2011-05-01

Congressional Showdown Over Government Shutdown; Battle Over 2012 Budget Just Beginning

As this issue of The Hematologist went to press, Congress was preparing to vote on a compromise deal on a final fiscal year (FY) 2011 spending bill. The FY 2011 plan was unresolved until an hour and a half before the government was scheduled to shut down. Overall, the deal included approximately $39 billion in cuts from previous spending levels but dropped most of the controversial policy provisions proposed by House Republicans.

The federal government has been operating under a temporary funding mechanism known as a Continuing Resolution (CR) since the start of FY 2011 on October 1, 2010. Because the CR, which provided flat funding for the National Institutes of Health (NIH), was set to expire April 8, Congress needed to pass a funding bill for the remainder of the fiscal year to avoid a government shutdown. However, negotiations between the House of Representatives, the U.S. Senate, and the White House had been stalled over major disagreements over not only spending cuts, but also 65 policy provisions that conservatives in the House wanted, including stopping the implementation of the 2010 health-care overhaul law and blocking funding for Planned Parenthood.

The compromise slices $13 billion from Labor-HHS-Education provisions but preserves $500 million for biomedical research at the National Institutes of Health originally set to be cut. Spending restrictions on the health-care overhaul law funding, included in an earlier House-passed spending bill (HR 1), were eliminated in exchange for studies on the impact of the law’s mandates. There continue to be controversial issues that are likely to meet strong resistance in Congress and will require Democrat and Republican leaders to persuade rank-and-file lawmakers to finally pass the deal. Once those votes occur, attention will focus on the FY 2012 funding bill in which NIH will once again be a target for budget cuts.

Further threatening NIH funding, the Congressional Budget Office (CBO) released a report titled “Reducing the Deficit: Spending and Revenue Options.” The CBO regularly produces a compendium of options for lawmakers to consider for altering federal spending and revenues, and Congress frequently refers to CBO options when considering changes in spending or revenue.

Included in the report are more than 100 options for altering federal spending or revenues, including an option that would “reduce or constrain” funding for NIH, suggesting two possible funding alternatives:

1. Restrict the rate of growth of the NIH appropriations to 1 percent per year, an amount less than recent annual biomedical inflation rates, or around 3 percent.
2. Reduce NIH’s FY 2012 appropriation to the FY 2003 funding level (which would mean a cut of about 13 percent); after that, funding would increase at the rate of inflation assumed in CBO’s baseline projections.

ASH will continue to advocate for support of the NIH. The Society has already participated in multiple coalition efforts as well as individual advocacy campaigns, Capitol Hill Days, and a communications strategy involving publishing letters to the editor in newspapers around the country. In the coming weeks and months, ASH will again be asking members for help in making the case for NIH and advocating for appropriate NIH funding in the upcoming FY 2012 budget. It is critical that members of the medical research community contact their Representative and Senators to inform them about the benefits of NIH-funded research and the threats posed by NIH funding cuts. Please take action by visiting the ASH Advocacy Center to send a letter to your Representative and Senators. Updated information about FY 2011 and FY 2012 funding is available on the ASH website.

ASH Partners With Medical Organizations to Call for Permanent Fix for Medicare Physician Payment System

ASH, in partnership with 130 medical organizations, has sent letters to each member of the House of Representatives and Senate requesting a bipartisan, permanent fix to the current Sustainable Growth Rate (SGR) system.

The SGR is a statutory formula that sets overall targets in order to hold down spending on Medicare Part B physician services. Payment rates are adjusted every year to reflect differences between actual spending and the target. Since 2002, spending has exceeded the target, resulting in payment cuts. Beginning in 2003, Congress has repeatedly implemented temporary measures to avert the cuts.

Without action, the SGR mandates that Medicare payments be cut by 29.5 percent starting

January 1, 2012. While Congressional leaders have indicated plans to take action by that date, there has not been agreement on a permanent solution, leaving doctors with uncertainty that affects their ability to formulate business plans. In addition, because of the enormous price tag of a complete overhaul of the current payment system – several hundred billion dollars over a decade – many believe Congress will likely put off a permanent solution once again at the end of the year in favor of a less costly, short-term fix.

Although it appeared a few years ago that both Democrats and Republicans were ready to include the costs of a comprehensive overhaul into the deficit, the rise of Tea Party activists makes that unlikely any time soon. The excuse at the end of this year for another short-term fix may be that the issue will be handled as part of eventual legislation overhauling the Medicare entitlement. ASH continues to be active in working with the Congress to identify a permanent solution and will keep members apprised of developments.

Senate Republicans Block CMS Administrator Nomination

The confirmation of Centers for Medicare & Medicaid Services (CMS) Administrator Donald M. Berwick, MD, appears to be blocked by objections from a group of 42 Republican senators. Dr. Berwick was appointed to the CMS helm during a congressional recess in August 2010 and can only remain administrator until the end of this year unless the Senate votes to confirm him.

On March 3, Republican senators sent a letter to President Obama stating concern that

Dr. Berwick’s “past record of controversial statements and general lack of experience managing an organization as large and complex as CMS should disqualify him being confirmed as the CMS administrator.” In response to that letter, Senate Finance Committee Chairman Max Baucus (D-MT) stated that “the votes aren’t there” to move the nomination of Berwick as CMS administrator through the Senate. Senate Republicans have indicated that they would vote against Berwick’s nomination, which is enough to keep it from receiving the 60 votes needed to stop a filibuster.

If Dr. Berwick is forced to leave at the end of the year, some observers believe that Marilyn Tavenner, CMS second in command, would stand a good chance of moving into the top spot.

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