Life Science Compliance Update

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30 posts from February 2011

February 28, 2011

Maryland House: HB 818 Manufacturers of Prescribed Products - Payments to Health Care Professionals - Prohibition

Maryland General Assembly 
This Thursday Maryland lawmakers are holding a hearing to consider legislation to ban "gifts" and most payments for services from manufacturers to health care providers in the wake of allegations that a Towson cardiologist was "indirectly influenced" to perform unnecessary stent procedures by device maker Abbott Laboratories.    

According to an article from the Baltimore Sun, much of the momentum towards a gift ban in Maryland stems from “Last year's stent scandal, in which Dr. Mark G. Midei was accused of placing medically unnecessary coronary stents, made by Abbott Laboratories, into hundreds of patients at St. Joseph Medical Center.” This event, and a Senate investigation and report from Senator Charles Grassley (R-IA) “has renewed interest in the laws, which are among several options being considered during this year's legislative session.”

Another reason for attention surrounding physician-industry collaboration is the ProPublica database. Sharstein pointed out that “hundreds of Maryland doctors and a handful of nurses have accepted payments from pharmaceutical companies in the past two years in exchange for promoting drugs to other physicians, according to recent company disclosures.” The Baltimore Sun reported that about $6 million split among 450 Maryland practitioners. Abbott was not among the companies included in the database.

Unfortunately, the bill is a similar to a Vermont law which has driven out industry and research from their state.  Whereas Vermont has almost no life science companies to speak of, Maryland has a robust life sciences industry and restrictions would apply to many of our countries top scientists.

Maryland Gift Ban

On February 11, 2011, Maryland Delegates Nicholaus Kipke (R-Anne Arundel County) and Health and Government Operations Committee Chairman Peter Hamme (D-Baltimore City) introduced HB 818, known as the Manufacturers of Prescribed Products – Payments to Health Care Professionals – Prohibition. As introduced, the purpose of the legislation is to prohibit a manufacturer of prescribed products from offering or giving a gift to a health care professional. A full summary of HB 818 appears below.

While the legislation authorizes certain exceptions from the prohibition of payments to health care professionals (HCPs), such as samples or medical devices, HB 818 will have significantly negative impacts on patient health and outcomes, medical training, and physician and patient education. The legislation will also hurt the economy in Maryland, resulting in a loss of jobs and innovation in the medical sector. If passed, the Act would take effect October 1, 2011.

Maryland House of Delegates hearing on HB 818 
Thursday, March 3, 2011 at 1:00 p.m
Government Operations Subcommittee, Rm 240, 
House Office Bldg. Anapolis, MD 

Summary of HB 818 – Prohibited Payments to Health Care Providers

HB 818 explicitly states that a manufacturer (pharmaceutical, biotech, medical device company) may not offer or give any gift to a health care professional. The legislation defines gift as any payment, food, entertainment, travel, subscription, advance, service, or anything else of value provided to a health care professional (HCP), unless the HCP reimburses the cost at fair market value.

Similar to the legislation enacted in Vermont, HB 818 defines a significant educational, scientific or policy conference or seminar as an event that is:

Offered by an entity accredited by the Accreditation Council for Continuing Medical Education (ACCME) or a comparable organization; and

  • Offers CME credit;
  • Has multiple presenters on scientific research; or
  • Is authorized by the sponsoring association to recommend/make policy

Consequently, HB 818 allows a manufacturer to provide a HCP:

  • Samples of a prescribed product to give free to patients
  • Loan of a medical device not to exceed 180 days
  • Peer-reviewed academic, scientific or clinical articles or journals that serve a “genuine educational function” for the benefit of patients
  • A scholarship for students, residents or fellows to attend programs
  • Payment to sponsor of a program if:
    • The payment is not made directly to the HCP;
    • Payment is used solely for bona fide educational purposes; and
    • All program content is objective, free from industry control, and there is no specific product promotion
    • Payment for a government-sponsored educational program if:
      • Program is sponsored by federal, state, local government for purpose of developing, implementing or evaluating government policy
      • Payment is used solely to underwrite the program or expenses; and
      • All program content is objective, free from industry control, and there is no specific product promotion
    • Honoraria and payment of expenses of a HCP who serves on faculty of a program if:
      • There is an explicit contract with specific deliverables that are restricted to educational, scientific, policy or medical issues and not marketing; and
      • The content of the presentation, including slides/written materials is determined by the HCP
    • Direct and indirect costs of a bona fide clinical trial
    • Payment for bona fide scientific consulting if:
      • The consulting is governed by a written agreement between the HCP and manufacturer;
      • The payment is at fair market value and reimbursement for reasonable expenses including travel and lodging associated with the bona fide consulting work;
      • There is no marketing activities; and
      • Payment is not based on or related to a decision to use a prescribed product
    • Payment or reimbursement for reasonable expenses, including travel and lodging for training HCP on medical devices (must have written agreement)
    • Royalties and licensing fees paid to HCPs for contractual rights to use/purchase a patented discovery which HCP holds ownership right to
    • Health care products donated to public/private nonprofit education or health care organization for training or free distribution to patients or public, if the donation does not require the organization to purchase a prescribed product.
    • Unlike the Vermont and Massachusetts laws, the Maryland bill would not require manufacturers to report payments to HCPs.

PhRMA Statement Opposing HB 818

In response to HB 818, the Pharmaceutical Research and Manufacturers of America (PhRMA) issued a statement respectfully opposing the legislation because it “places unnecessary restrictions on industry-provider communications that could negatively impact patient health and access to new pharmaceutical and healthcare innovations; and creates unnecessary and duplicative regulatory burdens on an industry already in compliance with strict industry-wide guidelines and federal law, which may have a negative affect on Maryland’s economy.” 

HB 818 could have a negative impact on patient health. 

PhRMA asserted that HB 818 could have a negative impact on the dissemination of scientific knowledge about new and existing products and treatments, resulting in harm to patients.  Restricting biopharmaceutical industry interactions with healthcare providers does nothing to protect patients.  Physicians need access to information about new developments in medicine to most appropriately treat patients.  HB 818 could limit the communication about even standard medical guidelines along with information about new medicines or new information about older medicines.  

Moreover, PhRMA added that this legislation could have a chilling effect on the necessary exchange of information about new treatments by limiting biopharmaceutical industry communications with Maryland’s health care professionals. The impact could negatively impact doctor’s ability to access an abundance of information received at educational symposia and conferences held in Maryland. 

Limiting communications between biopharmaceutical industry and health care professionals could put patient safety at risk.  This legislation could have the unintended consequence of reducing the educational opportunities for physicians to learn about new conditions and treatments and access continued medical education.    

HB 818 may have a negative impact on Maryland’s economy by placing a harmful chilling effect on the economic benefits derived from biopharmaceutical industry investments. 

PhRMA’s statement recognized that medical industry conventions are huge revenue source for the state.  Maryland’s fine conference facilities, the abundance of academic research facilities and the presence of the U.S. Food & Drug Administration have made the state an attractive location for educational symposia and conferences.  However, a biopharmaceutical company may be reluctant to support events in Maryland because it would assume the considerable risk of being non-compliant with this ambiguous and unnecessary state law.  

PhRMA also noted that in 2006, biopharmaceutical companies supported 89,675 jobs in Maryland – 28,065 directly in the sector and 61,610 in other sectors that support the biopharmaceutical industry.  Direct biopharmaceutical wages in Maryland were estimated to be $2.3 billion in 2006, resulting in an estimated $537.4 million in federal taxes and $86.4 million in state taxes.  HB 818 may send the unintended message to the biopharmaceutical sector that Maryland is no longer an attractive investment. 

Current regulations and new federal requirements imposed by the Accountable Care Act (ACA) just last year make the proposed Maryland efforts duplicative and unnecessary. 

PhRMA emphasized their continuous commitment to ensure that pharmaceutical marketing practices comply with the highest ethical standards, including their newly revised version of the pharmaceutical industry’s voluntary guidelines (“PhRMA Code”), which went into effect in January 2009. Among the restrictions, the Code prohibits the distribution of non-educational items (pens, mugs, and other “reminder” items), places a $100 cap on educational items of economic value provided to healthcare providers, gives detailed standards regarding the independence of continuing medical education (CME), and provides guidance for speaking and consulting arrangements with healthcare professionals.

Every PhRMA member company and many non-member companies have adopted the PhRMA Code.  If a company has chosen to sign the PhRMA Code, that company’s CEO and Compliance Officers have agreed to and are required to certify annually that their company is in compliance (a process patterned after the concept of the Sarbanes-Oxley compliance mechanism). 

Enforced by the U.S. Department of Justice, pharmaceutical manufacturers are also subject to criminal anti-kickback statutes and other criminal and civil provisions that govern their relationships with healthcare providers. US Health and Human Services Office of Inspector General (OIG) maintains detailed guidelines for pharmaceutical companies designed to deter violations of these federal laws under the threat of criminal and civil penalties. 

Finally, beginning next year (January 1, 2012) the Physician Payment Sunshine provisions of the Accountable Care Act will go into effect.  The new federal law requires drug and medical device manufacturers to publicly reports gifts and payments made to physicians and teaching hospitals. 

It also requires disclosure of payments to all covered recipients including: compensation; food, entertainment or gifts; travel; consulting fees; honoraria; research funding or grants; education or conference funding; stocks or stock options; ownership or investment interest; royalties or licenses; charitable contributions; and any other transfer of value as described by the Secretary of the U.S. Department of Health and Human Services (HHS). This information is compiled by HHS and will be available for the public to view and search on an HHS website.  HHS will also submit an annual report to Congress and each state legislature. 

The forthcoming federal reporting requirements will ensure the disclosure of all Maryland-based industry-physician interactions, which would make the proposed legislation redundant and duplicative in nature.  This legislation would create a patchwork of state regulations that will only serve to increase compliance costs to the pharmaceutical industry.  We urge the committee to oppose the imposition of unnecessary and duplicative regulations on an industry already in compliance industry-wide guidelines and strict federal law.


In announcing this legislative initiative, Maryland pointed to gift bans already in place in Vermont and Massachusetts, even though Massachusetts tried to repeal the law last year, and all candidates, including recently elected Governor Deval Patrick, indicated their support for removing the ban

The bans in both states have been challenged frequently by industry officials saying it hurts business and patients, especially because doctors are required to frequently collaborate with drug and device makers to improve products. As noted above by PhRMA, HB 818 will have negative consequences for patient health, physician training, and the Maryland economy by chilling innovation and communication in the healthcare community. In fact, research from the Massachusetts Institute of Technology (MIT) found that a similar payment restriction law had an extremely negative impact on medical innovation Massachusetts.


HB 818 could have a significant impact on continuing medical education (CME). If the legislation is adopted, many commercial supporters who support CME programs at hospitals, non-profits and medical professional organizations will discontinue sponsoring CME programs in Maryland to avoid the risk of non-compliance with ambiguous regulations created by HB 818. As a result, hospitals, academic medical centers, and healthcare institutions that are already strapped for cash and resources will face significant challenges finding ways to offer CME to their physicians, staff and faculty.

Moreover, HB 818 is unclear as to whether physicians would be able to participate in CME programs as speakers or as participants. For example, there is no indication whether a physician could attend a CME event and receive a meal in connection with the program because HB 818 only says that the payment for an educational program must be "used solely for a bona fide educational purpose." Under the current language, a physician accepting a meal at a CME event paid for by a sponsor would constitute a gift (since the payment for the meal was not a bona fide educational purpose).

In addition, it is unclear whether a physician who speaks at a commercial event would be permitted under HB 818. Specifically, the legislation allows payment to physicians for consulting, however not if the activity deals with marketing. Under this provision, it is likely that HB 818 would classify commercial speaking as a "marketing" activity. This definition could also be expanded to independent medical education.

Another real problem HB 818 poses for CME and CME stakeholders is the prohibition the legislation creates about the mentioning of specific products. This provision is problematic for medical education because if there are evidence-based recommendations for specific products as best in class, these need to be shared openly with audiences, otherwise education is academic and of no benefit to patients or payors. Under HB 818, physicians would be extremely limited or banned from discussing FDA approved labels and products that are found to be safe and effective.


One of the major problems with the proposed Maryland legislation is that it comes in response to the actions of one individual. While his incident was certainly unethical and deserving of punishment if he is indeed found guilty of what he has been accused of, incidents like these are extremely rare. Does that mean we should sacrifice the entire medical practice of physician-industry collaboration and innovation because of one rare incident? There will always be exceptions to the standard that laws and policies seek to find and eliminate.  State legislatures are filled with stories of inerrant members who take advantage of the system.  This has not prompted them to stop accepting political contributions.

The overwhelming majority of physicians in every state are highly trained professionals who strive to practice legal and ethical medicine each day. These individuals have sworn an oath to do no harm to patients, and by enacting laws that prevent physicians from information, training and education with industry, doctors will have to struggle to ensure they do not break this oath. 

Accordingly, at a time when medical innovation and discovery are facing tremendous obstacles in America, patients and consumers cannot afford HB 818, literally and financially. As recent reports have clearly document, America’s leadership in the medical field is declining and the number one problem facing medical innovation is our regulatory system. Maryland is strategically located outside of Washington, D.C., and with the FDA and CMS located within the state, and numerous other health agencies, institutions, and private firms, some of the world’s leading experts in all medical fields call Maryland home. As a result, enacting legislation in Maryland to create more obstacles for these individuals will only drive innovation and the best talent in the world out of Maryland to other states and countries.

You and your organizations are encouraged to attend the event this Thursday and provide input.

Maryland House of Delegates hearing on HB 818 on Thursday, 
March 3, 2011 at 1:00 p.m, 
Government Operations Subcommittee, Rm 240, House Office Bldg.

HB 818, The Manufacturers of Prescribed Products – Payments to Health Care Professionals – Prohibition

Members Maryland Government Operations and Health Committee

House Energy and Commerce Hearing: Impact of Medical Device Regulation on Jobs and Patients

Interventional Cardiology 
In light of many recent reports about the negative impact federal regulations are having on the medical device and technology industry in America, the House Committee on Energy and Commerce held a hearing last week to examine the state of the medical device industry and the impact of regulations on job creation and patient access.

At the hearing, entitled, “Impact of Medical Device Regulation on Jobs and Patients,” Committee Chairman Fred Upton (R-MI) noted in his opening statement that America’s leadership in medical innovation is being threatened by a lack of predictability, certainty, and transparency at the Food and Drug Administration (FDA). He asserted that these problems are hurting US innovation, costing US jobs and hurting American patients.

In addition, Mr. Upton cited recent reports and first-hand accounts from American small businesses, that device companies are being forced to market their devices first in Europe because the EU countries have predictable and consistent regulatory processes.  Because of this, medical devices are available to European patients two years ahead of when they're available to U.S. patients. To make matters worse, American jobs are following too as U.S. firms move their operations overseas. 

Consequently, Mr. Upton noted the need to reauthorize the Medical Device User Fee Act, which expires in September of 2012. The Energy and Commerce committee is charged with leading its reauthorization. Accordingly, Mr. Upton recognized the need for FDA to fix its problems and to build more predictability and transparency into its process so that America can stay as the global leader in medical device innovation, so we can create good-paying jobs here at home and so we can improve the lives of patients.

Representative Joseph Pitts (R-PA), Chairman of the Subcommittee on Health, who chaired the hearing, echoed Mr. Upton’s comments. He pointed to a November 2010 study entitled “FDA Impact on U.S. Medical Technology Innovation,” which surveyed over 200 medical technology companies. Mr. Pitts noted how the companies in the study described the FDA process as “unpredictable and characterized by disruptions and delays.” The report also found that because of FDA’s “suboptimal execution,” U.S. patients had to wait two years longer to benefit from new devices as compared to patients in foreign countries.

The study also noted that companies are able to make their products available to patients faster and at a significantly lower cost in markets such as Europe. For example, in order to get clearance for low-risk devices, device companies had to spend $31 million, of which $24 million went to the FDA-related expenses. With respect to higher-risk devices, device companies had to spend $94 million and $75 million of that amount went toward FDA-related expenses.  As it gets more expensive for device firms to obtain FDA clearance or approval, the device sector becomes less attractive for venture capital. 

This trend is significant because according to the Lewin Group, the medical device industry employed 422,778 workers nationwide, paid $24.6 billion in earnings, and shipped $135.9 billion worth of products in 2008.

Mr. Pitts also pointed to a January 2011 Boston Consulting Group report “EU Medical Device Approval Safety Assessment: A comparative analysis of medical device recalls 2005-2009.” He noted how  “the results of this study suggest little difference between absolute number of serious recalls between the US and EU regulatory systems.  The distribution of the serious recalls is similar across therapeutic areas and reasons for recall, suggesting that differences between the two systems do not ultimately affect performance.

Another recent report from PwC found that the U.S. medical device environment is deteriorating, in part because of unpredictability and inconsistency in the regulatory process.  PwC explained that “[t]he innovation ecosystem for medical device technology, long centered in the United States, is moving offshore. 

Testimony from Panel

The Subcommittee on Health then heard testimony from:

  • Jeffrey E. Shuren, M.D., J.D., Director of the Center for Devices and Radiological Health (CDRH), FDA
  • Josh Makower, M.D., Consulting Professor of Medicine, Stanford University   CEO, ExploraMed Development, LLC  Venture Partner, New Enterprise Associates
  • Mark Deem, Managing Partner and Chief Technology Partner The Foundry 
  • Ralph F. Hall, Distinguished Professor and Practitioner of Law University of Minnesota Law School
  • Dr. Rita Redberg, Director, Women's Cardiovascular Services, University of California San Francisco Medical Center
  • Dr. Steven E. Nissen, Professor of Medicine, Cleveland Clinic Lerner School of Medicine at Case Western Reserve University, Chairman, Department of Cardiovascular Medicine, Cleveland Clinic Foundation

Jeffrey E. Shuren (FDA)

Dr. Shuren’s written testimony gave a brief historical description of the regulation of medical devices. He also discussed some of the findings from the medical device reports noted above. In addition, Dr. Shuren emphasized the positive role FDA has had in meeting its device approval timelines. He stated that 95% of the over 4,000 medical device applications meet their timelines and that 90% of devices under the 510(k) program are approved in 90 days or less, and 98% in 150 days or less.

Nevertheless, Dr. Shuren recognized that FDA is not meeting its goals in a number of areas. He explained the causes for these problems to include increasing workloads, turnovers of key staff, growing device complexity, and poor-quality submissions.

Dr. Shuren also discussed differences between the EU and the FDA device regulatory system. In addition, Dr. Shuren also addressed why it takes so long for complex medical devices to get approval, pointing to the need for more clinical data and much earlier agency involvement with the company. Dr. Shuren also discussed the recent 510(k) plan of action and recommendations.

Dr. Josh Makower

As the founder of a number medical device companies, and inventor of hundreds of medical devices, Dr. Makower explained in his written testimony that over the past few years, it has been increasingly more difficult, more time consuming, more costly and less predictable to navigate the FDA approval process. As a result, investment is drying up, companies are moving overseas  or closing their doors and US patients are being denied timely access to safe and effective new  medical products.  If this situation does not improve immediately, a generation of innovation  and businesses will be lost, along with the jobs they would have created and the lives they would have saved or improved.

For example, from 1980 to 2000, new diagnostic and treatment paradigms helped drive a 4 percent increase in life expectancy in the U.S., a 16 percent decrease in annual mortality rates, and a 25 percent decline in disability rates for the elderly.

After discussing the results from his study and some medical device industry details, Dr. Makower asserted that “FDA must balance the imperative  of assuring the safety, effectiveness, and quality of commercially available medical devices with its mission of fostering innovation by providing companies with a timely, predictable route to market.”

Ultimately, Dr. Makower concluded that serious device-related safety problems are extremely rare, and that data shows that the majority of these rare postmarket events stem from issues relating to quality systems and manufacturing processes and not issues that would have been most effectively detected through more expansive premarket clinical trials.

Mark Deem

As a founder of dozens of medical device startups, Mr. Deem asserted that medical device startups are currently struggling and that this is problematic because “startups are responsible for a huge percentage of paradigm-shifting breakthroughs in patient

care.” He noted that while startups “exist for patients, they live on venture capital.” He cited the PwC report and how between 2007 and 2010, venture capital investment in the medical device sector declined by over 37%, and that the primary risk factor affecting investment is the unpredictability of and delays by the FDA.  

He also gave examples of the many medical devices that have changed patient care, such as a catheter based procedure that only takes an hour to repair a valve, which ten years ago would have been major open heart surgery. He also discussed how patients can now have a blood clot removed with a tiny device threaded into the arteries in their brains.

In light of these advances, he pointed to the Boston Consulting Group study, which showed that the EU safety record is essentially identical to that of the US. Accordingly, he asked why, if we are not increasing safety, we should be satisfied with a system that is driving investment innovation and jobs overseas?  Why should we be satisfied with a system wherein US patients wait up to 4 years longer for access to care that was pioneered in the US? He answered the question by noting that “the sad fact is, many of those patients simply will not live that long” to wait.

Ralph F. Hall

Mr. Hall, a law professor at the University of Minnesota Law School used his testimony to discuss the findings of research he conducted as well. He told the committee that the findings from his research “suggest that reform of the regulatory process is needed to ensure the safety of medical devices.” Mr. Hall asserted that his study showed that “FDA has a very positive safety record in its 510(k) clearance decisions."

For example, Mr. Hall pointed out that overall, 510(k) regulated medical devices have an excellent safety profile.  Over 99.5% of 510(k) submissions assessed during the study period did not result in a Class I safety recall, and over 99.7% of 510(k) submissions did not result in a Class I recall for any reason relevant to the 510(k) premarket system.

Additionally, Mr. Hall noted that less than 9% of Class I recalls during the study period involved possible undiscovered clinical risks.  As such, Mr. Hall concluded that “increased preapproval clinical testing would not have any meaningful impact on reducing the number of Class I recalls.”

Mr. Hall also recognized the need for people to remember that there are around 3,500 510(k) submissions per year compared to 20-40 PMA applications. Given these disparate numbers, “the fact that more recalls are for 510(k) products than PMA products is not meaningful or even a useful comparison.” Moreover, “the majority of all recalls (approximately 55%) are for post market issues.  For these recalls, no change in the premarket 510(k) or PMA process would affect the recall occurrence or frequency.” 

Dr. Rita Redberg

Dr. Redberg, Professor of Medicine and full time Faculty Member in the Division of

Cardiology at the University of California, San Francisco Medical Center, and editor of AMA’s Achieves of Internal Medicine expressed concern about the 510(k) approval process. She noted that while 510(k) clearance is appropriate in circumstances where low- and moderate-risk devices are substantially equivalent to previously approved devices, this approval pathway was not intended for, and should not be used for, high risk devices. 

She stated that too many high-risk devices are being cleared by a 510(k) mechanism without any clinical trial data; and second, after device approval there is little or no post-marketing surveillance that would detect serious adverse events in a timely fashion.  As a result, she called on the Committee to ensure that the risk from medical devices is minimized through proper use of evidence-based medicine and well-designed clinical tests before the devices are approved and clinical registries to track outcomes in real time after they are approved.

Dr. Steven E. Nissen

Dr. Nissen, Chairman of the Department of Cardiovascular Medicine at Cleveland Clinic, and a strong anti-industry critic, used his testimony primarily to discuss research he and his colleagues conducted about the safety of medical devices. His main concern stemmed from a finding that “71% of recalls for defects that could “cause serious

health problems or death” were originally approved using the 510(k) pathway.” As a result, Dr. Nissen recommended a more nuanced approach to device regulation that appropriately balances the need for timely approval with patient safety. He said that components of reform should include:

A more accurate definition of a high risk device, which takes into account the likely risks if the device is defective.

An intermediate regulatory category more rigorous than 510(k), but short of a full PMA process, for moderate risk devices.

Better funding for FDA Center for Devices to enable timely, but thorough, evaluation of the risks and benefits of medical devices.


Ultimately, people must remember that all devices carry risk. However, Congress and FDA must balance patient access to new technology with premarket processes by creating the standard that there must be "reasonable assurance" of product safety before the product should be marketed.

For decades, the American medical products industry has been responsible for innovations that have saved lives, reduced suffering, and sometimes even lowered medical costs. Moreover, this industry creates high-quality jobs that contribute to the nation’s economic health. Accordingly, Congress and the FDA must establish a way to strengthen the medical device industry to ensure that our advances, breakthroughs, jobs, and income stay here.

This Week Congress and President - a Potential Collision Course for Government Shutdown

Collision Course R 
President Obama recently submitted his $3.7 trillion 2012 budget proposal, marking the start of the annual budget process. Then, the House of Representatives approved a stopgap 2011 continuing resolution with over $60 billion in discretionary spending cuts.  Amendments approved would defund the landmark health law and halt funding for Planned Parenthood, the family planning organization. Three other amendments would bar federal funding for the healthcare reform law:

  • An amendment from Health Appropriations Subcommittee Chair Denny Rehberg (R-MT) to block 2011 HHS funds to implement the health reform law
  • Amendment from Rep. Steve King (R-IA) to block all funding for the law; and 
  • Amendment from Rep. Jo Ann Emerson (R-MO) to bar the IRS from using funds to enforce the law's individual mandate requirement.

President Obama has threatened to veto the GOP spending plan and Senate Democrats are working on their own short-term spending extension, which is expected to include a discretionary spending freeze.

House Speaker Boehner said in a speech this weekend "We have a moral responsibility to address the problems we face. That means working together to cut spending and rein in government -- not shutting it down….This is very simple: Americans want the government to stay open, and they want it to spend less money. We don't need to shut down the government to accomplish that."

 An alternative proposed by congressional negotiators this past weekend is to extend the budget by two more weeks which includes a $4 billion budget cut.

As a result, Congress may be on a course for a possible government shutdown when current stop-gap funding for 2011 expires on March 4, primarily because there is limited time to craft a compromise:  both chambers are were out this past week for the President’s Day recess, leaving one legislative week before the deadline.

1099 Provision

In addition, the House Ways and Means Committee, by party-line vote, recently passed a bill that would pay for repeal the 1099 reporting requirement contained in the Affordable Care Act, which would require small firms to report all payments to vendors in excess of $600. The bill to repeal this provision would increase the amount of subsidies recaptured for overpayment on new health exchanges opening in 2014.

The GOP said the pay-for is similar to the most recent one-year "doc fix" approved in December, but Democrats accused the Republicans of trying to increase taxes. 


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