FDA ISSUES DRAFT GUIDANCE FOR MEDICAL DEVICE DATA SYSTEMS

On June 20, 2014, the Food and Drug Administration (FDA) issued draft guidance to inform manufacturers, distributors, and other entities that FDA does not intend to enforce compliance with the agency’s 2011 regulations governing medical device data systems (MDDS) subject to 21 CFR §880.6310, medical image storage devices subject to 21 CFR §892.2010, and medical image communications devices subject to 21 CFR 892.2020, because of “the low risk they pose to patients and the importance they play in advancing digital health.” 

MDDS are hardware or software products that transfer, store, convert formats, and display medical device data. An MDDS device does not modify the data or control the functions or parameters of any connected medical device, and are not intended to be used in connection with active patient monitoring. For example, an MDDS device may be used to collect data on a patient’s CO2 level from the patient’s ventilator and transmit this information to a central repository.

Although the guidance does not establish legally enforceable responsibilities, it does describe the agency’s current thinking on a topic. A copy of the guidance is available here. Comments on the draft are due within 60 days of its publication in the Federal Register

ST. LUKE’S CANNOT DELAY DIVESTITURE OF PHYSICIAN GROUP 

On June 18, 2014, the U.S. District Court for the District of Idaho rejected St. Luke’s Health System’s motion to stay the divestiture order issued earlier this year. The court stated that St. Luke’s failed to show that it is likely to succeed on appeal and that, even if it does succeed in defending its merger, the forced unwinding would not cause irreparable harm. 

The decision follows the court’s January 2014 ruling that St. Luke’s Health System’s acquisition of Idaho’s largest independent, multi-specialty physician practice group, Saltzer Medical Group PA, violated §7 of the Clayton Act and the Idaho Competition Act. St. Alphonsus Medical Center-Nampa, Inc. v. St. Luke's Health System, Ltd., No. 1:12-CV-560 (D. Idaho, January 24, 2014). The court predicted that if the merged entity were allowed to move forward “health care costs will rise as the combined entity obtains a dominant market position that will enable it to (1) negotiate higher reimbursement rates from health insurance plans that will be passed on to the consumer, and (2) raise rates for ancillary services (like x-rays) to the higher hospital-billing rates.” 

CMS WILL SOON RELEASE NEW ACO RULE 

On June 19, 2014, Sean Cavanaugh, Deputy Administrator and Director of the Center for Medicare at the Centers for Medicare & Medicaid Services (CMS), announced that CMS would soon release a proposed rule outlining changes to the Medicare Shared Savings Program. Mr. Cavanaugh did not provide any specific details on the rule. The announcement was made at the Fifth National Accountable Care Organization Summit held in Washington, D.C.