Odds Improve for Medical Device Tax Repeal

Many in Congress have been trying to repeal the Affordable Care Act’s 2.3% excise tax on medical devices since it became law in 2012. Now a bill championed by Congressman Erik Paulsen (R-Utah) looks to have the best odds of winning bicameral approval, though it is uncertain President Obama would sign the bill into law.

The House Ways and Means Committee on June 2 passed the bill, H.R. 160, which is known as the “Protect Medical Innovation Act.” After this victory, Paulsen told MarketWatch that new leadership in the Senate would likely move the bill forward in the upper chamber.

The legislation has broad support in the House, with 254 cosponsors including 27 Democrats. Similar legislation introduced by Paulsen in the 113th Congress passed the U.S. House of Representatives on two different occasions, but never was brought up for a vote in the Senate. However, the Senate did pass a non-binding budget resolution in 2013 opposing the tax by a bipartisan vote of 79–20.

AACC endorsed the latest bill, and in a letter to Paulsen wrote that the association believes “this tax places an undue financial burden on device manufacturers that may harm one of the most dynamic and successful components of the healthcare sector.”

AACC Issues Position Statement on Personalized Medicine

A new position statement from AACC emphasizes the central role laboratory medicine plays in personalized medicine, while highlighting the regulatory, reimbursement, and research challenges that policymakers must tackle for the field to fulfill its potential.

FDA should not adopt policies that hinder test innovation, AACC stresses in the position statement, and Congress should increase funding for basic and clinical research in the field of personalized medicine tests.

Coverage and reimbursement policies are also critical. AACC recommends that the Centers for Medicare and Medicaid Services expand use of the Coverage with Evidence Development program and that both public and private payers develop clear and consistent evidence criteria for coverage of companion diagnostics that account for smaller affected patient and population subsets.

Finally, laboratory professionals must educate clinicians about the availability, advantages, and limitations of personalized medicine tests and assist with interpreting results. In addition, laboratory, clinical, and pharmaceutical professionals should partner to author and promote guidelines and standards for the development and implementation of personalized medicine algorithms and practices.

New ACO Rules, Results

The Centers for Medicare and Medicaid Services (CMS)  in June issued new data on the cost savings of accountable care organizations (ACO) just as it released a final rule intended to enhance the structure of ACOs. However, researchers have been unable to determine why some ACOs actually save money while others do not, and many stakeholders say the new ACO rules do not go far enough to encourage broader participation.

“We are pleased that CMS will allow the vast majority of early ACOs to continue to participate another three years at current risk levels … the rule makes it easier for certain ACOs to share in the savings they generate,” said American Hospital Association Senior Vice President Linda Fishman. “However, though we are encouraged that CMS has removed some regulatory barriers … CMS needs to remove additional barriers for all ACOs to make the program more attractive to new and current participants.”

CMS announced in May that its Office of the Actuary found the Pioneer ACO model generated more than $384 million in savings to Medicare over its first 2 years while continuing to deliver high-quality patient care.

On the heels of this announcement, CMS issued in a final rule some new structures for providers to participate in ACOs that the agency says are more flexible. For example, providers get an extra 3 years to try and save money before they have to worry about penalties. For providers with more experience in coordinating care, CMS also will offer a high risk/high reward ACO model where providers keep 75% of any savings, but are liable for 75% of possible losses.