Diagnostics & Imaging Week Washington Editor

WASHINGTON — As the new legislative cycle picks up speed and various members of the House have made known their antipathy to the President’s budget proposals, industry associations are getting their legislative and regulatory agendas into the public view.

The Advanced Medical Technology Association (AdvaMed; Washington) earlier this week rolled out its plan for 2007 at its DC headquarters, and while the association offered few surprises, it announced that it will stake out a position on healthcare reform, adding its voice to a near din in what will surely be one of the most contentious of healthcare debates in recent memory.

Ed Ludwig, chairman of the board of AdvaMed and president/CEO of Becton Dickinson (Franklin Lakes, New Jersey), said of reforms to Medicare that if the value of technology “gets lost in the weeds and [we] look only at the cost of something and not the value of something,” the patient loses. He also remarked that the association’s code of conduct “is being embraced as an industry gold standard.”

Ludwig also noted the organization’s increasing emphasis on the diagnostic sector, represented by many of its members.

Personalized medicine, he said, is “causing whole new paradigms of thinking” where reimbursement and regulation are concerned and that diagnostics are key to further development in this area.

Ludwig said that industry and FDA have reached an agreement in principal for user fees, though he offered no details.

“We are very excited about that because as we think about bringing technology to the people who need it, we are absolutely required to have an effective and transparent” regulatory and reimbursement system.

“It is incumbent upon us to be part of the emerging debate regarding healthcare reform,” including the debate over the uninsured, Ludwig said. He said the association will ratify a statement at the annual board of directors meeting, including “ideas we think should be embodied in any healthcare reform.”

Steven Ubl, president of AdvaMed, said that the association “wanted to bring a more evidence-based approach to our advocacy,” seeking to ensure that “research underlies our advocacy.”

As one example he cited the organization’s input to the hospital inpatient prospective payment system inpatient (HIPPS) rule published by CMS last year. Ubl said that the association offered data on the proposed CMS update, including figures that entailed micro-simulation of the impacts of various changes to the HIPPS on hospitals.

Ubl also announced that the association will launch a trade show in Washington in October, timed to coincide with the Oct. 3-4 meeting of the Global Harmonization Task Force, which is attempting to do for devices what the International Conference for Harmonization is doing for regulation of pharmaceutical production.

Ubl said that the recent recovery of both the Senate and the House by Democrats was “a sea change election . . . but it hasn’t changed our advocacy in the least,” thanks to the association’s bipartisan approach to lobbying. “There is no congressional office we can’t visit about our priority issues,” he observed, naming Rep. Ann Eshoo (D-California) as a long-standing sympathetic figure to the cause of the med-tech industry.

Ubl said that negotiations with FDA over user fees helped to guarantee “improvements in performance” of FDA’s product reviews, a reduction in application fees and a “changed mechanism to make fee increases more predictable.” He said that a compensating adjuster, a holdover from first agreement MDUFMA agreement, boosted per-application fees if the volume of applications was lower than anticipated. However, “in the new agreement, we made changes that will make those more predictable.”

As for reimbursement, AdvaMed will pursue two key priorities.

The first of these is a bill that would create doctor payment for remote monitoring. He said that this will be “a very important bill” because it would cut down on trips to the doctor’s office and reduce overall healthcare costs.

As for reimbursement for diagnostics, he said that while diagnostics will allow the practice of medicine to be tailored to individual patient, “[t]he bad news is that the wave of innovation is leading a stagnant payment system that hasn’t been updated for 15 years.”

Ubl said that the association’s bill will “bring a more transparent process to the way these tests are reimbursed.”

As for President Bush’s proposed budget, Ubl said that AdvaMed is very concerned about “the breadth and depth of Medicare reductions” and the possible impact on patient access to technology. “We will be monitoring those reductions as we move forward” in the budget process, Ubl promised.

Ubl observed that Europe is examining “adoption of the DRG [diagnostic-related groups] to one extent or another,” but that domestic issues in connection with DRGs “tend to pale in comparison” with those in Europe, partly because of the difficulty of dealing with diagnostic standards that do not mesh with new technology.

However, he said that the association is “very engaged in developing pass-through payments” for European hospitals, especially since most European reporting systems bundle devices with services fairly tightly.

“Keeping new technology out of those bundles” is an essential ingredient in that effort, he said.

Regarding the reaction of House Democrats to the upcoming scheduled cuts to physicians under Medicare Part B, Ubl said, “If history is any guide, most members view that as unsustainable.”

On the other hand, he indicated that it is unlikely that Congress will deal with the SGR mechanism as a whole, despite the fact that SGR cuts continue to grow rather large over time.

As to the White House approach to trimming the Medicare budget, Ubl said he believed that Democrats will “warm up to that over time,” citing what he called the conventional wisdom that Medicare Advantage (MA), a.k.a. Medicare Part C, “is an area where congressional democrats are interested.”

However, the White House “will go to the mat” on MA, Ubl said.