Group purchasing organization Novation this week chided medical device makers who attempt to pass on the burden of a 2.3% sales tax on to their customers, asking the industry to take responsibility for its share of the cost of healthcare reform.
Novation reported that at least 1 medical device manufacturer is attempting to bill hospitals for the levy, and the GPO "is taking a firm stance with suppliers who are trying to pass their medical device excise tax obligations on to hospitals."
The tax was designed to ensure that medical device makers help cover the cost of the Affordable Care Act. Healthcare providers committed $155 billion over 10 years and the pharmaceutical industry committed to $80 billion, Novation noted.
"Medical device manufacturers, however, refused to voluntarily contribute," according to a press release. "As a result, the government imposed the Medical Device Tax to cover their portion. This Tax was specifically intended to be a tax on the manufacturer. Even then, by comparison, the Tax is anticipated to amount to roughly $20 billion over 10 years."
""While most device manufacturers are taking responsibility for this Tax, there are some manufacturers attempting to pass their obligation on to hospitals," Novation president & CEO Jody Hatcher said in prepared remarks. "This Tax should be the responsibility of the manufacturers, and Novation is dedicated to ensuring that member hospitals are impacted by it as little as possible."
GPOs have been wary of tax-related price hikes long before the tax took effect at the start of this year. In May 2012 GPO Premier urged the IRS to protect hospitals from price hikes by requiring device makers to promise that their tax burden isn’t baked into their prices.
