AMMA to CMS: Fix Policies and Payments to Support US Manufacturing of Medical Supplies
June 17, 2024

AMMA’s Response to CMS’s Proposed Rule: Ensuring the Resilience of America’s Medical Supply Chain through Strategic Policy Adjustments

The American Medical Manufacturers Association (AMMA) recently submitted a public comment to the Centers for Medicare & Medicaid Services (CMS) regarding the proposed rule changes for the Hospital Inpatient Prospective Payment Systems (IPPS) and Long-Term Care Hospital Prospective Payment System.

This blog post highlights AMMA’s key points and recommendations for strengthening the resilience of the U.S. medical supply chain by implementing strategic policy adjustments within Medicare and Medicaid systems and advancing various policy levers to support domestic manufacturing.

Our recommendations align with the Biden Administration’s support for domestic supply chains, recent actions to raise tariffs on PPE and medical products from China, and bipartisan proposals currently under consideration in Congress.

The Importance of Domestic Manufacturing

AMMA represents domestic personal protective equipment (PPE) and medical product manufacturers. The COVID-19 pandemic underscored the vulnerabilities in relying on outsourced medical supplies. Supply chain disruptions left the U.S. healthcare system scrambling for essential items like PPE and drug administration devices. AMMA advocates for a robust domestic supply chain to safeguard public health and national security.

Implement Payment Adjustments within Medicare and Medicaid Systems

One of AMMA’s primary recommendations is for CMS to implement payment adjustments within the Medicare and Medicaid systems. This strategy encourages ongoing investment in the domestic production of vital medical supplies. By adjusting payment systems, CMS can create financial incentives for healthcare providers to procure high-quality medical products manufactured within the United States. This approach is essential for de-risking healthcare supply chains and ensuring that the nation is better prepared for future public health emergencies.

Advance a Variety of Policy Levers to Support Domestic Manufacturing

In addition to payment adjustments, AMMA advocates for various policy mechanisms to support a resilient healthcare supply chain and domestic manufacturing industry. The National Strategy for a Resilient Public Health Supply Chain outlines several initiatives that align with this goal:

  • Incentives for Domestic Production: To fortify and maintain the public health industrial base, it is crucial to offer incentives for domestic manufacturers. This includes financial support and regulatory adjustments that make it easier for U.S. companies to compete with foreign producers.

  • Enhanced Quality Controls: The Administration has already implemented heightened scrutiny over syringe quality and device reliability. Continued investment in these areas will help ensure that domestically produced medical supplies meet high standards of safety and effectiveness.

  • Tariffs on Inferior Imports: Introducing tariffs on critical medical supplies can help combat the influx of inferior products that undermine the domestic industry and pose risks to healthcare workers and patients. This policy lever can protect the integrity of the U.S. healthcare supply chain.

  • Regulatory Support through Medicare/Medicaid: CMS should use its regulatory authority to influence hospital purchasing decisions in favor of domestic manufacturing. Expanding payment adjustments to include essential supplies like gloves, gowns, and syringes/needles, similar to the current policy for N95 respirators, would be a significant step.

AMMA’s recommendations aim to promote fair competition for domestic manufacturers and strengthen the resilience of the U.S. healthcare supply chain. By implementing strategic payment adjustments within Medicare and Medicaid systems and advancing a variety of supportive policy levers, CMS can help ensure the health and safety of all Americans. These efforts are crucial for building a robust, self-sufficient medical supply chain to withstand future challenges.