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From Health Law Daily, December 18, 2015

Shutdown avoided, ACA taxes delayed

By Melissa Mitchell, J.D. and Michelle L. Oxman, J.D., LL.M.

Both the House and the Senate passed a $1.1 trillion appropriations bill on December 18, 2015, which was immediately signed by President Obama. The legislation avoided a government shutdown, funded the federal government through September 2016, and postponed the implementation of two major provisions of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148)—the medical device tax and the so-called Cadillac tax—for two years. The 2,000 plus page law also contains other notable appropriation measures for Medicare, Medicaid, and other federal health programs.

The House passed the bill by a vote of 316 to 113. After voting on related procedural motions, the Senate passed it by a vote of 65 to 33 less than two hours later. President Obama signed the bill immediately. The President thanked Speaker Paul Ryan for helping to “make government work.”

Health reform implications. Section 9001 of the ACA places an excise tax, known as the Cadillac tax, on high-cost employer-sponsored plans. Section 9009 of the ACA places a 2.3 percent excise tax on the sale of certain medical devices. Both of these provisions have been in the crossfire of the Republican-backed bills that attempted to repeal the ACA (see House to vote on repeal of major ACA provisions, October 28, 2015; Senate passes bill dismantling Affordable Care Act, December 9, 2015).

Other health implications. In addition to general funding of Medicare, Medicaid, and other federal health care programs, the appropriations law also addresses: (1) Medicare payments for digital radiography; (2) limits on Medicaid payments for durable medical equipment (DME) to the Medicare payment; (3) Medicare payments for disposable devices; and (4) Medicare payments for hospitals in Puerto Rico.

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