Guest Post: Hospitals Combatting Shortages of IV Fluids, Urge FDA to Act Swiftly, by Roslyne Schulman, American Hospital Association

In recent months, hospitals and health care systems across the U.S. have experienced shortages of normal saline and other intravenous (IV) fluids that are critical to patient care. A range of factors, including a reported increase in demand by hospitals and other providers, as well as production interruptions from the manufacturers of these products, triggered the shortage. The U.S. Food and Drug Administration (FDA) reported that it will take several months to address the issue.

As a result, in a letter to the FDA, the American Hospital Association (AHA) urged the agency to vigorously pursue additional supplies and suppliers of normal saline and other IV fluids to ease this shortage and prevent future shortages. Recently, the FDA announced that it will allow a Norwegian maker of normal saline solution to temporarily import product to help address the critical shortage. The product is made by Fresenius Kabi USA in its Norway manufacturing facility, which has been inspected by FDA, and it has the same active ingredient in the same concentration as 0.9% sodium chloride injection products approved in the U.S.

"The current shortages of IV fluid are unacceptable and must be resolved quickly to prevent a negative impact on patient care," wrote AHA Executive Vice President Rick Pollack in the letter to the FDA. "Currently, hospitals are scrambling to manage the shortfall and have employed strategies including using smaller IV bags, switching patients to appropriate alternatives and prioritizing patients based on clinical factors. While these strategies have somewhat mitigated the problem to date, the AHA is concerned that patients could face harm in the future if these shortages are not resolved quickly."

The Drug Information Service of the University of Utah, in collaboration with the American Society of Health-System Pharmacists (ASHP), has compiled a guide, “IV Fluid Conservation Strategies,” to assist hospitals and health care systems seeking ways to manage shortages by conserving existing supplies of IV solutions and minimizing waste. The AHA is asking hospitals to share the document with pharmacy, medical and nursing leadership, materials managers and others who are involved in addressing the current IV fluid shortage.

Roslyne D. W. Schulman, Director of Policy Development, American Hospital Association

Inside HSCA Guest Blog, MJ Wylie: UDI Marks a Turning Point in Healthcare

This blog is excerpted from its original post at Today's Medical Developments.

The U.S. medical device industry continues to innovate, producing sophisticated, life-saving products for the nation’s most at-risk patients, developing cutting-edge treatments to improve the quality of life for those with chronic conditions, and offering tried-and-true approaches for common, everyday ailments. Information about medical devices, particularly those that are needed to save lives, should be clear, accurate and easy to find. This is especially critical to foster recalls or to identify contaminated products; yet sharing information about medical devices throughout the supply chain, and directly with the patient, is needlessly complex.

Lack of consistent device identifiers in healthcare has been a long-standing problem, yet is one that is solved with the adoption of consistent global identification standards across the industry and the implementation of systems to provide accurate data throughout the healthcare system. 

In late September 2013, the U.S. Food and Drug Administration issued its highly anticipated final rule establishing a unique device identification (UDI) system that provides a platform for communicating accurate, reliable information about medical devices to all recipients who need information about the device. The new regulation will affect how manufacturers label their products and publish device identifiers to a centralized database (see www.gs1us.org/hcudi for more information). It comes after many years of industry collaboration and input, and marks a turning point in healthcare. Its impact will be felt across all of healthcare, from the different points in the healthcare supply chain to clinicians, payors and members of the public – all of whom will be able to rely on consistent, publicly accessible standardized information regarding medical devices, thus increasing patient safety and improving supply chain efficiency and security. 

This UDI system is comprised of the UDI code, application of the UDI to device labeling and packaging, and a related, centralized database that will serve as a one-stop shop of sorts for information related to all the medical devices being developed and/or on the market. The system will enable many benefits that will ultimately improve patient safety, including:

• Faster and easier product recalls
• Improved traceability
• More effective counterfeit detection and abatement
• Increased accuracy in electronic transactions and information sharing
• Reduced supply chain costs
• Increased access to product information for members of the public and the medical community

Perhaps more importantly, the UDI rule has implications beyond the U.S. healthcare supply chain, as it supports global alignment efforts to use data standards that provide global product visibility and can identify recalled products that need to be removed from a supply chain that crosses international borders. Any manufacturer located anywhere in the world that sells products in the U.S. is required to comply with the new rule.

The components of the FDA UDI system are:

• The UDI – a unique numeric or alphanumeric code that includes a device identifier (DI), which is specific to a device model, and a production identifier (PI), which includes the current production information for that device, such as the lot or batch number, the serial number and/or the expiration date (including year, month and day).

• The label – the UDI must appear on the label in human readable format as well as in a manner that can be read by automatic identification and data capture (AIDC) technology, such as a linear or 2D DataMatrix barcode, for example. A UDI must be applied to the base package and higher levels of packaging.

• The database – Manufacturers must submit the UDI to the FDA Global UDI Database (GUDID), and include a standard set of basic identifying attributes for each UDI. The GUDID will store information about all medical devices, and providers, patients, and members of the public will be able to access the information when needed, leading to better decisions concerning patient care. Using consistent, global standards will also enable providers to harness data for longer-term goals, such as comparative effectiveness, outcomes research and population health management.

The proposed effective dates for UDI requirements are based on risk class after publication of final rule, which occurred on September 24, 2013:

• Class III – 1 year (by September 2014)
• Class II implants and life-supporting/life-sustaining devices – 2 years (by September 2015)
• The rest of Class II – 3 years (by September 2016)
• Class I – 5 years (by September 2018)

GS1, a leading standards organization, was named by the FDA as an accredited issuing agency for UDIs. Healthcare’s 11ptst manufacturers, distributors, leading IDNs, and GPOs are already using GS1 Standards to improve patient safety, supply chain efficiency, and prepare for regulatory requirements such as FDA UDI. GS1 Standards, specifically the Global Trade Item Number® (GTIN®), are recognized across the healthcare industry as a unique identifier of medical/surgical products for every level of packaging and supports UDI regulation.

While the FDA UDI regulation is now a reality, it is important to remember that organizations representing all aspects of the supply chain have been working together for many years to support UDI capabilities, not only in anticipation of the law, but because it is the right thing to do for patient safety. In addition, clean, consistent and global data has immeasurable value for any organization that decides to implement standards. A UDI system accessed and leveraged by all constituents in the U.S. supply chain will improve the speed and accuracy for product recalls as well as adverse event reporting, among other benefits. The time is now – the industry is able to implement UDI to the benefit of patients, healthcare providers and manufacturers here in the U.S. and around the world.

MJ Wylie is the Sr. Director of Healthcare for GS1 US, leading US healthcare trading partners to actively engage, adopt, and use the GS1 standards to improve their business and supply chain operations, with a clear passion to support the FDA’s Unique Device Identification (UDI) regulation to enhance patient safety. Ms. Wylie is a certified Global Regulatory Affairs Compliance Professional (GRACP).

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Additional Resources

UDI Implementation for Manufacturers

To support UDI implementation using GS1 Standards, I recommend that manufacturers take the following approach:

1.  Assess how your company currently identifies and marks its products in terms of the UDI requirements (e.g., identification numbers, labeling, barcodes). Does your company know where the FDA-requested data attributes reside? Do you know how your products are classified?

This step could take several weeks, even months, and perhaps is the most time and research-intensive of all the steps, so get started right away.

2.  Determine the responsible party within your organization for assignment of:

·      UDI / GTINs (usually those responsible for packaging)

·      GUDID: data aggregation, submission, and maintaining the data to the FDA’s database

·      Work with your regulatory affairs to manage updates to both the UDI and GUDID

3.  Join GS1 US to obtain a GS1 Company Prefix, which is the foundation for creating GS1 identification numbers (i.e. GTINs) for UDI requirements. You may also need to identify your locations with Global Location Numbers (GLNs) to meet customer requirements.

4.  Assign GTINs and design your approach to production information for your products.

5.  For smaller to mid-sized manufacturers, select a solution provider partner and/or use the online GS1 US Data Driver® tool to generate your GTINs.

6. Prepare notification of adoption of standards for product and location identification. There are a host of useful tools to help manufacturers get started on UDI, including visuals, a GTIN Quick Start Guide and a UDI “Frequently Asked Questions” at www.gs1us.org/hcudi

7. Begin marking products with barcodes containing GTIN plus, if applicable, the secondary information, such as expiry date, serial number and such. 

8. Load GTIN and GTIN data attributes, if applicable, into the Global Data Synchronization Network (GDSN) to submit to the US FDA GUDID. The GDSN is currently used by the industry to share standardized healthcare product information across supply chain partners, and may also be used to populate the FDA GUDID.Create and use a cross-reference file between the old identification numbers and GTINs.

9. Communicate with your customers about any new packaging, labeling and usage in procurement and contracting efforts.

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About GS1 Standards

The GS1 System of global supply chain data standards has revolutionized efficiency, accuracy and cost-effectiveness in a broad range of industries. Recognizing the impact that industry-wide adoption of a common language can have, GS1 Healthcare US has set out to apply these same standards to helping the healthcare industry improve efficiency and quality for lower costs, more streamlined care delivery and better patient safety.

Global Location Number (GLN): Location Identification

This number is an industry-wide, standardized location identifier that replaces custom account and location numbers.

Global Trade Item Number (GTIN): Product Identification

Manufacturers are moving toward adopting a standardized product identifier to ensure accuracy of product information at every level of packaging, throughout the supply chain.

Global Data Synchronization Network (GDSN)

The GDSN is an authoritative source of standardized healthcare product information. With this network, all supply chain partners will be able to access identical, up-to-date, reliable product data efficiently. The GDSN plays an integral role in the adoption of GTINs. Healthcare organizations can use the network to create and store product information for faster standardization and better communication across the industry.

Source: November 2013 Healthcare Implementation Workshop: AHRMM, HSCA, SMI, GS1 Healthcare US

Inside HSCA Guest Blogger Lori Pilla Discusses Recent Study on Implantable Device Costs

Editor’s Note: A recent study led by Dr. Kanu Okike and published in Health Affairs found that very few orthopedic surgeons are able to correctly estimate the price of implantable devices. Doctors surveyed in the study were only able to accurately estimate these costs between 17 and 21 percent of the time. Lori Pilla, Vice President of Clinical Advantage and Supply Chain Optimization for Amerinet, shared her thoughts on the study and its implications for healthcare organizations with Inside HSCA.

A very interesting study published recently in Health Affairs touches on the reality of implant utilization and why there remains a gap overall in relation to actual costs being paid by hospitals across the country. For years there has been a significant variance in the knowledge amongst surgeon groups about the total expense implants place on hospital budgets. It is very refreshing to see that at least the majority of the group actually participated in the survey and the fact that 21% actually knew the costs is progress. It is not a surprise that the delta across the estimates is so variant against what the cost actually is, of those products they use every day.

On the other side, this article validates once again the lack of transparency in pricing on vendors like products used in different organizations as pointed out by the Government Accountability Office in 2012. As reimbursements continue to decrease, this point will be of focus as organizations bear the strain of increased implant costs.

Finally, as organizations work to engage their physicians in helping with cost containment, it will be important to:

·      Stress the lack of variance in quality outcomes across like products made by multiple suppliers

·      Educate the physicians, and drive this education through both outcomes data and financials

·      Finally, incentivize those physicians, who are early adopters in participating in cost containment through equipment and other desired service line products.

Source: “Survey Finds Few Orthopedic Surgeons Know The Costs Of TheDevices They Implant,” Health Affairs, January 2014.

-       Lori Pilla, RN, BSB/M, MBA, Vice President of Clinical Advantage and Supply Chain Optimization, Amerinet.

Inside HSCA Guest Blog, Tom Bulleit: OIG’s Bad News for PODs: Whither (or Wither) the Physician-Owned Supply Chain?

2013 was not a good year for physician-owned distributors of implantable medical devices (“PODs”).  In March, the Office of Inspector General of the Department of Health and Human Services (“OIG”) published a Special Fraud Alert on Physician-Owned Entities, the essential conclusion of which was that physician-owners ordering implantable devices for their patients through their PODs is “inherently suspect” under the Federal health care programs antikickback law (“AKL”). In October, OIG released a report reviewing the prevalence and use of spinal devices supplied by PODs, the essential conclusions of which took the wind out of the sails of POD proponents by demonstrating that PODs (i) do not result in cost savings and (ii) do lead to increased utilization of implantable devices. In the course of the year, several large hospital chains, including Tenet, Ascension, and Intermountain Health, adopted policies prohibiting purchasing from PODs owned by the ordering physicians. While the proponents of PODs have continued to scrounge for arguments that support the POD business model (see links below), it is increasingly clear that there is little to be said in favor. 

These points are made in greater detail in a recent article that I co-authored in Compliance Today (the leading periodical for hospital compliance officers, published by the Health Care Compliance Association) and in a letter to the editor of Orthopaedics This Week (perhaps the most widely-read publication in the orthopaedics industry).

These developments should not come as a surprise to anyone who has followed the steady defeat of each new physician ownership vehicle over the last twenty years.  Beginning with the publication of OIG’s Special Fraud Alert on Joint Venture Arrangements in 1989, the federal government has moved to restrict self-referrals by passive physician owners in ancillary lines of business. In the early 1990s the government settled cases involving physician-owned laboratories, imaging and radiation therapy centers.  See, e.g., SmithKline Lab To Pay Record $1.5-Million Fine, Los Angeles Times, Dec. 29, 1989; DOJ Press Release, T2 Medical, Inc. Agrees to Pay $500,000 and Discontinue Improper Practices (Sept. 26, 1994), ; Shalala v. T2 Medical, No. 1-94-CV-2549-ODE, 1994 WL 686949 (N.D. Ga. 1994); Shalala v. RadiationCare, No. 1 :94-CV-3339-RCF, 1995 U.S. Dist. LEXIS 749 (N. D. Ga. 1995). 

In the course of 7 years of litigation against the Hanlester laboratory network that yielded only a partial victory – investment interests are remuneration under the AKL, but some defendants were acquitted – OIG convinced Congress to act against physician self-referral more directly, and the Stark law was born.  See, e.g., Office of Inspector General (OIG),Financial Arrangements Between Physicians and Health Care Businesses: Report to Congress (May 1989); General Accounting Office,Referrals to Physician-Owned Imaging Facilities Warrant HCFA’s Scrutiny; Report to the Chairman, Subcommittee on Health (Oct. 1994). 

Stark effectively stopped, or at least severely regulated and restricted, physician self-referral for certain “designated health services.”  Where self-referral crept back in to exempt certain services from Stark (e.g., physician-owned mobile providers), the government continued to pursue cases under the antikickback law, and obtained a settlement against a physician-owned mobile laser provider as recently as 2010.  See OIG Press Release, OIG Enters into $7.3 Million Civil Monetary Penalty Settlement with Physician-Owned Enterprise (July 8, 2010). See also, American Lithotripsy Society v. Thompson, 215 F.Supp.2d 23 (2002) (holding that lithotripsy is not a Stark DHS); 69 Fed. Reg. 16054, 16105 (Mar. 26, 2004) (“in light of the unique legislative history regarding the application of [the Stark law] to lithotripsy, we will not consider lithotripsy an ‘inpatient or outpatient service’ for purposes of [the Stark law].”).

PODs are easier to disapprove than any of these earlier models, since at least those involved regulated providers furnishing healthcare services. And as CMS has made clear, PODs also raise concerns under the Stark law.  See, e.g., 73 Fed. Reg. 23527, 23694-23695 (April 30, 2008) (concern that PODs “may serve little purpose other than providing physicians the opportunity to earn economic benefits in exchange for nothing more than ordering medical devices . . . that the physician-investors use on their own patients” and in many instances would not qualify for an exception from the Stark law’s self-referral prohibition).  Accordingly, as OIG’s recent pronouncements make clear, the physician-owned supply chain is doomed to wither under the continued scrutiny of  enforcers, whistleblowers, and perhaps most important, hospital customers who will not want to put themselves at risk by purchasing from a self-referring POD.  But these developments do beg the question, what next?  In this regard, I offer a few possibilities:

•  Gainsharing Makes a Comeback. Hospital-physician gainsharing never really went away, and OIG has approved numerous programs that allow procedural physicians to share in the concrete savings to which they contribute by adopting cost-reducing treatment protocols. The withering of the physician-owned supply chain will re-invigorate interest in these programs.

• ACO Waivers Arrive. As the Affordable Care Act continues to encourage hospitals and physicians to work together to control costs through bundled payment arrangements, there will be an increasing array of physician-incentive plans tested.  For recognized ACO’s, some of these will be protected at least temporarily under waivers from the AKL and the Stark law. http://www.gpo.gov/fdsys/pkg/FR-2011-11-02/pdf/2011-27460.pdf

•  ACO-type Arrangements Proliferate. Even outside the context of CMS-recognized ACOs, hospitals and physicians will explore shared savings arrangements that are based on similar principles. Providers, drug/device companies, and payors will work more closely to achieve arrangements that properly incentivize physicians through the existing managed care safe harbors: 42 C.F.R. 1001.952(m) (“price reductions offered to health plans”), (t) (“price reductions offered to eligible managed care organizations”), and especially (u) (“price reductions offered by contractors with substantial financial risk to managed care organizations”).

Now that OIG’s pronouncements have made clear that PODs are not an acceptable or lawful answer to rising healthcare costs, hospitals, physicians, and implantable device makers can be expected to begin more serious efforts at shared savings and other arrangements that will at once bring about greater cost control and continue to encourage the product and service innovation that represent the best of American medicine.

- Tom Bulleit, Partner, Ropes & Gray