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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 2015 Budget Proposes Workforce Program Alterations, Nearly Flat NIH Funding

March 7, 2014—President Obama March 4 released his fiscal year (FY) 2015 budget, which calls for $3.9 trillion in spending.  The budget adheres to the FY 2015 discretionary (appropriated) spending levels agreed to in the Bipartisan Budget Act (P.L. 113-67), which provide less than a $1 billion increase for non-defense programs. Overall, the administration proposes $71.8 billion for discretionary programs under the Department of Health and Human Services (HHS), a decrease of $206 million (0.3 percent) from FY 2014.

The president proposes a new workforce initiative to expand residency training in “primary care  or high-need specialties;” however the president’s budget includes $402 billion in health-related cuts over 10 years, including cuts to providers and cuts in payments to teaching hospitals for doctor training and complex patient care [see related story].

AAMC President and CEO Darrell G. Kirch, M.D., March 4 released a statement expressing concern with the president’s new workforce initiative and the proposed funding level for the National Institutes of Health (NIH).  In the statement, Dr. Kirch notes the AAMC’s gratitude that the budget recognizes the physician shortage facing the nation, however, he states “the funding for these important programs should not come at the expense of existing support for teaching hospitals.”

Dr. Kirch also urged lawmakers to “find a path forward for medical research funding that allows NIH and the nation’s research community to continue to be leaders in pioneering the discoveries that offer hope for America’s patients and their families.”

National Institutes of Health (NIH): The president’s budget requests $30.126 billion through the Labor-HHS Appropriations Subcommittee for FY 2015, an increase of $200 million (0.7 percent) over FY 2014.

The proposed FY 2015 program level for NIH, which includes $77 million from the Interior Appropriations Subcommittee for the National Institute of Environmental Health Sciences (NIEHS), $150 million in mandatory funds for type I diabetes research, and an $8.2 million transfer to the National Library of Medicine (NLM), is $30.362 billion, an increase of $211 million.

According to the HHS Budget in Brief, the president’s budget proposes:

  • $100 million for the Brain Research through Advancing Innovative Neurotechnologies (BRAIN) Initiative;
  • $30 million for the Cures Acceleration Network;
  • $100 million for High-Risk High-Reward projects funded through the institutes and centers; and
  • $30 million for Common Fund projects modeled after the Defense Advanced Research Projects Agency (DARPA). 

The budget also would:

  • retain the salary cap at Executive Level II of the Federal Executive Pay scale ($181,500 in 2014);

  • increase National Research Service Award (NRSA) pre- and post-doctoral stipends by 2 percent; and

  • implement a modified version of last year’s proposal to reorganize government-wide Science, Technology, Engineering, and Mathematics (STEM) education programs. 

Health Professions: The president’s budget proposes $214.9 million for the Health Resources and Services Administration’s (HRSA) Title VII health professions programs, a $30.5 million (12.4 percent) decrease below the FY 2014 level.

As the president proposed in FY 2014, the budget recommends eliminating funding for the Title VII Health Careers Opportunity Program (HCOP), a diversity pipeline program, and the Title VII Area Health Education Centers (AHEC) program.

The budget requests $10 million to support a new Clinical Training in Interprofessional Practice program to “increase the capacity of community-based primary health care teams to deliver quality care” and $4 million to fund new Rural Health Physician Training grants to “help rural-focused training programs recruit and graduate students most likely to practice in underserved rural communities.” Both programs are authorized under Title VII. The budget proposes funding all remaining Title VII programs at the FY 2014 level.

The president proposes $223.8 million for the Title VIII nursing workforce development programs, which provides funding for all Title VIII programs at their FY 2014 levels. Within this total, the president requests a $62 million transfer from the Public Health Service (PHS) Evaluation tap to the fund the Title VIII Advanced Education Nursing program.

Proposed Graduate Medication Education (GME) Grant Program: The administration requests legislative authority for a new program, “Targeted Support for Graduate Medical Education,” to be funded through the Medicare Hospital Insurance Fund [see related story] and administered by HRSA to “fund teaching hospitals, children’s hospitals, and community-based consortia of teaching hospitals and/or other health care entities to expand residency training in primary care or high-need specialties not supported by GME payments.”

According to budget materials, the program will support residency positions “using a competitive approach in which applicants demonstrate how their training of residents addresses key workforce objectives, such as: training and retaining residents in primary care; training and retaining residents in rural settings and in underserved areas; and, providing comprehensive primary care that includes oral health, behavioral health, prevention, and population health.”

Budget documents note that funds “will be targeted to training programs that feature concepts such as team-based care, the effective incorporation of health information technology into clinical practice, population health, and telemedicine.”

The program incorporates HRSA’s Teaching Health Center Graduate Medical Education program and the Children’s Hospitals Graduate Medical Education (CHGME) program. The budget proposes eliminating the appropriation for CHGME and setting aside $100 million for children’s hospitals in each of FYs 2015 and 2016.

For this initiative, the budget requests a transfer of $5.23 billion for FYs 2015-2024 from the Medicare Hospital Insurance Fund. Within this total, the budget requests $530 million in FY 2015. According to the budget justification, “Over ten years, the program is expected to support approximately 13,000 residents to complete their training in community-based ambulatory care settings that provide a range of training experiences to address key health care workforce development needs.” According to budget materials, the program will “encourage innovation in training models and greater accountability in the use of GME funds”

Children’s Hospitals Graduate Medical Education (CHGME): The president proposes to eliminate the current $265 million appropriation for the CHGME program in FY 2015. Instead, the administration requests a $100 million set aside for each year in FYs 2015 and 2016 from the proposed new “Targeted Support for Graduate Medical Education Program.”

National Health Service Corps (NHSC):  For FY 2015, the president’s budget requests a total of $810 million for the NHSC, a $505 million (166 percent) increase over the $305 million provided by the mandatory Affordable Care Act (ACA) NHSC Fund.

While the NHSC has been fully funded by the ACA NHSC fund since FY 2011, the president’s request for NHSC includes $100 million in discretionary appropriations. The remaining mandatory funding proposed includes $310 million from the ACA fund and $400 million from a new mandatory fund. The president’s budget also indicates that the NHSC only spent $283 million of the $305 million provided under the ACA fund in FY 2014, presumably due to sequestration.

The president proposes annual NHSC funding of $710 million for FY 2016 through FY 2020. The total $3.95 billion in mandatory funding for the NHSC through FY 2020 will require additional legislative action. Starting in FY 2015, the administration projects a field strength of 15,400 primary care clinicians compared to 8,899 in FY 2014.

Agency for Healthcare Research and Quality (AHRQ): The president’s budget proposes $334 million in Public Health Service Evaluation tap funds for AHRQ in FY 2015, a $30 million (8.2 percent) cut below FY 2014. The agency also is scheduled to receive $106 million transferred from the Patient-Centered Outcomes Research Trust Fund (PCORTF) in FY 2015, bringing AHRQ’s total proposed program level to $440 million, $24 million (5.2 percent) below the comparable FY 2014 level.

Within the total, the administration proposes to end support for a set of research and dissemination activities included within the “Prevention and Care Management” portfolio; to eliminate the “Value” portfolio; to reserve $15 million in investigator-initiated grants to support health economics research; and to dedicate $15 million for a new multi-year initiative for “Expanding Patient Safety Improvements to All Health Care Settings,” with the goal of extending patient safety activities to primary care practices, nursing homes, and other settings beyond hospitals.

National Health Care Workforce Commission: Unlike past budget proposals, the president’s budget does not request funding for the National Health Care Workforce Commission, which was established as an independent advisory body in the Affordable Care Act (ACA, P.L. 111-148 and P.L. 111-152). In past years, the budget has requested $3 million for the commission. 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 $5.399 billion in base budget authority for CDC. In addition, the budget assumes a transfer of $810 million from the Prevention and Public Health Fund (PPHF) and $397 million from the Public Health Service (PHS) evaluation tap in FY 2015, bringing the president’s proposal for CDC to $6.606 billion. This funding level represents a $243 million (3.5 percent) decrease below the FY 2014 level.

Department of Veterans Affairs (VA): The president requests $588.9 million for VA Medical and Prosthetic Research, a $3.2 million (0.6 percent) increase over FY 2014. Due to decreases in other federal, and non-federal support, the budget estimates total VA research resources at $1.86 billion in FY 2015, a decrease of 19 million (1 percent).

While not providing new dedicated funding, the VA congressional budget justification addresses the physical condition of VA’s research facilities. The administration highlights the 2006 congressionally requested report on VA research infrastructure, and notes that “sixty percent of the campuses at which assessments were performed have received or are in the pipeline to receive funding for renovation and/or construction projects affecting research space.”

The president’s budget and the Strategic Capital Investment Planning (SCIP) process include a number of current and future-year VA research facility projects in major construction, minor construction, and non-recurring maintenance.

The president’s budget requests $58.7 billion in VA medical care advance appropriations for FY 2016, a $2.7 billion increase over the FY 2015 comparable level.

National Science Foundation (NSF): The president requests $7.255 billion for NSF, an $83.1 million (1.2 percent) increase over the FY 2014 level. For research and related activities, the president’s budget requests $5.807 billion, a $1.5 million (0.3 percent) decrease below the FY 2014 level.

Food and Drug Administration (FDA): The president requests $2.584 billion in base budget authority for FDA, a $23 million (0.9 percent) increase over the FY 2014 level. In addition, the FDA budget is supplemented by industry user fees, proposed to generate $2.161 billion in FY 2015. This addition brings the total request to $4.745 billion, a $358 million (8.2 percent) increase over the FY 2014 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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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