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This final rule addresses comments received on an interim final rule with comment period published on December 7, 1992. The interim final rule implemented section 4062(b) of the Omnibus Budget Reconciliation Act of 1987. It specified that payment under the Medicare program for durable medical equipment (DME), prosthetics, and orthotics furnished on or after January 1, 1989 is limited to the lower of the actual charge for the equipment or the fee schedule amount established by the carrier. This final rule describes amendments to the methods for computing fee schedules covering the six classes of DME and how they are updated in subsequent years in accordance with sections 13542 through 13546 of the Omnibus Budget Reconciliation Act of 1993.

Numerous types of implantable biomaterials are available for a variety of applications. Although much has been written about the physical properties or biocompatibility issues, very few papers have focused on the economic feasibility of these materials. This article assesses financial factors associated with first metatarsophalangeal total joint prostheses.

Biomaterials are the building blocks of implant technology. They enable implants to function properly and endure the harsh environment of the human body but they are often the cause of implant failure. To reduce failure rates and substantially improve implant function, new biomaterials must be developed. The development of new implantable materials is costly, time consuming, and extremely difficult; however, new materials are needed in order to optimize implant function, incorporate emerging technologies, and substantially improve patient care.

During the 1980s, the hospital cost for total hip arthroplasty was controlled, but the implant cost for total hip arthroplasty was not controlled. With the introduction and acceptance of case price payment systems, hip implant cost consumed a greater portion of the hospital payment each year during the 1980s. Cost control for total hip arthroplasty during the 1990s will require control of implant costs. One objective method for controlling implant costs in total hip arthroplasty is implant standardization.

To help balance the operating budget of The Hospital for Special Surgery, which was encountering an annual major deficit of $4 million in 1989, a program of cost awareness leading to cost containment was instituted in 1990. Costs of supplies, implants, and equipment were identified and reviewed by the hospital staff, including orthopaedic surgeons, orthopaedic residents, health care personnel, and administration, for cost effectiveness. Methods to accomplish the goals included structuring committees for information; workshops organized by different services to affect change; feedback to health care professionals through posters and newsletters; and statistical identification for continued education. Major cost savings resulted from recycling wasted implants, reduction of costly implants, and reduction of unnecessary supplies. As a result, vendors had been challenged, leading to more competitive prices. This program has opened new avenues of cost reduction without sacrificing quality of medical care and has contributed to a breakdown of barriers between medical staff, administration, and finance, leading to a strong hospital-team commitment. The price of health care in the United States in 1993 exceeded $900 billion. Health care expenditures now account for approximately 14% of the gross domestic product. Health care costs have been rising faster than the inflation rate for more than a decade. The result is the current national focus on containment of health care expenditures.

The cost of health care in the United States has been rising steadily during the past 10 years. Total joint arthroplasty, a commonly performed orthopaedic procedure, accounts for approximately $10 billion dollars per year. The objective of this study was to perform a clinician-oriented cost analysis of primary and revision hip and knee arthroplasty. Twenty-five consecutive cases each of total knee arthroplasty, total hip arthroplasty, revision total knee arthroplasty, and revision total hip arthroplasty were analyzed. The length of stay and number of minutes spent in the operating room were significantly higher for the patients with revision hip surgery than for the other groups. The total charges for the prosthesis in the 4 groups exceeded 40% of the total charges for the procedure. Primary hip and knee surgery had similar billed costs, and work for revision hip surgery has a significantly higher billed cost than physician's work. The implant selection process by an orthopaedic surgeon performing arthroplasty of the hip and knee needs to include economic aspects.

To decrease implant costs for total hip arthroplasty, a number of different options are available, including the use of remaindered implants, older designs, discounted stock, or specifically designed implants manufactured and sold at low cost. To determine the prevalence of these practices, 80 questionnaires were mailed to members of the Hip Society; 55 (79%) were completed and returned. In addition, 32 questionnaires were mailed to a representative group of orthopaedic surgeons in Canada; 29 (90%) were completed and returned. Analysis of these returns revealed that 73% of the respondents used a low-cost prosthesis for certain indications in total hip arthroplasty. No uniform policy with regard to cost containment or to the definition of low cost was apparent. In a parallel study, the results of a clinical trial with a generic hip implant in 150 patients observed for 2 years or longer revealed the general improvement in hip scores and the rate of complication to be compatible with those of other, more-expensive hip prostheses. Control of prosthetic costs as a means of influencing the cost of arthroplasty appears to be a wide-spread practice.

Faced with the closing of its service, the Orthopaedics Department at Mt. Sinai Medical Center, working with Materials Management, began a program to become profitable. Through standardization, appropriate utilization, pre-planning of cases and the development of critical pathways, the service has realized about 40% savings in materials and dropped their average product costs to $2,700 per joint and reduced length of stay by five to six days. The keys have been physician input from the start, teamwork and continuous training.

A study done by the American Academy of Maxillofacial Prosthetics to evaluate the Medicare Resource Based Relative Value Scale (RBRVS) as it relates to maxillofacial prosthetics. The method of RBRVS formulation is described. The degree of difficulty and treatment time were determined for nine Physicians' Current Procedural Terminology-edition 4 (CPT-4) codified maxillofacial procedures. A preliminary survey indicates that practice expense and malpractice expense ratios were 66% and 1%, respectively. Correlation of maxillofacial procedures to other medical procedures was not performed because an additional study with a greater sample size is needed.

High-cost, high-volume specialty programs such as orthopedics and neurosciences find themselves in a position of evaluating the costs and in some cases the appropriateness of medical practices in response to payer scrutiny and provider selection processes. Orthopedics and neurosciences programs are at a stage of development analogous to that of cardiovascular care several years ago. Many of the same trends have come into play, such as payer "carve-outs" for orthopedic services, payer selection of centers of excellence based on cost and quality, reduction of Medicare reimbursement, greater use of high-cost technology, the decline of profitability due to "older, sicker, and tougher" patients, and the recent emergence of national orthopedic specialty networks oriented to national contracts for care. In an era in which payers demand value on both sides of the cost-plus-quality equation, programs are challenged to maximize the return on a patient population rife with "no-win" situations. In the orthopedic service line these include a high proportion of Medicare patients and chronic conditions such as workers' compensation medical back cases or repetitive motion injuries, which can be elusive to diagnose and expensive to treat. Many hospitals continue to lose money on joint replacement surgeries, the largest-volume orthopedic inpatient service, primarily because of the high Medicare population and the cost of implants. Neuroservices, while still relatively well reimbursed, face a rising proportion of Medicare payments as patients live longer and develop chronic, degenerative conditions. Inpatient days are decreasing due to payer pressures to limit hospital stays and to shift inpatient care to outpatient services. Some hospitals "have lost interest in (the orthopedic) service line during the last five years because of recent trends in orthopedic-related inpatient volume and payment." But by managing costs strategically, both the neurosciences and orthopedics service lines can provide substantial revenue as well as the opportunity to achieve a "center of excellence" competitive position in a managed care environment. This Special Report outlines the process and advantages of managing costs and quality of care strategically, that is, in a manner which helps these programs meet internal cost and clinical goals while responding to market situations. The hospital, physicians, and patients all benefit as costs are reduced, quality is enhanced, and the service line's competitive position is strengthened.

The purpose of our investigation was to compare external sphincterotomy, the traditional method of treatment of detrusor-external sphincter dyssynergia (DESD), with two newer methods, balloon dilatation or internal stenting of the external sphincter. Sixty-one spinal cord injured (SCI) men were prospectively evaluated. The indications for treatment were DESD and voiding pressure greater than 60 cmH2O demonstrated during video-urodynamic study. Twenty patients were treated with balloon dilatation of the external sphincter, 26 with an internal stent prosthesis, and 15 with traditional external sphincterotomy. Age and duration of SCI were similar among the three treatment groups. A significant decrease in both voiding pressure and residual urine from presurgery levels persisted during the follow-up period of 3 to 26 months (mean, 15 months) in all three groups. Bladder capacity remained constant, renal function improved or stabilized, and autonomic dysreflexia (AD) improved in all three groups. Balloon dilatation and prosthesis placement are associated with a significantly shorter length of surgery (p = 0.045), length of hospitalization (p = 0.005), decrease in hospitalization cost (p = 0.01), and decrease in hemoglobin postoperatively (p = 0.046) when compared to external sphincterotomy. Complications of stent insertion included device migration (three patients) and secondary bladder neck obstruction (two patients). In the balloon dilatation group, three recurrent sphincter obstructions, one case of bleeding requiring transfusion, and one case of bulbous urethral stricture occurred. After external sphincterotomy, two patients developed recurrent obstruction, two required blood transfusion, and 1 patient noted erectile dysfunction. Balloon dilatation and prosthesis placement both proved to be as effective as external sphincterotomy in the treatment of DESD.(ABSTRACT TRUNCATED AT 250 WORDS)

The Xomed Audiant Bone Conductor is an implantable hearing device for conductive hearing impairments not adequately relieved by surgical methods or hearing aid amplification. It has now been used long enough for analysis of its present position in our management armamentarium. Data obtained from respondents from the United States and Canada are presented and indicate that this device, properly prescribed and used, almost eliminates the conductive elements of the hearing impairment. During the early years of its use, the device was frequently implanted in patients outside the manufacturer's guidelines for use. Some of the reasons for this discrepancy, as well as evidence that this misapplication is lessening, are presented. When proper guidelines were used, however, the results presented here indicate that socially adequate hearing can be restored to patients with conductive loss by the Audiant. Complications have been few and appear to be diminishing. The results indicate that this device has, in its present state of development, a narrow and restrictive application, but a well-defined and efficient role to play in the management of conductive hearing impairment.

A cooperative effort between physicians and facility administrators with respect to purchase of materials and services can reduce costs dramatically and provide clinical benefits, as well. At Hamot Medical Center in Erie, Pa., orthopaedic physicians and hospital administrators developed a process for selecting a single source of implants used in total joint replacement procedures. As a result, the medical center was able to enter into a volume purchasing contract anticipated to save the medical center about $630,000 over the two-year period of the contract.

This final rule would address the provisions of section 1834(a)(12) of the Social Security Act that authorizes us to designate one carrier for one or more regions to process all claims within that region. It incorporates in regulations the four designated carriers that will process claims for durable medical equipment, prosthetics, orthotics, supplies and certain other items covered under Part B of Medicare. We expect the above changes to lead to more efficient and economical administration of the Medicare program.

Background: Transcatheter implantation of the Rashkind PDA occluder is an alternative to conventional surgical closure of isolated patent ductus arteriosus. Neither the clinical outcomes nor the costs of these procedures have been formally compared., Methods: We performed a retrospective cohort study to evaluate the clinical outcomes within a seven-month period for comparable patients with patent ductus arteriosus who underwent either placement of an occluder or surgical closure. The patients were treated between 1982 and 1987 at 14 major North American centers where patent ductus arteriosus was closed predominantly by a surgical procedure or by the occluder technique. To estimate inpatient and follow-up costs, we multiplied the observed use of resources by 1989 unit costs based on hospital-accounting and physician-reimbursement data., Results: On the basis of cardiac auscultation at follow-up, the initial procedure resulted in closure of the ductus arteriosus in 77.3 percent of 185 patients in whom the occluder was implanted (95 percent confidence interval, 70.6 to 83.1 percent) and 99.8 percent of 446 surgical patients (95 percent confidence interval, 98.8 to 100.0 percent). Second procedures increased the percentage of successful closures to 87.6 percent (95 percent confidence interval, 81.9 to 92.0 percent) and 100.0 percent (95 percent confidence interval, 99.3 to 100.0 percent) for patients in the occluder and surgical groups, respectively. There were no deaths. Major complications occurred in 2.7 percent of the patients in whom the occluder was implanted (95 percent confidence interval, 0.9 to 6.2 percent) and 0.2 percent of the patients who underwent surgery (95 percent confidence interval, 0.0 to 1.2 percent); moderate complications in 16.8 percent (95 percent confidence interval, 11.7 to 22.9 percent) and 15.0 percent (95 percent confidence interval, 11.8 to 18.7 percent), respectively; and minor complications in 11.4 percent (95 percent confidence interval, 7.2 to 16.8 percent) and 24.9 percent (95 percent confidence interval, 20.9 to 29.2 percent). Including the cost of follow-up care, the mean estimated cost per case treated surgically was $8,838 (in 1989 U.S. dollars), as compared with $11,466 per case treated with the occluder technique. Sensitivity analyses based on our data identified no plausible situations in which the costs of surgery and of implantation of the occluder would be equal., Conclusions: The more effective and less costly surgical procedure was superior to transcatheter placement of the occluder for closure of isolated patent ductus arteriosus. Consequently, our results do not support the wide-spread dissemination of the occluder procedure for the management of this common congenital lesion.

A new dural prosthesis was prepared by bilateral coating of polyester net with radiation-modified collagen. Prosthesis is smooth highly flexible, water resistant and 0.3 mm thick. In the Department of Neurosurgery, Warsaw Medical Academy, Poland, 11 patients had a new dural prosthesis implanted, 1 with posttraumatic CSF-leakage and 10 with intracranial neoplasms. Early observation (2 to 4 weeks) and delayed (7 to 23 months) were performed. Neither allergic nor inflammatory reactions were observed. No CSF-leakage was observed. A new Polish dural substitute seems to be better than other ones because of its similarity to natural dura mater and low price.

This study is an economic comparison of various methods of breast reconstruction after mastectomy. The hospital bills of 287 patients undergoing breast reconstruction at three institutions from June of 1988 to March of 1991 were analyzed. The procedures examined included mastectomy, implant and tissue-expander reconstruction, and TRAM and latissimus pedicle flaps, as well as free TRAM and free gluteal flaps. These procedures were subdivided into those which were performed at the time of mastectomy and those performed at a later admission. In addition, auxiliary procedures (i.e., revision, nipple reconstruction, tissue-expander exchange, and contralateral mastopexy/reduction) also were examined. Where appropriate, these procedures were subdivided into those performed under general or local anesthesia and by inpatient or outpatient status. Data from the three institutions were converted to N.Y.U. Medical Center costs for standardization. A table is presented that summarizes the costs of each individual procedure with all the pertinent variations. In addition, a unique and novel method of analyzing the data was developed. This paper describes a menu system whereby other data regarding morbidity, mortality, and revision rates may be superimposed. With this information, the final cost of reconstruction can be extrapolated and the various methods of reconstruction can be compared. This method can be applied to almost any complex series of multiple procedures. The most salient points elucidated by this study are as follows: The savings generated by performing immediate reconstruction varies between $5092 (p < 0.05) for free gluteal flaps and $10,616 (p < 0.05) for pedicled TRAM flaps.(ABSTRACT TRUNCATED AT 250 WORDS)

This interim final rule implements section 4062(b) of the Omnibus Budget Reconciliation Act of 1987 which specifies that payment under the Medicare program for durable medical equipment, orthotics, and prosthetics furnished on or after January 1, 1989 is limited to the lower of the actual charge for the equipment or the fee schedule established by the carrier. We are setting forth the methods for computing fee schedules for six classes of these items. We are also describing how the fee schedules are updated in subsequent years.

This final rule Modifies regulations to provide that claims for durable medical equipment, prosthetics, orthotics and certain other items covered under part B of Medicare be processed by designated carriers. Specifies the jurisdictions each designated carrier will serve. Changes the method by which claims for these items are allocated among the carriers from "point of sale" to "beneficiary residence." Establishes certain minimum standards for suppliers for purposes of submitting the above claims. Incorporates in regulations certain supplier disclosure requirements imposed under section 4164 of the Omnibus Budget Reconciliation Act of 1990, as part of the process for issuing and renewing a supplier's billing number. Describes the criteria and standards to be used beginning October 1, 1993 for evaluating the performance of designated carriers processing claims for durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) in the administration of the Medicare program. Section 1842(b)(2) of the Social Security Act requires us to publish criteria and standards against which we evaluate Medicare carriers for public comment in the Federal Register. We expect the above changes to lead to more efficient and economical administration of the Medicare program.

66 patients with congenital or acquired amputations of the hand have been studied after fitting partial or complete silicone hand prostheses which can be manufactured at relatively low cost. Most patients used their prostheses on social occasions only and all but four expressed satisfaction with them.

Silicone breast implants have been used for breast enlargement and reconstruction after mastectomy since 1963. It is estimated that they have been implanted in over 2 million women in the U.S. The U.S. Food and Drug Administration (FDA) has required manufacturers of the implants to submit evidence of their safety and effectiveness. The implants have been shown to benefit women in psychological studies. Physical risks include capsular contracture (affecting up to half of wearers), impaired mammographic results, implant rupture, and possibly connective tissue disease. Human studies would benefit from improved research design, including controls and long-term follow-up. Professional societies of plastic surgeons, whose members benefit commercially from breast augmentation and reconstruction, have campaigned forcefully for the continued and increased use of breast implants by women.