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  • Washington Highlights

    Burwell Testifies Before House Ways and Means, Senate Finance Committees on FY 2017 HHS Budget

    Len Marquez, Senior Director, Government Relations

    Health and Human Services (HHS) Secretary Sylvia Matthews Burwell testified this week before the House Ways and Means and Senate Finance committees to discuss the administration’s fiscal year (FY) 2017 budget request. The president proposes net Medicare projected savings of $419.4 billion over the 10-year budget window, including $421 billion in Medicare provider cuts and a 10 percent reduction ($17.8 billion) in indirect medical education (IME) (see related story).

    At the Feb. 10 Ways and Means hearing, Secretary Burwell testified that the FY 2017 budget request is “focused on moving towards a health care system that delivers better quality of care, spends dollars in a smarter way, and keeps people healthy. The Budget advances the Department’s work in three critical areas: improving the way providers are paid, finding better ways to deliver care, and creating better access to health care information for providers and patients.” She further explained that the budget encourages participation in alternative payment models through various proposals, and that improving the health of patients should emphasize “prevention and wellness…we are focused on improving access to care by investing in telehealth, rural health clinics, and federally qualified health centers.”

    In his opening remarks, Ways and Means Committee Chair Kevin Brady (R-Texas) told Secretary Burwell, “While we will disagree more than we agree today, I do believe that there are some important areas of cooperation.” He highlighted specific policy issues of particular interest including “the training of physicians in the United States, a field in which the federal government is a major contributor through the Medicare and Medicaid programs as well as the Department of Veterans Affairs and the Indian Health Services.”

    Rep. Danny Davis (D-Ill.) highlighted proposed reductions in the HHS FY 2017 budget, including a 10 percent cut in Medicare IME payments for teaching hospitals. He argued, “My teaching hospitals tell me that the costs of these programs are significantly greater than the direct and indirect GME payments they received. In fact, most of the major teaching hospitals in Chicago are training in excess of 100 doctors over the residency cap, and we still face significant access to care problems in my community. I'm concerned that these cuts that are proposed would result in fewer doctors being trained that will heighten the access to care problem. Wouldn't it make more sense or be better to lift the cap and train more rather than fewer physicians?”

    Secretary Burwell defended the cuts arguing that the administration is “trying to make sure that we do get the right numbers of physicians and types of physicians. And so, the proposals that we put forth are both targeting in terms of higher need communities as well as primary care and the specialties where we don’t.” She added, “That's what our changes are targeted towards in terms of making sure that we are in the Medicare space, paying for those physicians that will do Medicare and Medicare hospitals, and making sure that we're targeting in terms of the right things.”

    Rep. Davis also highlighted the aging baby boomer population asking, “Don’t we also need specialists, cardiologists, and neurologists to deal with the needs of this population group?” Burwell responded saying, “It's both primary care underserved, getting physicians to go to underserved as well as the issue of specialties where we are short. And so, we are trying to have all of these assistants in the medical education be more targeted to those areas.”

    Reps. Dave Reichert (R-Wash.) and Robert Dold (R-Ill.) echoed similar concerns regarding the proposed cuts to graduate medical education.

    Rep. Jim Renacci (R-Ohio) sought the administration’s support in refining the Hospital Readmission Reduction Program, established through the Affordable Care Act (ACA, P.L. 111-148 and P.L. 111-152), citing a problematic implementation for hospitals serving low-income populations. Rep. Renacci stated, “Evidence suggests that economically disadvantaged patients, especially patient’s eligible for both Medicare and Medicaid, are much more likely to be readmitted within 30 days of discharge regardless of a physician's efforts to educate them on proper post-discharge care.”

    He added, “This also has the effect of disproportionately harming hospitals that take care of those that need it most. I've said all along, this is not a Republican or Democrat issue, this is really an issue of fairness of service to those individuals. Do you believe the readmission program criteria can be improved by adding clear adjustments for dual eligible status as well as for other plan readmissions such as those falling trauma?”

    Secretary Burwell responded by highlighting the efforts HHS is taking to better understand the impact of the program, including a recently announced Center for Medicaid and Medicare Innovation (CMMI) initiative, “There are a number of steps we're taking. We believe it's an issue that we are looking closely at.”