THE 2.3% MEDICAL DEVICE TAX WILL AFFECT YOUR PRACTICE

Imposed to help fund the cost of “Obamacare”, the new 2.3% medical device tax will take effect in 2013.  Quoting from The McGill Advisory, Volume 27, Issue 11, November 2012:  “The IRS expects to issue final regulations within the next few months.  However, at this point it is clear that the new 2.3% medical device tax does apply to dentistry, and that virtually all items of dental equipment and instruments, and a substantial portion of lab and supply items, will be subject to the new tax beginning in 2013, adding significantly to doctors’ overhead.”

Although the excise (sales) tax is to begin on January 1, 2013, the IRS has yet to hand down final regulations as noted in the quote above.  The Advisory article is an excellent one, describing what the medical device tax is, to what it is to be applied, and how it will affect dentistry.  The IRS has rejected all requests from the ADA and other dental organizations to exempt dentistry.  Under exemption rules, explained in The Advisory, only items such as toothbrushes, toothpaste, floss, denture adhesives, mouthwash, bleaching paraphernalia and mouth guards will be exempt from the tax.

Suggestions:  follow news about this tax closely and expect to see the 2.3% additional costs added to non-exempt items you purchase for your practice.  Your 2013 fee schedule should reflect this additional cost that will have to be passed to end users, your patients, in the form of fee increases.  And consider checking out this and future articles in The McGill Advisory:  newsletter@mcgillhillgroup.com.