Medical Device Daily Washington Reporter

The Securities and Exchange Commission proposed Wednesday to transition from U.S. accounting standards for publicly traded companies to an international standard that would make uniform financial reports across borders.

During the Aug. 27 hearing, SEC Chairman Christopher Cox said the uniform standards "would significantly improve investor confidence" in those standards and "would be a boon to emerging markets."

Cox made reference to the fact that the 10 most commonly spoken languages all have at least 100 million speakers, making communication difficult. "Fortunately, we won't have to wait as long for the language of finance to converge," Cox said, stating that "an international language of disclosure" would facilitate the flow of capital to the markets of most interest to investors.

He also said "all of Europe and more than 100 companies around the world require the use of the International Financial Reporting Standards [IFRS]," but this relatively limited history of the effort is an important reason that the U.S. needs to continue to support the work of the authoring body, the International Accounting Standards Board (London).

According to Cox, the roadmap would require "that the standards be crafted in the interest of investors" and that "the standards-setting process be transparent." The standard-setter "must also be independent from special pleaders" and from regional biases, he said, noting also that "it is vitally important that the stakeholders participate in the process."

Work on the IFRS, formerly known as International Accounting Standards, commenced in 1973 and was largely completed in 2001. The SEC proposed Wednesday to transition financial reporting to a set of international accounting standards by 2014, but Cox said the roadmap that would allow the largest publicly traded U.S. companies to make the switch by 2010.

The move is supported by a number of multinational corporations who have to replicate their reports by more than one standard, but some critics say the transition period could generate confusion as to the meaning of competing versions of a report. Cox's tenure at SEC will likely end when the next president is sworn in, but many are of the opinion that the push toward international standards is likely to persist after January 2009.

Chuck Grothaus, spokesman for Medtronic (Minneapolis), told Medical Device Daily: "it would be convenient having one set of standards to follow" and that while such a move "may eliminate one set of records down the road, its' very early in the process" and too early to determine whether this will actually unfold as depicted by Cox.

OIG says 'nay' to practice-sharing

The Office of Inspector General at the Department of Health and Human Services has rendered another decision on an arrangement between providers, giving a thumbs-down to a proposal for leased office space that OIG says "could potentially generate prohibited remuneration under the anti-kickback statute."

The decision memo states that the requestor, a cancer treatment clinic, proposed to lease space, equipment and personnel to members of a urology group in the same metropolitan area for chemotherapy and radiation services for prostate cancer patients.

The urology group already refers some, but not all, of its patients to the clinic, and the proposed arrangement would require at least eight hours a week of lease time. However, the fees paid under the arrangement would be fixed and would be calculated on a fair-market value calculation provided by a third party.

OIG reiterated its "longstanding concerns about certain problematic joint venture arrangements between those in a position to refer such business . . . and those who furnish items or services for which Medicare pays." The decision memo refers to an April 2003 special advisory bulletin dealing with a situation in which "the owner contracts out substantially the entire operation of the related line of business to the manager/supplier otherwise a potential competitor receiving in return the profits of the business as remuneration for its federal program referrals."

OIG said that the referring practice "would commit little in the way of financial, capital or human resources" and "would assume very little real business risk," but would be "in a position to ensure the success of the business" by not only making referrals, but also by "the choice of [intensity-modulated radiation therapy] over other therapies."

Uninsured down, taxpayers cover more

The Census Bureau report filed on the number of Americans without health insurance indicated that the numbers were down to about 45.7 million last year, a drop from the 47 million reported from the previous year. The slight downtick, however, apparently reflects an increase in enrollment in taxpayer-funded plans such as Medicare and Medicaid.

The Census Bureau stated that the ratio of Americans covered by government health insurance programs rose from 27% in 2006 to 27.8% last year, representing an absolute increase from 80 million to 83 million. Those covered by employer-sponsored insurance dropped from 59.7% to 59.3%.

Ron Pollack, executive director of Families USA (Washington) said in a statement, "It is ironic that, at the very time the Bush administration tried to cut back Medicaid and twice vetoed legislation to extend children's health coverage, the public safety net cushioned the loss of employer-sponsored health coverage. He said the numbers demonstrate "the importance that the next president should protect, and not undermine, the public health safety net."