By Nathaniel Weixel
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.
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.
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
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
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
“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
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