Vice President for Government Relations

Post-Election Transition. Between now and the inauguration on January 16th, Governor-Elect Bob McDonnell will be assembling staff members to coordinate the office transition efforts. The McDonnell Transition Team leaders were appointed at the end of last week:

Several staff members for McDonnell’s gubernatorial campaign have been appointed to the transition staff as well, with additional announcements expected shortly. One notable appointment is Eric Finkbeiner, a VCU graduate who serves as Senior Vice President and Director of Government Relations for McGuireWoods Consulting and who is tapped as the Director of Policy for the Transition Team.

Additionally, leaders of the Cuccinelli Transition Team were announced and include former Attorneys General Andrew P. Miller, a Democrat who served two terms under Republican governors Linwood Holton and Mills Godwin; Richard Cullen, a Republican who served under former Governor Gilmore; and ex-state GOP Chairman Patrick M. McSweeney.

Healthcare Reform. Democrats in the House of Representatives narrowly passed sweeping health care reform legislation Saturday night. HR 3962 passed 220 to 215 with 39 Democrats voting against the bill, and only one Republican supporting the bill. Virginia Democrats voting for the measure included Congressmen Bobby Scott, Tom Perriello, Jim Moran and Gerry Connolly. Congressmen Rick Boucher and Glenn Nye were the only Virginia Democrats to break rank with their party and join all five Virginia Republicans (Congressmen Rob Wittman, Randy Forbes, Robert Goodlatte, Eric Cantor and Frank Wolf) in voting against the legislation.

Due to the overwhelming time and attention given to passing healthcare reform legislation in the House, House Majority Leader Steny Hoyer released an updated House vote schedule on Wednesday. According to the calendar, lawmakers are scheduled to be in session until December 18th with votes scheduled for December 21st through December 23rd (if necessary).

With the House passage of healthcare reform legislation, attention is now directed toward the Senate, which is still waiting on the final cost analysis and coverage implications from the Congressional Budget Office (CBO). Senator Reid advanced the House healthcare bill to the Senate legislative calendar for next week, thereby allowing him to have the Senate bill skip the committee process and go straight to floor debate. The Senate needs 60 votes to start debate on the floor of this legislation. Reid stated on Tuesday that he expects to have a final bill to present to President Obama by the end of the year. To meet that deadline, there is a possibility that the Senate will have six-day workweeks in December and work the weekend before the Thanksgiving recess begins.

Medicare Physician Reimbursement. Next week, the House is scheduled to take up HR 3961, the “Medicare Physician Payment Reform Act of 2009.” The bill would eliminate the 21.2% reduction in Medicare physician payments that would take place on January 1, 2010.

On the Hill. Virginia Senator Mark Warner gave a speech on the Senate floor last week on coordinated care. He used the VCU Health System’s Coordinated Care Program as one of his examples of medical care emphasizing the quality rather than quantity care. The program assigns primary care physicians to the uninsured, which in turn reduces the number of costly emergency room visits as one of his examples.

State Highlights:
Joint Commission on Health Care (JCHC). The Joint Commission on Health Care held their Decision Matrix review meeting on November 11th to discuss studies conducted by JCHC staff and options for further action. Action was taken on several key studies by the Commission during the meeting including:

November Elections. Tuesday was Election Day in the Commonwealth of Virginia, with the statewide offices and all 100 seats in the House of Delegates up for election. The Republican Party swept all three of the statewide races, taking over control of the Governor’s Office from the Democrats and retaining control of the offices of Lieutenant Governor and Attorney General.
Governor:                      Bob McDonnell (R)
Lieutenant Governor:      Bill Bolling (R)
Attorney General:           Ken Cuccinelli (R)

Going into the election, Republicans held a 55 (including two Independents who caucus with the Republicans) to 45 majority in the House of Delegates. In the lead-up to the election there were 11 incumbents who retired or were defeated in primary contests. Coming out of the election, the Republicans had a net gain of at least 5 and potentially 6 additional seats. The Republicans flipped seven Democrat seats with the Democrats capturing two Republican seats. One seat is still in contention with a margin of 16 votes -- the 21st district in Virginia Beach between incumbent Bobby Mathieson (D) and challenger Ron Villanueva (R). Senior Republican Phil Hamilton (R-Newport News) was defeated. Delegate Hamilton was the chair of Health, Welfare and Institutions, vice chair of House Appropriations, the chair of the Health and Human Resources Subcommittee for House Appropriations, vice chair of the Joint Commission on Health Care, and a budget conferee. There will be 19 and possibly 20 new members in the 100-member House in January.

The Speaker will appoint the membership of committees in mid-January. Other than Delegate Hamilton, all committee chairs are expected to return to their leadership positions. The Republican gains will require the Speaker to slightly adjust the party representation on the committees. Currently the House rules dictate that there be, as close as practical, 13 Republicans and 9 Democrats on each standing committee. In January the ratio will change to 14:8.

In local election news, Cynthia Newbille was elected to Richmond City Council. She replaced Betty Squire who temporarily represented the district after Delores McQuinn resigned to take a seat in the House of Delegates. Newbille is expected to take the oath of office prior to the City Council meeting on Monday, November 9th.

H1N1 Update. The Virginia Department of Health (VDH) reported this week that the number of H1N1 deaths in Virginia has risen to 21. Local health officials are trying to distribute the H1N1 vaccine as quickly as possible and the vaccine will be available for the general public at pharmacies, healthcare provider offices and local health departments in mid-November. For a list of public vaccination sites and school vaccination sites, please go to the VDH website.

Healthcare Reform. According to House leaders, the House is tentatively scheduled to vote on healthcare reform legislation Saturday evening at 6:00 p.m. The Manager’s Amendment (a package of numerous individual amendments agreed to by both sides) was filed late Tuesday evening, giving House members at least 72 hours to study the legislation. The Rules Committee is scheduled to meet at 2:00 p.m. on Friday to determine the rules for the final health debate.

Prior to a final vote, an impasse among Democrats must be resolved. Anti-abortion Democrats want to amend the bill to strengthen its prohibitions against the use of federal funds for abortions and insiders state that they have 40 Democratic votes, enough to keep the healthcare reform bill from reaching the minimum of 218 votes needed to pass the legislation. Currently, federal law known as the Hyde Amendment prevents the federal funding of abortion.

On Tuesday, House Republicans released a substitute version of healthcare reform legislation. A summary of the bill outlines key elements including:

House Republicans will be allowed to offer their plan as an amendment to the Democratic bill when it is brought to the floor, though there is little to no chance of their bill passing.

On the Senate side, Senate Majority Leader Harry Reid is waiting to receive cost estimates from the Congressional Budget Office (CBO) on different variations of his bill, which will most likely not be completed until next week.

340B. Language extending the 340b pharmaceutical discount to an inpatient setting has been included in the Senate healthcare reform package but not in the current version of legislation in the House. At present, VCU only receives 340b drug discounts for outpatient services. If Congress voted to expand this discount to inpatient services, VCU could save approximately $8 million a year on pharmaceutical costs.

Medicare Physician Reimbursement. Late last week, House Democratic leaders from the Ways and Means Committee and the Energy and Commerce Committee introduced HR3961, a bill that would repeal the current system of paying physicians under Medicare. The “Medicare Physician Payment Reform Act” would repeal a 21% fee reduction scheduled for January 2010 and replace the physician payment formula with a more stable system. Under HR3961, the sustainable growth rate (SGR) formula would be replaced with a new formula.

On the Hill. A special election was held in New York for the United States House of Representatives with Bill Owens (D) winning the seat over Doug Hoffman (R). The seat was held by former GOP Rep. John McHugh, who resigned in September to serve as Secretary of the Army. The race received national attention when Republican Dede Scozzafava withdrew from the race and threw her support to Owens. Additionally, John Garamendi (D) won a special election in California to replace former Rep. Ellen Tauscher (D), who resigned to become Under Secretary of State for Arms Control and International Security. With the additional seat pick-up in New York for the Democrats, the 435 member House will now be composed of 258 Democrats and 177 Republicans.

State Council of Higher Education for Virginia (SCHEV). SCHEV hosted a meeting at the Virginia Commonwealth University Student Commons on Wednesday. Members of the Council were presented with several options concerning the additional funding needed in order to reach the FY2010 full base funding level for base adequacy. The Council adopted a resolution establishing student financial aid as the top priority for the 2010-12 budget. They are seeking an increase of $19.9 million for FY2011 and $38.8 million for FY2012 for in-state undergraduate students and an additional $17.7 million in financial aid for graduate students over the biennium. The agenda also included an overview of budget items for the 2010-2012 biennium budget, including capital outlay projects, and staff recommendations on faculty salary increases and financial aid assistance.

November Elections. The Commonwealth of Virginia is holding a general election on Tuesday, November 3rd. The statewide offices are up for election with the following candidates on the ballot:
Governor:                      Bob McDonnell (R) vs. Creigh Deeds (D)
Lieutenant Governor:      Bill Bolling (R) vs. Jody Wagner (D)
Attorney General:           Ken Cuccinelli (R) vs. Steve Shannon (D)

In addition to the statewide races, all 100 seats in the House of Delegates are up for election with 69 contested races and 31 uncontested races. Information on voting and polling locations and the candidates can be found on the Virginia State Board of Elections website.

Healthcare Reform. Senate leaders reached an agreement between the Finance Committee and the Health, Education, Labor and Pension (HELP) Committee bills and sent the merged legislation to the Congressional Budget Office (CBO) for scoring this week and expect to receive the report by early next week. Senate Majority Leader Harry Reid announced on Monday that he did include a public insurance option in the Senate healthcare bill that allows an opt-out provision for states. The opt-out provision would automatically enroll states into the public option plan unless the states choose to opt-out by 2014 (Virginia would need approval by both the General Assembly and Governor to opt-out).

However, the public option plan was dealt a blow on Tuesday when several centrist Senate members publicly commented that they would join Senate Republicans in blocking the bill. One potential solution is to replace the opt-out provision with a trigger option that allows a government run plan only if the private market fails to lower costs on their own. While a Congressional Budget Office cost report has not been completed, the CBO has estimated that a trigger option would save as much as $15 billion over the next decade while providing coverage to 6 million individuals. A second solution is to implement reconciliation, a procedural maneuver that requires only a simple majority to pass legislation in the Senate. With so much controversy surrounding the public option component as well as other contentious issues, it is widely believed that floor debate and votes in the Senate could be pushed back to January 2010.

On the House side, Speaker Nancy Pelosi and House leaders finished merging the Tri-Committee legislation and unveiled HR 3962, a $894 billion dollar healthcare package on Thursday. The “Affordable Health Care for America Act” expands health coverage to 96% of Americans and key components of the bill include:

The Congressional Budget Office released the HR 3962 preliminary cost analysis report on Friday and House members will be given 72 hours to read the legislation before a vote. If all goes as expected, the House should begin debating the bill at the end of next week.

House Appropriations Committee. At the House Appropriations Committee on Monday, members received the September Revenue Report by Secretary of Finance Ric Brown and a revenue and budget update. With total general fund revenue collections falling 7.5% in September 2009 compared with September 2008, the economic prognosis continues to look bleak in the Commonwealth. The economic and revenue outlook will serve as the basis for the Governor’s introduced budget bill for the 2010-2012 biennium that will be released on December 18th.

Senate Finance Committee. The Senate Finance Committee met on Thursday to receive the revenue report from Secretary Brown. In addition, a second presentation was given on the current use of stimulus funds in Virginia. Secretary Brown reported that the waiver to use FY11 higher education stimulus funding in FY10 was submitted on October 21st. In the event the waiver is not approved, there will be an additional $130 million shortfall for higher education institutions in FY10. The agenda also included a presentation on the Medicaid forecast by Pat Finnerty, Director of the Department of Medical Assistance Services.

State Council for Higher Education in Virginia (SCHEV). On October 27th, SCHEV will be hosting a meeting at the Virginia Commonwealth University Student Commons. The agenda includes an overview of budget items for the 2010-2012 biennium budget, including base adequacy funding, capital outlay projects, and staff recommendations on faculty salary increases and financial aid assistance.

H1N1 Update. Richmond area hospitals, including the VCU Medical Center, announced a new visitation policy in effect beginning Monday, October 26th to reduce the spread of seasonal and H1N1 flu. The plan limits hospital visitors to healthy adults aged 18 years and older and allows patients no more than two visitors at a time. The policy will remain in effect until the end of the 2009-2010 flu season, at least until March 2010.

Healthcare Reform. In the House, Speaker Nancy Pelosi met with the full Democratic Caucus on Tuesday to announce that the cost of healthcare reform legislation in the House has been reduced to $871 billion over the next 10 years, provided that it includes a public insurance option that reimburses at Medicare rates plus 5%. A few concerns are being voiced by House Democrats as they continue to merge the Tri-Committee legislation – including cost containment and reducing future impact on the federal budget, relaxing health insurance requirements on individuals and small businesses and strengthening pre-existing abortion bans. House leaders are working on lining up the necessary 218 votes over the next few weeks and expect legislation to be brought to the House floor in early November.

On the Senate side, leaders continue to work together to merge the proposals passed by the Senate Finance Committee and the Senate Health, Education, Labor and Pensions (HELP) Committee.

Medicare Physician Reimbursement. The Senate procedural vote of cloture on S.1776 “The Medicare Physician Fairness Act of 2009” failed 47 to 53 this week, leaving the legislation stalled in the Senate. The measure would update the Medicare physician reimbursement schedule by repealing the sustainable growth rate formula (SGR) and scheduled payment cuts. S.1776 faced opposition from both Republicans and conservative Democrats due to it adding $247 billion over 10 years to the federal deficit. Both of the Virginia senators, Mark Warner and Jim Webb, voted against the measure. Sources have indicated that Senator Kent Conrad, Chair of the Budget Committee and Senator Charles Grassley are working on amending S.1776 to pay for the expected cuts.

Health IT Advisory Commission. Governor Kaine announced the creation of a Health Information Technology Advisory Commission on Tuesday as part of Executive Order 95 which was signed into effect at the end of last week. The Commission is responsible for providing guidance to the Governor on the most effective use of American Recovery and Reinvestment Act (ARRA) health information technology funds. Dr. Alistair Erskine, Chief Medical Information Officer at the VCU Health System, was one of the gubernatorial appointees to the Commission.

Joint Legislative Audit and Review Commission (JLARC). At the JLARC meeting on Wednesday, the Commission announced the 2010 proposed study topics, including a study on Cost Efficiency at State Colleges and Universities. The study would examine duplication and productivity of degree programs, average class sizes and faculty work loads, online and distance learning courses, remedial courses, utilization of classrooms and laboratories, consolidation of administrative functions and outsourcing non-academic services.

Senate Finance Education Subcommittee. The Senate Finance Education Subcommittee met on Friday. The higher education discussions centered on enrollment growth at Virginia colleges and universities and a review of financial aid programs in Virginia.

Senate Finance and House Appropriations Staff. On Wednesday, staff members from the Senate Finance Committee and House Appropriations Committee were on the medical campus to tour the Critical Care Hospital and the Molecular Medicine Research Building.

Healthcare Reform. On Tuesday, the Senate Finance Committee voted 14 to 9 to advance healthcare reform legislation. Senator Olympia Snow was the only Republican to vote for the measure. Over the next few weeks, Senate leadership will combine the Senate Finance Committee legislation with the legislation passed in July by the Senate Health, Education, Labor and Pensions (HELP) Committee in hopes of creating a single bill that can win at least 60 votes in the Senate. The combined bill is expected to be on the floor of the Senate in the next two weeks, and floor debate will run several weeks with a goal of voting before the Thanksgiving recess.

On the House side, House leadership is actively working to combine the Tri-Committee legislation passed by the House Ways and Means, Energy and Commerce, and Education and Labor Committees. Like the Senate, the legislation is expected to be on the House floor within the next two weeks, but it is anticipated that floor debate will only last one day.

Committee	Senate Finance Committee	Senate HELP Committee	House Tri-Committee (as introduced)
Proposal Name	America’s Healthy Future Act of 2009	Affordable Health Choices Act	America’s Affordable Health Choices Act
Cost	$829 billion over 10 years	$645 billion over 10 years	$1.05 trillion over 10 years
Coverage	94% of all Americans; Illegal immigrants would not receive government benefits.	Aims to cover 97% of Americans.	Approximately 94% of residents under age 65 would be covered.
Government Run Public Option	None.	Yes. Creates a government run public plan to compete with private insurers. The plan would negotiate payment rates with providers.	Yes. Creates a new public plan through insurance exchanges run by the Secretary of Health and Human Services.
Individual Mandate	Requires U.S. citizens and legal residents to have coverage through an employer, on their own or through a government plan. Creates state-based Health Insurance Exchanges (HIE) where individuals can purchase coverage, with premium and cost-sharing credits available to Individuals and families meeting income restrictions.	Individuals are required to have insurance. Creates state-based American Health Benefit Gateways through which individuals and small businesses can purchase health coverage. Subsidies will be available to qualifying individuals and families meeting income restrictions.	Requires all individuals to have health insurance. Creates a Health Insurance Exchange (HIE) through which individuals and smaller employers can purchase health coverage, with premium and cost-sharing credits available to qualifying individuals meeting income restrictions.
Medicaid Changes	Beginning 2014 expands Medicaid to 133% FPL and CHIP eligibility to all children up to 250% FPL.	Expands Medicaid to all individuals with incomes up to 150% FPL.	Beginning 2013 expands Medicaid for the non-elderly up to 133% FPL; provides premium and cost-sharing credits to purchase coverage in new HIE to individuals and families with incomes up to 400% FPL.

Medicare Physician Reimbursement. On Monday, Senator Debbie Stabenow introduced S.1776, which would update the physician fee schedule beginning 2010. The legislation is intended to mitigate the impact of reimbursement cuts, including a 21.5% reduction, by repealing the sustainable growth rate formula. Senate Democratic leaders bypassed the committee process on Tuesday, allowing the legislation to be sent directly to the Senate floor with a vote occurring as early as next week.

Modeling and Simulation Conference. Senator Mark Warner hosted the Virginia Summit on Modeling and Simulation in Virginia Beach on Tuesday. Joining Senator Warner were Aneesh Chopra, U.S. Chief Technology Officer, and General James Mattis, Commander of the U.S. Joint Forces Command. Dr. Ellen Brock, Director of the VCU Center for Human Simulation and Patient Safety, sat on one of the conference panels.

Joint Commission on Health Care (JCHC). The Joint Commission on Health Care met on October 7th to discuss studies currently being conducted by JCHC staff. Highlights from the meeting include:

After the full JCHC committee meeting, the Behavioral Health Care Subcommittee met in the afternoon. The agenda for the subcommittee meeting included an update on the Commission on Mental Health Law Reform, a Mental Health First Aid initiative, and the development of a comprehensive plan for behavioral health services for children, adolescents and their families.

The presentations to the full JCHC committee can be found here and presentations to the Behavioral Health Care Subcommittee can be found here.

Healthcare Reform. The Senate Finance Committee delayed the vote scheduled for this past Tuesday on healthcare reform legislation due to the Congressional Budget Office (CBO) needing additional time to “score” (provide updated cost and revenue estimates) the legislation. Late on Wednesday, the CBO released the revised estimates, predicting that the Senate Finance Committee healthcare reform package, as amended, would cost $829 billion over 10 years and provide coverage to 94% of Americans (excluding illegal residents) and 91% of all United States residents.

The amended legislation meets President Obama’s target of keeping the cost of healthcare reform under $900 billion and would lower the deficit by $81 billion due to new revenue and spending cuts. However, there is concern by hospital groups, particularly the Federation of American Hospitals, that the 94% coverage is not sufficient and that the hospital cost-cutting agreement was based on 94% coverage of all residents and 97% coverage excluding illegal immigrants.

Senate Majority Leader Harry Reid indicated in a floor speech on Thursday that the Finance Committee will vote on its healthcare bill next Tuesday morning.

After the Senate Finance Committee votes on its measure, the Democratic leadership in the House and Senate will each work to create a proposal for floor debate in their respective chambers. The House requires 218 (out of 435) votes while the Senate needs 60 votes (to avoid a filibuster) to pass healthcare reform legislation. This week, the Congressional Progressive Caucus informed House Democrats that the group had 208 of the 218 votes needed, though this number remains unconfirmed.

Once both the House and Senate pass their respective versions of the legislation, a conference committee would negotiate a final version to be approved by both chambers before going before President Obama for his signature.

On Monday at the White House, President Obama was joined by doctors from all 50 states to continue to push for healthcare reform legislation. He spoke about features of the plans including capping patient costs, creating an open marketplace for health plans and requiring insurance companies to cover preventative health costs. A copy of the President’s remarks can be seen here.

Medicare Part B. On Wednesday, the Senate blocked a unanimous consent request from the House to approve a bill eliminating all Medicare Part B premium increases (Medicare Part B pays for doctor visits for senior citizens). HR 3631, the “Medicare Premium Fairness Act,” passed the House by a vote of 406 to 18 on September 24th and is necessary due to the impact of deflation and no Social Security cost-of-living adjustment scheduled for next year. Most Medicare beneficiaries have their premiums deducted from their Social Security payments and without Congressional action, an estimated 12 million people (27% of Medicare beneficiaries) would face monthly premium increases of $8 to $23 above the standard monthly premium of $96.40.

VCUHS Briefing. On Wednesday, the Office hosted the annual briefing on the fiscal and operating conditions of the VCU Health System at the Molecular Medicine Research Building on the medical campus. The briefing was attended by members of the Governor’s Cabinet, budget committee staff, representatives from key agencies, and staff from the University and Health System. This event presents the opportunity to provide insight regarding the financial condition of the VCU Health System and to discuss funding requirements for meeting our indigent care mission.

Joint Commission on Health Care (JCHC). Mark Smith, along with Dr. Gordon Ginder and Dr. John Roberts of the Massey Cancer Center and Massey Cancer Center Advisory Board members George Emerson and Judy Turbeville, were appointed to the Joint Commission on Health Care SJR 292 Task Force. The resolution directs that a study of cancer research funding in Virginia be conducted to include examining the sufficiency of current funding sources for both the Massey Cancer Center and the University of Virginia Cancer Center, review the history and successes of cancer research at each center, explore benefits to the Commonwealth of expanding state support of both centers, and research additional funding opportunities for both centers.

The Task Force met on September 29th with representatives from the Massey Cancer Center, UVA, health non-profits, and cancer survivors. The JCHC staff will develop a plan for outlining the Task Force’s work over the next year. The final report with findings and recommendations will be completed by November 2010.

Grow By Degrees. The Grow By Degrees campaign hosted the “Virginia Summit on Economic Competitiveness and Higher Education” on Thursday. Both the Democratic (Creigh Deeds) and Republican (Bob McDonnell) candidates for Governor spoke about higher education initiatives and challenges in Virginia. In addition, Governor Kaine, former Virginia Governors Gerald Baliles and George Allen, and former Governors Robert L. Ehrlich of Maryland and Michael F. Easley of North Carolina participated in the summit.

H1N1 Update. Governor Kaine and Dr. Karen Remley, the Commissioner of Health, are hosting a press conference at the Critical Care Hospital on the MCV Campus on October 5th to announce Virginia’s “H1N1 Get One” vaccination campaign. Vaccinations will be available as early as next week and it is recommended by the Centers for Disease Control and Prevention that high risk groups such as pregnant women, young children and their caregivers and adults with pre-existing health concerns receive the vaccination.

Healthcare Reform. The Senate Finance Committee on Tuesday rejected two amendments to include a government run public health insurance option with votes of 15 to 8 and 13 to 10. The amendments were opposed by all 10 Republicans on the committee and several Democrats. Democratic proposals passed by the Senate Health, Education, Labor and Pensions (HELP) Committee and three House committees all include the public insurance option. Senate Finance is finished its mark-up early Friday morning. A vote on the bill from the full committee is expected next week after further evaluation by the Congressional Budget Office (CBO) is completed. The bill will then be merged with the legislation passed by the Senate HELP Committee. Senate leaders are hopeful that full Senate debate will occur in mid to late October, and it has been speculated on the Hill that the Senate may forgo the Columbus Day recess week in order to continue advancing health care reform legislation to the Senate floor.

Democratic leaders in both the House and the Senate are emphasizing the need for floor votes this fall. House Democratic leaders planned a series of meetings beginning Tuesday in order to merge the three versions of health care legislation passed out of House committees. Additionally, the House leaders hope to reduce the overall cost of the House proposals by $200 billion, to bring the total amount under $900 billion over the next 10 years – in line with the Senate bills.

NIH Funding. President Obama announced on Wednesday that the National Institutes of Health (NIH) is set to receive an additional $5 billion in research grants as part of the American Recovery and Reinvestment Act of 2009 (ARRA). The funding is expected to support 12,000 research projects and tens of thousands of jobs, primarily in the fields of heart disease, autism, HIV/AIDS, H1N1 swine flu and cancer.

HR 3221. The “Student Aid and Fiscal Responsibility Act” was passed by the House last week. It was expected that the Senate version of the bill would be introduced this week; however, reports from Washington indicate that the legislation will be delayed for at least a week.

Medicaid Prescription Drug Abuse. The Government Accountability Office (GAO) reported earlier in the month that an audit of five large states in fiscal years 2006 and 2007 discovered there were at least 65,000 instances of improper Medicaid prescription drug abuse, at a cost of $65 million. The states that were audited include California, Illinois, New York, North Carolina and Texas, and accounted for 40% of the Medicaid prescription drug payments at the time. A hearing was held by Senator Thomas Carper and his subcommittee on Federal Financial Management, Government Information, Federal Services and International Security on Wednesday to go over the report findings. The full “Medicaid: Fraud and Abuse Relating to Controlled Substances Identified in Selected States” report can be seen in its entirety here.

Modeling and Simulation Conference. Senator Warner will be hosting the Virginia Summit on Modeling and Simulation on October 13th in Virginia Beach. The summit will discuss the application of modeling and simulation techniques to defense, education, and health care. Dr. Ellen Brock, Medical Director at the VCU Center for Human Simulation, is one of the panel participants.

Healthcare Reform. The Senate Finance Committee began the final mark-up of its healthcare reform bill this week. The bill is expected to cost $774 billion over the next decade. The debate continues on how to pay for this, and we are carefully monitoring the impact of the proposal on safety net hospitals. More than seven hundred amendments to the bill have already been proposed, with Republicans seeking to change or eliminate the proposed $500 billion in Medicare changes, the fine imposed on Americans without health insurance, and the new industry fees that Republicans fear will be passed on to consumers. Democrats, on the other hand, are primarily interested in expanding subsidies.

As for the House Tri-Committee bill, the House Energy and Commerce Committee continued their mark-up this week. Speaker Nancy Pelosi is hoping to consolidate the three different committee versions of this legislation and advance it to the floor in mid-October. Again, the point of contention revolves around the public option.

On Monday, Congressmen Eric Cantor and Bobby Scott co-hosted a discussion on healthcare reform at the Richmond Times-Dispatch downtown office, drawing a maximum capacity crowd of 225 people for the event.

Senator Warner joined nine other freshman Senators on the Senate floor on Wednesday to discuss the cost of inaction for healthcare reform. You can find his remarks here.

On the Hill. The House of Representatives passed HR 3221, The Student Aid and Fiscal Responsibility Act of 2009. The bill terminates the Federal Family Education Loan (FFEL) program, eliminates student loan subsidies for financial institutions, and converts all new federal student lending to the Direct Loan program. The Congressional Budget Office has estimated the elimination of these subsidies will save $87 billion from FY2010 through FY2019.

Sheldon Retchin, Don Gehring, Dom Puleo and Sheryl Garland attended a meeting of the National Association of Public Hospitals and Health Systems (NAPH) this week to learn more about healthcare reform and the implications for safety net hospitals. Sheryl Garland and Anna Healy James visited with the offices of Senators Warner and Webb and Congressman Cantor on Wednesday to discuss the challenges safety net hospitals face and perspectives on the national reform effort. Anna Healy James met with other hospital government relations representatives at a meeting conducted by the American Hospital Association.

Budget Update. The Secretary of Finance, Ric Brown, addressed the State Council of Higher Education for Virginia (SCHEV) on Tuesday and answered questions regarding Governor Kaine’s 8% cut to higher education totaling $105.2 million.

On Thursday, Secretary Brown presented on the Governor’s budget cuts at the Senate Finance Committee meeting. In addition, he made the following points about the economy in Virginia:

Emergency Department Study. The Crime Commission met on Wednesday to discuss a preliminary report on violence in hospital emergency department (ED) and other issues. The report highlighted some of the issues in the ED including overcrowding, personnel shortages, as well as included best practices from around the state for reducing ED violence. The Commission decided not to pursue further study or a final report of this issue.

Healthcare Reform. The chairman of the Senate Finance Committee, Max Baucus, unveiled a 220-page healthcare reform proposal on Wednesday. The "America's Healthy Future Act of 2009" proposal would cost $856 billion over the next decade and would include the following:

The Senate Finance Committee will begin discussions on the Chairman’s mark this Tuesday.

American Recovery and Reinvestment Act (ARRA) funding for healthcare-associated infections. Governor Kaine announced today that Virginia has received a $1,063,554 grant to decrease the occurrence of healthcare-associated infections. The Commonwealth will collaborate with the Virginia Hospital & Healthcare Association (VHHA), the Virginia Health Quality Center and the Virginia Chapter of the Association for Professionals in Infection Control and Epidemiology in how to distribute and utilize these funds efficiently.

H1N1 Update. The Food and Drug Administration approved the new swine flu vaccine Tuesday and approximately 45 million doses are expected by mid-October. FDA licensure means that the government has certified the vaccine is made properly and meets specific manufacturing and quality standards.

In other H1N1 news, Virginia Commonwealth University Medical Center is holding trials for the H1N1 virus for children between 3 and 8 years old and adults 65 and older.

Budget Reduction. Governor Kaine announced his executive spending reduction plan earlier this week to address the FY2010 $1.35 billion revenue shortfall. The Governor's plan calls for Virginia Commonwealth University to reduce its overall budget by 15%, resulting in a General Fund reduction of $25,166,106. Fortunately, federal stimulus funds will offset some of the reduction, translating into a net reduction of approximately $13.4 million or 8%. The plan also calls for a reduction in funding for indigent care services paid to the VCU Health System by three percent in FY2010 (totaling $4.3 million). In addition, Governor Kaine announced a one day furlough that applies to all state employees, including higher education, to be taken on May 28, 2010. A video of the Governor's press conference can be seen here, and the budget reduction plan can be seen in its entirety here.

Healthcare Reform. Congress returned from the August recess this week and is once more taking up the issue of healthcare reform. During the recess, Congressional members across the country hosted healthcare reform town hall meetings in their districts, meetings that were highly attended and contentious at times.

The Chairman of the Senate Finance Committee, Max Baucus (D-Mont) revealed his bipartisan healthcare proposal on Wednesday. Two highlights of the bill that would potentially cause concern for Republicans include new taxes on high end insurance plans and the creation of nonprofit insurance cooperatives as alternatives to a government run public plan. Other items in the proposal which could positively or negatively affect VCUHS include:

Also on Wednesday, President Obama addressed a joint session of Congress to urge for the passage of healthcare reform legislation. In his speech, the President offered an outline for reform measures, including an individual health insurance mandate, requiring businesses to offer healthcare coverage to workers or contribute towards the cost of obtaining coverage, and defending his proposal for a government-run public health insurance option. The President's remarks can be seen or a transcript read online at the White House website. The full Obama Plan referenced in his remarks can be seen here.

Poison Center Grant. The Health Resources and Services Administration (HRSA) announced this week that the Virginia Poison Center at Virginia Commonwealth University is the recipient of a $246,907 grant to support the work of the center. The grant will help the center with core services, including providing treatment to Virginia residents, complying with certification requirements, and conducting evaluations of poison prevention strategies and other public education campaigns.

VCU is staying actively engaged on the topic of healthcare reform. Over the next couple of weeks, our office will be attending meetings in DC organized by the Association of American Medical Colleges (AAMC), the National Association of Public Hospital and Health Systems (NAPH) and the American Hospital Association (AHA). In addition, we will be visiting our Virginia Congressional Delegation and their staff to talk about the impact of healthcare reform on VCU.

Joint Commission on Health Care (JCHC). The Joint Commission on Health Care met on September 1st to discuss studies currently being conducted by JCHC staff. The agenda included an update on present and future needs of Virginia's healthcare workforce, opportunities for early identification and preventive care of chronic diseases, culture change in long-term care facilities, and a report on services for Virginians with autism spectrum disorder. Additionally, the Healthy Living/Health Service Subcommittee met as well. The agenda for the subcommittee meeting included healthcare access for uninsured Virginians and an overview of air medical services and medical helicopter operations in Virginia. The presentations to the full JCHC committee can be found here and presentations to the Healthy Living/Healthy Services Subcommittee can be found here.

H1N1 Update. The Commonwealth of Virginia has formulated an H1N1 action plan in an effort to protect Virginians. The plan includes immunization efforts by the Virginia Department of Health among susceptible groups when the H1N1 vaccine is received in October. Governor Kaine has stated that a strong partnership between state agencies and school systems is vital to protect the health of students, faculty and staff from the H1N1 influenza virus. To see the Governor's press release and for recommended actions to protect against the H1N1 virus, go here.

Transportation Safety Grants Awarded. It was announced this week that Virginia Commonwealth University is the recipient of five transportation safety grants totaling $418,935.30:

Health Care Reform. Both Senator Mark Warner and Congressman Bobby Scott hosted healthcare reform town hall meetings on Thursday. In addition, several area healthcare reform rallies were held in Richmond this week by the Democratic National Committee grassroots organization, Organizing for America and Move-On.org.

As the recess draws to an end, questions continue surrounding the ability of Congress to pass healthcare reform legislation. The support of the fiscally conservative Blue Dog Coalition will be imperative to passing legislation in the House. Several legislators in the group have recently expressed reluctance about supporting the public insurance option and overall price tag of healthcare reform proposals.

President Obama will address a joint session of Congress on Wednesday, September 9th regarding healthcare reform.

Federal Budget. Senior Senators speculated this week that Congress will not pass all 12 spending bills before the end of the fiscal year on September 30th. The House has passed all of its appropriations bills, but the Senate has only approved four at this time. The Senate Labor-HHS appropriations legislation has not been heard. The appropriations bills will need to be reconciled in a House-Senate conference after the Senate approves the measures. Should Congress not pass the appropriations bills before October 1st, a continuing resolution will need to be passed to fund government operations.

Healthcare Reform. Senator Ted Kennedy, chief architect of the Health, Education, Labor and Pensions (HELP) committee’s health reform bill, passed away this past week at the age of 77. Senator Chris Dodd, who has been interim chair of the committee in Kennedy’s absence, is still debating if he should relinquish his chairmanship of the Senate Banking Committee to assume this post on a permanent basis.

President Obama’s health advisors held an hour long conference call Tuesday night with close to 3,000 physicians and officials of the American Medical Association (AMA). The discussion revolved around Obama’s healthcare plan and the need for physician advocacy and involvement.

Congressman Bobby Scott will be hosting several town hall forums on healthcare reform, including one in Richmond at the General Assembly Building Senate Room A on Thursday, September 3rd at 7:00 p.m. Additionally, Congressman Rob Wittman and Congressman Tom Perriello are hosting several town hall forums over the next few weeks as well.

Other Hill News. The White House released new budget projections on Tuesday, showing the total 10-year projected deficit will now total $9.05 trillion, $2 trillion more than predicted in February. White House budget director, Peter Orszag, blamed rising healthcare costs, especially as it relates to Medicaid and Medicare, for this sudden increase in the deficit. This new budget projection could have a serious impact on current healthcare reform negotiations.

Children with Disabilities Grants Awarded. Governor Kaine announced Friday that the American Recovery and Reinvestment Act of 2009 appropriated more than $10 million for Virginia's Early Intervention Program under Part C of the Individuals with Disabilities Education Act (IDEA). Funding was awarded to a number of programs including $336,568 for Virginia Commonwealth University's Richmond Infant Council. For more details see the Governor's press release.

Medical Complex Study. Five members of Richmond City Council announced on Monday that they are drafting a resolution to be presented in September to Mayor Jones and to the entire Council seeking establishment of a Shockoe Bottom Medical Complex Exploratory Commission. The Commission would be responsible for studying the feasibility of creating a medical, research, education and hospital complex.

Virginia General Assembly. On Wednesday, Governor Kaine provided a revenue forecast update to members of the Joint Money Committees. The Commonwealth ended fiscal year 2009 $298.8 million below the official revenue forecast. For fiscal year 2010, total general fund revenues are projected to decline by 1.6 percent (bringing projected revenues down by nearly $1.2 billion), marking the first time on record that general fund revenues are projected to decline for two consecutive years, This would leave a revenue gap of approximately $1.5 million for the remainder of the fiscal year. The Governor directed executive agencies in July to prepare budget reduction plans at the 5, 10 and 15 percent levels and will announce and implement budget decisions in early September. For more details, see the Governor's press release and the presentation given to the Joint Money Committees.

Through the efforts of VHHA, John Duval, Don Gehring and Mark Smith, among others, met with all six statewide candidates. The discussion allowed the candidates for Governor, Lt. Governor, and Attorney General to discuss their positions on COPN, medical malpractice, right to work law (card check) and Medicaid funding.

Healthcare Reform. President Obama and Secretary of Health and Human Services Sebelius have both publicly stated that they think the public plan should still be considered but the healthcare reform legislation doesn’t need to be based on that one concept. Obama said that his priorities are that the final legislation does not increase the deficit, controls costs, creates an insurance exchange and prevents health plans from denying coverage because of pre-qualified conditions.

Members of Congress have scheduled town hall meetings around the state to discuss the current healthcare reform proposals. At this time, none have been scheduled in Richmond.

Cantor Job Fair. On Monday, Congressman Cantor hosted a job fair in Chesterfield County where attendees had the opportunity to meet with area businesses, including the VCU Health System, and participate in breakout seminars discussing resume writing, interviewing skills, job searches, and accessing unemployment benefits.

The Virginia Congressional Delegation members have returned to their home districts for the August recess and most plan on hosting a series of town hall meetings on health care reform over the next few weeks. While no Richmond area dates have been announced at this time, Congressman Bobby Scott and Senator Mark Warner plan to schedule meetings later this month. Congressman Cantor plans to conduct a series of telephone town hall meetings in the fall.

In an effort to address the many rumors associated with health care reform, the White House has developed a website with video clips that offer a "Reality Check" and a link to Frequently Asked Questions (FAQ).

Joint Commission on Health Care. The Joint Commission on Health Care (JCHC) subcommittees met on Wednesday. The Behavioral Health Care subcommittee discussed the Geriatric Mental Health Planning Partnership and gave an overview of the effect of federal legislation requiring parity for mental health and substance abuse health benefits. The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) becomes effective for plan years on or after October 3, 2009 and are applicable to large employer groups only. The legislation requires that a group health plan that provides both medical/surgical benefits and mental health/substance use disorder benefits cannot be more restrictive nor have more financial requirements for mental health services than for medical/surgical benefits. This potentially conflicts with two code sections in Virginia (38.2-3412.1 and 38.2-3412.1:01) and will need to be resolved by the Virginia General Assembly.

The Healthy Living/Health Services subcommittee agenda included an update on the Trauma Center Fund, an overview on childhood obesity, a discussion on HIV/AIDS in Virginia, infant mortality, and Virginia's State Rural Health Plan. To view more information about the subcommittee meetings, including presentations given to the Commission at the meeting, please go to the JCHC website (Behavioral Health Care subcommittee and Healthy Living/Healthy Services subcommittee).

Virginia General Assembly. On Wednesday, August 19, the General Assembly will be in Richmond for the Governor's annual August budget presentation to the General Assembly's Joint Money Committees (House Appropriations, House Finance and Senate Finance). In addition, Governor Kaine called for a special session in the afternoon to focus solely on the required law changes needed for the Commonwealth to be in compliance with the United States Supreme Court ruling in Melendez-Diaz v. Massachusetts, which pertains to criminal evidence.

Trauma Grants Awarded. Governor Kaine announced Thursday that eight organizations received a total of $2.8 million in grant funding to expand and improve community-based programs and services that address the needs of people with traumatic brain and spinal cord injuries and their families. Funding was awarded to a number of programs including $445,000 for Virginia Commonwealth University's Rehabilitation Research and Training Center. For more details see the Governor's press release.

Governor's Campus Preparedness Conference. Virginia Commonwealth University hosted the third annual Governor's Campus Preparedness Conference at the Student Commons on Monday. Hosted annually at VCU since 2007, the day-long conference brought together teams from Virginia’s two- and four-year degree granting public and private colleges and universities to focus on all hazard preparedness. Along with Governor Kaine, attendees included Congressman Bobby Scott; Robert P. Crouch, Jr., Assistant to the Governor for Commonwealth Preparedness; and Virginia Secretary of Education Thomas R. Morris.

Infant Mortality Rate. Governor Kaine announced on Tuesday that Virginia's infant mortality rate has decreased from 7.7 deaths per 1,000 live births in 2007 to 6.7 deaths in 2008, which is the lowest level in the Commonwealth's history. While the infant mortality rate has declined over the past few years, the state-wide rate remains higher than the national average.

The House is currently in recess and the Senate plans to recess on Friday, August 7th or Saturday, August 8th. Both Houses will return after the Labor Day holiday.

Capital Indirect Medical Education. It was announced this week that the Centers for Medicare and Medicaid Services (CMS) will be restoring the $1.5 million cut to Capital Indirect Graduate Medical Education (IME) in FY2010 (starting October 1). CMS released the final Inpatient Prospective Payment Systems (IPPS) rule this past week. Originally, the proposed rule included the 100% reduction to this fund. VCU has worked with our Congressional delegation as well as CMS on this issue over the past two years.

Health Care Reform. The bipartisan negotiators from the Senate Finance Committee known as the "Gang of Six" have been holding daily negotiating sessions to advance health care legislation. Senate Finance Committee Chairman Max Baucus (D-Mont.) has set a deadline of mid-September for negotiating a bipartisan deal, while Senate Majority Whip Dick Durbin (D-Ill.) and Senator Chuck Schumer (D-NY) have endorsed a firm deadline of September 15th.

When Congress reconvenes in September, the House will have to reconcile all health care reform legislation into one uniform bill, and the Senate will need to reconcile the two Senate bills into one bill.

It was recently announced by the United States Census Bureau that the highest percentages of Virginians lacking health insurance are those living in college towns. Virginia had 1,034,424 people (15.5 percent of the population) without health insurance in 2006, the most recently available data.

On the Hill. On Monday, Senator Jim Webb was joined by President Obama, Vice President Biden, Secretary of Veterans Affairs General Eric Shinseki, and former Senator John Warner at George Mason University in honor of Webb's "Post-9/11 GI Bill" which took effect on August 1st. The bill offers comprehensive education benefits to veterans of the Iraq and Afghanistan wars. To learn more about the Post-9/11 GI Bill, please visit the GI Bill website of the Department of Veterans Affairs.

The U.S. House of Representatives will be in recess starting Monday, August 3rd while the Senate still has one more week of business. Both houses will be returning after Labor Day on September 8th.

Healthcare Reform. Senator Max Baucus, Chair of the Senate Finance Committee, announced on Thursday that the Committee’s health reform bill will not be ready until after the recess. Several Senators from both parties felt the process was moving too fast and are striving for a bipartisan bill. Negotiations on bill language will take place over the August recess, and the Committee hopes to vote on the mutually-agreed upon legislation when they return in early September.

Senator Mark Warner (D-VA), along with eight other freshman Senators, sent Senator Max Baucus a letter commending the efforts of Baucus and the committee members in achieving bipartisan support for healthcare reform legislation and to emphasize the continued need to focus on cost reduction and expanded coverage in healthcare reform legislation. To view a copy of the letter sent by Senator Warner and his colleagues, please click here.

The House Energy and Commerce Committee struck a deal late last night which will allow them to vote on the House Healthcare Reform Bill today. This committee is the last of the three House committees to consider this bill before it goes to the floor in early September. The final agreement between the leadership and the Blue Dog Democrats on the committee does include a change to the public plan language. Instead of the public plans reimbursing at Medicare rates, these plans would need to negotiate fair rates with providers.

President Obama hosted a town-hall meeting in Bristol, Virginia on Wednesday to discuss healthcare reform with employees at a Kroger grocery store. In addition, the First Lady was in Bowling Green, Virginia this week for the opening of a community health center built with a $1.3 million grant from the stimulus package.

Federal Budget. It was announced this week that the VCU Health System was awarded $48,824 in ARRA funds to develop community-based, competitive employment opportunities for individuals with Asperger's syndrome and other Autism Spectrum Disorders (ASD).
On the Hill. This week, the Secretary of Health and Human Services, Kathleen Sebelius, announced $200 million in grants to expand the training of health care professionals. The funds are expected to train approximately 8,000 students and credentialed health professionals by the end of fiscal year 2010 and are distributed as follows:
· $80.2 million for scholarships, loans, and loan repayment awards
· $47.6 million for primary care training programs
· $50 million in grants to health professions training programs for equipment
· $10.2 million to increase health professions diversity
· $10.5 million to strengthen the public health workforce
· $1.5 million to support the efforts of state professional licensing boards in reducing telemedicine barriers

On the Hill. On Tuesday, Senators Amy Klobuchar (D-MN) and Mel Martinez (R-FL) introduced legislation to help stop fraud in the United States healthcare system. The "Improving Medicare/Medicaid Payment Policy for Reimbursement through Oversight and Efficiency" (IMPROVE) Act would require direct depositing of all Medicare and Medicaid payments made to providers. The legislation is sponsored in the House by Representatives Patrick Murphy (D-PA) and Mike Arcuri (D-NY).

Statewide Races. This Saturday at 11:00 am, the Virginia Trial Lawyers will host the first gubernatorial candidate debate between former Attorney General Bob McDonnell and State Senator Creigh Deeds at the Homestead in Hot Springs. If you would like to watch the debate, VirginiaTalks.com will be broadcasting live.

State Medical Facilities Plan. The State Medical Facilities Plan (SMFP) Task Force met on July 22nd. Darrell Johnson represents the VCU Health System on the Task Force. SMFP regulations promulgated by the Virginia Department of Health set out the methodologies for projecting the need for medical care facility beds and services. The SMFP provides specific procedures and criteria for review of applications for projects for medical care facilities and services. The issuance of a Certificate of Public Need (COPN) must be consistent with the provisions of SMFP. In response to complaints from the medical community that the regulations had not been updated in nearly 15 years, the General Assembly created an on-going Task Force in 2008 to meet regularly to review and make recommendations on necessary modifications to the SMFP. During the meeting this week, the Task Force discussed findings from four subcommittees: Radiation Therapy, Evolving Technologies, Rehabilitation, and Inpatient Beds. There were no controversial issues raised. The next meeting is scheduled for November 18th.

Budget Requests. The House passed the Labor-Health and Human Services Appropriations bill today with a vote of 264 Yeas – 153 Nays and 16 No Votes. $600,000 for Massey Cancer Center was included in this bill thanks to the support of Congressmen Scott and Wittman. The Senate Labor-Health and Human Services-Education Appropriations Subcommittee is scheduled to mark up its version of the bill on Tuesday, July 28.

Health Care Reform. Health care reform remains stalled in the House Energy and Commerce Committee due to contention between the Democratic leadership and a group of fiscally conservative Democrats known as the Blue Dog Coalition. The bill has already been approved by the House Ways and Means Committee as well as Education and Labor. On the Senate side, the Senate Finance Committee is still working out the details of their health care reform legislation. Senate Majority Leader Harry Reid stated on Thursday that a vote on health care reform in the Senate will not happen until after the August recess. House Speaker Nancy Pelosi concurred with Senator Reid about postponing action on the bill until September.

As reported last week, the Congressional Budget Office (CBO) estimated the House Tri-Committee Health Reform Bill would cost $1 trillion over a ten year span, resulting in a net increase in deficit spending of $239 billion during that time. After pressure from the House, this week the CBO re-evaluated the bill and found that it is now budget neutral.

Both federal and state Virginia lawmakers have recently weighed in on health care reform. House of Delegates member Jennifer McClellan addressed the need for health care reform at a press conference at the Fan Free Clinic. Delegate McClellan, along with volunteers and Obama supporters across the country, began a nationwide grassroots push for congressional action. Additional information on the event can be found here. Meanwhile, Senator Mark Warner believes that health care reform is too focused on increasing access to health coverage and not enough attention has been given to driving costs down. Additional comments on health care reform by Senator Mark Warner, Senator Jim Webb and Congressman Bob Goodlatte can be seen here.

On the Hill. Representative Allyson Schwartz (D-Pa.) introduced legislation (H.R. 3134) to establish pilot Health Care Innovation Zones (HIZs). The HIZs would include an academic medical center—a medical school, faculty physicians, and teaching hospitals—and community partners that provide the full spectrum of health care. Within the zones, alternative payment structures rewarding quality and outcomes would be promoted. The legislation creates and tests these zones around the country with the goal of improving patient outcomes, while slowing the growth of health care costs.

On Tuesday, The Student Aid and Fiscal Responsibility Act of 2009 cleared the House Education and Labor Committee. The bill proposes to eliminate private lenders from the federal student loan industry and expanding direct lending by the federal government starting July 2010, generating an estimated $87 billion in savings over the next decade to fund a $40 billion increase in federal Pell Grant scholarships, $10 billion in community college upgrades and $8 billion in pre-kindergarten changes. The full text of the legislation can be seen here.

On Tuesday, Anna Healy visited the offices of Senators Warner and Webb, and Congressmen Cantor, Scott and Wittman to speak with staff about the effect of healthcare reform on hospitals. This was part of an organized federal lobbying effort by the Virginia Hospital and Healthcare Association (VHHA). Sheryl Garland also attended the meetings with the offices of Congressmen Wittman and Scott.

State Council of Higher Education for Virginia. The State Council of Higher Education for Virginia (SCHEV) met this week to discuss enrollment growth targets, additional state budget cuts, and academic degree programs. SCHEV approved institutional enrollment targets projected a 5.3 percent growth for Virginia's public four year institutions, despite potential budget cuts totaling $200 million. Next Wednesday, all state agencies are expected to give Governor Kaine budget reduction plans of 5 percent, 10 percent, and 15 percent. SCHEV also approved a new academic degree program for VCU - a doctor of philosophy degree in nanoscience and nanotechnology beginning Fall 2009.

Virginia State Crime Commission. The Virginia State Crime Commission met on July 14th for an organizational meeting to study issues of public safety in hospital emergency rooms (SJR 358). The workgroup will meet one or two more times before their findings and recommendations are presented to the Commission on September 12th. Virginia Commonwealth University is well-represented on the workgroup with Dr. Carl Ameringer, Coordinator and Professor of Health Policy and Politics (MPA program); Carlton Edwards, Interim Chief of Police for VCU; and, James Jenkins, Emergency Room Nurse.

Senate Finance Staff. Mark Smith organized a tour of relatively new facilities for senior staff with the Senate Finance Committee. John Duval, CEO MCV Hospitals, met Betsey Daley, Staff Director; Bill Echelberger, Legislative Analyst (General Government and Capital Outlay); and, April Kees, Legislative Analyst (Higher Education) for a tour of the Critical Care Hospital. Dr. Jerry Strauss, Dean for the School of Medicine, guided the staff on a tour of the Molecular Medicine Research Building. Dr. Ron Hunt, Dean for the School of Dentistry, provided a tour of the W. Baxter Perkinson, Jr. Building.

Healthcare Reform. The House of Representatives released revised health care reform legislation this week, which now includes financing details and amends proposals contained in the earlier draft of the legislation. Changes in the revised bill include Medicare and Medicaid provider payments, the creation of a public health insurance option, Medicaid eligibility expansion, a requirement that individuals to hold some level of health coverage and would levy fees against employers that don't offer insurance. The bill now includes $20 billion in Medicare and Medicaid DSH savings that would begin in 2017. This is considerably less than the $50 billion in DSH savings included in the agreement between the Senate Finance Committee and the American Hospital Association, expected to begin in 2015. Click here for the full text of the legislation and here for a guide to the major changes in the legislation.

The Congressional Budget Office estimates that the House's version of a health reform bill will cost approximately $1 trillion over a 10-year period and cover approximately 97% of the population by 2019. The House spent the latter part of the week marking up the reform legislation and has set a goal of passing the bill before the August recess.

Also this week, the Senate Health, Education, Labor and Pensions (HELP) committee voted 13-10, along party lines, to pass a $600 billion health care reform measure that expands health coverage to 21 million uninsured people over the next decade by requiring an individual health insurance mandate and requiring employees to contribute to the cost.

Douglas Elmendorf, director of the Congressional Budget Office, warned this week that the proposed health care reform measures would raise costs instead of lowering them. While testifying before the Senate Finance Committee on Thursday, Elmendorf explained that subsidies to help uninsured people would raise federal health care spending and that the Medicare and Medicaid cuts proposed to pay for coverage expansion are not large enough to offset the current cost trend.

VCU Priorities. I am pleased to report that $600,000 was included in the House Labor – HHS Appropriations bill for Massey Cancer Center. This bill was scheduled for mark-up this morning. We are working with our Congressional Delegation on making sure this money is included in the final versions in both the House and Senate.

Health Care Reform. On Monday, the American Hospital Association, the Federation of American Hospitals, and the Catholic Health Association reached an agreement with the White House and the Senate Finance Committee to help finance health care reform over the next decade. The joint statement on the health care reform agreement can be seen here. Key highlights of the agreement include:
· No GME/IME cuts
· A permanent ban on physician self-referral
· Reductions to Disproportionate Share Hospital (DSH) payments
· Reductions delayed until 2015
· Reductions would only go into effect (10% per year) if the number of uninsured is reduced by 50%

As more individuals are insured, there will be less of a reliance on DSH payments. With a trigger mechanism in place along with a delay in reduction, the AHA proposal is well thought out and has lessened the impact on the Health System of the automatic DSH reduction as proposed by President Obama.

This is only an agreement among parties and not actual legislation. This is one proposal of many being discussed on Capitol Hill and hundreds of amendments have already been filed for the first Senate bill.

In other health care reform news, senior lawmakers are concerned about the ability of the Senate to pass a bill by the August recess, as they originally hoped to do. Democratic leaders had set an aggressive goal for the health care reform timetable, hoping to vote before the August recess and reach a compromise on the House and Senate versions in the autumn and sending a bill to President Obama before the end of the year. Delays include an inability to compromise on the inclusion of a government run public plan and whether to tax employee health benefits. An additional delay comes as a result of the confirmation hearings for Supreme Court justice nominee, Sonia Sotomayor.

The Senate Finance Committee is expected to release its own draft of health reform legislation today. We will keep you apprised of what is included in this bill as this is being touted as the Senate vehicle for health care reform. The delay in action from the Senate Finance Committee has been due to debates over a public plan option, the original price tag of the bill at $1.6 trillion, and also the committee’s aspiration of a bipartisan bill.

On the Hill. On Wednesday, President Obama nominated Francis S. Collins, M.D., Ph.D., to be the new director of the National Institutes of Health (NIH). Previously, Dr. Collins served as the director of the National Human Genome Research Institute and was responsible for overseeing the International Human Genome Sequencing Consortium.

Mandated Benefits Commission. The Special Advisory Commission on Mandated Health Insurance Benefits met this week to discuss two legislative initiatives to mandate that health insurers cover formula for amino acid deficiencies and also telehealth. VCU has worked with the Joint Legislative Audit Review Commission (JLARC) as they prepared their background and reports on these two subjects. The Commission will meet again in August to give their recommendation to the General Assembly on these measures.

Healthcare Reform. The Senate Health, Education, Labor and Pensions (HELP) committee has drafted a proposal that includes a government run plan to compete with private insurers through exchanges (new insurance purchasing pools). The HELP Committee public plan proposal is one of four to be debated after lawmakers return next week. Additional information on the options can be found here.

During this recess, legislators will be holding health care reform talks around the country to discuss the current proposals and contentious issues surrounding health care reform. These issues include the overall cost, whether or not to create a government run plan to compete with private health plans, taxing workers' benefits and whether to penalize employers not offering coverage to their employees. Several town hall meetings discussing health care reform were held around the state this week, including one hosted by President Obama and Governor Kaine at Northern Virginia Community College and one held at the VCU Student Commons by several health care interest groups and attended by Congressman Bobby Scott.

A group of Richmond business, health insurers and other healthcare groups met on Monday with Sr. Policy Advisor, Sheryl Jaeger from Congressman Cantor’s Whip Office and Aryana Khalid, the Health Policy Legislative Aide to Senator Mark Warner to discuss the current Healthcare Reform ideas of the House and Senate. The topics discussed were the public plan option, insurance mandates for employers and individuals, how to fund healthcare reform and geographic disparities in Medicare payments across the country.

On the Hill. The Minnesota Supreme Court issued a ruling this week on Al Franken's behalf, naming him the victor in the United States Senate election battle against Norm Coleman in a 5-0 opinion. Out of 2.9 million votes, only several hundred votes separated the two candidates, and a panel found that Franken won by 312 votes. It is expected that Senator Franken will be seated in the Senate as early as next week.

As a reminder, the majority of legislation approved by the General Assembly and signed by Governor Kaine goes into effect next week on July 1, 2009. 2009 General Assembly legislation that VCU tracked can be found on our website. In addition, DMAS has sent a reminder to providers regarding payment delays as a result of budget language during this past General Assembly.

We have compiled the current issues below that are garnering a considerable amount of attention as it relates to healthcare reform. As this debate evolves, we would appreciate your input and thoughts surrounding these issues and others that may arise.

1. Public Plan
· The Senate Health, Education, Labor and Pensions (HELP) Committee, the House Health Reform Plan and the President’s Plan have all included some type of public option for individuals to buy into. It is still unclear how this would work.

2. Reduction of DSH Payments to 25% of current funding
· Currently, we receive $118 million in Medicaid DSH and $15 million in Medicare DSH. The President has publicly supported a decrease of 75% of DSH payments, touting that hospitals would no longer rely on these payments as there will be a decrease in uninsured patients.

3. 30-day Readmission Rates
· If any hospital is above the 75th percentile mark in readmission rates on eight services, that hospital would only be reimbursed up to 80% of their payments for those services for the next year. If the patient was not readmitted within 30 days, the hospital would get the other 20%. AHA has done a preliminary study that has shown that safety net hospitals are much more likely to fall into this category.

4. Bundling of Payments
· Instead of itemized reimbursement from Medicare to individual providers, CMS would bundle payments and pay for an episode of care instead.

5. More GME residency slots for family practice programs
· Congress wants to increase residencies in family practice programs to increase access in the communities for individuals

6. Medical Home Pilot Programs
· Congress has been very interested in any medical home model, where a primary care provider would coordinate all the healthcare services for an individual.

7. Health Information Technology
· Much debate has occurred over the last few weeks regarding the appropriations for Health IT through the American Recovery and Reinvestment Act (ARRA) and who is considered a “meaningful user of health information technology.”

Health Care Reform. Health care reform continues to remain a contentious issue in Congress, and members of the Senate are becoming increasingly concerned that compromise will not be reached on health care reform in 2009. The primary obstacle impeding bipartisanship is whether or not to include a government run insurance option in the legislation, along with the cost of health care reform.

It was announced this week that the $1.6 trillion health care reform plan sponsored by Senate Democrats is now expected to cost approximately $1.2 trillion (a reduction of $4 billion). One change impacting the total cost is a reduction in subsidies to help the uninsured purchase coverage.

Hospital representatives, including the American Hospital Association, the American Medical Association, the Federation of American Hospitals and the Catholic Heath Association, are involved in negotiations with lawmakers over approximately $200 billion in potential cuts. These cost-cutting measures for health care reform savings include the Medicare and Medicaid disproportionate-share payment programs. The hospital industry is expected to come to an agreement with lawmakers and the Obama Administration similar to the Pharmaceutical Research Manufacturers of America deal with Senate Finance Chairman Max Baucus and the White House. The PhRMA deal could save the government $80 billion by expanding the Medicare prescription drug program.

Health Information Technology. David Blumenthal, National Coordinator for Health Information Technology, warned this week that hospitals unwilling to share health records with competitors would most likely not be eligible to receive economic stimulus funds. The American Recovery and Reinvestment Act includes $47 billion in incentives for hospitals and physicians adopting electronic health record systems.

State Revenues. Both House Appropriations and Senate Finance met this week to hear current projections and the outlook for the 2010 – 2012 biennium. According to Ric Brown, Secretary of Finance, Virginia is facing an additional $1.3 billion shortfall. The year-end revenue target has already been decreased three times this year, reflecting the worst Virginia economy in decades.

Health Care Reform. Health care reform continues to be a hot topic in Washington D.C. and there are several pieces of legislation proposed by different interest groups in the House and Senate. This week, House Republicans offered a plan that includes regulatory relief, an individual tax break for purchasing health insurance and limits on malpractice lawsuits. Highlights of the House Republican plan also include allowing Medicaid users to transfer the value of their benefits to a private health care plan and encouraging employers to automatically sign workers up for health insurance, forcing employees to opt out if it was not wanted.

The two health care reform bills in the Senate are facing difficulties and potential delays due to financial concerns and inability to agree on several key components of the legislation. The Senate Finance Committee will be slowing down action on the legislation and it is foreseeable that committee action could be stalled until after the July recess. One reason for the delay is the expense of the reform legislation - the Congressional Budget Office estimated this week that the proposal would cost $1.6 trillion. The Senate Health, Education, Labor and Pensions (HELP) Committee proposal is also facing delays of its own, though the committee members remain confident that the bill will continue to move forward through the committee process. One key reason for the delays is the size and volume of the health care reform proposals - the Senate HELP legislation weighs in at more than 600 pages and with almost 400 amendments just from committee members.

Lastly, three former Senate majority leaders unveiled their own health care reform proposal this week. The bipartisan plan, with an estimated cost of $1.2 trillion, was created by Democrat Tom Daschle and Republicans Bob Dole and Howard Baker and includes an individual health insurance mandate and a public insurance plan option. The plan can be seen in its entirety here.

Medical Malpractice. During a speech to the American Medical Association (AMA) on Monday, President Obama discussed medical malpractice reform in the United States. The President stated that more needs to be done to limit the vulnerability to lawsuits experienced by medical doctors though he does not favor a medical malpractice cap. The Congressional Budget Office estimates that malpractice caps on damages awarded can reduce malpractice premiums but only has a marginal impact on total health spending.

On the Hill. Senator Mark Warner introduced legislation proposing changes to end-of-life care, including symptom management as opposed to aggressive treatments and procedures. In addition, S.1251, the Senior Navigation and Planning Act of 2009, also proposes a reduction in medical costs and requires physicians to advise terminally ill patients on advance directives and planning tools.

Congressmen Eric Cantor and Bobby Scott hosted a video conference on high speed rail at the VCU Cabell Library on Thursday. The Congressmen, along with Richmond City Mayor Dwight Jones, offered introductory remarks to the participants. The program concerned the newly released guidelines on the Federal Railroad Administration (FRA) competitive grant process for high speed rail projects nationwide and Virginia's overall role.

Joint Legislative Audit and Review Commission (JLARC). On Monday, JLARC met to discuss an assessment of services for Virginians with Autism Spectrum Disorder (ASD). Key findings of the assessment show that the needs of some Virginians with ASD are currently not met but that options exist to improve service delivery. The briefing presentation to the Commission can be found here and the full 200 page report can be seen here.

Primary Results. The statewide Democratic primary election was held in Virginia on June 9th to determine the Democratic nominee for Governor, Lieutenant Governor, and Attorney General. As it stands now, the following candidates will be running for election in November:
Governor: Bob McDonnell (R) vs. Creigh Deeds (D)
Lieutenant Governor: Bill Bolling (R) vs. Jody Wagner (D)
Attorney General: Ken Cuccinelli (R) vs. Steve Shannon (D)

Looking at key Central Virginia primary races for the House of Delegates, Betsy Carr won the Democratic primary for the 69th district (the seat was vacated by former Delegate Frank Hall in early 2009), while John Cox won the Republican primary for the 55th district (the seat is currently held by Delegate Frank Hargrove, who announced his retirement earlier in the year). Results from the primary election and candidate information can be found on the Virginia State Board of Elections website.

Virginia Health Exchange Network. Governor Kaine issued a press release on Friday touting the Virginia Health Exchange Network. (VHEN) To read a copy of the press release, click here.

Health Care Reform. This week, the Senate Health, Education, Labor & Pensions (HELP) committee revealed their legislative proposal for health care reform. Highlights include prohibiting insurance companies from denying coverage or charging more due to medical history, a health insurance mandate requiring all individuals to have insurance, and the creation of a government sponsored insurance plan to compete with private insurers. The National Association of Public Hospitals and Health Systems (NAPH) summarized key components of the legislation, including:

Next week, the HELP Committee will hold discussions and begin the official mark-up process of the legislation.

Three House chairmen - Charles Rangel (D-NY), Chair of the Ways and Means Committee; George Miller (D-CA), Chair of the Committee on Education and Labor; and Henry Waxman (D-CA), Chair of the Energy and Commerce Committee, are working together to draft a single health care reform bill, which was summarized at a House Democratic Caucus meeting on Tuesday. The House proposal, similar to the Senate HELP legislation, would require an individual health insurance mandate and create a government-run insurance program to compete with private insurance companies. A formal copy of the legislation is expected to be released next week and finalized in July. Both plans have a public insurance option, which is opposed by the American Medical Association (AMA), who released a statement this week. They believe that the introduction of a new public plan threatens to restrict patient choice by driving out private insurers.

On the Hill. On Wednesday, a bill was introduced in the House that establishes a national database registry for artificial joints. H.R.2813 would allow doctors to track patient results and assess medical practices for hip and knee replacement surgeries. On Thursday, the Senate voted 79-17 on legislation that increases the federal regulation over tobacco sales, manufacturing, and marketing. S.982 was passed by the House on Friday with a vote of 307-97 and will now be sent to President Obama for his review.

This week, Mark Smith attended the Association of American Medical Colleges (AAMC) Government Relations meeting in Washington, D.C. AAMC provided an update on the status of health reform legislation and related legislative strategies. In addition Mark met with staff of the Virginia Congressional offices to discuss Health Care Reform and VCU federal legislative priorities.

Healthcare Reform. The Senate Health, Education, Labor and Pensions Committee (HELP) is expected to release its initial version of health reform legislation in the next couple of days. This plan will include a public run plan that would compete with the private insurance market. The HELP Committee Plan differs dramatically from the Senate Finance Committee Plan, as the HELP Committee only deals with policy decisions and not the funding strategy.

An ambitious timeline has been set regarding the process for healthcare reform:

June:
o First Week - The Senate Health, Education, Labor and Pensions (HELP) Committee will publish their plan for healthcare reform.
o Week of June 16 – Both Senate bills will be marked up by the Senate Finance Committee as well as the Senate HELP Committee.

July:
o Before July 4th Recess - A single bill will be produced on the Senate side.
o Last two weeks of July – Floor discussion will take place on both Senate and House Healthcare Reform Bills.
o Bills will be initially voted on and will most likely go into conference.

August/September:
o A single healthcare bill will be produced as a compromise of both the House and Senate.
· October
o President Obama has stated that he would like to see a bill on his desk that he can sign by October 1st.

The Senate will be the first to initiate and react to any healthcare reform legislation. The House is inclined to produce their own legislation after the Senate version is published. In the House, the bill will have to go through three committees: Ways and Means; Education and Labor; and Energy and Commerce. The rules of the House allow for a more streamlined and faster process of passing a bill, especially through a reconciliation process.

Medicare. Sen. Jay Rockefeller (D-W.V) has introduced a bill that would increase the powers and jurisdiction of the Medicare Payment Advisory Commission (MedPAC). This legislation would actually make MedPAC a new federal agency modeled after the Federal Reserve. This new agency would be staffed by independent experts who would then set all reimbursement rates for Medicare. Congress would have the power to either accept or reject the recommendations. President Obama has publicly supported this legislation.

On the Hill. The House Republicans, led by House Republican Leader John Boehner (R-OH) and Republican Whip Eric Cantor (R-VA) sent President Obama a proposal outlining how to save $375 billion over the next five years. The only healthcare related suggestion was eliminating double payments for Indirect Medical Education (IME) which would save approximately $5.2 billion over that period.

On Tuesday June 2nd, the Senate began debate on granting authority to the Food and Drug Administration (FDA) to regulate the tobacco industry.

Healthcare Reform. For this week’s legislative highlights, I thought it best to compare and contrast the various plans by President Obama, the Senate Finance Committee and also the Patients’ Choice Act of 2009 (the Republican Plan).

	President Obama	Senate Finance Committee	Patients’ Choice Act of 2009
Date of Plan	February 26, 2009	April – May 2009	May 20, 2009
Approach to Healthcare Reform	8 Principles to Healthcare Reform: · Reduce long-term growth of healthcare costs · Protect families from debt and rising healthcare costs · Guarantee access to doctors and health plans · More preventative care · Improve quality of care and patient safety · Make health coverage affordable · Portability of healthcare coverage · Eliminate denial of coverage for those with pre-existing conditions	The Senate Finance Committee has released three white papers regarding: · Delivery of Healthcare · Access to Healthcare · Financing of Healthcare The committee is requesting feedback to these very broadly written papers. A couple of recurring themes were: · Everyone has health insurance · Health Insurance Exchange · Expand Medicaid and Children’s Health Insurance Program (CHIP) · Medicare Buy-in	To counter the work of the Senate Democrats, the Republicans have also issued a white paper outlining their priorities for healthcare reform. Most of the ideas revolve around creating a state-based health insurance exchange. Some other priorities are: · Tax credits ($2,300 for individual, $5,700 for family) to help offset the costs of insurance · More Medicaid for those with disabilities · Taxing employer-provided health benefits
Individual Mandate	· The plan must cover all Americans	· Requires all individuals to have a minimum standard of healthcare coverage · Exemptions will be granted for financial hardship	· No requirement
Employer Requirements	· No requirement	Two proposals: · Require employers with more than $500,000 in employee compensation to contribute at least 50% of the premium or pay an assessment · No employer mandate/assessment	· No requirement
Expansion of Public Programs/Public Plan	· President signed the CHIP Reauthorization bill	· Individuals with income up to 115% FPL would be eligible for Medicaid · These individuals could be enrolled in private plans through the Health Insurance Exchange if it was cheaper · Another option would be for childless adults (who are not currently covered) to receive tax credits, but not necessarily be enrolled in Medicaid. · Expand CHIP eligibility to 275% FPL after September 30, 2013 · Medicare buy-in option for those 55-64 years old · Creation of a public plan that could be offered through the Exchange	· Restructure Medicaid to only apply to those low-income individuals with disabilities · Those without disabilities would join a private plan and would receive a tax credit to pay for this · Allow private facilities to compete with VA hospitals to provide care to veterans
Tax Credits	· No requirement	· Provide tax credits to individuals with incomes between 100% FPL and 400% FPL · Provide tax credits to small employers who purchase insurance for their employees	· Tax credit of $2,300 for individuals and $5,700 for families
Cost Containment	· More preventative care measures · Reduce administrative costs and control fraud and abuse	· More use of Health Information Technology (HIT) · Increase funding for anti-fraud activities · Restructure payments to Medicare Advantage (MA) plans to promote quality · More Accountable Care Organizations created and funded · Cover more preventative services · Bundling of payments · Establish a 30-day readmission rule for Medicare	· More use of HIT and personal health records · National Strategic Prevention Plan · Lower premiums to Medicare enrollees who adopt healthier lifestyles · More Accountable Care Organizations · Competitive bidding for MA plans · Create “health courts”
Quality/Health System Performance	· Plan must implement better patient safety and quality measures · Include more HIT	· Increase use of primary care providers · Comparative clinical effectiveness research · Bundling of payments for acute, inpatient hospital services · Value-based purchasing program	· Create new Health Care Services commission to establish uniform measures for reporting price and quality information
Financing	· Earmarked $630 billion over 10 years in a Health Reserve Fund in his introduced budget	· Considering a range of taxes (alcohol, soda taxes) · Eliminating the federal tax-exempt status of non-profit hospitals	· Plan is revenue neutral · Will pay for some of it by taxing employer-sponsored health benefits
Other	· Promote wellness	· Promote wellness by state grant system · Change the Medicaid FMAP rates to take into effect the economic situation of the country · Reform GME to incentivize more primary care doctor residencies	· Determine a defined allotment individual enrolled in Medicaid for long-term care services. Medicare should pay for cost-sharing, deductibles and premiums for low-income Medicare beneficiaries

Federal Budget Requests

We have been working with our Congressional Delegation over the past few months on appropriations requests for VCU's federal priorities. The Congressional offices submitted the following budget requests on behalf of VCU:

Senator Jim Webb

• $1,000,000 for Atlantic Rivers Institute

Senator Mark Warner

• $1,000,000 for Atlantic Rivers Institute

• $500,000 for Massey Cancer Center Vivarium

Representative Bobby Scott

• $1,000,000 for Atlantic Rivers Institute

• $1,000,000 for Massey Cancer Center Vivarium

Representative Rob Wittman

• $1,000,000 for Massey Cancer Center Vivarium

Representative Mary Jo Kilroy (OH)

$5,000,000 for Multi-functional Oxide Materials and Application Devices (Partnership with Ohio State University)

Over the next month, staff of these offices will be working with budget committee staff on these requests. We will provide updates as the process progresses.

Other News. The Centers for Medicare & Medicaid Services (CMS) has decided not to perform complex reviews of medical necessity through its Medicare recovery audit contractors (RAC) until 2010. This type of review accounted for 32% of all claims denials during the demonstration phase of this new audit initiative.

Health Care Reform. On Monday, May 18th, Senate Finance Committee Chair Max Baucus (D-Mont.) and Ranking Member Chuck Grassley (R-Iowa) issued the third and final paper on Health Care Reform. This specific paper dealt primarily with financing the health care system. Included in the paper were options to restructure the way in which the federal government allocates Disproportionate Share Hospital (DSH) and Graduate Medical Education (GME) payments to hospitals. Unlike the previous two documents, this paper does examine ways to fund this reform. Options for funding included utilizing savings achieved through reduced spending levels, reevaluating health tax subsidies and possibly increasing taxes on alcohol and sweetened beverages (soda tax).

Republicans have presented their own plan, entitled the "Patients' Choice Act,” which mostly centers on building health insurance exchanges at the state level. The revenue-neutral legislation would create a new tax credit ($5,700 for families, $2,200 for individuals) to help pay for healthcare coverage or insurance premiums. The Republicans believe that taxing employer-provided health benefits will help offset some of the funds needed for the tax credit.

Health IT. On May 18th, Senator Warner hosted a conference at Virginia Commonwealth University to bring together stakeholders to learn how Virginia can access new federal funds and position the Commonwealth as a national leader on health IT. Approximately 400 participants attended the conference with an additional 300 viewing online, including hospital and health care executives from across the state, as well as federal and state officials. Click here to see an overview of the conference. Copies of the presentations can be found on Senator Warner's website.

On the Hill. The Resident Physician Shortage Reduction Act (S. 973/H.R. 2251) was recently introduced in both the House and the Senate. This legislation would create approximately 15,000 more Medicare-supported positions to residency training programs. The bill states that preference would go to programs training physicians for primary care and general surgery. In addition, this bill increases flexibility in where the student could be trained, allowing for more residents to work in practice offices, as well as in community health centers.

On May 20th, the Obama Administration launched the Health Care Fraud Prevention and Enforcement Action Team. This taskforce, chaired by Secretary of HHS Kathleen Sebelius and Attorney General Eric Holder, will increase technology use and audits to help detect and prevent health-related fraud in our Medicaid and Medicare systems. The Action Team’s goals are to increase training for providers on Medicare compliance; improve data and information sharing between law enforcement officials and the Centers for Medicare and Medicaid Services (CMS); and better monitor Medicare Advantage plans and prescription programs.

If you have questions, contact Don Gehring (dcgehrin@vcu.edu) or Mark Smith (mesmith@vcu.edu). Our office phone number is: 804-828-1235.

Joint Legislative Audit and Review Commission. The Joint Legislative Audit and Review Commission (JLARC) met on May 11th to discuss their proposed work plan for 2009. Studies to be conducted by JLARC staff include delivering services to Virginians with autism spectrum disorders (mandated by House Joint Resolution 105 from 2008) and reviewing mandated health insurance benefits, as directed by 2.2-2503 and 30-58.1 of the Code of Virginia. As part of the mandated health benefits study, interviews will be conducted with medical experts from the VCU Health System on telehealth and amino acid deficiencies in children.

Department of Health Professions. This week, Secretary of Health and Human Resources, Marilyn Tavenner, provided the House Appropriations Committee with an update on the Department of Health Professions security breach. Once the agency realized that security on the system had been compromised, they shut down all computer systems to protect the data. State and federal regulatory and law enforcement agencies were notified, and the investigation may take up to two weeks. Fortunately, back up files have been properly secured.

Influenza A (H1N1 Virus) Outbreak. Secretary Tavenner also reported that, as of May 11th, there have been 16 confirmed cases of H1N1 virus in Virginia, fortunately resulting in no deaths. The Virginia Department of Health Flu Plan was implemented in coordination with appropriate state agencies. Virginia has 770,000 antiviral courses on-hand at a cost of $11 million. The Secretary's Office is reviewing lessons learned from the outbreak in preparation for the 2009-10 flu season.

Health Care Reform. Senate Finance Committee Chair Max Baucus (D-Mont.) and Ranking Member Grassley released proposals on Monday for a public health insurance option and a requirement that all U.S. residents obtain health coverage. The proposals in the 63-page "policy options" paper included three options for a public plan. One would be similar to Medicare; another would call for a third-party administrator outside of HHS to oversee and regulate the plan; and a third would allow states to decide whether to create a public option. The paper also gives the option of not including a public plan but instead relying on a "reformed and well-regulated private market."

At a Senate Finance Committee roundtable on May 12th, participants debated various options for financing health care reform, including increasing taxes on alcohol and tobacco products, taxing employer-sponsored health coverage and reducing income tax deductions for individuals. The third and final policy paper on Health Care Reform, which focuses on health care financing, will be published early next week.

Medicare. In its annual report to Congress this week, the Medicare Board of Trustees said it expects the Hospital Insurance Trust Fund to be exhausted in 2017, two years earlier than previously predicted, as a result of the current economic recession. According to the report, Medicare expenditures totaled $468 billion in 2008, or 3.2% of gross domestic product, and are expected to reach 11.4% of GDP in 75 years.

Inpatient Prospective Payment System (IPPS). Fifty-six senators yesterday asked the Centers for Medicare & Medicaid Services to withdraw a proposed payment cut to teaching hospitals scheduled to take effect October 1 under the proposed inpatient prospective payment system rule. The rule would phase out the indirect medical education adjustment paid to teaching hospitals for their capital expenditures. Senator Mark Warner’s signature was included on the letter.

Health IT. At its initial meeting yesterday, the Health Information Technology Policy Committee agreed to form a work group to consider the definition of “meaningful use,” a concept that will determine what level of health information technology adoption is eligible for funding under the American Recovery and Reinvestment Act of 2009. In addition, the committee agreed to name a work group to address health IT certification, adoption and workforce issues; and a third work group to address health information exchange.

On the Hill. On Friday, President Obama named Dr. Thomas R. Frieden, New York City's health commissioner, as head of the Centers for Disease Control and Prevention (CDC).

Joint Commission on Health Care. The Joint Commission on Health Care met on April 30th to discuss their proposed work plan for 2009. Studies to be conducted by JCHC staff include a review of opportunities for early identification and preventative care of chronic diseases; continued analysis of health workforce pipelines for physicians, psychiatrists, dentists, clinical psychologists and pharmacists; additional safeguarding of medical information; a review of appropriating additional funds for cancer research; and studying ways to ensure that individuals with life-threatening conditions receive the care they need, regardless of resources.

FY 2010 Budget. The Department of Health and Human Services released its proposed FY 2010 Budget in Brief this week. According to that document, the President's budget calls for an FY 2010 program level of $30.996 billion for the National Institutes of Health (NIH). This is an increase of $443 million (1.45% over the FY 2009 comparable, excluding American Recovery and Reinvestment Act (ARRA) funding. A summary of the President's budget for NIH can be found at NIH Office of Budget site.

In other budget news, for Title VII health professions training programs, the budget requests $265 million, a 19.4% increase over the FY 2009 omnibus. This funding level represents increases for most Title VII programs, as well as a substantial increase for state dental health improvement grants authorized under section 340G of the Public Health Service Act.

The budget also requests $263 million for the Title VIII nursing education programs, including an $88 million (237 percent) increase for the Nursing Education Loan Repayment Program. Additional details on program specific funding levels in the President's FY 2010 request to appropriated funding levels in FYs 2005-2009 can be seen here.

Health Care Reform. Senate Finance Committee Chairman Max Baucus (D-Mont.) predicted that President Obama will be the difference-maker in bringing together bi-partisan support for health reform. Some of the larger, more contentious issues, such as whether to create a government-run public plan option to provide health benefits or how to pay for the massive reform bill have yet to be answered. In June, the Finance Committee, along with Senator Edward Kennedy's (D-Mass.) Health, Education, Labor and Pensions Committee and three House panels, will mark up the first drafts of health care reform legislation (The Hill).

Inpatient Prospective Payment System (IPPS). On May 1, the Centers for Medicare & Medicaid Services (CMS) issued its hospital inpatient and long-term care prospective payment system proposed rule for FY 2010. The rule proposed a 1.9 percent cut to eliminate what CMS claims is the effect of coding or classification changes the agency says do not reflect real changes in case-mix. In total, this proposal would cut $1.9 billion for FY 2010 and $22.1 billion over 10 years. Due to the coding offset cut, with other policy changes, hospitals will see their FY 2010 payments decrease by 0.5 percent on average compared to FY 2009.

In this rule, CMS also reiterates that it will eliminate the adjustment for capital indirect medical education (IME) for FY 2010 and beyond. Although Congress retroactively prevented CMS from reducing the IME adjustment to capital payments by 50 percent in FY 2009, it did not prevent the agency from going forward with its already-finalized plan to eliminate the IME adjustment completely in FY 2010. The elimination of this payment would result in a loss to VCUHS of approximately $1.5 million annually. VCU is working with our Congressional delegation to sign on to a letter to the acting CMS Administrator to halt these cuts.

Medicare Payments. A bipartisan group consisting of 90 House members on Wednesday sent a letter to House leadership asking them to increase Medicare physician payments for 2010, when a 21% reduction is set to take effect, and permanently change the payment formula. The letter adds that the lawmakers will not support health care overhaul legislation funded by a cut to specialty physician payments.

On the Hill. Democrats in the Senate currently have a 59 seat majority as a result of Arlen Specter, the senior senator from Pennsylvania, switching in late April from the Republican to the Democratic Party. In addition, Al Franken, the Democratic candidate for the 2008 Senate race in Minnesota, was confirmed by the court in mid-April though his seat remains unresolved. His opponent, Republican Senator Norm Coleman, has filed an appeal to the Minnesota Supreme Court, which is expected to hear the case in June.

Also of note, Carmen Nazario, a graduate of the VCU Master of Social Work program (MSW, 1973) is nominated by President Obama for Assistant Secretary for Children and Families in the Department of Health and Human Services. Ms. Nazario is currently an Assistant Professor at the Inter American University of Puerto Rico, where she teaches Social Policy and coordinates the Social Work Practicum at the School of Social Work.

Health IT Conference. On May 18, Senator Warner is hosting a conference at the VCU Eugene P. and Lois E. Trani Center for Life Sciences with stakeholders in health information technology to discuss how to maximize opportunities available through the 2009 American Recovery and Reinvestment Act.

If you have questions, contact Don Gehring (dcgehrin@vcu.edu) or Mark Smith (mesmith@vcu.edu). Our office phone number is: 804-828-1235.



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