LAWMAKERS INTRODUCE MEDICAL EXCISE TAX REPEAL BILL:

On January 25, lawmakers in both the House and Senate introduced companion bills that would immediately repeal the $20 billion tax on medical devices that was included in the new healthcare reform law – the Patient Protection and Affordable Care Act (PPACA).

Known as the Protect Medical Innovation Act in both chambers, the House and Senate bills were introduced by Congressman Erik Paulsen (R-MN) and Senator Orrin Hatch (R-UT) respectively. The legislation seeks to repeal the 2.3 percent excise tax on medical device sales, which is slated to take effect beginning on January 1, 2013.

According to Congressman Paulsen: “Taxing the medical technology industry to the tune of $20 billion will only stifle growth, innovation, and access to the life-saving technologies U.S. device companies produce.” Senator Hatch issued a similar statement, adding that “…these tax hikes will only result in higher insurance premiums and increase the cost of medical devices.”

As expected, the Medical Device Manufacturers Association praised the legislation, noting the adverse affect the tax will have on the small businesses that develop innovative technologies.

LEGISLATION INTRODUCED TO REPEAL NEW MEDICARE PAYMENT BOARD:

The following day, additional legislation was introduced in the House that would impact the implementation of the PPACA. Known as the Medicare Decisions Accountability Act, the bill would halt the creation of the Independent Payment Advisory Board (IPAB) – a PPACA-created entity that would have authority to cut Medicare payments.

The IPAB is slated to begin operating in 2014, at which time its 15 presidentially-appointed members would set Medicare reimbursement policy. Such policy would automatically become law unless Congress intervenes – a move that IPAB critics have said would take Medicare accountability away from lawmakers and move it to the hands of unelected officials.

The legislation’s sponsor, Congressman Phil Roe (R-TN), said that the IPAB should be repealed because it will result in reduced access to care and quality of care by forcing reimbursement cuts on providers. IPAB proponents, on the other hand, state that it will curb Medicare spending in an effective manner while also maintaining beneficiary protections.

NEW MEDICAL HOME STANDARDS EMPHASIZE HEALTH IT:

On January 31, the National Committee for Quality Assurance (NCQA) unveiled new medical home standards that are patient-centered and include a focus on federal health information technology (HIT) requirements.

The standards emphasize practices that base care on patient preference and need, such as providing services in a patient’s preferred language and access to care both during and after regular office hours. In addition, the standards include federal language on “meaningful use” of HIT, which are used to evaluate patient-centered medical homes (PCMHs) – providing a further incentive for providers to use HIT to improve quality.

NCQA – a non-profit organization that certifies and accredits various healthcare organizations – is also working with the Agency for Healthcare Research and Quality within the Department of Health and Human Services (HHS) to develop a medical home version of the Consumer Assessment of Healthcare Providers and Systems (CAHPS) Clinician and Group Survey. That version of CAHPS is due to be released later in the year.

FLORIDA JUDGE RULES HEALTHCARE LAW UNCONSTITUTIONAL:

In a 78-page ruling on January 31, U.S. District Judge Roger Vinson declared the entire healthcare reform law (the PPACA) unconstitutional, stating that one section of the law that was unconstitutional – the individual mandate requiring most citizens to have health insurance or pay a fine – could not be carved out of the rest of the statute.

Ruling against HHS in the case, Judge Vinson held that by enacting the individual mandate, Congress exceeded its authority under the Constitution’s commerce clause. The outcome means that federal district court rulings on the PPACA are now evenly split. Thus far, the two judges that have found it unconstitutional are Republican appointees, and the two judges that have ruled it does not violate the Constitution are Democratic appointees. The Supreme Court is expected to settle the question within the next one to two years.

NEXT STEPS:

As the first session of the 112th Congress moves forward, we continue to follow news from Capitol Hill. In addition, we continue to monitor HHS/CMS and other agencies, as the implementation of healthcare reform progresses and other related matters arise. We will bring you timely updates as such developments take place.