GAO Examining Cost of Implantable Devices

The medical device industry is back in the crosshairs of federal lawmakers as they attempt to control the escalating cost of healthcare.

Buoyed by their victory in the battle over a medical device excise tax, lawmakers have now shifted their focus to the cost and use of implantable devices. Leading this latest charge is U.S. Sen. Max Baucus, D-Mont., the Senate Finance Committee chairman who floated a $40 billion, 10-year tax proposal on devices before his colleagues cut that figure in half to appease medical manufacturing executives.

Baucus has asked the U.S. Government Accountability Office (GAO) to conduct an investigation into the pricing and use of implantable medical devices. As part of the investigation, the GAO will evaluate trends in the use of implantable products, the pricing of those devices for hospitals, and the effect of those prices on overall Medicare spending, according to a letter from James Cosgrove, a director in GAO’s healthcare office. Industry insiders speculate that Baucus may be targeting Medicare device payments to reduce healthcare spending.

The investigation into the pricing and use of implantable devices is expected to take about nine months.