Held hostage by medical device cheerleader: Representative Erik Paulsen (R-MN)

Push to kill medical device tax isseen as way out of shutdown

Article by: KEVIN DIAZ , Star Tribune Updated: October 2, 2013 - 10:14 PM

FiDA highlight

WASHINGTON – A small group of rank-and-file House members trying to break through the impasse in the government shutdown revived talks on Wednesday aimed at repealing a health care tax that falls heavily on Minnesota’s medical device industry.

The effort is being led by Minnesota Republican Erik Paulsen, who has cast himself as the champion of an industry estimated to employ 35,000 in Minnesota. Paulsen said he discussed his proposal Wednesday with Republican House Speaker John Boehner hours before House and Senate leaders were scheduled to meet at the White House with President Obama.

“I said this can and should be part of the solution,” said Paulsen, one of about a dozen House Republicans who have signaled their willingness to drop GOP demands of defunding or delaying the Affordable Care Act, often called Obamacare, as a condition of keeping the government open.

Paulsen sponsored a measure to repeal the medical device tax as part of a GOP government funding proposal that got 17 Democratic votes over the weekend. The Democratic-led Senate stripped the language as part of a broader dispute over Republican efforts to derail the Affordable Care Act, which rolled out this week.

Minnesotans in Congress from both parties have been pressing to undo a $30 billion medical device tax levied under Obama’s health care overhaul. But the two sides have been unable to agree on a way to make up the lost revenue.

Now, with both sides looking for an end to the government shutdown, the repeal effort has been caught up squarely in the protracted politics of the standoff.

Democrats, including Minnesota Sens. Amy Klobuchar and Al Franken, have said they are unwilling to repeal the tax as part of any GOP funding measure that delays implementation of Obamacare as the price for keeping the government open.

“I continue to believe that the current continuing resolution is not the best place to work out a medical device tax repeal that the president would sign into law,” Franken said. “I think the surest way to quickly reopen the government is for the House to vote on the Senate-passed bill to fund the government at its current levels. But I will take a careful look at any proposal that emerges.”

Meanwhile, Republicans have used the issue to attack Minnesota Democrats who voted against the repeal of the medical device tax as part of a GOP funding measure that puts off the health care law.

Despite the discord, Paulsen said the repeal effort represents the best opportunity for compromise. “The number one provision in this entire debate that has brought the most bipartisan support is repealing the medical device tax,” he said. “So we’ve got an opportunity to make that the linchpin as part of a solution.”

Paulsen said he has been in talks with a group of Republican and Democratic House members, including Wisconsin Democrat Ron Kind, an opponent of the medical device tax. Kind, however, has been working on a way to offset any lost revenues that might result.

Optimism from the industry

Industry leaders expressed guarded optimism about the new push on the medical device tax, which already has collected more than $100 million.

“There is reason for optimism that there is a critical mass and bipartisan support for repealing the tax,” said J.C. Scott, chief lobbyist for the Advanced Medical Technology Association.

The House voted last year to repeal the 2.3 percent excise tax on medical device makers like Minnesota-based Medtronic, which has said the tax could cost it $175 million annually. But efforts to win passage in the Senate have been stymied by Democratic concerns about losing one of revenue streams to pay for Obama’s 2010 health care law intended to cover some 40 million uninsured Americans. The repeal measure also has faced a White House veto threat.

White House officials contend that medical device makers will benefit from the new business created by the expansion of coverage to Americans who are now uninsured.

Where state’s senators differ

While Franken and Klobuchar have vowed to get the repeal through the Senate, they differ on a key sticking point: how to make up for the revenue.

Last year’s House-passed bill would have offset the lost taxes by shrinking insurance subsidies for low- and middle-income workers under the health care law. Franken said the GOP plan would undermine the goal of affordable health care.

Klobuchar said Wednesday that she is committed to repealing the medical device tax. However, she said, “the president has made clear that he will not accept changes to the Affordable Care Act as a condition for opening the government.” That doesn’t prevent a repeal in future negotiations, she said, adding that “the best way to get there is for the House to take up the Senate bill to reopen the government so we can have those negotiations.

Paulsen said House members are working on new revenue measures. “It’s definitely something that’s being conducted by rank-and-file members looking for a way out and a solution with bipartisan support,” he said.

Even if enough Democrats come on board, Paulsen’s greatest challenge may be convincing other Republicans.

“I would call it a win,” Paulsen said. “It would be a major accomplishment that helps the economy.”

explanthis

Oct. 3, 13

1:12 PM

The medical device industry is poorly regulated. I have been a patient advocate on the federal level for nearly 5 years, testifying at FDA meetings about the high rate of failure of implanted hips, knees and surgical mesh. The industry has fought UDI (unique device identification), legal protections for harmed patients, transparency of doctor/device mfg. financial relationships and independent outcomes registries to adequately inform patients and their providers. Right now, in WV federal court there are nearly 50,000 harmed women fighting for their civil rights and compensation for 'morbid disfigurement' from multiple manufacturers of surgical mesh. The 2.3% tax is warranted and capitulation to this entitled industry by our elected representatives is undemocratic. Research on 'Failed Implanted Medical Devices'.

Proprietary Demands and Threats by Mayo Clinic CEO

Mayo CEO on Minnesota expansion: 'We'll have to rethink ... thebest use of our money'

•                Article by: KEVIN DIAZ , Star Tribune Updated: April 9, 2013 - 11:16 PM

He warned legislators on eve of hearing on $500M tax proposal.

WASHINGTON – In blunt words aimed squarely at the Minnesota Legislature, the president and CEO of the Mayo Clinic warned Tuesday that the hallowed medical institution has “49 states” eager to have Mayo’s planned multibillion-dollar expansion if the state is unwilling to pitch in.

“We’re never going to leave Minnesota, and we don’t want to leave Minnesota,” Dr. John Noseworthy said in an interview at the National Press Club, where the CEO made a pitch for federal investment in health care and medical research. “But we’ve got to decide where we’re going to put the next $3 billion.”

That money would be part of a $5 billion, 20-year expansion in Rochester dubbed “Destination Medical Center,” which would require a half-billion dollars from state officials for infrastructure improvements.

“If they say yes, that’s great, we want to stay in Minnesota,” Noseworthy said. But, he cautioned, “If they say no, or you’re going to have to go for a bonding bill every year for the next 30 years, we’ll have to rethink about whether that’s the best use of our money.”

Noseworthy, a neurologist, said Mayo is not threatening to leave Rochester, where the renowned clinic was established 149 years ago.

But in a clear message to the Legislature, where the clinic’s proposal is encountering significant sticker shock, Noseworthy pointed out that “there are 49 states that would like us to invest in them. That’s the truth.”

Noseworthy’s comments came on the eve of a House tax committee hearing, where skeptical legislators have split Mayo’s $500 million plan into separate tax and bonding provisions, a development that has concerned backers.

Mayo, the state’s largest private employer, says the taxpayer funding is needed for infrastructure improvements to keep up with the clinic’s expansion plans in Rochester.

Noseworthy said the clinic plans to pour $3.5 billion of its own money into the project and $2 billion from other potential private investors, fostering the city’s growth as an international destination, creating 40,000 jobs and expanding its tax base.

None of the proposed state money would be earmarked for the clinic, he said. “We just hope they’ll help us build some sidewalks and sewers,” he said.

Noseworthy also flexed some lobbying muscle in Washington, where he met with members of Congress on Tuesday to promote funding for medical research, quality care and payment reform under Medicare. Lagging federal provider rates have cost the clinic $128 million, he said, on top of another $47 million in the first year of the sequester budget cuts.

“This is a big deal,” he told the National Press Club audience. “It’s a very serious thing for all of us.”

The sold-out event, which included U.S. Sen. Amy Klobuchar, D-Minn., is an indicator of the Mayo Clinic’s influence in promoting a Minnesota model that drives down costs by emphasizing quality of care and collaboration among medical providers.

But the health care giant faces a tougher audience in St. Paul, where legislators are raising questions about the amount of the requested taxpayer assistance to a city of little more than 100,000 residents, about a third of them in the health care industry.

Noseworthy said the clinic is responding to legislators’ concerns.

“Yes, we’re listening to that input, and we’re trying to see how are we going to get the right answer,” he said. “It’s being reviewed, amended, revised and rethought as we go through.”

Some legislators have suggested that Rochester could pony up more for the stadium-size price tag by raising local sales tax rates.

But Noseworthy said the town doesn’t have the tax base to support the infrastructure improvements that could justify Mayo’s further expansion.

“I don’t know whether it will happen,” he said. “I hope it happens. We’ve told the state we want to grow, and we want to grow in Minnesota.”

In the meantime, other states beckon for a piece of the Mayo mystique.

“Medicine is a growth industry,” Noseworthy said. “We need to decide where to invest for that growth.”

Kevin Diaz • kdiaz@startribune.com

In a recent year Mayo Clinic made $7billion  though it is a 'non-profit' institution and it  paid its' CEO more than $1m.  It is so lawyered up that there has been only one conviction of a doctor in two decades.  Is it possible that these demands are being made by an institution that disguises it's mission as community-focused to derive maximum profit?  How can this be healthy for the majority of Minnesotans?   comment

Med Device Innovation: Profit without accountability

http://www.startribune.com/business/155855295.html

Rep. Erik Paulsen called the tax a “tax on innovation.”

Jerry Holt, Star Tribune

Taking aim at med device tax

•                Article by: JIM SPENCER and KEVIN DIAZ  (FiDA blog bold)

•                Star Tribune staff writers

•                May 30, 2012 - 9:11 PM

WASHINGTON - Republican House members are not waiting for the long-sought decision of the U.S. Supreme Court next month on the constitutionality of President Obama's signature health care law.

Spearheaded by Minnesota Republican Erik Paulsen, the GOP-led House is expected to vote next week to repeal an estimated $28 billion tax on medical device makers. While the tax is intended to help pay for the expansion of health care in the U.S., its repeal would provide relief to an industry with a major hub in the Twin Cities, home of pacemaker giant Medtronic.

Paulsen's bill, scheduled to pass out of the House Ways and Means Committee on Thursday, represents the third time this year that the House's GOP majority has moved to dismantle the health care law in whole or in part, fulfilling a central promise of the 2010 Tea Party movement that dubbed it "ObamaCare."

Paulsen's device tax repeal bill has 239 co-sponsors, including a dozen Democrats, which virtually ensures its passage once it comes to the House floor, possibly as soon as early next week. At a business roundtable in Minnetonka on Wednesday, Paulsen called the medical devices tax a "tax on innovation" that would "hit companies in Minnesota pretty hard" unless it were repealed.

Minnesota is home to some 400 medical device makers who employ 35,000 people, making the state one of the leading regional economies in the U.S. to feel the pinch once the planned 2.3 percent levy on revenue kicks in next January.

Chances for a repeal are far less likely in the Senate, where Democrats are reluctant to blow a $28 billion hole in a massive health care overhaul that needs every dollar Washington can muster to expand coverage to about 30 million people.

Potentially caught in the crossfire could be Sens. Amy Klobuchar and Al Franken, Minnesota Democrats. Both have staked out positions against the medical devices tax, but it is unclear whether they could support a repeal effort that did not include a another means of filling the funding gap.

"I still think we need to eliminate the tax," Franken said, "but any plan to do so must be offset in a responsible and fiscally sound way."

Klobuchar pushed to reduce the tax from the $40 billion that was originally proposed in the 2010 health care law. Appearing at the Minnetonka roundtable with Paulsen, she said she would "continue to support repealing it, reducing it, whatever we can do."

She has not said whether she would require the offset that other Democrats want, waiting to see what might be proposed. The GOP plan headed for the House floor next week provides no offset.

Industry presses

With no agreement on how to backfill the lost revenue that would be generated by the tax, next week's action in the House could turn out to be largely symbolic, much like previous votes to dismantle the Affordable Care Act's cost-control board or to repeal the law altogether.

But political analysts say the election-year House votes will count heavily on lawmakers' records, regardless what the Senate or the Supreme Court do in the coming weeks. The medical technology industry also has become heavily involved.

"We expect the House to pass the measure [repealing the tax] with a significant number of Democrats voting to do so," said Steve Ubl, CEO and president of AdvaMed, the country's leading medical device advocacy group. AdvaMed has poured time and hundreds of thousands of dollars into lobbying to get rid of the device tax, which it calls a job killer.

In the 2012 election cycle, Paulsen received $64,000 in campaign contributions from medical suppliers -- more than any other member of the House, according to records compiled by the Center for Responsive Politics.

Those records also show that Klobuchar, who is running for reelection this year, ranks third in the Senate, with $63,650 in campaign contributions from medical suppliers.

Paulsen quipped that "we're counting on Senator Klobuchar to twist the arm of [Senate Majority Leader] Harry Reid to schedule it on the Senate floor." But that appears unlikely.

"The Senate couldn't put [the House bill] on the floor today and pass it," admitted Shaye Mandle, government relations vice president for the LifeScience Alley, which represents the med-tech industry in Minnesota. "There's a lot of politics, given the presidential election."

'Congress' responsibility'

Even if the Supreme Court strikes down the individual mandate, which forces individuals to buy health insurance or pay a penalty, experts believe the entire Affordable Care Act will be difficult to dismantle because many parts already have been put into place.

Using the individual mandate to increase the number of healthy people buying insurance was the reform's most critical source of revenue. If the Supreme Court throws that out, other revenue sources, such as the device tax, magnify exponentially in importance.

Some in the medical device industry don't see that as their problem.

"I don't think it's our responsibility to go through the whole federal budget and find $20 billion," Mandle said. "It's [Congress'] responsibility."

AdvaMed's Ubl believes there are other ways to recoup the tax money that would be lost, should the device tax be repealed. But his organization is not advocating for any offset and in fact hopes the Senate will not attach one to the repeal bill.

The issue is complicated and controversial enough that Ubl thinks it will not be taken up as stand-alone legislation, but perhaps included in an end-of-the-year, overall tax package.

"We've heard from Senate Democrats who are concerned if it gets pushed to a vote [right now]," Ubl explained.

Meanwhile, the IRS is moving ahead with rule-making to collect the tax. The medical device industry is playing a role in that process to protect its interests in the event that the House and Senate deadlock over the device tax repeal.

"On the one hand, we want to get rid of the tax," Ubl said. "But we have to prepare for its implementation."

Jim Spencer and Kevin Diaz are correspondents in the Star Tribune Washington Bureau.

© 2011 Star Tribune