Medical Device Daily Washington Editor

Recent reports of FDA’s intent to consolidate its food inspection programs drew immediate fire from Congress and others, and the subsequent announcement that the agency would seek to outsource some of its administrative function was greeted the same way.

While the initial list for outsourcing included lab personnel, the modified list examines whether about 300 administrative positions in 20 cities could be handled by the private sector, a move that aligns with long-standing government policy to privatize federal government work, including that of the Clinton administration when Vice President Al Gore spearheaded the effort.

Colleen Kelley, the president of the National Treasury Employees Union (NTEU; Washington), which is said to represent at least half the agency’s 9,000 employees, said in an Aug. 22 press release that the consolidation plan is “a disgrace, given the recent crises we have experienced with our food supply and other imports.”

“The fact that the FDA started with one list, notified those employees that their jobs were in jeopardy and then withdrew those notices and notified a new group of employees demonstrates NTEU’s point,” Kelley said. However, she did not comment on Congress’s failure to pass an FDA reauthorization prior to breaking for summer recess.

Former FDA commissioner William Hubbard says that the blistering criticism should not be aimed at FDA because the agency is simply doing what it can to deal with a long-running lack of funds. Hubbard told Medical Device Daily that FDA’s emphasis on outsourcing is “just another example of how the budget has turned [FDA] to desperation.”

“You lose a thousand people over the past ten years,” Hubbard said, and such adjustments become inevitable.

Regarding the proposed consolidation of food safety labs, Hubbard said “I think they felt they had to because they had lab technicians standing around” with no samples to examine because resource problems have lowered the volume of food samples the agency has been able to collect.

Hubbard said that the growing investment in drugs, devices and biologics in both the public and private sectors has swamped the agency, but he also said that FDA would be underfunded even if the budget at the National Institutes of Health (NIH) had not doubled over the past decade. “There has not been attention in keeping FDA strong” while Congress and the White House pumped billions into research at NIH, which produces basic research that it hands off to the private sector for development. Add the basic research funded by other sources and the prospects for FDA’s ability to keep pace dims.

Hubbard compared the relative financing of FDA and NIH to the recent bridge collapse in Minnesota, commenting that “there’s always money for a new bridge, but no money for the old bridge” because of political expediency. “Nobody wants to finance regulatory [bodies] until there’s a problem,” and sometimes not even then. He also described the job of FDA commissioner as among the top ten hardest jobs in all of government.

Kelley told MDD in an e-mail interview that “NTEU believes without a doubt that the work of the federal government is best performed by accountable and committed federal employees” and that FDA “has presented no business case to show that these duties would be performed more effectively by an outside contractor.”

Kelley also said that “the savings of contracting out are false savings because they do not take into account all of the costs of these competitions and once contracted out, the contracts are never examined to see if the contracts are yielding promised results or whether the work should be brought back in-house.” She described this as a particularly acute problem for FDA because “the current job descriptions do not accurately portray all of the work these employees are performing.” Kelley also said that the change would also fail to “account for the loss of institutional knowledge.”

Kelley made the case that lab consolidation for food testing could be problematic because the personnel in specific labs “have developed specific expertise based on their location and can respond quickly to situations that develop locally.”

CMS boosts quality report mandate for ASCs

The Centers for Medicare & Medicaid Services (CMS) released a proposed new rule describing the conditions for coverage for ambulatory surgical centers (ASCs) that want to do Medicare business. According to CMS the new standards for conditions, dealing primarily with quality standards reporting, would “reflect contemporary standards of practice in the ASC community.”

The CMS announcement says that the final rule on prospective payments published last month (Medical Device Daily, July 20, 2007) has “dramatically changed” the types of procedures the agency will cover for ASCs.

According to the agency, the proposed rule would impose a “more comprehensive quality assessment and performance improvement condition (QAPI) that enables ASCs to take tailored proactive steps to ensure quality care” and would mandate that “the ASC’s governing body…be responsible for the oversight and accountability for the updated QAPI program.”

The new rule also adds requirements for ASC-provided radiological services “to ensure they are parallel to the requirements for furnishing laboratory services,” and would force physicians to disclose to patients any financial interest they have in the ASC.

Craig Jeffries, the executive director of the American Association of Ambulatory Surgical Centers (AAASC; Johnson City, Tennessee) said that the association’s members are “delighted that CMS has proposed improvements in the Medicare Conditions for Coverage that reflect standards of practice that most ambulatory surgery centers already address.”

Jeffries said that the new requirements “should eliminate many of the regulatory oversight concerns raised by those who opposed further expansion of the list of procedures that Medicare allows to be performed in an ASC,” and that the standards combined with the core measures that CMS will start collecting in 2009 “address the quality elements that underscore the value of ASC for Medicare beneficiaries looking for expanded access to high quality, lower cost and patient-centered procedures.”

CMS’s July 16 announcement indicated that the agency would add almost 800 procedures to the list eligible for performance in ASCs, for a total of about 3,300. CMS anticipates paying out about $3 billion to roughly 4,600 ASCs in calendar year 2008.