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Final Adjournment Wrap-Up: Congress Clears Legislation Reforming NIH, Full-Year “Continuing Resolution” Expected Early Next Year, New SAMHSA Administrator Confirmed
December 14, 2006
In a flurry of activity just prior final adjournment late last week, Congress passed legislation reforming the National Institutes of Health (NIH), by creating greater transparency in the NIH grant process and fostering more trans-NIH research opportunities. In addition, the Senate unanimously confirmed Dr. Terry Cline of
Democratic Leaders Expect to Continue FY 2006 Funding Levels Through October 1, 2007
In a NAMI E-News message sent out on December 9, it was noted that Congress adjourned for the year without completing action on spending bills for the current fiscal year covering nearly all domestic agencies and programs ($463 billion in total discretionary spending), including mental illness research and services, as well as housing and veterans programs. As a result of this action, all of the agencies and programs covered by the “continuing resolution” are now operating under their current FY 2006 budgets through February 15, despite the fact that the 2007 fiscal year actually began on October 1.
On December 11, Democratic leaders – who will be assuming control of Congress in a few weeks – declared that they intend to move forward on a full year “continuing resolution” that would continue FY 2006 spending levels for the rest of FY 2007, i.e. through October 1, 2007. The incoming chairmen of the House and Senate Appropriations Committees, Representative David Obey (D-WI) and Robert Byrd (D-WV), have made clear that they will have to begin work on the President’s FY 2008 budget in February, and will not have enough time to initiate separate spending bills for the current fiscal year given that FY 2007 will already be in its 5th month.
Thus, most federal agencies and programs will be operating under a budget freeze through October 1, 2007 – at levels that Congress put in place back in the fall of 2005. Of particular concern are programs and agencies that were proposed for increases for FY 2007 – most prominently, a $3.1 billion increase for VA medical care that was endorsed by the House and Senate, but can not be realized under a continuing resolution. Democratic leaders are now considering adding these funds to the continuing resolution in February, or including them as part of any FY 2007 supplemental funding request that the President will make in February.
Also at risk in this process are increases that were proposed by the President and endorsed by Congress (e.g., a proposed $209 million boost for homeless funding at HUD and a proposed $8.7 million increase for youth suicide prevention funding at SAMHSA endorsed by the Senate).
For NIMH, the President’s proposal for an $8.5 million reduction for FY 2007 would be restored under this “continuing resolution,” bringing funding back to a freeze level of $1.404 billion. However, this is below the projected annual increase in the cost of doing research (i.e., medical research inflation) for FY 2006 and FY 2007, thereby eroding the capacity of NIMH to invest in new extramural grants.
Likewise, nearly all mental illness services programs at SAMHSA: the Mental Health Block Grant ($428.5 million), PATH homeless services ($54.3 million) and Childrens Mental Health ($104.1 million) would all be frozen at current levels for the rest of FY 2007.
On December 9, Congress cleared legislation enacting the most far reaching reforms to the structure of the National Institutes of Health (NIH) in nearly 15 years. The bill (HR 6164) was cleared by both the House and Senate as part of an agreement that also cleared reauthorization of the Ryan White CARE Act (the federal program supporting AIDS-HIV treatment and supports). The NIH bill is now on its way to the White House where the President is expected to sign it into law. HR 6164 includes a range of changes designed to create greater transparency and accountability in how each of the 27 institutes and centers at NIH (including the NIMH) allocate funding for medical research.
The bill establishes a “common fund” to provide a permanent funding mechanism for trans-NIH research projects. The common fund is a reserve account, and institutes, centers, and independent investigators advancing trans-NIH research may compete for these funds. The amount reserved for the common fund may not be less than the percentage reserved during the previous fiscal year.
Once the common fund reaches 5% of the total NIH budget, the Director of the NIH (in consultation with an advisory council), must submit recommendations to Congress on changes to the amount reserved for the common fund. In allocating resources from this new common fund, a new center would be established in the NIH Director’s office. This new office would direct resources to grants on the basis of emerging scientific opportunity and public health burden. A proposal similar to this common fund was recommended by an Institute of Medicine (IOM) report from 2003.
HR 6164 also initiates a formal strategic planning process for the entire research portfolio of NIH that transcends the research planning activities of individual institutes and centers through the establishment of the Division of Program Coordination, Planning and Strategic Initiatives. The bill does not change the authority of individual institutes and centers to conduct their individual planning, priority setting and research activities.
Among the key provisions in HR 6164 is a proposal for establishing a new standardized NIH-wide uniform electronic reporting system. This would become the basis of an NIH-wide reporting system for all research grants, categorized by disease. This provision is intended to help clarify research funding by disease state, i.e. how much is NIH spending on a specific condition or illness – including schizophrenia, bipolar disorder and major depression. Other key provisions in HR 6164 would:
Read a summary of the legislation. (PDF, opens in a new window)
Medicaid and SCHIP Changes
A NAMI E-News message sent out on December 9 included a brief description of technical changes to Medicaid as part of the final tax, trade and health package that cleared Congress just prior to adjournment. In addition, short-term changes to the State Childrens Health Insurance Program (SCHIP) were added to the NIH authorization bill. All are on the way to the White House where they are expected to be signed into law. Included below is a more in-depth analysis of these provisions.
Technical Corrections to the Medicaid Deficit Reduction Act (DRA)
As part of this end- of the session package, Congress made a number of important technical corrections to last year's DRA. Among these is a clarification that Medicaid recipients below 100% of the federal poverty line are NOT subject to most of the new cost sharing requirements of the DRA. Congress also clarified that the total cap on cost sharing applies to the family, not on a per person basis within a family.
The bill clarifies that Congress intended to exempt certain groups of citizens (not aliens as the original DRA stated), from the need to provide documentation proving citizenship. Although CMS had declared earlier this summer that Medicare and SSI recipients were exempt from the documentation requirement, the bill makes that exemption part of statute. The bill extends new exemptions from the citizenship documentation requirement to children receiving adoption or foster care services under Titles IV-B and IV-E of the Social Security Act and to recipients of Social Security disability benefits.
SCHIP Funding Shortfalls
The fix approved by Congress does not completely fill shortfalls that a number of states are expected to experience next year in federal SCHIP funding. Various estimates peg the total shortfall at $870 to $900 million. CMS projects that 14 states will have shortfalls next year although other estimates show 17 states will face shortfalls. It is important to note that the bill adds no new funding for SCHIP. However, it redistributes $271 million in various unspent SCHIP dollars to the shortfall states.
Under the bill, HHS must redistribute $146 million in unspent funds from FY 2004 that would otherwise expire. In addition, HHS would establish a redistribution pool that would take up to $20 million in unspent FY 2005 SCHIP dollars from states that have more than twice the amount necessary to meet projected demand. About $125 million is projected to end up in this e redistribution pool. HHS will redistribute the money monthly, in the order that states begin to hit their shortfall. The redistributed money is expected to plug the shortfall until May 2007.
Eleven states had expanded their Medicaid programs to cover uninsured children before the enactment of SCHIP (CT, HI, MD, MN, NH, NM, RI, TN, VT, WA, WI). The bill grants those states permission to spend up to 20 percent of their FY 2006 and 2007 SCHIP allotments to provide Medicaid to eligible children. Shortfall states that enrolled eligible non-pregnant adults in SCHIP will receive funds from the redistribution pool, but they will only be eligible for the Medicaid match rate - not the higher SCHIP match rate - for these adults.
Finally, the SCHIP fix was included in H.R. 6164 (PDF, opens in a new window), a bill that reauthorized the National Institutes of Health (not as part of the tax bill as I reported earlier!).
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