WSJ: 'Fiscal cliff' payment change benefits Varian

An unanticipated provision in the congressional budget bill addressing the U.S. "fiscal cliff" included a financial and competitive advantage for radiation therapy firm Varian Medical Systems, according to a Wall Street Journal article published on January 28.

A last-minute provision in the bill, put through by Senate Majority Leader Harry Reid (D-NV), mandated that Medicare payments for a treatment with Varian's linear accelerator-based stereotactic radiosurgery systems remain the same, the article stated. However, reimbursement would be reduced 58% for hospitals using Gamma Knife, resulting in similar reimbursement levels for both Gamma Knife and linear accelerator-based treatments. Gamma Knife is manufactured by the Swedish firm Elekta.

Reid had previously secured federal funding for Varian to work with the Harry Reid Center for Environmental Studies at the University of Nevada, Las Vegas, according to Wall Street Journal reporter Alicia Mundy. Its director, Oliver Hemmers, PhD, told Mundy that the federal project researched technologies that could x-ray cargo shipments as part of antiterror efforts.

The equipment from Varian was subsequently transferred to the university by the U.S. Department of Energy. In addition to donating equipment valued at $1 million or more, Varian and the university are now partnering on a multimillion dollar accelerator center for research in the national security, health, and energy sectors, according to the article.

Varian had been trying to obtain a reimbursement per treatment with linac-based stereotactic radiosurgery that was comparable to the Gamma Knife treatment, but the firm couldn't convince officials at the U.S. Centers for Medicare and Medicaid Services (CMS), the article said. In November, CMS reaffirmed the separate rate structure for the treatments. After this occurred, Varian's representatives lobbied Congress to get the rates equalized.

The senator's aides told the Wall Street Journal that the provision was added to the fiscal cliff legislation on December 31, 2012. The article further reports that the International RadioSurgery Association has requested Congress to reverse the new payments.

Elekta hired its first congressional lobbyist earlier this month.

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