Medical Device Daily Washington Editor

The FDA formally notified the American Red Cross (ARC; Washington) of its intent to levy a $4.2 million fine against the non-profit blood collection agency after a review of recalls conducted between 2003 and 2005 that disclosed violations of the terms of a 1993 consent decree.

According to the FDA, “these events were preventable” and include deviations from good manufacturing practices including failure to ask donors all appropriate screening questions and failure to follow testing protocols. However, the FDA admitted that it has “no evidence that these violations resulted in serious health consequences.”

The agency noted that since the 2003 amendment of the original consent decree, “FDA has issued the American Red Cross seven similar letters and assessed a total of $5.7 million in penalties.”

In a prepared statement, ARC stated that while the notification from the FDA was expected, the organization's management “takes it seriously and is committed to full compliance with the Amended Consent Decree and all applicable federal regulations. The Red Cross remains dedicated to its mission and to the millions of Americans who rely on us to provide lifesaving blood and blood components each year.”

Health IT sponsors have four weeks

The U.S. House of Representatives has put a lot of effort into healthcare information technology (HIT) over the past half year, but the House and Senate had better get busy if they want to forge a consensus law from their respective bills before heading home for elections Sept. 29.

Rep. Nathan Deal (R-Georgia), himself a former physician, admitted that he was not certain legislators could work out the details, but remarked that “there are not that many differences” between the two packages. One bone of contention revolves around a provision in the House version (H.R. 4157) that would allow hospitals to donate IT to physician practices, but many observers insist that the Department of Health & Human Services and its Office of Inspector General covered that with a set of rules that address such concerns (Medical Device Daily, Aug. 3, 2006).

However, at least one of those observers, American's Health Insurance Plans (AHIP; Washington) takes exception to the failure of H.R. 4157 to require interoperability for donated technology. A legal brief prepared for AHIP by Epstein Becker and Green (Washington) concluded that without an interoperability requirement, “the physician could be forced to funnel his or her patients to a particular hospital or hospital system to the exclusion of other appropriate treatment options.”

In a Sept. 1 letter to Senate Finance Committee chairman Chuck Grassley (R-Iowa), AHIP's president/CEO, Karen Ignagni, stated that “we believe congressional action is no longer needed” on the technology donation issue, thanks to the HHS rules. All the same, she insisted that should IT sharing language survive reconciliation, it should be “accompanied by interoperability requirements to improve communication and the flow of information throughout the healthcare system.”

CMS eyes long-term gainsharing

Despite the impending departure of administrator Mark McClellan, the Centers for Medicare & Medicaid Services (Baltimore) continues to roll out demonstration projects, one of the latest of which will extend gainsharing to a longer timeline than the 2003 pilot allowed.

In a press release, CMS described the Physician-Hospital Collaboration Demonstration (PHCD) as a “three year demonstration program to examine whether allowing hospitals to provide financial incentives for physicians to support better care can improve patient outcomes without increasing costs.”

Under this pilot, hospitals will take in their normal fees for inpatient care and would pass along to doctors a portion of any savings garnered by improved physician care. Documentation requirements include those that support a conclusion that the collaboration fostered “significant improvements in the quality of care and savings in the overall cost of care,” according to the release.

McClellan stated that despite the fact that “the most costly and intensive physician services are provided in hospitals…our payment systems do not support steps by hospitals and doctors to work together to improve care.”

CMS hopes to recruit 72 hospitals and an unknown number of physician groups and require that they track benchmarks including rates of infection and readmission to gauge whether extended coordination of care will keep patients healthier and away from hospitals and doctors' offices. The fact sheet accompanying the press release states that participating hospitals “must guarantee budget neutrality or savings to Medicare over the entire episode of care for the period of the demonstration.” Applicants must file for participation by Jan. 9, 2007. Representatives of the American Hospital Association (Chicago) and Premier (Charlotte, North Carolina) said that their organizations have not reviewed the proposal.

The agency noted that continuous monitoring of care will be required of participants “to ensure that care provided to beneficiaries is not compromised” and that it will require that gainsharing be based on net savings.

“This demonstration project will support efforts to track and improve the overall episode of patient care, including follow-up and longer-term outcomes,” McClellan noted.