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Second Opinion Podcasts

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

House Energy and Commerce Panel Passes 21st Century Cures Act

May 22, 2015—The House Energy and Commerce Committee May 21 unanimously approved the 21st Century Cures Act (H.R. 6) after delaying the mark-up for a day as committee members worked out how to pay for the bill.

In a May 21 statement, AAMC President and CEO Darrell Kirch, M.D., commended the committee for “working in a bipartisan and transparent manner to advance this groundbreaking piece of legislation.” Dr. Kirch thanked the committee for including language that would reauthorize the National Institutes of Health (NIH) for three years and for proposing a five-year, $10 billion NIH Innovation Fund.

Final passage occurred after the committee adopted by voice vote a manager’s amendment offered by committee chair Fred Upton (R-Mich.) that included offsets to pay for the estimated $13 billion cost of the legislation, including drawing down and sell crude oil from the Strategic Petroleum Reserve to generate $5.2 billion for fiscal years (FYs) 2018 through 2025.

In addition, the amendment would delay the timing of pre-payments to Medicare Advantage Part D prescription drug sponsors, a move that would save an estimated $5 billion to $7 billion.

The amendment also would limit federal Medicaid reimbursement rates for durable medical equipment to levels paid by Medicare to provide another $2.8 billion and would limit Medicare payments for traditional x-ray imaging services to incentivize the transition towards digital imaging for $200 million in savings.

The manager’s amendment:

  • Mandates the NIH Director ensure that “the participation by scientists from groups traditionally underrepresented in the scientific workforce” remains a priority in the agency’s strategic plan;
  • Includes a “sense of Congress” that the National Institute on Minority Health and Health Disparities (NIMHD) should include in its strategic plan ways to increase representation of underrepresented communities in clinical trials;
  • Mandates the Secretary of Health and Human Services (HHS) to finalize within a year draft NIH policy on the use of a single institutional review board for multi-site research;
  • Creates a Cures Innovation Fund for the Food and Drug Administration (FDA), supported by a mandatory appropriation of $110 million a year for FYs 2016 through 2020;
  • Provides additional hiring authority to FDA for scientific, technical, and professional personnel;
  • Exempts certain FDA user fees from sequestration; and
  • Includes a House-passed measure from last year encouraging Lyme disease research.

Several committee members offered and withdrew amendments on a number of issues, including prescription drug price transparency, negotiation of Medicare Part D prescription drug prices, inclusion of underrepresented minorities in clinical trials and the biomedical research workforce, and research on the medical efficacy of marijuana. Chairman Upton pledged to work with committee members to attempt to address their concerns before the bill goes to the House floor, which is expected in June.

Despite rumors earlier in the week that the package would include language modifying the Health Resources and Services Administration (HRSA)’s 340B Drug Pricing Program, the legislation does not include the text.

Contact:

Dave Moore
Senior Director, Government Relations
Telephone: 202-828-0559
Email: dbmoore@aamc.org

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Senate Appropriators Approve Subcommittee Allocations

May 22, 2015—The Senate Appropriations Committee May 21 formally approved spending allocations for its 12 individual subcommittees. The committee adopted the subcommittee allocations, informally known as 302(b)s, by a party-line vote of 16-14.

The fiscal year (FY) 2016 allocations are based on the statutory spending limit of $1.017 trillion mandated by the Balanced Budget Act of 2011 (P.L. 112-25) and FY 2016 House and Senate budget resolutions (S.Con.Res. 11, H.Con.Res. 27).

The allocations also allow for the appropriation of $96 billion for Overseas Contingency Operations (OCO) as approved in the FY 2016 budget resolution.

The allocations, proposed by Appropriations Chair Thad Cochran (R-Miss.), would provide $153.2 billion for the Labor-HHS-Education subcommittee, $138 million more than the House allocation approved April 22, but approximately $3.6 billion less than the current fiscal year [see Washington Highlights, April 24].

Ranking committee member Barbara Mikulski (D-Md.) offered an alternative set of 302(b) allocations based on the president’s FY 2016 budget request, which called for increasing discretionary spending by a total of $74 billion above the statutory caps. The committee rejected the substitute amendment on a party-line vote of 14-16.

Senator Mikulski said Democrats will vote against starting Senate floor debate on any spending bill that adheres to the sequester-level limits.

“That is why, although we are moving the process along today, I want to put the Chairman on notice. The President will veto bills at this allocation, and Democrats will vote against motions to proceed to these bills on the Senate floor,” Mikulski warned.

“We need a sequel to Murray-Ryan and we need it sooner rather than later, so we can write realistic bills that keep America safe and invest in our future,” she said, referring to the Bipartisan Budget Act of 2013 (P.L. 113-67) negotiated by Sen. Patty Murray (D-Wash.), and Rep. Paul Ryan (R-Wis.).

Contact:

Dave Moore
Senior Director, Government Relations
Telephone: 202-828-0559
Email: dbmoore@aamc.org

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Senate NIH Caucus Holds Initial Briefing

May 22, 2015—At a May 19 Capitol Hill briefing, Senators Lindsey Graham (R-S.C.), Richard Durbin (D-Ill.), and Jerry Moran (R-Kan.) officially launched the Senate National Institutes of Health (NIH) Caucus, a new group that seeks “a bipartisan strategy to restore the purchasing power that NIH has lost and provide steady, predictable growth for biomedical research in the future.”

The senators said the caucus will offer “more than symbolic support” for NIH and will work to increase research funding.

Senator Durbin, who will co-chair the caucus with Senator Graham, said, “We have to tell the political story…. We have to do what America expects us to do.”

Senator Graham said, “The purpose of this caucus is to shine a light on what you [the NIH] do, inform the American tax payer that this is a great return on investment….”

NIH Director Francis Collins, M.D., Ph.D., and three institute/center directors: Tom Insel, M.D.; National Institute of Mental Health; Nora Volkow, M.D., National Institutes on Drug Abuse; and Chris Austin, M.D., National Center for Advancing Translational Sciences, reviewed some of the most promising scientific opportunities.

In addition to Senators Graham, Durbin, and Moran, caucus members include Senators Tammy Baldwin (D-Wis.), Richard Blumenthal (D-Conn.), Ben Cardin (D-Md.), Bob Casey (D-Pa.), Christopher Coons (D-Del.), Joe Donnelly (D-Ind.), Al Franken (D-Minn.), Angus King (I-Maine), Amy Klobuchar (D-Minn.), Edward Markey (D-Mass.), Claire McCaskill (D-Mo.), Gary Peters (D-Mich.) Brian Schatz (D-Hawaii), Debbie Stabenow (D-Mich.), Thom Tillis (R-N.C.), Tom Udall (D-N.M.), and Roger Wicker (R-Miss.).

Comntact:

Dave Moore
Senior Director, Government Relations
Telephone: 202-828-0559
Email: dbmoore@aamc.org

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AAMC Comments to NIH on Strategies to Improve the Sustainability of Biomedical Research

May 22, 2015—The AAMC May 17 submitted a comment letter to the National Institutes of Health (NIH) in response to a Request for Information on optimizing funding policies and other strategies to improve the impact and sustainability of biomedical research [see Washington Highlights, April 3].

The letter emphasizes the need for reliable, predictable, long-term funding to sustain progress in biomedical research. AAMC also recommends that NIH and the research community oppose any formulation of policies that would increase levels of federal research activity by shifting costs onto institutions or other partners, such as through caps or arbitrary adjustments. The letter states, “The key to improving the environment for research is to create more resources, to make better use of resources, and to establish a more predictable environment, not to distort, mask, or shift the actual costs of research.”

AAMC notes that, based on extensive interaction with constituents, an outline of an evolving research system has emerged, and recommends that NIH help catalyze these trends to optimize research funding. This evolving research enterprise may be characterized by institutional changes that include: 

  • Finding more opportunities for resource-sharing and strategic collaboration;
  • Seeking to diversify sources of research support;
  • Greater integration of research and training missions with health and community service; and
  • Finding optimal methods to store, share, and access data.

“The resulting academic research system will be in parts more complementary, seeking and matching comparative advantage over competition,” the AAMC states. 

Finally, concerns about the sustainability of the biomedical research system largely center on the training and development of the research workforce. In its comments, the AAMC reiterates its support of efforts to broaden the scope of research training programs, to collect better data on training outcomes, and further recognize the diversity of careers that research training can serve.

Contact:

Anurupa Dev, Ph.D.
Science Policy Analyst
Telephone: 202-862-6048
Email: adev@aamc.org

Stephen Heinig
Director, Science Policy
Telephone: 202-828-0488
Email: sheinig@aamc.org

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Senate Special Aging Committee Hearing On Observation Status

May 22, 2015—The Senate Special Committee on Aging May 20 held a hearing titled, “Challenging the Status Quo: Solutions to the Hospital Observation Stay Crisis,” focused on the Centers for Medicare and Medicaid Services’ (CMS) “two-midnight” rule, which determines how short hospital inpatient stays are paid under Medicare. The committee held a similar hearing in August 2014 [see Washington Highlights, Aug. 1, 2014].

CMS Administrator and Director Sean Cavanaugh and Medicare Payment Advisory Commission (MedPAC) Executive Director Mark Miller, Ph.D., testified on the first panel.

In his testimony, Cavanaugh called the determination of inpatient admission “a complex medical judgment” and stated that CMS seeks to balance principles that are “clear, are consistent with sound clinical practice, reflect the beneficiaries’ medical needs, respect a physician’s judgment, and are consistent with the efficient delivery of care to protect the Trust Funds.”

Cavanaugh noted that CMS is currently reviewing stakeholder feedback, as well as recent MedPAC recommendations, related to the two-midnight rule, and expects to include further dialogue in the upcoming 2016 Hospital Outpatient Prospective Payment System proposed rule.

Dr. Miller echoed similar themes and added, “Hospitals have noted concerns about the two-midnight rule because it conflicts with existing admission criteria deferential to physician judgment, increases the burden associated with physician documentation of inpatient admissions, and may result in revenue gains or losses caused by stays shifting between inpatient and outpatient status.”

Chair Susan Collins (R-Maine) encouraged CMS and MedPAC to continue efforts to clarify elements of the policy and further investigate members’ concerns, including that once patients are alerted of their status, they “may leave the hospital prematurely because they are going to be very worried about the financial implications of staying.”

Sen. Elizabeth Warren (D-Mass.) urged CMS to use its regulatory authority to quickly address issues with the two-midnight rule, rather than waiting on Congress to pass legislation stating, “We need to address this observations status problem. Seniors need to be notified of their admissions status and CMS needs to implement an auditing system that is less disruptive, more effective, and far more targeted.”

Testifying on a second panel, SSM Health System Medical Director for Informatics and Physician Compliance Jeetu Nanda, M.D., stated, “Hospitals seek to deliver the right care at the right time in the right setting. While a complex issue, observation services ultimately reflect high standards of care and quality regulations to which hospitals adhere. It is important to note that the distinction between inpatient and observation services is a payment distinction, set forth by CMS, not a clinical distinction.”

Dr. Nanda added, “Hospitals are doing their best, both to comply with Medicare payment policies and to address the confusing and difficult patient status with patients and their families. Medicare audit contractors continuously second guess physician judgment, sometimes years after a patient was seen and often with additional retrospective information on the patient’s condition, undermining the physician’s medical judgment at the time.”

Contact:

Len Marquez
Director, Government Relations
Telephone: 202-862-6281
Email: lmarquez@aamc.org

Courtney Summers
Legislative Analyst
Telephone: 202-862-6042
Email: csummers@aamc.org

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Senate Committee Approves VA Funding During National VA Research Week

May 22, 2015—The Senate Appropriations Committee May 21 approved by a 21 to 9 vote its fiscal year (FY) 2016 Military Construction, Veterans Affairs and Related Agencies (MilCon-VA) spending bill.  During the MilCon-VA markup, the overall FY 2016 spending allocations (see related story) were the focus of debate, with Democrats describing the levels as “spartan.”

The Senate measure includes $48.7 billion for FY 2016 VA Medical Services, a $3.5 billion (7.7 percent) increase over the FY 2015 enacted level. However, similar to the House approach, the Senate bill includes across-the-board rescissions to prevent a scheduled 1.3 percent VA pay raise.

The measure provides $622 million for VA Research, a $33 million (5.6 percent) increase over current levels, in line with the final House bill after an amendment offered by Rep. David Price (D-N.C.) [see Washington Highlights, April 24]. The bill also matches the President’s Budget and House levels for FY 2017 advanced appropriations for VA medical services, facilities, and support and compliance with $63.3 billion.

At a May 20 Senate VA Committee hearing on the legislative priorities of several Veterans Service Organizations, many of the witness organizations recommended additional funding for VA Research. Paralyzed Veterans of America (PVA) National President Al Kovach noted, “PVA is extremely disappointed that the House bill does not fully fund the Medical Services account to the levels recommended by the Administration for FY 2016, while also forcing cuts to Medical Support and Compliance, Medical Facilities, and Medical and Prosthetic Research.”

PVA is a co-author of the Independent Budget and serves with AAMC on the Executive Committee of the Friends of VA Medical Care and Health Research (FOVA) coalition.

Meanwhile, the VA’s Office of Research and Development (ORD) May 18-22 coordinated National VA Research Week. Among other events at VA Medical Centers and academic affiliates across the country, ORD highlighted the Cleveland-based Advanced Platform Technology Center, where VA researchers reported on new technology that will restore natural touch perception to users of artificial hands.

Contact:

Matthew Shick, J.D.
Senior Legislative Analyst, Government Relations
Telephone: 202- 828-0525
Email: mshick@aamc.org

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Ways and Means Committee Holds Hearing on Competition in Medicare

May 22, 2015—The House Ways and Means Health Subcommittee held a hearing May 19 titled, “Improving Competition in Medicare: Removing Moratoria and Expanding Access,” which largely focused on proposed legislation regarding physician-owned hospitals.

Chairman Kevin Brady (R-Texas) opened the hearing stating, “Today we're going to explore how much competition exists in Medicare: its impact, benefits and savings for Medicare patients as well as the potential for improving Medicare access and choices through more competition. We're also going to hear about two ideas to make Medicare more responsive to seniors' needs while also driving down costs and expanding access.”

He highlighted two proposals to improve competition in the Medicare Fee-For-Service (FFS) program, including expanding seniors' access to local physician-owned hospitals and improving the way Medicare currently administers the Durable Medicare Equipment (DME) benefit.

Chairman Brady also mentioned that “going forward, continuing the discussion we have today, we’ll also be looking at issues of physician shortages, disparities in rural health care within Medicare, as well as looking at improved programs on inpatient, outpatient and other hospital payment systems.”

Ranking Member Jim McDermott, M.D., (D-Wash.) disputed the chairman’s description of the proposals saying, “Unfortunately, the proposals that we will hear this morning won’t control costs. Instead, they are designed to appease the very interests that benefit from waste in the system and contribute to higher healthcare spending.”

Witness testimony was heard from: American Hospital Association President and CEO Rich Umbdenstock, American Enterprise Institute Wilson H. Taylor Scholar in Health Care and Retirement Policy Joe Antos, Methodist McKinney Hospital President Joe Minissale, and Barnes Healthcare Services (Valdosta, Ga.) President Robert Steedley, on behalf of the American Association for Homecare.

The discussion between subcommittee members and witnesses mainly focused on the belief that physician-owned hospitals often “cherry-pick” profitable patients, and incentivize physician self-referral, which drives utilization and higher costs.

Umbdenstock testified, “Physician self-referral represents the antithesis of competition. Instead it allows physicians to steer the most profitable patients to facilities in which they have an ownership interest, potentially devastating the health care safety net in vulnerable communities. Changing current law would not foster competition. Instead it would only allow these physicians to increase their profits.”

Umbdenstock further urged Congress “to stay with a program that limits the growth of these hospitals where they are highly selective and picking off the most profitable services.” Citing Medicare cost report data, he stated, “You notice the services on which hospitals like this focus. And I understand why, that’s where the payment is. Community hospitals don’t have that opportunity.”

Rep. McDermott asked Umbdenstock why physician-owned hospitals choose to only provide limited specialty services, to which he replied that it is important to recognize “the particular services limited service hospitals focus on, are the profitable services.”

Rep. Mike Thompson (D-Calif.) referenced the type of patients physician-owned hospitals serve, stating that according to CMS data, “in about 70 percent of physician-owned hospitals, fewer than 5 percent of admissions are Medicaid patients, and a little over 20 percent admitted no Medicaid patients at all.”

Rep. Thompson then asked Minnisale, “Your hospital, specifically in 2013, had 24 percent Medicare discharges and zero percent Medicaid discharges. Can you explain why these hospitals, in general, that are often located in proximity to full-service hospitals, aren’t treating Medicaid patients? Isn’t there a need to do this in underserved areas?”

Minnisale replied this was due to “geography,” adding “the Medicaid population tends to go to the closet facility due to transportation challenges, and we happened to build the hospital where there isn’t an indigent population.”

Contact:

Len Marquez
Director, Government Relations
Telephone: 202-862-6281
Email: lmarquez@aamc.org

Courtney Summers
Legislative Analyst
Telephone: 202-862-6042
Email: csummers@aamc.org

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House, Senate Bills Address Foreign Medical School Access to Federal Student Loans

May 22, 2015—Senators Dick Durbin (D-Ill.) and Bill Cassidy (R-La.) joined Representatives Elijah Cummings (D-Md.) and Michael Burgess, M.D., (R-Texas) May 19 in introducing the Foreign Medical School Accountability Fairness Act (S. 1374 , H.R. 2417). The legislation is the same bill introduced by Senator Durbin in the 113th Congress.

The measure would eliminate a grandfathered exemption of certain foreign medical schools from current Department of Education requirements for federal student loans.  As a result, the bill ensures all medical schools outside of the U.S. and Canada enroll at least 60 percent non-U.S. citizens or permanent residents and their graduates must have at least a 75 percent pass rate on the U.S. Medical Licensing Exam. Any U.S. student enrolled before the enactment of the legislation would retain access to Direct Loans.

In a press release on the bill’s introduction, Sen. Durbin stated, “As Congress continues work on the reauthorization of the Higher Education Act, I hope this bipartisan bill will be part of the discussion.”

In support of the measure, the press release notes that median debt at a specific Caribbean institution is $309,000 versus $180,000 for graduates of U.S. medical schools, and in 2015 U.S. graduates of foreign medical schools had a residency match rate of 53 percent compared to 94 percent of graduates of U.S. medical schools.

Contact:

Matthew Shick, J.D.
Senior Legislative Analyst, Government Relations
Telephone: 202- 828-0525
Email: mshick@aamc.org

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On The Agenda

May 22-June 1: House and Senate in Recess
The House and Senate will be in recess May 22 through June 1.

May 27: Bioethical Issues Commission Meeting
9 a.m.; 3400 Civic Center Boulevard, Philadelphia, Pa.
The Presidential Commission for the Study of Bioethical Issues will hold its twenty-first meeting to discuss various agenda items including bioethics education and the democratic deliberation theory.

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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

Dave Moore
Senior Director, Government Relations
Telephone: 202-828-0559
Email: dbmoore@aamc.org