Print | Email Advocacy Center 

The White House unveiled its proposed budget for fiscal year (FY) 2014.  The $3.77 trillion budget, released April 10, cuts $400 billion from Medicare and other health-related programs over the next ten years; including $10.98 billion from graduate medical education.  Specifically, the budget cuts target indirect medical education payments, which the Medicare Payment Advisory Commission determined to be “…significantly greater than the additional patient care costs that teaching hospitals experience.”

The Senate and House of Representatives released their proposed budgets earlier in the year.  If a budget deal is to be reached, it must be approved by both chambers of Congress and signed by President Obama prior to September 30, at which point the current fiscal year ends.  In absence of an agreement, a continuing resolution would be needed to fund government past the conclusion of FY 2013.

Read overview and full budget document 

An interim report released by the Institute of Medicine (IOM) is critical of the idea to pay Medicare providers based on geographic region.  Secretary of Health and Human Services Kathleen Sebelius, at the urging of members of Congress, requested IOM to research the idea of paying Medicare providers less if their regions are heavy users of services.  The inquiry is based on previous research that suggests unnecessary services and waste may cause certain areas (such as the city of New York and Florida) to spend more Medicare dollars per beneficiary.  IOM’s concern is that physicians using Medicare services properly would be unfairly impacted if they happen to practice in regions with higher spending.  IOM also notes that spending varies within the regions studied.

The report was released March 19 by the IOM Committee on Geographic Variation in Health Care Spending and Promotion of High-Value Care. 

This item is a summary of Jordan Rau’s Kaiser Health News article, “IOM Panel Raises Concerns About Lowering Medicare Pay For High Spending Areas.”

Learn more

Facing a March 27 deadline to fund the federal government, the Senate is considering its own version of the House-passed continuing resolution.  Notably, the Senate’s proposal keeps the majority of funding for the Department of Health and Human Services at existing levels.  The Senate proposal omits additional funds requested by the White House for the Centers for Medicare and Medicaid Services.  It also retains a House provision that rescinds $10 million allocated to the Independent Payment Advisory Board.  However, the Senate proposal includes a $71 million increase for the National Institutes of Research.

To prevent a government shutdown, the House and Senate must reconcile a continuing resolution by the end of the current fiscal year, which concludes September 30, 2013.

This item is a summary of Paul Jenks’ Congressional Quarterly article, “Senate Funding Measure Dodges a Health Spending Battle With the House.”

Barring a last minute alternative, the automatic spending sequester will go into effect on Friday, March 1.  This measure entails $85 billion in across-the-board cuts to federal agencies for fiscal year 2013.  According to the Congressional Budget Office, funding for Medicare will be reduced by $10 billion.  Medicare payments to physicians and hospitals will be cut by 2%, while beneficiaries will not be directly impacted.  Funding for the National Institutes of Health (NIH) will also be reduced, however NIH recently announced a plan to mitigate the impact of these cuts.  In the event of sequestration, NIH will reduce funding for non-competing continuation grants and will make fewer competing awards available.

While these cuts will take effect on March 1, Congress can potentially still agree on an alternative to sequestration even after this deadline has passed.

This item is a summary of Paul M. Krawzak’s Congressional Quarterly article, “Sequester to Roll Across Government with Bureaucratic Efficiency” and other sources.

In an effort to enhance patient privacy, the Department of Health and Human Services (HHS) unveiled new rules strengthening the Health Insurance Portability and Accountability Act of 1996 (HIPAA), a policy that governs health records and information.  Released last week, the new rules expand government oversight to include health entity business associates (contractors and subcontractors) with whom patient information may be shared. The policy increases the maximum penalty for non-compliance to $1.5 million per violation. In addition, patients may now request medical records electronically.  As of March 26, health entities and their associates will have 180 days to comply with these changes.

The item is a summary of Kathleen Struck’s MedPage Today article entitled “New HIPAA Rules Fortify Patient Privacy.”

In response to proposed deficit reductions targeting vital health care entities, the Association of American Medical Colleges (AAMC) sent a letter to Congress opposing Medicare cuts to graduate medical education (GME) and hospital outpatient departments (HOPDs).  The December 10 letter explains that cuts to GME would both “threaten access to critical services” and reduce physician training at a time when 32 million new patients are expected to enter the health care system.  Reductions to GME funding also hinder efforts to address the impending physician shortage.  The letter also highlights that proposed reductions in Medicare payments for HOPDs’ evaluation and management (E/M) services would disproportionally harm teaching hospitals.  Specifically, a $1 billion per year cut to E/M services at HOPDs would amount to annual cuts exceeding $738 million to teaching hospitals; many of which often care for more disadvantaged patients. 

Read the letter

With the United States facing a physician shortage over the next decade, newly released data from the Association of American Medical Colleges (AAMC) reveals significant growth in first-time medical school enrollment.   Notably, representation of racial and ethnic minorities increased in terms of both applicants and enrollment.  African-American and Hispanic/Latino enrollees increased to all-time highs of 1,416 and 1,731, respectively.  Native American enrollees saw a 17.2% increase in enrollment, following a decreases in 2011.  AAMC President Darrell G. Kirch, MD, praised these figures, but also noted that increased enrollment will not translate into more doctors unless Congress lifts caps on residency training positions.

In an effort to address the nation’s physician shortage, Representative Joseph Crowley (D-NY) introduced the Resident Physician Shortage Reduction Act of 2012 (HR 6562).  The bill would increase the number of Medicare-supported residency slots by 15,000 over five years.  One-third of these new positions would be allocated to hospitals operating over their resident caps.  In addition, the bill calls for studies on physician workforce and diversity.  The legislation, introduced September 25, has been referred to the House Committee on Ways and Means and the House Committee on Energy and Commerce, where it awaits consideration.

Read text of the bill

Recent reports about institutions altering Medicare billing codes led Attorney General Eric H. Holder, Jr. and Department of Health and Human Services (HHS) Secretary Kathleen Sebelius to send a letter to five major medical associations iterating that the federal government will not tolerate misuse of health information technology (IT).  The September 24 letter states that the Department of Justice and HHS are both committed to ensuring payment accuracy and preventing health care fraud.  In the letter, Mr. Holder and Ms. Sebelius explain that some providers are using health IT to obtain reimbursements to which they are not entitled.  Specifically, the two officials mention possible “cloning” of medical records to increase reimbursements as well as “upcoding” the severity of patient conditions.  The American Hospital Association (AHA) submitted a response differentiating increased reimbursement claims and fraud.  AHA also reiterated an earlier request for the development of national guidelines for the reporting of emergency department and clinic visits.

This item is a summary of Dena Bunis’s Congressional Quarterly article, “Sebelius, Holder Warn Hospitals Over ‘Upcoding’ Trends.”

The White House released a report detailing the impact the automatic spending sequester would have on federal programs should it go into effect.  According to the September 14 report, payments to Medicare providers would be reduced by $11 billion in 2013.  Medicare beneficiaries will not be directly affected, and Medicaid, the Children’s Health Insurance Program, and Veterans’ Affairs medical care would be exempt from reductions.  However, the National Institutes of Health (NIH) would be cut by $2.5 billion, potentially having a drastic impact on medical research.  NIH Administrator Francis Collins has repeatedly warned that a quarter of all 2013 NIH grants will not be funded if the sequester is implemented.  The Health Resources and Services Administration and Centers for Disease Control and Prevention would also see cuts to 2013 funding. 

Congress, the White House, and numerous stakeholder groups are striving for an alternative course of action that would prevent these cuts from taking place.  Due to typical length of the legislative process, it is likely that any agreement offsetting the reductions will take place following the November election.  At present time, the spending sequester is scheduled to occur on January 2, 2013. 

Read the report

As senators and representatives return from August recess, Congress’s main priority will be to keep the government running past the end of fiscal year (FY) 2012.  House leaders plan to introduce a continuing resolution (CR) September 13 that will fund the government through March 27, 2013, six months after FY 2012 concludes.  Funding will remain relatively flat during this period and will reflect the $1.047 trillion cap on discretionary spending set in the debt limit deal.  While some lawmakers may attempt to add special items and provisions to the CR, leaders in both parties indicated they a “clean” bill.  The CR must be signed into law by September 30 to finance the government’s daily operations and not face the threat of a shutdown.

This item is a summary of Kerry Young’s Congressional Quarterly article, “Top Focus is on Stopgap Funding.”

The White House will submit a report to Congress on September 6, detailing how it will implement across the board spending cuts--known as the “sequester”-- scheduled to go into effect January 2.  President Obama signed into law the Sequestration Transparency Act of 2012 (HR 5872), which requires the White House to issue a report outlining specific reductions to government programs, projects, and activities.  The sequester, as written in the 2011 debt limit law, will result in cuts in both discretionary and mandatory spending, including an annual reduction to Medicare spending.  However, the Medicare reduction will be limited to 2% and beneficiaries will not be impacted.  Both parties are aiming to prevent the sequester from taking place, but they disagree on an alternative course of action.

This item is a summary of Kerry Young’s Congressional Quarterly article, “President Signs Measure Seeking Details on Sequester Planning” and other sources.

Authors of the bipartisan Simpson-Bowles plan are rewriting their deficit reduction proposal in a way that controls health care spending.  The original 2010 proposal, created by the 18-member National Commission on Fiscal Responsibility and Reform, did not include any significant changes to Medicare or Medicaid.  Former Senator Judd Gregg (R-NH) explained that the health care components of the reworked plan will encompass bipartisan initiatives that have been vetted over the past two years, though he did not go into specifics.  Overall, the new plan will be based on the original Simpson-Bowles, but will likely feature more spending reductions and less revenue.  The goal is to agree on a revised proposal before the end of the year.

This item is a summary of Paul M. Krawzak’s Congressional Quarterly article “Simpson-Bowles Authors Revisit Plan.”

In a 16-14 vote, the Senate Committee on Appropriations approved the Labor-Health and Human Services (HHS)-Education fiscal year (FY) 2013 spending bill.  The bill includes $30.723 billion to fund the National Institutes of Health (NIH), a $100 million increase over FY 2012 levels.  It also maintains current funding for the Institutional Development Award program, which allocates medical research dollars to states that are unsuccessful at obtaining NIH grant money.  The bill allocates $256.6 million for the Health Resources and Services Administration’s Title VII health professions program (an $11.6 million reduction from FY 2012) and $49 million for the Title VII primary care training and enhancement programs (a $10 million increase over FY 2012).

The committee’s June 14 vote clears the way for the bill to be considered by the full Senate.

Several members of the Alliance for Academic Internal Medicine (AAIM) Advocacy Committee participated in the American College of Physicians (ACP) 2012 Leadership Day on Capitol Hill.  During the June 7 event, AAIM joined ACP members for meetings with Senate and House offices to discuss various matters that impact internal medicine.  AAIM’s role in the meetings was to advocate support for issues concerning graduate medical education, including increasing the number of training positions, and adjusting Medicare payments to reflect the cost of training residents and fellows.  2012 is the first year that AAIM has joined ACP in this endeavor.

In an effort to promote medical education and training opportunities for future physicians, Congresswoman Allyson Y. Schwartz (D-PA) and Congressman Phil Roe (R-TN) re-launched the bipartisan Congressional Academic Medicine Caucus.  According to a press release from Congresswoman Schwartz’s office, the caucus will provide a forum for dialogue about vital issues surrounding graduate medical education.  The caucus will work with teaching hospitals, medical schools, and providers to confront challenges facing academic medicine, and explore policy approaches to ensure an adequate supply of qualified physicians. 

View list of caucus members

Senators Jack Reed (D-RI) and Jon Kyl (R-AZ) introduced the Graduate Medical Education Reform Act of 2012 on May 17.  The proposed legislation would adjust indirect medical education (IME) payments so that they are based on performance measures to be determined by the Secretary of Health and Human Services.  Specifically, these IME performance adjustments would be based on reporting and measures of patient care priorities.  According to Senator Reed, this legislation would allow teaching hospitals to compete for additional funding while striving to improve their programs.  The bill is currently being considered by the Senate Committee on Finance.

In recent Congressional hearings on funding for the National Institutes of Health (NIH), appropriators expressed concern about plans to cut funds in the fiscal year (FY) 2013 budget for the Institutional Developmental Award (IDeA) program.  IDeA allocates medical research dollars to 23 states that are often unsuccessful in competing for NIH grant money.  NIH Director Francis Collins MD, PhD, has planned to cut $50 million from the $276 million program, which funds states primarily in the Midwest, West, South and Appalachia.  Proponents believe that these funds attract scientists to institutions within these states and also help underfunded states become more competitive in the global high-tech economy.  Dr. Collins has said that he is enthusiastic about the IDeA program, but explained that it received $50 million as a boost in FY 2012 and now the money is needed elsewhere.

This item is a summary of John Reichard’s Congressional Quarterly article “Funding Squeeze at NIH May Deliver Blow to High-Tech Hopes of 23 States.”

The House Committee on Ways and Means and the Energy and Commerce Committee approved legislation March 8 and March 6, respectively, that would abolish the Independent Payment Advisory Board (IPAB); a 15-member panel charged with curbing growth in Medicare spending.  IPAB was created by the Obama Administration’s 2010 health care overhaul legislation and is set to begin its work in 2013.  IPAB is tasked to annually evaluate whether projected Medicare expenditures will exceed target levels, then make recommendations to Congress and the President.  Opponents of the panel cite that these recommendations would automatically go into effect, barring Congressional action.
 
The bill currently has 234 co-sponsors and is expected to be considered by the full House of Representatives as early as the week of March 19.  While Senator John Cornyn (R-TX) is pursuing similar action to repeal the panel on the Senate side, President Obama has made it clear that he supports IPAB and will oppose any measure to repeal it.

This item is a summary of Elham Khatami’s Congressional Quarterly article “Bill to Abolish Medicare Board Approved in Two House Panels.”

A new rule established February 7 by the American Board of Medical Specialties (ABMS) now requires physicians to attain board certification three to seven years after completing residency training.  Specific time limits will vary by specialty, with each of the 24 ABMS member boards required set their respective policies by April 16, 2012.  According to ABMS President and Chief Executive Officer Kevin B. Weiss, MD, the goal of this new rule is to ensure the term “board eligible” is used appropriately by banning physicians from using the status indefinitely.  American Board of Internal Medicine Vice President of Academic Affairs William B. Iobst, MD, praised the policy.  He explains that it will allow physicians to show they are becoming certified, while at the same time protecting patients from physician misrepresentation about board status.  The policy is retroactive to January 1, 2012.

Learn more

The Medical Group Management Association (MGMA) sent a letter to Department of Health and Human Services (HHS) Secretary Kathleen Sebelius, calling for action regarding problems with the transition to Health Insurance Portability and Accountably Act (HIPAA) Version 5010 electronic transactions.  The February 1 letter to Secretary Sebelius outlines the critical payment and billing issues physicians now face because of the transition to Version 5010, and implores her to address these issues.  Concerns with the transition include claims being rejected or lost, issues with secondary payers, and sporadic payment of re-submitted claims.  MGMA recommends several steps HHS should take, including extending the enforcement delay until at least June 30, 2012; instructing Medicare Administrative Contractors to provide advance payments to physicians whose practices are struggling to meet the Version 5010 mandate; and monitoring the readiness of the industry for the transition.

Read the MGMA letter to Secretary Sebelius regarding HIPAA Version 5010

During a February 7 House Ways and Means Subcommittee on Health hearing, witnesses argued for the need to link incentives programs that reward physicians for their performance to reforms at the federal level.  Those testifying from the health community all discussed private sector innovations that evaluate performance and create incentives.  In particular, Jack Lewin, MD, of the American College of Cardiology (ACC) detailed the performance measures of the ACC “Door to Balloon” initiative, aimed at speeding up treatment for myocardial infractions.

Subcommittee chair Wally Herger (R-CA) and ranking member Pete Stark (D-CA) both stressed the need to hear from the private sector regarding reforms to Medicare.  Discussion about comparative effectiveness and the need to bring a permanent solution to the ongoing sustainable growth rate problem was a key highlight of the question and answer session.

President Obama has announced his intention to nominate Marilyn Tavenner to succeed Donald M. Berwick, MD, as administrator of the Centers for Medicare and Medicaid Services (CMS).  Berwick’s resignation from the position is effective December 2, so Tavenner will serve as acting administrator during her confirmation process.  Tavenner began her career as a nurse and then served in several managerial capacities at Hospital Corporation of America, eventually becoming Virginia’s Secretary of Health and Human Resources.  In February 2010, she was appointed to the position of principal deputy administrator at CMS and has been serving in that capacity up to this point.  Details as to her confirmation process have not yet been made available.

This is a summary of an article originally entitled “Tavenner Picked to Succeed Berwick,” written by John Reichard of Congressional Quarterly.

It appears that the Joint Select Committee on Deficit Reduction (also known as the “Super Committee”) will fail to meet its legislative deadline.  As a result, automatic across-the-board cuts totaling $1.2 trillion are scheduled to go into effect in January 2013.  These automatic cuts will not impact Medicaid and should have a limited impact on Medicare, through which gradaute medical education (GME) is funded.  The Budget Control Act, which was signed into law on August 2, states that the percentage reduction for Medicare programs as a whole would be limited to 2%.  Some of the proposals originally considered by the committee included cuts that exceeded 2% and may have had a devastating impact on GME.  However, if the automatic cuts go into effect as scheduled, then these proposals would be tabled.

These automatic cuts are still subject to congressional action, and therefore any reductions to Medicare could feasibly be modified before 2013.  AAIM will keep you updated about developments in Congress that involve Medicare and GME.

Modify and use the PowerPoint presentation "Policy Update:  Graduate Medical Education Funding" to educate and engage your residents in advocacy efforts. See the Action Alert to send an email to your senator or representative.