Congress reaches budget deal

Congress Reaches Budget Deal; SHELTERS RESEARCH FROM SEQUESTER IN 2014

Just before it recessed for Christmas, the Congress passed a bipartisan budget agreement that will eliminate a government shutdown in January and replace a major portion of the impending sequester cuts that have struck fear into many government-funded researchers.

The deal calls for the U.S. government to increase federal discretionary spending to about a trillion dollars in fiscal year 2014. The 2014 discretionary number is essentially half-way between a lower total adopted by the Republican controlled House earlier this year and a higher number supported by the Democratic-led Senate. It is also $45 billion higher than what would have gone into effect in January 2014 as required by the 2011 law that created the sequestration mechanism.

The higher spending is intended, in large part, to ease the pain promised by the sequester. In 2013, the sequester required many agencies, including major research funders such as the National Institutes of Health (NIH), to cut their budgets by about 5%.

In 2014, the cuts were supposed to total between $90 billion and $100 billion, roughly split between defense and non-defense programs. Many research advocates — including NIH Director Francis Collins and the Endocrine Society — argued for ending those cuts because of the devastating impact to research.

The agreement eliminates about $65 billion in across-the-board domestic and defense cuts over the next two years. The extra money would be spread evenly between Pentagon and domestic spending, nearly erasing the impact of sequestration on the military while domestic programs, including health research funding, could fare particularly well because other funding moves — such as keeping in place cuts to the Medicaid healthcare program — would give Congress greater fl exibility in spending.

Overall, the agreement appears set to remove about one-half of the sequester cuts planned for 2014, and one-quarter of those scheduled for 2015. Further relief could come from new revenue sources established by the plan, such as a new fee on airline tickets. Still, for the time being, planned sequester cuts remain in place in 2016 through 2020. And the deal will still require cutting some spending – and those details still need to be worked out. The agreement does not establish exactly how much each agency can spend, only the overall totals for broad categories of spending.

Next Steps

The House and Senate Appropriations Committees are expected to work into January on a spending bill to fund federal agencies through September 30, 2014. The first step will be approval of new spending allocations for the 12 appropriations subcommittees that will determine how the brokered spending level will be allocated among the various agencies and programs.

Endocrine Society Actions

• The Endocrine Society actively advocated throughout the summer and fall for a budget agreement that would repeal sequestration and protect biomedical research from further budget cuts. Activities included: online grassroots advocacy campaigns, Hill Days in Washington, letters to the editor, and multiple letters and visits to members of Congress
and the White House.
• The Society hand delivered letters to Congress calling for quick passage of the budget agreement and urging the Appropriations Committees to provide the highest level of spending for the NIH as possible.
• The Society currently has an online grassroots campaign for all U.S. members to contact their senators and representatives to make one final push for the highest possible spending levels for the NIH. Please visit: www. The budget agreement increases the amount of money available for domestic discretionary programs so there is a chance that NIH could receive an increase over its FY 2013 post-sequestration level. We need to make our voices heard as the appropriators finalize decisions about FY 2014 spending!

Congress Averts 25% Medicare Physician Payment Cut Through March 31; Continues to Work on Permanent “Doc Fix”

The Bipartisan Budget Act of 2013 (BBA) included a provision to prevent the 25% Medicare physician payment cut scheduled to begin January 1, 2014. The BBA provides for a 0.5% update from January 1 to March 31, 2014 and extends the fl oor for the Geographic Cost of Practice (GPCI) until April 1, 2014. This shortterm relief will provide needed time for Congress to finalize a more permanent reform to physician payment under Medicare. To pay for these and several other Medicare changes, the BBA extended the 2% cut in Medicare payments due to the sequester for an additional year (2023) and made changes to Medicaid Disproportionate Share Hospital (DSH) allotments and LongTerm Care Hospital payments.

Additionally, in December, two congressional committees advanced legislation that would eliminate the annual routine for physician payment adjustments. The House Ways and Means Committee and the Senate Finance Committee passed similar bills to repeal the Sustainable Growth Rate (SGR) formula that drives annual reductions in Medicare payment for physician services. The main difference between the proposals is that the Ways and Means Committee bill provides a 0.5% update in physician fees for three years followed by a freeze in fees for seven years. The bill passed by the Senate Finance Committee would freeze fees from 2014 to 2023. Starting in 2017, the bills establish a Value-Based Performance Incentive Program (VBP), which consolidates and makes changes to the existing Medicare quality programs.

Next Steps

The Committee proposals now will need to be consolidated with a proposal passed by the House Energy & Commerce Committee and Congress must identify fiscal off sets to pay for adjustments to provider payments. With the short-term physician fee fix that was included in the budget bill, Congress will have the first quarter of 2014 to complete action on the SGR repeal bills or pass another short-term extension of the current payment rate.

Endocrine Society Activity

The Society met with staff from the Senate Finance and House Ways & Means Committees to advocate on behalf of endocrinology throughout the development of these new payment proposals and submitted comments outlining concerns with the discussion draft. These comments reiterated the Society’s position on the repeal and replacement of the SGR and also focused on the measurement of quality and resource use through the proposed Value-Based Performance Payment Program and refinements to the proposed alternative payment models. The Society’s comment letter, along wiThits position statement, can be accessed at

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