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Still more focus on recalled and replaced devices

Device Regulation Alert: Safety, Compliance and Reimbursement News, August 20, 2007

In the last issue, we told you CMS addressed costs of recalled and replaced devices in the Inpatient Prospective Payment System (IPPS) final rule. CMS also expressed concern about the cost of monitoring and replacing recalled or nonfunctioning devices in the proposed rule for the 2008 Medicare physician fee schedule (MPFS).

In the MPFS proposal, CMS discusses the costs to Medicare for physician monitoring of recalled devices. CMS predicts patients with recalled devices may need extra doctor or hospital outpatient visits as well as additional diagnostic tests and the cost to Medicare and the patient-even when replacement isn't necessary-"may be substantial and burdensome."

CMS therefore requested public comment on ways to measure the costs related to recalled devices and how to address these additional costs for hospital outpatient and physician payment systems.

To view the proposed rule in the July 12, 2007 Federal Register, click here.

Finally, in the proposed rule for the 2008 Outpatient Prospective Payment System (OPPS), CMS proposes to reduce payment for APC in which a device cost is packaged when the credit is 20% or more of the cost of the new replacement device.

CMS previously addressed in the OPPS situations in which a hospital paid nothing for a device or received a full credit for a replacement device. CMS also proposes a HCPCS modifier be reported if a device is replaced with a partial credit of 20% or more of the cost of the replacement device.

To view the August 2, 2007 proposed rule Federal Register, click here. Scroll to Proposed Rules under Centers for Medicare & Medicaid Services

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