Spotlight On: Medical Device Tax

Navigant lends perspective to Healthcare Finance News

Navigant weighs in on Congress’ proposal to do away with the medical device tax, which imposes a 2.3 percent tax to companies that have revenue over $100 million, was created to offset Affordable Care Act expenses. According to the article, the tax is projected to raise $29 billion over the next 10 years.

Excerpt:

"The ACA encourages transparency in a myriad of ways, from a switch from fee-for-service to value-based payment, accountable care organizations and avoidable readmissions. What all attempt to do is change the way providers are paid.The result is consumers are shopping around for the best deal when hospitals are squeezed by lower reimbursement rates from the government and push-back from insurance companies, he said. CFOs are seeing the margins in their core business shrink once again. For the fifth consecutive year, the operating margin of the core is down, to 2.1 percent. We know the margins are shrinking in the traditional lines of business they deliver.”

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