Washington Editor

Tamping down on Medicare fraud and abuse is no easy feat, and a new report by the Department of Health and Human Services shows just how tough it is to stay one step ahead of both crooks and changes to coding and billing systems. A new report indicates that the erroneous payment rate had trended down for several years going into fiscal 2012, but the rate jumped in fiscal 2013 by 1.6 percentage points, costing the taxpayers an additional $8 billion.

The 230-page report notes that HHS had moved back the report date by six months in order to "more accurately measure the improper payment rate" in Medicare fee-for-service, and that hence the figures for fiscal 2013 draw on data from July 1, 2011 through June 30, 2012.

The accounting also addresses a long-standing point of conflict between hospitals and the Centers for Medicare & Medicaid Services, adjusting for claims filed under Part A that would ordinarily be permitted only as a Part B claim. The report states that the numbers for 2012 reflect such an adjustment, a move said to have been backed by a ruling by an administrative law judgment. The report stated that this adjustment dropped the overall improper payment rates for fiscal 2013 by 0.6% to 10.1%, which translates into $36 billion.

The data, which do not include Medicare Part A, indicate that the improper payment rate for Medicare FFS was 8.5% in fiscal 2012, which equaled nearly $30 billion. The 10.1% for fiscal 2013 was $36 billion, although $1.4 billion of that sum consisted of underpaid claims. HHS projected that the rate of improper claims for fiscal 2014 will hit 9.9%, or $37 billion of the $392 billion that will be paid out in this current fiscal year. The rates are projected to drop a tenth of a percent in each of the two succeeding years.

FDA finalizes balloon pump classification

FDA reported in the Dec. 30 Federal Register that intra-aortic balloon pumps will be designated class II devices for several indications and class III for two others, finalizing its work on the device type, a hold-over from prior to passage of the medical device amendments to the statute. The two indications for class III are for use in cases of septic shock and pulsatile flow generation, while the class II indications include for use in cardiac and non-cardiac surgery, acute coronary syndrome, and complications stemming from heart failure.

FDA held a December 2012 advisory hearing to address the reclassification (Medical Device Daily, Dec. 17, 2012), which rendered a recommendation matching FDA's final decision in the matter. Among the winners in this decision is Maquet Cardiovascular (Wayne, New Jersey), whose chief medical officer told Medical Device Daily last year that these devices "have been trusted by physicians for years."

The agency said it had received one comment in disagreement with the class II designations, but noted that it disagreed with a class III designation for those indications that are now in class II because special controls are adequate to address changes to a device design. The agency pointed out that 510(k) applications are subject to requests for clinical data "where it is necessary to demonstrate substantial equivalence."

Manufacturers that label their pumps for use in septic shock and pulsatile flow generation have 90 days from the date of the announcement to file a PMA or a product development protocol for those indications. The order is in effect in its entirety Dec. 30.

ECP devices also classified

FDA also reported in the Dec. 30 Federal Register another legacy device classification, this one for external counter-pulsation devices, which were likewise the subject of an advisory committee hearing. The agency stated that class II would apply to these devices for only treatment of chronic, stable angina that is refractory to medical therapy, assuming revascularization is not an option. All other indications would be subject to class III requirements.

This order, too, is effective Dec. 30, and those with devices sold under other indications have 90 days from Dec. 30 to file a PMA or a product development protocol. Sponsors will have to file for investigational device exemptions prior to conducting any clinical testing of ECP devices for other indications, the announcement states.

The agency noted that the advisory panel agreed with the agency's view that ECP devices are not life-supporting devices, adding that FDA "does not regulate the practice of medicine" in response to a comment regarding off-label use of ECPs.

FDA issues guidance for dental device

FDA released a number of documents to end the calendar year, including a Dec. 30 final guidance for special controls for temporary mandibular condyle reconstruction plates, a completion of the draft issued in February. As was the case with electronic counterpulsation devices and intra-aortic balloon pumps (see above), this guidance was part of a decision to reclassify the device in question from class III to class II.

The scope of the document is limited to temporary reconstruction plates and does not address permanent mandibular plates or bone plates for other indications in the oral and maxillofacial area. The use of base metal alloys is also not covered by the controls.

The agency listed a number of risk and mitigation measures that sponsors should include in their 510(k) filings, including loosening and migration, and structural/mechanical failure. Filings must also include data such as the composition of materials used in the plate, screws and condylar heads, including surface coatings and treatments, the guidance states.

Among the consensus standards FDA indicated it would accept in such filings are ISO 5832 for metallic materials. The document lists two ASTM standards for performance specifications for screws and bone plates, ASTM F 543-07e1 (screws) and the re-approved 2008 edition of ASTM F 382-99 for plates.

Sponsors can cited ISO 7405:1997 for biocompatibility, but can also cite materials used in cleared or approved devices as well. Product labels must address whether the device is MRI-compatible.

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