Senate Passes Health Reform Bill

On December 24, the Senate passed H.R. 3590, the Patient Protection and Affordable Care Act (PPACA) along party lines by a vote of 60-39. The bill included numerous provisions of interest to device manufacturers including the imposition of an annual fee, disclosure of financial relations and other provisions. Of notable interest, the Senate bill included a slightly modified version of the device fee. Specifically, the device fee included in the Senate bill will total $20 billion over 10 years and begin in 2011. The fee will be $2 billion annually from 2011-2016 and increase to $3 billion in 2017. In addition, the fee remains non-deductible and includes a small business exemption similar to earlier Senate legislation. Specifically, it would exempt the first $5 million in U.S. sales from any tax and U.S. sales from $5-25 million would be taxed at half the rate.

The House and Senate must now reconcile each body’s respective legislation. Throughout this process, MDMA will continue to work closely with House and Senate staff to improve the device related provisions, including the device tax. While MDMA opposes the imposition of a new tax on the industry, it is unlikely that the tax will be excluded in its entirety. Therefore, we are also engaged in discussions to minimize the impact of the tax on our membership. Specifically, MDMA has been working on delaying the start date until 2013 and providing relief for smaller companies.