Senate Bill 1080, passed during the 77th Texas Legislature, 2001, contained provisions which effectively amended certain sections of the Health and Safety Code, Chapters 431 and 432, as they relate to the salvaging of foods, drugs, cosmetics and devices. The amendments were intended to harmonize the chapters to provide for improved clarification of the requirements affecting the regulation of salvaging activities. As a result, The Texas Board of Health approved 25 new Texas Administrative Code, Sections 229.601 - 229.614, Rules for Regulation of Device Salvage Establishments and Brokers, which became effective on December 17, 2002. The following FAQs were developed to assist interested parties in understanding and complying with the new rules.

What is a distressed device?

A distressed device is a device that has been rendered unsafe or unsuitable for its intended purpose. A distressed device includes a device that has lost its labeling or is otherwise unidentified, has been subjected to prolonged or improper storage, or has been subjected to abnormal environmental conditions or conditions that cause its strength, purity, or quality to fall below that which it is represented to possess. Distressed devices are referred to as “adulterated” or “misbranded” within the meaning of the Texas Food, Drug, and Cosmetic Act (Health and Safety Code, Chapter 431).

Are previously used devices that are not distressed devices required to meet manufacturer’s specifications?

Previously used devices that are not distressed devices should function normally as intended and within acceptable limits as determined by the original manufacturer’s specifications.

Can hospitals purchase or sell previously used devices without licensing as device salvage establishments and brokers with TDH?

Previously used devices that are not distressed and have been determined to function properly can be purchased or sold by hospitals and others similarly to any purchase or sale of a new device.

Can usable parts or components from distressed devices be sold to someone other than a licensed salvager?

Usable parts or components from a distressed device can be sold to someone other than a licensed salvager if those parts or components are not distressed and are the subject of an acceptable determination of functionality as outlined in Section 229.604 (d-e) of the new Rules for Regulation of Device Salvage Establishments and Brokers.

What should an acceptable determination of functionality include?

Acceptable determinations of functionality are discussed in Section 229.604 (d-e) of the new Rules for Regulation of Device Salvage Establishments and Brokers. Acceptable determinations of functionality include those documented through certification statements, reports of inspection, installation, or calibration, or product conformance affidavits. Any acceptable determination of functionality should include a reference to the device that is the subject of the determination and be completed, signed and dated no more than 14 days prior to the sale or distribution of the device by a qualified representative of the seller, a qualified representative of a hospital licensed under Health and Safety Code, Chapter 241, a person licensed as a device salvager, or a state or federal regulatory agency having knowledge or jurisdiction over the device subject to the sale or distribution.

Can someone other than a certified biomedical technician sign acceptable determinations of functionality?

Those qualified representatives of the seller or a hospital licensed under Health and Safety Code, Chapter 241 can sign acceptable determinations of functionality. In addition, persons licensed as device salvagers or a state or federal regulatory agency having knowledge or jurisdiction over the device can sign acceptable determinations of functionality. “Qualified representatives” are generally those individuals acting on behalf of the seller or hospital who are knowledgeable of and responsible for the evaluation, maintenance, servicing, and/or repair of the subject device.

What should a hospital be aware of if it intends to sell or dispose of a distressed device?

If a hospital intends to sell a distressed device with the understanding that the device will eventually be reintroduced into commerce for its intended purpose, then the hospital should assure that the buyer is a person licensed as a device salvage establishment or broker with TDH. If the hospital intends to sell or dispose of a distressed device for the purpose of destruction, then the hospital should document the conditions of the sale or disposition, including the identity of the device involved.

What should a hospital be aware of if it intends to purchase a distressed device?

If a hospital intends to purchase a distressed device, presumably for the purpose of reconditioning and reusing the device, then the hospital should license with TDH as a salvage establishment and be in compliance with the Rules for Regulation of Salvage Establishments and Brokers at the time of purchase.

Should a hospital be licensed with TDH as a device salvager if it intends to purchase distressed devices at auction? If so, does this also apply to previously used devices that are not distressed?

If a hospital intends to purchase distressed devices at auction, then it should be licensed as a device establishment or broker with TDH. If a hospital intends to purchase previously used devices that are not distressed, then the hospital does not need to license as a device salvage establishment or broker with TDH, regardless of whether the sale is conducted at auction or by some other means.

What should a device salvager be aware of if it intends to sell or dispose of a distressed device for a use other than its intended purpose?

If a device salvage establishment or broker intends to sell a distressed device (excluding a prescription device) for a use other than its intended purpose (e.g. research, teaching, or analysis) and not for a medical purpose, then the salvager should document these conditions of sale, including any relevant terms of the sale, the identity of the device involved, signatures of both the seller and the purchaser, and the address and telephone numbers of both the seller and purchaser. Requirements pertaining to the sale or distribution of unreconditioned devices can be found in Section 229.611(o) of the new Rules for Regulation of Device Salvage Establishments and Brokers (Rules). If a device salvage establishment or broker sells or distributes a distressed device for the purposes of waste reclamation and/or destruction, then the salvager should document the date and disposition of the device in the appropriate device inventory record, as required in Section 229.612(a) of the Rules.

For more information about TORCH, contact:
Texas Organization of Rural & Community Hospitals
P.O. Box 14547
Austin, Texas 78761
512-873-0045
torch@torchnet.org