Washington Highlights: May 1, 2009
Congress Approves FY 2010 Budget Framework
Contents
Prior Issues
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The House (233-193) and Senate (53-43) April 29 approved
a conference agreement (H.Rept.
111-89) for the FY 2010 budget resolution. No Republicans voted
for the measure in either chamber. The budget resolution provides
a framework for House and Senate appropriators to fund programs
through the annual appropriations process later this year.
The $3.56 trillion budget resolution includes reconciliation instructions
that would allow health care reform to move through Congress without
the roadblock of a Senate filibuster. Similar reconciliation instructions
would allow the elimination of the Federal Family Education Loan
(FFEL) program.
For "non-emergency, non-defense" discretionary spending,
the conference agreement provides $530 billion, a 0.1 percent increase
over FY 2009, but $10 billion less than the President's budget outline.
According to the conference report accompanying the final agreement,
discretionary funding levels for Function 550 (Health) include "increased
funding above the 2010 baseline level consistent with the President's
health priorities" for the National Institutes of Health (NIH),
the Health Resources and Services Administration (HRSA), the Center
for Disease Control and Prevention (CDC), the Indian Health Service
(IHS), and the Food and Drug Administration (FDA). In addition,
the conference agreement "assumes significant increases"
for Community Health Centers, health professions, and the National
Health Service Corps within HRSA.
The conference agreement assumes $38 billion in new Medicare spending
to address the scheduled 21 percent reduction in Calendar Year (CY)
2010 physician payments. According to the conference report, new
funds would permit a payment freeze (0 percent update) in CYs 2010
and 2011 "and at least part of 2012." While the final
agreement does not require the House to identify an offset for physician
payment relief, it does require the Senate to do so.
The final agreement includes reconciliation instructions for the
committees that oversee the Medicare, Medicaid, and other health
programs. In the Senate, the Committees on Finance and Health, Education,
Labor, and Pensions (HELP) must each identify (by Oct. 15) $1 billion
in saving over 5 years. Similarly, the House Committees on Ways
and Means, Energy and Commerce, and Education and Labor must each
identify (also by Oct. 15) $1 billion in savings over 5 years. The
House reconciliation measures are specifically identified as support
for health care reform, while the Senate reconciliation instructions
are not.
The budget resolution includes a non-binding deficit-neutral Senate
reserve fund to "transform and modernize" the nation's
health care system. The fund must be used to "reduce excess
cost growth in health care spending" and be "fiscally
sustainable over the long term." It also may be used to increase
Medicare physician reimbursement, promote an increase in primary
care physicians, and "address geographic variations" in
Medicare spending. A non-binding, deficit-neutral House reserve
fund for health care reform would permit "improvements to health
care" that may include public/private coverage expansions,
and quality improvement, among other options. The House reserve
fund does not address Medicare physician payments.
The final conference agreement includes more funding than FY 2009
for VA to research and treat mental health, post-traumatic stress
disorder, and traumatic brain injury. According the conference report,
the measure "supports increasing the number of healthcare professionals
in the Veterans Health Administration (VHA) to meet the needs of
the expanding number of veterans and to fill vacant healthcare professional
positions at VHA." The conference agreement also supports enhanced
incentives for healthcare professionals of the VHA who serve in
rural areas. A provision in the Senate budget resolution that would
have provided advanced funding for VA Medical and Prosthetic Research
was not included in the conference agreement.
The White House is expected to release President Obama's proposed
budget for FY 2010 the week of May 4.
Information:
Christiane Mitchell, Director, Federal Affairs
AAMC Government Relations
cmitchell@aamc.org
(202) 828-0526
Matthew Shick, Senior Legislative Analyst
AAMC Government Relations
mshick@aamc.org
(202) 862-6116
AAMC, Hospital Groups Urge Congressional Support
for Medicare and Medicaid DSH Programs
The AAMC signed an April 27 letter
urging continued congressional support for Medicare and Medicaid
Disproportionate Share Hospital (DSH) programs. The letter was sent
to all members of the House and Senate and also was signed by the
American Hospital Association, the Catholic Health Association of
the United States, the Federation of American Hospitals, the National
Association of Children's Hospitals, and the National Association
of Public Hospitals and Health Systems. The letter recommends the
preservation of federal support for DSH payments until "coverage
expansions are universal and fully implemented and Medicare and
Medicaid payment shortfalls are addressed."
Information:
Travis W. Crytzer, Legislative Analyst
AAMC Government Relations
tcrytzer@aamc.org
(202) 828-0418
AAMC Comments on OMB Recovery Act Standard Data
Elements
The AAMC provided comments
April 29 to the Office of Management and Budget (OMB) on the standard
data elements for reports under the American Recovery and Reinvestment
Act of 2009 (P.L.
111-5). Section 1512 of the Recovery Act requires standardized
reporting for recipients of federal grants, cooperative agreements,
and loan funds under the Act. In addition to basic identifiers about
a particular grant, evaluation of completion status, and amounts
expended, the standard data elements include, by quarter, by grant,
a narrative description of the employment impact of the Recovery
Act funded work (e.g., types and numbers of jobs created and jobs
retained).
Urging that reporting requirements be standardized across agencies
without agency-specific requirements, the AAMC asked that reporting
be deferred until Oct. 10 in anticipation of the proposed electronic
central government-wide portal. The AAMC expressed particular concern
with the reporting period end date, ten days after the end of the
calendar quarter, and also with the fact that the reports are built
on FTEs based on hours rather than as a percentage of total.
Information:
Susan Ehringhaus, Sr. Director & Regulatory Counsel
AAMC Biomedical Health Sciences Research
sehringhaus@aamc.org
(202) 828-0543
Baucus, Grassley Unveil Policy Options for Reforming
Health Care Delivery System
Senate Finance Committee Chair Max Baucus (D-Mont.) and Ranking
Member Charles Grassley (R-Iowa) April 28 released the first in
a series of policy options intended to guide the panel as it works
to draft comprehensive health care reform legislation. The initial
set of policy options were issued as follow-up to the committee's
April 21 roundtable discussion on improving the delivery and reducing
the cost of patient care [see Washington
Highlights,
April 24]. Additional policy options will be issued in conjunction
with two future roundtable discussions scheduled for May 5 and 14
on health care coverage and financing, respectively.
Among the April 28 policy options are several of particular interest
to medical schools and teaching hospitals, including a proposal
to redistribute unused graduate medical education (GME) training
positions currently funded under Medicare. Similar to the redistribution
program established under the Medicare Modernization Act (P.L.
108-173), the committee proposes a redistribution of slots that
have gone unused for more than 3 years. Preferences would be given
to hospitals that use the slots for primary care and general surgery
training, as well as those caring for underserved populations.
Additionally, the options include AAMC-supported proposals to eliminate
current restrictions on the counting of didactic time for GME payment
purposes and to ease the regulatory burdens associated with the
voluntary supervision of resident training in non-hospital settings.
Other options for health care reform include proposals to:
- Reduce "avoidable and preventable" hospital readmissions;
- Establish "accountable care organizations";
- Provide bonus payments for certain primary care and general
surgery services;
- Implement value-based purchasing for hospital services; and
- Bundle payments for acute and post-acute care
Information:
Christiane Mitchell, Director, Federal Affairs
AAMC Government Relations
cmitchell@aamc.org
(202) 828-0526
House, Senate Move False Claims Act Amendments
The House Judiciary Committee April 28 approved (20-6) the "False
Claims Act Corrections Act of 2009" (H.R.
1788). The bill addresses a number of court rulings that proponents
claim stray from the original intent of 1986 False Claims Act (FCA)
amendments. The AAMC April 21 joined 16 organizations in letters
to the House Judiciary committee noting concerns with the bill [see
Washington
Highlights,
April 24]. The coalition letter states that the current statute
is working appropriately and that new legislation is unwarranted.
In his opening remarks at the House Judiciary Committee consideration
of H.R. 1788, Ranking Member Lamar Smith (R-Texas) noted the past
success of the FCA and its ongoing importance for oversight of the
Recovery Act spending, but questioned whether the proposed reforms
were needed. He specifically mentioned the opposition of the AAMC,
the Association of AmericanUniversities, and the American Hospital
Association. In response, Rep. Berman noted that the Department
of Health and Human Services Inspector General found that up to
6.3 percent of Medicare payments are overpayments caused by fraud,
waste, or abuse.
Rep. Dan Maffei (D-N.Y.) outlined the funding process of grants
from the National Institutes of Health and university controls to
prevent fraud, as well as the process that hospitals use to reconcile
Medicare overpayment. Rep. Maffei also submitted the coalition letter
for the record.
During the mark-up, Rep. Maffei and Zoe Lofgren (D-Calif.) offered
an amendment to H.R. 1788 that would prohibit FCA suits while a
process for overpayment reconciliation is still open. Though House
Judiciary Committee Chair John Conyers (D-Mich.) urged the amendment's
passage, Reps. Maffei and Lofgren previously agreed to withdraw
the amendment and work with Rep. Howard Berman (D-Calif.) on this
issure before H.R.1788 reaches the House Floor. Ranking Member Smith
and Rep. Darrell Issa (R-Calif.) also spoke in favor of the amendment.
The Senate April 28 passed (92-4) the "Fraud Enforcement and
Recovery Act" (S.
386), which primarily addresses mortgage fraud, but would also
amend the FCA. Before passing S. 386, the Senate adopted an amendment
offered by Sen. Jon Kyl (R-Ariz.) to help clarify that the legislation
only imposes liability under FCA for knowing and improper "retention"
of an overpayment, as opposed to mere "receipt" of an
overpayment. The AAMC April 21 joined the same group of 16 organizations
in a coalition letter that supported adoption of the Kyl amendment.
Information:
Matthew Shick, Senior Legislative Analyst
AAMC Government Relations
mshick@aamc.org
(202) 862-6116
Senate Panel Examines NHSC's Role in Health Care
Reform
The Senate Committee on Health, Education, Labor, and Pensions
April 29 held a hearing entitled, "Primary Health Care Access
Reform: Community Health Centers and the National Health Service
Corps." In his opening statement, Sen. Bernie Sanders (I-Vt.)
noted the importance of addressing the health professionals shortage
in health care reform and lauded the steps made under the "American
Recovery and Reinvestment Act of 2009" (P.L.
111-5) to triple funding for the National Health Service Corps
(NHSC).
Fitzhugh Mullan, M.D., Murdock Head Professor of Medicine and Health
Policy, The George Washington University, discussed physician distribution
problems and testified strongly in support of increased funding
for the NHSC, referring to its current size as only a "demonstration
project." Dr. Mullen's written statement notes, "The NHSC
is a proven program that delivers primary care clinicians to needy
communities in return for student debt reduction. It is a brilliant
and successful strategy that has always been under funded. It is
time to radically increase its budget toward the end of fully staffing
Community Health Centers and addressing the oncoming needs for clinical
service in the U.S."
Dr. Mullen briefly noted his support for the "Access for All
America Act" (S.
486, H.R.
1296) introduced by Sen. Sanders Feb. 26 and Rep. James Clyburn
(D-S.C.) March 4. The bills would authorize over $1 billion for
the NHSC by FY 2015. In FY 2009, NHSC receieved an appropriation
of $135 million.
John Matthew, M.D., a primary care physician from Vermont, echoed
Dr. Mullen's NHSC recommendations: "Expansion of the National
Health Service Corps will be one mechanism to address the need to
replace the nation's aging cadre of primary care medical and dental
providers."
The AAMC plans to submit to the committee a statement for the record
in support of increasing the size of the NHSC. In coordination with
a group of 30 concerned NHSC stakeholder associations, the AAMC
has recommended a $235 million FY 2010 appropriation for the NHSC,
a $100 million (74 percent) increase over the comparable FY 2009
funding.
A Webcast of the hearing and witness testimony is available on
the committee's Website.
Information:
Matthew Shick, Senior Legislative Analyst
AAMC Government Relations
mshick@aamc.org
(202) 862-6116
Specter Introduces Bill to Accelerate Translational
Research
Sen. Arlen Specter (D-Pa.) April 28 introduced legislation to provide
federal funds to "accelerate the development of cures and treatments."
The bill also requires the National Institutes of Health (NIH) to
develop and enforce conflict of interest policies, affords the National
Center on Minority Health and Health Disparities institute status,
and provides a simple reauthorization of NIH.
"The Cures Acceleration Network and National Institutes of
Health Reauthorization Act of 2009" (S.
914) would create an independent agency - the Cures Acceleration
Network (CAN) - outside of the Department of Health and Human Services
to "identify and promote revolutionary advances in basic research,
translating scientific discoveries from bench to bedside."
The CAN would award grants and contracts to "independent investigators,
research organizations, biotechnology companies, academic research
institutions, and other entities to develop medical products for
the treatment and cure of diseases and disorders." Funds provided
through the CAN could be used "to accelerate the development
of cures and treatments, including through the development of medical
products, behavioral therapies, and biomarkers that demonstrate
the safety or effectiveness of medical products." CAN funds
also could be used to help "establish protocols that comply
with Food and Drug Administration [FDA] standards and otherwise
permit the recipient to meet regulatory requirements at all stages
of development, manufacturing, review, approval, and safety surveillance
of a medical product."
The bill authorizes two types of grant awards, each with a $1 billion
funding authorization in the first year. The Cures Acceleration
Grant Awards would provide up to $15 million per year per project,
with out-year funding available, to applicants that do not have
access to private matching funds. The Cures Acceleration Partnership
Awards also provide up to $15 million per year, but require grantees
to match one dollar for every three federal dollars to offset partially
development costs.
The bill creates a 24-member board, appointed by the president,
to evaluate grant proposals. The board would include at least one
individual "who is eminent" in each of the following fields:
basic research, medicine, biopharmaceuticals, discovery and delivery
of medical products, bioinformatics and gene therapy, medical instrumentation,
and regulatory review and approval of medical products. The board
also would include at least 4 leaders in professional venture capital
or private equity organizations who have demonstrated experience
in private equity investing and at least 8 individuals representing
disease advocacy organizations. Representatives from NIH, the Assistant
Secretary of Defense for Health Affairs, the Veterans Health Administration,
the National Science Foundation, and the FDA would serve as ex officio
members.
The board chair would be authorized to enter into an interagency
agreement with NIH's Center for Scientific Review to utilize panels
to review applications and make recommendations to the CAN.
In addition, the bill requires the Director of NIH to develop and
enforce conflict of interest policies and to "respond in a
timely manner" when these policies have been violated by a
grant or contract recipient. In cases where the principal investigator
on a grant or contract over $250,000 "has a conflict of interest,"
NIH must require the recipient to provide information on the "degree
of the primary investigator's financial interest, estimated to the
nearest $1,000" and a "detailed report explaining how
the recipient will manage the primary investigator's conflict of
interest."
S. 914 also elevates the National Center on Minority Health and
Health Disparities to institute status and authorizes appropriations
for NIH at $40 billion for FY 2010 and "such sums as may be
necessary" for FYs 2011 and 2012.
Information:
Dave Moore, Senior Director
AAMC Government Relations
dbmoore@aamc.org
(202) 828-0525
NCVHS Hosts Hearing on "Meaningful Use" of Health
Information Technology
The Executive Subcommittee of the National Committee on Vital and
Health Statistics (NCVHS), an advisory body to the Department of
Health and Human Services, hosted on April 28-29 a hearing about
what should be considered "meaningful use" of health information
technology (HIT). The "American Recovery and Reinvestment Act
of 2009" (P.L.
111-5) requires the establishment of "meaningful use"
criteria related to HIT. While the final definition of the term
will be determined through the regulatory process, the NCVHS hearing
provided important information into the development of a proposed
definition.
After brief introductory remarks by NCVHS Chair Harry Reynolds,
Jr., and David Blumenthal, M.D., National Coordinator for Health
Information Technology, members of various panels presented their
testimony. Testimony covered topics including the urgent need for
a coordinated, national effort to implement health information technology,
how high to set the bar for implementation by 2011, and how technology
can be used to improve the quality and efficiency of the nation's
health system. Many individuals who testified supported the notion
that "meaningful use" requirements should be incremental,
with initial requirements being set so that many physicians can
meet them, and stricter requirements being imposed over a number
of years.
All materials from the meeting will be posted on the NCVHS Website.
Information:
Ivy Baer, Director & Regulatory Counsel
AAMC Health Care Affairs
ibaer@aamc.org
(202) 828-0490
On the Hill...
Senator Arlen Specter (Pa.) April 28 announced he is joining the
Democratic Party and plans to run for reelection in 2010 in the
Democratic primary. Citing "a schism which makes our differences
irreconcilable," Sen. Specter issued a statement defending
his vote in favor of the American Recovery and Reinvestment Act
(P.L.
111-5). He also emphasized that "much more needs to be
done," particularly with respect to funding for the National
Institutes of Health.
The switch will cement a filibuster-proof 60-seat majority for
Democrats, pending a victory for Al Franken (D) against incumbent
Sen. Norm Coleman (R-Minn.). Senate Appropriations Ranking Member
Thad Cochran (R-Miss.) reportedly will assume Sen. Specter's duties
as Ranking Member for the Labor-HHS-Education Appropriations Subcommittee
until a permanent replacement is named.
Also on April 28, the Senate confirmed Kansas Governor Kathleen
Sebelius as Secretary of Health and Human Services. The 65-31 vote
included the approval of 8 Republicans.
Democrat Scott Murphy (N.Y.) was sworn into the House of Representatives
April 29 to fill the seat vacated when N.Y. Governor David Paterson
(D) appointed former Rep. Kirsten Gillibrand (D) to the Senate
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