We anticipate several important Medicare proposals out sometime in the next several weeks. Here are a few key issues for medtechs to look out for.
- Prior authorization:Over the objections of device companies, last year’s OPPS/ASC rule instituted prior authorization requirements as a prerequisite for reimbursing spinal neurostimulation implants and cervical fusion procedures. Those policies take effect on July 1. Device industry advocates say they have been pressing CMS to reverse the decision, arguing it presents unwarranted access barriers to necessary healthcare. We are watching to see if CMS responds to the pushback or doubles down and identifies additional procedures to undergo prior authorization to limit unnecessary use. While prior authorization requirements are routine in the private payor world, CMS has just recently started adopting the practice for select items and services.
- Site flexibility.We’ll also be looking to see if CMS under the new administration continues policies allowing more complex procedures to move out of inpatient settings—in particular, whether it maintains the 2021 outpatient rule policy setting a path to completely eliminate the “inpatient only list” over a three-year transition period. That will remove administrative restrictions barring certain procedures from being performed in an outpatient setting, and leave it up to the providers. Similarly, CMS loosened the criteria for procedures to qualify for use in freestanding ASCs, and total hip replacements are allowed to be performed in these facilities for the first time. This trend shifting the setting for more procedures is causing device firms to adjust market access and pricing strategies.
- AI tech payments.Several companies with AI-based technologies are looking for some movement in this year’s PFS toward winning national Medicare rates that reflect the true value of the devices, including the AI algorithm elements. iRhythm Technologies Inc., in particular, has been reeling from underpayments by Medicare administrative contractors (MACs) for its wearable continuous ECG monitor and has urged CMS to establish a more robust national rate. HeartFlow Inc. is making a similar pitch for a national PFS rate for its FFRCT Analysissystem for assessing CT algorithms, while angling for an increase on the outpatient side as well. We are watching for policies on these technologies and also, more generally, comments CMS makes about its thinking about setting reimbursement policies for AI technology.
- First dialysis add-on payments?CMS’ dialysis technology add-on payment, called the “transitional add-on payment adjustment for new and innovative equipment and supplies” (TPNIES), was established in 2020, but the agency has yet to award any bonus payments under the program for renal dialysis devices. Last year, TPNIES applications from Baxter International Inc. and Outset Medical Inc. were rejected by CMS based on clinical evidence and “newness” considerations.
Excerpted from “Pathways Picks June 30: Upcoming Medicare Rules, EU’s HTA Plan, VALID Reboot, and More,” Market Pathways, June 30, 2021.
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