Medical Device Daily Washington Editor
The annual slate of proposed fee schedules is making its way out of the Centers for Medicare & Medicaid Services (CMS), and the latest such proposal, which covers reimbursement for in-patient rehabilitation services, suggests that the agency is taking a firm stance in the effort to slow down federal spending on healthcare.
On the other hand, while the proposal essentially freezes reimbursements, it is not an absolute loser for rehab facilities because the proposal also adjusts downward the percentage of patients who must have one of 13 qualifying conditions in order for a rehab facility to qualify for reimbursement.
CMS's April 21 statement noted that there are still about 1,200 facilities that are reimbursed as in-patient rehab facilities (IRFs) and that the zero payment update is "[d]ue to statutory requirements in the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA)." Whether Congress will change its mind and force CMS to cough up more for IRFs remains to be seen, but such a move would not be unprecedented, given the restoration of cuts to Medicare imaging and to physician fees under Part B.
The agency said it expects reimbursement for fiscal 2009 to total roughly $5.6 billion.
The so-called 75% rule required that three fourths of an IRF's patients be afflicted with one of 13 qualifying conditions. CMS floated a proposal last summer to push the threshold all the way up to 75% last summer (Medical Device Daily, June 18, 2007) from the then-existing threshold of 65%, which was reached in 2003 (IRFs can also make use of a set of co-morbidities to qualify patients who ordinarily would not qualify under their primary condition).
However, last year's discussions regarding dropping that threshold to 60% found their way into MMSEA, in part because of the Medicare Payment Advisory Commission, which went on record in a June 11 letter to Congress describing the threshold as a "blunt instrument" for reining in costs. MedPAC chairman Glenn Hackbarth also said in the letter that MedPAC preferred that CMS "mov[e] away from simple diagnosis-based criteria to more specific patient-based criteria."
Acting CMS administrator Kerry Weems said in the CMS statement that the fee proposal "will help ensure that these services continue to be available to those who need them while helping to preserve the Medicare Hospital Trust Fund for future generations."
CMS will accept comments from the public on the proposed rule until June 20 and anticipates publication of a final rule Aug. 1.
Broken complaint system drives warning
The April 1 FDA warning letter to Philips Medical (Andover, Massachusetts) was well detailed and fairly hefty, detailing nine deviations from good manufacturing practices (GMPs) and three problems with medical device reporting (MDR) procedures. The company managed to get matters largely under control as evidenced by the fact that the agency found Philips' responses on several of the findings adequate. Still, the effort required eight letters from the firm to clear up, and not all matters are settled between the two parties.
The letter also seemed to serve as a cautionary tale concerning the banes of having a fractured complaint handling system in place.
The inspection disclosed that Philips had "a total of 1,216 software defects that were imported into the 'CT defect database' in December of 2004 [and] are still open and have not been assigned a priority rating." Another part of this finding is that "another 234 software defects are still open with a priority rating of 0, which means 'showstopper,' and must be fixed prior to the next software release."
Philips apparently informed FDA that "all priority 0 defects have been reviewed to ensure proper classification," although the warning letter does not explain the underlying rationale for the reclassification. The warning letter also stated that complaint records henceforth include fields that "identify complaints and complaint numbers for defect records [and] clearer ways of identifying how or where defects were discovered."
Perhaps equally indemnifying was the firm's response that a new defect management policy brings all complaint procedures "into a single harmonized process that includes roles and responsibilities of those persons involved in the engineering defect management system." This policy, Philips indicated to FDA, "also requires replication of a defect from one program to another and a determination as to which program should be responsible for the defect."
Another part of the complaint handling system got less than glowing reviews from FDA, however. The warning letter said that Philips had no procedures to ensure that complaints are evaluated for MDR reportability. The procedure, FDA said, "only requires that your firm classifies as 'a potential safety event' to have a documented rationale" on reportability. Philips is said to have received 459 complaints between March and August 2007, only seven of which were assessed for MDR status. Of those that were not reported or evaluated, one was for a complaint of a "burning smell coming from gantry" and another regarding "images labeled Wrong Image."
FDA said that the proposed procedural revision "does not ensure adequate evaluation" because the procedure "does not require systemic evaluation to determine if an event is MDR reportable."
FDA also noted three specific complaints that Philips did not initially handle to the agency's satisfaction, including one in which a scanner picked up "a false brain bleed." The firm's response that new software would permit "cut-and-paste into the complaint tool to ensure that documentation of investigations are adequately maintained was deemed adequate by FDA.
Ian Race, Philips' corporate communications manager, told Medical Device Daily in an e-mail that "corrective actions have been taken and continue to be taken" on the four outstanding issues from the warning letter."
Race also said that Philips has "hired a consultant with more than 30 years [experience] in dealing with FDA matters to review and verify that our corrective actions were satisfactory to address the FDA's concerns" with regard to completed and ongoing warning letter findings.