The American Hospital Association, the Federation of American Hospitals and other healthcare groups are urging the Internal Revenue Service to prohibit device companies from passing medical device excise taxes along to customers, according to an AHA News Now report.
A provision in the Patient Protection and Affordable Care Act requires medical devices companies to pay an excise tax on devices; the concern among the AHA and other groups is that devices companies, in an attempt to sidestep the tax, will force customers, including hospitals, to pay more for crucial devices. In a letter to the IRS, AHA and the supporting groups write:
"As the [PPACA] appears to permit device companies to deduct the tax from their income for federal tax purposes, to allow device companies also to pass through the tax to their customers, would provide a financial benefit that could leave device companies in a better financial position than before the [PPACA] was enacted."
In its letter, the AHA also urged the IRS to clarify that hospitals and healthcare providers who sterilize and package devices used in surgery kits should not be treated as device manufacturers or importers under the new device tax rules.
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A provision in the Patient Protection and Affordable Care Act requires medical devices companies to pay an excise tax on devices; the concern among the AHA and other groups is that devices companies, in an attempt to sidestep the tax, will force customers, including hospitals, to pay more for crucial devices. In a letter to the IRS, AHA and the supporting groups write:
"As the [PPACA] appears to permit device companies to deduct the tax from their income for federal tax purposes, to allow device companies also to pass through the tax to their customers, would provide a financial benefit that could leave device companies in a better financial position than before the [PPACA] was enacted."
In its letter, the AHA also urged the IRS to clarify that hospitals and healthcare providers who sterilize and package devices used in surgery kits should not be treated as device manufacturers or importers under the new device tax rules.
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