A Medical Device Daily

The clash of the 110th Congress and the White House over healthcare spending is far from over as a threat from the White House to veto a measure for financing Medicare makes clear.

One of the focal points of the measure, the cuts scheduled for doctors' fees under Part B as part of the sustainable growth rate (SGR) mechanism, will hit July 1 unless Congress and the White House can cut a deal. The sticking point is that Senate Finance Committee chairman Max Baucus (D-Montana) wants to trim spending on Medicare Part D managed care plans, known as Medicare Advantage (MA) plans, to finance the backstop for physician Part B fees. Baucus' proposal would cost Uncle Sam $18.2 billion over five years.

Some Capitol Hill observers say Baucus is making sure he pulls in some GOP support with sweeteners for Republicans who are up for elections with uncertain outcomes, and Olympia Snowe (R-Maine) and Gordon Smith (R-Oregon) have announced their support for the bill.

However, the ranking member of the Senate Finance Committee, Chuck Grassley (R-Iowa) has veered sharply from his previous accommodations to the majority party by purportedly working on a competing bill. Although details are not yet available, Grassley has acknowledged that "we've got to get things done by June 30, and that's going to make it impossible" with the Baucus bill, give the White House's position. By most counts, Baucus does not have the 60 votes needed to end debate and force a vote.

The Premier (Charlotte, North Carolina) healthcare alliance said in a June 9 statement that it "applauds ... Baucus for developing legislation that includes many important provisions to help hospitals better serve patients, particularly in vulnerable rural areas, and avert the harmful physician payment cut."

However, Premier's statement, attributed to senior VP of public affairs Blair Childs, also noted that while the group "commend[s] chairman Baucus for his efforts to address value-based purchasing, we regret that the time limitations and other issues with the overall package prevented its inclusion" in reference to pay-for-performance provisions. Childs also said that Premier anticipates "seeing provisions addressing quality incentives in any future bi-partisan compromise moving forward."

CMS moving forward with DME bids

The competitive bidding program for durable medical equipment, prosthetics, orthotics and supplies (DME) might not play like a winner on Capitol Hill (Medical Device Daily, June 9, 2008), but the Centers for Medicare & Medicaid Services shows no sign of slowing down on its plan to put the winning providers in 10 areas into business as of next month.

According to the June 9 announcement at the CMS web site, CMS is about to commence with an outreach program to help Medicare beneficiaries navigate the program in its first phase. The CMS statement notes that its efforts will cover "[n]early four million people with Medicare living in ten communities across the nation" who "will receive information about a new program that will lower their costs for certain medical equipment and supplies by changing how Medicare pays for these items."

CMS "will begin mailing letters on the new program, which begins July 1, to beneficiaries later this month," the statement said.

Acting CMS administrator Kerry Weems is quoted in the announcement as having said that the program will save "as much as a 43 percent for certain items" and that the agency's vetting process ensures that beneficiaries "will have accredited and financially sound suppliers providing them with equipment and supplies."

The program involves a brochure sent to beneficiaries that describes the program along with a list of suppliers in their area. The statement said CMS is "also sending similar information about the new program and the list of Medicare contract suppliers to local partner groups and durable medical equipment (DME) referral agents, such as hospital discharge planners, physicians' office staff and home health agency social workers."

Inova drops bid for nearby hospital

Inova Health Systems (Falls Church, Virginia) has dropped its pursuit of Prince William Hospital (Manassas, Virginia) after encountering stiff headwinds from the Federal Trade Commission and the state attorney's office for the state of Virginia.

The two groups formally announced their opposition to the merger last month (Medical Device Daily, May 13, 2008), but Inova pressed on for a time, convinced it could assuage concerns over market concentration.

A statement released by Inova said that the chain opted to hang it up "after careful consideration and by mutual agreement" with Prince William. Inova said FTC's and the state's opposition could "prolong completion of the merger by as much as two years, which both health systems believe is not in the best interest of the communities they serve."

Much of the interest on the part of Prince William was to boost investment in hospital capacity in Prince William County, Virginia, which is experiencing spill-over from neighboring Fairfax County, with a population in excess of one million, and Loudon County, which grew more than 58% between 2000 and 2006.