CHI Addresses Important Medicare Rules Proposals

As part of our ongoing coverage and reimbursement program, CHI has submitted formal comments on two proposed Centers for Medicare and Medicaid Services (CMS) rules:

• Hospital Inpatient Prospective Payment System (IPPS)  – CHI commented on major revisions to the IPPS that would adopt hospital-specific relative value cost center (HSRVcc) weights and severity-adjusted diagnosis related groups (DRGs). If implemented, this new methodology for analyzing a hospital’s cost and charge data and assigning services to DRGs would change the payment landscape for medical technology.  CHI urged CMS to delay implementing the proposed rule for at least one year to allow fuller analysis and stakeholder comment.  CHI also requested that CMS implement any future cost-based payment system at the same time as the severity and complexity adjusted DRGs.
• Competitive Bidding for Durable Medical Equipment   – CHI commented on the proposed rule regarding competitive bidding for durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS), particularly products for diabetes.  CHI urged CMS to:

1. Exempt diabetes supplies from the program, or ensure beneficiaries’ continuity of access through a local supplier via a geographic proximity rule similar to the Medicare Part D and TriCare programs;
2. Ensure beneficiaries’ access to products most clinically appropriate for their condition;
3. Publish a new proposed rule that narrowly defines product categories, and give stakeholders opportunity to comment;
4. Exclude infusion pumps and related drugs from the program, or ensure patients’ access to each brand of drug from at least one supplier in the area;
5. Analyze cost savings resulting from the program over a complete course of care for a Medicare beneficiary.

For additional information, including how you can participate in the CHI Coverage Working Group (which helped to develop these and other CHI comments) contact Todd Gillenwater, CHI vice president-public policy (858-551-6677 or gillenwater@chi.org.

CHI President Participates in Forum on Cost Effectiveness

On June 28, CHI president and CEO David Gollaher participated in a forum hosted by the American Enterprise Institute (AEI) in Washington, D.C. on the use of cost effectiveness analysis in the UK’s National Institute for Health and Clinical Excellence (NICE), and its possible application in the U.S.  A video recording of the event, which also included Mark Pauly (Wharton School of the University of Pennsylvania), Steve Pearson (Harvard Medical School and senior fellow at America’s Health Insurance Plans), Heinz Redwood (independent health policy consultant and author), and Andrea Sutcliffe (NICE chief financial officer) is available on-line at http://www.aei.org/events/eventID.1353,filter.all,type.upcoming/event_detail.asp.

Senate to Vote on Stem Cell Legislation Following July 4th Recess
Leaders in the Senate have agreed to hold floor debate on three stem cell bills, including a House passed measure that would expand the number of embryonic stem cell lines eligible for federal funding.  Under the agreement, the Senate will vote on H.R. 810 (the Stem Cell Research Enhancement Act), S. 2754 (the Alternative Pluripotent Stem Cell Therapies Enhancement Act), and S. 3504 (the Fetus Farming Prohibition Act of 2006).  The compromise package attempts to address demands from supporters of embryonic stem cell research who have been pushing Senate leadership for an up or down vote, and conservatives who seek to preserve or extend current restrictions.  While it is expected that the measures will pass the Senate, President Bush has announced his intention to veto H.R. 810 and it is unlikely that either chamber has the votes needed to override.  For more information contact David Burt, CHI associate legislative director (858-551-6677 or burt@chi.org).

CHI Works to Advance Legislation Promoting Contemporary Health Information Technology
It is critical that the U.S. adopt a medical classification system that meets the demands of an increasingly complex health delivery system.  The current system, International Classification of Diseases, 9th revision (ICD-9), was developed more than 30 years ago and no longer reflects current knowledge of disease processes, contemporary medical terminology, or the modern practice of medicine.  The flexible structure of ICD-10, conversely, utilizes unique codes that explicitly identify technologies used to perform new procedures, providing for more precise and detailed clinical information, improved quality measurements and patient safety activities, and more accurate reimbursement.  On June 19, CHI sent a letter  to House Ways and Means Committee Chairman Bill Thomas (R-Bakersfield) and House Rules Committee Chairman David Dreier (R-San Dimas) expressing support for the Ways and Means version of legislation (H.R. 4157, the Health Information Technology Promotion Act) that would implement ICD-10 by 2009.  For more information, contact David Burt, CHI associate legislative director (858-551-6677 or burt@chi.org).

House Introduces Bioterrorism Bill
On Tuesday, June 6, Representatives Mike Rogers (R-MI) and Anna Eshoo (D-Palo Alto) introduced H.R. 5533, the Biodefense and Pandemic Vaccine and Drug Development Act of 2006.  The bill is the companion to S. 2564, legislation introduced by Senator Richard Burr (R-NC), and would create a Biomedical Advanced Research and Development Authority (BARDA) within HHS to establish a single point of federal authority for advanced research and development of medical countermeasures.  The House bill has minor differences including the removal of a provision that would offer countermeasures 10 years of orphan drug marketing exclusivity.  CHI will continue to work with members of Congress to ensure that appropriate incentives and protections are in place to encourage the life sciences industry to develop products to protect the American public from the threats of bioterrorism and pandemic.

Coming Up This Week
Congressional Hearings

July 11 – 10:00 am (EST)
House Government Reform Committee
Criminal Justice, Drug Policy, and Human Resources Subcommittee hearing on "Pharmaceutical Supply Chain Security."

July 11 – 2:30 pm (EST)
Senate Appropriations Committee
Commerce, Justice, Science and Related Agencies Subcommittee markup of H.R.5672, the "Commerce, Justice, Science and Related Agencies Appropriations Act, FY2007."

July 12 – 10:30 am (EST)
Senate Small Business and Entrepreneurship Committee
Full committee hearing on strengthening participation of small businesses in Federal contracting and innovation research programs.

July 13 – 1:00 pm (EST)
House Ways and Means Committee
Health Subcommittee hearing on Medicare reimbursement of physician-administered drugs.