimates this will save more than $4 billion annually, which will
be reinvested into student aid. Further, the budget overview proposes
to modernize the Perkins Loan program.
The overview document also articulates 8 principles to guide health
care reform efforts. The document establishes a $634 billion reserve
fund (over 10 years) intended to finance certain "reforms to
our health care system" that control costs, expand access,
and improve quality. The cost of the non-binding reserve fund is
partially offset by improving health care quality (e.g., reducing
hospital readmission rates), reforming the Medicare payment system
(e.g., reducing Medicare "overpayments" to private insurers),
and reducing income tax deductions for high-income individuals.
The overview doucment also states that "the Administration
would support comprehensive, but fiscally responsible" changes
to the Medicare physician payment formula.
AAMC President and CEO Darrell G. Kirch, M.D., issued a Feb. 26
statement
praising the administration's focus on health care reform as a top
priority. Concurring with the outlined reform principles, Dr. Kirch
encouraged the administration to "preserve the greatest strengths
of our current system," noting, "We agree with the need
to reduce waste and inefficiency in our system, but at the same
time, these savings should not undermine the ability of our teaching
hospitals and physicians to care for their communities."
The Ad Hoc Group for Medical Research also issued a statement,
applauding the president for recognizing the value of science investments
in improving both the nation's economic strength and quality of
life. Expressing thanks for the $10.4 billion for NIH in ARRA, the
statement emphasizes that "The next step is to build on this
investment through predictable and sustained, long-term growth in
NIH funding in the FY 2010 budget and beyond."
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
Christiane Mitchell, Director, Federal Affairs
AAMC Government Relations
cmitchell@aamc.org
(202) 828-0526
House Approves FY 2009 Funding
The House Feb. 25 approved, 245-178, a $410 billion omnibus bill
(H.R.
1105) to complete work on the nine FY 2009 appropriations bills
that were not finished by the 110th Congress. Most domestic federal
programs have been operating under a continuing resolution (P.L.
110-329) that expires on March 6. The Senate is scheduled to
consider the omnibus bill the week of March 2.
The Labor, Health and Human Services (HHS), Education, and Related
Agencies portion of the bill (Division F) provides $151.8 billion
in funding for FY 2009, a $6.7 billion (4.6 percent) over the FY
2008 comparable funding level.
National Institutes of Health: The bill includes $30.317
billion for NIH, an increase of $937.5 million (3.2 percent) over
the FY 2008 comparable. An accompanying explanatory statement notes
the bill "provides funding for a 2 percent increase in the
average cost of new and competing as well as non-competing grants."
The extramural salary cap is retained at Executive Level I, which
is $196,700 for 2009. The explanatory statement also states, "NIH
is encouraged to take steps to accelerate implementation of its
conflict of interest policy for contract staff."
Health Professions: The bill provides $222 million for Title
VII, representing a $48 million (14.3 percent) increase over FY
2008. Within the total, the bill boosts the Centers of Excellence
to $20.6 million (an $8 million, 61.3 percent, increase) and nearly
doubles funding for the Health Careers Opportunity Program to $19.1
million (a $9 million, 94.7 percent, increase). The bill includes
$48.5 million for Primary Care Medicine and Dentistry (a $0.5 million,
0.9 percent, increase), $32.5 million for Area Health Education
Centers (a $4 million, 15.5 percent, increase), $13.9 million for
Allied Health (a $5 million, 57.8 percent, increase), and $9 million
for Public Health (a $0.7 million, 8.8 percent, increase).
All the Title VIII nursing education programs are increased for
a total $171 million in the omnibus, $15 million (9.6 percent) more
than in FY 2008.
National Health Service Corps: The omnibus provides $135
million for the National Health Service Corps, an increase of $11.5
million (9.3 percent) over FY 2008.
Children's Hospitals Graduate Medical Education: The omnibus
provides $310 million for the Children's Hospitals Graduate Medical
Education program, an increase of $8.4 million (2.8 percent) over
FY 2008.
Agency for Healthcare Research and Quality: For FY 2009,
the omnibus provides $372 million in program level funding for AHRQ,
an increase of $37.5 million (11.2 percent) over FY 2008. The funding
level includes $50 million designated for clinical effectiveness
research, a $20 million (66.7 percent) increase.
National Research Service Awards (NRSA): The omnibus preserves
for FY 2009 the NIH's authority to transfer 1 percent of its budget
for National Research Service Awards (NRSA) to the Health Resources
and Services Administration and AHRQ.
Centers for Disease Control and Prevention: The omnibus
includes $6.670 billion for CDC, providing a $239 million (3.7 percent)
boost. The bill maintains funding for public health research at
the FY 2008 level of $31 million.
Education: The omnibus includes $67 million for Perkins
Loan cancellations, $2.8 million (4.4 percent) above the FY 2008
level. The bill level funds the Federal Work Study program at $980.5
million. Under the "Higher Education Opportunity Act"
(P.L.
110-315), up to 25 percent of federal work study funds can be
transferred to the Perkins Loan program.
In other portions, the omnibus increases funding for the Food and
Drug Administration to $2.1 billion (a $335 million or 19.4 percent
increase), and the National Science Foundation (NSF) to $6.5 billion
(a $363 million or 5.9 percent increase over funding provided in
FY 2008). The NSF total includes $5.2 billion for research and related
activities, a $339 million (7 percent) increase.
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
Harkin, Specter Introduce Stem Cell Legislation
Long-time champions of stem cell research Senators Tom Harkin (D-Iowa)
and Arlen Specter (R-Pa.) Feb. 26 introduced legislation to expand
the eligibility for federal funding for embryonic stem cell research.
Section 2 of the "Stem Cell Research Enhancement Act of 2009"
(S. 487) is identical to legislation (H.R.
873) introduced Feb. 4 by Reps. Diana DeGette (D-Colo.) and
Mike Castle (R-Del.) [see Washington
Highlights, Feb. 20]. This legislation is similar to legislation
passed by the 110th Congress but vetoed by President Bush [see Washington
Highlights, June 22, 2007].
S. 487 also authorizes the federal government to "conduct
and support basic and applied research to develop techniques for
the isolation, derivation, production, or testing of stem cells
that, like embryonic stem cells, are capable of producing all or
almost all of the cell types of the developing body… but are
not derived from a human embryo." The bill calls for NIH to
develop guidelines governing research involving pluripotent stem
cells not derived from human embryos.
Senators Edward Kennedy (D-Mass.), Orrin Hatch (R-Utah), Dianne
Feinstein (D-Calif.,), and Harry Reid (D-Nevada) are original co-sponsors
of S. 487.
Information:
Dave Moore, Senior Director
AAMC Government Relations
dbmoore@aamc.org
(202) 828-0525
Tony Mazzaschi, Senior Director
AAMC Scientific Affairs
tmazzaschi@aamc.org
(202) 828-0059
Grassley Reintroduces False Claims Act Revisions
Senator Charles Grassley (R-Iowa) Feb. 24 reintroduced legislation
to amend the Federal False Claim Act (FCA). Supporters of the "False
Claims Clarification Act of 2009" (S.
458) say it is needed to correct recent decisions by various
federal courts that have limited the scope and application of the
FCA through interpretations that are contrary to the original congressional
intent of the 1986 amendments to the statute.
The bill is similar to legislation (S.
2041) approved unanimously by the Senate Judiciary Committee
in the 110th Congress [see Washington
Highlights, April 4, 2008]. In a statement introducing the
bill, Senator Grassley said, "I believe this version of the
bill not only clarifies the original intent of the 1986 amendments
but also makes a number of modifications that strengthen the False
Claims Act and will help the Government recover taxpayers' dollars
lost to fraud and abuse for years to come." The AAMC opposed
the previous bill because of the demonstrated effectiveness of the
current legislation.
The most significant change is the new bill would retain the existing
language in the False Claims Act to calculate monetary liability
at three times the amount "of damages which the Government
sustains because of the act of that person." The previous bill
would have calculated the liability at three times the total "amount
of money or property paid or approved because of the act of that
person."
S. 458 also would impose additional reporting requirements on the
Department of Justice.
Senate Majority Leader Dick Durbin (D-Ill.), Judiciary Chair Patrick
Leahy (D-Vt.), Judiciary Ranking Member Arlen Specter (R-Pa.), and
Judiciary Administrative Oversight and the Courts Subcommittee Chair
Sheldon Whitehouse (D-R.I.) are original co-sponsors of the bill.
Information:
Matthew Shick, Senior Legislative Analyst
AAMC Government Relations
mshick@aamc.org
(202) 862-6116
Dave Moore, Senior Director
AAMC Government Relations
dbmoore@aamc.org
(202) 828-0525
Finance Committee Hearing Focuses on CBO Health
Care Reform Options
The Senate Finance Committee Feb. 25 held a hearing on the Congressional
Budget Office (CBO) scoring options for health care reform [see
Washington Highlights, Feb.
13]. "Comprehensive health reform is no longer simply
an option. It's an imperative," stated Finance Committee Chair
Max Baucus (D-Mont.) in his opening statement.
Although expanding health insurance to all Americans is a top priority,
Baucus added that quality of care, affordable coverage, and cost
containment are essential to achieving health care reform.
CBO Director Douglas W. Elmendorf outlined
numerous options for controlling cost, expanding coverage, and improving
quality. One such option is moving the payment system away from
a fee-for-service system to one that provides greater incentives
to control costs and reward value. Another area of concern was uncompensated
care and cost shifting. By expanding coverage to all Americans,
CBO Director Elmendorf stated, "Hospitals and doctors would
experience a decline in uncompensated care or an increase in their
revenues from insured patients and in response would have to lower
the fees they charge private health plans." Elmendorf concluded
that overall, patients and providers alike need stronger incentives
to control costs and improve quality and value.
At the conclusion of the hearing Chairman Baucus stated, "CBO's
work will make or break" health care reform efforts, to which
Director Elmendorf responded that the hard decisions must be made
by Congress with CBO providing the data upon which to base their
choices. Chairman Baucus acknowledged that both CBO and the Congress
will be responsible for the hard decisions surrounding health care
reform, and that it will be an ongoing process.
Information:
Travis W. Crytzer, Legislative Analyst
AAMC Government Relations
tcrytzer@aamc.org
(202) 828-0418
NCRR to Host CTSA Videocast
The National Institutes of Health (NIH) Feb. 25 announced plans
to coordinate a March 5 pre-submission videocast
for the NIH National Center for Research Resources (NCRR) Clinical
and Translational Science Award (CTSA) program. During the videocast,
NCRR and other NIH staff will explain the goals and objectives of
the CTSA program and will discuss changes to the CTSA Request for
Applications (RFA).
Prospective applicants may submit questions through a live event
feedback form or can watch an archived copy of the videocast online.
Information:
Irena Tartakovsky, Senior Science Policy Analyst
AAMC Biomedical and Health Sciences Research
itartakovsky@aamc.org
(202) 862-6134
President Names New HRSA Administrator
President Barack Obama Feb. 20 announced
the appointment of Mary Wakefield, Ph.D., R.N., FAAN, as administrator
of the Health Resources and Services Administration (HRSA). Most
recently, Dr. Wakefield was the Associate Dean for Rural Health
at the University of North Dakota School of Medicine and Health
Sciences, where she was a tenured professor and Director of the
Center for Rural Health. She has served as a member of the Medicare
Payment Advisory Commission and the Department of Veterans Affairs'
Special Medical Advisory Group, as well as Chair of the Institute
of Medicine Committee on Health Care Quality for Rural America and
as subcommittee chair for President Clinton's Advisory Commission
on Consumer Protection and Quality in the Health Care Industry.
In announcing the appointment, President Obama remarked that "Under
her leadership, we will be able to expand and improve the care provided
at the Community Health Centers which serve millions of uninsured
Americans and address severe provider shortages across the country."
Current HRSA Administrator Betty Duke, Ph.D., previously had announced
her intention to step down from her post effective Feb. 28. The
position is a Career Senior Executive Service appointment and does
not require Senate confirmation.
On the Hill . . .
The Senate Feb. 24 voted to confirm California Democrat Hilda Solis
as Secretary of Labor. Upon her confirmation, Secretary Solis resigned
her House seat. California Governor Arnold Schwarzenegger (R) will
schedule a special election to fill the vacancy.
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