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House Appropriators Approve Subcommittee Allocations
April 24, 2015—The House Appropriations Committee April 22 approved by voice vote its fiscal year (FY) 2016 subcommittee allocations. The allocations, also known as 302(b)s, limit spending for the 12 annual appropriations bills.
The total allocations adhere to the $1.017 trillion discretionary spending cap mandated by the Budget Control Act of 2011 (P.L. 112-25) and adopted in both the FY 2106 House and Senate budget resolutions (H.ConRes. 27 and S.Con.Res. 11).
The House allocation for the Labor-HHS-Education subcommittee is $153.05 billion, a decrease of approximately $3.7 billion (2.4 percent) from the current year’s level.
The White House took an unusual step of challenging the spending allocations prior to the committee’s action. In an April 21 letter to House Appropriations Committee Chair Hal Rogers (R-Ky.), Office of Management and Budget (OMB) Director Shaun Donovan said the Republican’s budget framework “would lock in sequestration funding levels for FY 2016.”
The letter also warns that the president “has been clear that he is not willing to lock in sequestration going forward, nor will he accept fixes to defense without also fixing non-defense.”
The committee rejected along party lines an amendment offered by Ranking Democrat Nita Lowey (N.Y.) to increase the allocations by approximately $75 billion to match the spending levels in the president’s FY 2016 budget.
Senior Director, Government Relations
House Appropriations Committee Approves VA Spending Bill with Research Bump
April 24, 2015—The House Appropriations Committee April 22 approved by voice vote the fiscal year (FY) 2016 Military Construction, Veterans Affairs, and Related Agencies (MilCon-VA), spending bill sending the bill to the House Floor for consideration. The final measure includes approximately $430 million in rescissions from various appropriations account to prevent a proposed 1.3 percent Department of Veterans Affairs (VA) pay raise.
An amendment offered by Rep. David Price (D-N.C.) during mark-up provided an additional $15 million for VA Medical and Prosthetic Research over the subcommittee-approved level with an offset from the VA Information Technology account. The pay raise rescission would cut final VA Research funding by $3 million. As a result, the final measure includes $619 million for VA Research, a $30 million (5.1 percent) increase over FY 2015, short of the president’s budget [see Washington Highlights, Feb. 6].
Ranking Member Sanford Bishop (D-N.Y.) also spoke in favor of the amendment. The Friends of VA Medical Care and Health Research (FOVA) advocated the funding increase without identifying a specific offset. AAMC serves on the FOVA executive committee.
The White House sent an April 21 letter to House Appropriations Chair Hal Rogers (R-K.Y.) expressing “serious concerns about this legislation.” Specifically, the letter opposes the “Republican’s 2016 budget framework, which would lock in sequestration funding levels for FY 2016.”
The letter continues, “Underfunding the President's FY 2016 [VA] Medical Care request by more than half a billion dollars, equivalent to the cost of providing care for tens of thousands of veterans. If enacted, the bill would negatively impact veterans' medical care services, including reducing VA's ability to activate new and replacement facilities with sufficient staff and equipment and to adequately maintain facility infrastructure.”
The measure would also provide $63.3 billion in FY 2017 advance appropriations for VA medical services, facilities, support and compliance, matching the president’s request.
Matthew Shick, J.D.
Senior Legislative Analyst, Government Relations
Telephone: 202- 828-0525
AAMC Joins Letter Opposing Medicare Sequestration Extension
April 24, 2015—The AAMC April 21 joined eight hospital associations, including the American Hospital Association, Federation of American Hospitals, and the Children’s Hospital Association, in a letter to Congress strongly opposing the use of Medicare sequestration cuts through 2024 to offset partially the cost of the Trade Adjustment Assistance (TAA), and for other purposes Act of 2015 (H.R. 1892), international trade legislation unrelated to the Medicare program, that was approved April 23 by the Ways and Means Committee.
Urging lawmakers to strike the language, the groups call the extension of Medicare sequestration “unacceptable,” at a time when, “hospitals are already facing more than $121 billion in cuts imposed since 2010, and are projected to experience this year the lowest Medicare margin - negative 9% - ever recorded.” The letter also states “while we do not have concerns with the continuation of the TAA program, we strongly object to any additional hospital Medicare cuts to pay for it.”
The legislation extends the Medicare sequester cuts, originally passed in the Budget Control Act (BCA) of 2011, to partially offset the cost of the legislation. This is not the first time sequestration has been used as an offset. Last year, Congress offset the cost of patching the Sustainable Growth Rate (SGR) formula [see Washington Highlights, March 28, 2014], by extending and front-loading Medicare sequester cuts in the first-half of FY 2024. The TAA bill would extend the Medicare sequester throughout the second half of the year at .25 percent, which according the Congressional Budget Office, would save $700 million.
The Senate Finance Committee April 22 passed respective trade legislation similarly offset by the extension of Medicare sequester. Before passage, Sen. Mark Warner (D-Va.) offered, but ultimately withdrew, an amendment to replace the Medicare sequester extension with an offset related to mortgage reporting requirements.
Director, Government Relations
Senate Appropriators Examine FY 2016 HHS Funding Request
April 24, 2015—Several senators emphasized the need for greater investment in the National Institutes of Health (NIH) when Secretary of Health and Human Services (HHS) Sylvia Burwell April 23 testified before the Senate Labor-HHS-Education Appropriations Subcommittee about the department’s fiscal year (FY) 2016 budget proposal.
In his opening remarks, Subcommittee Chair Roy Blunt (R-Mo.) described “limited resources” and the need for funding to be “targeted to programs that have shown proven and effective results” or “effective result potential.” He praised the administration’s proposal to boost NIH funding by $1 billion, noting that Congress had once come together to double funding for the agency.
“But once we got to the doubling goal that seemed to be the place to stop,” he said. “I know that Dr. Collins and you and me and others don’t want that same experience to repeat itself, that we set a worthy goal but don’t understand the importance of having that goal extend beyond achieving the first marker in the goal.”
Sen. Dick Durbin (D-Ill.) echoed the need for a sustained commitment to funding growth for medical research, stating, “I think it is time for us to step up as a Congress and do something truly bipartisan the American people will applaud and say we’re going to start a commitment of five percent plus inflation to key medical research, and we’re going to do it on a bipartisan basis, no ands, ifs, or buts about it.” He continued that any relief from spending limits for the Department of Defense should be matched by increases to non-defense spending as well.
Listing several health care investments in the administration’s budget proposal, Ranking Member Patty Murray (D-Wash.) urged lawmakers to build on the deal she brokered two years ago with Rep. Paul Ryan (R-Wis.) to ease sequestration spending limits. Secretary Burwell’s testimony reinforced the sentiment, pointing to the president’s proposal to increase investments in both defense and non-defense priorities above the existing spending caps in FY 2016.
Sen. Lamar Alexander (R-Tenn.) referenced his work with Sen. Murray in their roles as chair and ranking member, respectively, of the authorizing Senate Health, Education, Labor, and Pensions (HELP) committee to examine innovation in medical research and drug development. He reiterated his concern with a finding from the National Academy of Sciences that federally-supported researchers spend 42 percent of their time on administrative tasks, suggesting that he would be pursuing legislation to ease the regulatory burden on researchers.
Secretary Burwell also fielded questions from Sen. James Lankford (R-Okla.), who raised concerns about the Centers for Medicare and Medicaid Services (CMS) Recovery Audit Contractor (RAC) audit process and pending reforms. Responding to his question of “what’s next” in addressing problems, Secretary Burwell noted that the department has implemented some administrative changes, but that Congress has imposed constraints on the agency’s ability to go forward with RACs and that there are contracting challenges.
She also indicated, “The place where we believe we need some help from the Congress, and have had these conversations across a number of committees, [is] in that backlog process.”
Among other topics raised at the hearing, senators also inquired about contraceptive coverage under the Affordable Care Act (ACA, P.L. 111-148 and P.L. 111-152), proposals to fight antibacterial resistance, and the administration’s efforts to address substance abuse. Regarding efforts to curb opioid addiction, Secretary Burwell suggested that Congress should help ensure that incoming physicians are trained to implement guidelines being developed by HHS.
Director, Government Relations
FY 2016 IPPS Proposed Rule Released
April 24, 2015—The Centers for Medicare and Medicaid Services (CMS) April 17 released the Inpatient Prospective Payment System (IPPS) proposed rule containing changes to the Medicare payment policies and rates under the IPPS and Prospective Payment System (PPS) payment update for fiscal year (FY) 2016. Comments are due by June 16 and CMS expects to issue the final rule by Aug. 1.
The proposed rule includes a projected payment update of 1.1 percent in FY 2015 for acute care hospitals. CMS proposes to update the IPPS market basket by 2.7 percent, but also proposes a 0.8 percent recoupment cut to the standardized amount in FY 2016 to continue implementing the documentation and coding adjustment required by the American Taxpayer Relief Act of 2012 (ATRA, P.L. 112-240).
The payment update also reflects a multi-factor productivity adjustment of minus 0.6 percentage points and a 0.2 percentage point reduction required by the Affordable Care Act (ACA, P.L. 111-148 and P.L. 111-152).
CMS projects that the proposed rate increase along with other proposed payment changes in the rule will decrease IPPS operating payments for all hospitals by approximately 0.3 percent. CMS’ projected impact for major teaching hospitals (hospitals that train 100 or more residents) is also a 0.3 percent operating payment increase.
In the proposed rule, CMS explains that the agency is carefully considering stakeholder feedback and recent Medicare Payment Advisory Committee (MedPAC) recommendations on issues related to short inpatient hospital stays, long outpatient stays with observation services, and the related 0.2 percent IPPS payment adjustment. CMS expects to further discuss these issues in the proposed calendar year (CY) 2016 Hospital Outpatient Prospective Payment system rule.
The rule does not propose changes to the graduate medical education (GME) payment regulations.
For planning purposes, CMS seeks comment on policy and operational issues surrounding potential future expansion of the Bundled Payments for Care Improvement Initiative (BPCI). CMS would use additional rulemaking outside this IPPS rulemaking cycle, if the agency decides to expand any of the models.
Additionally, CMS is seeking public comments on a range of issues including: breadth and scope of an expansion; episode definitions; models for expansion; roles of organizations and relationships necessary or beneficial to care transformation; setting bundled payment amounts; mitigating risk of high-cost cases; administering bundled payment; data needs; use of health information technology; quality measurement and payment for value; and the transition from Medicare Fee-For-Service payments to bundled payments.
CMS continues to implement changes to Medicare disproportionate share hospital (DSH) payments required by the ACA. Beginning in FY 2014, hospitals started receiving 25 percent of what they would have received under the former statutory formula for Medicare DSH. The remaining 75 percent of what would have been paid as Medicare DSH was adjusted for decreases in the rate of uninsured individuals under the ACA, and redistributed to hospitals as Uncompensated Care DSH (UC DSH) payments based on each hospital’s relative share of uncompensated care costs calculated using a proxy of low income days.
CMS’ Office of the Actuary estimates that 75 percent of what would have been paid in Medicare DSH payments for FY 2015 at $10 billion, which is then reduced to reflect the change in the percentage of individuals who are uninsured as estimated by the Congressional Budget Office (CBO) and a statutory factor to determine the amount available for UC DSH payments.
After such a cut to the UC DSH pool, the amount available to be redistributed to hospitals based on their relative share of uncompensated care, is $6.4 billion (a decrease of $1.3 billion from the estimated FY 2015 amount).CMS is again proposing to use low income days (Medicaid days + Medicare SSI days) as a proxy to determine each hospital’s relative share of uncompensated care for purposes of redistributing UC DSH payments.
CMS is also proposing revisions to the wage index for acute care hospitals and the annual update of the wage data. Additionally, CMS is proposing to extend an additional year the imputed floor policy, which is currently set to expire Sept. 30.
Regarding the hospital quality pay-for-performance programs, CMS has proposed the following significant changes: an expansion of the pneumonia readmissions measure cohort in the Hospital Readmissions Reduction Program starting FY 2017, the removal of the Clinical Care Process Domain in the Value Based Purchasing (VBP) Program in FY 2018, and an increase in the weighting – to 85 percent – for the Centers for Disease Control infection measures in the Hospital Acquired Conditions Reduction Program (HACRP) starting FY 2017.
CMS has also proposed to assess hospitals on expanded data collection for central line associated blood stream infections (CLABSI) and catheter associated urinary tract infections (CAUTI) measures for HACRP in FY 2018 and intends to propose this change for the VBP Program starting FY 2019.
In regards to the Inpatient Quality Reporting (IQR) Program, CMS has proposed requiring hospitals to submit certain core quality measures electronically for FY 2018 payment determination and is seeking feedback on the collection of “core elements” from an EHR to improve risk adjustment.
Finally, the proposed rule also includes proposals to implement section 1206 of the Pathways for SGR Reform Act, which requires the establishment of an alternative site-neutral payment rate for Medicare inpatient discharges from long term care hospitals (LTCHs) that fail to meet certain statutorily defined criteria, beginning on or after Oct. 1, 2015.
Lori K. Mihalich-Levin, J.D.
Director, AAMC Health Care Affairs
Allison M. Cohen, J.D., LL.M.
Senior Policy and Regulatory Specialist
Scott Wetzel, M.P.P.
Senior Specialist, Health Care Affairs
Ad Hoc Group Urges Amendment to Medical Research Funding
April 24, 2015—The AAMC-led Ad Hoc Group for Medical Research April 17 sent a letter to House and Senate conferees on the fiscal year (FY) 2016 budget resolution (H.Con.Res. 27) urging them to adopt a Senate amendment to support the National Institutes of Health (NIH).
The bipartisan amendment (Senate Amendment No. 1099), offered by Sen. Jerry Moran (R-Kan.) and cosponsored by 33 senators, would create a deficit-neutral reserve fund to support investments in precision medicine, biomedical research, and NIH. The Senate March 27 agreed to the amendment by unanimous consent.
The letter notes that “science and innovation are essential if we are to continue to improve our nation’s health, sustain our leadership in medical research, and remain competitive in today’s global information and innovation-based economy.”
Senior Director, Government Relations
CMS Releases Proposed Rule Modifying Meaningful Use for 2015 through 2017
April 24, 2015—The Centers for Medicare and Medicaid Services (CMS) April 15 published in the Federal Register a proposed rule modifying the Electronic Health Record (EHR) Incentive Program for 2015 through 2017. Comments on the proposed rule are due June 15.
The rule is the third in a series of regulations published recently by CMS and the Office of the National Coordinator for Health Information Technology (ONC) related to the “meaningful use” EHRs and is separate from the Meaningful Use Stage 3 and the 2015 Edition Health IT Certification Criteria proposed rules [see Washington Highlights, March 27].
Although the changes are similar to CMS’ proposed modifications for Meaningful Use Stage 3, the proposed rule would go into effect this calendar year (CY). The rule contains several critical changes to the EHR Incentive Program, proposing to:
- Align the reporting period, beginning in 2015, for hospitals with the calendar year rather than the federal fiscal year;
- Permit all hospitals and eligible professionals (EPs) a 90-day reporting period in 2015, instead of the current requirement for a full year. For 2015 only, CMS proposes that hospitals may begin an EHR reporting period as early as Oct. 1, 2014 and end by Dec. 31, 2015;
- Remove the “menu” and “core” reporting structure currently in place under Stages 1 and 2, such that all objectives and measures would now be required and not optional;
- Modify the patient action measures in the Stage 2 objectives related to patient engagement to reduce the burden on providers, despite proposing to make these measures more stringent in Stage 3; and
- Remove reporting requirements for Stages 1 and 2 of the Medicare and Medicaid Incentive programs that have become redundant, duplicative, or “topped” out through advancements in EHR function and provider performance.
The rule requests public comment on the current definition of a hospital-based EP for purposes of the EHR incentive program. Under the current definition, an EP is hospital-based – and thus not eligible for EHR incentive payments or subject to Medicare EHR payment penalties – if he or she furnishes 90 percent or more of his or her covered professional services in sites of services identified as inpatient hospital (POS 21) or emergency room (POS 23) settings in the year preceding the payment year.
CMS also seeks comment on whether other place of service codes should be included in the definition of a hospital-based EP and how the inclusion of additional settings might affect EP eligibility for EHR incentive payments.
Additionally, CMS seeks comment on whether the agency should implement only the current proposed modifications, from 2015 through 2017, and begin Stage 3 in 2018, removing the previous proposal to begin Stage 3 in 2017.
Lori K. Mihalich-Levin, J.D.
Director, AAMC Health Care Affairs
Mary Patton Wheatley, M.S.
Director, Health Care Affairs
AAMC Submits Letter to FDA on Public Health Concerns of Demographic Subgroups
April 24, 2015—The AAMC April 16 submitted a letter to the Food and Drug Administration (FDA) regarding areas of public health concern for racial/ethnic minority populations to enhance development of the FDA’s research agenda and inform funding decisions for the next fiscal year. The request for comment was published in the Federal Register on Feb. 25, 2015.
In the letter, AAMC supports the FDA’s efforts to seek more knowledge about the health of racial/ethnic demographic subgroups to better inform health care decisions of providers and patients.
Acknowledging the existing initiatives of the FDA, the AAMC provides suggestions to the FDA in three broad categories:
Identifying areas of public health concern for racial/ethnic minorities;
Improving participation rates of racial and ethnic minorities in research; and
Effectively disseminating important information to all populations.
The AAMC recommends the FDA leverage community health needs assessment (CHNA) data to identify prioritized health needs, develop strategies for communicating clinical trial results to participants, and create new methods to communicate FDA actions to all populations.
Furthermore, the AAMC encourages the FDA to broaden its current efforts to include other populations such as veterans, persons with disabilities, and LGBT and rural populations who also experience disparate health outcomes.
Philip M. Alberti, Ph.D.
Senior Director, Health Equity Research and Policy
Heather Pierce, J.D., M.P.H.
Sr. Director, Science Policy & Regulatory Counsel
AAMC Joins Letter Expressing Concerns with America COMPETES Act
April 24, 2015—The AAMC joined nearly 150 member organizations as part of the Coalition for National Science Funding (CNSF) in an April 21 letter to House Committee on Science, Space, and Technology Chair Lamar Smith (R-Texas) and Ranking Member Eddie Bernie Johnson (D-Texas) regarding the America COMPETES Reauthorization Act of 2015 (H.R. 1806).
In the letter, the organizations stress concerns in the current legislation pertaining to the National Science Foundation (NSF), “that will negatively affect NSF and the scientific community that relies on NSF,” most specifically opposing specific budget authorization levels for individual directorates at NSF and significant reductions for the Social, Behavioral and Economic Sciences (SBE) and Geosciences (GEO) directorates.
Additionally, the organizations affirm the coalition’s commitment to work with the committee “to produce the strongest possible legislation” that incorporates “the spirit and commitment of the original act” of 2007 and reauthorization legislation of 2010, and encourage a bipartisan compromise that can be supported not only by the committee, but also by the scientific and higher education communities.”
The legislation, which authorizes research, engineering, and education programs supported by the National Science Foundation, Department of Energy’s Office of Science, and National Institute of Standards and Technology, was approved along party lines (19-16) during a contentious April 23 committee mark-up. A House floor vote on the legislation may occur as soon the week of April 27.
Senior Director, Government Relations
On The Agenda
April 28: Senate Finance Committee Hearing on Medicare Appeals
10 a.m.; 215 Dirksen Senate Office Building
The Senate Finance Committee will hold a hearing to discuss audit and appeals issues in Medicare. Nancy Griswold, chief administrative law judge, Office of Medicare Hearings and Appeals, Department of Health and Human Services, is among a panel of witnesses expected to testify.
April 28: Senate HELP Committee Hearing on Medical Innovation
10 a.m.; 430 Dirksen Senate Office Building
The Senate Health, Education, Labor & Pensions (HELP) committee will hold a hearing titled, “Continuing America’s Leadership: The Future of Medical Innovation for Patients.” Witness testimony will be posted to the committee’s website when available.
April 28-29: Public Workshop on Precision Medicine Initiative
1 p.m.; Natcher Conference Center, NIH Campus, Bethesda, MD
The National Institutes of Health (NIH) Precision Medicine Initiative (PMI) working group will meet to discuss biomedical questions that can be addressed in the proposed national research cohort. A meeting agenda and accompanying materials can be found on the precision medicine initiative website.
April 30: E&C Health Subcommittee Hearing on 21st Century Cures
10 a.m.; 2123 Rayburn House Office Building
The Energy and Commerce Subcommittee on Health will hold a hearing to discuss legislation regarding the committee’s 21st Century Cures initiative. Kathy Hudson, deputy director, Science, Outreach, and Policy, National Institutes of Health; Janet Woodcock, director, Center for Drug Evaluation and Research, Food and Drug Administration; and Jeff Shuren, director, Center for Devices and Radiological Health, FDA, are expected to testify.
April 30: Senate Labor-HHS Subcommittee Hearing on NIH Budget
10 a.m.; 124 Dirksen Senate Office Building
The Senate Labor, Health and Human Services, And Related Agencies (Labor-HHS) Appropriations Subcommittee will hold a hearing to review the fiscal year (FY) 2016 funding request and budget justification for the National Institutes of Health (NIH). Director Francis Collins, M.D., Ph.D., is expected to testify, and will be accompanied by directors from respective institutes.
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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Senior Director, Government Relations