A Medical Device Daily

The ability of the Centers for Medicare & Medicaid Services to keep costs down has been the source of intense speculation for years, and a recent report by the Office of Inspector General (OIG) at the Department of Health and Human Services suggests that this is a problem for the agency's payment for negative pressure devices for wound therapy.

According to the March 19 report, "suppliers paid an average of $3,604 for the new pump models, compared to Medicare's purchase price of $17,165," a hefty markup in any industry. The OIG report states that the payment schedule called for CMS to pay more than $1,700 per month for a series of pumps for the first three months. "At this rate, suppliers recouped the average cost of a new pump model in about two months," the report notes. This is in addition to coinsurance payments of almost $1,300.

Of the claims for 223 pumps which OIG studied, 52 were obtained by suppliers by "leasing, renting or exchanging them." OIG also says that suppliers "reported not always communicating with beneficiaries' clinicians" as required, but were said to have kept up with routine maintenance procedures.

OIG recommended that CMS consider using the reasonableness standard "to reduce the amount that it reimburses suppliers for pumps" and "include pumps in the second round of the competitive bidding acquisition program. Another step CMS is urged to consider is to "monitor the growth of the new pump market" by "tracking trends in market share among different suppliers." CMS is said to have agreed with the recommendations with the caveat that it may not be able to collect valid data on prices.

Bill would educate judges

The ability of judges to give juries appropriate instructions in patent infringement cases has been at the heart of the damages apportionment question where patent reform is concerned, and a new bill that would deal with just this issue has just won approval in the House of Representatives.

Rep. Darrell Issa (R-California) authored H.R. 628, a bill that is not formally titled but is described as a bill "to establish a pilot program in certain United States district courts to encourage enhancement of expertise in patent cases among district judges." The bill passed Tuesday by an impressive margin of 409-7, and now goes to the Senate.

AdvaMed forms VC council

The Advanced Medical Technology Association (AdvaMed; Washington) reported earlier this week that it has formed a venture capital advisory council to advise new device makers on how to keep things afloat during the current economic squeeze.

According to the March 17 announcement, the council "will provide guidance on initiatives and advocacy priorities of particular importance to smaller manufacturers," and noted that the association's current legislative priorities include "seeking increased funding for the federal Small Business Innovation Research (SBIR) grant program" and "accelerating the federal net operating loss tax deduction for small, research-intensive medical technology companies." Upcoming related events include a council meeting planned for May 4 and 5 at the headquarters of Edwards Lifesciences (Irvine, California) and at AdvaMed 2009:The MedTech Conference in October in Washington.

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