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What the MedTech Act Really Means for Healthcare Innovation


We outline the pros and cons of the MedTech Act. Will it help grow or crush healthcare innovation? Photo via stasique/ shutterstock.

In 2014, Senators Orrin Hatch and Michael Bennett proposed an initiative called the “Medical Electronic Data Technology Enhancement for Consumers’ Health Act.” The act focuses on bringing medical innovations to market more quickly, proposing to exempt low-risk medical software and mobile medical apps from regulation by the U.S. Food and Drug Administration (FDA).

The Basics

In a nutshell, the MedTech Act is the answer to conversations about the role of the FDA in regulating digital health. Within the Act, the FDA will now manage medium and high-risk groups of medical software, including imaging technologies, lab diagnostics and medical devices. Low risk software, which includes applications for administrative and financial purposes, lifestyle and wellness programs, some portions of electronic health records, and care coordination applications, will not fall under FDA regulations.

So long as a technology does not give you a diagnosis or care recommendation, it will not be regulated. For example, if an app provides non-interventional advice, like “your insulin is low, call the doctor,” that app would not be subject to pre-market regulation. If an app uses biometric information to influence a diabetic’s insulin pump, however, that technology would be regulated and considered medium to high risk.

The Good

The MedTech Act mirrors previous policies like The Sensible Oversight for Technology Which Advances Regulatory Efficiency (SOFTWARE) Act of 2013 and The Food and Drug Administration Safety and Innovation Act of 2012 (FDASIA), but it gives them more clarity and crystalizes the regulatory functions of FDA on medical software. It will demand high degrees of transparency from entrepreneurs.

The MedTech Act’s proponents hope that the Act will boost innovation in health information technology. Andrey Ostrovsky, MD, CEO and co-founder of Care at Hand, hopes that the MedTech Act will allow for an easier flow of information within the healthcare system. ”You cannot validate digital technology in a lab,” Ostrovsky says. “It has to be in the market place. It must be given to the user, and they update you. This act helps to make sure that technology is safely developed and used but at the same time, that it is not overreached or overly regulated.”

The hope is that the act will also help to reduce the cost of medical innovation, as it’s designed to help innovators avoid the 2.3% tax charged to medical technology firms as per the federal health care reform act. In an interview with Fierce Health, Senator Hatch commented on these taxes. “Since the tax took effect last year, it has been a drain on American innovation, job growth and our ability to provide groundbreaking medical technologies to patients in need,” he said.

The Bad

Healthcare technologists worry, though, that the FDA will overlook issues with electronic health records and other software and mobile apps considered “low risk.” Within this act, the FDA will no longer receive adverse events (AE) reports, which have previously allowed for a method of improving workflow, process and policy, especially for EHRs. It is still unclear how significant the loss of AE reports might be, but there is the possibility that it could adversely affect patient care.

Many also worry that there are apps with little to no scientific research behind them. If these sorts of applications are indiscriminately used by patients, outcomes could be harmful, especially in emergency situations.


While this Act is yet to be passed in the legislature, Ostrovsky says that it will probably be reintroduced in future congresses. Whether the MedTech Act succeeds in spurring innovation or not, its biggest influence will likely be in removing the ambiguity around medical IT regulations.

Ammu Thampi Susheela, MD

Ammu Thampi Susheela, MD

    A doctor by training, Ammu Thampi Susheela applies her exposure in clinical training to write about the health care topics and has years of experience in writing medical and non-medical articles. Currently she is a research fellow at Beth Israel Deaconess Medical Center, a Harvard medical school affiliate hospital. She has a passion for innovation, technology and health care. She takes keen interest in community activities and volunteers for NGOs. Dance and yoga are her favorite pastimes.

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