Medical Device Daily Washington Editor

The Agency for Healthcare Research and Quality reported recently that per-capita healthcare expenditures for those aged 65 and older in the U.S. were up by almost a third between 1996 and 2006. According to the August 2009 edition of the Medical Expenditures Panel Survey, average annual expenses for this age group rose from slightly less than $7,000 to almost $9,100 in that time after adjusting for inflation. The total amount of reported expenditures rose from $227 billion to $333 billion, with the number of persons counted in the survey rising from roughly 34 million to 38 million.

AHRQ broke down the data by quartiles, which showed that expenses incurred by seniors in the lowest quartile doubled, from slightly more than $800 to more than $1,750. However, that increase of about $900 was dwarfed by the increasing cost of caring for those who fell into the 75th percentile, for whom average expenditures jumped from slightly more than $6,100 to nearly $9,300, an increase of more than $3,000, or roughly 50%.

Medicare's share of payments for covered services – minus prescription drug coverage – was up from slightly less than 57% in 1996 to about 61% a decade later. For prescription drugs, Medicare snared a much heftier portion of the tab thanks to Part D, rocketing from 3.8% to 46% of all such spending. Private insurers reaped much of the benefit from this change, seeing their share of prescription drug coverage fall from more than 31% to less than 13%.

In terms of out-of-pocket expenses, seniors fared about the same in proportional terms for non-drug coverage services, paying for 15.3% in 1996 vs. 15.2% a decade later, but saved a bundle on drugs, paying 35.3% in 2006, down sharply from the 52.1% paid by beneficiaries in 1996.

CMS sets rules for acute care hospitals

The Centers for Medicare & Medicaid Services yesterday released a 484-page document spelling out changes to the inpatient prospective payment system for acute-care hospitals, specifically addressing "operating and capital-related costs of acute care hospitals" in an effort to "implement changes arising from our continuing experience with these systems" as well recent legislation, including the Medicare Improvements for Patients and Providers Act of 2008. This set of rules, the notice in the Federal Register says, will go into force for all discharges as of Oct. 1, the beginning of the new fiscal year.

Offering a level of detail only an actuary or someone with a large financial stake could be motivated to exhaustively pore through, CMS says that among the proposed changes are those to the Medicare severity-adjusted diagnostic-related groups (MS-DRGs) "based on our yearly review." The agency also proposes to apply the documentation and coding adjustment to hospital-specific rates for FY 2010 resulting from "implementation of the MS–DRG system."

CMS also indicated that its rule includes "a discussion of ... recommendations relating to charge compression," as well as a solicitation of public comments on the ''over'' standardization of hospital charges as well as a proposed recalibrations of the MS-DRG relative weights.

The FR notice further informs the reader that the agency is eyeing changes to the payment rates for long-term care hospitals for relative weights for MS-DRGs and high-cost outlier reimbursement amounts. Interested parties have until Oct. 26 to offer comments.

FDA reshuffles offices, functions

FDA recently reported that it is reorganizing the Office of the Commissioner and renaming some of the functions occupying the highest levels of the agency.

The Aug. 18 announcement states that the reorganization includes "the re-alignment of four Deputy-level offices within the Office of the Commissioner." Specifically, the agency is retooling the Office of the Chief Scientist, the Office of Administration (previously known as the Office of Operations), the Office of Foods and finally, the Office of Policy, Planning and Budget, which was formerly known as the Office of Policy, Planning and Preparedness.

According to the notice, the organizational change "will allow the agency to better focus the science and research activities under the Office of the Chief Scientist" (OCS). This tweak will put several functions under the OCS, namely the Offices of Counter-Terrorism and Emerging Threats, of Critical Path Programs, of Scientific Integrity, and of Science and Innovation.

The renaming of the Office of Operations to the Office of Administration reflects an effort to "strengthen agency wide management programs, budget and shared services operations" and will put under this umbrella the Offices of Executive Operations, of Information Management, of Management, of Equal Employment Opportunity and of Diversity Management, and establishes the Office of Financial Operations.

As for the Office of Foods, it will "be realigned from the Office of Operations and will report directly to the Commissioner," the statement notes, a move that reflects a greater emphasis on food safety than had been the case in the recent past.

Ray Formanek of the Office of Public Affairs at FDA told Medical Device Daily that the letter from FDA commissioner Margaret Hamburg, MD, to Secretary of Health and Human Services Kathleen Sebelius, noted that "in reviewing the current structure, I have identified certain disadvantages to the existing organization as well as unmet needs." Formanek said the letter goes on to say that there was "no current provision for the new Center for Tobacco Products," and states "food safety oversight is fragmented within the organization." The letter also states that "various programs in the Office of the Commissioner are cited across the organization with little underlying rationale for their placement."

Formanek said that the reorganization is "a process that's still ongoing," noting the agency recently brought on board new hires for center directors at the Center for Tobacco Products and the Center for Food Safety and Nutrition. As for the job of director at the Center for Device and Radiological Health, he said the agency intends to hire someone "as soon as possible," but said "it's hard to predict any kind of timeline with scheduling" that has to mesh with the schedules of FDA personnel and the applicants' other responsibilities.

FDA, SoCRA, announce workshop

FDA and the Society for Clinical Research Associates (SoCRA, Chalfont, Pennsylvania), have reported a workshop for clinical trial requirements. The two-day event will take place Oct. 21-22 in Pittsburgh and will cover informed consent, clinical investigation requirements, institutional review board inspections, electronic record requirements, and investigator initiated research," according to the announcement.

Mark McCarty, 703-268-5690;