The American Medical Manufacturers Association (AMMA) is leading the charge to reshape US healthcare supply chains. AMMA advocates for critical changes in payment structures prioritizing domestically made personal protective equipment (PPE) and medical supplies.
In response to the Centers for Medicare and Medicaid Services (CMS) proposed rule, AMMA’s recommendations will boost the nation’s ability to produce lifesaving medical supplies while strengthening preparedness for future health crises. CMS’ rule seeks to adjust payment methodologies under the Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment Systems.
Concurrently, on September 13, the US Trade Representative’s office announced approval of the Biden administration’s significant tariff increases on Chinese imports, including medical supplies and nitrile gloves. There is significant momentum to strengthen protections for key industries and address China’s state-supported industrial practices.
Why This Matters?
The proposed rule represents a significant opportunity for CMS to bolster the U.S. manufacturing base by incentivizing hospitals to purchase domestically made PPE, such as N95 respirators and nitrile gloves. This is crucial for creating a more resilient healthcare supply chain capable of withstanding future public health crises. AMMA supports these efforts, emphasizing that strengthening domestic production is not just about healthcare preparedness but also about ensuring patient safety and supporting American jobs.
Key Takeaways from AMMA’s Comments to CMS
National Standard for N95 Respirators: AMMA supports CMS’s proposed shift from a hospital-by-hospital approach to a national standard unit cost differential for NIOSH-approved surgical N95 respirators. This change would reduce administrative burdens and encourage broader adoption of domestically manufactured products. AMMA recommends that CMS set a payment adjustment of five times the difference between foreign-sourced and domestic N95 respirators to create a meaningful financial incentive for hospitals to choose U.S.-made products.
Simplifying the Payment Adjustment Methodology: AMMA advocates for a simplified payment adjustment methodology to encourage greater hospital participation. A streamlined process would make it easier for healthcare facilities to procure domestic PPE, reducing reliance on complex reporting requirements.
Inclusion of Nitrile Gloves and Non-Surgical Respirators: AMMA strongly supports including all NIOSH-approved N95 respirators, both surgical and non-surgical, within the payment adjustment framework. Additionally, AMMA recommends that nitrile gloves be subject to a similar cost differential adjustment, ensuring that the domestic production of this critical PPE remains viable.
Expanding Payment Adjustments to Other Medical Devices: AMMA urges CMS to extend payment adjustments to other essential medical devices, including syringes, needles, surgical masks, and gowns. These items are critical to healthcare delivery and emergency preparedness, and expanding the scope of payment adjustments would help address supply chain vulnerabilities.
Creating a Public Database of Eligible Products: To improve transparency and simplify the procurement process, AMMA supports the development of a publicly accessible database listing eligible domestic products. This would help hospitals easily identify which items qualify for payment adjustments, ensuring compliance with CMS’s requirements.
Addressing Pricing and Awareness Issues: AMMA highlights the need for increased awareness about the payment adjustment program and simplified participation processes. CMS can foster broader adoption of domestic products by targeting procurement decision-makers and hospital reimbursement leads.
What Happens Next?
CMS will likely rule on these changes in the months ahead. The COVID-19 pandemic exposed deep weaknesses in the U.S. medical supply chain, especially in PPE availability. By adopting AMMA’s recommendations, CMS has the opportunity to strengthen the domestic manufacturing base, safeguard public health, and ensure hospitals can access critical medical supplies during times of crisis. AMMA’s comments highlight the importance of taking bold steps to protect the healthcare system and the American people through a more resilient supply chain.