HIDA’s Health Reform Update

Edition: November 2012 - Vol 20 Number 11
Article#: 4102
Author: Linda Rouse O’Neill, VP, Govt Affairs, HIDA

The following update by the Health Industry Distributors Association (HIDA) is designed to keep healthcare distributors and other key stakeholders current on the latest government-affairs related topics.

Washington D.C. is preparing for Inauguration Day already. Yet, as I write this, we don’t know who will repeat the Presidential oath of office. What we do know is how each candidate will approach policies that impact health care.

Simply stated, Republicans want to repeal health reform; Democrats do not. But what does all this mean for you? Today? Here’s the breakdown as I see it.

Medical device tax

The meter starts running Jan. 1, 2013 for medical device tax. Companies are expected to pay an excise tax based on biweekly estimates. Therefore, Uncle Sam is looking for the first installment as early as Jan. 29. What are the chances for repeal post-election? Watch for action during November and December “lame duck” session when many elected officials are leaving office but their replacements haven’t arrived yet, or in January if Republicans sweep Congress.

Romney, should he win, would take office 20 days after the tax takes effect. He has vowed to try and repeal all of the Affordable Care Act. Should a Republican majority win the Senate and Romney take the White House, expect quick efforts to repeal the law, which will be difficult at best due to the $20 billion in revenue the tax will create as well as Congressional procedure hurdles. If there’s no big change in Congress, it will be almost impossible for Romney to dismantle reform.

With quite a few Senate Democrats sympathetic to device tax repeal, it won’t be clear what its fate will be until newly elected Democratic members hit the halls of Congress. If momentum swings in favor of repeal and President Obama remains in the White House, there may be renewed pressure to undo the tax.

ACOs

Accountable Care Organizations (ACOs) are one piece of a bigger effort to lower Medicare costs; a goal both candidates embrace. Under Romney, there’s no specific edict that ACOs will go away, as the concept was not one of the controversial provisions of the ACA. Under President Obama, expect increased growth as the pilot programs of today become model programs for tomorrow.

Quality, performance and related penalties

Assume both candidates will continue to focus on quality improvement and performance measurement across all sectors of the health market. While October brought the first round of readmission penalties and value-based purchasing, public reporting of quality measures has been tied to hospital and nursing home reimbursement for sometime, notably through reporting programs that began under President George W. Bush (Hospital Compare and Nursing Home Compare). Both candidates recognize the intense pressure America’s aging population will put on health services and would likely continue tying Medicare payments to performance.

Competitive bidding

Regardless who celebrates on Election Night, don’t expect much to change with competitive bidding for durable medical equipment, prosthetics, orthotics and supplies. If anything, it’s likely that competitive bidding – seen by both parties as a highly successful Medicare cost saving method – will be applied to other aspects of service.

The Obama Administration has made clear it will expand the existing bidding program to all areas of the country by 2016. Romney has suggested competitive bidding for Medicare insurance plan providers as a way to rein in Medicare spending (insurance companies already run almost 30 percent of Medicare plans receiving payment directly from the government).