Manufacturer and Vendor Relationships in Historical Perspective
Examining the historical development of re-use programs for medical equipment, including New Jersey's successful model for single-contractor management of pick-up, delivery, warehousing, and refurbishment of DME and mobility equipment, with local suppliers contributing technology assessments and time labor but no reimbursement under the re-use program. Medicaid programs encouraged to develop re-use guidelines based on successful CMS demonstration project and GAO reports.
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1. Manufacturer and Vendor Relationships Sept 16, 2009
2. Historical Perspective • Re-use historically was viewed as “closets” – MDA, ALS – Churches – UCP • CMS demonstration project and GAO reports encouraged Medicaid programs to develop re- use guidelines • New Jersey was one of the participants in the demonstration project and the pilot project for re- use
3. Historical Perspective • New Jersey model- DME and wheeled mobility – Single contractor- responsible for pick-up and delivery, warehousing, cleaning, modifying, repairing and refurbishing equipment, as well as education and other services – Local suppliers still worked seating and mobility clinics and participated in technology assessments- no reimbursement for their time/labor – Suppliers submitted prior authorizations as was done previously- but under re-use program, the reviewer was required to use a previously owned item if one was available that worked for the recipient.
4. Flaws in New Jersey Model • Re-used product was required if available- no choice given to the recipient • No communication with manufacturers or response to – Requests to provide training – Requests to track serial numbers for FDA purposes – Offers to check and validate reliability of products • Single contractor- excluded local suppliers from participating • No reimbursement to local supplier when they provided assessments yet did not ultimately sell a product because a “suitable” product was re-used • No clear guidelines to determine whether a re-used device was “suitable” – Lack of clinical and functional comparison of product requested and product provided – No follow up to determine if clinical or functional needs were met – Complaints from clinicians of inappropriate technology was ignored – Even something as simple as color- devastating to a adolescent- pink wheelchairs should not be forced on boys. Socialization and the need to fit in impacts a child’s ability to develop and learn. • $ Savings rather than clinical outcome was the driver.
5. The Rest of the Story • Harsh resistance from supplier, manufacturer and clinical community • Strong efforts to stop the re-use mandate in the NJ model • Articles were written in magazines reporting a death related to the re-use program* • Ultimately the program was cancelled. • Definitely tainted industry views or re-use
6. • Providing a product is not enough; it must be the right product • Consumer satisfaction is important • Ensure desired clinical and functional outcomes are met • Product safety and liability • Brand Protection- A consumers view of a manufacturer is formed by their experience • Concerns regarding mandatory use of previously owned devices by payors • Service- If not handled by the re-use program, it falls back on the manufacturer • Product tracking – FDA requirements The Vendor/Manufacturer Perspective
7. Critical Program Features • Clear procedures for determining product integrity • Medical model – Physical evaluation – Technology assessment – Ensure appropriate technology match • Vendor involvement • Trained staff – Cleaning – Programming, adjusting, repairing • Serial number tracking
8. Unintended consequences • Medicaid seeking savings- requiring re-use for all recipients • New sales/innovation connection – Drop in new sales reduces R&D for innovation – European re-use program acknowledged decrease in innovation and drop in new devices available for re- use- not sustainable program • Technology solution failure • Decrease in local suppliers as new sales drop – Fewer suppliers to service and repair equipment
9. Establishing Relationships with Industry (manufacturers and suppliers) • Establish purpose of these programs is not to replace the sale of new equipment but to make additional equipment more readily available. • Create a collaborative focus rather than a competitive one by allowing suppliers another way to serve their customers – Most people accessing a reuse program have no other way to pay for devices – For customers that have insurance or alternative funding, the program should allow the supplier to provide additional needed equipment • Provide mutual marketing and demonstration opportunities • Be a referral source. • All suppliers to access equipment for evaluation and/or short term needs.
10. Maintaining Relationships with Manufacturers and Suppliers • Ongoing reuse staff training • Quality assurance procedures • Collaborative events including manufacturers and suppliers • Marketing opportunities • Referral and information resource – Refer to local suppliers when funding is available or no appropriate product is available. Suppliers can often help secure alternative funding.