Hello, and welcome to Medical Device Tax Watch.
The Healthcare Supply Chain Association (HSCA) launched Medical Device Tax Watch to serve as a clearinghouse of information for American hospitals and healthcare providers on the medical device excise tax (MDET), and to gather information and create awareness of medical device industry efforts to pass the costs of the device tax on to American hospitals and other health care providers.
As part of the Patient Protection and Affordable Care Act
(PPACA), Congress imposed a 2.3 percent excise tax on sales of “taxable medical
devices” by manufacturers and importers beginning January 1, 2013. Other
healthcare stakeholders, including hospitals and the pharmaceutical industry,
were also asked to pay their fair share of healthcare reform. Hospitals, for example,
committed $155 billion over the next ten years to help fund PPACA.
HSCA and its group purchasing organization (GPO) members
have now begun to see evidence that some medical device manufacturers are
shifting the burden of the medical device tax directly to American hospitals
and healthcare providers, and billing hospitals directly to cover the costs
associated with ACA’s medical device tax.
HSCA took no position on the medical device excise tax,
other than expressing its concern that the device industry not be allowed to
pass along the cost of the tax to hospitals – in effect, double-taxing
hospitals. In a March 2011 letter to the U.S. Internal Revenue Service (IRS),
HSCA joined the American Hospital Association (AHA), the Federation of American
Hospitals (FAH), and the Catholic Health Association (CHA) in urging the IRS
not to allow medical device manufacturers to pass on the cost of the device tax
to hospitals.
American hospitals have already lived up to their shared financial
responsibility for national healthcare reform, and now face mounting budgetary
strain as they continue to deliver affordable and effective patient care with
fewer dollars. It is disheartening to find that some medical device companies
have chosen to tack the tax right onto their invoices.
We urge all manufacturers to immediately stop passing the
medical device tax on to American hospitals, and ultimately to patients and
taxpayers.
Curtis Rooney
President
Healthcare Supply Chain Association
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