Washington Highlights: August 6,
2010
Senate Approves
Temporary Extension of FMAP Increase
Contents
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The Senate Aug. 5 passed education and Medicaid funding for states
legislation (H.R.
1586) that provides a six-month extension through June 2011
of the temporary Federal Medical Assistance Percentage (FMAP) increase
and $10 billion in education funding support for states. Passage
of the legislation represents a significant victory for Senate Majority
Leader Harry Reid (D-Nev.) just prior to adjourning for the August
recess.
Beginning in January 2011, the revised and scaled back FMAP extension
provides a 3.2 percent first quarter increase, which is reduced
to 1.2 percent in the second quarter. However, high unemployment
states would continue to receive the same FMAP increase as they
do under the current ARRA provisions. The $26.1 billion price tag
was offset by a series of tax increases and spending rescissions.
Maine's Republican Senators Olympia Snowe and Susan Collins voted
with the Democrats to pass the package, 61-39.
The House of Representatives recessed after finishing legislative
business on Aug. 2 and had not taken action on the legislation.
House Speaker Nancy Pelosi (D-Calif.) commented that the House will
return to Washington the week of Aug. 9 to pass the bill.
Contact:
Len Marquez, Director
AAMC Government Relations
lmarquez@aamc.org
(202) 862-6281
FY 2010 IPPS Final Rule Includes Minus 2.9 Percent
Coding Offset
The Centers for Medicare and Medicaid Services (CMS) July 30 released
the Medicare inpatient prospective payment system final
rule for fiscal year (FY) 2011. The rule is scheduled to be
published in the Aug. 16 Federal Register and will take effect
for discharges on or after Oct. 1, 2010.
Under the final rule, CMS will update Medicare inpatient hospital
payments by a market basket rate of 2.6 percent, minus a reduction
of 0.25 percentage points required by the Affordable Care Act (P.
L. 111-148), minus 2.9 percentage points to remove half of what
CMS believes to be the overpayments made to hospitals in 2008 and
2009 due to changes in hospital coding practices that do not reflect
increases in patients' severity of illness. The health reform and
coding adjustments will result in an overall reduction of 0.55 percent
to the standardized payment amount. CMS estimates that as a result
of other factors, average teaching hospital operating payments per
discharge in 2011 will be 0.5 percent less than in 2010.
The final rule also contains several provisions affecting DGME
and IME payments. The final rule would clarify the definition of
"approved medical residency programs" to distinguish between
physicians, who should bill for their services under Medicare Part
B, and residents and fellows, who should be included in the FTE
count for DGME and IME purposes. Previously, CMS defined an approved
program as one that is accredited by a national accrediting organization
or that leads toward board certification by the American Board of
Medical Specialties (ABMS). CMS now clarifies that:
- effective for cost reporting periods beginning on or after
Oct. 1, 2010, chief residents who have already completed an
accredited program and have satisfied minimum requirements for
board certification will no longer be considered residents for
indirect medical education (IME) and direct graduate medical
education (DGME) payment purposes;
- effective for cost reporting periods beginning on or after
Oct. 1, 2010, individuals training in residency programs that
hospitals operate for a period longer than the minimum accredited
program length will no longer be considered residents for DGME
and IME payment purposes; and
- hospitals may only receive Part B reasonable cost reimbursement
for residents in unapproved programs if those residents are
not fully licensed in the state where the residents are training.
CMS also finalizes the agency's proposal to permit the electronic
submission of GME affiliation agreements to the CMS Central Office.
If the electronic submission system is ready to receive affiliation
agreements for the academic year beginning July 1, 2011, CMS will
notify hospitals by May 2011 of the electronic submission process.
CMS will continue to accept hard copies of affiliation agreements
after the electronic process is in place.
In the rule, CMS finalizes its three-year plan for measure expansion
in the pay for reporting quality program (RHQDAPU). The final rule
includes measure requirements for FYs 2012-2014 and one modification
for FY 2011. The three-year plan provides for the inclusion new
types of measures such as hospital acquired conditions and infection
rates as well as alternate data collection mechanisms such as the
CDC National Healthcare Safety Network. As a result, the number
of measures required for the annual payment update will be 45 in
FY 2011, 55 in FY 2012, 57 in FY 2013, and 60 in FY 2014. CMS did
not finalize the agency's proposal to require registry-derived measures
and has deferred collection on all-patient volume data.
The final rule also contains provisions that affect long-term care
hospitals, critical access hospitals, new technology payments, the
approach for updating ICD-9-CM and ICD-10-CM/PCS codes, outlier
payments, the labor related share, provider taxes, and the wage
index.
Contact:
Lori K. Mihalich-Levin, J.D., Senior Policy Analyst
AAMC Health Care Affairs
lmlevin@aamc.org
(202) 828-0599
Jennifer Faerberg, Director, Health Care Affairs
AAMC Health Care Affairs
jfaerberg@aamc.org
(202) 862-6221
Karen Fisher, J.D., Sr. Director, Health Care Affairs
AAMC Health Care Affairs
kfisher@aamc.org
(202) 862-6140
Senate Appropriations Report Provides FY 2011
HHS Funding Details
The Senate Appropriations Committee Aug. 2 filed the report for
its FY 2011 Labor-HHS-Education spending bill (S. 3686, S.Rept.
111-243), after the committee approved the bill July 29 [see
Washington Highlights,
July 30].
NIH: The committee's recommended $32.007 billion for the
National Institutes of Health (NIH) includes $561.6 million for
the NIH Common Fund, the same as the president's budget, and $17.5
million (3.2 percent) more than the FY 2010 level.
The committee recommends a total of $500.4 million for the Clinical
and Translational Science Awards [CTSAs] program in FY 2011, a $17.5
million (3.6 percent) increase over FY 2010. The report states that
under the Senate bill, a portion of the costs of the CTSAs will
continue to shift to the National Center for Research Resources
(NCRR) from the Common Fund. NCRR's share of the CTSA program increases
from $457.7 million in FY 2010 to $477.7 million in FY 2011, while
the Common Fund's share drops from $25.4 million in FY 2010 to $22.7
million in FY 2011.
In addition, the committee's bill includes $194.4 million for continuation
of the National Children's Study.
The committee's bill retains the cap on salaries on extramural
grants funded by NIH, AHRQ, and the Substance Abuse and Mental Health
Services Administration at the Executive Level I rate ($199,700
in 2010).
Regarding "class B" animal dealers, the committee reiterates
its expectation that NIH phase out the dealers expeditiously. The
report notes that "The 3- to 4-year timeline projected by the
NIH to complete this transition is longer than the Committee would
have preferred," but also indicates that "the Committee
is pleased that the NIH is on track to meet the early milestones
of this timeline … [and] expects this pace to continue."
AHRQ: The committee maintains funding for the Agency for
Healthcare Research and Quality (AHRQ) at the FY 2010 funding level
of $397 million, but transfers an additional $17 million to AHRQ
from the Prevention and Public Health Fund for the U.S. Preventive
Services Task Force ($7 million) and clinical preventive services
research ($10 million). The committee rejects the president's proposal
to discontinue funding for the existing Centers for Education and
Research in Therapeutics (CERTs), and instead provides $13.5 million,
the same as in FY 2010. The bill provides $35 million for patient-centered
outcomes or comparative effectiveness research, a $21 million (66.7
percent increase) over FY 2010.
Health Professions: The bill provides $356.6 million for
the Title VII health professions programs, a $102.5 million (40
percent) boost. Within the total, the committee allocates $90 million
for grants to support physician assistant education, as well as
physician training in family medicine, general pediatrics, and general
internal medicine - a $51 million (131 percent) increase over the
comparable FY 2010 funding level. The bill also significantly expands
the Title VII Faculty Loan Repayment program, with $6.3 million
(a $5 million or 395 percent increase), and funding for Title VII
Workforce Information and Analysis, providing $13.8 million (a $10.9
million or 386 percent increase). Funding for the Public Health
and Preventive Medicine program is increased to $19.7 million, a
$9.7 million (96.7 percent) increase directed to fellowships and
training in preventive medicine.
The committee also invests in two new Title VII programs established
in the Affordable Care Act (P.L.
111-148 and P.L.
111-152). The bill provides $5.1 million for the Rural Physician
Training grant program for medical schools to establish, improve,
or expand "rural-focused" training programs. Additionally,
the bill provides $5 million within the Centers for Disease Control
and Prevention (CDC) intended for a new public health loan repayment
program.
NHSC: While the committee recommends flat discretionary
funding ($141 million) for the National Health Service Corps (NHSC),
the committee notes that this amount is in addition to mandatory
funding provided through the HHS Secretary's NHSC Fund as established
under the Affordable Care Act (P.L.
111-148). Combined, the committee anticipates $431 million for
the NHSC in FY 2011, more than double the FY 2010 enacted level.
In addition to encouraging HRSA to continue recent improvements
to the applications process and a demonstration project for part-time
service, the committee notes that that "specialty care is increasingly
rare in communities that have been declared a public health emergency"
and encourages HRSA to provide "technical assistance"
to these communities.
Children's GME: Like in FY 2010, the bill provides $317.5
million for the Children's Hospitals Graduate Medical Education
program.
The committee's bill continues a provision authorizing the transfer
of up to 2.5 percent of Public Health Service funds for evaluation
activities; the administration had requested increasing this "evaluation
tap" to 2.9 percent.
It is unclear when - or if - the full Senate might consider the
bill. The House Labor-HHS-Education Appropriations Subcommittee
approved its version July 15, but no date is scheduled for full
committee consideration.
Contact:
Dave Moore, Senior Director
AAMC Government Relations
dbmoore@aamc.org
(202) 828-0525
Tannaz Rasouli, Senior Legislative Analyst
AAMC Government Relations
trasouli@aamc.org
(202) 828-0525
Matthew Shick, Senior Legislative Analyst
AAMC Government Relations
mshick@aamc.org
(202) 862-6116
Medicare Trustees Report Shows Affordable Care
Act Improves Financial Outlook for Medicare Trust Fund
The Boards of Trustees of the Federal Hospital Insurance Trust
Fund and the Federal Supplementary Medical Insurance Trust Fund
(commonly referred to as the "Medicare trustees") Aug.
5 released their annual
report on the current status and projected financial condition
of the Medicare program. The report shows that the financial status
of the hospital insurance (Part A) trust fund is substantially improved
by the lower expenditures and additional tax revenues instituted
by the Affordable Care Act (ACA, P.L.
111-148).
The report estimates that the hospital insurance (HI) trust fund
will be exhausted in 2029 under current law and by 2028 under an
alternative scenario, which assumes that the physician fee reductions
are overridden and that the productivity adjustments are gradually
phased out over the 15 years starting in 2020. This represents a
substantial improvement compared to projections estimating the exhaustion
of the HI trust fund by 2017 under the law in effect prior to the
ACA. The productivity adjustments refer to the ACA's mandated reduction
in the rate of growth in health care costs.
The trustees caution that in the long range, the improvement in
the financial outlook of the Medicare trust fund depends on the
feasibility of the ACA's mandated reduction in the rate of growth
in health care costs. If providers cannot reduce their cost per
service correspondingly, through productivity improvements or other
steps, Medicare beneficiaries' access to services can be negatively
affected. The report emphasizes the need to find innovative new
methods of delivering and paying for health care that improve quality
of outcomes and achieve better cost efficiency.
According to the trustees, the difference between expenditures
and general revenue is projected to exceed 45 percent in 2010,
prompting a funding warning for the fifth consecutive year. Pursuant
to the 2003 Medicare Modernization Act (MMA), a funding warning
is triggered when the trustees make a determination in two consecutive
annual reports that general revenue will make up more than 45 percent
of total Medicare financing within a seven-year period. When a funding
warning is issued, the MMA requires that the administration make
and Congress consider a proposal to bring the funding level below
45 percent. Congress has not acted on previous administration proposals.
Health and Human Services Secretary Kathleen Sebelius responded
to the release of the report stating "It is clear that the
Affordable Care Act is helping to strengthen the solvency of the
Medicare Trust fund and preserve this important program that millions
of Americans rely on for their health care."
Congressional Republicans focused on the Medicare funding warning,
the deteriorating financial condition of the Medicare and Social
Security programs, and the need for reform. House Minority Leader
John Boehner (R-Ohio) said in a statement "The Social Security
and Medicare Trustees have repeatedly warned Congress and the American
people that the programs must be reformed or future benefits will
be threatened, and today's report is the most dramatic warning yet.
Congress can't sit idly by while these programs go bankrupt; we
must act now."
Contact:
Diana Mayes, Specialist
AAMC Health Care Affairs
dmayes@aamc.org
(202) 828-0498
Legislation Introduced to Address Multi-Campus
Hospital HIT Incentive Payments
Reps. Pete Stark (D-Calif.), Zach Space (D-Ohio), Frank Pallone
(D-N.J.), and Michael Burgess (R-Texas) July 30 introduced AAMC-supported
legislation titled Electronic Health Record Incentives for Multi-Campus
Hospitals Act of 2010 (H.R.
6072). The bill would ensure that Medicare and Medicaid HIT
incentive payments authorized by the American Recovery and Reinvestment
Act (P.L.
111-5) would be available to each hospital meeting meaningful
use requirements in a multi-campus system that share a single Medicare
provider number [see Washington
Highlights, March 19].
The bill clarifies the that hospital systems with multiple campuses
will receive larger incentives that reflect their incremental costs
incurred in installing, operating, and using certified electronic
health records, and training staff at each campuses.
In a joint
statement, Rep. Stark said the bill would ensure that the incentive
payments "better address the costs faced by multi-campus hospitals
to promote adoption of health IT systems." Rep. Pallone added
the legislation "addresses the unique needs" of multi-campus
hospitals. Additionally, despite attempts to get this provision
resolved through the regulatory process, Rep. Burgess stated "The
rule still ignored the issue, and this bill would finally fix the
problem."
Similar AAMC-supported legislation, the Electronic Health Record
Incentives for Multi-Campus Hospitals Act of 2010 (S.
3708), was introduced Aug. 5 in the Senate by Sen. Charles Schumer
(D-N.Y.). In addition to Sen. Schumer, original co-sponsors of the
bill included Sens. John Kerry (D-Mass.), Frank Lautenberg (D-N.J.),
Robert Menendez (D-N.J.), Robert Casey (D-Pa.), Kristen Gillibrand
(D-N.Y.), Al Franken (D-Minn.), Tom Harkin (D-Iowa), and Amy Klobuchar
(D-Minn.).
Contact:
Len Marquez, Director
AAMC Government Relations
lmarquez@aamc.org
(202) 862-6281
Travis W. Crytzer, Legislative Analyst
AAMC Government Relations
tcrytzer@aamc.org
(202) 828-0418
On The Hill. . .
Rep. Jerry Moran (R-Kan.) Aug. 3 defeated Rep. Todd Tiahrt (R-Kan.)
in the Senate primary to fill the seat of Sen. Sam Brownback (R-Kan.)
who is running for Governor. Both Moran, serving his seventh term,
and Tiahrt, serving his eighth term, will be replaced in the House
after the November elections.
Rep. Carolyn Cheeks Kilpatrick (D-Mich.) was defeated Aug. 3 by
state Sen. Hansen Clarke (D) in the Democratic primary. Kilpatrick
currently serving her seventh term sits on the House Appropriations
Committee and was the former Chair of the Congressional Black Caucus.
On the Agenda in Washington
Aug. 12: CMS Electronic Health Record Incentive Program Teleconference
2 p.m.; Register for dial-in information
The Centers for Medicare and Medicaid Services will hold a conference
call to discuss the Medicare and Medicaid Electronic Health Record
Incentive Program.
Aug. 12: National Science Board Task Force Meeting
3 p.m.; National Science Foundation, 4201 Wilson Blvd., Arlington,
VA
The National Science Board Committee on Programs and Plans will
hold a meeting of
its Task Force on Support of Mid-Scale and Multi-investigator Research.
Aug. 17: NIH Council of Councils Meeting
11 a.m.; Dial-in at 888-285-2623; access code: 86739025
The Council of Councils of the National Institutes of Health will
meet
via teleconference to discuss the Roadmap Transformative R01 Program
and review process.
Aug. 19: HRSA Advisory Committee on Interdisciplinary, Community-Based
Linkages Meeting
8:30 a.m.; Hilton Washington DC/Rockville, 1750 Rockville Pike,
Rockville, Md
The Health Resources and Service Administration (HRSA) Advisory
Committee on Interdisciplinary, Community-Based Linkages will meet
to consider pending agenda items, including presentations that will
include Healthy People 2020, chronic illness management, integrating
programs to manage health behaviors, and financing issues.
New In Health Reform
The AAMC continues to develop and update resources related to the
Affordable Care Act (P.L.
111-148 and P.L.
111-152). Materials will be posted regularly to the AAMC Health
Reform Web site. Recent
additions include a Congressional Research Service (CRS) report
on ACA regulation issued during the first four months of reform.
Check back frequently for new and updated materials.
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