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Cosmetic Surgeons Decry Tax on Their Services

Janice Simmons, for HealthLeaders Media, November 30, 2009

When the Senate returns today to start debate on its healthcare reform bill, one group of medical providers likely to be taking sharp interest in the proceedings are those providing cosmetic surgery and related medical procedures.

Under a provision (Section 9017) inserted in the bill released earlier this month, a 5% tax has been proposed on the elective cosmetic procedures.

This tax, which quickly earned the nickname "bo-tax" in the media, is expected to raise about $6 billion of the projected $849 billion cost of the bill over the next decade. This tax would be paid by patients receiving the procedure or treatment and then collected by physicians. The tax, though, is to be paid whether or not the services are reimbursed by insurance.

The tax, as specified in the bill, would not apply to cosmetic surgery to correct congenital deformities or disfigurements resulting from an accident, personal injury or disease. However, representatives of cosmetic and plastic surgery organizations have quickly moved to point out that the others are not all necessarily "Cadillac" or high-cost procedures performed just for a wealthy clientele.

"This tax is effectively a 'Soccer Mom' tax that will adversely impact mainstream American wives and mothers, who are the majority of plastic surgery patients," said Renato Saltz, MD, president of the American Society for Aesthetic Plastic Surgery.

A survey from the American Society of Plastic Surgeons of people planning to have cosmetic surgery within the next two years found that 60% of respondents reported an annual household income of between $30,000 to $90,000 a year. In addition, 40% of those reported a household income of only $30,000 to $60,000; only 10% of respondents reported a household income of more than $90,000.

"Medical professionals in the cosmetic surgery industry object to this tax provision because it doesn’t really reach the wealthy as intended," said Jeffrey Raval, MD, a Denver facial plastic surgeon.

Providers also have been critical of the definition of "cosmetic" as applied to the tax—saying the language was adapted from Internal Revenue Service rules currently in place to bar tax deductions for elective and cosmetic procedures. The interpretation could be tricky in determining if breast reconstruction surgery, for instance, qualifies for the tax—when the treatment of the disease caused the disfigurement, Ravel said.

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