FOR IMMEDIATE RELEASE OCTOBER 15, 1999

CONTACT: Linda Ruckel (202) 434-7243 Bahar Morid (202) 434-7273

HIMA APPLAUDS THOMAS LEGISLATION WHICH REFORMS HOSPITAL
OUTPATIENT SERVICES AND DELAYS
HCFA'S INHERENT REASONABLENESS AUTHORITY

WASHINGTON, D.C.--"The Health Industry Manufacturers Association (HIMA) commends Representative William Thomas (R-CA), Chairman of the Ways & Means Health Subcommittee for his outstanding leadership in moving the 'The Medicare Balanced Budget Refinement Act of 1999,'" said Pam Bailey, President of the association.

The bill is designed to make adjustments to Medicare's payment systems -- including significant reforms to the hospital outpatient prospective payment system.

"The hospital outpatient reforms are a tremendous first step toward truly integrating life-saving and life-enhancing medical technologies into the Medicare program," Bailey continued. "Because of innovative medical technologies, more and more procedures are performed on a hospital outpatient basis, making procedures less invasive, enabling faster recovery and lowering inpatient hospital expenditures."

The hospital outpatient provisions will ensure that patients have continued access to state-of-the-art medical care in the outpatient setting by:

• Fundamentally restructuring the payment groups or ambulatory patient classifications (APCs) by creating additional groups to ensure they are more clinically and economically coherent.

• Creating "outlier" payments for atypical cases treated in the outpatient setting so that hospitals are not penalized for treating medically complex patients.

• Creating special transition payments for new and certain existing medical devices, drugs and biologics for which HCFA lacks sufficient and reliable data to assign a technology to an APC.

• Requiring HCFA to review the payment groups and amounts and update them annually to reflect advances in medical practice and technology.

• Requiring high-tech medical devices to be assigned to an APC rather than paid for separately on a rigid government-set fee-schedule, which could stifle innovation.

The Thomas bill would also stop the Secretary of Health and Human Services from implementing its inherent reasonableness authority until the Secretary has published proposed and final rules outlining the process for the exercising the authority. HIMA has been highly critical of the IR process citing several methodological flaws in HCFA's previous attempts to target products for reimbursement reductions.

"This legislation will make Medicare beneficiaries confident that they will have continued access to the latest advances in medical technology in the hospital outpatient setting," said Bailey. "It will also assure that arbitrary product reimbursement reductions will be put on hold until HCFA establishes a fair and open process. We urge Congress and the Administration to follow Congressman Thomas's lead," Bailey added.

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The Health Industry Manufacturers Association (HIMA) is a Washington, D.C.-based trade association and the largest medical technology association in the world. HIMA represents more than 800 manufacturers of medical devices, diagnostic products, and medical information systems. HIMA's members manufacture nearly 90 percent of the $62 billion of health care technology products purchased annually in the United States, and more than 50 percent of the $147 billion purchased annually around the world.