Life Science Leader Magazine

APR 2014

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CAPITOL PERSPECTIVES column LIFESCIENCELEADER.COM APRIL 2014 12 By J. McManus PARTISANSHIP SCUTTLES BIPARTISAN REFORM OF SGR The House leadership's clever way to finance the bill dissolved the bipartisan comity: Repeal Obamacare's individual mandate to purchase health insurance. The CBO estimated this would save hun- dreds of billions of dollars because fewer individuals would be coerced into buying highly subsidized coverage. Republicans argued that the Obama administra- tion had waived scores of provisions of Obamacare that helped businesses, insurance companies, hospitals, and oth- ers. Why not delay the provision most onerous to the individual — the mandate to purchase coverage? The Republican leadership had select- ed the most controversial provision in Obamacare. It was the basis for the Supreme Court review of the law and the administration viewed it as critical to a functioning healthcare marketplace, arguing that it would deter adverse selection. But the Republicans felt that the administration would waive this pro- vision in essence anyway by making so many hardship exceptions that it would be a mandate in name only. Why not cap- ture the savings and solve the SGR at the same time? The bill passed with a dozen Democrats joining a unified Republican conference. The Senate quickly announced that it would call up the SGR reform legislation with no offset whatsoever — the one approach the House could not accept. Newly installed Finance Chairman Wyden introduced new legislation with- out notifying his Republican counterpart and partisan acrimony deepened. A tem- porary patch now looks likely, and the sword of Damocles will continue to hang over physicians' heads. Congressional paralysis continues … JOHN MCMANUS is president and founder of The McManus Group, a consulting firm spe- cializing in strategic policy and political counsel and advocacy for healthcare clients with issues before Congress and the administration. Prior to founding his firm, McManus served Chairman Bill Thomas as the staff director of the Ways and Means Health Subcommittee, where he led the policy development, negotiations, and drafting of the Medicare Prescription Drug, Improvement and Modernization Act of 2003. Before working for Chairman Thomas, McManus worked for Eli Lilly & Company as a senior associate and for the Maryland House of Delegates as a research analyst. He earned his Master of Public Policy from Duke University and Bachelor of Arts from Washington and Lee University. UPDATE ON PART D RULE In February's issue, I reported on the controversial proposed rule CMS (Center of Medicare and Medicaid Services) issued that would have gutted patient access protections in Medicare Part D. The agency encountered withering push back from 371 organizations rep- resenting millions of patients, seniors, and multiple healthcare stakeholders, as well as bipartisan opposition from the finance committee. But it took the scheduling of a vote in the House of Representatives to strike the regulation that forced CMS to summarily withdraw the proposal the morning of the vote. An important victory for a program that is working! l The Republican leadership had selected the most controversial provision in Obamacare. Physician Utilization of Services Plummets Dramatically Reduced Cost to Repeal the SGR Source: The McManus Group Growth in Use of Physician Services Per Medicare FFS Beneficiary Congressional Budget Office Score for SGR Repeal 4 2 5 6 3 1 0 1997 2001 1999 2003 2005 2007 2009 2011 2013 Change in Volume/Intensity per Enrollee in % $117 Billion 2013 2011 $300 Billion 0 4 1 4 _ C P . i n d d 2 0414_CP.indd 2 3 / 2 1 / 2 0 1 4 1 1 : 0 8 : 2 8 A M 3/21/2014 11:08:28 AM

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