Autumnal Announcements

GAO Evaluates FDA Performance on Medical Device Review Process

    The US Food and Drug Administration (FDA) must review all applications for new medical devices. Manufacturers of medical devices have long complained about the arduous and lengthy process they must undergo to bring a new medical device to market. In 2002, Congress passed the Medical Device User Fee and Modernization Act (MDUFMA) that permitted the FDA to collect user fees from manufacturers.

Tied to this was a mandate for the FDA to adhere to certain performance goals and timelines in their review process in 2005. The MDUFMA also stipulated that the Government Accountability Office (GAO) must report on the FDA’s adherence to these performance goals and determine whether the department would be able to meet the goals established for 2006.

    This past September, the GAO completed its performance review for 2005. The GAO found limited completed FDA data on which they could base their assessment of the agency’s performance; however, based on this data, the GAO predicted the FDA would “likely” meet some of its performance goals for 2006. The FDA’s ability will obviously have ramifications on the manufacturers of medical devices. The complete GAO report can be viewed at: https://www.gao.gov/new.items/d051042.pdf.

CMS Issues Draft of Home Medical Equipment Supplier Standards

    The Medicare Modernization Act (MMA) mandated the establishment of quality standards for all durable medical equipment, prosthetic, orthotics, and medical supplies (DMEPOS) manufacturers wishing to participate with Medicare Part B — either in the competitive bidding (CB) program or as “traditional” Part B providers. Late in September, the Centers for Medicare and Medicaid Services (CMS) issued a preliminary draft of these standards. The lengthy document has two sections: 1) a detail of business standards and 2) standards for suppliers specializing in certain products and product categories.

    The business standards section addresses administration; financial management; beneficiary services; human resources, equipment, and safety management; performance management; and beneficiary rights and ethics. The product-specific section addresses, among other issues, establishing supplier service standards, delivery and set-up in a beneficiary’s home, and product education for the beneficiary regarding supplies and services for 13 categories of home medical equipment that include diabetic equipment and supplies, customized orthotics and prosthetics, support surfaces, and electric and manual hospital beds.

    Comments on this draft will be accepted through November 28, 2005. The product-specific section is expected to be finalized by January 2006. Suppliers will be accredited only when they prove they have met both the business and product-specific standards for the products they have been authorized by Medicare to market and distribute. The draft of these standards is available at: https://www.cms.hhs.gov/suppliers/dmepos/default.asp.

    The next step in this process is for CMS to select an accrediting body to enforce the new standards, to be announced by the end of 2006.

Update on Competitive Bidding

    The Program Advisory and Oversight Committee (PAOC), also established through a mandate in the MMA, has been directed to evaluate the effect of competitive bidding on suppliers and beneficiaries and to establish a process for bidding implementation in 10 of the country’s largest metropolitan areas by 2007. The 22-member PAOC panel has been meeting regularly to discuss competitive bidding issues. The recently released draft of supplier standards, described above, also will fall under the committee’s jurisdiction. The PAOC also will review the results from small-supplier focus groups conducted earlier this year. It is anticipated that the CMS will publish a proposed rule in the near future that will outline exactly how competitive bidding will be implemented. This proposed rule will likely lean heavily on the recommendations from the PAOC. Read more about the PAOC in “Special Report to OWM” on page 18.