Tax us? Find another way, says Invacare

Wednesday, September 16, 2009

ELYRIA, Ohio – There are better ways to reform the healthcare system than by taxing medical device manufacturers, says Invacare.

The manufacturer sent a letter to Ohio senators last week urging them to reject a measure that would tax manufacturers and importers of class II or III medical devices about $4 billion annually to help pay for healthcare reform.

The measure first came to light Sept. 8 as part of the Senate Finance Committee’s healthcare reform framework. Then it was included this week as part of a draft healthcare reform bill released by Sen. Max Baucus, D-Mont., chairman of the committee.

Invacare estimates the size of the U.S. device market to be about $131 billion. If the measure were to become law, it believes manufacturers would be taxed based on their market share, an average of about 3.1%.

The letter, sent to Sens. George Voinovich, R-Ohio, and Sherrod Brown, D-Ohio, outlines several concerns that Invacare has with the proposed tax, including job losses, the elimination of research and development, increased healthcare costs, and increased burdens on patients.

The tax would also disproportionately affect DME manufacturers, says Invacare.

"The HME industry is already the subject of multiple proposals to cut Medicare payment,” it wrote. “These include cuts to home oxygen items and services, and power wheelchairs; Part B productivity adjustments; and a DME outlier payment rule. These payment cuts will have an impact on Invacare, as our provider customers will be forced to absorb these payment cuts."