Medical Device Daily Washington Editor

Investigations into the relationships between device makers and physicians have resulted in closer scrutiny, but at least one company is saying enough is enough.

Stryker (Kalamazoo, Michigan) has been under continuous scrutiny since last year, when it entered into a corporate integrity agreement with the Department of Justice and the Department of Health and Human Services, but Stryker is of the opinion that federal prosecutors and HHS's Office of Inspector General have gone overboard in their pursuit of information.

Stryker filed an Aug. 15 suit against the agencies in the U.S. District Court of New Jersey, citing "an oppressive and overly broad subpoena" in response to which Stryker says it has submitted more than 300,000 pages of documents. The suit seeks "a declaratory judgment for injunctive relief and for abuse of process" despite what Stryker said is "overwhelming and compelling evidence that Stryker did not commit any of these violations."

Stryker was among a group of orthopedic device makers who were investigated by federal authorities in connection with allegations of improper payments to physicians last year (Medical Device Daily, September 28, 2007). Smith & Nephew (London) and Zimmer Holdings (Warsaw, Indiana) were also caught up in the action, but Stryker avoided any fines while the other parties were fined a total of more than $300 million for allegedly getting physicians to use their products exclusively.

According to court documents obtained by Medical Device Daily, the suit also alleges that government officials have sought documents "far beyond its orthopedic division and well outside any relationship to Medicare and Medicaid providers." The complaint also states that Stryker is under pressure to produce documents related to providers in other nations for products sold outside the U.S.

Stryker officials could not comment for the record because the legal procedures are ongoing.

Docs, insurers not ready for ICD-10

The U.S. is one of only a few Western nations still working with ICD-9 (International Classification of Diseases version 9), but the federal government is nudging private industry toward it's successor because ICD-9 is said to be too chock full of diagnoses to accommodate many more.

Still, the proposal by the Bush administration to complete the switch by 2011 was greeted by less than warm enthusiasm by doctors and payers, despite the support of hospitals.

Rick Pollack, executive vice president of the American Hospital Association (Chicago), described the adoption of ICD-10 as "long overdue," noting that the transition "has been discussed over the past ten years."

However, William F. Jessee, CEO of the Medical Group Management Association (Englewood, Colorado), described the deadline as "a recipe for disaster ... without pilot testing and allowing sufficient time for implementation."

In an Aug. 20 statement, Joseph Heyman, MD, chairman of the board at the American Medical Association (Washington), described a deadline that does not allow providers to first pilot test the newest Healthcare Insurance Portability and Accountability Act (HIPAA) electronic transaction form "that will be needed to process claims boggles the mind." Heyman made the case that a deadline of three years "is setting the stage for major implementation problems."

ICD-10 can accommodate more than 150,000 codes, a substantial jump from the 17,000 available in its predecessor. By some accounts, ICD-9 will be full sometime next year, but none of the opponents of the proposed transition date have offered an explanation as to how reimbursement will be affected by a filled-up ICD-9.

Robert Zirkelbach, spokesman for America's Health Insurance Plans (Washington) told Medical Device Daily "we support the transition, but believe more time is needed to fully implement the transition," due to "significant operational changes."

Device makers obviously want to see an expanded list of diagnostic slots, and in an Aug. 22 statement, Stephen Ubl, President/CEO of the Advanced Medical Technology Association (AdvaMed; Washington), said "AdvaMed is very pleased that Secretary Michael Leavitt has released proposed regulations that will help modernize America's health care system by implementing the ICD-10 classification system," which would, among other things, "better identify and describe new medical procedures and technologies."

Firm gets first taste of FDA's function

From time to time, small companies wade into the shallow end of the medical device ocean only to discover that the jaws of FDA will happily bite swimmers at any depth.

Such seems to have been the case in the Aug. 9 warning letter to lighting maker O'Ryan Industries (Vancouver, Washington), whose web site describes the founder as having taken an interest in fiber optics into a thriving business. Among the company's product lines is a lighted showerhead and swimming pool lights, but O'Ryan also makes a variety of products for dental practices.

The warning letter cited the company for its manufacture of a light source for oral surgery, the Endo 150, and for its distribution of Omega ST autoclaves, manufactured by Tuttnauer (Breda, the Netherlands).

FDA gave the company a scrub-down of the quality systems regulations, citing O'Ryan for lack of procedures for quality system audits and for never conducting a quality audit after April 1, 2006, when the firm was said to have started distributing FDA-regulated devices.

The warning letter also cited O'Ryan for lack of procedures for complaint evaluation, device acceptance activities, design controls, device history records and corrective and preventive action. FDA stated that the company had no procedures to deal with medical device reports (MDRs), but the agency made no reference to any events that would generate an MDR. O'Ryan was also said to have no 510(k)s for either of the devices. At press time, the company had not responded to a call for comment.