Feb. 18 --Repealing the medical device tax will once again be the top priority of the medical devices industry in 2014, officials from the Advanced Medical Technology Association said during a Feb. 18 briefing.
Stephen J. Ubl, president and chief executive officer of AdvaMed, said the trade group also will focus on driving the growth of medical technology innovation and changing the Medicare reimbursement structure for medical technology in accountable care organizations.
According to Ubl, much of the industry's attention in the past has “rightfully” focused on regulatory issues with the Food and Drug Administration, but Medicare payment changes under the Affordable Care Act “are increasingly a concern to companies of all sizes,” Ubl said.
Ubl said AdvaMed would like the Centers for Medicare & Medicaid Services to institute a “transitional payment” methodology for new technology used in ACOs. Ubl said the payment methodology could be modeled after Medicare's pass-through payments for outpatient services and the add-on payments for inpatient services, which are intended to ensure that new technologies and procedures can be accessed by Medicare beneficiaries in a timely manner.
Ubl said senior citizens need to be ensured access to lifesaving innovative technology. Medicare ACOs aim to improve the quality and lower the cost of health care through several mechanisms, such as disease management programs, care coordination and the alignment of financial incentives for hospitals and physicians, but the current quality incentives are “weak,” he said.
Ubl said ACOs need a payment-neutral model that encourages providers to use innovative technologies that may increase costs in the short term but will save money in the long run.
According to AdvaMed, the number of therapies likely to qualify for the payment program would be relatively small, so the financial impact would also be relatively small.
Repealing the 2.3 percent medical device excise tax will be a top priority in 2014, David Dvorak, chairman of the AdvaMed board, said during the briefing. Dvorak also is president and chief executive officer of device maker Zimmer Inc.
The tax, which was part of the ACA, is projected to collect $38 billion over a decade. The tax took effect in 2013.
Ubl and Dvorak said AdvaMed was disappointed the politics of budget negotiations didn't allow for the tax repeal to be included in a final bill. However, they said the industry is encouraged by companion bills in the House and Senate to repeal the tax.
Dvorak said the devices industry is “ambivalent” about finding an offset if the tax is repealed. The job of finding a pay-for should be up to the lawmakers, not industry, he said.
Also Feb. 18, AdvaMed released a report examining the first-year impact of the excise tax. According to the report, the tax has led to employment reductions of about 14,000 industry workers and foregone hiring of 19,000 workers. The total job impact of the tax on industry employment was approximately 33,000.
The report, which polled AdvaMed member organizations at the end of 2013, also found that almost one-third of respondents (30.6 percent) said they had reduced research and development as a result of the tax. Almost 10 percent of respondents said they had relocated manufacturing outside of the U.S. or expanded manufacturing abroad because of the tax, according to the report.
During the briefing, Ubl said contrary to popular belief, companies haven't seen any “windfall” from the ACA's coverage expansion, and companies can't pass the cost of the tax on to patients or hospitals.
“We've seen no uptick in patients,” Ubl said. “The arguments that there's a windfall from the tax grows weaker by the day.”
To contact the reporter on this story: Nathaniel Weixel in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Brian Broderick at email@example.com
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).