Following are key provisions of the proposed economic stimulus likely to affect manufacturers of innovative medical technology:

  • Prevention and Wellness
  • Medical Product Development and Procurement
  • Comparative Effectiveness Research
  • Health Information Technology

Prevention and Wellness

The bill proposes a $3 billion fund to fight preventable chronic and infections diseases, including:

  • $954 million for the Centers for Disease Control and Prevention (CDC) discretionary immunization program in public health departments;
  • $1.5 million to the Institute of Medicine (IOM) for a report on prevention and wellness priorities;
  • $150 million for hospital infection prevention;
  • $60 million for injury prevention; and
  • $335 million for domestic HIV/AIDS, viral hepatitis, STDs, and TB prevention.

Many of these funds are intended for services and "programs," including education, planning and strategy development, and stakeholders will need to position themselves with agencies as eligible providers.

Stakeholders should also assess opportunities to further target the spending of those funds, whether through the priority development process at the Institute of Medicine (IOM) or directly with the agencies and Capitol Hill.

In addition, funding under the programs can include product development or procurement, and manufacturers, in particular, should assess whether products such as vaccines, anti-virals, drug-delivery devices like syringes, diagnostics, or infection-reducing products used in surgery might qualify for development or purchase.

Medical Product Development and Procurement

The stimulus proposes that $850 million be directed to the Public Health and Social Services Emergency Fund (PHSSEF), including:

  • $430 million for Biomedical Advanced Research and Development Authority (BARDA) procurement and advanced development of medical countermeasures for chemical, biological, radiological and nuclear agents (i.e., products that are in clinical trials but are not yet cleared for marketing by FDA);
  • $420 million for pandemic flu preparation, including development and purchase of vaccine, antivirals, necessary medical supplies, diagnostics and other surveillance tools (including construction of facilities related to vaccines and biologics) for potential eventual deposit in the Strategic National Stockpile.

Stakeholders should rapidly become familiar with the divergent requirements of BARDA, BioShield, the Stockpile, and the Pandemic Flu Plan, for funding of products, requirements that vary depending on the stage of product development, status of FDA review, status of commercial market, and other requirements.

Stakeholders have an opportunity to engage the BARDA office within the Office of the Assistant Secretary for Preparedness and Response (ASPR), as well as other ASPR units on the merits of their products and their eligibility for ASPR funding under this bill and other existing funding.

While the pandemic flu spending plan is currently in place and funding under this bill will presumably be devoted to procurements consistent with the plan, stakeholders with related products may wish to take advantage of the new administration and seek modifications to the current spending plan.

Comparative Effectiveness Research

The stimulus would provide $1.1 billion to the Department of Health and Human Services (HHS) for comparative effectiveness research. Much or all of the funding can either “support” research done by others or can be conducted by the Agency itself (e.g., by NIH). All products, procedures, and services are intended to be subject to comparative effectiveness evaluation.

Whether comparative effectiveness funding can be used for cost-effectiveness studies remains an open question. The reference to “appropriateness of items” is potentially intended to permit such studies. (Similar language is used in section 1013 of the Medicare Modernization Act, and section 1013 is a permitted use of the funds under the stimulus bill.) Stakeholders should consider working with agencies and the Hill to ensure that these studies are only done if appropriate and consistent with patient interests.

The public is expressly given the opportunity to comment on research findings, but need only be consulted to the "extent feasible."

Within 90 days of the bill passing and before providing the funding (in either 2009 or 2010), the Secretary shall provide the Appropriations Committees (but not necessarily the public or others) an operating plan for use of the funds. Stakeholders should seek to influence this plan before it goes out and should strive to get access to the plan after it is finalized.

Funding for comparative effectiveness research would be disbursed across HHS:

  • $300 million to the Agency for Healthcare Research and Quality (AHRQ). AHRQ has substantial experience with this type of research, but is not accustomed to this level of funding.
  • $400 million to the National Institutes of Health (NIH). The NIH money may go to specific Institutes or to the Common Fund but the formula is not dictated (unlike in other provisions of the bill). Stakeholders should consider influencing where the funding is directed to ensure maximum impact.
  • $400 million to be used at the discretion of the Secretary of HHS. This money is expected be used to “encourage the development and use of clinical registries, clinical data networks, and other forms of electronic health data that can be used to generate or obtain outcomes data.” Organizations with experience in setting up or running registries or ensuring the quality and appropriate conduct of data banks should consider involvement. The implications for open access to research results and open data policies should be explored.
  • The Secretary may delegate his authority to spend the money to other Agencies or to private-sector entities. That money is intended to “accelerate the development and dissemination” of comparative effectiveness research, so the money could be spent on research itself or planning and other activities not directly considered research. "Appropriate entities” can participate in this funding, including organizations not traditionally considered “scientific,” such as consulting, social behavior, or other entities that have demonstrated experience and capacity to achieve the goals of comparative effectiveness research.
  • A new Federal Coordinating Council will assist the Administration with coordinating comparative effectiveness research and will provide stakeholders with another opportunity/obligatory point of contact to ensure appropriate policy. Half of the members of the Council will be drawn from the physician/provider community. Stakeholders should consider membership in the Council or otherwise communicating appropriate priorities and methods to the Council.
  • The Institute of Medicine must make recommendations on national (not local or regional) comparative effectiveness research priorities by June 2009. Stakeholders are expressly urged to engage in developing these priorities.

Health Information Technology

The stimulus bills would provide a total of $20 billion to support infrastructure for electronic exchange of health information and incentives to encourage doctors and hospitals to adopt certified electronic health records.

The House bills provide an immediate $2 billion infusion to the Office of the National Coordinator (ONC) for Health Information Technology for:

  • Architecture supporting the nationwide electronic exchange of health information
  • Training of health care professionals; and
  • Grants to institutions and providers to acquire health IT products that meet certain quality standards.

To help promote the adoption of certified health records, the bill provides $540 million in Medicare payments and $360 million in Medicaid payments over 11 years to doctors and hospitals who use certified electronic health records.

  • Physicians will be eligible for incentive payments ranging from $40,000 to $65,000 for demonstrating that they are using health IT for reporting quality measures, e-prescribing, and being connected to regional information exchanges that improve the coordination and quality of care.
  • Hospitals that use health IT will be eligible for incentive payments from both the Medicare and Medicaid programs.
  • Non-hospital providers, including nurse midwives and nurse practitioners, federally qualified health centers, rural health clinics, and children’s hospitals will be eligible for funding through the Medicaid incentive program.
  • Incentive payments for both physicians and hospitals will continue for several years, but will be phased out over time. Eventually, Medicare payments for physicians and hospitals that do not use certified electronic health records will be cut.

The legislation also:

  • Creates national and regional centers to provide technical assistance and teach best practices to all providers;
  • Provides State grants for health IT planning and implementation activities, low-interest loans to help providers finance infrastructure, and grants to regional health information exchanges to unite local providers;
  • Offers grants to providers other than physicians and hospitals; and,
  • Supports developing courses for health professionals on how to integrate health IT and electronic health records.

The Office of the National Coordinator (ONC) will have a new Chief Privacy Officer with responsibility over privacy, security and data stewardship matters as well as coordinating with other public and private entities on HIT matters. There will also be a substantial new role for HIT in data development in a range of areas, including telemedicine, drug safety, biosurveillance, public health research, medical errors, etc. Stakeholders with interests in effective and reasonable privacy and security protections should consider surfacing potential candidates for this office and should actively engage the office with proposals.

Stakeholder engagement

Stakeholders should evaluate opportunities to influence policy development and disbursement of funds for health IT, including:

  • Stakeholders should assess their ability to access $2 billion in funds for IT infrastructure and should ensure that they are not pre-emptively barred from or hindered in their eligibility.
  • The Office of the National Coordinator of Health IT (ONC) must update the Federal HIT Strategic Plan. Stakeholders should evaluate their opportunities under the existing plan and ensure that the new plan is consistent with their objectives. Because the statute would alter the planning roles previously played by the Secretary, ONC and others, stakeholders should assess opportunities and threats and seek to influence new plan development.
  • ONC will be advised by a new Policy Committee and a new Standards Committee. The committees shall "reflect providers, ancillary health care workers, consumers, purchasers, health plans, technology vendors, researchers, federal agencies, and other experts." Stakeholders should consider appropriate engagement with these committees.
    • Within 90 days of passage of the bills and before providing the funding (in either 2009 or 2010) , the Secretary of HHS shall provide the Appropriations Committees (but not necessarily the public or others) an operating plan for the funds. Stakeholders should seek to influence this plan before it goes out and should strive to get access to the plan after it is finalized.
    • Accountability for the funds expended will be assessed by the Government Accountability Office (GAO). Stakeholders should consider engagement at the appropriate time with GAO on that assessment.
    • For the first time, ONC is provided authority to charge “nominal fees” to providers for use of an electronic health record. Stakeholders should engage to ensure that the fees and circumstances of their being charged, as well as fee waiver options, do not adversely impact the stakeholder.
    • Stakeholders need to assess the appropriateness of the incentives to physicians ($40,000-$65,000) and hospitals (several million dollars), which will be available for several years and then phased out, to ensure that stakeholders do not lose access where they should qualify.
    • Several new privacy and security requirements in the statute—including requirements for notification of consumers where a breach is involved, restrictions on marketing, sales, data mining, fundraising, and promotion using health information, and expansion of the Health Insurance Portability and Accountability Act (HIPAA) requirements to new entities involved with health records, as well as increased penalties for violations—all expose a vast array of entities to new privacy and security requirements that may be the subject of new rule-making. Stakeholders should engage to protect their interests in the statute as well as subsequent rules that will be developed.
  • The current executive order directing that entities doing business with the government shall do so using interoperable HIT systems is altered to become a statutory requirement. Stakeholders should engage to influence and assess what new obligations will be imposed.