Medical Device Daily Washington Editor

A day after the House of Representatives announced the publication of the full draft of its healthcare reform legislation, the Senate Health, Education, Labor and Pensions (HELP) Committee passed its Affordable Health Choices Act of 2009 (S. II), a bill that runs 615 pages and includes a public option for enrollees.

According to a July 15 statement published by the HELP Committee, insurers will no longer be able to deny coverage for pre-existing conditions in the individual insurance market, and insurers will not be able to cap annual or lifetime dollar-value benefits. The HELP Committee bill includes a mandatory enrollment provision for individuals with an exemption for financial hardship, and also mandates that employers offer a plan with an exemption for those employing fewer than 25. Companies with more than 25 employees that do not offer an in-house plan would be required to pay an annual fee of $750 per full-time employee and $375 per part-time employee.

S. II describes its healthcare insurance exchange as a gateway, and allows states to form multi-state gateways. However, states have up to six years after enactment to form a gateway or join in on a regional gateway. The bill also includes the CLASS Act, a provision dealing with long-term care (Medical Device Daily, July 9, 2009).

In a July 15 statement, David Nexon, senior executive VP for the Advanced Medical Technology Association (AdvaMed; Washington), commended the HELP Committee for passage of the bill, but noted that the association "continue[s] to have some concerns about certain provisions, such as the comparative effectiveness research (CER) language in the legislation." Nexon remarked that AdvaMed "supports the use of CER to advance quality patient care and to guide clinical decision making, but the research process should be transparent, involve all stakeholders, and clearly be focused on finding what works best for patients."

CBO scores House bill

The Congressional Budget Office yesterday released an analysis of the House healthcare reform bill, known as the America's Affordable Health Choices Act of 2009 (H.R. 3200), which was offered in full for the first time on Tuesday (MDD, July 15, 2009). According to CBO, the House bill would jack up the federal deficit by more than $1 trillion between 2010 and 2019, but would nonetheless leave about 17 million in the U.S. without healthcare insurance.

Some of the offsets to the cost of the plan, which has been widely pegged at a total cost of $1.5 trillion over the first decade, would come from businesses that do not offer coverage, an amount projected at $163 billion over 10 years. Companies who offer coverage but whose employees opt to enroll in the individual market would be taxed $45 billion between 2010 and 2019, and those who choose to remain uninsured would be set back by $29 billion. Another source of revenues is a tax surcharge proposal in the House bill to boost taxes on those making more than $280,000 ($350,000 for married couples) by 1%, rising to 5.4% for individuals making $800,000 a year ($1 million for couples). One of the concerns that fiscal conservatives have is that many in this income group operate small businesses and that such a tax would tamp down economic growth. The CBO analysis does not include an examination of the impact on increased taxes on the economy.

The Blue Dog Coalition made the rounds yesterday, with Rep. Jim Cooper (D-Tennessee) saying of the House bill in an interview with CBS News: "There's a lot of good in it and a lot of bad," but he was non-committal as to whether he supports the bill en toto. "I'm trying to weigh the pros and cons," he said, noting that a health insurance exchange "is going to encourage a more efficient marketplace," which can help save money.

Of the tax surcharge, Cooper said, "over 10 years, it's estimated to be about $540 billion," which he described as "a lot of money."

"We don't like it for a couple of reasons," Cooper said, partly because "it takes money outside the healthcare system and puts it in the healthcare system." He noted that small businesses are affected, characterizing them as the prime engines of job creation in the U.S.

Cooper observed further, "most people think [the surcharge] would never pass the Senate, so the House is needlessly walk the plank on this issue." Noting that President Obama made promises about taxes in the run-up to the legislation, Cooper remarked that the imposition of a surtax "is a big mistake" to the extent that it would "undermine our own president's credibility."

Cooper also remarked that "it is possible" that the House will pass the bill before the August recess and that he is "willing to sacrifice August vacation, any vacation," to finish the bill. He hinted that this bill will not get out of the House in its current form, stating that "all first drafts need improvement."

FTC publishes Alta Bates ruling

The Federal Trade Commission has announced a final ruling in the matter of Alta Bates Medical Group (San Francisco), voting 4-0 to uphold the preliminary action announced on June 4. FTC announced on that date that its preliminary decision would be open for public comment until July 6 (MDD, June 9, 2009). However, FTC's July 14 statement did not specifically state that it had opted to retain the conditions of its preliminary ruling.

According to the June 4 FTC announcement, Bates started pursuing "collective negotiations for fee-for-service contracts" in 2001, but that Bates "proposed, rejected and countered offers to insurers without consulting with its individual physician members regarding the prices" proposed for those services. FTC also said in its June 4 statement that Bates had undertaken "an unlawful concerted refusal to deal," in disallowing its member physicians to participate in a plan set up by Kaiser Permanente (Oakland, California). FTC indicated in its June 4 statement that while it would impose no financial penalties on Bates, the organization would have to clear "certain contacts with insurers" with FTC. Bates admitted to no wrongdoing.

An FTC spokesman told Medical Device Daily that the agency received no public comments and confirmed that FTC's final decision mirrored its initial proposed remedy.