Industry Roundtable: In Search of an Earlier Payday
For medical technology companies, reimbursement is the issue of the day. Unfortunately, say the experts, it's an issue that's not likely to go away soon.
Moderated by Steve Halasey
| To learn more about the industry experts involved in this roundtable, click on the names below Robin Bostic, Smith & Nephew Inc. Kim Norton, Vertis Neuroscience Randel Richner, Boston Scientific Jo Ellen F. Slurzberg, Cypress Bioscience Inc. |
Not surprisingly, the Lewin Report is highly critical of the Health Care Financing Administration (HCFA, Baltimore). In some detail, the report builds the industry case against HCFA's operation of the Medicare reimbursement processes, which it says are "complicated and time-consuming, impeding patient access and discouraging innovation of breakthrough technologies."
Just as predictably, HCFA disagreed. In response, HCFA administrator Nancy-Ann Min DeParle wrote, "We believe that we have been successful in assuring that innovations in healthcare are readily available for Medicare beneficiaries. As you can imagine, then, we strongly disagree with some of the conclusions presented in your paper and the assumptions on which they are based."
To find out more about this reimbursement controversy, MX recently conducted a telephone roundtable involving four industry experts in the field (HCFA representatives declined the invitation to participate). In this discussion, the panelists reveal that reimbursement-related issues affect a wide range of functions not mentioned in the Lewin Report, including staffing, scheduling, budgeting, and investment funding.
MX: AdvaMed's Lewin Report describes a reimbursement system for medical products that includes a lot of built-in delays. Do the findings of that report reflect reality as you see it?
Richner: In my experience, the Lewin Report is very accurate. New medical technologies must overcome tremendous obstacles to get through the convoluted Medicare reimbursement system in the United States. And getting a reimbursement decision from a local carrier can be just as cumbersome as the national process. Either way, companies can find that they're constantly falling into traps along the way, first to get a current procedure terminology (CPT) code, then to overcome all of the obstacles to coverage, and finally to negotiate some reasonable rate of payment.
Delays are very common. In my experience on the Medicare Coverage Advisory Committee (MCAC; Washington, DC), there have been technologies that have fallen into a morass for up to 7 years. And there's no recourse because you can't appeal through the courts; everything has to be done through the bureaucracy at HCFA. Manufacturers end up going back and forth with HCFA, and it's not at all a clear process.
Norton: It's hard to generalize what happens to companies in this area, but it is certainly commonplace for the reimbursement process to take anywhere from 2 to 5 years—and there are examples of it taking longer.
The length of time required is largely dependent on whether the technology requires a new CPT code, whether it receives Medicare coverage through a national or a local process, and whether the technology faces clinical or economic barriers to coverage and payment. And all of these can be complicated by lengthy technology assessment activities or by how long it takes payers to recognize a new code, to determine coverage policies, and to set reimbursement rates. Most of these variables affect both public and private payers.
Slurzberg: My experience suggests that novel products may suffer the most because they tend not to fit very neatly into currently coded coverage categories. In the local process, small companies that are developing niche products for a very specialized patient population can suffer because they don't fit into existing categories and the local contractors don't have the expertise or staff to review them appropriately. The national process can also be daunting for a small company.
It's certainly inappropriate for the process to take as long as it does, but part of the problem is that many companies fail to incorporate the appropriate timeline into their planning. Sometimes a company's lack of planning creates a situation where the company is trying to quickly manage the coverage, coding, and reimbursement processes after the product has already hit the market. At that point, it's often hard for a company to launch and integrate its product appropriately into the marketplace.
Are there areas where the need to assess a new technology is more complicated or more readily leads to such delays at HCFA?
Norton: The most troublesome areas are probably those where there's little clinical consensus, or where there's little clinical consensus around the use of the new product. For instance, in the area of pain management, where Vertis Neuroscience (Seattle) is intending to launch products, there are numerous paths that patients can follow and there's not a lot of clinical consensus about how to treat chronic pain.
When a company enters a field like that, where there are already differing opinions and numerous treatments, it's very difficult to plan for a technology assessment process. The company never knows what kind of gold standards its product will be compared to, and this can make it very difficult to plan the clinical trials on which the technology assessment will be based.
Richner: New technology assessments aren't only the realm of the government. Companies are also confronted with the differing standards established by private payers, hospitals, and managed-care plans. Depending upon the payer or customer, there can be a plethora of different perspectives, barriers to entry, and criteria to which manufacturers must respond.
Slurzberg: A positive technology assessment can be a windfall for a company, but a negative assessment can have a tremendously harmful impact. If a company is launching a product to address an unmet medical need, its efforts can really be frustrated if a technology assessment is performed prematurely—before the product is well integrated into the marketplace—or is done in an area where there isn't a lot of data yet. That's often the case for products or clinical fields that are not well understood.
This can become a Catch-22 situation. Without a technology assessment, private payers are sometimes hesitant to pay, or they want to wait and see what the government's going to do. So the company is struggling to integrate its products so there's enough data to be assessed, but no one will approve the product for coverage until there's a positive assessment.
In addition to conducting clinical trials of their products, manufacturers are conducting more and more outcomes research, including cost-effectiveness studies. Do such early studies help to shorten the technology assessment process?
Bostic: Exogen (Piscataway, NJ) collected about 6 years' worth of outcomes data, and we felt this information was going to make a big difference because outcomes data was the buzzword for coverage. First you complete your clinical trials, and then a clinical database allows you to follow up on patients' outcomes. We even coupled that with a cost-effectiveness analysis, but we found that medical directors felt it was still just anecdotal data. We even had the patient registry database audited by Arthur Andersen and published, but there was still a demand for additional prospective, randomized, placebo-controlled studies. So even though they spoke a lot about the need to have outcomes data, we didn't find that to be a big point with payers.
Norton: I concur with that, and I would also say that for small device companies the burden of doing that kind of research is incredibly high. If a small device company is expected to track long-term outcomes data for 2 or 3 years until a payer can conduct a technology assessment or make a coverage decision, then that company has to stay in business for that long without an explicit coverage or payment policy. In many cases, that's unrealistic. Often, the best that such companies can achieve is some kind of outcomes modeling based on actual or expected data from clinical trials.
It's always valuable to start that process as early as possible. But if a technology assessment is conducted too early, the company may have efficacy data from a clinical trial, but no real-world effectiveness data. And then the company is in that Catch-22 situation, trapped between the need to have data as early as possible and the impossibility of generating the types of data that payers require.
Slurzberg: Companies have to be responsible for incorporating outcomes research into their planning during the early stages of product development. But it's true that small companies can find this quite burdensome. Many small companies don't have the expertise to perform outcomes research in-house, and hiring out the performance of that research can be very costly.
Ultimately, these burdens also have an impact on patients. They make the cost of going to market so great that they can actually dissuade small companies from developing niche products for patients with unmet medical needs. Unless the company can partner with another firm or get an investment that covers outcomes planning and prospective outcomes trials, its products may never get to market. And large companies don't necessarily fill the gap, because they may evaluate the market and determine that there isn't enough return on investment to make it worth developing a niche product for a small patient population.
At the end of the day, we probably all agree that outcomes data is critical, as is the private-sector emphasis on cost-effectiveness data, so that products can be placed appropriately. But, unfortunately, with the way the reimbursement process works now, none of the required steps occurs concurrently. And because every step has to be performed in sequence, it can easily take 10 years for a company to get its product on the market. Patients are the ones who suffer most from all this, because they don't benefit from the innovative technologies that might help them when there is no alternative treatment.
Richner: Payers can use outcomes research as a barrier to entry. The person who's doing the assessment can define what is "effective" and what is a "positive health outcome" associated with the technology. Changing definitions can raise the bar even as the company is moving along on the continuum of its research—and that's a real issue.
The criteria now being developed by the coverage group at HCFA use a pristine academic approach to technology assessment. That approach will raise the bar for all manufacturers by setting high expectations for the kinds of information HCFA will require when the technology is commercialized. Such high expectations create a huge problem. Technology evolves over time; outcomes improve over time; and data need to be collected over time. But none of these activities are possible if the company can't get its technology covered out of the chute.
Bostic: And what's frustrating is that you're told you have to have outcomes data and you have to have cost analyses—and when you finally provide that information it becomes like a barrier to entry. If you don't have outcomes data and you don't have cost-effectiveness data you really don't have anything, but then you give that to them and they say the studies weren't designed properly.
Norton: Or it's not enough.
Bostic: Then what is enough? To be honest with you, I think we're learning that outcomes data cannot replace prospective studies. What payers are really saying when they talk about outcomes data is that they want a published retrospective study. But it's becoming so cost prohibitive to launch a new product, and it takes so long to do these things, that products are almost obsolete by the time they get to market.
Learning from FDA?
Before enactment of the FDA Modernization Act of 1997 (FDAMA), industry often claimed that delays in the product approval process were having a chilling effect on innovation—the same effect that you've ascribed to HCFA's processes. How could HCFA best learn from FDA's experience in this area?
Slurzberg: In terms of the process of getting a product approved, one of the important differences between FDA and HCFA is that FDA uses expert panels comprised of leaders in the field to review the technologies and make a recommendation. HCFA doesn't have that level of expertise, so when the HCFA coverage group reviews a product, the manufacturer can end up working with someone who does not have a degree or a background in medicine at all.
That's a little frightening. Although HCFA's people know how to review a published clinical trial, they may not really understand the nature of the technology, the patient population it's being studied in, or how it compares with other treatments for that patient population. That lack of understanding can create a real problem for reaching consensus about how a company's products fit into the scheme of coverage.
Even so, adopting FDA processes would be rather cumbersome for HCFA.
Richner: FDA's process is scientifically based, with black-and-white rules for getting a technology approved. But in the area of coverage, there is a whole array of methodologies associated with technology assessment, and they all rely on rather vague and indeterminate phrases such as "reasonable and necessary," "improved health outcome," and so on. There is no standard methodology, or standard interpretation, or standard agreement about what is the acceptable level of evidence necessary for a technology to be covered.
Everything about the world of coverage is constantly changing and evolving, starting with the pharmaceutical world and its approaches to pharmacoeconomic research. So the ground rules are ambiguous, and on top of that there is a great deal left to interpretation. Moreover, the ground rules can change, and different payers conduct technology assessments differently.
I don't think you could ever apply what FDA has done to this field. Instead, we just have to keep the debate lively, make sure that everyone understands that the issues are extremely complex, and hope that HCFA never finalizes standards for coverage that would eliminate the flexibility that manufacturers need.
I'm very concerned that HCFA is on a course to standardize coverage policies in a way that would make it impossible for manufacturers to meet the agency's interpretation of those standards. The practice of evidence-based medicine that has taken hold in Australia, Canada, and the UK is a perfect example of how such policies can raise the bar for manufacturers. And once again, those policies are often based on the interpretations of the academics or researchers who apply them.
Slurzberg: It's inappropriate to compare FDA assessments of safety and efficacy, which yield yes or no answers, to payer assessments of effectiveness, which inherently include a lot more gray area. But even when payers say they are looking at cost-effectiveness, very often they are really looking at cost substitution.
In cost substitution, the payer assumes that if product A and product B are each 60% efficacious in a well-controlled clinical trial, then the two products are essentially equivalent. If there is a difference in the cost of the two products, then the one that's less costly should be used.
The problem with cost substitution is that it doesn't account for the fact that the same 60 out of 100 patients are unlikely to experience the same level of effectiveness when they use either of the two products. So if the system doesn't allow both products to be available to the practitioner, the government or the payer is effectively practicing medicine.
Some manufacturers have complained that, unlike FDA, HCFA offers little guidance and employs procedures that are barely documented. Would solving that problem be of use to manufacturers?
Bostic: HCFA's processes have evolved and continue to change. I submitted my first product for a coverage decision 10 years ago. Back then, the company just sort of sat down with HCFA and talked about the product, and the mood they were in on that day determined what they would do with it. But that process took 5 years. By contrast, to get a coverage decision on another product in 1998 took only 90 days. So from my perspective, there has been improvement in HCFA's processes.
Sometimes manufacturers get what they ask for, only to find that it's a two-edged sword. We would love to have standardized criteria for product coverage decisions—if every payer interpreted those criteria in the same way. But they don't, and that's the problem we face. A prime example is the way coverage criteria are handled by the Blue Cross/Blue Shield plans. They have published criteria, but one plan interprets them one way, and the other plan interprets them another way. The only advantage is that the criteria are published, so at least a company can argue the case according to those guidelines.
With Medicare, you really can't even argue. If HCFA says your argument in favor of coverage is wrong, you really don't have any recourse. There are no published criteria, and that allows the agency to pick which arguments it feels are important. The agency can determine, for example, that the company didn't include enough elderly people in its study population, and never have to reveal how many it would consider enough. So HCFA's definition of key terms like "reasonable and necessary" or "clinically beneficial" remain very ambiguous.
So, although I've seen improvement in HCFA's pace for making decisions over the past year, I still have questions about how the agency defines whether a product is clinically beneficial. I don't have a good sense of that.
Norton: Another important issue is openness—whether HCFA's decisions are made in a way that is open to the public and to manufacturers. In fairness to HCFA, I believe that at the national level, at least, the agency is trying to open up its process and to create some definitions around it.
But new technologies coming onto the market can still face a problem when they must go through the process at the local level, where there are more than 50 decision-making Medicare carriers. At that level, companies never know what each of the local carriers will want to know about their technology, or what their criteria will be for making coverage decisions.
Slurzberg: On the national level, HCFA has done a commendable job in opening up its process and working to establish a much more collaborative system. That accomplishment has come with a lot of push from industry. The local level still needs a lot of work, because the local contractors do not operate according to uniform guidelines for coverage decisions. HCFA's Office of Program Integrity has recently sent a new guideline to the local contractors to be sure that the local medical review process is being followed appropriately.
But artifacts of the old, closed system still exist. HCFA still has work groups that make coverage decisions behind closed doors, without stakeholder input. These work groups don't operate in the sunshine: industry can't find out who their members are, and the members tend not to acknowledge themselves. In fact, when suspected members or HCFA Program Integrity officials are asked about the work groups, they deny that the groups even formally exist. The work groups disseminate their opinions—they call them opinions—to local contractors, and those views manage to work their way into local coverage decisions.
Richner: We're trying to pass legislation to correct that.
Norton: Legislation might correct parts of it, but certainly not all of it.
Richner: True. But one of the things that the proposed legislation will do is to make sure that HCFA's meetings at the local level are open.
Slurzberg: That goes to the idea that the expertise of the members of the 50-state carrier advisory committees (CACs) varies tremendously. In some parts of the country the members are academics, and in other parts they are community doctors or general practitioners. It's going to take a lot of effort to ensure that the CACs are constructed so that each medical specialty is well represented or, if it's not, that the appropriate medical specialty society is asked for an opinion that will count in the final decision.
Niche products shouldn't have to have national coverage decisions. In fact, it would be unreasonable to expect HCFA to make a national coverage decision on every product that comes to market. Niche products should be allowed to bubble up from the local level. But instead, what's been happening is that the local medical directors get together, make de facto coverage decisions, and push them down. In effect, such local decisions amount to a national coverage decision without due process. That's a problem.
Bostic: It's the same with the durable medical equipment regional carriers. If a company makes durable medical equipment, there are four regional carriers that are essentially establishing national coverage policy. That's good if you get it, but it's not so good if you don't. And you're right, they do make de facto national policies without companies really being included in the process.
So without regard to the actual criteria that HCFA might be using, the process is still one that is a little obscure and in some cases could use some sunlight?
Norton: I agree with that.
Bostic: Definitely.
Effects on Business Planning
How do the reimbursement-related issues you've identified affect companies' business planning?
Richner: With the arrival of the new ambulatory patient classification (APC) system, the whole area of reimbursement for outpatient-use products has become a huge problem. At Boston Scientific (Natick, MA), we've had to increase staff exponentially just to take care of the technical burdens of the new system.
But the company was already making a tremendous investment in staff. Unlike a few years ago, we now have a health economics staff, including in-house biostatisticians, and we have secondary databases. We're planning very early on, and we even consult with staff about the reimbursement profiles for certain technologies, which could influence our new business acquisition strategies. We're very engaged in the R&D process, and we're essentially performing environmental analyses on the reimbursement and value opportunities of technologies under development.
In every way, shape, and form, reimbursement and outcomes planning have become a major cost center in our company. I believe this is also going to be the case at other companies. And for small companies, it's going to become a barrier to entry, because they can't afford to accomplish what we're attempting to do in-house.
Slurzberg: I would agree. And the costs can be for very basic items. For example, when HCFA requested applications for pass-through payment under the outpatient prospective payment system, the request was posted on the HCFA Web site. Manufacturers were given just two weeks to comply, in multiple copies, and they weren't permitted to submit the information on-line. And HCFA's request coincided exactly with the timing of our company's Securities and Exchange Commission (SEC) filing.
Now, our company has one receptionist and one administrative person. Needless to say, they were entirely occupied with the SEC filing. So we had to contract out the compilation of the HCFA application, and then we paid a small fortune to have it assembled and shipped to HCFA overnight in order to meet the two-week window. That's just a tiny example.
Richner: We had to compile 2000 of those applications in the same period.
Slurzberg: I don't think HCFA recognizes how expensive it can become when it requests 40 copies of something and doesn't make it possible to file the materials electronically. The shipping costs alone can be very expensive, and that kind of burden grows exponentially with the number of products you have. Some small companies called me just completely blindsided by HCFA's request, and they still aren't integrated into the APC system because they haven't been able to pull their applications together. That's unfortunate, because it means there are patients who are not getting products they may need.
My advice to small, privately held companies that are raising money through venture capital is that funding to increase reimbursement-related staff is part of the cost of doing business. You can't avoid the need, so you must raise the necessary money. The same is true for executives who are doing private placements for a public company; reimbursement has to be part of the early-stage planning for those placements.
Unfortunately, many companies don't bring people like us on until they're only 6 months away from going to market. That's really too late, and that's when companies can start to experience delays in their timetable.
Bostic: What's worse is when a company has been paid for a year with a product under the radar screen, and then all of a sudden it receives a negative coverage decision and it doesn't get paid anything. Talk about screaming—all of a sudden the company's stock drops from $60 to $3 a share, and the company is in jeopardy of going out of business. Unfortunately, I've seen that happen time and time again.
Reimbursement is becoming a benchmark for start-up companies. It's as important as having the clinical trials behind it. I've had financial analysts call me about reimbursement for start-up companies, asking whether I think their time frame is right, or whether the company is really going to be able to get paid in three years, or whatever. And if the answer is no, they're not investing.
Slurzberg: I've had some of those calls myself. The reimbursement timeline has become almost more critical because it's less predictable than FDA's timeline.
Richner: Our department is completely integrated now as a 100% player in discussions with all of the marketing, clinical affairs, and regulatory teams. Our company now recognizes that it has to have an entire reimbursement team similar to what it has for regulatory affairs, or marketing, or legal affairs. It's just as critical.
Bostic: Companies really need to have departmental integration, but how many start-up companies are able to achieve this? Most can't, and so they're basically being prevented from entering the market, where they could make a difference. And because they're not on the market, it becomes impossible to complete a clinical study that requires long-term patient follow-up registry data from multiple sites across the country.
Norton: When a company is talking to investors, it has to be able to manage their expectations. It has to convince them of the need to invest in reimbursement much earlier in the development process, so that it can foresee and avoid the pitfalls of the reimbursement process. It has to convince them that by doing so, the investment will pay for itself.
Slurzberg: I am beginning to see companies start earlier—especially start-ups. Now, they're talking about reimbursement even before they apply for FDA approval, whereas 10 years ago it wasn't really considered at that point.
Cypress Bioscience and Vertis Neuroscience are probably good examples of that trend—two small companies that thought of reimbursement early on. The fact that this is a very material issue for small companies is important. I worked in terror for several months while awaiting the outcome of national coverage and pass-through payment decisions, because these are material issues for a company that has only one product on the market. The reimbursement staff becomes directly responsible for the company's share price—or a big piece of it.
Because this is so important, it may be necessary for small companies to hire consultants in support of the efforts of in-house staff. And because such companies often can't afford to buy huge databases, they may also have to buy data from other people.
This is why, when venture capitalists or investment bankers are evaluating companies, reimbursement is an area that they're beginning to look at very closely. They're very savvy, and they expect that small companies will have an understanding of what their payer mix is going to be and what they're going to do about it. Many such companies can't answer those questions, but they need to realize that in the eyes of sophisticated investors, having a good idea just isn't enough any more.
How much should companies be budgeting for these reimbursement activities?
Norton: I think companies have to budget about the same as they are used to budgeting for FDA clearance.
Richner: Yes, that would be appropriate. But it depends upon the technology. Certainly, to move a breakthrough technology from conception to launch, as much as 5 or 6% of the overall development cost may have to go toward reimbursement.
Reimbursement versus Investment
Is the investor community savvy enough that it is willing to invest at the level necessary to fully support reimbursement-related activities?
Slurzberg: I think investors understand how important an appropriate coverage decision can be. But it's been harder for them to recognize that reimbursement-related costs represent a significant part of their investment. Some of the larger investment banks are probably a little more forward thinking on this issue than other investors. Some of the venture capital groups don't have a global appreciation for it, but they are at least beginning to ask the right questions. On the other hand, some consultants have told me that venture capitalists sometimes want a two-day turnaround for information that would take them as much as 8 weeks to pull together.
Richner: In many ways, reimbursement issues have hit the medical device community broadside. For many years, there was the perception that if you could build a product, somebody would pay for it. Even in our company, people used to think that reimbursement was a real nice thing—to make sure that the doctors were happy and got paid, and all that—but no one was encouraged to do more beyond that.
It's only been relatively recently that everyone has become so acutely aware of the severe downward price pressures on medical technologies. That pressure on technology didn't necessarily exist before, at least not so acutely, but it has increased dramatically since passage of the Balanced Budget Act of 1997 with its own set of pressures on hospital costs. So reimbursement is going to continue to be a massive problem, and it's only going to escalate.
Are investors especially concerned that reimbursement issues can result in a longer time frame for their return on investment? And if so, how does this skew industry's product development process?
Bostic: I think investors are becoming a little smarter than they used to be. They are looking at time frames, and they are more aware of how time frames can vary according to the type of product or study that must be conducted. But they're also willing to listen to the forecasts that companies make to determine when the best times to invest might be. If the company expects that its study data will be published in a peer-reviewed publication within the next year, for instance, then that's a good time to invest.
So investors are increasingly making investments that are linked to the accomplishment of specific milestones, instead of putting a big lump sum of money into something early on. Companies and investors are building long-term relationships in which every company achievement brings an additional infusion of capital.
Norton: Everybody's getting smarter about the fact that it takes longer with reimbursement thrown into the process to develop and launch your product. What that skews is how companies create their sales and marketing strategies. If a company is planning to go into 15 territories, then it has to pick them very carefully in terms of understanding the payer mix, knowing whether some payers are more or less flexible than others, and exploring other payment sources such as patient self-pay, automobile insurance, or workers' compensation. There are other sources outside of the private healthcare group markets, Medicare, and Medicaid. Longer time frames just force companies to be much more creative about their sales and marketing strategies.
Where to Now?
How would you sum up where industry stands in dealing with reimbursement issues now, and what can manufacturers do to help industry move toward a resolution?
Richner: What we're trying to do is to work very actively with our industry associations—with AdvaMed, the Medical Device Manufacturers Association (MDMA; Washington, DC), and others—to make sure that we have a common voice in trying to initiate policy changes. We're also working very actively on the political side, making sure that we're influencing thought leaders at HCFA and beyond. Industry should try to create its own destiny in this area, and to do so it's really important that every company take an active role.
We have to continue partnering with our customers as well, and to make sure that patients are fully aware of these issues. We want the United States to remain the world leader in medical technology innovation, but the paradigm shift to such a high barrier to entry has the potential to severely disrupt the availability of new technologies—and that's going to affect all of us. We have to make sure people are aware that these issues are only going to hurt us all in the end, by closing off medical technology innovation.
Slurzberg: This issue is going to affect the cost of new technologies and will have a significant impact on patients—especially as we move into the next few decades when the U.S. population is heading into significant old age. It will be very much reflected in how much it costs for patients to receive government benefits through Medicare as well as through private insurers.
Companies need to be involved with their trade associations. AdvaMed and MDMA are critical to giving us a uniform voice and drawing us together around issues that we have in common, rather than the competitive issues that tend to pull us apart. That's very important, and I urge large, small, and start-up companies to find the trade association that's right for them and jump in. Companies should seek out an understanding of reimbursement issues as early as possible, and especially at the executive level.
In small companies, executives are often scientists or researchers, and they tend to think of politics as an area to be avoided if at all possible. But today's reality is that understanding the influence of politics is very much a part of doing business. Company leaders should have relationships with their representatives and senators. They should know where their elected representatives stand, and how much they support industry and patient access to technology.
We're moving into a Congress now that is split pretty much 50-50 between the Republicans and the Democrats. That split is likely to cause delays in moving forward legislation to accomplish significant Medicare reform, a patient bill of rights, and other issues that may affect whether future patients have access to new technologies.
Norton: The one thing that we all have in common is patients. Patients are the reason that manufacturers innovate, and providing patients with access to care is what HCFA and other payers do. With that in mind, we need to continue talking about how to open up HCFA's national processes, how to open up the local process, and how to revitalize the CPT coding process—an issue that has a significant impact on reimbursement timing.
Without getting into too much detail, companies that introduce new technologies have one shot per year to apply to the American Medical Association (AMA, Chicago) for a new CPT code. If the company misses that deadline, it automatically creates a delay that's simply impossible to get around. There is clearly a need for reform of how often the AMA panels meet and when manufacturers can submit applications. In fairness to AMA, the panel members are unpaid volunteers who sacrifice about 14 days a year to do their work, without which physicians could not get paid and manufacturers could not get coverage. So it would be useful to work with AMA to speed up the process of assigning CPT codes.
Bostic: We're in a state of evolution in healthcare. Initially, the idea behind Medicare was to establish a minimum standard of healthcare for the mass population. But now, we want the best care for every patient. When manufacturers talk to HCFA, individuals will readily say that they'd like such-and-such a technology to be available to their grandparents. But when they're making decisions for the entire population, it's not so easy for them to do that. Even so, HCFA is becoming less of a gatekeeper, and it's trying to start looking at the individual beneficiary.
Manufacturers have a responsibility beyond reimbursement. As manufacturers, our real responsibility still is to have good studies—to do the studies that we need to do, and not to cut them short. And following that, to get out there and train the doctors the way they should be trained. If we perform both of those duties, we'll be able to continue to benefit patients.
Robin Bostic is director of reimbursement affairs for the orthopedic division of Smith & Nephew Inc. (Memphis, TN). Bostic worked in the insurance industry for eight years before moving into medical manufacturing. For the past 10 years, she has managed reimbursement departments and national accounts for medical device companies, including Exogen Inc. (Piscataway, NJ). Her involvement in reimbursement issues has included educating medical case managers, making presentations to the medical directors of payer organizations, obtaining positive technology assessments, helping to establish Medicare guidelines, requesting HCPCS and CPT codes, and justifying payment.
Kim Norton has more than 10 years of experience in the fields of reimbursement, medical outcomes, and government relations. She is currently director of reimbursement at Vertis Neuroscience (Seattle). Norton was previously with Medical Technology Consultants, a division of Quintiles Consulting, UK, where she was responsible for European regulatory and reimbursement business development and account management for U.S. device and diagnostic companies. Previously, she was director of reimbursement at NeoPath (now TriPath Imaging), where she developed and implemented the company's reimbursement strategy and oversaw government relations. She also has extensive outcomes research experience in the United States, Canada, and Europe and has published numerous articles in this field. Norton has a BA in political science from Wellesley College (Wellesley, MA) and a master's degree in public policy from the University of California at Berkeley.
Randel Richner is vice president for reimbursement and outcomes planning at Boston Scientific (Natick, MA), where she has developed a strategic global reimbursement and outcomes process for minimally invasive medical technologies. Richner has played a key role in developing state and global policy initiatives to obtain reimbursement for less-invasive treatment and in influencing protechnology changes in HCFA's ambulatory patient classification system. Richner was appointed to the executive committee of the Medicare Coverage Advisory Committee (MCAC) in 1999. She is also on the founding board of the medical device council of the International Society for Pharmacoeconomics and Outcomes Research. Richner joined Boston Scientific from SmithKline Beecham, where she was director of outcomes research and pharmacoeconomics. Prior to that, she worked as a policy analyst and a dialysis and transplant nurse. Richner has a master's degree in public health policy and administration from the University of Michigan (Ann Arbor), where she also earned a BS in nursing. She is on the board of governors for the University of Michigan School of Public Health.
Jo Ellen F. Slurzberg is director for health policy and medical affairs at Cypress Bioscience Inc. (San Diego), a biotechnology company that develops medical devices and biologics. She has held similar positions at Advanced Tissue Sciences Inc., and at Ortho Biotech Inc., a Johnson & Johnson company. She has been working in the pharmaceutical/biopharmaceutical and biotechnology device industries since 1983. Slurzberg has focused on Medicare coverage, coding, and payment issues and related health policy as part of her work to gain coverage and reimbursement for novel biotechnology devices and biologic therapies. She has participated in industry-related policy and reimbursement committees and has conducted training programs on these topics.
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