Washington Highlights: May 23, 2008
Contents
Prior Issues
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AAMC Nominee Named to MedPAC
The Government Accountability Office (GAO) May 22 announced
the appointment of three new members to the Medicare Payment Advisory
Commission (MedPAC), including Peter W. Butler, executive vice president
and chief operating officer of Rush University Medical Center, who
was nominated for the position by the AAMC and the American Hospital
Association. "The AAMC applauds the appointment," said
AAMC President and CEO Darrell G. Kirch, M.D. "Peter will bring
to the commission the important perspective of the nation's teaching
hospitals and physicians who provide a full range of clinical care
for Medicare beneficiaries and train the next generation of health
care providers."
Michael Chernew, Ph.D., professor of health care policy at Harvard
Medical School, and George N. Miller, Jr., senior vice president
of Catholic Health Partners and president and chief executive officer
of Community Mercy Health Partners, were also appointed to the commission.
Two current MedPAC members were reappointed: Jennie Chin Hansen,
R.N., M.S.N., member of the Board of Directors of AARP, and Nancy
M. Kane, D.B.A., professor of management at the Harvard School of
Public Health. MedPAC is an independent federal agency that advises
Congress on issues affecting the Medicare program. Members of the
commission serve three-year terms.
Information:
Atul Grover, Director, Government Relations
AAMC Health Care Affairs/Government Relations
agrover@aamc.org
(202) 828-0666
Senate Approves Supplemental Funding Bill with
Medicaid Relief, NIH Funds
The Senate May 22 approved, 75-22,
an amendment (S.AMDT. 4803) to its emergency FY 2008 supplemental
appropriations package (H.R.
2642) that includes AAMC-supported provisions to prohibit until
April 1, 2009, any CMS action on the Medicaid GME proposed rule
and the Medicaid final rule regarding cost limits/units of government
("IGT final rule"). A total of 25 Republican Senators
supported the amendment. No Democrat opposed the amendment. The
Senate also approved, 70-26, a second amendment (S. AMDT. 4818)
to provide $165 billion for military operations in Iraq and Afghanistan.
The AAMC sent a May 22 hospital group letter
to all Senators, urging them to include the Medicaid provisions
in the supplemental appropriations bill. The letter also called
the President's veto threat "disappointing," in light
of broad bipartisan Congressional support. The American Hospital
Association, Catholic Health Association of the United States, Federation
of American Hospitals, National Association of Children's Hospitals,
National Association of Public Hospitals and Health Systems, Premier
Inc., and VHA Inc. joined the AAMC in signing the letter.
In an effort to gain support for the supplemental funding bill,
the Senate Democratic leadership May 20 had scaled back the size
and cost of the measure, excluding many domestic spending provisions
approved by the Senate Appropriations Committee May 15. Senate Majority
Leader Harry Reid (D-Nevada) then replaced the Appropriations Committee's
amendment with a less costly version drafted by the Democratic leadership.
The Senate-approved package retains $1.2 billion in FY 2008 funding
for science programs that was included in the bill approved by the
committee. This total includes $400 million for the National Institutes
of Health (appropriated to the Office of the Director), $200 million
for the National Science Foundation (with $150 million for research
and $50 million for education), $200 million for NASA, and $100
million for the Department of Energy. AAMC President and CEO Darrell
G. Kirch, M.D., sent a May 19 letter
to all Senators urging support for the additional funding.
The House May 15 approved a version of the war supplemental that
included the AAMC-supported Medicaid provisions. The House version
includes much less for domestic programs and does not include the
science funding in the Senate package. The package now must go back
to the House for final passage prior to being sent to the President.
The White House repeatedly has vowed to veto any supplemental spending
bill that exceeds the Administration's $108.1 billion request.
Information:
Dave Moore, Senior Director
AAMC Government Relations
dbmoore@aamc.org
(202) 828-0525
Christiane Mitchell, Senior Legislative Analyst
AAMC Government Relations
cmitchell@aamc.org
(202) 828-0526
Senate-Passed Legislation Limits Growth of Physician-Owned
Hospitals
The Senate May 22 passed an amendment (S. AMDT. 4803) to its emergency
supplemental spending package (H.R.
2642) that includes AAMC-supported language to eliminate the
"whole hospital" exception to the current Medicare prohibition
on self-referrals to physician-owned hospitals. The provisions would
take effect 18 months after enactment and would "grandfather"
physician-owned hospitals having a Medicare provider agreement in
place as of Sept. 1. Ambulatory surgery centers that converted to
physician-owned hospitals on/after enactment would not qualify as
a "grandfathered" hospital.
The grandfathered hospitals could expand only if granted approval
under a new application and review process to be established by
the Secretary of Health and Human Services before Nov. 1, 2009.
To apply, a hospital must fulfill certain thresholds related to
population growth, bed capacity/occupancy and Medicaid admissions.
The review process would include input from "individuals and
entities in the community." Grandfathered hospitals could apply
once every two years, but could only double the number of operating
rooms, treatment rooms, and beds over their lifetime. They could
expand only "facilities on the main campus of the applicable
hospital."
The provisions also require the public disclosure of physician-specific
ownership information, staffing levels, and emergency capacity.
The investment interest of physician owners in the aggregate would
be limited to 40 percent of total investment interests or the percent
effective upon implementation of the legislation (whichever is greater).
In anticipation of the Senate vote, the AAMC signed a May 21 hospital
group letter
to all Senators strongly urging support for the specialty hospital
language. The letter cites research conducted by the Medicare Payment
Advisory Commission, Government Accountability Office, and Centers
for Medicare and Medicaid Services, which found that specialty hospitals
treat healthier patients with similar diagnoses and not "all
citizens in our communities." It refers to empirical evidence
that the presence of specialty hospitals is "associated with
a significant increase" in health care utilization, and points
to patient safety and quality concerns identified by the Department
of Health and Human Services' Office of Inspector General.
According to the letter, the Congressional Budget Office has determined
that the legislative language would reduce Medicare spending by
$1.3 billion over 10 years. It adds that "we suspect there
likely would be a significant effect on private-sector spending
as well." Also signing the letter were the American Hospital
Association, Catholic Health Association of the United States, Federation
of American Hospitals, National Association of Children's Hospitals,
National Association of Public Hospitals and Health Systems, Premier
Inc., and VHA Inc.
Information:
Christiane Mitchell, Senior Legislative Analyst
AAMC Government Relations
cmitchell@aamc.org
(202) 828-0526
House, Senate Negotiators Reach FY 2009 Budget
Agreement
House and Senate negotiators May 20 signed off on a conference
agreement on the FY 2009 budget resolution (S.
Con. Res. 70).
The conference agreement includes approximately $21 billion more
for non-defense discretionary (appropriated) spending than requested
by the President, an increase of slightly more than 2 percent.
Within that total, Function 550 (health) receives $59.7 billion,
which is $5.2 billion higher than the President's budget. The health
community was seeking
$58.556 billion for Function 550.
The conference agreement also assumes $2.4 trillion in Medicare
spending over 5 years. Mandatory health spending, which includes
Medicaid and the State Children's Health Insurance Program (SCHIP),
totals $1.4 trillion over 5 years. The budget resolution rejects
the Administration's proposed cuts to Medicare and Medicaid, and
it does not include reconciliation instructions.
The budget includes $198 million for FY 2009 Medicare fraud and
abuse initiatives. It also contains several 5-year, non-binding,
deficit-neutral reserve funds of interest to teaching hospitals
and physicians, including:
- Support for increasing Medicare physician payments and launching physician
quality reporting programs;
- Delaying implementation of certain Medicaid regulations, including
the GME proposed rule and final rule on cost limits/units of government;
- Establishment of a federal or public/private comparative effectiveness
research initiatives;
- The sharing of Medicare data for the evaluation of safety, quality,
efficiency, and utilization;
- $50 billion to reauthorize and expand SCHIP;
- Promoting the adoption of health information technology, including
electronic prescribing; and
- Funding initiatives to cover the uninsured and underinsured.
The budget resolution is a nonbinding blueprint that lays out aggregate
revenue and spending targets and sets the conditions for subsequent
congressional consideration of tax and spending bills.
The House and Senate are expected to consider the conference agreement
in June. Additional details on the conference agreement are available
on the House Budget
Committee website.
Information:
Dave Moore, Senior Director
AAMC Government Relations
dbmoore@aamc.org
(202) 828-0525
Christiane Mitchell, Senior Legislative Analyst
AAMC Government Relations
cmitchell@aamc.org
(202) 828-0526
House Passes Conrad 30 Physician Visa Waiver Program
Extension
The House May 22 passed a bill (H.R.
5571) that reauthorizes the Conrad State 30 J-1 visa waiver
program until June 1, 2013. In response to recommendations by the
AAMC, the legislation also expands from 5 to 10 the number of "flex
slots," which allow states to place non-primary care international
medical graduates in areas outside of federally designated health
profession shortage areas- often academic medical centers.
Sen. Kent Conrad (D-N.D.) introduced a Senate version of the reauthorization
bill, the "Conrad State 30 Improvement Act" (S.
2672), on Feb. 27 [see Washington
Highlights, Feb. 29].
The Senate bill would permanently authorize the Conrad 30 program
with a number of reforms designed to direct more physicians into
underserved areas. AAMC President and CEO Darrell G. Kirch, M.D.,
sent an April 2 letter
supporting the proposed reforms in S. 2672.
The current authorization for the Conrad 30 program is set to expire
June 1. The Senate Judiciary Committee is likely to start working
on reauthorization shortly after the Memorial Day recess.
Information:
Matthew Shick, Senior Legislative Analyst
AAMC Government Relations
mshick@aamc.org
(202) 862-6116
CMS Launches Demo to Test "Bundled" Hospital and
Physician Payments
The Centers for Medicare and Medicaid Services (CMS) May 16 announced
that beginning Jan. 1, 2009, it will launch a three-year Acute Care
Episode (ACE) demonstration project that will include bundling Medicare
payments to hospitals and physicians into a single payment.
The demonstration is limited to applicants from Texas, Oklahoma,
New Mexico, and Colorado. CMS will competitively award only one
ACE demonstration site per market area (defined as a metropolitan
core-based statistical area, or the aggregate of rural areas within
a state) during the first year of the demonstration, but plans to
expand the program and award multiple providers within a market
area in the following two years.
The new demonstration program is designed to test the use of a
bundled payment for an episode of care and is part of CMS's ongoing
effort to improve the quality and efficiency of the Medicare fee-for-service
program. CMS defines an "episode of care" as both hospital
and physician services furnished to a patient during an inpatient
stay. Under the ACE demo, hospitals and physicians that provide
services to a patient during an inpatient stay will receive a single
"bundled" payment for those services. Currently, under
the inpatient prospective payment system (IPPS), CMS makes a single
payment to hospitals for all services furnished during an inpatient
stay. CMS makes separate payments through the Medicare Physician
Fee Schedule for each service the physician provides during the
same stay.
According to CMS, the "separate payment systems can lead to
conflicting incentives that may affect decisions about what care
will be provided," and the purpose of the demonstration is
"to better align the incentives for both types of providers….
[and to] test the effect that transparent price and quality information
has on beneficiary choice and provider referrals for select inpatient
care."
The demonstration will not encompass all hospital services. Instead,
CMS has chosen 28 cardiac and 9 orthopedic inpatient surgical services,
stating that there is sufficient market competition for these procedures
to attract applicants. These procedures also have quality metrics
that the agency plans to monitor throughout the demonstration. To
be eligible for the demonstration, applicants must meet certain
procedure volume thresholds for the selected cardiac and orthopedic
inpatient surgical services and have established quality improvement
mechanisms.
The application deadline for participation in this demonstration
project is Aug. 15.
CMS will hold an informational teleconference for potential applicants
and other interested parties on June 4, from 3 to 4:30 p.m. EST.
Additional information on the ACE demonstration is available on
the CMS
website.
Information:
Diana Mayes, Specialist
AAMC Health Care Affairs
dmayes@aamc.org
(202) 828-0498
Senate Negotiations on Medicare Bill Continue
Senate Finance Committee Chair Max Baucus (D-Mont.) issued a May
21 statement
following a bipartisan meeting to discuss details of a forthcoming
Medicare bill. The legislation reportedly will include provisions
to stop a scheduled 10.6 percent cut to Medicare physician payments
effective July 1. Chairman Baucus pledged to "spend the Memorial
Day recess crafting legislation that my Democratic colleagues and
I believe is in the best interest of America's seniors - including
an increase in physician payments," and noted his expectation
for that legislation "to move directly to the Senate floor
in the early part of June." The chairman also plans to continue
reaching out to all of his colleagues as the legislation advances.
Information:
Travis W. Crytzer, Legislative Analyst
AAMC Health Care Affairs/Government Relations
tcrytzer@aamc.org
(202) 828-0418
Congress Approves Sixth Temporary Extension of
HEA
The House and Senate May 20 passed a one month extension of the
Higher Education Act (HEA). The bill, S.
3035, authorizes HEA through June 30, 2008, and makes no other
changes. Congress has not completed a full reauthorization of HEA
since 1998.
The AAMC May 15 sent a letter
to the House and Senate education committees regarding ongoing conference
of the "College Opportunity and Affordability Act of 2007"
(H.R.
4137) and the "Higher Education Amendments of 2007"
(S.1642).
The letter comments on provisions of the HEA reauthorization bills
that could affect medical education, including loan repayment, financial
aid, institutional grant programs, and accreditation [see Washington
Highlights, May 16].
Information:
Matthew Shick, Senior Legislative Analyst
AAMC Government Relations
mshick@aamc.org
(202) 862-6116
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