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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 Budget Proposes to Increase NIH Funding, End to Sequestration

February 6, 2015—President Obama Feb. 2 released his fiscal year (FY) 2016 budget request, which replaces sequestration and increases the Budget Control Act (BCA, P.L. 113-67) caps for defense and non-defense discretionary (appropriated) spending, resulting in an overall request of $1.091 trillion for discretionary spending in FY 2016, $75 billion above the $1.016 trillion allowed by the BCA. The budget proposal offsets the increase through new tax revenues and reduced spending.

The budget materials note, “without Congressional action, sequestration will return in full in 2016, bringing discretionary funding…to its lowest level in a decade… In fact, assuming roughly the current allocation of resources across programs, a return to sequestration levels in 2016 would mean the lowest real funding level for research since 2002- other than when sequestration was in full effect in 2013- a major disinvestment in exactly the areas where investment is needed to support growth.”

Overall, the administration proposes $80.4 billion for discretionary programs under the Department of Health and Human Services (HHS), an increase of $2.6 billion (3.3 percent) over FY 2015.

Discretionary spending proposals of interest to academic medicine include:

National Institutes of Health (NIH): The president's FY 2016 budget proposes a program level of $31.3 billion for NIH, an increase of $1 billion (3.3 percent) over the current level. The program level includes:

  • Labor, Health and Human Services (Labor-HHS) budget authority of $30.3 billion, an increase of $868 million;
  • Interior budget authority (for the National Institute of Environmental Health Sciences) of $77 million, equal to FY 2015 levels;
  • Type I diabetes mandatory appropriation of $150 million, the same as the current year; and
  • A total of $847 million from the Public Health Service (PHS) evaluation fund, an increase of $132 million over the current year.

NIH also updated its projection for the Biomedical Research and Development Price Index (BRDPI) in FY 2016 to 2.4 percent.

The president's budget includes increases for the following initiatives [see related story]:

  • Precision Medicine - $200 million;
  • Antimicrobial Resistance- $100 million;
  • BRAIN Initiative - $70 million, bringing total funding to $135 million; and
  • Alzheimer's disease - $50 million, bringing the total to $638 million.

According to budget materials, NIH estimates the proposal will allow for approximately 10,300 new and competing renewal research project grants (RPGs), an increase of more than 1,200 over the current year. This would result in an estimated success rate of 19.3 percent in FY 2016, compared to 18.0 percent in FY 2014 and 17.2 percent in FY 2015. NIH projects the average size of RPGs to be $461,000, similar to current year. The administration emphasizes that nearly 90 percent of the FY 2016 increase will go to RPGs.

The president's budget includes $660.1 million for the National Center for Advancing Translational Sciences (NCATS), an increase of $24.9 million (3.9 percent). This includes $25 million for the Cures Acceleration Network (CAN) in FY 2016.

The budget retains the salary cap on extramural grants at Executive Level II, which is $181,500 in 2015.

Health Professions: The president’s budget proposes $469 million for the Health Resources and Services Administration (HRSA)’s Title VII health professions and Title VIII nursing workforce development programs. Within this total, the president requests $237.8 million for Title VII programs, a $17 million (6.7 percent) decrease below the FY 2015 levels, and maintains funding for all Title VIII programs at the FY 2015 level of $232 million.

The request proposes a $3.3 million increase for the Title VII Centers of Excellence (COE) program. While the budget again proposes to eliminate the Title VII Health Careers Opportunity Program (HCOP, -$14 million), it also creates a new “Health Workforce Diversity Program,” funded at $14 million. According to budget materials, the new Title VII Health Workforce Diversity Program (HWDP) will “fund activities that create a career pipeline for health professions students that lead directly to service in underserved communities,” and will build “on the experience gained from the Health Careers Opportunity Program.”

Following last year’s proposal, the administration proposes to eliminate the Title VII Area Health Education Centers (AHEC) program. Again, the budget requests $10 million to support a new Title VII Clinical Training in Interprofessional Practice program and $4 million for Title VII Rural Health Physician Training grants; to date, Congress has not provided funding for either program.

Remaining Title VII programs are proposed to be funded at FY 2015 levels, except the Title VII public health and preventive medicine programs, which are slated for a 19 percent decrease as a result of eliminating the Integrated Medicine Program. Budget materials note, “funding from previous years is sufficient to demonstrate the impact of incorporating integrative medicine into health professions training programs.”

Proposed Graduate Medication Education (GME) Grant Program: Similar to the administration’s FY 2015 request, the budget requests legislative authority to create a new grant program administered by HRSA, “Targeted Support for Graduate Medical Education,” to encourage “innovation in training models and greater accountability in the use of GME funds.” The budget requests $400 million in mandatory funding for FY 2016, and a total of $5.25 billion to support the program through 2025.

According to budget materials, the program will “support community-based consortia of teaching hospitals and/or other health care entities to expand residency training in primary care or high-need specialties, in order to focus on ambulatory and preventive care and advance the goals of higher value health care that reduces long-term costs.”

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 and other high need health care services.” The budget materials note that the program is “built upon the work of the Teaching Health Centers Graduate Medical Education Payment Program” (THCGME) and THCGME awardees will be eligible to compete for funding since their funding expires at the end of 2015.

Children’s Hospitals Graduate Medical Education (CHGME): For CHGME, the president’s budget requests $100 million, resulting in a $165 million (62 percent) cut to the program. According to the budget justification, the request only will support “direct medical expenses for graduate medical education” at grantee institutions,  an “FTE verification contract to ensure funded FTEs are not funded by other federal programs,” and “costs associated with the grant review and award process, follow up performance reviews, and information technology and other program support costs.”

National Health Service Corps (NHSC): The president’s budget again proposes to more than double funding for the NHSC by requesting $810 million for FY 2016. Within this total, the budget proposes $287 million in discretionary funding and $523 million mandatory funding. The NHSC Fund, a mandatory funding stream created in the Affordable Care Act, currently provides all of the NHSC’s funding, including $310 million ($287 million after sequestration) in FY 2015; however, the fund expires at the end of the fiscal year. The president’s budget includes a new NHSC mandatory fund that would provide $523 million annually for FY 2016 through FY 2020, totaling $2.6 billion. This is a decrease in comparison to the president’s FY 2015 budget, which proposed $710 million annually through FY 2020.

Agency for Healthcare Research and Quality (AHRQ): For AHRQ, the president’s budget proposes $479 million in total program level funding, $14 million (3.1 percent) more than the comparable FY 2015 funding level. The increase is derived entirely from an increase in the scheduled transfer to AHRQ from the Patient-Centered Outcomes Research Trust Fund (PCORTF) in 2016 ($116 million in FY 2016 compared to $101 million in FY 2015). Within the program level total, the budget requests $275.8 million in base budget authority and $87.9 million in Public Health Service (PHS) evaluation tap funding. Unlike previous years, appropriators funded AHRQ entirely through discretionary budget authority in FY 2015, rather than relying on the PHS evaluation tap.  

National Health Care Workforce Commission: As in the FY 2015 request, the president’s budget again 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). 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. The Senate Labor-HHS Appropriations Subcommittee had proposed $3 million for the commission in FY 2015, but the funding was not included in the final spending package.

Centers for Disease Control and Prevention (CDC): The budget proposes a program level of $7 billion for the CDC, a $110.7 million (1.6 percent) increases above the FY 2015 level. This total includes $6.1 billion in appropriated funds and a transfer of $914.3 million from the Prevention and Public Health Fund (PPHF). The budget does not request a transfer from the PHS evaluation tap or the Public Health and Social Services Emergency Fund (PHSSEF) to the CDC in FY 2016.

Hospital Preparedness: The president’s budget proposes $255 million in FY 2016 for the Hospital Preparedness Program (HPP) in the HHS Office of the Assistant Secretary for Preparedness and Response (ASPR), the same level of base discretionary funding provided for the program in FY 2015. The budget also proposes $110 million for a Public Health Emergency Fund that would not expire and could only be accessed in a declared public health emergency, with up to $20 million reserved for preparedness training and equipment. The budget materials state that the “lack of dedicated and flexible funding impeded the Department’s ability to respond more quickly to control the spread of Ebola at its source in West Africa.”

Additionally, the budget proposes statutory language to provide the HHS Secretary the authority to transfer up to 10 percent of the appropriation for an HHS account within the department in the event of a declared public health emergency. Appropriators provided the secretary such authority for the emergency supplemental Ebola funding provided in the final FY 2015 spending package.

In FY 2015, ASPR also received $576 million in emergency supplemental funding through 2019 to bolster hospital preparedness for Ebola and other infectious diseases. HHS has not yet announced how it will distribute that funding to achieve the Congressional directive “to implement a regional strategy for designating treatment centers which balances both geographic need and the fact that different institutional capabilities may be necessary for a successful strategy.”

National Science Foundation (NSF): The president requests $7.7 billion for NSF, a $379 million (5.2 percent) increase over the FY 2015 level. For research and related activities, the president’s budget requests $6.2 billion, a $253 million (4.3 percent) increase over FY 2015.

Food and Drug Administration (FDA): The president requests $2.7 billion in base budget authority for FDA, a $148 million (5.7 percent) increase over the FY 2015 level. In addition, the FDA budget is supplemented by industry user fees, proposed to generate $2.2 billion in FY 2016. This addition brings the total request for FDA to $4.9 billion, a $425 million (9.4 percent) increase over the FY 2015 level.

Contact:

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

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

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For More Information

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