June 10, 2005

TO: Board of Directors

FR: Kevin J. Burke
Director, Division of Government Relations

CC: Doug Henley
Todd Dicus
Rosi Sweeney

RE: State and Federal Legislative Update (Week of June 6)

On Thursday, June 9, the House Appropriations Subcommittee on Labor/HHS/Education debated its spending bill. Virtually all Title VII Health Professions programs, including the Section 747 Primary Care Medicine and Dentistry Cluster, which contains family medicine training, received zero funding in the bill. This action is unprecedented at the House subcommittee level.

Community Health Centers received an increase of $100 million and Scholarships for Disadvantaged Students received level funding of $47 million. Title VII Nursing Programs were cut only slightly. AHRQ received $318 million, which is the current funding level.

The House Appropriations Committee is scheduled to consider the bill as early as next Wednesday, June 15.

The Congressional Budget Office (CBO) has released an estimate of costs associated with frequently suggested alternatives to the sustainable growth rate (SGR) formula. The options range from freezing Medicare Physician payment rates at current levels to elimination of the SGR. They have also scored an extension of the most recent 1.5 percent increase for one and two years. The 5- and 10-year scores of the various options are identified below.

The table shows the significant costs of available options to remedy the pending negative Medicare payment rate for physicians.

Senators Susan Collins (R-ME) and Dick Durbin (D-IL) have finalized and sent a letter from the Senate to CMS administrator McClellan urging an administrative resolution to the issue of volunteer faculty in residency training in non-hospital settings. A total of 61 senators signed the letter which recommends an extension of the moratorium and a collaborative effort to:

Senators Olympia Snowe (R-ME) and Debbie Stabenow (D-MI) introduced Health Information Technology Act. The bill would provide a direct grant program that would make available $15,000 for individual physicians to invest in health information technology (HIT). Additional incentives, like adjustments to Medicare payments for HIT enable quality services, would be available. The bill would also require HHS to provide for the development and adoption of standards for data and communication that would promote interoperability among electronic health record systems.

Rep Kenny Hulshof (R-MO) this week introduced the Telehealth Enhancement Act of 2005. Among other things, the bill would provide up to $30 million in funding for telehealth grants and telehealth resource centers through HRSA. The bill would eliminate the geographic restrictions on reimbursement so that individuals in inner city areas can benefit from telehealth as well as those living in rural underserved areas. It also unbundles provider reimbursement from the originating site fee. This means that a telehealth provider can be reimbursed for seeing patients from any site (e.g., in the home), not just those designated as originating sites. In addition, it expands the list of originating sites to include skilled nursing facilities, renal dialysis facilities, county mental health clinics or other publicly funded mental health facilities. And the bill would require that the federal Office for the Advancement of Telehealth (OAT) to conduct a study of “store and forward” utilization and costs for the purpose of expanding reimbursement in this area in the future. Rep. Hulshof is seeking support for this bill.

On Tuesday, June 14, the House Small Business Committee will hold a hearing on how rising medical liability premiums are affecting health care access for minority and underserved communities. AAFP President-Elect, Larry Fields, MD, will testify.