Medicare and Medical Technology Policy

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Medicare and Medical Technology Policy

• Sean Tunis MD, MSc
• Chief Medical Officer, CMS
• February 11, 2005

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Overview

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

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Mortality in the 20th Century
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Now over 15
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Looking Ahead Expected Cost Increases
National Business Group on Health

• Estimated cost of family coverage 9,160 for
  2003
• 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)

• 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.

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Technology and Spending

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

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Is Technological Change in Medicine Worth It?

• 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.
• 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

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MedTAP report Value of Innovation in Health Care

• Looked at health spending and outcomes 1980 to
  2000
• Diabetes, stroke, MI, and one other
• Annual health spending increased by 102 over the
  20 year period
• Health gains of 2.40 to 3.00 for each 1 spent
• Assumes all gains result from spending on health
  care

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Percutaneous Coronary Interventions
CP1027346-1
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Percent of Medicare Decedents Admitted to ICU
During their Final Hospitalization (1995-96)
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HEDIS Quality CompassDiabetic Eye Exam Rate -
Commercial Plans
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Desirable new/improved Medicare benefits

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

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In need of coherent technology policy framework

• Technology will continue to be focus since widely
  felt to increase costs
• 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

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• 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

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Steps to Medicare Reimbursement

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

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

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

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Improvements since 2000

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

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

• 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.

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Brief History of RN

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

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Reasonable and Necessary

• Safe and effective (per FDA, if applicable)
• 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
• Open door call Sept 30

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Role of costs in RN

• Legislative language and history mute
• 1989 NPRM proposed CEA as criterion
• Long practice to ignore costs
• In practice high cost and/or small benefit
  receive greater scrutiny

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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)

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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 19993191618.
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EBM according to Dilbert
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Problems with EB coverage

• Viewed as interference with pt/doc decisions
• 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
• When evidence limited, may still be strong demand
  for technology
• Does not promote promising but unproven high
  value technologies

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Improving Evidence for Decisions core concept

• Links coverage with prospective data collection
• 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
• Retains EBM as conceptual framework for coverage
  and payment

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PET for suspected AD

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

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Kaplan-Meier Survival by Treatment Group

Total Mortality CONV 19.8 ICD 14.2
Hazard Ratio 0.69
Adjusted P0.016
31 reduction in risk of all-cause mortality
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Kaplan-Meier Estimates of the Survival
Probability in MADIT II for Patients with QRS ?
120 ms
p-value0.25
Patients with pacemakers were excluded. CMS
analysis of the MADIT II dataset supplied by
Guidant.
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CMS ICD policy ICD June 03

• ACC/AHA/NASPE gave this IIa recommendation
• single trial, possible selection bias
• need for risk-stratification
• MCAC voted 7-0 (evidence adquate)
• MADIT-II prevalence pool 600k (about half gt65 -
  9B potential spending)
• CMS decided to cover wide-QRS subgroup, revaluate
  after SCD-HeFT results
• Widely viewed as driven by economic factors

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Mortality by Intention-to-treat
Sudden Cardiac Death SCD-HeFT Heart
Failure Trial
HR 97.5 CI P-Value Amiodarone vs.
Placebo 1.06 0.86, 1.30 0.529 ICD Therapy vs.
Placebo 0.77 0.62, 0.96 0.007
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Meta-Analysis Results ICD Therapy for Primary
Prevention of SCD (DCRI, 2004)
QRS gt 120
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Meta-Analysis Results ICD Therapy for Primary
Prevention of SCD (DCRI, 2004)
QRS lt 120ms
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CMS ICD policy Jan 2005

• Medicare proposed decision to cover most pts with
  EFlt35
• SCD-HeFT make eligible pool 1M
• Linked to submission of data to national ICD
  registry
• Basic registry launched, ICD working group
  developing robust registry

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Off-label use of cancer drugs

• Medicare law requires on labelcompendia
• CMS reviewed Camptosar, Eloxatin, Avastin and
  Erbitux
• Mandatory coverage of off-label use in
  NCI-sponsored clinical trials
• Other off-label use remains at discretion of
  contractors
• Intent is to move toward coverage of off-label
  use in non-NCI PCTs

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Other CUP activity

• PET for cancer staging
• bariatric surgery
• Priority setting and methods
• AHRQ priorities for Sec 1013 (comparative
  effectiveness studies)
• IOM Nov 15 workshop on PCTs and registries
• Device evaluation methods papers

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Benefits of approach

• Addresses economic barriers to good trials,
  especially for promising technology
• Payers can promote innovation and access, while
  supporting better evidence
• One strategy to establish clinical research
  agenda oriented to decision makers
• Strong public/professional demand can be
  channeled to improve evidence
• Focus discussion around improving evidence with
  key stakeholders
• product developers, pt advocates, payers,
  clinicians

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Some key questions

• How to evolve from ad hoc to systematic policy
  approach
• Priority setting criteria, participants,
  process
• Roles and governance what organizations oversee
  and implement various functions of the initiative
• Funding
• How much can be accomplished by CPD
• What are other sustainable sources and mechanisms
  of funding
• What is the business case for each potential
  funder?
• Methods When to use registries, practical
  trials, registries, outcomes studies, etc
• Infrastructure what exists, what needs to be
  created, how can this be done most efficiently
• Legal and ethical private payer contractual
  issues, HIPAA, human subjects, conflicts of
  interest

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Next Steps

• ICD registry workgroup expanded
• IOM/AHRQ/CMS discussions
• Planning mtg on Jan 31
• Initial focus on registries to break trail
• Priorities, governance, funding, implementation
• Larger stakeholder mtg 3/1
• Individual mtgs with key stakeholders
• Guidance on coverage plus data
• Open door forum 2/14
• Initial draft guidance by 3/31
• NICE, Ontario exploring similar issues

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• We will have to have more comprehensive and
  timely evidence on the value of new medical
  treatments. With this evidence, we could do a
  better job of helping patients find the right
  treatments for their needs and help health care
  providers make better use of quality measures and
  payment incentives. It would encourage the more
  rapid diffusion of new treatments that really are
  worthwhile. Together these steps will improve
  medical innovation, since it would be clearer to
  product developers that they will be rewarded
  when and only when their new treatments truly add
  value to patient care. We cannot get this
  valuable evidence unless more routine and
  extensive data collection and analysis tools are
  systematically built into our delivery of care.
• Mark McClellan, Sept 2004

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Considering costs in technology policy

• No explicit use of costs or CEA in coverage or
  payment policy
• Awareness of costs and CEA have influenced some
  policies
• LVAD (coverage and payment)
• iFOBT (price linked to CEA)
• Stents (payment rate and speed)
• Initiating NCDs on high cost drugs
• Functional equivalence and equitable adjustments
• Further public dialog needed on technology,
  innovation, costs, quality, access, etc

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Barriers to use of CEA(see AJMC May 2004)

• Locus of decision making
• Integrity of payer coverage process
• Judgments about adequate evidence
• CEA-specific issues
• Complexity / transparency of models
• Concerns about motivations for use
• Application to individuals