Bipartisan Senators File Bill To Repeal Medical Device Tax

A bipartisan group of Senators recently filed a new bill that seeks to repeal the medical device tax. Another version of the bill was filed recently by members from both parties in the House of Representatives. Both pieces of legislation are likely to get approved by Congress.

“Every dollar medical device manufacturers spent on this onerous tax is a dollar taken away from American innovation, job growth, and the ability to provide groundbreaking medical technologies to patients in need,” said Sen. Orrin G. Hatch (R-Utah), chairman of the Senate Finance Committee and author of the bill, according to a Washington Times report. Co-sponsors of the bill include four other Republicans and five Democratic senators.

Since the bipartisan support pushes the numbers closer to a set threshold, the measure will likely survive a filibuster and move to President Barack Obama's desk. "Senate Republicans hold 54 votes, and five Democrats — Sens. Amy Klobuchar and Al Franken of Minnesota, Joe Donnelly of Indiana, Bob Casey of Pennsylvania and Jeanne Shaheen of New Hampshire — have sponsored the bill," noted the Times.

Another version of the bill also recently gathered support from both sides of the aisle in the House of Representatives. Proposed by Rep. Erik Paulsen (R-Minn), that bill is being co-sponsored by 254 representatives, including 27 Democrats.

According to a Modern Healthcare article, President Obama has not said whether or not he will veto any legislation repealing the medical device tax.

Sen. Hatch and his Republican colleagues have sought the repeal of the tax since its inception. Their past efforts have proved futile, however, because Democrats — who previously held the majority in the Senate — had shot down bills coming from the lower chamber. Now that the GOP has control of the Senate, Republicans are hopeful that a repeal of the controversial tax will soon be approved.

The 2.3 percent excise tax on medical devices is designed to raise about $30 billion over the next decade to partially fund the Affordable Care Act. However, the IRS is reportedly struggling to collect the tax from medical device manufacturers.

The Advanced Medical Technology Association (AdvaMed) also claimed in a recent study that the tax had resulted in the loss of 33,000 jobs since taking effect at the start of 2013, according to Modern Healthcare. However, the nonpartisan Congressional Research Service (CRS) refutes such claims, saying in its own recent report that the impact to the medical device industry is likely smaller than anticipated.

The trade association criticized the CRS study for drawing faulty conclusions.

“Prices are actually declining in major sectors of the industry, but the CRS assumes the tax can be ‘passed on’ to purchasers,” such as patients and hospitals, AdvaMed spokeswoman Wanda Moebius said recently, according to the Times. “That’s simply not the case.”