A Medical Device Daily

Among the cost centers at Medicare that have triggered angst on the part of Congress and the Centers for Medicare & Medicaid Services (CMS; Baltimore), perhaps none is more conspicuous than the fee schedule for doctors’ services under Medicare Part B.

Thanks to the sustainable growth rate mechanism designed to control Medicare spending, fees were scheduled to be cut by about 5% for the current and previous calendar years. However, thanks to the reversals of those cuts by Congress, doctors now face a snowballing reduction in fees that amounts to 10%, and this drop-off is scheduled to hit full force on Jan. 1, 2008.

In anticipation of those cuts, the Bush administration has staked out its position in a Dec. 4 letter to Sen. Max Baucus (D-Montana), the chair of the Senate Finance Committee, which has jurisdiction over Medicare spending in the Senate. In that letter, the administration indicates that it will wield the veto pen if any resolution does not meet certain conditions.

Attributed to Secretary of Health and Human Services Mike Leavitt, the letter states that the administration is aware that the committee “soon intends to consider draft legislation to block” the payment reductions, and that the administration is interested in “appropriately offsetting legislation to mitigate the cut” in an effort to render the restoration of Part B physician fees budget-neutral.

Among the features of such a bill that the White House would back are offsets to “other providers in the fee-for-service Medicare program,” and a requirement that doctors who want to avoid the cuts to adopt “certified electronic health information technology.”

The letter also states that the White House would veto any bill that raises taxes to fund the override of cuts or reduces access to Medicare managed care plans. The letter notes “legislation should not repeal the Medicare funding warning.

The Medicare funding warning was initiated in the Medicare Modernization Act of 2003 and alerts the White House and Congress when 45% or more of total funding for Medicare expenditures are drawn from the general revenue fund. If this happens in two consecutive years, MMA requires the White House to propose legislation that would trim general revenue funds back to that percentage.

FTC cracks down on cosmetic lens makers

The Federal Trade Commission, which exercises enforcement jurisdiction over a wide range of healthcare products, reported earlier this week that it had voted unanimously to settle with two makers of cosmetic contact lenses who were selling the lenses without prescriptions.

According to the Dec. 10 press release, the subjects of the FTC complaints are BeWild (Wantagh, New York), a web-based retailer of a variety of novelty items, and Pretty Eyes (Arvada, Colorado), whose web site URL, www.prettyeyes.org, is no longer functional. According to the FTC statement, the charges also included that the companies promoted the products as needing no prescription.

The proposed settlements include the requirement that the defendants either obtain the prescriptions or verify them via the prescriber, and must maintain records of those prescriptions. They must also desist from presenting the lenses as being available without a prescription.

BeWild has agreed to pay a civil money penalty of $11,000, but FTC has waived all but $2,500 of a proposed $25,000 settlement with Pretty Eyes, a concession the statement said was “based on their financial condition.”

Court dumps suit against PTO appointment

A U.S. District Court judge recently dismissed a complaint against the appointment of Margaret Peterlin to the position of Deputy Director of the U.S. Patent and Trademark Office partly on the grounds that the plaintiff, a software patent blogger named Gregory Aharonian, failed to respond to some of the arguments put forward to dismiss the suit.

According to PTO’s Dec. 11 statement, PTO director Jon Dudas said he was “pleased the U.S. District Court dismissed this meritless lawsuit” and that Peterlin “is well qualified to serve in her capacity as deputy undersecretary.” Peterlin was nominated for the position in May after spending several years as a congressional staffer.

Aharonian was one of several signers of a June 2 letter addressed to Dudas and Secretary of Commerce Carlos Gutierrez that complained that Peterlin’s curriculum vitae “does not include any apparent references to professional activity concerning patents or trademarks, in either a practical, corporate, academic, or publishing capacity.” The letter made reference to a portion of the U.S. Code, which states in part that a deputy director “shall be a citizen of the United States who has a professional background and experience in patent or trademark law.”

All the same, Judge James Robertson granted the PTO motion to dismiss, noting that even had the plaintiff responded to all the points made in the motion to dismiss, such a response would not have “made much difference.”

Robertson said that “neither the text nor the legislative history of the statute evinces anything approaching the congressional intent required to establish a private cause of action” short of “a cause of action for persons aggrieved by final agency decisions that are arbitrary, capricious, or contrary to law.”