Health Policy News

Congress Extends Medicare Physician Payment for the Rest of 2012
On Friday, February 17, 2012 Congress passed the Temporary Payroll Tax Cut Continuation Act of 2011 that provides a 10 month “freeze” in physician payments, thereby blocking the scheduled 27.4% SGR cut through the end of the year.   Additional congressional action will be required before December 31, 2012 to block the SGR cut that will now take place on January 1, 2013, having grown to between 32 – 35%.  This package also contains language requiring the Government Accountability Office (GAO) and HHS to submit reports to assist Congress in the development of a long-term replacement to the current Medicare physician payment system.

 The cost of this short-term patch was offset through reductions in a number of health care programs, including Medicaid disproportionate share payments to hospitals, Medicare bad debt payments to hospitals, and a cut of about 1/3 to the prevention fund created by the Affordable Care Act.  Other expiring Medicare policies were also extended through the end of the year, including the “floor” on geographic adjustments to the physician work component of the Medicare fee schedule.  To view a summary of the health care provision, please click here. 

HHS Announces Intent to Delay ICD-10 Compliance Date
Secretary Kathleen Sebelius announced that HHS will initiate a process to postpone the compliance date by which certain health entities have to comply with ICD-10. The press release can be found below.

As part of President Obama’s commitment to reducing regulatory burden, Health and Human Services Secretary Kathleen G. Sebelius today announced that HHS will initiate a process to postpone the date by which certain health care entities have to comply with International Classification of Diseases, 10th Edition diagnosis and procedure codes (ICD-10).

The final rule adopting ICD-10 as a standard was published in January 2009 and set a compliance date of October 1, 2013 – a delay of two years from the compliance date initially specified in the 2008 proposed rule. HHS will announce a new compliance date moving forward.  AUGS will provide more specific information to our members as it becomes available.

President's FY 2013 Proposed Budget - Level Funding for NIH
The President’s fiscal year 2013 budget, released on February 13, 2012, calls for $31 billion for NIH, which is essentially the same amount as fiscal year 2012.  However, the Administration did make the following positive remark about funding biomedical research at the NIH:

Supports Biomedical Research at NIH:

Biomedical research contributes to improving the health of the American people as well as the economy. The Budget includes $31 billion for NIH to support research on-campus and at academic and independent research institutions across the country. Tomorrow’s advances in health care depend on today’s investments in basic research on the fundamental causes and mechanisms of disease, new technologies to accelerate discoveries, advancing translational sciences, and encouraging new investigators and new ideas. In 2013, NIH will implement new grants management policies to increase the number of new research grants.

NICHD would receive $1.32 billion under the President’s request, an increase of $0.775 million over the FY 2012 Enacted level. NIH budget policy for research project grants (RPGs) in FY 2013 discontinues inflationary allowances and reduces the average cost of noncompeting and competing RPGs by one percent below the FY 2012 level. The NICHD will support a total of 1,529 Research Project Grant (RPG) awards in 2013. Non-competing RPGs will decrease by 41 awards while increasing the amount to support the costs associated with the commitments of prior year competing awards by $1.320 million compared to the FY 2012 Enacted level. Competing RPGs will remain at the FY 2012 level of 391 awards, while the amount to support the costs associated with those awards will decline by $1.553 million compared to the FY 2012 Enacted level, due to the declining average cost.

The full Congressional Justification for NICHD can be found here:

http://www.nichd.nih.gov/about/overview/approp/CJ/upload/CJ_NICHD_2013.pdf

Note, the release of the President’s Budget is the starting point for the FY 2013 Federal funding process.  Rarely do the numbers in the President’s Budget request get enacted at the same levels by Congress.