The U.S. House and Senate took a big step toward passing a funding bill with benefits for orthopedics when they named conferees September 4 and 6, 2018 to iron out differences between their versions of a so-called “Minibus” Defense Department-Labor-HHS Appropriations bill.
“AAOS is pleased to see an increase in National Institutes of Health [NIH] research funding in both packages, which can be used to support important orthopaedic research at the National Institute of Arthritis and Musculoskeletal and Skin Diseases. We’re also closely following funding levels for the Defense Health Research Programs included in the defense portion of the minibus bill,” said Wilford K. Gibson, M.D., AAOS Council on Advocacy Chair.
The benefits for orthopedics in either the House or Senate version of the bill include, according to the American Academy of Orthopaedic Surgeons (AAOS):
- Both the Senate and House bills provide more money for the National Institutes of Health (NIH) than in fiscal year 2018. The Senate bill includes a $2 billion (5.4%) increase, which might be enough to add to the budget for the National Institute of Arthritis and Musculoskeletal and Skin Diseases (NIAMS), where orthopedics research is done. The skimpier House increase in the NIH budget would provide less or no additional funds for NIAMS.
- The Senate includes $711 million for the 21st Century Cures Act, a 2016 law which aims to accelerate development of new drugs, therapies such as cell regeneration, and devices which either address unmet medical needs or are better than current devices for treating life-threatening or long-term debilitating diseases.
- The Senate bill also includes $765.1 million for Department of Defense (DOD) health research, including the Peer-Reviewed Orthopedic Research Program (PRORP), which researches both battlefield and non-battlefield orthopedic injuries and treatments. Non-battlefield orthopedic injuries are also important to DOD because more military personnel end up unavailable due to non-battlefield mishaps.
- The House bill includes an AAOS effort to prod Centers for Medicare and Medicaid Services (CMS) to recognize the value of physician-owned hospitals (see below).
Potential Obstacles to Enactment of the “Minibus”
The DOD and Labor-HHS appropriations bills, normally separate, were combined this year in the Senate to pressure defense-minded Republicans and social-program-minded Democrats to horse-trade, giving the bill a better chance under the new “normal,” in which many appropriations bills don’t pass, and then the entire federal government budget is lumped into a continuing resolution around the September 30 fiscal year deadline.
With the midterms a few weeks after that September 30 budget deadline, both Republicans and Democrats in Congress want to show results. Hence this and a few other bipartisan “Minibus” bills.
Two remaining unpredictable variables are:
- Can the Senate and House agree on a final bill, despite differences over Planned Parenthood and family migration, which are expected to be serious headwinds for this bill?
- How will President Trump react? He has threatened a shutdown of all or part of the government if he doesn’t get his way on budget cuts to domestic programs and his border wall.
Will Physician-Owned Hospitals Make a Comeback?
AAOS persuaded the House to urge CMS in its Labor-HHS appropriations bill to do a project demonstrating the quality of physician-owned hospitals (PHOs). AAOS is trying to get the Senate to make the same recommendation. In case the appropriations process fails, AAOS is pushing for the same language in a continuing resolution.
PHOs have been in regulatory limbo since the Affordable Care Act (ACA) was passed. Previously, the Stark Law set tough conditions on physician ownership. ACA section 6001(a)(3) added more, basically freezing in place both the size and physician ownership of PHOs as of March 23, 2010.
HHS Secretary Alex M. Azar II has signaled that he favors relaxing these restrictions. Last year, CMS asked stakeholders for views on the role of PHOs. Then, in a January 2018 American Hospital Association webcast, CMS Administrator Seema Verma indicated that CMS knows the Stark Law generally is a top concern of providers and said CMS would join an inter-agency group to discuss Stark Law barriers to “modernization.”
Those comments and the request for stakeholder input hint that the Administration might favor opening the door for new PHOs and expansion of existing ones.
However, HHS and CMS regulators can’t legally do much more than grant individual exceptions, argues healthcare lawyer Sheppard Mullin in a March 2, 2018 post (“Lifting the Limits on Physician-Owned Hospitals: Can Regulators Prevail Where Legislators Have Stalled?” (https://www.sheppardhealthlaw.com/2018/03/articles/hospitals/physician-owned-hospitals-stark-law/).
That probably leaves the burden of real change in the lap of Congress.
