'Stupid' medical device tax faces GOP repeal

Republican senators led by Utah's Orrin Hatch have said they will work to repeal the 2.3 percent medical device tax that went into effect January as part of the 2010 Affordable Care Act.

The tax--intended to help pay for costs associated with the healthcare reform law--is a point of contention for many legislators, as well as device makers, innovators and providers. Hatch, ranting about the tax on Tuesday, referred to it as "one of the stupidest aspects" of the ACA.

"There's so many stupid aspects of that, it would take all day to explain them to you," he said, according to The Hill's On The Money finance blog.

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.

At a Congressional hearing in March, meanwhile, 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"While the IRS and FDA have provided some draft guidance on how they will apply the medical device definition and medical device tax, their analysis is not a poster child of clarity and leaves large parts of the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 March 2012 report published by AdvaMed concluded that the tax could result in the loss of close to 39,000 jobs and $8 billion in economic output.

Senate Majority Whip Dick Durbin (D-Ill.) said he would be open to supporting a repeal of the tax, so long as there is a mechanism to replace the revenue that the tax would have generated, according to The Hill.

"I have said from the beginning that we should be open to changes in the Affordable Care Act," he said.

To learn more:
- read The Hill article