Not-So-Happy New Year: Device Tax Not Addressed In Fiscal Cliff Law

Article preview from "The Gray Sheet" - January 07, 2013

There’s no mention of a device tax delay or repeal in the measure signed by President Obama Jan. 2, and the new law contains some Medicare payment cuts as one-year “Doc Fix” pay-fors.

Not-So-Happy New Year: Device Tax Not Addressed In Fiscal Cliff Law

Article preview from "The Gray Sheet" - January 07, 2013

Device firms’ year-end hopes were dashed last week on the news that the fiscal cliff measure (H.R. 8) agreed to by Congress over the New Year holiday and signed by President Obama Jan. 2 does not include a repeal or delay of the medical device excise tax, despite a concerted push by device lobbyists to make it so. The “American Taxpayer Relief Act of 2012” was approved by the Senate by a 89-8 vote, and by the House 257-167 with more than two-thirds of Republicans opposed, then quickly signed by the President before new tax rates take effect in 2013.

In fact, the measure falls short on three key expectations that AdvaMed and its member companies had for the fiscal cliff bill: to delay or repeal the medical device tax; to avoid Medicare provider cuts; and to lift a current restriction in the law blocking FDA from spending beyond fiscal 2012 user fee levels, even though companies are paying increased fees in fiscal 2013 under a new agreement. (See "Device Tax Repeal Tops AdvaMed Priority List For Fiscal-Cliff Bill" — "The Gray Sheet," Oct. 8, 2012.)

“The passage of a scaled-back fiscal cliff package that did not address the medical device tax does not diminish the need to repeal the tax,” said AdvaMed President and CEO Stephen Ubl, while pledging that the trade group will continue its push to repeal the excise tax in 2013.

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