Impact of Healthcare Reforms on US Medical Devices Market Studied in New Research Report by GBI Research30 May 2013 • by Natalie Aster
Healthcare reform legislation in the US has had major implications for companies and providers in the country’s medical device market. In March 2010, the US enacted the Patient Protection and Affordable Care Act (PPACA) (2010) and the Healthcare and Education Reconciliation Act (2010), both of which have had a significant impact on manufacturers, physicians and hospitals.
According to the report “Changing Regulatory and Reimbursement Scenario for Medical Devices in the US Market” by GBI Research, the Healthcare and Education Reconciliation Act (2010) changed the device tax to a flat sales or excise tax of 2.3% on all devices regulated by the Food and Drug Administration (FDA), which exempts hearing aids, contact lenses, eyeglasses, and other products sold directly to the consumer at retail level. In March 2013, the Senate voted 79-20 in favor of repealing this tax proposal. If reversed, it will prevent a negative impact on US medical device manufacturers.
Changing Regulatory and Reimbursement Scenario for Medical Devices in the US Market
Published: May, 2013
Price: US$ 3,500.00
From 2011, PPACA has adopted 75% equipment utilization rate for diagnostic imaging equipment priced above $1m, such as Magnetic Resonance Imaging (MRI) and Computed Tomography (CT) system. Before 2011, the equipment utilization rate for these systems was estimated to be 50%, but the revised rate requires healthcare providers to examine the utilization of existing diagnostic and imaging systems for effectiveness before acquiring a new machine. As the Centers for Medicare and Medicaid Services (CMS) reimburses per procedure and not per device, the new assumption will help CMS to cut diagnostic procedure reimbursement per single examination.
CMS’ global reimbursement for diagnostic imaging procedures comprises a professional component and a technical component. The professional component covers the physician fee while the technical component covers the equipment and staffing cost. According to the aforementioned proposal, CMS will cut the technical component payment by 50% for sequential diagnostic imaging procedures performed for contiguous body parts which can be examined in a single procedure.
More information can be found in the report “Changing Regulatory and Reimbursement Scenario for Medical Devices in the US Market” by GBI Research.
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