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Learn about policy issues important to medical schools and teaching hospitals, with Atul Grover, M.D., Ph.D.
House Passes SGR Reform, Senate Punts Until After Recess
March 27, 2015—The House March 26 overwhelmingly (392-37) passed the Medicare Access and CHIP Reauthorization Act of 2015 (H.R.2),bipartisan legislation introduced March 24 by leaders of the House Energy and Commerce and Ways and Means Committees which permanently replaces Medicare’s sustainable growth rate (SGR) formula, reforms physician payment, and extends funding for Children’s Health Insurance Program (CHIP). Senate consideration of H.R. 2 was delayed until members return from a two-week spring recess.
Though physicians face a 21 percent cut in Medicare reimbursement when the current SGR patch expires March 31, CMS has the ability to hold claims for 10 business days, allowing the Senate time to vote on the package upon return to Washington.
In a March 26 statement, AAMC President and CEO, Darrell G. Kirch, M.D., applauded the bipartisan effort garnered to pass H.R. 2 stating, “We thank the Republican and Democratic House and committee leaders for coming together to address this important issue. This bipartisan agreement to achieve a permanent solution to the ongoing threat of Medicare physician payment cuts is critical to ensuring that all Americans get the quality health care they need.”
The compromise builds upon the SGR Repeal and Medicare Provider Payment Modernization Act (H.R. 1470)bipartisan, bicameral legislation negotiated and agreed to in the 113th Congress [see Washington Highlights, Feb. 7, 2014] and reintroduced March 19 in the House and Senate.
In addition to reforming the Medicare physician payment system, the new package also reauthorizes CHIP through fiscal year (FY) 2017, extends the partial enforcement delay of CMS’ two-midnight policy for short stay inpatient hospitalizations, and extends funding for the National Health Services Corps and the Teaching Health Center (THC) program for two additional years.
Joining eight fellow hospital and health systems, the AAMC sent a March 25 support letter to House members, stating “We appreciate the effort that has been put forth in crafting this legislation. Eliminating planned cuts to physicians in Medicare will ensure access to care for our nation’s Medicare beneficiaries.”
The Obama Administration March 25 released a Statement of Administration Policy affirming the President’s support for the passage of H.R. 2, stating, “the proposal would advance the Administration's goal of moving the Nation's health care delivery system toward one that achieves better care, smarter spending, and healthier people through the expansion of new health care payment models, which could contribute to slowing long-term health care cost growth.”
Director, Government Relations
E&C Health Subcommittee Discusses 340B Drug Pricing Program
March 27, 2015—At a March 24 House Energy and Commerce Health Subcommittee hearing with a panel of federal witnesses to discuss the 340B drug pricing program, several subcommittee members expressed the importance of the program in helping hospitals in their communities extend access and services to underserved populations.
Questions sought to clarify program intent and eligibility, how covered entities use savings, recent oversight activities undertaken by the Health Resources and Services Administration (HRSA), HRSA’s plans to conduct audits of manufacturers and to report ceiling prices, and upcoming guidance anticipated from the agency.
Health Subcommittee Chair Joe Pitts’ (R-Pa.) opening noted, “This program, designed to stretch scarce federal dollars, is critically important for indigent and low-income patients who may otherwise be unable to access needed drugs or afford treatment.” He also indicated the need for “greater oversight and transparency,” echoing remarks by full committee Chair Fred Upton (R-Mich.) that “It is in the interest of good government to see program integrity strengthened, the program’s operating parameters clarified, and the program’s rules consistently enforced.”
Subcommittee Ranking Member Gene Green (D-Texas) opened by observing, “As we examine the 340B program and oversight efforts during today's hearing, it’s important to remember that for 23 years, 340B’s mission has been to lower drug cost for safety net providers so they can provide more comprehensive services and reach more individuals. The program enables providers to decide how to best serve their communities [by] obtaining and leveraging savings from manufacturers so more patients can receive more care in their communities.”
Further clarifying the programmatic intent, Committee Ranking Member Frank Pallone (D-N.J.) stated, “Congress’s intention when this program was created was to help covered entities expand their capacity to serve their patients. Through savings from the drugs purchased at a discounted rate, 340B providers are able to stretch scarce resources to reach more eligible patients and provide more comprehensive health services.”
He continued, “It’s without a doubt that the resources provided through the 340B program have a direct impact on augmenting patient care throughout the country and will continue to play an integral role in the future by supporting the mission of safety net providers, to serve low-income, uninsured, and underinsured patients.”
Similar to comments by Rep. Kathy Castor (D-Fla.), Rep. G.K. Butterfield (D-N.C.) described that “340B is critical to the communities that I represent in Eastern North Carolina. And its importance cannot be overstated ... For many North Carolinians, the only way to access the care they need is through 340B.” Regarding potential changes to the program, he stated, “I ask that we proceed with caution to avoid disruption to the patient populations that heavily depend on hospitals for their health care needs.”
He asked about growth in the number of covered entities, prompting HRSA Deputy Administrator Diana Espinosa to explain that such trends are resulting both from “a decentralization of health care with ... care being provided in more sites,” as well as from a change in how HRSA has accounted for eligible entities, now counting not only the organization itself, but also all its sites.
She added, “But I should note, since there have been several comments about the growth in 340B, that over the last several years, the 340B sales have remained at about 2 percent of overall pharmaceutical sales. So while the number of entities has increased, the sales – the 340B as a proportion of pharmaceutical sales – has stayed about 2 percent.”
Rep. John Shimkus (R-Ill.) questioned whether covered entities were spend savings consistent with the program’s intent to support access to care. Debbie Draper, Ph.D., Director of Health Care for the Government Accountability Office (GAO), cited a 2011 GAO report in which interviewed covered entities “all reported using the revenues generated consistent with their mission.” She added, “for example, they used the revenues to provide more comprehensive services in terms of case management services or patient education” and “to expand services to other locations.”
In response to a similar question from Rep. Renee Ellmers (R-N.C.), Dr. Draper reiterated that the 2011 GAO report found that these safety net providers were using savings to provide “more comprehensive services in terms of … adding additional sites, providing patient care, paying for patients’ copays or helping them get the drugs that are needed.”
A number of committee members inquired about HRSA’s efforts to report ceiling prices, enabling covered entities to ensure that they are not being overcharged by manufacturers, as recommended by the Health and Human Services Office of the Inspector General (OIG). Espinosa reported that the agency expects a pricing system to be operational later this year and also described efforts to conduct manufacturer audits similar to those it has been carrying out for covered entities.
HRSA also indicated that the agency’s anticipated omnibus proposed guidance on the program is expected to be released this year, and will address issues such as patient definition, hospital eligibility, and contract pharmacies, among other areas of clarification.
Director, Government Relations
Director, Government Relations
House and Senate Pass Respective GOP Budgets
March 25, 2015—After hours of debate and consideration of nearly 40 amendments, the Senate March 27 passed the Republican’s fiscal year (FY) 2016 budget resolution 52-46. Just two days earlier, the House March 25 adopted its FY 2016 budget resolution on a 228-199 party-line vote.
Although different, both budgets aim to reduce the national deficit, balance the budget within a decade, repeal the Affordable Care Act (ACA, P.L. 111-148 and P.L. 111-152), and reform the Medicare and Medicaid programs[see Washington Highlights, March 20]. Both budgets also include reconciliation language directing House Ways and Means and Energy and Commerce Committees and the Senate Finance Committee to report back deficit reduction recommendations.
Upon return to Washington, members will have just days to meet the April 15 deadline for a joint budget resolution.
Senior Director, Government Relations
House and Senate Letters Support NIH Funding
March 27, 2015—A total of 169 House members, including 29 Republicans, signed a March 25 letter supporting increased funding for the National Institutes of Health (NIH) in fiscal year (FY) 2016. The letter, organized by Reps. David McKinley (R-W.Va.), Susan Davis (D-Calif.), Andre Carson (D-Ind.), and Peter King (R-N.Y.), requests that NIH receive “at least $32 billion” in FY 2016.
The House letter, which was sent to the chairs and ranking members of both the full House Appropriations Committee and its Labor-HHS subcommittee, states “it is critical that the United States make forward-thinking investments that promote medical breakthroughs as well as our international leadership in biomedical research.”
Similarly, a total of 54 senators, including 12 Republicans, signed a March 27 letter requesting the chairs and ranking members of the Senate Appropriations Committee and Labor-HHS subcommittee “maintain a strong commitment” to funding for NIH.
The Senate letter, organized by Senators Bob Casey (D-Pa.) and Richard Burr (R-N.C.), does not mention a specific funding level for NIH but urges appropriators “to consider the tremendous benefits of a sustained investment in the NIH.”
Senior Director, Government Relations
NHSC Stakeholders Urge FY 2016 Appropriation
March 27, 2015—An AAMC-led coalition of more than 50 National Health Service Corps (NHSC) Stakeholder associations March 24 sent a letter to House and Senate appropriators, recommending a discretionary appropriation of $287.4 million for fiscal year (FY) 2016. The group represents the “multiple health professionals, institutions, and underserved areas/patients that benefit from the NHSC's history of public service.”
The NHSC Stakeholders’ recommendation matches the president’s FY 2016 budget request for discretionary funding [see Washington Highlights, Feb. 6]. The letter highlights the success of the NHSC and the unfilled need of existing health professional shortage areas.
In reference to NHSC funding proposed under the SGR fix [see related story], the letter states, “Recognizing that mandatory funding may be provided through other mechanisms, the appropriations committees still retain primary responsibility for funding the administrative functions of the NHSC and for avoiding budgetary lapses in future years.”
Matthew Shick, J.D.
Senior Legislative Analyst, Government Relations
Telephone: 202- 828-0525
House and Senate Letters Call for Title VII Funding in FY 2016
March 27, 2015—Representatives Michael Burgess, M.D., (R-Texas) and Diana DeGette (D-Colo.) led a March 23 letter urging House Labor, Health and Human Services, Education and Related Agencies (Labor-HHS) Appropriations Subcommittee Chair Tom Cole (R-Okla.) and Ranking Member Rosa DeLauro (D-Conn.) to provide $280 million for the Health Resources and Services Administration (HRSA)’s Title VII health professions programs in fiscal year (FY) 2016. A total of 80 members, including 6 Republicans, joined Reps. Burgess and DeGette in signing the letter.
The letter highlights the role of the Title VII programs in preparing the health workforce to meet the nation’s needs and the need for sustained funding for the programs. “At a time when the country is facing unprecedented provider shortages, as well as a rapidly growing and aging population, a strong commitment to the Title VII programs is necessary,” the letter states.
In the Senate, Jack Reed (D-R.I.) was joined by 28 Senators on a March 27 letter to Senate Labor-HHS Appropriations Subcommittee Chair Roy Blunt (R-Mo.) and Ranking Member Patty Murray (D-Wash.) recommending $280 million for Title VII in FY 2016.
Similar to the House effort, the letter highlights the importance of the Title VII programs, which “guide current and aspiring health professionals to high demand careers in areas of greatest need.”
Sen. Reed and his colleagues note that “support for these programs will ensure that the distribution, quality, and diversity of the health professions workforce continue to improve, and that the workforce is prepared to meet the country's evolving and emerging health care needs.”
Meanwhile, the Health Professions and Nursing Education Coalition (HPNEC) March 18 sent a letter to House and Senate Labor-HHS Appropriations Subcommittee leadership recommending $524 million for HRSA’s Title VII health professions and Title VIII nursing workforce development programs in FY 2016.
Led by the AAMC, HPNEC is an informal alliance of more than 60 national organizations representing schools, programs, health professionals and students dedicated to ensuring the health care workforce is trained to meet the needs of our diverse population.
HELP Committee Explores Barriers to Advancing Treatments and Cures
March 27, 2015—The Senate Health, Education, Labor and Pensions (HELP) Committee March 24 held a hearing titled, “Continuing America’s Leadership: Advancing Research and Development for Patients.”
The hearing, the second in an expected series of hearings focused on medical innovation, featured witnesses from the private sector and academia who discussed their role in advancing research and development, as well as their interactions with the National Institutes of Health (NIH) and the Food and Drug Administration (FDA).
In his opening remarks, HELP Committee Chair Lamar Alexander (R-Tenn.) expressed interest in learning how Congress may be able to help reduce the time it takes to get drugs, devices, and treatments from the discovery process, through the regulatory process, and into medicine cabinets and doctor’s offices. The Chairman also expressed interest in learning how Congress can help “decrease red tape and administrative burden.”
In that vein, Chairman Alexander asked the panel about the amount of money spent on administrative costs, and noted that it could be an area to identify dollars that could be spent on additional grants. Bruce Sullenger, Ph.D., director of Duke Translational Research Institute, said researchers are spending increasing amounts of time on regulatory issues, some, he said, do not pass the “common sense test.” He also described the “stress” on the research process, stemming from the limited budget environment and NIH’s success rates.
Ranking Member Patty Murray (D-Wash.) said medical innovation is at a “critical moment” and added Congress must “give our nation’s biomedical community the right tools to innovate for patients, now and for generations to come.” She also noted the importance of looking at the entire spectrum of medical innovation – from basic research, to development and approval, and into the post-market setting. However, she cautioned that speed must not come at the expense of safety, adding “we need to ensure we are both encouraging innovation and upholding the highest standards of patient and consumer protection.”
Senator Elizabeth Warren (D-Mass.) expressed concern about the lack of adequate funding for NIH and criticized Congress for “choking off vital funding for medical research” over the last ten years. Sen. Warren asked panelists about the impact of the funding environment on their work in the private sector. Panelists noted the lack of funding sustainability or predictability has had in the venture capital space; the loss of talented researchers to other countries or jobs; and because of the time it takes from discovery to treatment, the lost scientific potential for additional drugs or treatments.
Before closing the hearing, Ranking Member Murray expressed concern about the impact of sequestration and budget cuts on families who are waiting for cures.
Members of the committee also expressed interest in FDA’s approval times, the use of medical data, improving the efficiency of clinical trials, engaging patients and families in the research continuum, and reimbursement issues once drugs or devices make it into the system.
Senior Director, Government Relations
AAMC Submits Comment Letter to HHS and NIH on ClinicalTrials.gov
March 27, 2015—The AAMC March 23 submitted a comment letter to the Department of Health and Human Services (HHS) regarding the Notice of Proposed Rulemaking (NPRM) published in the Nov. 21 Federal Register titled “Clinical Trials Registration and Results Submission” and the related draft policy issued by the National Institutes of Health (NIH) on dissemination of NIH-funded clinical trial information.
The HHS proposed rule clarifies and expands requirements for the submission of clinical trial registration and results information to the ClinicalTrials.gov database for trials that are subject to Title VIII of the Food and Drug Administration Amendments Act of 2007 (FDAAA, P.L. 110-85). In particular, the proposed rule extends the FDAAA’s requirements to all applicable trials, not only those for which the drug or device has received FDA approval.
Released concurrently with the NPRM, NIH’s proposed policy applies reporting requirements to all NIH-funded clinical trials, regardless of study phase and whether or not they are subject to the FDAAA. The proposals aim to increase transparency and improve public access to clinical trials information [see Washington Highlights, Nov. 21, 2014].
AAMC has long supported the registration of clinical trials and was a leading proponent in 2004 of advancing ClinicalTrials.gov as the uniform, comprehensive national registry and results database for clinical studies.
In the letter, AAMC generally agrees with the expanded reporting requirements in both the NPRM and parallel policy, while encouraging the NIH to consider the following as it implements any resulting regulations:
- limitations or difficulty in using the existing ClinicalTrials.gov database;
- the extent of effort required to submit additional data in comparison with the perceived marginal benefit to patients and the research community;
- the alignment of incentives and obligations for faculty researchers, particularly with posting negative results, and;
- ensuring that the public-facing interface is both usable and clear in its utility and limitations.
The AAMC further urges “the NIH to use this opportunity to create an environment that supports effective, evidence-based regulation…(and) sees the current HHS proposed rule and the parallel NIH policy as part of the continuing effort to strengthen clinical trials by promoting transparency, trust, and usefulness of knowledge from human subjects research.”
Heather Pierce, J.D., M.P.H.
Sr. Director, Science Policy & Regulatory Counsel
Director, Science Policy
CMS Releases Meaningful Use Stage 3 Proposed Rule
March 27, 2015—The Centers for Medicare and Medicaid Services (CMS) March 20 issued a proposed rule defining the third stage of “meaningful use” for the Medicare and Medicaid Electronic Health Record (EHR) incentive programs. The proposed rule is expected to be published in the Federal Register on March 30, followed by a 60-day comment period.
The proposed rule defines the Stage 3 meaningful use requirements that hospitals and eligible professionals (EPs) must meet to avoid downward payment adjustments under Medicare for Stage 3 of the EHR Incentive Program. The criteria CMS proposes for Stage 3 aims at increasing interoperability among EHRs and increasing the focus on patient outcomes to improve care.
The criteria, effective on an optional basis in calendar year (CY) 2017, would be required of all providers beginning in payment year 2018, regardless of their prior participation in the program. In the rule, CMS eliminates requirements from Stages 1 and 2 that will no longer be relevant for the advanced use of EHRs.
Regarding the clinical quality measure (CQM) requirements, CMS intends to further align the EHR Incentive Program with established physician and hospital quality programs. Many future CQM reporting requirements for EPs will be proposed in the Physician Fee Schedule (PFS) rule, while hospital CQM requirements will be included in the Inpatient Prospective Payment System (IPPS) rule. CMS will continue to encourage electronic submission of CQMs for EPs and hospitals in CY 2017. The proposed rule mandates the electronic submission of CQMs starting in CY 2018.
Finally, the Stage 3 proposed rule changes the EHR reporting period so that all providers would report under a full calendar year timeline, with a limited exception for Medicaid EPs, and eligible hospitals demonstrating meaningful use for the first time. CMS intends the Stage 3 rule to be the final stage of the meaningful use framework.
Additionally, the Office of the National Coordinator for Health Information Technology (ONC) March 30 released the 2015 Edition Health IT Certification Criteria proposed rule, expected to be published in the Federal Register on March 30, followed by a 60-day comment period.
Lori K. Mihalich-Levin, J.D.
Director, AAMC Health Care Affairs
Scott Wetzel, M.P.P.
Senior Specialist, Health Care Affairs
Mary Patton Wheatley, M.S.
Director, Health Care Affairs
On the Hill
March 27, 2015—Senate Minority Leader Harry Reid (D-Nev.) announced March 27 that he will not seek re-election in 2016. First elected to the House in 1982, Minority Leader Reid began his work in the Senate in 1986, where he has served as Democratic leader since 2005.
House Appropriations Chairman Hal Rogers (R-Ky.) announced March 17 that Rep. Steven Palazzo (R-Miss.) has been appointed to serve on the committee. Rep. Palazzo will serve on the Agriculture; Commerce, Justice, and Science; and Legislative Branch subcommittees.
Sen. Dan Coats (R-Ind.) announced March 24 that he will not seek re-election in 2016. After serving in both the House and Senate from 1981-1999, Sen. Coats was named U.S. Ambassador to Germany. He returned to the Senate in 2011 and has since served on the Finance and Select Intelligence Committees, and as chairman of the Joint Economic Committee.
On The Agenda
April 2-3: MedPAC Meeting
Time: TBD; 1300 Pennsylvania Avenue NW, Washington, D.C.
The Medicare Payment Advisory Commission (MedPAC) will hold a public meeting and will solicit comments on the agenda via its website.
April 7: HIT Policy Committee Meeting
9:30 a.m.; 10 Thomas Circle NW, Washington, D.C.
The Office of the National Coordinator (ONC) for Health Information Technology (HIT) Policy Committee will meet to discuss recommendations on a policy framework for the development and adoption of a nationwide health information infrastructure, including standards for the exchange of patient medical information.
Washington Highlights, a weekly electronic newsletter, features brief updates on the latest legislative and regulatory activities affecting medical schools and teaching hospitals.
For More Information
Senior Director, Government Relations