Sens. Herb Kohl (D-Wis.) and Mike DeWine (R-Ohio) introduced much-anticipated legislation aimed at more strictly controlling the business practices of hospital group purchasing organizations. The Medical Device Competition Act of 2004 would have HHS oversee the GPO industry to prevent groups from engaging in anticompetitive or unethical practices. The bill would direct HHS to write rules forbidding such behavior; bar GPOs from receiving vendor fees without HHS certification of their compliance with the rules; and limit vendor fees to 3% the price of goods and services sold. "Our bill will ensure that GPOs act in the best interests of patients and hospitals," Kohl said in a news release.
Novation, the nation's largest GPO, said the bill threatens to raise healthcare costs for consumers, insurers and government. "Unfortunately, this bill puts the interests of a handful of private, and in some cases, publicly traded medical device companies and their stockholders ahead of the interests of America's not-for-profit hospitals and the patients they serve," Novation said. The Health Industry Group Purchasing Association has been trying to preserve GPOs' relative regulatory freedom in talks with the Senate Judiciary Committee's antitrust subcommittee, which began investigating GPOs more than two years ago after complaints by some small-device manufacturers. "We look forward to continuing our discussion with the subcommittee on non-legislative solutions," HIGPA said. -- by Cinda Becker