Healthcare Business News
Sen. Al Franken (D-Minn.)

House floats repeal of medical device tax as compromise to end government shutdown

By Andis Robeznieks
Posted: October 4, 2013 - 7:30 pm ET

A bipartisan House measure to repeal the 2.3% medical device excise tax that helps fund the healthcare reform law has been floated as compromise to end the federal government shutdown.

Reps. Charlie Dent (R-Pa.) and Ron Kind (D-Wis.) were leading a coalition of 11 Republicans and eight Democrats late this week seeking an end to the stalemate. The proposal reportedly would fund the government at the sequester cut levels for six months, repeal the device tax and offset the nearly $30 billion revenue loss over 10 years by changing employer pension rules.

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In a video on the Lehigh Valley Morning Call newspaper's website, Dent said they were calling for paying for the repeal “in a responsible way.”

Kind issued a news release saying both sides were “having constructive conversations to build trust.”

But Democratic leaders in both the House and Senate opposed the measure because they aren't willing to negotiate reform law provisions as part of the current spending fight and because it would extend the sequester cuts for six months rather than the shorter period they seek.

“The current continuing resolution is not the best place to work out a medical device tax repeal that the president would sign into law,” Sen. Al Franken (D-Minn.), a supporter of repealing the device tax, told Modern Healthcare. “I think the surest way to quickly reopen the government is for the House to vote on the Senate-passed bill to fund the government at its current levels. But I will take a careful look at any proposal that emerges.”

Rep. Kind's spokesman, Peter Knudsen, said the Democrats are not committed to a device tax repeal though it's not off the table. “There are a lot of proposals, the medical device issue being just one of them. It's a fluid situation. Going forward, I hope that there's a lot more to discuss, a lot more ideas, a lot more thoughts.”

AdvaMed and two other medical device industry trade groups issued a statement saying: “We are very pleased with the broad bipartisan interest in repealing the device tax, and the level of focus and attention to this urgent issue. The House has now passed repeal legislation twice in a bipartisan fashion. We urge Congress to act to address this onerous tax this year, which has already resulted in lost jobs, cuts in R&D and threatens our global leadership in the development of new medical technologies.”

In other related developments, Congress's failure to pass a budget was cited as the source of District of Columbia “budget difficulties” making it unable to pay Medicaid managed-care organizations or fee-for-service providers, according to a news release from the District's Department of Health Care Finance. Payments scheduled for Oct. 4 were not made.

“Cash-flow disruptions provide serious challenges for some, if not most, Medicaid providers,” said K. Edward Shanbacker, executive vice president of the Medical Society of the District of Columbia. “It can mean almost immediate staff layoffs for some providers. We are rapidly approaching the point where physicians and other providers will reduce, if not end, their involvement with the program altogether. I have also reached out to our physician community to see what alternatives are necessitated by the government shutdown and resulting Medicaid disruptions.”

Meanwhile, the CMS Innovation Center found an innovative way to deal with a problem caused by the government shutdown. A two-day meeting for participants in its Comprehensive Primary Care Initiative scheduled for last week was canceled. Instead, however, a three-hour interactive webinar was presented Oct. 3.

Patrick Gordon, associate vice president of the Rocky Mountain Health Plan and executive director of the Colorado Beacon Consortium, praised the Innovation Center's “skeleton crew” for putting on a good program on very short notice. “I don't know how they got folks to the table,” he said. “The quality of thought leadership was evident.”

Follow Andis Robeznieks on Twitter: @MHARobeznieks

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