Medical Devices Today

CMS Inpatient Payment Proposal Addresses “Charge Compression”

This article is reprinted from "The Gray Sheet" – April 21, 2008

CMS plans to take steps next year to improve the accuracy of its payments to hospitals for high-cost devices, though the agency does not promise as quick of a remedy as sought by manufacturers.

The so-called "charge compression fix" is included in the agency's fiscal year 2009 inpatient prospective payment system ¹proposed rule, which was released April 14.

Charge compression, as described in a March 2007 CMS-commissioned report from research firm RTI International, relates to variations in hospital markup practices for certain products, and most notably affects devices and medical supplies.

Hospitals generally mark up charges for relatively inexpensive supplies at a higher rate than expensive devices. But CMS payment calculations, which are based on hospitals' cost reports, group all the products together to derive an overall payment for a procedure or diagnosis. Based on the math, the costs for services that include expensive products with low markups tend to be underestimated in the payment rates.

Questions Remain Over Usefulness Of The Expanding National ICD Registry

This article is reprinted from "The Gray Sheet" – April 7, 2008

Some cardiologists doubt the value of the national registry for implantable cardioverter defibrillators that was created to satisfy CMS coverage requirements, even as the registry is about to expand.

Brian Olshansky, University of Iowa, is among ICD implanters who question whether the National Cardiovascular Data Registry data will be used in a scientifically valid way.

"The information is going to be used for political purposes by CMS to limit implantation of devices," Olshansky said at the American College of Cardiology's annual meeting in Chicago March 30.

"It's not going to be for the benefit of the patients, and it's not going to be for the benefit of the profession."

OIG Allows Two More Gainsharing Programs; CMS Demos Still Pending

This article is reprinted from "The Gray Sheet" – January 21, 2008 Two more hospital/physician gainsharing programs focused on product standardization got the HHS Office of Inspector General's OK Jan. 14. "This now becomes the tenth opinion that we've secured in this area. It shows there is replication to the model," said Joane Goodroe, president of Goodroe Healthcare Solutions, which designed the projects. Gainsharing arrangements, whereby hospitals share with physicians the cost savings that come from quality and efficiency initiatives, are generally illegal, since physicians may be rewarded for reducing health services, or their referral patterns could be influenced. However, OIG has granted exceptions in certain cases, all designed by Goodroe, stating in the accompanying advisory opinions that it will not impose sanctions because the programs include enough patient protections.

Four Firms Apply For Medicare New-Tech Add-On Payments

This article is reprinted from "The Gray Sheet" – December 3, 2007

“The Gray Sheet” – Comprehensive news and analysis for medical device professionals. Click here for a free, 30-day trial. © FDC Reports 2007 - All Rights Reserved

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.

Renal Stenting Surprise: CMS Proposes To Keep Coverage Status Quo

This article is reprinted from "The Gray Sheet" – November 26, 2007

“The Gray Sheet” – Comprehensive news and analysis for medical device professionals. Click here for a free, 30-day trial. © FDC Reports 2007 - All Rights Reserved

CMS' proposal to maintain its existing renal stenting coverage policy surprises many stakeholders who expected the agency to further restrict coverage because the data on the intervention's effectiveness is relatively weak.

The agency strongly encourages enrollment in randomized clinical trials to resolve "general uncertainty" about whether stenting offers any benefits or risks over other treatment options, but it stops short of making trial enrollment a condition of coverage in the Nov. 20 ¹proposed coverage policy.

For at least the past decade, percutaneous transluminal angioplasty of the renal arteries has been nationally covered as an alternative to surgery in patients who have not responded to drug therapy. Coverage of renal artery stenting is at the discretion of local Medicare contractors.

Device Makers Cite Special Concerns With Comparative Effectiveness

From the October 29, 2007, issue of "The Gray Sheet"

Comparative effectiveness research, where evidence supporting an established medical therapy is stacked up against that of up-and-coming approaches, is a small but growing element of the U.S. government's strategy for assessing health care.

It is likely to become much more significant in the coming years. There is substantial momentum in Congress to establish a new federal center for prioritizing and conducting comparative effectiveness reviews as a component of Medicare reform (¹"The Gray Sheet" Oct. 1, 2007, p. 12). Several presidential candidates have proposed similar measures.

The device industry is viewing these developments with substantial skepticism and is lobbying Capitol Hill accordingly.

Preliminary Recs Would Stop Payments For Drug-Eluting Stents In Britain

From the September 3, 2007, issue of "The Gray Sheet"

A committee meets this week to consider whether to move forward with preliminary recommendations for the Nation Health Service of England and Wales to stop paying for drug-eluting stents.

Public comments on the recommendations were due Aug. 29 in the lead up to a National Institute of Health and Clinical Excellence (NICE) appraisal committee meeting on Sept. 4. This will be the fourth meeting by the committee on this topic in two years, but it is expected to submit its final appraisal to NICE in time for the institute to release final recommendations by January.

The $80-$100 million UK drug-eluting stent market is only a small piece of the $5.5-$6 billion worldwide market, but to the extent that an NHS decision could set a precedent for other European countries to follow, NICE's deliberations may have a larger impact on an already struggling sector.

Self-Certification For Trial Coverage Will Be Easy, Says CMS

From the August 13, 2007, issue of "The Gray Sheet"

CMS is trying to make it simple for clinical trial sponsors and investigators to get reimbursed by Medicare for routine costs.

"If you can't meet these standards, then you ought to be questioning whether you ought to run the trial," Steve Phurrough, director of CMS' Coverage and Analysis Group, said Aug. 7 during an Open Door Forum on the agency's latest clinical research policy proposal.

The proposal, released July 19, is intended to address confusion that arose after CMS first issued a proposed revision of the original 2000 policy in April (see chart: "Key Proposed Definitions").

Radiology Benefits Managers Offer Medicare Cost-Saving Option For Imaging

From the July 2, 2007, issue of "The Gray Sheet"

An insurance company strategy to rein in perceived overuse of imaging services has gained traction in Congress for its potential as a Medicare cost-saver.

The approach: private payers contract with third parties to act as "gatekeepers" for imaging coverage. Radiology benefits managers (RBMs), as they are called, review physicians' imaging study orders, excluding inpatient services, for prior authorization before allowing coverage.

RBMs argue that inappropriate use of high-cost imaging services like computed tomography (CT), magnetic resonance imaging (MRI) and positron emission tomography (PET) happens too frequently and reducing it can increase quality of care and save significant money.

CMS Backs Away From Expanding Carotid Stenting Coverage

From the May 7, 2007, issue of "The Gray Sheet"

CMS has reversed its earlier proposal to significantly expand coverage of carotid stenting, dampening industry's hopes for a more open U.S. carotid stent market in the near term.

The April 30 decision essentially maintains a 2005 policy that covers carotid stenting in patients for whom the "gold standard" endarterectomy surgery is too risky and who have symptomatic blockage >70% in their neck arteries. CMS covers high-risk symptomatic patients with between 50% and 70% blockage and asymptomatic patients with >80% blockage only in FDA-approved studies.

Following a March 2006 request from Guidant to more closely align Medicare coverage with the devices' FDA indications, in February CMS proposed to extend unrestricted carotid stenting coverage to high-risk, asymptomatic patients with blockage >80%. That policy would have doubled the population covered for the procedure, according to industry.