Medical Device Daily Washington Editor

Congress's scrutiny of the medical device industry seems to grow more intense each month, and a recent letter from Sen. Herb Kohl (D-Wisconsin) to Rep. Bart Stupak (D-Michigan) makes clear that the Democratic Party intends to keep the scrutiny up in the 111th Congress.

Kohl held hearings recently in the committee he chairs, the Senate Special Committee on Aging, on direct-to-consumer ads for medical devices and has penned a letter to Stupak, who chairs the health subcommittee for the House Energy and Commerce Committee, to seek Stupak's help in overseeing DTC ads for devices.

Kohl said in the letter that his committee is "prepared to further examine the need for possible moratoriums" on DTC device ads.

Kohl's Sept. 29 letter states that he is aware that Stupak's "subcommittee staff has done outstanding work in uncovering deceptive and misleading DTC ads sponsored by the drug industry," and said the Senate committee would "welcome any further exchange of information ... on this important matter," promising to "work with you and your able professional staff in addressing these DTC advertising issues in a cooperative and bicameral manner."

Ashley Glacell, press secretary for the Senate Special Committee on Aging, told Medical Device Daily, "We're almost at the end of this congress, so I don't think we'll see anything before January." She adde that she is unaware of even a draft of legislation.

CMS sees no coverage for Heartsbreath

The Centers for Medicare & Medicaid Services offered earlier this year to take a look at a test of biomarkers in the breath of heart transplant patients to detect tissue rejection (Medical Device Daily, April 30, 2008), but the plea seems to have fallen on deaf ears as CMS has issued a proposed finding of "not reasonable and necessary" in the use of the diagnostic, made by Menssana Research (Newark, New Jersey).

The memo indicates that CMS is seeking further public comment on the matter for 30 days after the publication of the proposed decision, which was published Sept. 29, and that a decision to investigate the matter further via the Coverage with Study Participation mechanism was still possible. At present, no local carriers have opted to cover the test, either, which is intended as an adjunct to a biopsy from one of the patient's ventricles.

According to CMS, the pivotal PMA study for the Heartsbreath, the HARDBALL (Heart Allograft Rejection; Detection with Breath Alkanes in Low Levels) study, covered more than 500 patients to evaluate the diagnostic as an adjunct to tissue biopsy for grade 3A rejection. The study did not cover patients who are experiencing grade 3B and grade 4 rejection.

One of the issues for CMS appears to be the "clinical utility" of the Heartsbreath test. The memo states that the usefulness of a determination of grade 3A rejection "is unknown, especially given the controversy in the transplant community regarding what grade of rejection should indicate a change in clinical management."

On the other hand, the agency also has questions about the nine volatile organic compounds (VOCs) found in the pivotal FDA study. CMS said "it is unclear if these specific VOCs are representative of grade 3A rejection in all patients or are representative of only the sample of patients" in the study.

CMS notes in the memo that "a non-invasive test is preferable if it can yield the same or similar benefit as an invasive test," but that the benefit of a test hinges on "clear technical characteristics," which CMS hinted was in doubt over the question of the VOCs.

Robert Zirkelbach, spokesman for America's Health Insurance Plans (AHIP; Washington), told MDD that for AHIP, "the focus is that we need to ensure that patients are receiving the most effective treatments available." On the one hand, "early studies have shown that this treatment offers some promise," he said, but payers are of the opinion that "more evidence is needed to find out under what circumstances this test is needed."

Medicaid expenditures tracking higher

Reports filed by the Medicare Trustees have always focused on the Medicare and Social Security programs, but the group recently filed its first report on Medicaid, and the results do little to tamp down the sense of urgency regarding government healthcare spending.

According to an Oct. 17 statement posted at the web site for the Centers for Medicare & Medicaid Services, spending on Medicaid "is expected to substantially outpace the rate of growth in the U.S. economy over the next decade." The report indicates that Medicaid spending will have increased by 7.3% this year over 2007 to a total of $339 billion. The projected rate of growth in the coming decade is almost 8% and spending may hit $674 billion by 2017.

Mike Leavitt, Secretary of Health and Human Services, announced the findings last week at a meeting of the National Association of State Budget Officers (NASBO; Washington), stating that the report "should serve as an urgent reminder that the current path of Medicaid spending is unsustainable for both federal and state governments." Leavitt remarked that if government is unable "to rein in these costs, access to healthcare for the nation's most vulnerable citizens could be threatened."

Medicaid is funded in part by Washington and state governments to provide health services to low-income residents. The program, which is administered by the states, is covering roughly 50 million residents this year, a figure that the Trustees project will rise by 1.2% per annum, to as many as 55 million Americans in 2017.

According to the CMS statement, Uncle Sam's share of each state's Medicaid spending ranges from half to as high as 83%, with the average coming in at 57%. All the same, states claim to be "struggling to meet their share of expanding Medicaid costs," the statement indicated. The state of Maine is said to be spending "as much as 31% of their budgets on Medicaid, according to NASBO."

The statement also indicated that the Trustees expect Medicaid's share of gross domestic product (GDP) to hit 3% in 2017, when Medicaid and Medicare will combine to consume 6.9% of GDP.

Scott Pattison, executive director of NASBO, confirmed that "Medicaid is indeed counter-cyclical," a reference to the fact that enrollment goes up when times get tough and state tax revenues fall, and enrollment falls when more people have jobs and tax revenues rise. He told MDD that the big problem "is the lag. States are going to be hurting for a longer time" than measures of leading economic indicators would seem to suggest for several reasons. Among these is that a clear picture of a state's receipts of income and property taxes tends to emerge only after a calendar year ends because the filing dates for those tax functions occur after the year in question.

As a result, Pattison predicted that state revenue streams might not start tracking back up until calendar year 2010 (or fiscal 2011). As for where states feel the revenue pinch first, Pattison said "the first thing to go down is corporate income tax, then sales tax."