Medical Device Daily Washington Editor

The Senate approved the nomination of Margaret Hamburg, MD, to take the office of the commissioner of FDA, making her the 25th commissioner and the second woman to hold the post after Jane Henney, MD, who held the job from 1999 to 2001. Hamburg takes the job as Congress is nearing approval of a bill that would give the agency regulatory authority over tobacco, a move that would substantially add to the regulatory burden on FDA.

Hamburg backs the proposition, according to testimony she gave before the Senate Health, Education, Labor and Pensions Committee (Medical Device Daily, May 12, 2009), telling committee members that she sees FDA as "the appropriate agency to regulate tobacco." The House of Representatives passed the Family Smoking Prevention and Tobacco Control Act of 2009 (H.R. 1256) earlier this year by a vote of 298-112, but the Senate version, S. 982, faces stiffer opposition. Several members of the Senate HELP Committee, including ranking member Mike Enzi (R-Wyoming), are opposed to the idea, which is expected to take more than one day to mark up. The committee was scheduled to commence with mark-ups of the bill yesterday afternoon.

In a May 18 statement, Steve Ubl, President/CEO of the Advanced Medical Technology Association (AdvaMed; Washington), congratulated Hamburg, saying that her previous experience "will serve her well in leading this vital government agency." Ubl also noted that the association's members "applaud Dr. Hamburg's expressed priorities of fostering innovation and further advancing the safety of medical products."

Tax exemption under Senate's scalpel

The Senate Finance Committee published a formal statement Monday listing a set of mechanisms by which healthcare coverage can be expanded to all Americans, a list that includes taxes on various beverages and the tax-exempt status of healthcare premiums. While the document does not prescribe any one set of mechanisms, it does make clear that the effort will require changes to many programs and an increase in taxes for most, if not all Americans.

The document notes that the indirect cost of "many subsidies and incentives related to healthcare" aggregately "account for more than 17% of all federal tax expenditures" at almost $195 billion a year, a hint that the tax exclusion for healthcare premiums will be trimmed. According to the document, the exemption keeps more than $132 billion in taxpayers' pockets and out of Uncle Sam's coffers.

The document states that to draw tax revenue from this source, policymakers could decide to limit the deduction based on a dollar-value cap of the benefit, a mechanism that could be limited to those whose incomes exceed a certain threshold. That threshold could be $200,000 for a single person and $400,000 for a married couple, but could also be geared to account for geographic differences in per-beneficiary cost, an idea that some experts argue would run afoul of existing statute (Medical Device Daily, May 14, 2009).

Dealing with payments to physicians under Medicare Part B, the document details the nature and the history of physician fee growth, including physicians who provide imaging services. The document offers no details on how to trim this part of the Medicare dilemma other than to note that the Senate Finance Committee will "explore options that would make payments to Part B providers more rational" and will consider establishing "an expert panel to assist CMS in evaluating and adjusting payments for potentially misvalued physician services."

As for the notorious geographic variance in per-patient spending under Medicare, the document says that spending reductions could be put into place "in areas where per beneficiary spending [under Medicare Parts A and B] is above a certain threshold compared to the national average," but no specific mechanism for achieving this is suggested.

The Senate Finance Committee said it will conduct a walk-through of its options for coverage and financing at a closed-door meeting scheduled for today, but any result will have to be reconciled with whatever work the Senate Health, Education, Labor and Pensions Committee produces.

Levinson: CMS still behind on fraud

Daniel Levinson, Inspector General for the Department of Health and Human Services, testified recently to Congress about the ability of the Centers for Medicare & Medicaid Services to keep tabs on fraud and waste, and while CMS would argue that it is doing a better job of wrapping its arms around an unwieldy set of programs, Levinson's May 6 testimony before the Senate Special Committee on Aging was anything but glowing.

Levinson's written testimony indicates that of the more than $2 trillion spent on healthcare in the U.S. each year, more than $60 billion goes down the drain of fraudulent and inappropriate billing. The Medicare program's reimbursement for power mobility devices was cited as the source of $96 million in claims "that did not meet Medicare's coverage criteria for any type of wheelchair or scooter" in addition to $82 million in such expenditures that could have been substituted with less expensive mobility equipment.

Levinson says that Medicare's home oxygen costs could be trimmed by $3.2 billion over five years if the agency limited reimbursement to 13 months rather than 32 months, but this idea may be shelved by Congress by the Home Oxygen Patient Protection Act of 2009 (Medical Device Daily, May 15, 2009).

Participation in federal health programs, Levinson notes, should be seen as "a privilege, not a right," and recommends that any providers and suppliers who want to do business with Medicare or Medicaid programs "should be screened." Among the methods of such screening are "meeting accreditation standards, requiring proof of business integrity or surety bonds," and periodic recertification in addition to on-site verification visits.