GPO wants to keep manufacturers from adding tax to medical devices

by | May 17, 2012

Charlotte, N.C.-based Premier, the second-largest group purchasing organization (GPO) in U.S. healthcare is urging the IRS to formally block medical device manufacturers from tucking the cost of the impending 2.3 percent excise tax into the prices they charge hospitals for their products.

The appeal comes after a survey of manufacturing finance executives showed that nearly half the industry is considering price hikes to offset the hit when the tax kicks in next January as part of the Patient Protection and Affordable Care Act (PPACA).

“Each part of the healthcare industry has a shared commitment and responsibility to pay for healthcare reform,” the dispatch reads. “The intent of the device tax is to raise revenues from manufacturers to cover their share of financing healthcare reform. Hospitals are already contributing their fair share, through policies that reduce hospital payment updates … and that penalize hospitals based on rates of readmissions and hospital-acquired conditions.”

The letter then urges the IRS to require that manufacturers provide documentation in their tax filings certifying that they have not included the tax in the price of their products.

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