Sens. Grassley and Specter Introduce Bill Requiring Medical Device Manufacturers to Publicly Report

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Written by Scott Becker
Friday, 18 January 2008
Orthopedic and cardiovascular medical device manufacturers are increasingly subject to a great deal of federal scrutiny. Further, throughout the healthcare industry, there is a tremendous concern about the amount paid by hospitals and other healthcare providers for high-technology devices. A new bill, recently submitted to the Senate Finance Committe for consideration, takes aim at both issues. The Transparency in Medical Device Pricing Act of 2007 would amend the Social Security Act to require any manufacturer of an implantable medical device to report the average and median sales price of each covered medical device. [S. 2221, 110th Cong. (2007).] The information would then be made publicly available on the CMS website. In introducing the bill on Oct. 23, Sen. Chuck Grassley (R-Iowa) and Sen. Arlen Specter (R-Pa.) argued that price transparency is necessary if hospitals are to have the equal footing with device suppliers when it comes to negotiating prices. Confidentiality agreements prevent hospitals from knowing exactly what the fair market value is, leading to some hospitals paying significantly more than others for the same device. Compliance would not only be a condition of receiving direct or indirect payments under Medicare, Medicaid, and SCHIP; the statute also imposes harsh monetary sanctions for failure to comply that have the potential to add up quickly. A manufacturer would be subject to penalties ranging from $10,000 to $100,000 for each compliance failure. The same penalty range applies to any misrepresentation a manufacturer makes, and can be assessed for each day the information remains on the Web site. -- Kelly A. Morgan, JD