Companies such as Scanlan, Cerner, Invacare, and Alere, among several dozen others have already been accused of passing the device excise tax up thte supply chain to hospitals, according to a new Web site, run by the Healthcare Supply Chain Association (HSCA). The site, www.devicetaxwatch.com, lists about 40 medical device suppliers “shifting the burden of the medical device excise tax (MDET) directly to American hospitals and other healthcare providers.”
An accompanying letter on the site is from Curtis Rooney, president of HSCA. The letter explained that the association had expressed concerns earlier about industry passing the tax on to end users. “We urge all manufacturers to immediately stop passing the medical device tax on to American hospitals, and ultimately to patients and taxpayers,” he said in the letter.
In a Reuter’s story about the Web site, Invacare released a statement, saying that based on its interpretation of the regulations, the company expects the impact of the tax to be less than $1.5 million, adding it intends to pass the cost on to the market.
Most of the companies on the list are small, private firms. If they were passing on the device tax, my guess would be that they are doing so out of genuine confusion. “The documents released by the IRS still have not satisfactorily answered the question of who, exactly, is supposed to pay the device tax,” says Frank Pokrop, director of regulatory affairs at CareFusion.
This problem is very likely going to worsen before it gets better. It really is unclear how firms can and cannot levy for the tax, and in the meantime, this kind of site could damage public opinion.
--Heather Thompson is editor-in-chief of MD+DI