Med device tax delay part of GOP bill to end shutdown

The medical device tax that went into effect in January as part of the Affordable Care Act could be a key to--at least temporarily--ending the government shutdown, now on Day 15.

A plan devised by House Republicans that increases the debt-limit until Feb. 7, 2014, and funds the federal government until Jan. 15, calls for a two-year delay of the medical device tax, in addition to mandating that all Congressional and cabinet members sign up for healthcare via the Affordable Care Act, but without any employer contributions, Bloomberg reports.

Prior to the shutdown, Sen. Orrin Hatch (R-Utah) called the tax--intended to help pay for costs associated with the healthcare reform law--"one of the stupidest aspects" of the ACA.

In July, the Medical Imaging & Technology Alliance, the Advanced Medical Technology Association and the Medical Device Manufacturers Association announced that medical device industry payments to the Internal Revenue Service already have passed the $1 billion mark.

"Congress cannot wait longer to repeal this burdensome tax and protect jobs and essential R&D funding," MITA Executive Director Gail Rodriguez said in a statement.

Meanwhile, at a Congressional hearing in March, lawmakers said that the tax "looms large" over the mobile healthcare industry.

"While the IRS and FDA have provided some draft guidance on how they will apply the medical device definition and medical device tax, their analysis is not a poster child of clarity and leaves large parts of the economy wondering if they will be on the hook for what is essentially a tax on innovation," Rep. Greg Walden (R-Ore.) said at the hearing.

A Washington Post article published this week takes such thoughts a step further, concluding that efforts by medical device companies large and small have been equally as important as lobbyists in fighting to repeal the device tax.

"[T]he reason the lobbying effort has been so successful is that there are a lot of medical device companies in this country, and they're spread out across a lot of states and a lot of cities, and that's given them pull with a lot of different members of Congress," Ezra Klein wrote.

While the bill could be voted on tonight, the White House already has labeled the GOP plan "a partisan attempt to appease a small group of Tea Party Republicans who forced the government shutdown in the first place," Reuters reports.

To learn more:
- read the Bloomberg article
- here's the Washington Post article
- check out the Reuters post

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