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President Trump Releases Remaining Details of FY 2020 Budget Proposal

March 22, 2019—The White House March 18 released the remaining volumes of the president’s fiscal year (FY) 2020 budget proposal and other related materials. This follows the March 11 release of select portions of the budget, which proposes significant decreases in federal spending overall, including a 12% reduction to the Department of Health and Human Services (HHS); deep cuts to Medicare, graduate medical education (GME), and Medicaid; and reduced funding for the National Institutes of Health (NIH), the Veterans Affairs (VA) Medical and Prosthetic Research, and health workforce programs [see Washington Highlights, March 15].

Additional details describing the proposed budget cuts are outlined in the Major Savings and Reforms document, including details regarding the proposed reduction of nearly $5 billion to the NIH. According to the document, the “Administration believes NIH can improve efficiencies to maximize the return of its investments” and proposes changes that “would enable funding to be better targeted toward supporting the highest priority research on diseases that affect human health while making research institutes less reliant on Federal dollars.”

The request proposes to lower the current HHS salary cap from Executive Level II ($189,600 in 2019) to Executive Level V ($154,300), as the Administration has proposed in its last two budget requests. In the accompanying congressional justification document, the NIH also outlines what it characterizes as a complementary “administrative policy” to “reduce the direct cost of research by capping the percentage of an investigator’s salary that can be paid with NIH grant funds at 90 percent.” The policy is similar to a proposal the administration requested legislative language for in its FY 2019 request.

The president’s FY 2020 request also notes that “For the past two years, NIH has been prohibited by law from reducing grantee administrative costs” and proposes eliminating the prohibition.  

Along with the additional materials posted regarding the president’s FY 2020 proposal, HHS also posted updated projections for the Biomedical Research and Development Index (BRDPI), expecting BRDPI to grow at 2.7% for FY 2019 through FY 2024.

The budget request also provides details on significant proposed cuts to the Health Resources and Services Administration (HRSA) Title VII health professions and Title VIII nursing workforce development programs. In the accompanying congressional justification document, the administration proposes to cut geriatric programs, diversity pipeline programs, and primary care training and enhancement programs.

While the budget proposes to eliminate most Titles VII and VIII programs, Mental and Behavioral Health ($36.916 million) and Behavioral Health Workforce Education and Training Programs ($75 million) are proposed to receive the same amount of funding in FY 2020 as was enacted in FY 2019. The full budget proposal also eliminates funding for HRSA GME grants for public medical schools. 

Contact:

Tannaz Rasouli
Sr. Director, Public Policy & Strategic Outreach
Telephone: 202-828-0525
Email: trasouli@aamc.org

Matthew Shick, JD
Director, Gov't Relations & Regulatory Affairs
Telephone: 202-828-0525
Email: mshick@aamc.org

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AAMC Joins Higher Ed Community Letter Endorsing DACA Legislation

March 22, 2019—The AAMC joined 37 higher education organizations on a March 20 letter led by the American Council on Education to House leadership in support of the American Dream and Promise Act of 2019 (H.R. 6). The letter notes that the bill “would allow some undocumented young people, who have already invested in our country and in whom the country has already invested, to earn lawful permanent residence in the United States and a path to citizenship,” and urges “the House to pass this legislation as soon as possible.” At press time, the legislation had 214 Democrat co-sponsors. 

Reps. Lucille Roybal-Allard (D-Calif.), Nydia Velázquez (D-N.Y.), and Yvette Clarke (D-N.Y.) March 12 introduced the measure, and Speaker of the House Nancy Pelosi (D-Calif.) assigned it a priority bill number for the 116th Congress. H.R. 6 is the latest version of the Development, Relief, and Education for Alien Minors (DREAM) Act introduced in several previous Congresses. In addition to providing a replacement for the Deferred Action for Childhood Arrivals (DACA) program, H.R. 6 also includes protections and a path to citizenship for Temporary Protected Status (TPS) and Deferred Enforced Departure (DED) beneficiaries, which was the subject of a March 6 House Judiciary hearing [see Washington Highlights, March 8].

In 2017, President Trump announced his decision to rescind the DACA executive action implemented under the Obama Administration [see Washington Highlights, Sept. 8, 2017]. While Congress has failed to pass legislation addressing this issue, federal courts have prevented rescission of the DACA program for current recipients [see Washington Highlights, Feb. 16, 2018].

Contact:

Matthew Shick, JD
Director, Gov't Relations & Regulatory Affairs
Telephone: 202-828-0525
Email: mshick@aamc.org

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White House Releases Proposal for Higher Education Act Reauthorization

March 22, 2019—The White House March 18 released Proposals for Reauthorizing the Higher Education Act (HEA). The administration stated the goal for HEA is to “increase access to affordable, flexible, and innovative postsecondary education and skills attainment to meet the interests and lifelong learning needs of every American.”

The proposal requests that Congress institute loan limits for GradPLUS loans, which currently allow medical students to borrow up to the full cost of attendance. The administration believes “the current system provides institutions of higher education with few incentives to control costs and saddles parents and graduate students with debt with little attention to borrowers’ likely ability to repay.” As in the president’s fiscal year (FY) 2020 budget request, the proposal would eliminate Public Service Loan Forgiveness (PSLF), citing the “biases and complications of the ‘PSLF’ program.”

Designed to simplify federal student aid, the proposal echoes the loan repayment plan that is outlined in the president’s FY 2020 budget request. The administration proposes a single income-driven repayment plan that would eliminate the Standard Repayment Cap, which would push most physicians out of the repayment plan [see Washington Highlights, March 15]. The proposal also includes implementing gainful employment reporting that would provide students with “program-level earnings and outcome data they need to make better informed choices about potential careers and educational opportunities.”

In response to the president’s proposal, Senate Health, Education, Labor, and Pensions (HELP) Committee Ranking Member Patty Murray (D-Wash.) noted that capping GradPLUS loans would “end up hurting students by reducing the amount of federal aid for students and taking billions out of the pockets of borrowers” and emphasized the importance of creating comprehensive bipartisan HEA legislation. HELP Committee Chair Lamar Alexander (R-Tenn.) shared the administration’s goal of making higher education more affordable, however he reaffirmed his commitment to work with Ranking Member Murray “to develop bipartisan recommendations so that we can report legislation to the full Senate before summer.”

Contact:

Matthew Shick, JD
Director, Gov't Relations & Regulatory Affairs
Telephone: 202-828-0525
Email: mshick@aamc.org

Brett Roude
Legislative Analyst
Telephone: 202-753-5726
Email: broude@aamc.org

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President Trump Issues Executive Order on Free Speech, Student Loans

March 22, 2019—President Donald Trump March 21 signed an “Executive Order on Improving Free Inquiry, Transparency, and Accountability at Colleges and Universities.” 

The order directs the heads of the Departments of Defense, Interior, Agriculture, Commerce, Labor, Health and Human Services, Transportation, Energy, and Education; the Environmental Protection Agency; the National Science Foundation; and the National Aeronautics and Space Administration to “take appropriate steps, in a manner consistent with applicable law, including the First Amendment, to ensure institutions that receive Federal research or education grants [excluding student aid] promote free inquiry.”

In an accompanying fact sheet, the Administration notes, “public schools should fulfill their obligation to uphold the First Amendment and private schools should comply with their stated institutional policies regarding free speech.”

In a press statement, Senate HELP Committee Chair Lamar Alexander (R-Tenn.) cautioned, “I don’t want to see Congress or the President or the department of anything creating speech codes to define what you can say on campus. The U.S. Constitution guarantees free speech. Federal courts define and enforce it. The Department of Justice can weigh in. Conservatives don’t like it when judges try to write laws, and conservatives should not like it when legislators and agencies try to rewrite the Constitution.”

Much of the Executive Order focuses on increasing transparency in student loan programs and directs the Department of Education to expand the College Scorecard to graduate and professional programs. The order also requires progress reports from the Department and studies on state innovations.

In remarks at the signing ceremony, President Trump also hinted at exploring current borrowers’ repayment saying, “we’re going to start with 43 million people in the United States who are currently working to pay off student loans. And we’ll be talking about that very soon.”

Contact:

Matthew Shick, JD
Director, Gov't Relations & Regulatory Affairs
Telephone: 202-828-0525
Email: mshick@aamc.org

Brett Roude
Legislative Analyst
Telephone: 202-753-5726
Email: broude@aamc.org

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MACPAC Releases March 2019 Report to Congress, Including Recommendation for DSH Allotments to States

March 22, 2019—The Medicaid and CHIP (Children’s Health Insurance Program) Payment and Access Commission (MACPAC) March 15 released its March 2019 Report to Congress on Medicaid and CHIP. The Commission made recommendations on restructuring disproportionate share hospital (DSH) allotment reductions in current law and upper payment limit (UPL) oversight. Additionally, MACPAC included its annual analysis of DSH allotments to states.

In its annual analysis of DSH allotments to states, MACPAC reported that$12.6 billion in federal DSH funds were allotted to states in fiscal year (FY) 2019. These allotments are scheduled to be reduced in fiscal FY 2020, with cuts continuing through FY 2025. If Congress chooses to proceed with these impending reductions, MACPAC recommends the reductions be phased in gradually and applied first to states with projected unspent allotments.

Under current law, the allotments would be reduced by $4 billion in FY 2020 and $8 billion a year in FYs 2021–2025, but MACPAC recommends phasing the reductions in by $2 billion in FY 2020, $4 billion in FY 2021, $6 billion in FY 2022, and $8 billion a year in FYs 2023–2029. In addition, the Commission recommends that Congress develop a new reduction distribution methodology based on the number of nonelderly, low-income individuals in a state, after adjusting for differences in hospital costs in different geographic areas [see Washington Highlights, Jan. 25].

Moreover, MACPAC recommends that the Department of Health and Human Services (HHS) establish process controls to ensure accurate and complete annual hospital UPL data. The Commission also recommends HHS make hospital-specific UPL data and methods publicly available in a standard format. Both recommendations were made to address discrepancies in UPL data.

Contact:

Andrew Amari
Hospital Policy and Regulatory Specialist
Telephone: 202-828-0554
Email: aamari@aamc.org

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MedPAC Releases March 2019 Report to Congress, Recommends Payment Updates for Medicare’s Payment Systems

March 22, 2019—The Medicare Payment Advisory Commission (MedPAC) March 15 released its March 2019 Report to Congress. The report recommends payment updates for Medicare’s payment systems, including a 2% update for hospital inpatient and outpatient services.

The 2% payment update would come as part of MedPAC’s combined recommendation to replace Medicare’s current hospital quality programs with the new hospital value incentive program (HVIP). The difference between the current law fiscal year (FY) 2020 update (projected to be 2.8%) and the Commission’s recommended 2% update would be used to fund the HVIP.

In addition, MedPAC recommends that Congress update the payment rates for physician and other health professional services by the amount specified in current law. MedPAC determined that current physician payment rates remain adequate, and no update is required. Under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA, P.L. 114-10), there will be no statutory update to payment rates for physicians and other health professional services in FY 2020.

Finally, MedPAC provides updates on both the Medicare Advantage (MA) and Medicare Part D programs. The Commission also includes a report on opioids and alternatives in the hospital setting, as mandated by the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment  for Patients and Communities Act of 2018 (SUPPORT Act, P.L. 115-271).

Contact:

Andrew Amari
Hospital Policy and Regulatory Specialist
Telephone: 202-828-0554
Email: aamari@aamc.org

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On the Agenda

March 26: House Appropriations Subcommittee Hearing on National Science Foundation Budget
9:30 am, H-309 U.S. Capitol Building, Washington, D.C.
The House Appropriations Commerce, Justice, Science, and Related Agencies Subcommittee will hold a hearing titled “National Science Foundation’s Budget Request for Fiscal Year 2020.”

March 26: House Budget Committee Hearing on HHS Budget
10:00 am, 210 Cannon House Office Building, Washington, D.C.
The House Budget Committee will hold a hearing titled “Department of Health and Human Services FY 2020 Budget.” HHS Deputy Secretary Eric Hargan will testify.

March 26: Senate HELP Committee Hearing on E-Health
10:00 am, 430 Dirksen Senate Office Building, Washington, D.C.
The Senate HELP Committee will hold a hearing titled “Implementing the 21st Century Cures Act: Making Electronic Health Information Available to Patients and Providers.”

March 26: Senate Judiciary Committee Hearing on Gun Violence
10:00 am, 226 Dirksen Senate Office Building, Washington, D.C.
The Senate Judiciary Committee will hold a hearing titled “Red Flag Laws: Examining Guidelines for State Action.”

March 26: Senate Veterans’ Affairs Committee Hearing on VA Budget
10:15 am, 418 Russell Senate Office Building, Washington, D.C.
The Senate Veterans’ Affairs Committee will hold a hearing titled “Fiscal Year 2020 Budget for Veterans' Programs and Fiscal Year 2021 Advance Appropriations Request.”

March 26: House Appropriations Subcommittee Hearing on Education Budget
10:30 am, 2358-C Rayburn House Office Building, Washington, D.C.
The House Appropriations Labor, HHS, Education, and Related Agencies Subcommittee will hold a hearing titled “Department of Education Budget Request for FY 2020.”
Secretary of Education Betsy DeVos will testify.

March 27: House Appropriations Subcommittee Member Day
10:00 am, 2358-C Rayburn House Office Building, Washington, D.C.
The House Appropriations Labor, HHS, Education, and Related Agencies Subcommittee will hold a Member Day hearing.

March 27: House Appropriations Subcommittee Hearing on VA Budget
1:00 pm, 2359 Rayburn House Office Building, Washington, D.C.
The House Appropriations Military Construction, Veterans Affairs, and Related Agencies Subcommittee will hold a hearing titled, “Veterans Affairs FY 2020 Budget Hearing.”

March 28: Senate Appropriations Subcommittee Hearing on Department of Education Budget
10:00 am, 124 Dirksen Senate Office Building, Washington, D.C.
The Senate Appropriations Labor, HHS, Education, and Related Agencies Subcommittee will hold a hearing “to examine proposed budget estimates and justification for fiscal year 2020 for the Department of Education.”

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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