FDA User Fee Reauthorizations Go to Conference

The House passed its version of FDA user fee legislation (H.R. 5651) on a vote of 387-5 which sets up a conference with the Senate on its reauthorization bill (S. 3187). The Congressional Budget Office estimates that the House bill would result in $1.5 billion in user fees and reduce the federal deficit by $114 million over 2012-2017 while the Senate bill would reduce the deficit by $363 million over 10 years. In general, for FY 2013-2017 the House bill would:

  • reauthorize the Prescription Drug User Fee Act (setting FY 2013 fee revenue at $713 million; the comparable Senate bill number is $693 million);
  • reauthorize the Medical Device User Fee Act (setting FY 2013-2017 fee revenue at $595 million, the same as in the Senate bill);
  • authorize new generic drug and biosimilars user fee programs; and, among other things,
  • provide new incentives for the development of antibiotics and provisions to address drug shortages.

Congress is taking an informal approach to passing this legislation, which gives committee leaders more power to influence the process and quickly pass the bill. No major additions or modifications to these bills are expected at this time.

House Action on Device Tax

The House will set the stage this week for action on an omnibus PPACA related bill which includes several measures that the House Ways and Means Committee passed last week. As reported last week, together these bills would repeal the PPACA medical device tax and the ban on the use of tax-free money in flexible spending arrangements (FSAs) and health savings accounts (HSAs) to purchase over-the-counter medicines without a prescription.

It would also allow up to $500 of unspent money in FSAs to be returned to account holders. To offset the cost of the omnibus bill, it is expected that the House Rules Committee will add a provision which increases revenue by about $44 billion by requiring individuals to return to the Treasury any PPACA premium assistance tax credits which are made in error.

The House Ways and Means Committee also approved a bill (H.R. 5858) that would encourage more use of health savings accounts by permitting individuals to get the saver’s credit currently allowed for retirement accounts to be used for HSAs. The bill would also allow retirees aged 55-65 to use the amounts to pay for group health insurance premiums.

Representatives Erik Paulsen (R-MN) and Jason Altmire (D-PA) recently said that a measure to repeal the health reform-created medical device tax could be tacked onto larger tax reform measures that may be addressed at the end of the year, and offsets could come from outside the healthcare sector, although recapturing health reform subsidies or finding other offsets within the health care law are still the most likely scenario. Both expressed confidence the bill would pass the House with bipartisan support, but acknowledge they face an uphill battle in the Senate.

Representatives Release Draft Language of SGR Bill

Representatives Charles Boustany, Jr. MD (R-LA) and Tom Price MD (R-LA) have released draft legislation to fix the Medicare physician payment update. In a letter sent to provider groups, the two Congressmen outlined their proposal and solicited feedback on the legislation. Specifically the proposal aims to:

  • institute a five-year period of stability for Medicare providers with annual increases tied to the Medical Economic Index to keep up with the rising cost of medical practice;
  • create a timeline for legislation to reform the physician payment model and require its consideration in the House and Senate;
  • address the problems of defensive medicine by providing safe harbors for physicians who have practiced according to best practice guidelines;
  • allow Medicare beneficiaries to freely contract with providers without penalty; and
  • establish safe harbors to allow non-salaried physicians to receive payments for helping to reduce costs and improve quality within acute care hospitals.

As of now, the Congressmen are not planning to introduce this bill. NASS staff is currently reviewing the merits of the bill for possible response.

IRS Delays Medical Loss Ratio Date

The IRS issued Notice 2012-37 to extend previous interim guidance and transition relief for health insurers regarding implementation of the PPACA minimum loss ratio rule. The relief extends through the first taxable year beginning after the end of this year. Comments are due by September 10.