House Approves IPAB Repeal; Senate Prospects Uncertain

On Tuesday, the House voted 244-154 to approve a bill (HR 1190) that would eliminate the Affordable Care Act's Independent Payment Advisory Board, the AP/Miami Herald reports.

The vote fell largely along party lines, with most Republicans voting in favor of the measure and most Democrats opposing it (Fram, AP/Miami Herald, 6/23). According to the Washington Times, 11 Democrats voted in favor of the bill (Howell, Washington Times, 6/23).

For more information on IPAB, see today's "Road to Reform" post.

Background

IPAB is a 15-member panel of health care experts established under the ACA to make cost-cutting recommendations for Medicare annually if program spending exceeds a target growth rate. The recommendations would take effect unless Congress develops an equivalent alternative.

Although it was scheduled to convene in 2014, the panel was not required to make recommendations that year because the projected growth rate was 1.15%, according to CMS. The Obama administration has not yet nominated any panel members.

Repealing IPAB would cost $7 billion over the next 10 years, according to some estimates. However, an amendment proposed by Rep. Joe Pitts (R-Pa.) would offset the IPAB repeal cost with funds that were authorized to promote public health and preventive care (California Healthline, 6/19).

Bill Prospects

The bill now heads to the Senate for consideration. According to the Times, the measure needs 60 votes in the Senate to bypass a potential Democratic filibuster (Washington Times, 6/23).

Further, President Obama is expected to veto the measure if it is passed. Obama administration officials said IPAB would "help reduce the rate of Medicare growth responsibly" (AP/Miami Herald, 6/23).

Regardless, Rep. John Fleming (R-La.) said the vote "put on record many Democrats" who think the board should be repealed. He added, "We're just going to keep sending pieces of repeal and full repeals, small repeals, whatever, and really get as many people on record where they stand on this" (Owens, National Journal, 6/23).

Senate To Consider Medical Device Tax Repeal

Meanwhile, the Senate is expected soon to consider another House-approved measure (HR 160) that would repeal the ACA's medical device tax, MedPage Today reports (Firth, MedPage Today, 6/23).

Background

The House last week voted 280-140 to approve the bill, with 46 Democrats voting in favor of the measure.

The 2.3% tax on medical devices was included in the ACA to help fund the law.

Supporters of the repeal argue the tax, which affects roughly 7,000 medical device makers throughout the country, curbs innovation on vital devices, such as ventilators and X-ray machines.

The Office of Management and Budget in a statement said the repeal "would increase the deficit to finance a permanent and costly tax break for industry without improving the health system or helping middle-class Americans" (California Healthline, 6/19).

Bill Prospects

While the effort has some Democratic support, it is uncertain whether the Senate will approve the measure (MedPage Today, 6/23). Some Senate Democrats have expressed support for repealing the tax if it includes offsets to replace the ACA funding.

However, Obama has threatened to veto the measure. In the House, the bill fell one vote short of the amount needed to override a presidential veto, but not all House members voted (California Healthline, 6/19).

Industry Weighs In

According to MedPage Today, the medical device industry has so far spent $110 million lobbying lawmakers since the medical device tax took effect.

J.C. Scott, who heads the Advanced Medical Technology Association's government affairs division, said the tax "put[s] pressure on the ability to fully fund research and development activities, [and] it's making investment in start-ups and smaller companies less attractive for venture capital investors." He noted some companies have had to stop projects since the tax took effect, adding, "We're talking about jobs that would have otherwise have been created."

Further, David Burton, a senior fellow in economic policy at the Heritage Foundation, said, "Tax policies should not pick winners and losers, and this obviously does that." He noted, "The government shouldn't be discouraging people from manufacturing medical devices any more than it should be subsidizing them" (MedPage Today, 6/23).

Senate Panel Advances Funding Measure Targeting ACA

In related news, a Senate appropriations panel on Tuesday advanced a draft spending bill out of subcommittee that targets funding for the ACA, The Hill reports.

The $153.2 billion spending measure includes funding for HHS, Labor and Education in upcoming fiscal year, which begins Oct. 1. Under the measure, the programs would receive $3.6 billion less than they did this year and $14.5 billion less than was included in President Obama's FY 2016 budget request.

Further, the measure includes language that would prohibit spending on the ACA's risk corridor program, as well as block funding for state-run health insurance exchanges under the ACA. In addition, the measure would require the Obama administration to publish data on the number of activities, contractors and employees related to implementing the ACA.

Meanwhile, the measure includes an increase in NIH funding levels. However, it would cut total HHS funding to $70.4 billion, a decrease of $646 million from this year. In addition, the bill would cut CMS funding by $1.15 billion, or 28% from its current funding level. CDC would also receive a funding cut totaling $251 million, or 4% less than its current budget (Shabad, The Hill, 6/23). The bill would also cut funding for the IPAB (Young, CQ News, 6/23).

According to the AP/Washington Times, Obama likely would veto the measure (Taylor, AP/Washington Times, 6/23). The legislation will next be marked up by the full committee, according to CQ News (CQ News, 6/23).