2010-03-01

President Obama Submits Details of FY 2011 Budget Proposal to Congress

President Obama has released the details of his FY 2011 budget proposal. Despite calling for a freeze in federal discretionary spending during his State of the Union address on January 27, the President reaffirmed his commitment to biomedical research by proposing approximately $32.089 billion in funding for the National Institutes of Health (NIH) in FY 2011, a 3.2 percent increase over the final FY 2010 funding levels that were enacted in December of last year. See a summary of the proposed budget numbers for Institutes of particular interest to ASH.

It is important to remember that the President’s proposal represents the opening bid in a lengthy federal budget process and that the proposal will be modified significantly by Congress. In the coming weeks, Obama administration representatives will be called to testify before Congress on the President’s proposals. Congress will then be tasked with drafting and passing its FY 2011 budget resolution, a nonbinding blueprint that provides a framework for the spending bills that the House and Senate Appropriations Committees will draft later this spring.

President Obama Renews Call for Health Reform

President Obama continues to prioritize the need for health reform legislation and has promised congressional leaders that he would offer his own bill to overhaul the health-care system prior to a February 25 congressional summit intended to set the overhaul back on course.

The President has never before offered a specific legislative proposal in the health reform debate, choosing instead to let the Congress take the lead in the legislative process. Leaving the details to Congress, however, has proven a near disaster: Public opinion of the health reform bills that the House and Senate have passed is low, the legislation did not garner any bipartisan support, and since the election of Republican Scott P. Brown to fill the late Sen. Ted Kennedy’s seat in January, congressional Democrats have been reluctant to clear the legislation, fearing backlash at the polls.

Given the latest political gridlock, President Obama announced that he would gather a bipartisan group of congressional leaders at the White House for a televised health summit to try to salvage the overhaul. But there is little trust among the policymakers, and the event has become clouded by politics. Administration officials have also announced that the President would offer his own legislation to discuss at the summit. Few details had been provided as this issue of The Hematologist went to press, but the Obama bill is likely to be based on the bills the House and Senate had already passed — in effect becoming the conference compromise bill that congressional Democrats were not able to produce on their own. The comprehensive bill is expected to include provisions to stop insurance company abuses, extend coverage to millions of Americans, and reduce premiums and out-of-pocket costs for consumers.

ASH Comments on NHLBI New FY 2010 Payline Schedule for A0, A1, and A2 Applications

In January, ASH submitted comments to the National Heart, Lung, and Blood Institute (NHLBI) concerning the announcement, “Funding Strategies for Translating NIH Peer-Review Changes into Funding Policies,” which contains the new FY 2010 payline schedule for A0 (new submission), A1, and A2 (resubmission) applications. While ASH applauded the NIH-wide efforts to enhance the peer-review process by reducing the need to resubmit applications, the Society expressed several concerns that NHLBI prioritized the funding of A0 submissions at higher paylines than A1 and A2 applications beginning October 2009 and urged NHLBI to continue to review this policy. NHLBI has responded indicating it will carefully monitor the new policy. For more information, visit the Advocacy page on the ASH Web site.

ASH Continues Efforts to Restore Payment for Medicare Consult Codes

The 2010 final Medicare Physician Fee Schedule eliminated consultation codes, effective January 1, 2010. The Centers for Medicare and Medicaid Services (CMS) directed providers instead to report other evaluation management codes in lieu of the consultation codes. The Society supports legislation that would delay this CMS decision for one year. The delay would allow the Secretary to work with the American Medical Association Current Procedural Terminology Editorial Panel to modify existing consultation codes or to establish new codes to accurately reflect the work of consultation services and to minimize coding errors. A one-year delay would ensure that the impact of this new policy is thoroughly studied and patients and physicians are not negatively affected by a hasty implementation.

A thorough explanation of how these changes will affect medical practices and further guidance are available on the Practice page of the ASH Web site.

Legislation Raising the Federal Debt Ceiling Provides Way to Offset Costs of a Medicare Physician Payment “Fix”

As this issue of The Hematologist was going to press, the March 1 deadline for addressing a 21 percent Medicare physician payment cut was fast approaching. Although consensus on how to permanently fix physician payment had not been reached, both the House and Senate passed HJ Resolution 45, a resolution to raise the federal debt limit, and included in the resolution a way to address the Medicare physician payment problem, at least temporarily and in a way to avert any immediate cuts. The resolution requires that any new federal spending or tax cuts be offset by corresponding spending cuts or tax increases. However, under a deal developed by the Senate Democratic leadership, the resolution makes certain exemptions from these rules, including one for addressing the Medicare physician payment cuts mandated by the sustainable growth rate (SGR) formula.

The SGR is a statutory formula that adjusts Medicare physician payment rates every year to reflect differences between actual spending and a target established by the SGR. Since 2002, spending has exceeded the target, resulting in scheduled payment cuts that Congress has had to avert through temporary measures. Currently, Congress has instituted a temporary freeze of Medicare physician payment to avert a scheduled payment cut of 21 percent that was to begin on January 1, 2010.

While many in Congress generally support the idea of repealing the flawed SGR formula and establishing a new foundation for physician payment, they do not agree on how to find the hundreds of billions of dollars needed to make a permanent change in the payment formula. The SGR exemption in HJ Resolution 45 would allow for an SGR fix that would not be required to be offset by other revenue or cuts and assumes a five-year freeze of the SGR with larger payment cuts and a higher cost after 2014. Congressional leaders, however, are also exploring legislation that would provide for a seven-month physician payment freeze and then revisiting the issue at that time.

For the latest information about legislative action on Medicare physician payments, visit the Practice page on the ASH Web site.

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