A Medical Device Daily

A former employee of Stryker Biotech (Hopkinton, Massachusetts) has pled guilty to charges of felony misbranding in a case prosecuted by the U.S. Attorney's Office for the District of Massachusetts, and federal prosecutors are of the view that they now have enough evidence to pursue charges against the company.

Shane Doyle, 32, was charged with felony misbranding of the firm's OP-1 Putty, which failed to pass muster in the eyes of an FDA advisory committee earlier this month (Medical Device Daily, April 2, 2009). Doyle's plea virtually ensures he will not face the full wrath of the law, which could have sentenced him to three years in prison and a fine of $250,000, but his plea may signal that he will cooperate in an investigation of Stryker Biotech.

Two other Stryker employees, Justin Demming and Darnell Martin, also pleaded their cases out to similar charges (Medical Device Daily, Feb. 13, 2009), thus adding fuel to the prosecutorial fire. According to the April 14 statement by the U.S. Department of Justice, Doyle "promoted a combination of the [humanitarian device exemption] devices with a bone void filler, and in furtherance of that promotion provided mixing instructions to surgeons, medical technicians and others." None of the three have been sentenced yet, but according to wire service reports, however, the firm is not alone in the DoJ's crosshairs; some physicians are said to be of interest to prosecutors as well.

DME again object of tug-of-war

The notoriety of fraud under the program for durable medical equipment, prosthetics, orthotics and supplies (DME) under Medicare has excited a lot of activity at the Centers for Medicare & Medicaid Services, which continues to excite activity on Capitol Hill.

An April 15 letter signed by more than 80 members of Congress to Nancy-Ann DeParle, director of the White House Office of Health Reform, acting Secretary of Health and Human Services Charles Johnson, and Charlene Frizzera, acting director of CMS, takes up the issue yet again, and suggests a determination on the part of Congress to halt the DME bidding program. All the same, CMS seems determined to forge ahead, even with a Democrat in the White House.

The congressional letter makes note of the Jan. 16 interim final rule on the bidding program, said to be effective April 18. The authors, who hail from both parties, indicate they are "deeply concerned that CMS has rushed implementation of this rule counter to Congress' intent when it delayed the competitive bidding program as part of the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA)" and urged that the rule be rescinded "so that all affected parties will have an opportunity to comment on it as a proposed regulation." The authors note that "questions were raised as to the immediate impact of the program on quality and access to care for patients" in addition to "the immediate elimination of thousands of eligible providers throughout the country."

CMS's response came in the form of an April 17 statement in which the agency noted that MIPPA "made limited changes to the competitive bidding program," including "a requirement that the Secretary [of the Department of Health and Human Services] conduct a second competition to select suppliers for Round 1 in 2009." The CMS statement notes further that the interim final rule "incorporates into existing regulations specific statutory requirements contained in MIPPA related to the competitive bidding program," and CMS further made its case by stating that the agency's review of the law has led to the conclusion "that the effective date should not be further delayed." However, CMS assured the reader that there "will be no immediate effect on the Medicare DMEPOS benefit and Medicare beneficiaries may continue to use their current DMEPOS suppliers at this time."

In an April 13 statement to the three Obama administration executives named in the congressional letter, Tyler Wilson, President of the American Association for Homecare (AAHomecare; Arlington, Virginia) states that the bidding program "will produce a bureaucratic, anti-competitive price-setting system that would be similar to a closed-model HMO and would have the effect of government-mandated consolidation in the homecare sector." Wilson also alleged that the program would reduce access "to quality home medical equipment and services, [which] will give many seniors no choice other than to leave their homes for nursing homes or hospitals."

NIH embryo policy draws bilateral fire

The National Institutes of Health recently published a draft guideline to deal with the use of embryos as a source of stem cells, and the guideline has sparked concern from right-to-life groups.

The draft indicates that NIH would like to restrict the use of embryos to those that were created for reproductive purposes, but which have not been used and are scheduled for destruction. This policy responds to the Obama Administration's reversal of the policy by the Bush White House to limit federal funding of embryonic stem cell research to 60 or so lines that were already in existence when a moratorium was placed on further expansion of the line. The final rule will be available and in force July 7.

The Family Research Council (FRC; Washington) reacted, with President Tony Perkins saying in an April 17 statement that the guidelines "purport to have tight informed consent requirements, but they don't even require IVF (in-vitro fertilization) doctors and the stem cell researchers to work separately, thereby opening a gaping loophole for the researchers to increase embryo production for their research." Perkins also states that FRC would prefer that government "fund research using adult stem cells that are on the cutting edge of treating patients for diabetes, spinal cord injury, heart disease, and various cancers."