The fate of key health care reform provisions impacting the device industry remains unclear following Republican Scott Brown's victory in the Massachusetts special election to fill the late Ted Kennedy's Senate seat.

With Democrats having lost their filibuster-proof majority in the Senate, party leaders are scrambling to figure out next steps.

In a Jan. 20 ABC News interview, President Obama suggested that Congress should pursue some sort of watered-down version of the health care reform bills previously passed in the House and Senate.

"I would advise that we try to move quickly to coalesce around those elements of the package that people agree on," he said.

That could mean tighter regulations on private insurers, expanded Medicaid and modest cost-containment reforms, in addition to a must-pass physician fee fix needed to avoid large payment cuts that will otherwise kick in March 1. The pared-down health care package could be pursued as a stand-alone bill or attached to some other non-health care legislative vehicle.

Fee On Device Manufacturers Could Remain

The price tag for such a package would no doubt be significantly smaller than for the comprehensive health reform bills, but industry fees, including a device fee, could still be employed to help cover the costs - albeit at a lower rate than previously expected, policy experts say.

What happens to other provisions important to the device industry, such as comparative effectiveness expansion, physician payment disclosure requirements and cuts to various provider categories, remains to be seen.

Passing a limited bill would require some Republican support unless Democrats elected to use the budget reconciliation process, which requires only a simple majority to pass a qualifying bill.

The idea of using reconciliation as a tool to pass a more comprehensive reform bill that resembles, but is not identical to, the Dec. 24-passed Senate bill (¹ Also see "Device Tax, Health Reform Close To Reality As Conference Committee Meets" - Medtech Insight, 4 January, 2010.), has also not been publicly taken off the table by Democratic leaders.

But under congressional rules, the reconciliation process can be used only to pass tax and revenue provisions that directly impact the budget.

This would likely exclude core elements of the health care reform bills, such as new state or federal exchanges to oversee the insurance market, and would restrict Congress from addressing the top priorities of conservative-leaning Democrats, such as restricting abortion coverage.

Play Or Punt? Decision Time Is Short

A growing chorus of Democrats, primarily moderates but some liberals as well, is pushing the leadership to move away from health care and focus on jobs creation in response to the Massachusetts election results. But that comes with its own risks.

"The question for [Democrats] is, 'What is worse for us in November? Is it to continue to work on an unpopular bill? Or is it not passing a bill at all?'" said Barrett Thornhill, a health lobbyist with the law firm Foley Hoag.

What seems widely agreed upon at this point is that time is of the essence for Democrats to avoid further damage to their chances in the 2010 national mid-term elections.

Conventional wisdom is that Democrats are aiming to come together around a plan in conjunction with the president's Jan. 27 State of the Union address and the Feb. 1 release of the White House fiscal year 2011 budget request.

"Dickering around for another two months ... probably is not good for them right now," Thornhill said. "It's either got to be fast and quick, or probably not at all."

- David Filmore ( ² d.filmore@elsevier.com )

Fate Of Health Care Reform And Key Device Provisions Uncertain

More from Archive

More from Medtech Insight