www.bakerdaniels.com

American Recovery & American Recovery & Reinvestment Act of 2009Reinvestment Act of 2009

February 27, 20092-3 p.m. Eastern

Please dial 1-866-642-1665Passcode 342441

to listen to the audio portion of the webinar

Key Provisions Key Provisions

Health and Life SciencesHealth and Life Sciences

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Agenda 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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B&D ConsultingB&D 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 overviewStimulus 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 vehiclesOther 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 factorsOther 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 Health provisions present opportunities and challengesopportunities 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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Providers (Hospitals

& Physicians)

Academic Health Centers

Biotech – MedTech

Patients and VHAs

Insurance Companie

s

States

HIT standards x x x x

HIT grants x x x x x x

HIT incentives x x

HIT privacy rules x x x x x

Comparative Effectiveness

x x x x x x

Research Funding

x x x

Research Infrastructure x x x

New Construction x x

Prevention and Wellness

x x x x

BARDA/Pandemic Flu x

COBRA Expansion x

Physician Training x x x x

Medicaid Funding and Rules

x x x

ARRA health provisions at a glanceARRA health provisions at a glance

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Health information technology --Health information technology -- Agency funding Agency funding

Office of the Nat’l 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 standardsHIT 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 grantsHIT 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 grantsHIT 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 MedicaidHIT Medicare and Medicaidincentivesincentives

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 provisionsHIT 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 effectivenessComparative 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 Comparative effectiveness (cont’d)(cont’d)

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 Research funding and infrastructureinfrastructure

$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 Nat’l 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 Research funding and infrastructureinfrastructure

$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 Nat’l 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 Research funding and infrastructureinfrastructure

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 wellnessPrevention 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 Training of medical professionalsprofessionals

$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 developmentMedical product development

No direct funding through BARDA or pandemic flu appropriations

Continued Hill interest in these programs

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Next stepsNext 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 Additional ARRA details available available

www.recovery.gov www.bakerdconsulting.com

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Vince Ventimiglia Senior Vice Presidentvincent.ventimiglia@bakerd.com202-312-7463

Ed Dougherty Senior Vice Presidentedward.dougherty@bakerd.com202-312-7425

Questions?Questions?