Fast-Track Bill Will Include Medical Device Tax Repeal
Committees in the U.S. House of Representatives are considering proposals to repeal several key Affordable Care Act (ACA) provisions, including the medical device tax, as part of a congressional budget tool called a reconciliation bill. Leaders in the med tech industry see the tax as an unnecessary drag on research spending and technology innovation, which a recent report suggests could reduce overall healthcare spending.
Since the beginning of the year, GOP members of the House and Senate have indicated plans to use a special process called “reconciliation” to expedite their fiscal policy agenda, and chief among their concerns is the dismantling of the ACA. According to the Center on Budget and Policy Priorities, the reconciliation process is ideally suited for controversial budget issues because it bypasses a potential opposition filibuster, limits amendments, and only requires a simple majority of 51 to pass the Senate.
The two percent tax levied against gross profits in the medical device industry is one of the provisions that the reconciliation bill is poised to repeal, and Forbes reported that outgoing Advanced Medical Technology Association (AdvaMed) president and CEO Stephen Ubl called the bill a “good opportunity.”
“The device tax remains at the top of the political radar screen,” said Ubl at his last AdvaMed annual meeting before he makes the move to PhRMA. “We need to finish the job and close the deal on device tax repeal.”
One of the principal arguments against the tax is that it limits funding for research and innovation. Med tech leaders have long insisted that innovative technology improves patient care, but a white paper recently released by AdvaMed indicates the same technology could also reduce healthcare spending.
According to the report, overall Medicare spending at the top technology hospitals in the U.S. is lower than spending at other hospitals, which suggests that implementing innovative technology is cost-effective, but more research is necessary to validate these findings.
“The results provide valuable insight into the potential economic benefits of adoption and use of medical technology,” wrote the authors in the report’s conclusion. “In particular, it suggests that providing technology intensive healthcare to patients is not incompatible with cost savings or the efficient delivery of care.”
AdvaMed also has an ongoing advocacy campaign encouraging people to contact their legislators and speak out against the tax.
In an announcement, House Ways and Means Committee Chairman Paul Ryan (R-Wisc.) said, “This bill is a big step toward dismantling Obamacare. Through reconciliation, we have the opportunity to get a repeal bill not only through the House — but actually to the president’s desk.”
According to the Washington Examiner, the House has voted over 60 times in attempts to defund the ACA with limited results, and many Congressmen and women see this latest attempt as a waste of time and fully anticipate a presidential veto.