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December 2015
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  • How Does the Fed's Spending/Tax Package Impact Medicine?

    Last month, all that stood between Congress and adjourning for the holiday recess were massive budget and tax bills. The holiday mood must have prevailed, as both sides gave a little and got a little to hash out the packages for passage. With President Obama signing the legislation, adoption of the 2016 federal budget is a done deal.

    Two parts of this package stand out as particularly important for physicians to know:

    • The deal suspends the existing 2.3 percent sales tax on medical devices for two years; the moratorium covers 2016 and 2017. Just last year, the ISMS House of Delegates adopted a policy of opposition to this tax so this is a step in the right direction.
    • The start date of the so-called "Cadillac tax" for benefit-rich health insurance plans has been pushed back by two years; the delay means the inaugural date is now 2020 rather than 2018. By imposing a 40 percent tax on the most expensive plans, this tax discourages employers from providing generous health plans to employees.

    Hidden in the bill were several other notable changes that impact medicine:

    • In a win for medical research, Congress boosted funding for the National Institutes of Health by $2 billion.
    • Medicare's Independent Payment Advisory Board (IPAB) - which technically isn't even authorized yet - saw its funding slashed by $15 billion. ISMS strongly opposes IPAB, so this is definitely good news.
    • Prevention programs for diabetes and opioid abuse both received additional cash support from the feds.

    What is IPAB?

    Authorized in 2010 as part of the Affordable Care Act, the Independent Payment Advisory Board (IPAB) is to consist of a group of 15 appointed members who would be empowered - without much accountability - to make recommendations to cut spending in Medicare if its growth reaches certain arbitrary levels. In practical terms, IPAB could impose significant changes to physician reimbursements without having to answer to voters.

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