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Second Opinion

Learn about policy issues important to medical schools and teaching hospitals, with Executive Vice President Atul Grover, M.D., Ph.D.

Tax Reform Legislation Progresses in both the House and Senate

November 17, 2017—The House of Representatives Nov. 16 passed H.R. 1, the Tax Cuts and Jobs Act, by a vote of 227 to 205. The vote largely fell along party lines with no Democrats voting for the bill. Thirteen Republicans voted against the bill. Most of the Republican defections were from the states of New York, New Jersey, and California. They would be significantly impacted by the provision in the bill that would limit the deduction for the state and local income tax.

The House bill also includes the following:

  • Repeals the tax exemption for private activity bonds (PAB) and advance refunding bonds, which are a critical financing source for capital improvements for AAMC members;
  • Imposes a 1.4% excise tax on certain college and university endowments;

  • Imposes an excise tax on compensation for certain employees at tax-exempt organizations;

  • Imposes a tax on tuition waivers for graduate students which would undermine the research career pipeline;

  • Repeals credits and deductions that help to make graduate and professional education more affordable, including the Student Loan Interest Deduction and the Lifetime Learning Credit; and

  • Repeals the ability of individuals to deduct medical expenses.

AAMC President and CEO Darrell G. Kirch, MD, outlined his concerns about the House legislation in a Nov. 9 statement, “Provisions in the legislation passed by the House Ways and Means Committee would have a damaging impact on the nation’s medical schools and teaching hospitals, and on the patients we care for, the students and residents we teach and train, and the millions of Americans who gain hope from the research we conduct.”

The Senate Finance Committee Nov. 16 also approved its version of tax reform legislation by a party-line vote of 14-12. The full Senate will consider the legislation after their Thanksgiving recess. The Senate bill’s provisions differ significantly from the House legislation. The Senate bill also includes a repeal of the individual mandate set forth by the Affordable Care Act (ACA) – the House bill does not include this provision. According to the Congressional Budget Office (CBO), repealing the individual mandate would reduce federal deficits by $338 billion over the 2018-2027 period and result in 13 million more individuals without insurance by 2027.

In a Nov. 15 statement, AAMC CEO Kirch expressed his disappointment at the Senate’s decision to include a repeal of the individual mandate, saying, “America’s teaching hospitals will continue to provide care for all Americans, regardless of their level of coverage. However, increasing the numbers of uninsured patients without corresponding support for the safety net will threaten both urban and rural providers, creating a ripple effect on regional health care networks.”

The following are examples of other ways in which the Senate bill differs from the House bill:

  • The Senate bill maintains the tax exemption for PABs;

  • The Senate bill does not include the provisions that are detrimental to students, as outlined above;

  • The Senate bill does not repeal the medical expense deduction.

While the passage of the House bill places increased pressure on the Senate to pass its legislation, several Senators have expressed reservations with the package, including Sen. Ron Johnson (R-Wis.), who has officially opposed the bill, and Sen. Susan Collins (R-Maine). Republicans hope to pass tax reform legislation through the reconciliation process, and thus must receive 50 votes with Vice President Mike Pence breaking a tie.

Contact:

Catie Spivey, JD
Sr. Legislative Analyst, Gov't Relations
Telephone: 202-862-6042
Email: cspivey@aamc.org

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AAMC Supports Legislation, Files Litigation to Rescind Cuts to 340B Hospitals

November 17, 2017—Representatives David McKinley (R-W.Va.) and Mike Thompson (D-Calif.) Nov. 15 introduced bipartisan legislation (H.R. 4392) to prevent dramatic cuts in Medicare payments to certain hospitals that participate in the 340B Drug Pricing Program effective Jan. 1, 2018. The bill would rescind the policy, which is part of the Centers for Medicare and Medicaid Services’ (CMS) Outpatient Prospective Payment System (OPPS) final rule [see Washington Highlights, Nov. 3].

In a joint press release issued by Reps. McKinley and Thompson, AAMC Executive Vice President Atul Grover, MD, PhD, expressed support for the bill, stating, “The AAMC would like to thank Representatives McKinley and Thompson for introducing this important bipartisan bill to prevent major Medicare cuts to safety net hospitals that participate in the 340B Drug Pricing Program. This program provides savings to many teaching hospitals, allowing them to maintain vital services for patients at no cost to taxpayers.”

Additionally, the AAMC, American Hospital Association, and America’s Essential Hospitals Nov. 13 filed a lawsuit against the Department of Health and Human Services (HHS). The suit argues that the 340B provisions in the outpatient final rule violate the Social Security Act and, therefore, should be set aside under the Administrative Procedure Act as unlawful and in excess of the HHS Secretary’s statutory authority. The lawsuit requests an injunction that would prohibit HHS from implementing the payment reductions to hospitals that participate in the 340B program, pending resolution of the lawsuit.

As part of a joint press release announcing the lawsuit, AAMC President and CEO Darrell G. Kirch, MD, said, “This decision will penalize safety net hospitals that participate in the 340B program, forcing them to curtail critical programs in communities around the country. The life-saving services provided to patients as a result of 340B savings have been put in jeopardy by this harmful, illegal regulatory change.”

Contact:

Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806
Email: jkleinman@aamc.org

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Coalition Letter Urges Congress to Preserve Public Service Loan Forgiveness

November 17, 2017—The AAMC Nov. 13 joined over 40 organizations on a letter to Congress asking lawmakers to preserve the U.S. Department of Education’s (DOE) Public Service Loan Forgiveness (PSLF) program. The letter includes signatories from groups representing health, academic, and legal professionals and institutions.

The letter states that since its enactment by former President George W. Bush, PSLF “has given Americans from every region of the country the ability to take and remain in critically needed public service jobs, including those in underserved communities.” The organizations also point out “By forgiving the remaining student loan debt of persons who have served ten years in qualifying public service employment and made consistent payments on their eligible student loans, PSLF creates incentives for motivated and committed individuals to pursue careers in public service.”

As alluded to in the letter, PSLF provides an opportunity for student loan forgiveness after a borrower has made 120 qualifying, on-time payments to an eligible loan while on an eligible repayment plan, while also working in a qualifying public service position. Borrowers can verify their eligibility by filing an employment certification form through the DOE.

The Trump Administration’s fiscal year 2018 budget proposal to Congress suggests replacing PSLF with a single income-driven student loan repayment plan.

In response to the president’s request, select lawmakers on Capitol Hill are working to raise awareness of the program’s benefits. Reps. Brenden Boyle (D-Pa.) and Ryan Costello (R-Pa.) Aug. 8 formed the Public Service Loan Forgiveness Caucus to “focus congressional efforts on protecting the federal Public Service Loan Forgiveness program.” In a press release launching the caucus, Rep. Boyle called the current threats to end or limit the program “shortsighted” while Rep. Costello recognized that “many teachers, first responders, and public health specialists are working hard to make a difference in their local communities while relying on the Public Service Loan Forgiveness Program.”

Contact:

Joseph Bañez
Legislative Analyst
Telephone: 202-739-2995
Email: jbanez@aamc.org

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Senate HELP Committee Hearing on Gene Technology: Innovation and Impact

November 17, 2017—Three research and industry institutions Nov. 14 testified before the Senate Health, Education, Labor, and Pensions (HELP) Committee about the role of gene editing technology, particularly CRISPR/Cas9, in developing treatments for genetic disorders as well as other uses. The hearing’s goal was to understand the implications of these advancements and ensure that the National Institutes of Health (NIH) and other federal programs are able to support this research safely and effectively. Committee members of both parties expressed bipartisan support of gene editing technology and its potential to solve many health problems, as well as current regulations of these technologies, recently updated in the 21st Century Cures Act of 2016.

In her opening statement, Ranking Member Patty Murray (D-Wash.) espoused the promise of these new technologies, “Gene editing technology has the potential to be used as a tool to tackle difficult research questions, treatment for serious genetic diseases, ... an approach to engineering our own cells to fight cancer and infections, and a new way to help stop the spread of infections.”

While they discussed several regulatory concerns, the witnesses agreed that current regulations were appropriate and that they created a robust research environment. The witnesses expressed a need for some flexibility, so that as more data is gathered, regulations adapt and remain data-driven.  Committee members emphasized the importance of genetic data privacy in light of the need for data sharing to advance both basic and industrial research, and members agreed that privacy was well protected in the 21st Century Cures Act. While witnesses stated that gene editing technology has not yet advanced enough to be used in hereditary human germline editing, current thinking, also expressed in a recent National Academies of Science report, is that potential future uses of gene editing technology in this context must be strictly regulated - used only for great need and when no other treatments are available.

Conversation about gene editing technology on the global stage centered on ensuring the United States remains a leader in the field. Witnesses were concerned that if the technology was prohibited in the U.S., the result would be a loss of American and international scientists to countries with fewer or no restrictions. Thus, the U.S. would not only lose any benefits from the technology, it also would lose any control of the direction of research. Witnesses also stressed that the U.S. must remain a leader in biodefense against harmful uses of gene editing technology. When asked about how the U.S. could help ensure ethical use abroad, witnesses described the ongoing international dialogue with the U.K., China, and other countries.

Also noted throughout the hearing was the importance of government funding of basic research in discovering CRISPR. As Chairperson Lamar Alexander (R-Tenn.) stated, “CRISPR is just one of the amazing discoveries that has come from basic research, funded in part by the federal government.”

Witnesses included Matthew Porteus, PhD, MD, Associate Professor Of Pediatrics, Stanford University; Katrine Bosley, CEO And President, Editas Medicine; and Jeffrey Kahn, PhD, MD, Director, Johns Hopkins Berman Institute of Bioethics.

 

Contact:

Amanda Field, PhD
Specialist, Science Policy
Telephone: 202-828-0542
Email: afield@aamc.org

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FDA Commissioner Issues a Statement on IV Fluid Shortages Following Hurricane Maria

November 17, 2017—Food and Drug Administration (FDA) Commissioner Scott Gottlieb, MD, issued a Nov. 17 statement to provide an update on the administration’s efforts to address the IV fluid shortage exacerbated by Hurricane Maria.

Commissioner Gottlieb noted that the FDA is working closely with federal and Puerto Rican authorities to help stabilize the medical products manufacturing sector and is taking steps to mitigate product shortages, including IV fluids. In conjunction with manufacturers, the FDA is addressing this issue by:

  • Temporarily allowing the importation of IV saline products from facilities outside of the U.S.;

  • Encouraging the expansion of production at existing facilities to meet shortfalls; and

  • Expediting its review of new product applications that will help address this shortage.

Gottlieb highlighted that “access to reliable power is integral to ensuring Puerto Rico-based medical product manufacturers return to full production capacity quickly.” He added, “As part of our efforts to reduce the risk of further shortages, the FDA has been working with federal and local government partners to prioritize a small number of critical facilities based on public health needs, including those plants that manufacture IV saline bags, for consideration or prioritization to gain earlier access to the electrical grid.”

Additionally, the FDA is encouraging hospitals to consider clinical recommendations for managing shortages of IV fluids.

Contact:

Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806
Email: jkleinman@aamc.org

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Trump Administration Nominates Pharmaceutical Executive Alex Azar for Secretary of the Department of Health and Human Services

November 17, 2017—President Trump Nov. 13 announced he was nominating Eli Lilly executive Alex Azar for Secretary of the Department of Health and Human Services (HHS) in a tweet. On Nov. 29, the Senate Health Education Labor & Pensions (HELP) Committee will consider the nomination of Azar, who previously served as chief counsel and deputy secretary of HHS during the administration of George W. Bush.

Following his tenure at HHS, Azar spent nearly a decade at pharmaceutical company Eli Lilly, headquartered in Indianapolis, Ind. This has caused several senators, including Sen. Bernie Sanders (I-Vt.), to question whether Azar would act to lower drug prices.

In a Nov. 13 statement, AAMC President and CEO Darrell G. Kirch, MD, stated, “Upon his confirmation, we look forward to working with Mr. Azar on improving the health of all through high-quality clinical care, groundbreaking medical research, and a robust, diverse physician workforce.”

Contact:

Catie Spivey, JD
Sr. Legislative Analyst, Gov't Relations
Telephone: 202-862-6042
Email: cspivey@aamc.org

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On the Agenda

Nov. 28: Health Professionals and Nursing Education Coalition (HPNEC) Briefing on HRSA Workforce Programs
12:00 p.m. – 2:00 p.m.; 2044 Rayburn House Office Building
HPNEC will hold a briefing entitled “How HRSA Workforce Programs Address Today’s Public Health Concerns.”

Nov. 29: Senate HELP hearing to Consider Alex Azar’s Nomination as HHS Secretary
9:30 a.m.; 430 Dirksen Senate Office Building
The Senate HELP Committee will hold a hearing entitled “Nomination of Alex Azar to Service as Secretary of Health and Human Services.”

Nov. 30: Senate HELP hearing on Opioids
10 a.m.; 430 Dirksen Senate Office Building
The Senate HELP Committee will hold a hearing entitled “The Front Lines of the Opioid Crisis: Perspectives from States, Communities and Providers.”

 

*Both House and Senate Chambers are on Recess November 20-November 27 in observance of the Thanksgiving Holiday

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Washington Highlights, a weekly electronic newsletter, features brief updates on the latest legislative and regulatory activities affecting medical schools and teaching hospitals.


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For More Information

Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806
Email: jkleinman@aamc.org