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The latest on
the Washington debate

Round-Up Extra: Governors, State Legislature Group Express Concerns Over Mark-Up

by Astrid Fiano , DOTmed News Writer
Five state governors have sent a public letter to Senator Max Baucus (D-MT), Chair of the Senate Finance Committee, with pressing concerns regarding the Chairman's Mark Senator Baucus released last week. The governors specifically had strong disapproval for the $40 billion tax on the medical device industry included in the health care reform legislation.

"We believe strongly that the industry's innovation contributes greatly to the continued growth in the efficiency and effectiveness of health care delivery within the system and the quality of care provided to patients," the letter states. "This industry is producing new innovations that are crucial to chronic disease management, reduced procedure times, and more precise diagnoses. In short, this industry provides solutions that are integral to our health care reforms."

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The letter stressed the importance of the medical technology industry to state economy, and the concomitant resources of employees, salaries, and global exports that could be affected by the tax. The governors say the tax would strain those resources, as well as development, support, training, and investment in manufacturing and jobs. The governors feel that the tax on the 80,000 different medical devices would actually increase health care costs, and therefore request that the tax be excluded from the final legislation. The governors who signed the letter were Tim Pawlenty (MN), Mitch Daniels (IN), Jim Gibbons (NV), Gary Herbert (UT), and Arnold Schwarzenegger (CA).

Governor Rick Perry of Texas also sent a letter to Baucus. Perry's letter protested a different area of the legislation--the expansion of Medicaid and the likely financial burden on the state. Perry suggested that Texas' Medicaid recipients would likely double in number and add $60 million to the state budget. The Governor urged the Committee to consider more flexible and state-specific reforms.

Finally, the National Conference of State Legislatures (a bipartisan organization serving state legislators and staffs) has also has sent a letter to Baucus and Committee member Senator Chuck Grassley (R-IA), about issues of particular concern for the NCSL. The letter, signed by Senator Don Balfour (GA), NCSL President, and Senator Richard Moore (MA), NCSL President-elect, began by urging that 100 percent federal matching payments are necessary for new mandatory eligibility categories or services and for mandatory increases in provider reimbursements.

NCSL also advocated: inclusion of an automatic counter-cyclical stabilizer for federal Medicaid matching funds to help states in economic hard times; and federal equity for legacy states--to avoid financial penalties on states that have already passed and implemented significant health care reform programs; retention of disproportionate share hospital payments providing funding to states for payments to hospitals serving a disproportionate share of Medicaid and Medicare recipients; and federal and technical assistance to fund reimbursement and recruitment strategies that would increase the number of providers participating in the Medicaid program.

The governors' letter can be accessed at: http://www.governor.state.mn.us/mediacenter/pressreleases/PROD009669.html

Governor Perry's letter can be accessed: http://governor.state.tx.us/files/press-office/O-BaucusMax20090923.pdf

The NCSL letter can be accessed at: http://www.ncsl.org/default.aspx?TabId=18624

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