Medical Device Daily Washington Editor

The impact of anti-kickback laws on various business arrangements has been tremendous, and business operators consequently take little for granted when it comes to doing business with the Centers for Medicare & Medicaid Services (CMS).

This was the case with a recent decision memo published by the Office of Inspector General (OIG) at the Department of Health and Human Services, which gave a thumbs-up to a rather innocuous-sounding proposal.

According to the Sept. 19 decision memo, which was not published until a week later, OIG was responding to a query "regarding a proposed arrangement under which your newly formed legal entity would provide purely administrative insurance pre-authorization processing and submission services for various radiology and imaging centers." The memo states that the proposed arrangement "would not generate prohibited remuneration under the anti-kickback statute."

The company that filed the request, which was not named in the document, "would form and wholly own and manage" a new entity that would contract with imaging centers across the U.S. to "provide purely administrative services consisting solely of the processing and submission of insurance pre-authorizations for certain radiology and imaging procedures."

The new entity would charge a fee per procedure regardless of whether the payer authorized the procedure, and the fees are described as "the same for all centers and would represent fair-market value in an arm's-length transaction."

The memo also indicates that neither the requestor nor this new entity is a healthcare "provider, practitioner or supplier" or is "in any way affiliated with the healthcare industry" outside of the offered services.

The proposed arrangement involves services that are "purely administrative," the entity would have no contact with patients, and the business operation "would not rise to the level of arranging for or recommending purchasing, leasing or ordering service items or services payable under a federal healthcare program," according to the memo.

OIG says that because of the insulation of the new entity from activities that often spur the office's concern, it would have no objections.

Device-related infections not easy to sort

Hospital-acquired infections (HAIs) are still a matter of concern, and the Government Accountability Office chimed in recently with a report on how the healthcare system tracks such infections.

According to GAO, HAIs "are estimated to be one of the top 10 causes of death" in the U.S. The infections of interest, "which may be introduced to a patient through the use of a device "such as a needle or tube to deliver medicine, fluids, or blood," include those of the urinary tract and of surgical sites, but pneumonia and bloodstream infections are also significant.

GAO says that the FDA Amendments Act of 2007 "requires us to conduct work on HAIs in hospitals associated with medical devices," and mandates that GAO distinguish between infections caused by bacteria and viruses that "were neither present nor incubating prior to the patient's receiving services in the hospital," and infections triggered by pathogens already present in or on the patient. The GAO task includes separately evaluating infections associated with both new and reused devices.

The agency started by attempting to discern what is currently known about HAIs that are attributable to devices and which factors are most conspicuous in that relationship. However, the Sept. 26 announcement points out that "none of the data sources we identified provide a national estimate of the number of all HAIs in hospitals associated with medical devices" despite that the data sources include AHRQ, CMS and the Centers for Disease Control and Prevention.

The CDC data are said to be drawn from hospitals that are not "a representative sample of hospitals nationwide," and the CMS data obviously over-represent Medicare and Medicaid beneficiaries.

Among the conclusions from the GAO report that will come as a surprise to no one is that "improper patient examination and treatment practices" are among the chief culprits. This includes "the improper insertion and maintenance of medical devices such as urinary catheters and central lines."

According to GAO, the Department of Health and Human Services saw the failure to sort out new and reused devices as a significant source of weakness in the report, but both GAO and HHS acknowledged "that very little is known about infections caused by reusable devices." At press time, the American Hospital Association (AHA; Chicago) and the Advanced Medical Technology Association (Washington) had not responded to queries for comment.

Safety alert upgraded to class I recall

The safety alert announced in June for a line of intrathecal infusion pumps and catheters made by Medtronic (Minneapolis) has been upgraded to a class I recall by FDA and the firm. The safety alert was issued in connection with a number of incidents in which bad connections allowed the drug to either leak or over-infuse the patient, potentially leading to an overdose.

According to wire service reports, one patient died from acute withdrawal from the antispasmodic baclofen "related to complications from an improperly connected catheter" in the pump. A second patient death also has been reported in connection with the devices, but the provider indicated the death of that patient was unrelated to the use of the pump.

Medtronic reported earlier this year a series of problems with the incidence of inflammatory masses in connection with implanted pain management infusion pumps (Medical Device Daily, March 21, 2008).

Cindy Resman, spokeswoman for Medtronic, told MDD that the firm had "sent a letter to physicians in June" regarding alignment of the connection between the catheter and pump. She said "no new action on the parts of patients and physicians and does not require the return of any products." However, she could not say whether the company's engineers were looking at a redesign of the connections to cut down on such problems in the future.