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November 4, 2011


Washington Letter
November 4, 2011
Newsletter of the American Thoracic Society's Washington Office

1150 18th Street NW
Suite 300
Washington, D.C. 20036
Telephone:(202) 296-9770


CMS Releases Final Rules for 2012

This week the Centers for Medicare and Medicaid Services issued final rules for the Medicare Physician Fee Schedule and the Hospital Outpatient Prospective Payment System for 2012. Both of these rules include important, and concerning, program changes for the pulmonary, critical care and sleep community.

2012 Conversion Factor – The rule finalizes the conversion factor for 2012 at $24.6712--a 27.4 percent cut from the 2011 conversion factor. The cut was expected and is a result of the flawed Sustainable Growth Rate (SGR) factor used to calculate the annual Medicare update. This marks the 11th straight year that the conversion factor has recommended steep cuts Medicare physician payments. Every year, except for 2002, Congress has intervened to prevent the cuts. The physician community is hoping and expecting Congress to forestall the 2012 cuts. 

In a press release describing the final rule, CMS Administrator Donald Berwick, MD, expressed his concern with the cut and called on Congress to work with the Administration to develop a permanent fix to the SGR formula.

Pulmonary Rehabilitation – The ATS is concerned and disappointed that CMS finalized a proposal to cut Medicare reimbursement for pulmonary rehabilitation (G0424) from $62 in 2011 to $37 in 2012.  CMS justifies the cut on data collected from hospital cost reports for pulmonary rehabilitation. The ATS and sister societies submitted comments and met with CMS staff to explain why hospital cost reporting data was flawed and would lead to inappropriate reimbursement rates.  We are disappointed that CMS chose to dismiss our concerns and recommendation.

The ATS will continue to work with CMS and sister societies to restore payment rates for pulmonary rehabilitation.

New CPT codes for Pulmonary Function Tests – The final rule includes a new family of codes for pulmonary function tests. 

The ATS will provide further details on both the Medicare Physician Fee Schedule and the Medicare Hospital Outpatient Prospective Payment System rule in the December issue of the ATS Coding and Billing Quarterly.  For those interested in viewing the final rules, the Medicare physician fee schedule rule can be found at:


The Medicare Hospital Outpatient Prospective Payment System rule--which covers outpatient payment for pulmonary rehabilitation (G0424)--can be found at:



Congress Begins Moving “Minibus” 2012 Spending Bills

This week, Congress began moving FY2012 spending bills, following Senate passage of a “minibus” package consisting of the Agriculture, Transportation and Housing and Commerce-Justice Fy2012 appropriations bills. The measure passed by a vote of 60- 39. The House leadership, which had earlier voiced opposition to moving packages of appropriations bills in favor of an omnibus including all of the bills, has now indicated that it will schedule votes on minibus bills passed by the Senate.

The next minibus slated for Senate floor votes includes the FY2012 Energy and Water, Financial Services and Foreign Operations bills, which include funding for USAID’s tuberculosis program. The bill provides $225 million for the TB program, the same as last year. Not yet up for Senate action is the Labor-Health and Human Services and Education bill (Labor-HHS-ED), which funds NIH and CDC, known as one of the most contentious spending bills. NIH funding is one of the many areas of difference between the House and Senate Labor-HHS bills, with the Senate bill proposing a 0.6 percent cut to FY2012 NIH funding and the House bill proposing a 3.3 percent funding increase for NIH.

The other curious difference between these two bills is that the Senate Labor-HHS-ED bill has been passed through the Appropriations Committee,but the House bill has not. Instead, House Labor-HHS-ED Appropriations subcommittee Chairman, Rep. Rehberg (R-MT), released the current draft House Labor-HHS-ED bill to the public. With the absence of standard committee approval, it is unclear what the specific process for action will be on the Labor-HHS-ED bill, though it appears that the House leadership is allowing the draft bill, at least for now, to serve as the House’s negotiation point with the Senate on labor, health research and services and education program funding.

Although Congress has started moving the spending bills, it does not appear likely that they will be able to pass all 12 bills by the deadline of November 18, when the current temporary resolution funding government programs runs out, despite the minibus approach. It is expected that Congress will have to pass another temporary measure to fund the government at least through December.

Senate Rejects Amendment to Delay Primatene Mist CFC Phase Out

In a related action, during consideration of the  “mini-bus” package, the Senate rejected by 54-44 (along party lines) an amendment offered by Sen. DeMint (R-SC) that would prevent FDA from removing Primatene Mist CFC from the market on January 1, 2012. 

As part of an international effort to remove all non-essential use of ozone-depleting substances from the market, the FDA and the EPA agreed to the impending removal of  Primatene Mist CFC in the United States. Primatene Mist uses chloroflourocarbons (CFC) as a propellant. CFCs are known ozone-depleting substances and have contributed to the hole in the ozone layer. 

In his comments regarding the amendment, Sen. DeMint stated that he offered the amendment to preserve low-cost, over-the-counter options for patients to treat their asthma. According to the National Asthma Education and Prevention Program guidelines for the treatment of asthma, epinephrine (Primatene Mist) is not recommended for the treatment of asthma because of the potential for excessive cardiac stimulation.

The ATS urged the Senate to oppose the DeMint amendment and allow Primatene Mist CFC to be removed from the market in 2012.

President Obama Issues Executive Order on Drug Shortages

Also this week, President Obama issued an executive order aimed at addressing drug shortages in the United States. Many drugs, including medications used to treat respiratory diseases, critical illnesses and sleep disorders are or have been in short supply across the country over the past few years. Causes for the shortages include consolidation in the drug industry and shortages of raw materials to produce drugs.

ATS members have reported that many drugs commonly used for treatment of respiratory diseases, critical illnesses and sleep disorders, particularly those used in intensive care units, have been in severe shortage. These include the following:

  • the sedative Propofol
  • furosemide, used to treat excessive swelling and fluid retention
  • fentanyl, used as a pain reliever and anesthetic
  • the sedative lorazepam
  • norepinephrine, a hormone and neurotransmittor

In addition to the medications listed above, many second-line drugs used to drug resistant tuberculosis, such as kanamycin, amikacin and capreomycin, have been in severe shortage across the country and when they are available,  come with an exorbitant cost, to the extent that treatment costs for multi-drug resistant TB range from $100,000 to $300,000. To address the TB drug shortages and high costs, the ATS worked with the U.S. Senate to secure a directive in the FY2012 health spending bill, noting the national drug shortages of second-line drugs and other barriers to optimal treatment and urging the Federal TB Task Force to work with the FDA and other partners to alleviate drug shortages. Though the bill has not yet been passed, the probability of enactment is reasonably good.

The President’s executive order takes the following actions:

  • Requires drug manufacturers to provide more advance notice of manufacturing discontinuances that could lead to shortages;
  • Authorizes expedited FDA reviews of new drug suppliers and manufacturing changes; and

Facilitates DOJ investigations of price gouging by drug manufacturers and suppliers.

In addition, the FDA announced that it would double the number staff in its drug-shortage program and add staff to the Office of Compliance.

The executive order is not expected to have a mjor effect on ameliorating the  current shortages because the President does not have the authority to require the pharmaceutical industry to increase the manufacture of certain drugs or create larger markets for drugs. That authority would require congressional action, which would be difficult if not impossible to initiate with the Congress so divided and focused on deficit reduction.


ATS Supports FAA Ban on E-Cigarettes

The ATS submitted comments to the Federal Aviation Administration (FAA) in support of a proposed rule that would ban the use of e-cigarettes on commercial flights.  While the FAA had previously banned tobacco use on air travel, the agency does not have a regulatory policy on e-cigarettes. The ATS noted that while there is little data on the health effects of e-cigarettes, they are still a tobacco product and should be treated similar to other tobacco products under FAA rules.



The Washington Letter is written by the American Thoracic Society government relations office and emailed to all ATS members living in the United States. The letter keeps clinicians, scientists, and patients abreast of legislative, judicial, and regulatory issues in pulmonary, critical care, and sleep medicine. Each week's edition is archived on the ATS Web site, www.thoracic.org. If you have any questions or one more information about becoming involved in advocacy, please contact the ATS Washington office at 202-296-9770.