Medical Device Daily Washington Editor

The Bush administration shows no sign of going out without a bang in its confrontations with Congress over federal healthcare spending, and the recent passage of the Medicare financing law provided the White House with another opportunity to go toe-to-toe with the Democrat-led legislature.

In a July 24 statement, Secretary of Health and Human Services Mike Leavitt said that Medicare spending must be dealt with whenever the Medicare trustees "have issued two consecutive reports projecting the program's spending from general revenue would exceed 45%."

He said the proposal for Medicare funding, which would increase Medicare spending at a slower pace than the increases sought by Congress, would "lengthen the life of the trust fund and improve Medicare and that legislation was introduced by members in both houses."

Leavitt referred to the analysis of S. 6331 performed by the Congressional Budget Office (see below), stating that "budget gimmicks contained in Medicare legislation passed last week meet the technical requirements of the trigger law," but noting that "parliamentary sleight of hand will do nothing to resolve the enormous financial challenges presented by Medicare in the near future." This presumably is a reference in part to the sustainable growth rate mechanism that would have cut doctor fees under Part B by more than 10% in the coming year.

Leavitt also said in the statement that Congress "has failed to act to address the underlying fiscal crisis, and the Democrat House leadership is now actively seeking to silence the alarm bells and prevent any action to address Medicare's underlying solvency problems."

He characterized the move as "morally irresponsible," adding that it "ignores the clear duty to preserve and improve Medicare for our senior citizens." Leavitt urged Congressional Democrats "to acknowledge the unmistakable warning signs and to take action on the President's legislation."

Senate IP bill dodges patent issues

Intellectual property (IP) issues have surface in Congress repeatedly over the past decade, but makers of devices who are concerned primarily with patent conflicts will take little heart in a bill introduced last week in the Senate Judiciary Committee.

The Enforcement of Intellectual Property Rights Act of 2008 (S. 3325) boasts a bipartisan sponsor roster of Judiciary chairman Pat Leahy (D-Vermont) and ranking member Arlen Specter (R-Pennsylvania), as well as John Cornyn (R-Texas) and Dianne Feinstein (D-California). While the bill beefs up enforcement activities for patent theft, it does not address how the U.S. Patent and Trademark Office adjudicates patent conflicts, nor does it deal with how awards for damages are calculated.

The bill would authorize the U.S. Attorney General to bring civil action against alleged copyright infringers in addition to the authority the office has to pursue criminal cases. The bill also boosts the financial hardship imposed on those suspected of piracy by doubling statutory damages in trademark cases to $200,000 and to $2 million for counterfeit cases.

The bill also would stimulate hiring at the Department of Justice, thanks to provisions that create an operational unit at the FBI for IP crimes, and offers grants to state and local entities in their pursuits of such cases.

Another feature of interest is that if enacted, S. 3325 would mandate that the Attorney General's office send five IP enforcement coordinators to nations or regions where their presence might have the greatest impact on the IP rights of U.S. citizens and companies.

On May 8, a companion bill titled the "Prioritizing Resources and Organization for Intellectual Property Act" (H.R. 4279) sailed through the House of Representatives by a vote of 410-11, with 12 abstentions.

However, the House bill does not include the provision for civil action by the Attorney General's office found in the Senate bill, and does not address the Senate bill's provision for coordination of federal enforcement against IP theft via an executive-branch coordinator's office and an inter-agency committee that would convene to track enforcement.

CBO's Medicare score leaves SGR in limbo

The Congressional Budget Office's numbers on healthcare spending often are disputed, but given the CBO's influence on Congress, never insignificant. The recent analysis by CBO of the impact of H.R. 6331, the Medicare Improvements for Patients and Providers Act of 2008, is sure to generate some comment as well.

According to the July 23 analysis, the bill "will increase Medicare spending by about $11 billion through fiscal year 2010 and then reduce Medicare spending in most subsequent years."

However, while the calculation employed by CBO involves the suspension of the scheduled 10.6% reductions physician fee payments under Part B for the next 18 months, it also factors those cuts back in. The document published by CBO states that the future payment rates "beyond 2009 will revert to the levels under prior law, necessitating a 21% reduction."

Unfortunately for the CBO analysis, Congress has yet to allow those reductions under the sustainable growth rate (SGR) mechanism to actually hit the reimbursement mechanism, overriding them at every turn. Even Pete Stark, chairman of the House Ways and Means Committee's health subcommittee acknowledged last week that H.R. 6331 is "just kicking the can down the road," adding, "none of us ... have any idea how we are going to solve the physician reimbursement issue."

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