Medicare and Medical Technology Policy Sean Tunis MD, MSc Chief Medical Officer, CMS February 11,...

Medicare and Medical Technology Policy Sean Tunis MD, MSc Chief Medical Officer, CMS February 11, 2005

Overview Improved health, technology, spending Improved health, technology, spending Is technological change worth it? Is technological change worth it? Moving toward transparent, rational technology policy Moving toward transparent, rational technology policy Medicare coverage Medicare coverage Linking coverage to clinical research Linking coverage to clinical research Economic factors in technology policy Economic factors in technology policy

Mortality in the 20 th Century Better treatment of cardiovascular disease, low birth weight infants Reduced infectious disease mortality (clean water, sewers, antibiotics, better nutrition)

U.S. Iceland Canada Australi a Netherlands Switzerland Germany France U.K. Japan Sweden HEALTH SPENDING AND AGING: SELECTED OECD COUNTRIES 2000 SOURCE: OECD Data, 2002 Now over 15%

Looking Ahead: Expected Cost Increases Estimated cost of family coverage: $9,160 for 2003 Estimated cost of family coverage: $9,160 for 2003 Figure will rise to $14,545 in 2006 Figure will rise to $14,545 in 2006 Number of uninsured Americans projected to reach 51.2 to 53.7 mil in 2006, from 41.2 in 2001 (US Census Bureau) Number of uninsured Americans projected to reach 51.2 to 53.7 mil in 2006, from 41.2 in 2001 (US Census Bureau) Projected. Source: Kaiser/HRET Employer Health Benefits, 2001-2003; Towers Perrin 2003 Health Care Cost Survey, Report of Key Findings, 2003; Mercer US Health Care Survey Results, Mercer HR Consulting, December 9 2002; Health Care Cost Increases Expected to Continue Double-Digit Pace in 2003, Hewitt Associates, Oct. 14, 2002. National Business Group on Health

Technology and Spending David Cutler (1995) estimated 50% David Cutler (1995) estimated 50% 81% of economists identify technology as primary cost driver (Fuchs 1996) 81% of economists identify technology as primary cost driver (Fuchs 1996) Project Hope (March 2001) estimates 25-33% of growth is technology Project Hope (March 2001) estimates 25-33% of growth is technology BCBSA report (Oct 2002) estimates 18% of growth is technology BCBSA report (Oct 2002) estimates 18% of growth is technology

Health Affairs, Sept/Oct 2001 Is Technological Change in Medicine Worth It? Cutler and McClellan studied costs and benefits of technology for 5 conditions Cutler and McClellan studied costs and benefits of technology for 5 conditions Technological change is bad only if the cost increases are greater than the benefits. Technological change is bad only if the cost increases are greater than the benefits. Heart attack and low birth weight benefits equal all health spending 1950 1990 Heart attack and low birth weight benefits equal all health spending 1950 1990 Implication policies to reduce spending, eliminate waste must consider impact on innovation Implication policies to reduce spending, eliminate waste must consider impact on innovation

MedTAP Jan 2003 MedTAP report: Value of Innovation in Health Care Looked at health spending and outcomes 1980 to 2000 Looked at health spending and outcomes 1980 to 2000 Diabetes, stroke, MI, and one other Diabetes, stroke, MI, and one other Annual health spending increased by 102% over the 20 year period Annual health spending increased by 102% over the 20 year period Health gains of $2.40 to $3.00 for each $1 spent Health gains of $2.40 to $3.00 for each $1 spent Assumes all gains result from spending on health care Assumes all gains result from spending on health care

CP1027346-1 Percutaneous Coronary Interventions

Percent of Medicare Decedents Admitted to ICU During their Final Hospitalization (1995-96)

HEDIS Quality Compass Diabetic Eye Exam Rate - Commercial Plans

Desirable new/improved Medicare benefits Fast, appropriate payment for innovation Fast, appropriate payment for innovation Better screening / prevention Better screening / prevention Improve safety and quality of care Improve safety and quality of care Avoid cuts in provider payments Avoid cuts in provider payments Invest in health IT infrastructure Invest in health IT infrastructure telemedicine, remote monitoring, e-visits telemedicine, remote monitoring, e-visits

In need of coherent technology policy framework Technology will continue to be focus since widely felt to increase costs Technology will continue to be focus since widely felt to increase costs Policy framework must: Policy framework must: Ensure quality and safety of care Obtain good value for health care dollars spent Provide incentives to use technology appropritely and efficiently Support informed decision making Support robust environment for innovation

Today more than ever, we must get more for what we spend on health care. Weve got to generate valuable innovation in medical products to reduce errors, complications, and unnecessary care while improving quality. All thats necessary to understand how urgent this is to consider the alternative: crude forms of cost cutting, in ways that reduce the incentives for medical progress while doing nothing to make our fragmented system work better. We owe it to the patients we serve to be more clinically sophisticated than that. Mark McClellan, September 2004

Steps to Medicare Reimbursement Regulatory approval (if applicable) Regulatory approval (if applicable) Benefit determination Benefit determination Coverage Coverage Reasonable and Necessary local vs national Coding Coding Payment Payment separately billable things bundled payment systems

While I can explain the meaning of life, I dont dare try to explain Medicare reimbursement.

Major Coverage Issues ICD for primary prevention of SCD ICD for primary prevention of SCD LVAD LVAD Carotid stents Carotid stents FDG-PET and other molecular imaging FDG-PET and other molecular imaging Zevalin, Bexxar, Eloxatin, Erbitux, Avastin, and anti-cancer pipeline Zevalin, Bexxar, Eloxatin, Erbitux, Avastin, and anti-cancer pipeline Bariatric surgery Bariatric surgery Lifestyle interventions Lifestyle interventions Genetic testing Genetic testing

Improvements since 2000 Coverage process described Coverage process described With specified timeframes for review Explicit adoption of rules of evidence Explicit adoption of rules of evidence Increased technical sophistication Increased transparency Increased transparency Public advisory committee (MCAC) Decision memos Highly interactive with stakeholders MMA changes: timeframes, proposed decisions, guidance docs. MMA changes: timeframes, proposed decisions, guidance docs.

MEDICARE NATIONAL COVERAGE PROCESS Staff Review Draft Decision Memorandum Posted National Coverage Request Medicare Coverage Advisory Committee External Technology Assessment 6 months Reconsideration Staff Review Public Comments Final Decision Memorandum and Implementation Instructions 30 days60 days 9 months Preliminary Meeting Benefit Category Department Appeals Board

Statutory Basis for Coverage Sect. 1862 (a)(1)(A), Title 18, SSA Sect. 1862 (a)(1)(A), Title 18, SSA ...no payment may be made... For expenses incurred for items or services.. [which] are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member. ...no payment may be made... For expenses incurred for items or services.. [which] are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member.

Brief History of R&N 1977 Intermediary letters defined R&N 1977 Intermediary letters defined R&N Safe, effective, appropriate, not experimental 1989: NPRM issued (legal settlement) 1989: NPRM issued (legal settlement) Safe, effective, appropriate, cost-effective 1990s: no consensus, no reg 1990s: no consensus, no reg May 2000: Notice of Intent May 2000: Notice of Intent 1989 NPRM withdrawn Demonstrated medical benefit, added value Strong stakeholder opposition Dec 2003: guidance documents (MMA) Dec 2003: guidance documents (MMA)

Reasonable and Necessary Safe and effective (per FDA, if applicable) Safe and effective (per FDA, if applicable) Adequate evidence to conclude that the item or service improves net health outcomes Adequate evidence to conclude that the item or service improves net health outcomes emphasis of outcomes experienced by patients generalizable to the Medicare population as good or better than current covered alternatives Guidance documents will provide greater detail on producing adequate evidence Guidance documents will provide greater detail on producing adequate evidence Open door call Sept 30

Role of costs in R&N Legislative language and history mute Legislative language and history mute 1989 NPRM proposed CEA as criterion 1989 NPRM proposed CEA as criterion Long practice to ignore costs Long practice to ignore costs In practice high cost and/or small benefit receive greater scrutiny In practice high cost and/or small benefit receive greater scrutiny

EBM: Definition ...Evidence-based medicine de-emphasizes intuition, unsystematic clinical experience, and patho-physiologic rationale as sufficient grounds for clinical decision making and stresses the examination of evidence from clinical research. Evidence-Based Medicine Working Group, JAMA (1992)

Alternatives to EBM Eminence-based medicine Confidence-based medicine Eloquence-based medicine Vehemence-based medicine Providence-based medicine Diffidence-based medicine Nervousness-based medicine Isaacs D, Fitzgerald D. Br Med J 1999;319:1618.

EBM according to Dilbert

Problems with EB coverage Viewed as interference with pt/doc decisions Viewed as interference with pt/doc decisions Payers appear to impede innovation in order to control spending / protect profits Payers appear to impede innovation in order to control spending / protect profits Insensitive to real barriers to doing adequate trials, and different challenges by technology Insensitive to real barriers to doing adequate trials, and different challenges by technology When evidence limited, may still be strong demand for technology When evidence limited, may still be strong demand for technology Does not promote promising but unproven high value technologies Does not promote promising but unproven high value technologies

Improving Evidence for Decisions: core concept Links coverage with prospective data collection Links coverage with prospective data collection Build on concept of medical necessity Build on concept of medical necessity Adequate evidence of benefit Adequate evidence of potential value and provided in appropriately designed study i.e. promising, important, potentially high value, and under careful investigation i.e. promising, important, potentially high value, and under careful investigation Retains EBM as conceptual framework for coverage and payment Retains EBM as conceptual framework for coverage and payment

PET for suspected AD Evidence supports clinical utility in limited context, but not broadly Evidence supports clinical utility in limited context, but not broadly Non-coverage difficult to sustain Non-coverage difficult to sustain covers for sx progressive for 6 months; diagnostic uncertainty (AD vs FTD) covers for sx progressive for 6 months; diagnostic uncertainty (AD vs FTD) Broader coverage for use in a large, community-based, practical clinical trial Broader coverage for use in a large, community-based, practical clinical trial established precedent for R&N in trials CMS, AHRQ, Alz Ass, industry, academics have developed protocols CMS, AHRQ, Alz Ass, industry, academics have developed protocols

Hazard Ratio = 0.69 Kaplan-Meier Survival by Treatment Group Adjusted P=0.016 31% reduction in risk of all-cause mortality Total Mortality CONV: 19.8% ICD: 14.2%

Patients with pacemakers were excluded. CMS analysis of the MADIT II dataset supplied by Guidant. Kaplan-Meier Estimates of the Survival Probability in MADIT II for Patients with QRS 120 ms p-value=0.25

CMS ICD policy ICD June 03 ACC/AHA/NASPE gave this IIa recommendation ACC/AHA/NASPE gave this IIa recommendation single trial, possible selection bias need for risk-stratification MCAC voted 7-0 (evidence adquate) MCAC voted 7-0 (evidence adquate) MADIT-II prevalence pool 600k (about half >65 - $9B potential spending) MADIT-II prevalence pool 600k (about half >65 - $9B potential spending) CMS decided to cover wide-QRS subgroup, revaluate after SCD-HeFT results CMS decided to cover wide-QRS subgroup, revaluate after SCD-HeFT results Widely viewed as driven by economic factors

HR97.5% CIP-Value Amiodarone vs. Placebo1.060.86, 1.300.529 ICD Therapy vs. Placebo0.770.62, 0.960.007 Sudden Cardiac Death SCD-HeFT Heart Failure Trial Mortality by Intention-to- treat

Meta-Analysis Results: ICD Therapy for Primary Prevention of SCD (DCRI, 2004) QRS >= 120

Meta-Analysis Results: ICD Therapy for Primary Prevention of SCD (DCRI, 2004) QRS < 120ms

CMS ICD policy Jan 2005 Medicare proposed decision to cover most pts with EF

Medicare and Medical Technology Policy Sean Tunis MD, MSc Chief Medical Officer, CMS February 11,...

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