American Recovery

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American Recovery Reinvestment Act of 2009
Key Provisions Health and Life Sciences

• February 27, 2009
• 2-3 p.m. Eastern
• Please dial 1-866-642-1665
• Passcode 342441
• to listen to the audio portion of the webinar

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Agenda

• Introductions
• Overview of ARRA the Economic Stimulus
• Key provisions
• Impact and engagement
• Hospitals and healthcare providers
• Academic health centers and research institutions
• Insurers
• Med Tech manufacturers
• Patient groups and voluntary health associations
• State and local governments

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BD Consulting

• Washington, DC-based health and life sciences
  consultancy
• Consulting division of Baker Daniels, LLP
• 50 professionals with deep sector concentration
• Substantive expertise at federal and state levels
• Focus on the technical and political aspects of
  the U.S. healthcare system

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Stimulus overview

• ARRA signed into law February 17, 2009
• 787 billion to support infrastructure, schools,
  state budgets, tax cuts, biomedical research,
  renewable energy and healthcare for the
  unemployed.
• Funding driven through direct grant making and
  RFP process
• Federal agencies and states involved

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Other funding vehicles

• FY 2009 omnibus bill
• FY 2010 budget and reconciliation
• FY 2010 appropriations
• Potential for technical corrections to ARRA
• Health reform
• Sustainable growth rate (SGR) formula fix and
  Medicare reform

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Other factors

• Delayed appointment of Secretary of HHS
• Requirement to develop plans for disbursing funds
• Increased oversight and reporting burdens
• Challenges of spending large quickly
• Focus on shorter term, stimulative investments
• 2 year horizon

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Health provisions present opportunities and
challenges

• Early engagement is key
• Stages of involvement
• Agency planning process
• Agency development of new regulations and
  requirements
• Potentially 2 rounds of agency funding
• Other funding or rule-making entities (states)
• Congressional education or intervention

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ARRA health provisions at a glance
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Health information technology -- Agency funding

• Office of the Natl Coordinator of HIT (ONC)
  total 2 billion
• ONC regional health 300 million
• NIST standards
• CHC (portion of 1.5 billion)
• IHS 85 million

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HIT standards

• ONC governance mechanism for nationwide health
  information network
• ONC chief privacy officer to coordinate with
  states, regions, others 
• HIT policy committee to recommend and prioritize
  areas for standards, implementation
  specifications and certification criteria
• HIT standards committee to recommend standards,
  implementation specs and certification criteria
• Secretary of HHS adopts standards by rulemaking

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HIT grants

• Immediate funding program to strengthen
  infrastructure and for other HIT activities
• Funded through ONC and administered by agencies
  with relevant expertise (such as HRSA, AHRQ, CMS,
  CDC and Indian Health Service), grants will be
  made available for certain health information
  exchanges (HIEs), federal HHS agencies,
  providers, community health centers, 340B
  entities, telemedicine providers, holders of
  health information and public health departments.
  Specifically, the Secretary is required to invest
  300 million to "support regional or sub-national
  efforts toward health information exchange."
• HIT implementation assistance
• The ONC, and in consultation with NIST and other
  agencies with experience in IT services, will
  establish an HIT extension program to assist
  providers in adopting and using certified EHR
  technology. In addition, the ONC will support HIT
  Regional Extension Centers (affiliated with
  nonprofits) to provide assistance to providers,
  hospitals, CHCs, entities serving the underserved
  and small group practices.

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HIT grants

• State grants to promote HIT
• Funded through ONC, these grants will be made
  available to states or "state-designated
  nonprofits" for planning or implementation and
  other uses to expand electronic health
  information exchange
• Competitive grants to states and Indian tribes
  for loan programs
• Funded through ONC, these grants will be made
  available to states or Indian tribes to establish
  loans for health care providers to acquire and
  effectively utilize EHR technology
• Demonstration program to integrate HIT into
  clinical education
• Competitive awards to health professions or
  medical schools for curricula development and
  assistance to other universities for similar
  purposes

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HIT Medicare and Medicaidincentives

• Medicare incentives for providers
• Up to 18k if in 2011, then, 12k, 8k, 4k, 2k in
  subsequent years
• Payment reduction begins in 2015-- 1, 2, 3
• Must meet standards
• Medicare incentives for hospitals
• Up to 16 million over 4 years if using HIT in
  2011
• Additional penalties if not adopted
• Must meet standards
• Medicaid incentives
• Pays states incentive payments to support costs
  incurred for adoption

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HIT privacy provisions

• Accounting for disclosures
• Inadvertent disclosures redefined
• Patient authority to withhold out of pocket info
• Minimum necessary disclosure
• Business associates and CEs
• CMPs
• AG enforcement
• PHRs and Googles now HIPAA covered
• Fundraising limits
• Marketing limits

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Comparative effectiveness

• Total of 1.1 billion
• 300 million administered by AHRQ to carry out
  research
• 400 million administered by NIH to conduct or
  support research
• 400 million administered by Secretary of HHS to
  accelerate development and dissemination
• Clinical removed, implying openness to cost
  assessments
• Intended for clinical decision support not
  coverage and payment determinations

Note CE is top priority in Congressional
healthcare reform plans
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Comparative effectiveness (contd)

• Amounts unambiguous, but specific purposes not
  yet defined
• Details will be determined quickly
• IOM report due to Congress June 30, 2009 on
  national priorities
• Secretary of HHS will submit operating plan by
  July 30, 2009

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Research funding and infrastructure

• 14 billion for health and life science research
  and infrastructure
• Funds must be obligated by September 2010
• 3 billion for National Science Foundation
• 300 million for major research instrumentation
• 200 million to modernize academic facilities
• 400 million for equipment and facilities
• 600 million for Natl Institute of Standards and
  Technology
• 220 million for scientific and technical
  research
• 20 million to create and test HIT security and
  interoperability standards

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Research funding and infrastructure

• 10.4 billion to NIH for scientific challenges
  new research activity on current projects and
  research on public and international health
  priorities
• 8.2 billion to support biomedical research
• 500 million for buildings and facilities
• 1.3 billion for the Natl Center for Research
  Resources
• 1 billion for construction/renovation of
  research facilities
• 300 million for acquisition of capital research
  equipment

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Research funding and infrastructure

• NIH funds to be distributed in 3 ways
• Pending R 01 awards
• Focus on stimulative activity geographic
  distribution
• Supplement existing grants
• Administrative or competitive process could
  include training or equipment
• NIH Challenge Grants
• RFA expected shortly 500,000 for 2 years

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Prevention and wellness

• 1 billion total funding
• 50 million to states to reduce health
  care-associated infections
• 650 million for evidence-based clinical and
  community-based prevention and wellness
  strategies that deliver specific, measurable
  health outcomes that address chronic disease
  rates
• 300 million to CDC for immunization

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Training of medical professionals

• 500 million total for health professions
  training programs
• 300 million for National Health Service Corps
• 200 million for primary care medicine,
  dentistry, public health, and preventive medicine
  program programs

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Medical product development

• No direct funding through BARDA or pandemic flu
  appropriations
• Continued Hill interest in these programs

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Next steps

• ARRA provisions direct funding at high level
• Specific details, including funding targets and
  processes for disbursement still under
  development
• How does this fit into your strategic plan?
• Health provisions, but others that impact your
  business (construction, energy, etc.)
• Are you communicating with Agency officials and
  congressional representatives about your
  interests/needs?
• Are you monitoring implementation?

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Additional ARRA details available

• www.recovery.gov
• www.bakerdconsulting.com

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Questions?

• Vince Ventimiglia
• Senior Vice President
• vincent.ventimiglia_at_bakerd.com
• 202-312-7463

Ed Dougherty Senior Vice President edward.dougher
ty_at_bakerd.com 202-312-7425