Transcript Georgia Biotech Summit 9-22-04

Medicare and Medical
Technology Policy
Sean Tunis MD, MSc
Chief Medical Officer, CMS
February 11, 2005
Overview
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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
th
20
Century
3000
deaths per
2500
Better treatment of cardiovascular
disease, low birth weight infants
2000
1500
1000
500
0
1900
1910
1920
1930
1940
Reduced infectious disease mortality (clean
water, sewers, antibiotics, better nutrition)
1950
1960
1970
1980
1990
SELECTED OECD COUNTRIES 2000
14%
U.S.
13%
Now over 15%
12%
11%
Switzerland
CARE
PERCENT OF GDP SPENT ON HEALTH
HEALTH
SPENDING AND
AND AGING:
AGING:
HEALTH SPENDING
Germany
10%
Canada
9%
8%
7%
France
Netherlands
Australi
a
Sweden
Japan
U.K.
Iceland
6%
11%
12%
13%
14%
15%
16%
17%
PERCENT OF POPULATION OVER AGE 65
SOURCE: OECD Data, 2002
18%
19%
National
Business
Group
on Health
Looking Ahead: Expected Cost Increases
Average Annual Premiums for
Employer-Sponsored Family
Coverage, 2001-2006
$16,000
$14,545
$14,000
$8,000
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$12,485
$12,000
$10,000
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Estimated cost of family
coverage: $9,160 for 2003
Figure will rise to $14,545
in 2006
$10,717
$9,160
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$7,956
$7,053
$6,000
$4,000
$2,000
Number of uninsured
Americans projected to
reach 51.2 to 53.7 mil in
2006, from 41.2 in 2001
(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
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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?
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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
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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)
% Admitted to ICU (1995-96)
30.0
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
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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
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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
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Regulatory approval (if applicable)
Benefit determination
Coverage
– Reasonable and Necessary
– local vs national
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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
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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
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Coverage process described
– With specified timeframes for review
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Explicit adoption of rules of evidence
– Increased technical sophistication
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Increased transparency
– Public advisory committee (MCAC)
– Decision memos
– Highly interactive with stakeholders
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MMA changes: timeframes, proposed
decisions, guidance docs.
MEDICARE NATIONAL COVERAGE PROCESS
Preliminary
Meeting
Reconsideration
6 months
Benefit
Category
National
Coverage
Request
Staff
Review
30 days
Draft
Decision
Memorandum
Posted
Public
Comments
60 days
Final Decision
Memorandum
and
Implementation
Instructions
External
Technology
Assessment
Staff
Review
Medicare
Coverage
Advisory
Committee
9 months
Department
Appeals
Board
Statutory Basis for Coverage
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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
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1977 Intermediary letters defined R&N
– Safe, effective, appropriate, not experimental
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1989: NPRM issued (legal settlement)
– Safe, effective, appropriate, cost-effective
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1990’s: no consensus, no reg
May 2000: Notice of Intent
– 1989 NPRM withdrawn
– Demonstrated medical benefit, added value
– Strong stakeholder opposition
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Dec 2003: guidance documents (MMA)
Reasonable and Necessary
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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
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Guidance documents will provide greater
detail on producing “adequate evidence”
– Open door call Sept 30
Role of costs in R&N
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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
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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
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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
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i.e. “promising, important, potentially high
value, and under careful investigation”
Retains EBM as conceptual framework for
coverage and payment
PET for suspected AD
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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
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CMS, AHRQ, Alz Ass, industry,
academics have developed protocols
Kaplan-Meier Survival by Treatment Group
Total Mortality
CONV: 19.8%
ICD: 14.2%
Hazard Ratio = 0.69
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
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ACC/AHA/NASPE gave this IIa
recommendation
– single trial, possible selection bias
– need for risk-stratification
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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
Mortality by Intention-totreat
Heart Failure
Trial
0.4
Amiodarone vs. Placebo
ICD Therapy vs. Placebo
Mortality
0.3
HR
1.06
0.77
97.5% CI
0.86, 1.30
0.62, 0.96
P-Value
0.529
0.007
0.2
0.1
Amiodarone
ICD Therapy
0
Placebo
0
6
12
18
24
30
36
42
Months of follow-up
48
54
60
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
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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
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Medicare law requires on label+compendia
CMS reviewed Camptosar, Eloxatin, Avastin
and Erbitux
Mandatory coverage of off-label use in NCIsponsored 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
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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
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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
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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?
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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
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ICD registry workgroup expanded
IOM/AHRQ/CMS discussions
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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
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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
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No explicit use of costs or CEA in coverage or
payment policy
Awareness of costs and CEA have influenced some
policies
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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)
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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