January 2020

Linda Rouse O’Neill
HIDA VP, Government Affairs

HIDA Member Efforts Pay Off With Permanent Repeal Of The Medical Device Tax. President Trump signed into law late last year a full and permanent repeal of the 2.3% excise tax on medical devices as part of a broader deal to fund the government. HIDA and its members rallied for a decade to definitively end the tax, which was created as part of the Affordable Care Act in March 2010 but suspended several times since its inception. The repeal is a huge win for the industry, the nation’s economy, and for medical innovation. It demonstrates the value of remaining engaged with policymakers. By abolishing the tax, the medical industry has a greater ability to make multi-year investments in research and development, hiring, and growth.

HIDA Medical Device Tax Info►

Supply & Demand

HHS Invests In Modernizing U.S. Manufacturing Capacity For Pandemic Influenza Vaccine. Recombinant technology can produce new vaccines faster than the traditional egg-based approach, and domestic manufacturing of vaccine supplies is viewed by the U.S. Health and Human Services Department as essential to save lives during a pandemic. That’s why HHS has issued a six-year, $226 million contract with Sanofi Pasteur, a global pharmaceutical company with New Jersey headquarters. As part of the agreement, Sanofi Pasteur will double its recombinant protein-based influenza vaccine manufacturing capacity by retrofitting Pennsylvania facilities, and HHS will have access to the new capacity for up to 25 years after the facilities are completed. As a result, Sanofi Pasteur may have capacity for nearly 100 million doses of vaccine in a pandemic scenario.

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Lease Spend Is A Hidden Category Full Of Savings And Strategic Value. Leasing spend represents a hidden opportunity for procurement and finance departments to find savings and create strategic value. With various departments in a business juggling leasing terms including financing and renewals for things like warehouses, offices, computers, supplies, furniture, and vehicles, it can be a daunting task to think one single department can manage it all. However, technology has evolved enabling the management of all of that spend. Additionally, in 2019 public companies had to adopt new accounting standards requiring all financing data about leases to move from financial report footnotes onto balance sheets. Private companies eventually will have to adopt these same accounting rules. Consider using a digital lease-versus-buy tool that automatically keeps variables up to date and standardizes workflows to ensure a centralized review process. A tool can help make smarter decisions than the usual process of filling out lease vs. buy spreadsheets and emailing them to procurement for review.

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Distribution & Logistics

California's New Contractor Law Creates Challenges For The Trucking Industry. California’s new contractor law leaves carriers with major uncertainty about compliance in 2020. Carriers wonder if they must make all drivers full employees, rather than contractors, and shippers wonder if higher rates or capacity shortages loom. The controversial new “ABC test” standard, implemented January 1, is intended to ensure that contractors working near full-time hours or contributing as the equivalent to a full-time employee receive overtime pay and benefits. Workers’ rights advocates, including unions and ride-sharing drivers, hailed the legislation as a win, but the trucking industry is at a loss for how to comply. At a minimum, companies contracting with drivers to do work in California may want to review their consulting and independent contractor agreements as they head into the new year. Meanwhile, New Jersey is considering similar legislation.

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Digital Supply Chain

Providers Adopting Advanced Revenue Cycle Management Capabilities. A College of Healthcare Information Management Executives survey found that technologically sophisticated providers are accelerating the transition to value-based care by investing in revenue cycle management. These health IT investments are enabling provider organizations to perform advanced tasks, such as real-time identification and tracking of value-based care conditions and the distribution and management of bundled payments. And the return is real, with about one-quarter of the surveyed providers’ revenue being generated from an alternative payment model. These models include pay-for-performance arrangements, bundled payment models, and shares savings and/or losses contracts.

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Events & Resources:

2020 Hospital and ASC Reimbursement Outlook (January 28 recorded webinar)
Hear key news and data from Linda Rouse O’Neill, VP, Government Affairs, HIDA.