Washington Watch: the debt ceiling and deficit debate in DC

Clouds over the Capitol.  Photo by Erin Donahue c. AZBioThere has been a lot of talk about budgets and debt ceilings in Washington this week. The negotiations – now taking place between the President and Congressional leaders are fluid, closely held, and difficult to predict. It does not take a PhD to know that Medicare and Medicaid cuts are on the table.

At AZBIO we stay in close communication with our partners at BIO, PhRMA, and AdvaMed so that we can share the latest news with our members.

AdvaMed President and CEO Steve Ubl recently shared a letter with members and leaders about what might be on the table.

As Steve’s note below indicates, members of our industry are making their  concerns known to Members of Congress and are working with other groups that share similar concerns.

Some groups with more direct vulnerabilities are going public with their concerns in advance of a deal. For example, the major hospital groups are planning to spend $1 million a week for a multiweek campaign to fight against potential cuts to Medicare and Medicaid hospital payments. You can see those ads here.

If an agreement includes cuts, they would probably begin with reductions in automatic market-basket or inflation increases for providers beyond those already included within health reform. Alternatively, the agreement might include targeted cuts directed at areas of particularly high cost-growth within Medicare, or a combination of the targeted cuts and across-the-board reductions. It is also possible that a deal would avoid specific cuts in Medicare or Medicaid, but instead include a budget mechanism that triggers across the board cuts or sequestration in all entitlement programs if future spending or deficit targets are not achieved.

If there is more targeted action, medical technology faces greater threats. An agreement could order reductions in imaging services, payments for durable medical equipment (DME) or establish co-payments for laboratory services. It seems unlikely broader policy changes such as the implementation of price transparency proposals or a rebate program for devices would get included. However, given the nature of the potential agreement – broad outlines, negotiated privately by a small group of leaders – it is difficult to be fully confident in even that prediction.

About AdvaMed:

AdvaMed advocates for a legal, regulatory and economic environment that advances global health care by assuring worldwide patient access to the benefits of medical technology. We promote policies that foster the highest ethical standards, rapid product approvals, appropriate reimbursement, and access to international markets.  You can join them in Washington, D.C.  September 26 – 28 – 2011 at AdvaMed2011

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