Washington Highlights: May 15, 2009
AAMC Comments on Genetic Diagnostic Tests and
Gene Patents
Contents
Prior Issues
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The AAMC May 15 submitted a comment letter
on gene patents and diagnostic tests to the Secretary's Advisory
Committee on Genetics, Health, and Society (SACGHS), which advises
the Department of Health and Human Services. The AAMC letter recommends
SACGHS work with stakeholder organizations for wider adoption of
existing principles endorsed by NIH and academic organizations.
SACGHS invited public comments to a "discussion draft"
released in March [see Washington
Highlights,
March 13] that questioned whether patents on gene-based diagnostic
tests, and specifically exclusive licensing and monopoly practices
on genetic tests under patent, are limiting availability and reliability
of these tests.
As emphasized in AAMC's letter, preliminary findings from detailed
case studies included in the SACGHS discussion draft do not indicate
substantial differences in pricing or availability of patented genetic
tests compared to unpatented tests. Still, the question of whether
monopoly control of a specific genetic test is beneficial to public
health remains a critical question. The AAMC letter recommends SACGHS
advocate that stakeholder organizations adopt NIH recommended best
practices on licensing of "genetic inventions" and widespread
adoption of principles included in a document,
"Nine Points to Consider," developed by academic organizations
in 2007. The AAMC also argued that academic organizations must retain
flexibility to reach the most appropriate licensing agreements on
a case-by-case basis.
The AAMC letter does not support measures to require licensing
changes for university gene patent holders through the Bayh-Dole
Act, which would be unwarranted from the evidence presented in the
report.
Information:
Stephen Heinig, Lead Science Policy Analyst
AAMC Biomedical Health Sciences Research
sheinig@aamc.org
(202) 828-0488
Susan Ehringhaus, Sr. Director & Regulatory Counsel
AAMC Biomedical Health Sciences Research
sehringhaus@aamc.org
(202) 828-0543
Senate, House Sign-on Letters Urge Preservation
of Capital IME Adjustment
Sens. Charles Schumer (D-N.Y.) and Pat Roberts (R-Kan.) May 5 sent
a bipartisan letter
to Centers for Medicare and Medicaid Services (CMS) Acting Administrator
Charlene Frizzera, urging her to rescind the regulation eliminating
(effective Oct. 1) the indirect medical education (IME) adjustment
under Medicare's capital reimbursement system. The Schumer/Roberts
letter was signed by 56 senators including 15 Republicans. Additionally,
Sen. Arlen Specter (D-Pa.) sent a letter
April 27, opposing the scheduled Medicare IME payment cuts.
In the House, Reps. Richard Neal (D-Mass.) and Patrick Tiberi (R-Ohio)
are seeking sign-ons from their colleagues on a similar letter,
which is expected to be sent to President Barack Obama before the
Memorial Day recess.
Both letters state that eliminating the IME adjustment "threatens
the financial viability of teaching hospitals, which serve a high
volume of Medicare beneficiaries and provide critical services unavailable
elsewhere in communities across the country."
Information:
Travis W. Crytzer, Legislative Analyst
AAMC Government Relations
tcrytzer@aamc.org
(202) 828-0418
Finance Committee Continues Discussion of Health
Care Reform Options
The Senate Finance Committee May 14 released to the public the
second of three papers outlining health care reform policy options
[See Washington
Highlights, May 1]. The paper
focuses on options to provide "affordable coverage" to
all Americans. According to the document, the options "are
intended to spur discussion," and are not necessarily supported
by Chairman Max Baucus (D-Mont.) or Ranking Member Charles Grassley
(R-Iowa).
The policy proposals include various insurance market reforms,
tax credits for the purchase of health coverage by small businesses
and low-income families, and several public plan options. The document
also includes an option that establishes an individual mandate,
requiring that every individual obtains health coverage.
The proposals also include options to "improve public programs."
One option changes policies affecting Medicaid Disproportionate
Share Hospital (DSH) payments. Under the proposal, the Secretary
of Health and Human Services would route Medicaid DSH payments directly
to hospitals. The Secretary would determine through regulation services
that would be eligible for DSH payments, as well as "appropriate
reimbursement rates" for Medicaid services and uncompensated
care. Additionally, hospitals would have to submit claims data for
uncompensated care.
A "variation" of the DSH proposal would "reallocate
DSH funds among states." Another option assumes a "diminish[ed]
need" for the Children's Health Insurance Program (CHIP) if
"access to private insurance increases."
Preceding the release of the document was a May 12 Finance Committee
roundtable,
during which a panel of tax policy experts, economists, and health
policy discussed possible changes to the health care financing system,
such as taxes on health benefits, improved efficiencies of care,
and a more competitive insurance marketplace.
Assuming that health care reform would assure that "everyone
has health insurance," Sen. Grassley stated at the hearing
that "presumably hospitals should see a steep decline or the
elimination of their uncompensated care." In that context,
he suggested that Congress and the Administration revisit the tax-exempt
status of hospitals. Reportedly, the Committee's minority counsel
on tax issues has previously stated that, under coverage mandates,
"presumably you would see uncompensated care rates go down
and charity care go down." She has asked what would then be
"the primary distinction between a for-profit and nonprofit
hospital?... maybe everyone should be taxable."
Information:
Christiane Mitchell, Director, Federal Affairs
AAMC Government Relations
cmitchell@aamc.org
(202) 828-0526
Medicare Trustees Report Issues Funding Warning
for Third Consecutive Year
The Boards of Trustees of the Federal Hospital Insurance Trust
Fund and the Federal Supplementary Medical Insurance Trust Fund
(commonly referred to as the "Medicare trustees") May
8 released their annual report
on the current status and projected financial condition of the Medicare
program. The trustees report that the hospital insurance (Part A)
spending began exceeding tax revenues received by the federal government
starting in 2008 and the trust fund will be depleted by 2017, two
years earlier than predicted in the 2007 and 2008 reports, reflecting
much lower projected payroll tax income as a result of the recession.
According to the trustees, a major factor contributing to the increased
spending relative to the tax revenue is the beginning of the retirement
of the baby boomers, which dramatically increases the number of
enrollees relative to the number of workers. Furthermore, as the
average age of Medicare beneficiaries increases, health care utilization
for each beneficiary increases, thus further increasing the cost
of the program.
Of particular concern for providers and beneficiaries alike is
that a funding warning has been activated for the third consecutive
year. Pursuant to the 2003 Medicare Modernization Act (MMA), a funding
warning is triggered when the trustees make a determination in two
consecutive annual reports that general revenue will make up more
than 45 percent of total Medicare financing within a seven-year
period. A funding warning was first issued in 2007 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.
When a funding warning is issued, the MMA requires that the Administration
make and Congress consider a proposal to bring the funding level
below 45 percent. Congress has not acted on previous Administration
proposals.
White House Press Secretary Robert Gibbs responded
to the release of the report stating "if we don't take action
to slow the growth in health care spending, both publicly and privately,
we are going to find ourselves in a simply unsustainable position;
… unless or until we address those rising costs through health
care reform, we're risking the solvency of these programs in the
future."
Congressional Republicans also expressed concern with the findings
of the report. Senator Charles Grassley, (R-Iowa), ranking Republican
on the Finance Committee said in a statement
"The message of the trustees' report is loud and clear. We
need to act now to address Medicare's fiscal sustainability."
Information:
Diana Mayes, Specialist
AAMC Health Care Affairs
dmayes@aamc.org
(202) 828-0498
GAO Appoints Two New MedPAC Commissioners; Reappoints
Five, Including Chair
Gene L. Dodaro, Acting Comptroller General of the United States
and head of the U.S. Government Accountability Office (GAO), May
8 appointed
two new members and reappointed five members to the Medicare Payment
Advisory Commission (MedPAC), an independent federal body that advises
Congress on issues affecting the Medicare program. The reappointments
include current MedPAC Chair Glenn M. Hackbarth, J.D.
The commission comprises 17
members who bring diverse expertise in the financing and delivery
of health care services. Commissioners are appointed to three-year
terms (generally subject to a three-year renewal) and serve part
time. Appointments are staggered; the terms of five or six Commissioners
expire each year.
Of the six members whose terms expired April 2009, five have been
reappointed. Despite already serving three terms (nine years), the
traditional length of service of MedPAC commissioners, Mr. Hackbarth
was reappointed to another three-year term. Mr. Hackbarth, currently
an independent consultant, was chief executive officer and one of
the founders of Harvard Vanguard Medical Associates, a multispecialty
group practice in Boston that serves as a major teaching affiliate
of Harvard Medical School. He also has held positions at the Department
of Health and Human Services, including deputy administrator of
the Health Care Financing Administration, the predecessor of the
Centers for Medicare and Medicaid Services (CMS).
The two newly appointed members are Robert A. Berenson, M.D., F.A.C.P.,
and Herb B. Kuhn. Dr. Berenson is a board certified internist and
senior fellow at the Urban Institute. Previously, Dr. Berenson served
as Director of the Centers for Health Plans and Providers in CMS
overseeing provider payment policy and managed care contracting.
Mr. Kuhn, an independent health care consultant specializing in
Medicare and Medicaid issues, served in multiple roles at the CMS.
Prior to CMS he was corporate vice president for the Premier Hospital
Alliance. Mr. Kuhn's term expires in 2010 because he was appointed
to complete the term of Jack Ebeler, who resigned from the commission
in March 2009.
The four commissioners who have been reappointed after serving
one term are: Mitra Behroozi, J.D., executive director of 1199 SEIU
Benefit and Pension Funds; Karen R. Borman, M.D., professor of surgery
at the University of Central Florida College of Medicine; Ronald
D. Castellanos, M.D., a urologist at Southwest Florida Urologic
Associates; and Bruce Stuart, Ph.D., professor and executive director
of the Peter Lamy Center on Drug Therapy and Aging at the University
of Maryland Baltimore. Robert D. Reischauer, Ph.D., President of
the Urban Institute, left the commission after serving two terms.
Information:
Diana Mayes, Specialist
AAMC Health Care Affairs
dmayes@aamc.org
(202) 828-0498
CMS Posts Prototype of Resource Use Report Measurement
The Centers for Medicare and Medicaid Services (CMS) has posted
a prototype of
a physician resource use feedback report that provides an example
of measuring per capita and per episode resource reporting for a
general internist. The "Medicare Improvement for Patients and
Providers Act of 2008" (P.L.
110-275) requires CMS to implement by Jan. 1, 2009, a physician
feedback program to provide confidential reports to physicians on
their resource use.
CMS hired Mathematica Policy Research to conduct phase 1 of a pilot
project that seeks to evaluate different methods of attributing,
benchmarking, and calculating resource use on Medicare Fee-for-service
patients. As part of phase 1, CMS sent reports to a small sample
of physicians in 12 cities. In its letter to these physicians, CMS
notes that it is seeking feedback on how the resource and cost information
is displayed; how useful the per capita and/or per episode resource
use measures are in helping physicians understand their practice
patterns; and how useful and actionable the breakdowns of resource
use by cost of service categories are in understanding the costs
for their Medicare patients. CMS has asked associations to coordinate
comments from its members. Please submit feedback through the AAMC
to Mary Patton at mpatton@aamc.org.
CMS considers resource use reporting a component of a Physician
Value-Based Purchasing plan. The AAMC Dec. 23, 2008, submitted a
letter stating any resource use reporting program should consider
the missions of academic medicine and adjust for the impact of teaching
residents, conducting research, and providing specialized services
[see Washington
Highlights,
Jan. 9, 2009].
Information:
Mary Patton, Senior Specialist
AAMC Health Care Affairs
mpatton@aamc.org
(202) 862-6297
HELP Committee Examines Primary and Specialty
Care Delivery Models
The Senate Committee on Health, Education, Labor and Pensions (HELP)
May 14 held a hearing
titled "Delivery Reform: The Roles of Primary and Specialty
Care in Innovative New Delivery Models." Witnesses and committee
members discussed addressing the current health professions shortage,
payment reform, and the medical home model.
While discussing short term innovative ideas with regard to the
pending workforce shortage, Sen. Patty Murray (D-Wash.) suggested
greater support for programs already in place such as graduate medical
education (GME) and the National Health Student Corp (NHSC).
Richard A Cooper, M.D., University of Pennsylvania Professor of
Medicine, testified on the "worsening shortages of physicians."
He suggested greater financial help to medical schools, but more
importantly "residency programs must be expanded." Dr.
Cooper emphasized that the cap on Medicare residency positions must
be lifted, and existing programs need support because "GME
is the portal to practice…that enhances the quality of care."
Also testifying was Michael Nochomovitz, M.D., President and Chief
Medical Officer at the University Hospitals Medical Practices and
University Hospitals Management Services Organization, Cleveland,
Ohio. Dr. Nochomovitz urged the creation of vehicles facilitating
an integrated delivery system: "These would provide opportunities
for participating providers to be eligible for quality and outcome
based bonus payments as well as benefit from more global savings"
Additional witnesses included Kenneth Thorpe, Ph.D., Professor
of Health Policy at Emory University, Steven Schlossberg, M.D.,
M.B.A., Vice President of Clinical Operations at Sentara Medical
Group on behalf of the Alliance of Specialty Medicine, and Marsha
Raulerson, M.D., on behalf of the American Academy of Pediatrics.
Dr. Thorpe described how to integrate primary prevention and care
coordination into the fee-for-service Medicare program. Dr. Schlossberg
focused on the medical home and allowing physicians, in consultation
with their patients decide which providers are most appropriate.
Dr. Raulerson also spoke about the importance of the medical home.
Information:
Travis W. Crytzer, Legislative Analyst
AAMC Government Relations
tcrytzer@aamc.org
(202) 828-0418
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