It all starts with the sweeping power that the Senate bill gives to the Centers for Medicare and Medicaid Services. The agency will be given the authority to unilaterally write new rules on when medical devices and drugs can be used, and how they should be priced. In particular, the Obama team wants to give the agency the power to decide when a cheaper medical option will suffice for a given problem and, in turn, when Medicare only has to pay for the least costly alternative.
The government has already sought to acquire this same power administratively. But on Tuesday the Obama Justice department got swatted down by the U.S. Court of Appeals for the D.C. Circuit, in what the judges described in their opinion as an attempt by Mr. Obama’s legal team to “end-run around the statute [Medicare].”
Hays v. Sebelius involved a patient who said Medicare unfairly denied her a prescribed treatment for her serious lung disease. Medicare decided instead to pay for a different drug that bureaucrats argued was a suitable but cheaper alternative.
Now the Obama team will use murky provisions embedded in the Senate bill to subtly attain in law those powers they couldn’t more artfully acquire in court. In fact, the bill lets Medicare seek almost any restrictive payment authority it wants from a Medicare Commission established for the purposes of cost control.
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