When Senate Finance Chairman Max Baucus (D-Mont.) first unveiled his health care reform bill earlier this month, lobbyists for clinical laboratories mounted an intense effort to try to kill a proposed new tax that targeted the industry. Representatives from companies such as LabCorp and Quest Diagnostics pressed Members to drop the tax from the bill.
When Baucus released the bills latest version for the markup that began last week, the labs new tax was gone. The labs, which still have to pay a price in the bill, consider it a big win.
Even as the Finance markup continues this week, there are already industry players like the labs who have racked up victories, while other sectors are still fighting to get out of the losers corner.
Alan Mertz, president of the American Clinical Laboratory Association, declined to give specifics of the deal his industry struck with the Finance Committee, but he explained that labs agreed to accept a temporary reduction in the industrys Medicare fee schedule update. Basically, for five years, from 2011 to 2015, the labs will face a reduction in Medicare payments but will not be slapped with a new tax. Both measures, Mertz said, would generate about $5.5 billion for the government.
Im not going to get into all of it, but its something the industry is supportive of getting the savings from the update, he said. You get the same savings that you wouldve from the tax. It replaced virtually all the tax, and we support that.
Many groups and industry players are finding it difficult to navigate the Finance markup and the possible 564 amendments that could end up on the table. But the biotech industry managed to scale back one amendment, offered by Sen. Charles Schumer (D-N.Y.), that deals with follow-on, or generic, biologics.
One biotech industry source, who did not want to be named, said that as first offered, the Schumer amendment would have grouped brand-name biologics with their follow-on products for the purposes of Medicare reimbursement codes.
The amendment passed the committee, but with tweaking supported by biotech companies that do not want to group the generics and brand-name biologics together.
Medical device makers have not yet been able to cut a deal to get rid of a new tax worth some $40 billion over 10 years. They have activated not only executives for medical device companies but also Members and governors to call on Baucus to drop the tax.
In a letter Friday, 20 Members from California, including Reps. Anna Eshoo (D) and Kevin McCarthy (R), argued against the tax. This $40 billion tax would hamper [research and development] investment, slow innovation, and cut jobs at a time when unemployment in California is 12.2 [percent]. We cannot afford these losses, the Members wrote.
A spokeswoman for AdvaMed, which lobbies for medical device makers, said that the tax goes against the original purpose of making health care more affordable. It adds an economic burden to the companies that will be passed on to the patients, said Wanda Moebius, noting that her group continues to watch the Finance markup and look for ways to get the tax out of the bill.
One lobbyist who represents the industry said that all eyes are on Sen. Orrin Hatch (R-Utah), who may offer an amendment striking the tax.
Sen. Jeff Flake, R-Ariz., takes a selfie with his cut-out head during the Hoops for Youth 16th annual charity basketball game held at George Washington University's Smith Center, September 8, 2014. The members of Congress team beat the lobbyist team 46-40. Buy photo here.