An in-depth look at the FDA’s refurb docket

August 01, 2016
by Gus Iversen, Editor in Chief
A man was repairing an MR system’s service panel when a sudden explosion knocked him to the floor, leaving him with burns and causing a power outage throughout half of the hospital.

Although nobody knows what exactly triggered the explosion, they do know the servicer overlooked certain safety precautions and was not employed by the MR’s original equipment manufacturer (OEM).

That real-life situation is one of several Patrick Hope, executive director of the Medical Imaging & Technology Alliance (MITA), recounts to the FDA in his response to a docket seeking comments from “the widest range of interested persons” on the possible safety issues that can arise from non-OEM medical equipment service.

MITA’s comment clocks in at 35 pages and, although more comprehensive than most, it is only one of 176 perspectives that organizations and individuals submitted before the docket’s June 3 deadline.

Third-party stakeholders – such as refurbishers, in-house health care technology managers (HTMs) and independent service organizations (ISOs) – generally view the docket as bad news.

“Smaller third-party vendors in particular fear they will be forced out of business with greater regulation,” writes Mary Logan, president and CEO of the Association for the Advancement of Medical Instrumentation (AAMI), in her comment.

Others, recognizing the exceedingly rare occurrence of events like the one described, are optimistic that the docket will usher in an era of more validated options for hospitals trying to save money. They see transparency on the horizon, and with it, better communication between OEMs and the reputable third-party organizations that can competitively service their equipment.

While just about everyone agrees that this docket has the potential to dramatically disrupt the balance of power in the device market, there are some stakeholders who think the whole thing will more or less blow over, as it did the last time the FDA opened this can of worms 20 years ago.

Why is this happening now? According to the docket itself, the FDA’s renewed interest in refurbishment came as a response to safety concerns brought to its attention. It’s also a chance to address ambiguities in the way certain terms associated with refurbishment and third-party service are defined.

“We hope that this current effort provides additional clarity on how these activities are defined, and what are some key considerations on the benefits and risks associated with these activities,” Deborah Kotz, press officer of media affairs and external affairs for the FDA, told HealthCare Business News.

Will new regulations hurt the health system?
Faced with the FDA’s concerns, third-party providers and their representative associations have vigorously defended their safety record, their value proposition, and the importance of a competitive market.

“Much like automobiles, aircraft or other complex machinery, the OEM isn’t the only one that is capable to repair the equipment,” writes Jeffrey Little, who describes himself as a 25-year veteran of health care operations, in his docket comment.

“At the end of the day, items like this definitely have a place for debate, however they are typically spawned from OEM vendors feeling a decline in dollars coming in from repairs, and finding fault with someone else’s work,” he writes.

In 1998, the FDA decided to exclude refurbishers and servicers from the requirement to comply with the 1997 Quality System Regulation under part 820, according to Diana Upton, president of the International Association of Medical Equipment Remarketers and Servicers, Inc. (IAMERS). Since the issues being raised in the current docket are the same, she argues, the agency would need compelling reasons to reverse its prior position.

For the FDA to make a judgment in the best interest of the entire health system, David Francoeur, senior director of brand and quality at Sodexo, says it needs to stick to the data. “Whatever the outcome, it has to be based on the impact of safety and not anything else – if it isn’t broken, why fix it?” he asks.

But, according to MITA's Hope, there may not be sufficient evidence either way. “It is impossible to provide a statistically valid analysis of the extent of problems that have occurred when there has been no prior scrutiny or any regulatory oversight of non-OEM service providers and other third parties, which would require reporting of problems,” he writes.

Although wary of lobbyists and the private interests of big business, many third-party stakeholders agree that some degree of increased oversight might not be such a bad idea, as long as it is implemented in a way that doesn’t unfairly undermine the value they bring to a health system that is already strapped for cash.

For Francoeur, that means new standards to ensure levels of technical competency, oversight and management. “I’m not necessarily advocating certification or registration,” he says, “but I do think it’s reasonable for the FDA to require some form of assurance that technicians possess the skill sets needed to work on medical equipment.”

Little also acknowledges the need for some kind of common requirements. “Not all third-party repair vendors are created equal, so standards must be established so that [everyone is] on the same level playing field,” he writes.

A liability imbalance
As OEMs have had to share business with a growing and increasingly sophisticated third-party sector, they are interested in sharing more of their burden of responsibility, too. For them, the docket is an opportunity to gain clarification as to where their obligations end and liability for patient safety and device maintenance transfers to “the other guy” servicing the machine.

As it stands, regardless of how many times a piece of equipment changes hands, and how far removed the manufacturer is from maintaining the device, many OEMs make the case that they are forever accountable.

“OEMs have a role as legal manufacturer of the device and are therefore subject to all FDA regulations, including 21 CFR Part 820 Quality System Regulation (QSR),” writes Tracey Fox, regulatory affairs director – global services at GE Healthcare, in her comment. Because of this, she says OEMs are held to a higher standard.

Although OEMs would most likely benefit from any new action taken by the FDA, several of them commented specifically that limiting competition would be bad for health care.

“We believe that many third parties, including hospital service teams, independent service organizations and others, are currently performing excellent service,” Matt Nichols, senior product manager of multivendor services at Philips Healthcare, told HealthCare Business News.

Both Siemens Healthineers (in a comment written by Hans Beinke, vice president, U.S. country head of quality and technology) and MITA point out that unregulated and unregistered third parties in the device industry have increased over the last 20 years without any comparable adjustment in the regulatory framework governing their activities.

Fox says that although some evidence does exist regarding actual problems with the safety of devices serviced by third parties, (like the situation MITA’s Hope described with the MR panel) the information provided to OEMs when service is performed by a third party is “sporadic and anecdotal.”

That sporadic and anecdotal body of evidence gets to the root of the OEMs’ complaint: third-party providers lack oversight. If third parties improperly service their equipment, the damage comes down on them as the manufacturer.

“Without labeling to indicate that servicing or refurbishing has been performed by a third-party entity, it is typically wrongly believed that the OEM maintains full knowledge of and responsibility for the state of the device,” writes MITA’s Hope. He believes the best method for ensuring safe and effective medical devices is to extend minimum requirements and regulatory oversight to all entities engaging in the activities the FDA has brought up.

The value proposition
In an industry that prioritizes “value” over virtually everything else, refurbishers, ISOs, OEMs and in-house HTMs offer unique benefits that make them desirable to different types of providers. While they all have a common interest in medical equipment, there is much they do differently.

An HTM has a broader focus, while OEMs tend to focus only on equipment maintenance, says Samantha Jacques, director of clinical engineering at Penn State Milton S. Hershey Medical Center in Hershey, Pennsylvania. “We aid the organization in vendor management, contract management, alarm management, and we also help our organizations support equipment planning across departments,” she says.

That means technical assistance is always on site. Steve Vanderzee, director of clinical engineering at Advocate Healthcare in Downers Grove, Illinois, says downtime may be greater for a piece of equipment serviced by the OEM if they have to travel long distances to repair it.

An in-house team, provided they have the capabilities to fix the problem, can start correcting it immediately. In cases where they must defer to the OEM, an HTM can articulate the problem more precisely and knowledgably than, say, a radiologist. There is value in that, too.

Although they won’t be at the hospital with the regularity of an in-house HTM, ISOs provide their own value. According to Francoeur, they provide a broad and unbiased intelligence to asset management because their focus is on the needs of the hospital rather than brand-specific equipment.

A good ISO evaluates products from an array of manufacturers and determines what equipment, or combination of equipment, would best suit a particular facility. In contrast, an OEM may have a financial interest in encouraging hospitals to invest in its own products.

“We know based on our data that OEM service, whether it be transactional or contracted, is often the most expensive service option,” says Vanderzee.

But to some extent, all third-party stakeholders are dependent on manufacturers. Vanderzee says 75 percent of Advocate’s HTM technical training is provided by the OEMs, and Jacques says her Penn State crew attends OEM training classes.

Although Sodexo offers on-the-job training for most devices, Francoeur says it sometimes partners with OEMs for servicing certain equipment.

Besides the larger footprint and intimate knowledge of the systems they’ve built, OEMs provide a level of security that third parties currently cannot. That’s because of the high level of accountability the FDA puts on them.

“Under current regulation, 21 CFR 820 must be adhered to by OEMs and registered remanufacturers,” writes Douglas J. Thistlethwaite, manager of regulatory affairs at Hitachi Medical Systems America, in his docket comment. “Since third-party servicers are not required to follow these regulations, the risk of incorrectly servicing medical equipment increases.”

“OEMs are more confident in the rigor of their quality system and risk management processes, which are highly regulated, documented, validated and audited,” says AAMI’s Logan. In addition, she says their parts have gone through a strong purchasing control process and their technicians have documented qualifications from controlled training programs.

All about data
Wherever one’s interests lie, it is generally agreed that more data about third-party service can’t hurt. They are “a growing and significant portion of the industry about which the FDA, health care providers, patients and OEMs know very little due to the lack of regulatory oversight, registration, or reporting,” writes MITA’s Hope.

But that isn’t to say there isn’t any data. ECRI Institute studied the MAUDE (Manufacturer and User Facility Device Experience) database and found that the number of technology- related adverse incidents caused by poor maintenance or repairs is “very low,” according to AAMI.

In addition, a search of the FDA’s official records for fiscal years 2007-2008 revealed “no pattern of adverse event reports or incidents indicating that refurbished and remarketed devices had been associated with or contributed to a death, serious injury or malfunction,” says IAMERS’ Upton. Without that pattern, Upton suggests there is no reason to assume third-party service or refurbishment puts patients in any more danger than if they are treated with OEM-serviced devices.

“We view it as a due diligence initiative by the FDA with the potential for increased regulations if the FDA isn’t satisfied with the status quo on all the information it gathers during this due diligence process,” says AAMI’s Logan. “It wants to do the right thing, and doing the right thing means gathering as much data as possible before deciding whether something further is needed.”

Collecting data is something AAMI knows about. In 2012, it hosted a survey from the Joint Commission to find out about the rate of patient injuries or deaths that had occurred due to modifying the preventive maintenance procedures assigned by manufacturers.

Of the 1,526 respondents, according to Kathryn E. Spates, director of federal relations for the Joint Commission’s own docket comment, only 12 reported any adverse outcomes. She goes on to state, “there seems to be very little, if any, evidence of differences in the risks associated with the various maintenance activities performed by the different owners, users, and maintainers.”

That observation can be read in different ways. Either there is no evidence because there is no difference or there is no evidence because the data is insufficient. The Joint Commission does not comment on that ambiguity, but its findings do echo the other research supporting the safety of third-party service.

If more comprehensive data does reveal a higher rate of incidents from third-party devices, IAMERS’ Upton speculates it might be due to OEMs “failing to fulfill disclosure” of assembly, installation, adjustment and testing (AIAT) information – equipment instructions manufacturers are required to provide under federal regulation.

One of the most persistent complaints about service from HTMs is their difficulty in accessing a well-written service manual, according to the AAMI statement.

Fox, on behalf of GE, writes that medical devices in the imaging space – such as X-ray tubes, ultrasound probes and MR surface coils – do not typically have service manuals available, and cites the absence of those manuals as something putting patients at greater risk when those devices are serviced by third parties.

If ‘something further’ is needed
According to research by Markets and Markets, the global market for refurbished medical equipment is forecast to reach $9.37 billion by 2019. Currently, the U.S. medical device service aftermarket is estimated to be worth about $50 billion annually, according to AAMI.

The docket refers to a very broad array of specialties, including endoscopy, which might be the source of the safety concerns the FDA is responding to. Over the last year, infections resulting from insufficiently reprocessed duodenoscopes have been the subject of a number of major media headlines.

“As is often the case with complex issues that involve multiple disciplines, multiple service models, lack of standardization, paucity of reliable data about the industry, uneven lobbying capabilities across the sector, strong opinions, and stories galore, there is a huge risk of unintended consequences from a regulatory answer,” warns AAMI’s Logan.

While the FDA might define “remanufacturing” in such a way that “very significant” repairs fall under a regulatory scheme, Logan believes implementing standards will be the best overall solution to whatever concerns the docket may yield.

Certifications are the answer, says Sean Poellnitz, the director of contracting and resource utilization at Christus Health in Irving, Texas. They will help ensure that those who service equipment know the core principles of maintaining them, he says, and the FDA should create a “checkoff” list that ensures refurbished equipment has the ability to operate like new.

Vanderzee, with Advocate, would like to see more recertification and better competency assessments after initial training, although he says some OEMs already do require recertification on a periodic basis.

GE, in its online comment to the FDA, writes, “We believe the most efficient way to ensure patient safety is through a consistent set of minimum requirements for all parties involved in these activities on complex medical devices.”

The most important stakeholder
So what happens next? According to the FDA’s Kotz, the Administration plans to share a summary of the submitted comments once it finishes reviewing them.

“We cannot comment on what actions we will take until after we finish our review and engage stakeholders further on this topic,” she says. “FDA intends to hold a public meeting later in 2016 to discuss activity definitions, benefits and risks, and appropriate next steps.”

Will manufacturers have to provide more detailed manuals ensuring third parties can adequately service their systems? Will those third parties, as Siemens’ requests in its comment, have to let manufacturers know that devices continue to meet design specifications?

“It’s important to remember that it’s not about where the paycheck or training comes from,” says Sodexo’s Francoeur. “It’s about the individual service providers — their skill sets, capabilities and talents. When someone is motivated by a passion for helping others, and they have the right training and tools to do the job, you’ll see that carry through in the integrity of the work they perform.”

AAMI’s Logan thinks that no matter what, one outcome of all this will be industry wide definitions to the key terms listed in the docket. She hopes the FDA will let those definitions arise through a “consensus-based process” with stakeholders working together.

She also points out that there are limits to what the FDA can do. It does not regulate component parts or hospital practices. It regulates medical device companies and the manufacturing of medical devices, she says.

The third-party industry has certainly grown since the last time the FDA looked into these issues. If it decides to take a greater interest in the work these organizations do, perhaps that is a testament to their significance.

For hospitals, and the patients they serve, having more options is a concept in line with value-based care. If a third party can somehow provide hard evidence of its success record, be it through standards or certifications or anything else, then its value should increase. If it isn’t as safe as the OEM, then that should be known, too.

There won’t be any easy answers here, but as the dialogue started in Docket No. FDA-2016-N-0436 rolls on, the entire range of stakeholders agree that the goal has to be ensuring avoidable errors, like the one caused by that MR technician who knocked out electricity in half of the hospital he was working in, are mitigated and patient safety is improved.

“It is because of patient need that medical imaging equipment exists,” writes MITA’s Hope. “For this reason, the patient is the most important stakeholder.”