Reasons Against Extending Medical Device Manufacturing Regulations to O&P Facilities

• UNPRECEDENTED LEVEL OF STATE REGULATION:  Orthotic and Prosthetic (O&P) facilities are exempt from the FDA´s medical device manufacturing guidelines at the FEDERAL level.  Texas would be the ONLY state to date to impose this regulation at the state level.  It is important to note that the Department of State Health Services (DSHS) adopted this position with no formal rulemaking or advance notice to O&P providers.  The laws regulating these services have not changed since 1989.  However, here some 19 years after the enactment of the law (Chp. 431) DSHS is attempting to impose these laws on O&P facilities.

• OVER REGULATION:  O & P facilities in Texas are regulated and licensed by the DSHS Board of Orthotics and Prosthetics and subject to its fees.  O&P facilities are regulated and licensed under Chapter 605 of the Texas Occupations Code.  Therefore, O&P facilities should NOT be subject to double regulation/fees by imposing medical device manufacturing regulations (Chapter 431 of the Texas Health and Safety code) to them. 

• ENDANGERS BUSINESS VIABILITY:  Imposing new regulations, fees, and taxes on orthotic and prosthetic facilities will endanger the ability of many small and mid-size businesses to remain economically viable.  Most of the patient fees charged by O&P providers are regulated and therefore increased costs can’t be easily recovered and must be absorbed by the providers.  In today’s uncertain economy the State of Texas should not be contemplating imposing additional taxes, fees, and regulations on an industry that employs thousands of people and provides affordable and safe care for patients.  Imposing these additional burdens will lead to closure of some O&P facilities and ultimately to job losses.

• ADMINISTRATIVE BURDEN:  The administrative burdens created to achieve compliance with the medical device manufacturer’s statute (Chp. 431) will be significant and in some cases shift the primary focus of an O&P practice to paperwork- rather than patient care. O&P FACILITIES DO NOT PRODUCE OR CREATE THOUSANDS OF ASSEMBLY LINE PRODUCTS and/or DEVICES!!!  Therefore, they should not be subject to the same regulations as those manufacturers.

• DOUBLE TAXATION:  The medical device license and fees in Texas are based on gross annual sales- rather than the sales of specific items that are regulated by the FDA- which essentially creates an additional INCOME TAX on O&P facilities payable to the State of Texas.  It is important to note that the State of Texas is not currently collecting revenue from O&P providers through the Chp. 431 manufacturing provisions, so there should be no resulting loss of revenue.

• DECREASED ACCESS TO CARE:  Compliance with Medical Device Manufacturers statute will ultimately LIMIT PATIENT ACCESS TO CARE in the State of Texas.  As small business owner’s confronted with the burdens of increased fees, effective double taxation, and the rigorous administrative requirements compliance will be forced to close their practices.

• TEXAS LEGISLATURE SHOULD CLARIFY THAT O&P FACILITIES ARE EXEMPT:  The Legislature should prevent the DSHS from imposing new regulations on O&P facilities, some 19 years after their enactment, by passing a statutory exemption for O&P facilities licensed and regulated by Chp. 605 of the Occupations Code.  The Legislature didn’t create this problem (DSHS did) but they can certainly prevent it.