A bill introduced in Congress earlier this week aims to provide transparency in medical device pricing for hospitals to help them negotiate on prices and reduce Medicare spending.
The Transparency in Medical Device Pricing Act of 2007 was introduced by Sen. Chuck Grassley, ranking member of the Committee on Finance, and Sen. Arlen Specter, ranking member of the Judiciary Committee on Tuesday.
The bill would require medical device manufacturers to submit data on average and median prices for all implantable medical devices used in inpatient and outpatient procedures. Data would have to be submitted every quarter as a condition of receiving direct or indirect payments from Medicare, Medicaid or the State Children’s Health Insurance Program.
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“This bill will improve the overall quality and efficiency of our healthcare system,” Sen. Specter said in a statement. “The legislation sends a message to medical device suppliers that if they want to do business with the federal government, they have to show us their prices. By making this important information readily available, in collaboration with similar initiatives in the private sector, we can help control government spending on healthcare.”
Manufacturers would be subject to civil monetary penalties from $10,000 to $100,000 for failing to report or misrepresenting price data. The Department of Health and Human Services also would be required to make the data available on the Web site of the Centers for Medicare & Medicaid Services and update the information quarterly.
The senators indicated annual domestic spending on implantable medical devices, such as pacemakers, stents and artificial hips, totals about $65 billion. Grassley contends that hospitals are sometimes prohibited from disclosing these devices’ prices and often are at a disadvantage when they try to negotiate with manufactuers. These negotiating disadvantages result in inflated prices that enivitably drive up device prices.
“Some hospitals are now paying a lot more than others for the same medical device – that means healthcare dollars aren’t being spent wisely,” Grassley said. “Taxpayers need confidence that they’re getting the most bang for their buck. More transparency will allow market forces to work for the taxpayers’ and patients’ benefit.”