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Big Changes With the 21st Century Cures Act

Posted by The CareSync Team

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Jan 17, 2017 1:40:00 PM

Funding medical research.jpgAt the end of November, Congress passed what is commonly being referred to as the 21st Century Cures Act. This broad, sweeping legislation dramatically boosts funding dedicated to medical research, relaxes the process for the development and approval of experimental treatments and new medications, reforms government policy on mental health treatment, and more.

Funding Associated With the Act

The 21st Century Cures Act aims to increase funding for the National Institute of Health and streamline the pathway for innovative, newly developed medications to reach patients. The bill provides $1.86 billion in mandated funding on an annual basis for the NIH, which started in fiscal year 2016 and extends through fiscal year 2020 by way of an innovation fund.

The innovation fund created by the bill will provide an additional $1.75 billion to the NIH. Of that money, $500 million will be targeted to the Accelerating Advancement Program (AAP). The AAP will essentially be a grant-matching program to facilitate biomedical research and development. Funding that is left over after will be divvied up among grants for various other medical research.

Another $110 million annually from the innovation fund created by the Act will be directed to the Cures Allocation fund. This funding will be used primarily to support development and implementation of the different programs that are created by the Act. These programs include developing user and clinical experience data, helping to develop drug tools, and monitoring the manufacturing process involved in the production of medications.

So how exactly will all of this money be spent, and to what end? 

Pharmaceutical Companies

For starters, the 21st Century Cures Act will drastically speed up the process of getting new medications approved by the Food and Drug Administration. This will be made possible by granting a higher level of authority to the FDA to require fewer studies and regulations. The result is that the timeline of getting a new drug on the market and to consumers will shrink.

It has been one of the more controversial aspects of the Act, as some see it as a "handout to the drug industry disguised as a pro-research bounty." And progressive critics such as Bernie Sanders and Elizabeth Warren argued that the bill gives too much latitude to pharmaceutical companies.

Not surprisingly, there was intense lobbying by numerous pharmaceutical companies, medical device organizations, and 26 “biotech products and research” companies - to the tune of $192 million. The bill ended up passing with strong bipartisan support by a vote of 94 to 5 in the Senate and 392 to 26 in the House of Representatives. 

Small Employers

Thanks to the Act, employers with fewer than 50 full-time employees now have a compliant way, through health reimbursement arrangements (HRAs), to reimburse employees who get their own individual health insurance policies.

Mental Health and Substance Abuse Advocates

Another set of groups that will benefit from the new legislation are mental health and substance abuse advocates. Approximately $1 billion in the form of state grants is allocated over the next two years to address opioid addiction and abuse. The vast majority of that funding is earmarked for treatment facilities; a much smaller portion will fund research.

In addition, the legislation increases funding for mental health treatment and research. The recently passed bill sets aside funds that climb into the hundreds of millions of dollars for nascent programs, as well as existing mental health and treatment programs.

An article in USA Today explained, "The bill, which combines mental health proposals from several lawmakers, also pushes states to provide early intervention for psychosis, a treatment program that has been hailed as one of the most promising mental health developments in decades."

Health IT and Data Management

Finally, the Act is a boon for health information technology and software companies. Federal agencies and health providers on a national scale will be mandated to begin utilizing electronic health records systems. Further, these entities are charged with collecting data to improve research and treatment.

Even though the newly passed legislation does not actually provide funding for these endeavors, IT and data management organizations stand to realize handsome gains, into the millions of dollars, in new business.

Impact on Doctors

Although the immediate implications of the Cures Act for physicians are not particularly significant, the legislation will certainly impact doctors. The dramatic increases in research and development for medications (as well as their speedier approval time), will have a noticeable effect on how physicians practice medicine. In addition, there are small provisions for the increased use of telemedicine, as well as minor funding bumps for continuing education.

The 21st Century Cures Act is sure to have a tremendous impact on the American healthcare landscape, due in no small part to its sheer size. Faster approval of new medications, increased funding for mental health and substance abuse, and a pronounced move toward technology-based healthcare solutions are some of the primary impacts of this new legislation.

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