Four Firms Apply For Medicare New-Tech Add-On Payments
This article is reprinted from "The Gray Sheet" – December 3, 2007
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Four manufacturers are seeking new-technology payments for their devices in the fiscal year 2009 inpatient payment rule, despite industry's frustration with CMS' process for granting the add-on payments.
FzioMed (Oxiplex intra-operative gel), TherOx (Downstream SuperSaturatedOxygen system), Emphasys Medical (Zephyr endobronchial valve) and SynCardia Systems (CardioWest temporary total artificial heart) met the Nov. 19 application deadline for special payments for new services or technologies under the Acute Care Hospital Inpatient Prospective Payment System.
The four applications are the most CMS has received in three years. The number of applicants for the payments had declined steadily from 10 for FY 2005, to eight for 2006, three for 2007 and one for 2008.
To qualify for a new-technology add-on payment, the company must show that the new device represents a "substantial clinical improvement" over existing therapies for the indicated condition or disease. Also, the sponsor must show that the diagnosis-group payment rate otherwise applicable to the technology is inadequate and that hospital data reflecting the true cost of the new technology is not yet available.
Industry representatives argue that the new technology add-on payment system is underutilized because manufacturers are confused by the application process, especially CMS' standards for determining if a device provides "substantial clinical improvement" over existing alternatives.
The applications will be discussed at a new-technology town hall meeting in early 2008. CMS' proposed decision on the add-on payments will be in the draft inpatient rule, to be released in the spring and finalized in the FY 2009 rule due out in August.
The FY 2008 inpatient rule included no new-technology add-on payments. Last year, Boston Scientific's Wingspan intracranial stent was the only item considered for an add-on payment and CMS rejected it, claiming the company had not demonstrated that the device provides substantial clinical improvement over existing alternatives.
The 2008 rule also discontinued add-on payments for three devices (1"The Gray Sheet" April 23, 2007, p. 13).
FzioMed's Oxiplex Gel For Spine Procedures
FzioMed's Oxiplex absorbable viscoelastic gel made of carboxymethylcellulose is used in spine procedures such as posterior discectomy, laminectomy and laminotomy. It is intended to reduce pain and neurological symptoms post-surgery by reducing the exposure of the nerve root and neural tissue to fibrin, wound exudates and neurotoxins.
Oxiplex is not yet FDA-approved, but the company expects approval by April 2008 based on the results of a 352-patient U.S. study that showed the gel reduces back and leg pain following spine surgery.
TherOx's Downstream SuperSaturatedOxygen Therapy
TherOx's Downstream system for treatment of myocardial infarction super xygenates the patient's own blood and injects it directly into the infarction site to reduce infarct size.
Irvine, Calif.-based TherOx expects FDA to approve the system in the second quarter of 2008 based on results of the 301-patient AMIHOT II trial, which showed that the Downstream SuperSaturatedOxygen therapy reduced infarct size by an average of 6.5%.
Zephyr Endobronchial Valve
The Zephyr valve is intended to reduce volume in diseased portions of the lung and improve function in the healthy parts without the risks of more invasive surgery. FDA granted expedited review for the Zephyr in October.
SynCardia CardioWest Total Artificial Heart
FDA approved CardioWest in October 2004 as a bridge to transplant for patients with biventricular failure who are not good candidates for ventricular assist devices. The age of the device could be an impediment to SynCardia's application, since CMS has sometimes rejected or discontinued add-on payments for devices it no longer considers new.
According to SynCardia, the cost to hospitals for the device plus the driver is $106,000, including up to 120 days with the console driver. Beyond 120 days, the driver costs about $4,950 a month.
SynCardia estimates there will be about 180 CardioWest implants in fiscal 2009.
- Reed Miller
