Medical Device Daily Washington Editor

The sharp rise in the amount of imaging services done under Medicare Part B has not gone unnoticed in the last days of the 110th Congress, and in an attempt to take the edge off that growth clip, Sen. Chuck Grassley (R-Nebraska) has proposed a bill that would force physicians to disclose to their Medicare patients any interest they may have in imaging services the doctor recommends.

The bill did not make it into the Medicare bill recently passed by Congress, but the expectation is that the 111th Congress will have to address the matter, especially given the interest in this issue on the part of the Medicare Payment Advisory Commission.

The Medicare imaging cost question has been on Congress's plate for several years, and the same can be said for the Centers for Medicare & Medicaid Services, which attempted to zero in on the "pod lab" arrangement two years ago (Medical Device Daily, Oct. 3, 2006). A pod lab is one that operates near a doctor's office – sometimes in the same building – and is owned in part by the doctor making the referral.

The Government Accountability Office recently reported that Medicare imaging under Part B skyrocketed from $6.9 billion in 2000 to $14.1 billion in 2006. In the summary for the June 13 report, GAO states "the proportion of Medicare spending on imaging services performed in office rose from 58% to 64%," and doctors "obtained an increasing share of their Medicare revenue from imaging services."

In keeping with other healthcare spending trends, geographic variability for Medicare imaging expenditures was huge by GAO's reckoning, averaging $62 per beneficiary in Vermont, but $472 in Florida.

Grassley's bill, the Medicare Imaging Disclosure Sunshine Act of 2008 (S. 3343), would force doctors to disclose their interests in providers of prescribed imaging services, and requires doctors to tell patients about any alternative providers, but whether this would spur action on the part of a patient is unclear. Grassley said in a July 25 statement that the bill would not hinder access, but would give patients "information about financial relationships in a way that's neither onerous nor overly prescriptive."

Rep. Carolyn McCarthy (D-New York) introduced a companion bill under the same name (H.R. 1293), but neither bill is likely to go anywhere this year due to the short time left for the 110th Congress.

Maureen Zilly, director of government relations for the National Electrical Manufacturers Association (NEMA; Rosslyn, Virginia), told Medical Device Daily "overall we would support the concept of the Grassley bill in terms of transparency," but she alluded to the possibility that it might have a negligible impact on the overall rate of imaging. "Based on estimates we've done, self-referral is about 4% of imaging referrals," she said, adding, "we would think [the effect of such a bill] would be a change in the site of service rather than a reduction in services."

NeoChild hit with FDA warning

Companies that receive warning letters from FDA often claim the issues are nothing more than documentation, but incomplete documentation regarding standard operating procedures (SOPs) was also the primary reason the agency did not care for the responses offered by NeoChild (Oklahoma City, Oklahoma) to the inspectional findings.

According to FDA, the April-May inspection disclosed that the maker of various tubing sets for neonatal patients had "not conducted and documented any quality audits." FDA said that NeoChild's May 15 response to the inspectional findings "provided only the title of SOP 1003" and not the content of that SOP. FDA asked for clarification or a copy of the entire procedure, which was the agency's response to almost all the firm's responses to the inspectional findings.

As was the case with a number of recent warning letter recipients, the use of a contract manufacturer created headaches for NeoChild. The agency charged that a contract manufacturer "provided you an undated draft procedure titled 'design and development procedure' and recommended it for your use." NeoChild signed off on the procedure, but FDA said the company failed to document how the design and development process works. The warning letter said NeoChild's May 15 response offered only an SOP number, but no information about the procedure.

In reference to a failure to establish device design risk analysis procedures, FDA informed NeoChild that "device design requirements are your firm's responsibility" and the conduct of a joint effort between NeoChild and a contractor firm does not change the fact that "your firm is ultimately held accountable for design and production defects in the devices."

The warning letter said that NeoChild had no documentation to support a change of a chemical formulation of enteral feeding tubes from polyvinyl chloride to silicone and polyurethane, which was cited as another violation of regulations governing device design. This change also came up at the end of the warning letter as a citation for failure to obtain a PMA or a 510(k) for the change of material. At press time, the company had not responded to a call for comment.

J&J dragged into biliary stent flap

Johnson & Johnson (J&J, New Brunswick, New Jersey) reported Tuesday that the Department of Justice has served the company with a subpoena in its investigation into promotions of off-label use of biliary duct stents.

Biliary stents, approved to open the tubes that carry bile to the intestines, are sometimes used to deal with stenosis of blood vessels in the legs, but reports that this off-label use may be causing injuries have attracted unwelcome attention. DoJ has served two other firms with subpoenas in its investigation, Boston Scientific (Natick, Massachusetts) and Abbott Laboratori

es (Abbott Park, Illinois). By some estimates, the size of the on-label market for biliary stents was about $40 million last year.

Chris Allman, a spokesman for J&J subsidiary Cordis (Miami Lakes, Florida), which makes the stents, told MDD, "we're cooperating fully in response to the subpoena."