Medical Device Daily Washington Editor

Tuesday's hearing on healthcare reform in the health subcommittee for the House Energy and Commerce Committee managed to feature two ardent proponents of a fundamental healthcare overhaul as well as one witness who urged caution in the rush to reform healthcare (Medical Device Daily, June 24, 2009), but at yesterday's hearing, the committee's Republican members once again expressed their displeasure at being shut out of the process of drafting healthcare legislation for the House of Representatives.

Energy and Conference Committee chairman Henry Waxman (D-California), said at the outset of the hearing that the discussion draft "is just that, a draft," and that the bill's sponsors "are seeking input because we want to improve the draft" before unveiling the entire bill.

On the other hand, the panel's ranking GOP member, Joe Barton (R-Texas), saw things a little differently. Barton said to Waxman, "were very ready and very willing to work" with Democrats "to create a new healthcare system for America" and that Waxman had promised to work with the GOP on the text of the legislation. However, Barton said further to Waxman, "while you and I have held several personal meetings ...the brown bag lunch that was supposed to occur [to go over the bill] was rescheduled and rescheduled" and eventually never took place. Barton noted that the last time Waxman had promised to hold the meeting, he canceled due to a scheduled appearance at a press conference to announce some of the details of the bill.

"Hope springs eternal on our side that some of our ideas may be included" in the legislation, Barton continued, but he didn't sound optimistic.

Waxman took a moment to applaud the House bill, describing it as legislation that "relies on and improves Medicare" and "builds upon Medicaid to extend coverage to low-income" Americans. He also stated that the bill's provision for a public option "fixes what's broken" in the private market.

Waxman also asserted that the public option to be made available through a healthcare insurance exchange "will be self-supporting [and] will not receive ongoing subsidies from the federal government." The option, he continued, "will provide competition so we can make the market work and keep everybody honest," the last comment aimed at healthcare insurance companies.

Health and Human Services Secretary Kathleen Sebelius testified at the hearing as to the Obama Administration's views on healthcare reform, but she had little to say that has not already been said of reform in general and of the House bill in particular. She repeated the oft-used message that reform is "not an option, it's a necessity."

"We can do it without adding to the deficit." Sebelius promised, adding that "health reform will be paid for and will be deficit neutral over 10 years." Part of the reason for the administration's optimism on this point, she said, is that the House legislation will start the process of "wringing waste out of the current system," and makes provisions for federal authorities to "aggressively [pursue] fraud and abuse."

She also remarked that President Obama has said "he will not sign a bill unless it's paid for," although she declined to speak about how much of a role that tax increases will play in making the reforms budget neutral.

Barton asked Sebelius to confirm that the White House has guaranteed that reforms will not contrtibute to the federal deficit expansion, and she confirmed this. Barton noted that the Medicaid expansion goes to 133% of the federal poverty level without requiring any matching contribution from the states, a move he said "would add as many 20 million" to the Medicaid rolls "at $6,000 a year. If you cover 20 million at $6,000 a year, that's $120 billion a year. How do you pay for that?" he asked Sebelius.

Sebelius' immediate reply was that "the President has proposed about $660 billion in savings from the current Medicare and Medicaid programs," but Barton said those would take a decade to be realized. "I can tell you that whatever the proposal that comes forward, the President has insisted that the bill will be paid for," she replied. Later in the hearing, Sebelius remarked that she was under the impression that the Medicaid expansion would run to about $3,000 per enrollee per year.

DoJ announces $50M Medicare bust

Lest anyone conclude that all the Medicare fraud takes place in the Sunbelt states, the Department of Justice reported yesterday that the Medicare Fraud Strike Force has corralled 53 individuals who are accused of perpetrating Medicare fraud to the tune of $50 million.

According to the June 24 statement, DoJ and the Department of Health and Human Services, with the help of the Federal Bureau of Investigation, obtained indictments from a Detroit grand jury for the arrest and arraignment of 53 healthcare executives, physicians and patients who are charged with criminal false claims and violations of anti-kickback laws. The two primary areas of Medicare services that served as the focus for this investigation, which swept up individuals in Denver and Miami as well as in Detroit, were infusion therapy and physical and occupational therapy.

The indictments allege that the participants attempted to bill Medicare for services that were unnecessary and, in many cases, never delivered. "In many cases, indictments allege that beneficiaries accepted cash kickbacks in return for allowing providers to submit forms" for the fraudulent claims, the DoJ statement notes.

Attorney General Eric Holder said in the statement that the indictments show that the federal government "will strike back against those whose fraudulent schemes not only undermine a program upon which 45 million aged and disabled Americans depend, but which also contribute directly to rising healthcare costs." The statement also notes that since 2007, the task force has obtained indictments for more than 250 individuals and organizations responsible for as much as $600 million in fraudulent claims.