Endocrine Insider
September 27, 2007

Earlier this summer, both the U.S. House of Representatives and Senate passed legislation reauthorizing the State Children’s Health Insurance Program (S-CHIP). Also contained in the House-passed version of the legislation was a provision that would have increased physician payments in 2008 and 2009 by 0.5 percent and ultimately changed the way that Medicare physician payments are calculated. Currently, physician payments are calculated using a complex method called the sustainable growth rate (SGR). The SGR has been a controversial process for some time, as it uses the Gross Domestic Product (GDP) in combination with other formulae to determine physician payments.

The version of the legislation passed by the Senate did not include provisions to alter the physician payment formula, and when Congress returned from its August recess, members of both legislative chambers were tasked with ironing out the differences between the two pieces of legislation. Though it has not yet come up for a vote in Congress, the compromise that members have initially agreed upon strips all language from the bill related to altering the Medicare physician payment formula and providing a payment increase in 2008 and 2009. Both chambers have expressed their desire to fix the physician payment formula, but will not do so in the S-CHIP legislation. Instead, the Senate has expressed its plan to eliminate the physician payment cut in end-of-the-year legislation.

Also in doubt is the passage of the 12 individual appropriations bills which provide funding to government agencies. Prior to adjourning for the August recess, the House passed all 12 spending measures. However, the Senate has passed only four of the spending bills to date and has yet to schedule the remaining eight bills for floor consideration. None of the four appropriations bills that have been passed individually by both chambers has gone through conference committee and been passed by the full Congress. Biomedical research is funded through four independent appropriations bills and of those, only one has been passed by both the Senate and House—the Military Construction, Veterans Affairs, and Related Agencies Appropriations Bill, which funds the VA Medical and Prosthetics Research Division. The remaining three bills have not been scheduled for consideration by the full Senate. The funding levels passed by the Senate Appropriations Committee and the full House are included in the chart below. Increases over FY 2007 funding levels are included in parentheses.

	Senate Appropriates Committee	House
National Institutes of Health*	$29.9 billion (+$1 billion)	$29.65 billion (+$750 million)
Dept of Energy Office of Science	$4.49 billion (+$698 million)	$4.51 billion (+$717 million)
National Science Foundation	$6.55 billion (+$636 million)	$6.51 billion (+$512 million)
VA Medical and Prosthetics Research Division	$500 million (+86 million) (passed by the full Senate)	$480 million (+$66 million)

* House bill requires that NIH transfer $201 million of its increase to the Global AIDS fund, and Senate requires that NIH transfer $300 million of its increase to the Global AIDS fund.

The current funding for FY 2007 runs out at the end of September, requiring the passage of a short-term continuing resolution in order to maintain government operations while the Senate and House determine the process for addressing the remaining appropriations bills. The CR, which will likely extend funding through mid-November, will fund government agencies at FY 2007 levels for the duration of the CR. It is likely that Congress will pass an omnibus spending bill for FY 2008, which will include funding levels for all or a majority of government agencies. However, the President has threatened to veto any appropriations bill, including an omnibus spending package, which exceeds the level of discretionary funding in his FY 2008 budget. Current congressional authorizations exceed his budget by $23B.

Society staff will continue to monitor the progress of both the physician payment fix and the appropriations process, and will provide opportunities for Society members to contact their members of Congress at key points during the process. Society staff will also be meeting with key Senate and House offices to share the concerns of the endocrinology community.