Regulatory Editor

The Centers for Medicare & Medicaid Services (CMS) declined to offer a rate increase for drug-coated balloons (DCBs)in the final rule for the calendar year 2018 outpatient final rule even though clinicians have argued that this will lead to under-treatment of peripheral artery disease, which may in turn drive an increase in readmissions.

The question of rates for DCBs was temporarily suspended by the issuance of a new technology pass-through payment for the devices, but pass-through payment will no longer be available for these devices in calendar year 2018. The matter came up in a Medicare advisory panel for the outpatient fee schedule, during which Dublin-based Medtronic had asserted that the proposed payment rate of $4,999 for DCBs was entirely inadequate.

However, Gary Ansel, a cardiologist at Ohiohealth in Columbus, Ohio, remarked to the advisory panel that the proposed rate would force hospital administrators to revisit the question of whether hospitals can afford to practice the device/procedure. Ansel said DCBs cut down on the need for repeat procedures on the affected vasculature, adding that DCBs "have changed the treatment landscape" for peripheral vascular disease. (See BioWorld MedTech, Aug. 23, 2017.)

Mark Pacyna, VP and general manager of the peripheral division in Medtronic's cardiac and vascular group, told BioWorld MedTech that the company "commends CMS for implementing the transitional pass through payments" for the company's In.Pact Admiral device, which he said is "the only DCB to demonstrate cost effectiveness, and significant improvement in patient clinical outcomes out to four years." Pacyna said that with the expiration of the pass-through payment, Medtronic "believes that an alternative reimbursement structure should be used to better align cost and access to DCBs that offer proven economic and clinical value over standard" angioplasty.

Pacyna added that the company "plan[s] to work to request a re-evaluation of DCB procedure payment in the next payment rule cycle (CY 2019), and encourage physicians and hospitals to continue use of the DCB C-code to track utilization and cost of this innovative and differentiated therapy."

CMS noted in the final rule that the new policy regarding quarterly rather than yearly pass-through status does not apply retroactively, and thus the expiration date for DCBs falls at the end of the second calendar year in which such payments were available.

CMS: talk to the CPT committee

The agency acknowledged the comments associated with potential access issues should the rates for DCBs take the expected hit, but nonetheless accepted the advisory panel's recommendation to track usage and costs for CPT code 37224 and HCPCS code 2623 to determine whether more granularity in CPT codes is warranted. The agency noted further that it was unpersuaded by arguments about the geometric mean cost calculations associated with DCBs, and closed with the suggestion that stakeholders who see the DCB rate question in a negative light could approach the American Medical Association's CPT editorial panel with a request for a new CPT code.

CMS also followed through on its proposal to end the new technology pass-through status for the Senza SCS system by Nevro Corp. of Redwood City, Calif. CMS said that any concerns that hospitals had under-reported costs associated with the use of the Senza − a neurostimulator approved by the FDA in May 2015 for analgesic effect in intractable pain in the trunk or limbs – would have to be addressed by the proper coding on claims forms.

CMS said no to a new technology pass-through payment for the Architect Px by Harbor Medtech Inc. of Irvine, Calif., despite that the extracellular collagen matrix met the newness and cost criteria for payment. The device faltered on the substantial clinical improvement criterion due to a lack of compelling evidence, but the newness issue was one of the more convoluted in recent memory.

CMS said Harbor had cited the Unite Biomatrix device by Pegasus Biologics Inc. of Irvine, Calif., as a predicate in its premarket filing with the FDA, which the agency cleared September 2014. The agency stated further that Harbor had initially described its device as identical to the Pegasus offering, but Harbor subsequently offered evidence that its manufacturing process employs a different stabilization process, which apparently sufficed to infer that the Architect Px was a new product.

Also faltering for pass-through payments were the Dermavest and Plurivest human placental connective tissue matrices by Aedicell Inc. of Honeoye Falls, N.Y. CMS said it could not determine fully whether the devices met the newness or substantial clinical improvement criteria, although the devices overcame the cost hurdle. Applied Biologics LLC of Scottsdale, Ariz., came up short on the substantial clinical improvement question for the company's Flograft products, thus leaving the company with no new pass-through payment for CY 2018.

Argus II takes hit for CY 2018

The final rule for 2018 will pay roughly $122,500 for the Argus II retinal prosthesis and the associated procedure despite that the sponsor, Second Sight Medical Products Inc. of Sylmar, Calif., had requested a rate of $150,000. The Argus II was previously the subject of a pass-through payment, and CMS said that while it had updated the rate to $150,000 for the current calendar year, data from fewer than 10 claims suggested a rate of $95,000. Nonetheless, the agency said it was concerned that this lower rate could create access issues, and thus arrived at the new rate by assigning the device and procedure to APC code 1904.

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