House Passes Medical Device Tax Repeal, Makes Progress on Other Health Legislation

The House voted to repeal the Affordable Care Act’s (ACA) 2.3 percent excise tax on medical device manufacturers last week. H.R. 160, the Protect Medical Innovation Act of 2015, was passed 280-140, with 46 Democrats joining every Republican in voting for the measure. The bill will cost $24.4 billion over the next decade, and was approved without an offset. The House also passed four bipartisan bills dealing with the Medicare Advantage (MA) program, including

  • H.R. 2570, the Value-Based Insurance Design for Better Care Act of 2015, to establish a demonstration program requiring the utilization of Value-Based Insurance Design;
  • H.R. 2507, the Increasing Regulatory Fairness Act of 2015, to establish an annual rulemaking schedule for payment rates under Medicare Advantage;
  • H.R. 2505, the Medicare Advantage Coverage Transparency Act of 2015, to require the annual reporting of data on enrollment in Medicare Advantage plans; and
  • H.R. 2582, the Securing Seniors’ Health Care Act of 2015, to improve the risk adjustment under the Medicare Advantage program, and to delay the authority to terminate Medicare Advantage contracts for MA plans failing to achieve minimum quality ratings.


The first three bills were scored as budget neutral according to the Congressional Budget Office. H.R. 2582 would result in $30 million in savings. H.R. 2570 also includes provisions related to electronic health records (EHRs) for ambulatory surgical centers (ASCs) and reimbursement for infusion drugs under the Medicare Part B durable medical equipment (DME) benefit. The House also began consideration of legislation to repeal ACA’s Independent Payment Advisory Board (IPAB) last week. The cost of H.R. 1190, the Protecting Seniors’ Access to Medicare Act of 2025, is estimated at $7.1 billion through the year 2025. This cost is offset by cuts to the ACA’s Public Health and Prevention Fund. The House is scheduled to vote on H.R. 1190 later this week. Both H.R. 160 and H.R. 1190 have received veto threats from the White House.

Lawmakers Express Opposition to 21st Century Cures Offset

Forty bipartisan members of the House of Representatives have written to Speaker John Boehner (R-Ohio) and Minority Leader Nancy Pelosi (D-Calif.) expressing opposition to a measure that would take $7 billion from Medicare Part D plans in order to pay for the 21st Century Cures Act. The proposed offset would delay certain government reinsurance payments to insurers while keeping the interest payments. The letter was spearheaded by Rep. Renee Ellmers (R-N.C.) and Rep. Ron Kind (D-Wis.). “The proposed budgetary change would not reduce federal spending or bureaucracy, but instead would result in increased Part D costs that ultimately would be passed on to the Medicare Trust Fund and its beneficiaries. This change is effectively a tax on America’s seniors,” the letter states. While the letter does not mention the 21st Century Cures Initiative by name, the proposal is known to be the preferred offset of Energy and Commerce Ranking Member Frank Pallone (D-N.J.).

MedPAC Releases June Report to Congress

The Medicare Payment Advisory Commission (MedPAC) has released its June 2015 Report to the Congress, titled “Medicare and the Health Care Delivery System.” The report considers a wide range of subjects, including hospital short-stay policy issues, payment policies for Part B drugs, value-based incentives for Part B drugs, polypharmacy and opioid use, risk-sharing in Part D, synchronizing policy across Medicare’s payment models, next steps in measuring quality, and the next generation of Medicare beneficiaries. Notably, MedPAC recommends that the two-midnight rule be withdrawn, and that recovery audit contractors (RACs) should be directed to focus reviews of short inpatient stays on hospitals with the highest rates of this type of stay. Additionally, the Commission recommends that RAC’s contingency fees should be modified to be based, in part, on its claim denial overturn rate, and the RAC look-back period should be shorter than the Medicare rebilling period for short inpatient stays.

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