House Votes To Repeal Medical Device Tax, Delays IPAB Repeal Vote

On Thursday, the House voted 280-140 to approve a bill (HR 160) that would repeal the Affordable Care Act's medical device tax, The Hill reports. According to The Hill, 46 Democrats voted in favor of the measure (Ferris, The Hill, 6/18).

Background

In order to help fund the ACA, the law established a 2.3% tax on the sale of medical devices that are primarily used by physicians and hospitals, such as CT scan machines and pacemakers. The tax went into effect in January 2013. Companies that are subject to the tax must file quarterly tax forms with IRS (California Healthline, 1/14).

The Office of Management and Budget in a statement said the repeal "would increase the deficit to finance a permanent and costly tax break for industry without improving the health system or helping middle-class Americans" (Sullivan , The Hill, 6/15).
Supporters of the repeal argue the tax, which affects roughly 7,000 medical device makers throughout the country, curbs innovation on vital devices, such as ventilators and X-ray machines (The Hill, 6/18).

Measure Could Face Veto

President Obama has threatened to veto the measure.

According to USA Today, the measure fell one vote short of the amount needed to override a presidential veto of the measure. However, not all House members voted on the bill's final passage.

Still, it is unclear whether the bill will gain enough support in the Senate to override a potential veto (Groppe, USA Today, 6/18). According to the Times, some Senate Democrats have expressed support for repealing the tax if it includes offsets to replace the loss in ACA funding (Howell, Washington Times, 6/18).

House Majority Leader Kevin McCarthy (R-Calif.) said he hopes the measure's bipartisan support in Congress "will make the president" reconsider the veto threat (Fram, AP/San Francisco Chronicle, 6/19).

Rep. Lamar Smith (R-Texas) noted the veto threat came from Obama administration officials but Obama himself has remained silent on the repeal. He added, "[W]e think it's still possible [HR 160] could be enacted" (Owens, National Journal, 6/18).

According to CQ News' "POTUS Operandi," Senate Majority Leader Mitch McConnell (R-Ky.) has said repealing the medical device tax is one of his priorities, so it is likely such a measure could make its way to Obama for consideration ("POTUS Operandi," CQ News, 6/18).

House Delays Vote on IPAB Repeal

Meanwhile, the House postponed a final vote on a separate measure (HR 1190) that would eliminate the ACA's Independent Payment Advisory Board, Modern Healthcare reports.

According to Modern Healthcare, a majority of senators favor of the bill (Ross Johnson, Modern Healthcare, 6/18). According to CQ News, final consideration of the measure is scheduled for next week (Attias, CQ News, 6/18).

Background

IPAB is a 15-member panel of health care experts established under the ACA to make cost-cutting recommendations for Medicare annually if program spending exceeds a target growth rate. The recommendations would take effect unless Congress develops an equivalent alternative.

Although it was scheduled to convene in 2014, the panel was not required to make recommendations that year because the projected growth rate was 1.15%, according to CMS. The Obama administration has not yet nominated any panel members (California Healthline, 3/31).

Repealing IPAB would cost $7 billion over the next 10 years, according to some estimates. However, an amendment proposed by Rep. Joe Pitts (R-Pa.) would offset the IPAB repeal cost with funds that were authorized to promote public health and preventive care (Scott, National Journal, 6/15).