Hearing of the House Ways and Means Committee - Markup of Medical Device Tax Repeal, IPAB Repeal, and Bipartisan Medicare Advantage Bills

Hearing

Last week, I had the opportunity to visit McLaren Health System in my district, and I was impressed by the innovative work going on to provide quality care, lower costs, and meet high standards. It was a good reminder of how important it is for us to establish federal policies that encourage and reinforce reform efforts.

Today, we do so when it comes to the fully bipartisan bills that we are set to consider. For example, the six bills related to Medicare Advantage demonstrate that our Committee can collaborate in a bipartisan manner, incorporating stakeholder feedback and technical advice to produce thoughtful legislation.

These bills contain important member priorities from both sides of the aisle designed to help Medicare beneficiaries and increase plan transparency.

Vern Buchanan and Charlie Rangel, and Energy and Commerce member Diane Blackburn, introduced legislation to delay CMS' authority to terminate Medicare Advantage contracts for plans failing to achieve minimum quality ratings based only upon the STARS rating systems. This delay would provide us with time to weigh the effects of socioeconomic status and complex cases on quality payment programs in Medicare, including the STARS rating.

The Value Based Insurance Design bill, championed by Diane Black and Earl Blumenauer, would establish a demonstration program to incentivize high-value services.

There's a bill that will allow CMS to evaluate and consider the risk adjustment methodology, to ensure we are appropriately accounting for individuals with multiple chronic illnesses, which Earl Blumenauer and Diane Black worked hard to bring together.

And we have a bill to promote transparency and provide critical information on Medicare enrollment for policy makers and researchers authored by Ron Kind and Mike Kelly, as well as the bill authored by Kevin Brady and Mike Thompson to extend the time period for comment on proposed Medicare Advantage payment changes to conform with the time period for commenting on other major rules.

Unfortunately, we are also considering legislation that is not only more controversial but would undo two important components of ACA.

Cost containment was an important feature of the ACA, and reform is having an impact. Medicare growth is at a historic low. We certainly had a healthy amount of debate about the Independent Payment Advisory Board (IPAB) on our side of the aisle when the ACA was being drafted. We understood that there needed to be a backstop -- a mechanism to develop further proposals to reduce Medicare spending -- contained within reform. The nonpartisan Congressional Budget Office projects that Medicare growth rates will remain beneath the IPAB triggers until at least 2022. This bill would add $7 billion to the deficit over the next 10 years without a plan by the Majority to pay for it.

Even more consequential is the bill to repeal the medical device tax established in the ACA. Doing so would increase the deficit by $26 billion over the next 10 years. And again, the Majority has no plan to replace that revenue.

The ACA was fully paid for in part because the industries that would benefit from expanded health insurance coverage agreed to increased revenues from their sectors. The Association that represents the medical device community stood with the President in supporting the ACA and communicated with Congress at the time their support for their role in contributing to the ACA. The medical device tax applies to both domestic sales and imports, so there is no competitive disadvantage to U.S. companies. A recent Ernst and Young analysis found that the medical device industry's revenue increased by $8 billion in the year the tax took effect, R&D spending has increased by 6 percent industry-wide, and employment in the medical device industry increased by 23,500.

Clearly, this bill reflects the Majority's objective to unravel the ACA. And, it would let one sector out of its commitment to contribute to overall reform, which was predicated on increasing demand for its products. This creates a dangerous precedent for other sectors, especially with no plan to replace that revenue.

Erin Richardson of the Democratic staff is leaving the Committee this month and I want to acknowledge her talented work for the Committee during her tenure. In addition to ACA, Erin was the lead staffer on the SGR reforms and the post-acute care reforms. She has real accomplishments to point to and she should be very proud of the role she has played in health policy and the positive impact her work has had on the lives of millions of Americans. I am confident that she will continue her efforts, but we will miss her here in the Committee. I want to thank her for her service.

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