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

Washington Highlights

President’s FY 2014 Budget Requests NIH Boost, Repeats Proposed Health Professions Cuts

April 12, 2013—President Obama April 10 released an FY 2014 budget request that proposes $506 billion for non-defense discretionary (appropriated) spending in FY 2014, a decrease of $23 billion over the FY 2012 level (see related stories). However, the president’s budget assumes no sequestration, which would lower the spending cap, will occur in FY 2014.

The budget includes $78.3 billion for programs at the Department of Health and Human Services (HHS), which is equal to the FY 2012 level. Discretionary spending proposals of interest to academic medicine follow. Comparisons to FY 2013 funding levels presented below represent only preliminary estimates, as HHS and many other federal agencies have not yet released spending plans that describe how the administration plans to implement the final FY 2013 spending bill (P.L. 113-6) or the automatic cuts triggered in FY 2013 as a result of sequestration.

National Institutes of Health (NIH): The president’s budget proposes an FY 2014 program level for NIH of $31.331 billion, an increase of $471 million (1.5 percent) over the FY 2012 program level of $30.860 billion. The program level includes $31.094 billion from the Labor-HHS appropriations subcommittee, $79 million from the Interior appropriations subcommittee to the National Institute for Environmental Health Sciences (NIEHS), and $150 million in mandatory appropriations for type 1 diabetes research.

NIH April 10 released updated projections for the Biomedical Research and Development Price Index (BRDPI). For FY 2014, NIH projects a 2.7 percent increase in the BRDPI.

NIH estimates that it will spend $16.9 billion (54 percent of its total budget) to support a total of 36,610 research project grants (RPGs) in FY 2014, an increase of $382 million and 351 grants over FY 2012. Within this total, NIH estimates it will support 10,269 new and competing renewal RPGs, an increase of 1,283 grants over FY 2012.

The statutory set-aside for the Small Business Innovation Research grant and contract program is scheduled to rise from 2.6 percent in FY 2012 to 2.8 percent in FY 2014, and from 0.35 percent to 0.4 percent for the Small Business Technology Transfer program.

For research training, the FY 2014 budget requests $776 million to support training 16,197 research scientists through the Ruth L. Kirschstein National Research Service Awards program. The budget proposes a 2 percent stipend increase for predoctoral research trainees and an average 4 percent increase for postdoctoral trainees. The total number of positions would decline by 108.

For the Institutional Development Award (IDeA) program within NIGMS, the budget includes $225.438 million in FY 2014, $50.519 million below the FY 2012 level.

The budget provides a total of $165.0 million for the National Children’s Study, which is $28.1 million less than the $193.1 million allocated for FY 2012.

The budget retains the limit on extramural salaries at Executive Level II.

Health Professions: The president’s budget proposes $211.8 million for the Health Resources and Services Administration (HRSA)’s Title VII health professions programs. The budget request does not confirm final funding levels for FY 2013, but AAMC’s preliminary estimates suggest that the proposed FY 2014 total for Title VII closely tracks the previous year’s total funding level, once the FY 2013 automatic budget cuts of up to 5.3 percent under sequestration are applied. 

As the president proposed in FY 2013, the budget recommends eliminating funding for the Title VII Health Careers Opportunity Program (HCOP) diversity pipeline program and the Area Health Education Centers (AHEC) program. The president offers increases for physician assistant training programs and workforce information and analysis, and also requests $5 million for a previously unfunded Pediatric Specialty Loan Repayment program authorized in the Affordable Care Act (ACA, P.L. 111-148 and P.L. 111-152).

The budget proposes continued funding through the Prevention and Public Health Fund (PPHF) for Alzheimer’s prevention through Geriatric Education Centers, but proposes reduced PPHF support for public health, preventive medicine, and mental and behavioral health programs compared to FY 2012 (final FY 2013 PPHF levels are not yet available). However, HRSA proposes a $35 million partnership with the Substance Abuse and Mental Health Services Administration (SAMHSA) for a one-year initiative to expand the mental and behavioral health workforce through the Title VII Mental and Behavioral Health Education and Training Grant Program.

For Title VIII nursing workforce programs, the president proposes $251.1 million, an increase over both the estimated FY 2013 levels and FY 2012. Within this total, the president requests $83.5 million for the Title VIII Advanced Education Nursing program, with the additional funding intended to increase the number of advanced practice registered nurses.

The Health Professions and Nursing Education Coalition, which the AAMC coordinates, issued an April 10 statement acknowledging the budget’s “much-needed investments in some” of the programs, while warning that “its failure to support the full range of health professions programs will disrupt efforts to address some of the country’s most pressing health care challenges.”

National Health Service Corps (NHSC): The president’s budget includes the full $310 million for FY 2014 provided by the mandatory NHSC Fund established under the Affordable Care Act (ACA, P.L. 111-148 and P.L. 111-152).  The NHSC Fund is set to expire at the end of FY 2015.

Children’s Hospitals Graduate Medical Education (CHGME): The president proposes $88 million for CHGME in FY 2014, seeking to eliminate an estimated two-thirds of the funding expected in FY 2013. According to accompanying budget documents, HRSA proposes to cease support for “indirect medical education” support at children’s hospitals, such as “expenditures associated with the reduced productivity of hospital staff because they are helping train residents, and the processing of additional diagnostic tests that residents may order during their clinical experience.”

Instead, the administration intends to focus CHGME grants exclusively on “direct” costs, defined in the HRSA budget justification as “expenditures related to stipends and fringe benefits for residents; salaries and fringe benefits of supervising faculty; cost associated with providing the GME training program; and, allocated institutional overhead costs.”

Agency for Healthcare Research and Quality (AHRQ): The president’s budget proposes $433.7 million in program level funding for AHRQ in FY 2014, including $333.7 million through the Public Health Service Evaluation tap and $100 million from the Patient-Centered Outcomes Research Trust Fund (PCORTF), as required by the Affordable Care Act. While FY 2013 funding levels have not yet been finalized, the agency was expected to receive a total of $429.7 million in FY 2013, prior to automatic cuts to the PCORTF as a result of sequestration.

 In previous years, AHRQ also had received $12 million in transfers from the Prevention and Public Health Fund to support the agency’s administration of the U.S. Preventive Services Task Force and other prevention activities. While final PPHF funding levels for FY 2013 are not yet available, the FY 2014 request proposes to discontinue the PPHF transfer and to support the Task Force through AHRQ’s discretionary budget.

National Health Care Workforce Commission: The president’s budget requests $3 million for the National Health Care Workforce Commission established as an independent advisory body in the Affordable Care Act. Though the Government Accountability Office appointed commissioners Sept. 30, 2010 [see Washington Highlights, Oct. 1, 2010], to date, Congress has not approved an appropriation to fund the commission’s activities.

Centers for Disease Control and Prevention (CDC): The president proposes$5.217 billion in base budget authority for CDC. In addition, the budget assumes a transfer of $755 million from the Prevention and Public Health Fund (PPHF) and $618 million from the Public Health Service (PHS) evaluation tap in FY 2014, bringing the president’s proposal for CDC to $6.6 billion. This funding level represents a $277 million (4 percent) decrease below the FY 2012 level.

Department of Veterans Affairs (VA): The president requests $585.6 million for VA Medical and Prosthetic Research, a $2.9 million (0.5 percent) increase over the FY 2013 comparable level (VA is exempt from sequestration). With additional VA, federal, and non-federal support, the budget estimates total VA research resources at $1.88 billion in FY 2014.

The VA congressional budget justification also indicates that “Medical Facilities funding will support research and development projects by ensuring that at least 5% of the total program allocation in a given year for nonrecurring maintenance and minor construction projects are used to fund projects at research facilities.” AAMC estimates this would ensure over $60 million for VA research infrastructure in FY 2014.

According to the agency’s budget overview, the budget also includes $799 million to “help VA provide the best possible specialized care for veterans in new or renovated facilities.” These funds will support the staff and equipment at VA facilities, specifically noting “improved polytrauma and spinal cord injury units.”

The president’s budget requests $157.5 million in additional medical care funding above last year’s advance appropriations for a total FY 2014 direct appropriations request of $54.620 billion, a (7.9 percent) increase above the FY 2012 enacted level. The budget requests $55.6 billion in advance appropriations for VA medical care in FY 2015.

National Science Foundation (NSF): The president requests$7.626 billion, a $520 million (7.3 percent) increase over the FY 2012 level. For research and related activities, the president’s budget requests $6.212 billion, a $454 million (7.9 percent) increase over the FY 2012 level.

Food and Drug Administration (FDA): The president requests$2.558 billion for FDA, a $51 million (2.1 percent) increase over the FY 2012 level. In addition, the FDA budget is supplemented by industry user fees, proposed to generate $2.096 billion in FY 2014. This addition brings the total request to $4.654 billion, a $1.1 billion (31 percent) increase over the FY 2012 level.

Contact:

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

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: 202-862-6116
Email: mshick@aamc.org

Alexandra Khalife
Legislative Analyst
Telephone: 202-828-0418
Email: akhalife@aamc.org

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