Charles E. Schneider03.31.09
Reimbursement Roadmap: Congress Introduces Plethora of Healthcare Proposals
Charles E. Schneider
The year 2009 signals change within the U.S. healthcare framework—from the inauguration of the 44th president, Barack Obama, to sweeping changes in Congress. The Democratic Party now controls the majority in both houses and the executive branch.
While there were many attempts at reform by the 110th Congress, control now enjoyed by one party will likely result in changes that will affect medical technology manufacturers, innovators and physicians.
In this installment, we look at some of the healthcare legislation proposed by the 111th Congress such as government-mandated healthcare insurance, increased scrut-iny over payments between manufacturers and physicians, Office of the Inspector General disclosure requirements, required use of generic medications and the potential repeal of Riegel v. Medtronic. Given the magnitude of regulatory changes expected in 2009, medical technology stakeholders are encouraged to become active participants in the legislative process, stay well informed and evaluate how such changes might affect innovation and commercialization of medical technologies.
• Beginning with the Comprehensive Health Reform Act of 2009 (S.4), introduced by Majority Leader Sen. Harry Reid (D-Nev.) on the first day of the new legislative session, the legislative process has been kick-started with an overriding objective toward healthcare reform. As summarized by the Congressional Research Service, S.4 “calls for Congress to enact, and the president to sign, legislation to guarantee health coverage, improve healthcare quality and disease prevention and reduce healthcare costs for all Americans and the healthcare system.”
This bill serves as a placeholder for an amended bill likely to include a great deal of substance.
• Sen. Herbert Kohl (D-Wis.) introduced S.75 that would amend 1860D-2(e)(2) of the Social Security Act to require recipients of Medicare Part D (pharmaceutical benefit) to use generic drugs unless name brand drugs are medically necessary.
• In the House, Rep. John Dingell (D-Mich.) introduced H.R. 15 calling for the creation of national health insurance. In brief, the federal government would establish the National Health Care Trust Fund, delegate responsibility for program administration to the states, establish local administrative committees composed mostly of program beneficiaries, establish local professional committees, and establish a National Health Insurance Board (NHIB). As written within H.R. 15, this board would consist of five members, three of whom would be appointed by the president, the surgeon general and the administrator of Social Security. H.R. 15 also would establish a National Advisory Medical Policy Council that shall advise the NHIB with matters concerning policy and program administration. If enacted, this program would go into effect on Oct. 1, 2010. A value-added tax is proposed to cover the cost of some of these services and program administration.
• Further regulating fraud and abuse, the 111th Congress likely will introduce bills requiring greater disclosure about the physician and manufacturing relationship, impose further scrutiny on durable medical equipment suppliers (H.R. 27 and H.R. 203) and pursue some regulations designed to limit awards on medical claims in terms of non-economic damages and timely filings of claims against the healthcare provider (S.45).
The plethora of legislation introduced during the initial weeks of the new legislative session shows significant interest on the part of Congress to act swiftly to regulate healthcare within the United States.
Whether sweeping healthcare reform as introduced by Reid and Dingell, required use of generic medications proposed by Kohl or specific reforms contemplated by other members, medical technology companies should pay close attention to the legislative agenda of the 111th Congress, actively participate in this process and make certain that advancements in medical device, diagnostics, biologics, pharmaceuticals and care delivery systems are not impeded by regulatory burdens, shortfalls in appropriations or rules that would needlessly increase the cost of the technology.
On the other hand, technology company executives may wish to support reforms that discourage frivolous lawsuits, deny access to advancements and create enabling pathways to medical technologies from concept through commercialization.
One thing is certain. The 111th Congress and President Obama will seek reform through legislation. Technology innovators and manufacturers would do well to become active participants in the process to ensure advancements in technology continue.