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
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
Mortality in the                                            20th            Century
                  3000

                  2500
                                                            Better treatment of cardiovascular
     deaths per




                                                            disease, low birth weight infants
                  2000

                  1500

                  1000

                   500

                     0
                         1900   1910   1920   1930   1940     1950   1960   1970   1980   1990
Reduced infectious disease mortality (clean
water, sewers, antibiotics, better nutrition)
PERCENT OF GDP SPENT ON HEALTH                 HEALTH SPENDING AND AGING:
                                               HEALTH SPENDING AND AGING:
                                                        SELECTED OECD COUNTRIES 2000
                                    14%
                                                                 Now over 15%
                                    13%                 U.S.

                                    12%

                                    11%
                                                                         Switzerland
                                 CARE




                                    10%                                                     Germany

                                        9%
                                                          Canada                       France
                                                                   Netherlands
                                        8%        Australi                                          Sweden
                                                  a                                        Japan
                                        7%
                                                Iceland                          U.K.
                                        6%
                                         11%      12%      13%     14%     15%   16%       17%     18%   19%
                                                        PERCENT OF POPULATION OVER AGE 65

SOURCE: OECD Data, 2002
   National
   Business
   Group
   on Health



                                      Looking Ahead: Expected Cost Increases


                Average Annual Premiums for                                                                    Estimated cost of family
                 Employer-Sponsored Family                                                                      coverage: $9,160 for 2003
                    Coverage, 2001-2006

  $16,000                                                                        $14,545                       Figure will rise to $14,545
  $14,000                                                           $12,485                                     in 2006
  $12,000                                              $10,717

                                                                                                                Number of uninsured
  $10,000                                  $9,160
                           $7,956                                                                        
     $8,000           $7,053
                                                                                                                Americans projected to
     $6,000
                                                                                                                reach 51.2 to 53.7 mil in
     $4,000
                                                                                                                2006, from 41.2 in 2001
     $2,000
                                                                                                                (US Census Bureau)
               $0
                        2001         2002         2003        2004* 2005* 2006*


•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.
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
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

                    Health Affairs, Sept/Oct 2001
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
                     MedTAP Jan 2003
Percutaneous Coronary Interventions




                                 CP1027346-1
Percent of Medicare Decedents Admitted
to ICU During their Final Hospitalization
               (1995-96)
                                  30.0
    % Admitted to ICU (1995-96)



                                  25.0


                                  20.0


                                  15.0


                                  10.0


                                   5.0
HEDIS Quality Compass
Diabetic Eye Exam Rate -
Commercial Plans
   1

  0.9
  0.8
  0.7

  0.6

  0.5
  0.4
  0.3
        1996   1997   1998   1999   2000   2001
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
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
“Today more than ever, we must get more for
  what we spend on health care. We’ve got to
  generate valuable innovation in medical
  products to reduce errors, complications, and
  unnecessary care while improving quality. All
  that’s 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)
     Benefit determination
     Coverage
      – Reasonable and Necessary
      – local vs national
     Coding
     Payment
      – separately billable things
      – bundled payment systems
“While I can explain the meaning of
life, I don’t dare try to explain
Medicare reimbursement.”
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
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.
     MEDICARE NATIONAL COVERAGE PROCESS

Preliminary                                                             Reconsideration
  Meeting




                         6 months                 30 days           60 days

                                                                         Final Decision
                                            Draft
              National                                                   Memorandum
 Benefit                  Staff            Decision       Public
              Coverage                                                        and
 Category                 Review          Memorandum     Comments
              Request                                                   Implementation
                                            Posted
                                                                           Instructions


                              External
                             Technology
                             Assessment
                                                 Staff
                                                Review                    Department
                             Medicare                                      Appeals
                             Coverage                                       Board
                              Advisory
                             Committee


                         9 months
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.”
    Brief History of R&N
   1977 Intermediary letters defined R&N
    – Safe, effective, appropriate, not experimental
   1989: NPRM issued (legal settlement)
    – Safe, effective, appropriate, cost-effective
   1990’s: 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)
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
Role of costs in R&N

   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
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
   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
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
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 R&N in trials
   CMS, AHRQ, Alz Ass, industry,
    academics have developed protocols
   Kaplan-Meier Survival by Treatment Group




    Total Mortality
     CONV: 19.8%         Hazard Ratio = 0.69
     ICD: 14.2%          Adjusted P=0.016




31% reduction in risk of all-cause mortality
Kaplan-Meier Estimates of the Survival
Probability in MADIT II for Patients
with QRS  120 ms



                                                                      p-value=0.25




          Patients with pacemakers were excluded.
          CMS analysis of the MADIT II dataset supplied by Guidant.
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
     >65 - $9B potential spending)
    CMS decided to cover wide-QRS subgroup,
     revaluate after SCD-HeFT results
     – Widely viewed as driven by economic factors
Sudden Cardiac Death
SCD-HeFT
Trial
        Heart Failure

                         Mortality by Intention-to-
                         treat
                         0.4
                                                                  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
                         0.3
             Mortality




                         0.2



                         0.1                                                               Amiodarone
                                                                                           ICD Therapy
                                                                                           Placebo
                          0
                               0       6      12     18        24    30     36   42        48   54       60
                                                             Months of follow-up
               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<35%
    SCD-HeFT make eligible pool 1M+
    Linked to submission of data to national
     ICD registry
    Basic registry launched, ICD working
     group developing robust registry
Off-label use of cancer drugs
   Medicare law requires on label+compendia
   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
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
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
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
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
“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
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
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