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Hospitals can achieve ACO savings with reprocessed devices

June 8th, 2011

by Daniel J. Vukelich, Esq.

ACOs have dominated headlines for the last few weeks--with the conversation swinging wildly from positive to negative to downright bewilderment. Amid the chatter and punditry, one thing is clear: ACOs are no longer the unicorns of healthcare--they are here, signifying that the moment for change in the delivery of healthcare in the United States is right now.

But it's time for hospital executives to take a breather from the rules and regs, and look to the supply side of the equation. Right now, the medical technology industry is in a unique position to affect change through the buying, selling and distribution of medical devices.

[More:]

Some supply chain executives and C-level healthcare administrators already know that today, reprocessing is among the most impactful sustainability initiatives employed by U.S. hospitals. Reprocessing helps reduce supply costs and minimize the environmental footprint of the healthcare industry, all while freeing resources to improve the quality of care. If just one or two percent of all medical devices labeled by the manufacturer as single-use were reprocessed, the healthcare industry would save almost $2 billion dollars every year.

With that in mind, the Association of Medical Device Reprocessors (AMDR) submitted comments June 7th in response to the CMS' proposed ACO rules to implement the Medicare Shared Savings Program (MSSP) and regulate Accountable Care Organizations (ACO). In short, AMDR believes reprocessed devices can play an important role for ACOs, and the following recommendations, if implemented, will better position hospitals participating in MSSP to achieve their savings goals by providing them with a tangible option to lower costs without compromising quality of care.

In particular, AMDR recommends that the final ACO regulations include a specific statement encouraging the use of lawful, FDA-regulated reprocessed devices. As an added step, we also encourage CMS to obtain assurance from hospitals that they are using an FDA-registered third-party vendor that can furnish proper documentation (510(k) or pre-market approval) upon request for each device reprocessed. With more than a decade of success in the U.S. market, we can proudly say that reprocessed devices purchased through an FDA-regulated vendor have been found to be just as safe and effective as their original counterparts, and through clear guidance, CMS has the opportunity to empower healthcare providers by giving them a viable option for cutting costs that will immediately benefit their ACO's ability to meet and exceed the goals of a shared savings program.

In addition, AMDR recommends that CMS confirm that use of reprocessed devices will not implicate civil monetary penalties laws for an ACO participating in MSSP. The civil monetary penalties statute prohibits hospitals from compensating physicians to withhold necessary care from a patient. While hospitals will spend less on reprocessed devices in an effort to promote savings, CMS should clearly state that using FDA-cleared or -approved devices--original or reprocessed--does not constitute improper patient care under the civil monetary penalties statute.

In today's market, hospitals are struggling to find reliable, low-cost solutions to reduce the financial burden of providing excellent care. AMDR believes CMS ought to highlight that the use of regulated reprocessed devices can be a successful means by which ACO-affiliated hospitals can provide the highest quality care while containing costs.

We encourage you to read AMDR's Full Comments regarding ACOs and the Civil Monetary Penalties Waiver.

Daniel J. Vukelich, Esq. is the President/CEO, and ex officio member of the Board, of the Association of Medical Device Reprocessors (AMDR). AMDR represents approximately 95 percent of the third-party medical device reprocessing done in the U.S. today. Please visit amdr.org and accountablecareforum.com for more information on reprocessing and ACOs.

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