Transcript Slide 1

Hard Wiring EBM into
Reimbursement Planning for
Medical Devices
Erica Bisguier, Director
Boston Healthcare Associates, Inc.
Confidential | © 2006 Boston Healthcare Associates, Inc.
| Create. Navigate.SM
Boston Healthcare Associates, Inc.
75 Federal Street, 9th Floor
Boston, MA 02110
617.482.4004
Fax 617.482.4005
www.bostonhealthcare.com
Why Does Evidence-Based Medicine
(EBM) Matter?
Technologies Face Two Major Adoption Barriers:
Coverage Barriers
Clinical Barriers

FDA and Providers
– Safety
– Efficacy (PMA, NDA, BLA)
– Controlled setting aligned
to best outcomes
– Expert academic-focused
review
– Scientific method to
answer a clinical question
– Cost is not considered
Confidential | © 2006 Boston Healthcare Associates, Inc.
|
Page 2

Payers and Providers
– Effectiveness
– “Real World” where
evidence evolves and
improves over time
– Non-academic review
– No standard methodology
for determining coverage
 Benefit category
– Cost is often a key
consideration
Create. Navigate.SM
Challenge of EBM
Payer View


Industry View
Need for “practical clinical trials”
(PCT) for coverage decisions
– Head-to-head design
– Large, diverse population
– Wide range of health outcomes
measured
– Several practice settings
– Long-term follow up
– Considers natural history of
disease
Without these data, reimbursement
of novel technologies, procedures
can result in millions of dollars
investment without a known longterm benefit or risk
Confidential | © 2006 Boston Healthcare Associates, Inc.
|
Page 3




PCTs are exceedingly difficult,
especially when a technology is first
introduced
– Feasibility of studies
– Scalability issues
– Slow innovation
– Expensive to conduct
While cost is not part of CMS’
criterion for coverage review, those
higher cost, higher impact
technologies have heavy scrutiny
Technologies are unique and each
should be evaluated amid the
circumstances
Perhaps novel technologies AND older
standards of care should both be
measured against EBM standards, yet
today many marginally beneficial
procedures are fully covered
Create. Navigate.SM
EBM Links to Coverage
 Private payer and Medicare decision-makers
increasingly are demanding EBM to inform
coverage decisions
– The agency is “being clear that in order to get coverage
or adequate payment, we’re going to be looking for
high-quality scientific evidence, including head-to-head
clinical trials that incorporate meaningful outcomes. The
intent is to incentivize the conduct of that sort of
study.” Sean Tunis, Chief Medical Officer, CMS 2003
The Gray Sheet, 2003
Confidential | © 2006 Boston Healthcare Associates, Inc.
|
Page 4
Create. Navigate.SM
Private Payer Coverage
 Private payer coverage is determined by assessing
whether a technology is:
–
–
–
–
–
–
–
Safe and effective
Going to impact current treatment options
Appropriate for the plan’s patient audience
Going to be widely utilized or over utilized
Likely to have a significant financial impact on the plan
Covered by public payers
Viewed positively by technology assessment groups
Confidential | © 2006 Boston Healthcare Associates, Inc.
|
Page 5
Create. Navigate.SM
What Coverage is Not
 A guarantee of a reasonable payment rate
 A guarantee of a new or acceptable billing
code
 Always consistent
Confidential | © 2006 Boston Healthcare Associates, Inc.
|
Page 6
Create. Navigate.SM
Private Payers: Coverage Criteria





Impact on current treatment options
Appropriate patient audience
Anticipated utilization
Financial impact on the plan
Coverage and payment guidelines differ by
individual company and by individual plans
Confidential | © 2006 Boston Healthcare Associates, Inc.
|
Page 7
Create. Navigate.SM
Coverage: Guidelines and Policies
Formulary
Coverage Guidelines
Prior Authorization (PA)
 A list of approved drugs
that are covered and paid
for by an insurer or payer
organization
 Usually created and
maintained by Pharmacy &
Therapeutics Committee
(P&T)
 Commonly, three-tier
formularies are created,
where the patients’ copayment varies by level
 Developed by the medical
policy or technology
assessment committees at
payer organizations
 Guidelines articulate the
coverage criteria for a
drug, device or procedure
 A set of criteria are
applied when evaluating a
case for coverage for the
particular drug, device or
product
 If criteria are met, the
case is approved and the
drug is covered and paid
 Physicians and patients
can appeal by providing
additional information
 A PA does not guarantee
that a claim will be paid
Coverage decisions can result in one of three options:
coverage, no coverage, or coverage with conditions.
Confidential | © 2006 Boston Healthcare Associates, Inc.
|
Page 8
Create. Navigate.SM
General Coverage Process
New Technology
Coverage Request
Clinical data
demonstrating clear
efficacy influences
adoption decision
MD, Patient,
Manufacturer
Experience with the
technology and
personal interest in
technology
PAYER
Internal Technology Assessment (TA)
Process
Assigned to a policy analyst:
 Gather data
 Consult with expert (sometimes)
 Check with external TA organizations
 Benchmark other plan coverage
 Research payment history
 Identify coding
Develop technology assessment
document:
 TA committee for review
Confidential | © 2006 Boston Healthcare Associates, Inc.
|
Page 9
Issue Coverage
Policy
Payer issues a
coverage policy
Programming of
Claims:
Updating of systems
for implementation
Create. Navigate.SM
Medicare Coverage
 Medicare coverage provisions are contained in the statute
and regulations (Federal Law)
 Section 1862(a)(1)(A) of the Social Security Act excludes
coverage for “Items or services that are not reasonable and
necessary for the treatment of illness, or injury, to
improve the functioning of a malformed body member.”
 What this means:
– Appropriate for the Medicare patient audience
 Coverage of routine costs for Medicare patients in clinical trials
 Coverage of Category B investigative devices
– Safe and effective
– Not experimental
– Not a screening or preventive technology
Confidential | © 2006 Boston Healthcare Associates, Inc.
|
Page 10
Create. Navigate.SM
Medicare NCD Process and Timeline
Additional
information
submitted
Coverage Request
Staff Review
Technology
Assessment
Medicare
Coverage
Advisory
Committee
90 days
(MCAC)
Coverage Decision
NCD Draft Decision Memo with
30 day notice and comment
KEY
180 days
Elective options
Decision path
60 days
NCD Final Decision Memo
Confidential | © 2006 Boston Healthcare Associates, Inc.
|
Page 11
Create. Navigate.SM
Medicare Local Coverage
Determination (LCD) Process
 Development of draft policy based on review of medical
literature and local practice patterns
 Solicit comments from medical community
– Carrier Advisory Committee (CAC) mandatory with broad
review responsibilities
– Appropriate groups of health professionals
 Respond to and incorporate comments into final policy
 Initial draft policy generated with 90 day notice and comment
period, followed by a final policy
Confidential | © 2006 Boston Healthcare Associates, Inc.
|
Page 12
Create. Navigate.SM
Hospitals as Purchasers
 Look to evidence-based medicine,
coverage policies of payers, and peers to
guide practice
 More and more pressure by hospitals and
practices to use “cost-effective”
treatments
– Developing processes to evaluate costeffectiveness or relative value
 Difficult for emerging technologies where
the evidence is limited and long-term
impact is not yet understood
Confidential | © 2006 Boston Healthcare Associates, Inc.
|
Page 13
Create. Navigate.SM
Follow the Money
 For your technology and for each account,
identify the party at risk for the cost and who
may profit from your technology
– Providers, by point of care
 Hospital, Ambulatory Care Center, Physician office
– MCO benefit structure
– Patients’ financial responsibility
 Understand how your technology
will impact each stakeholder
Confidential | © 2006 Boston Healthcare Associates, Inc.
|
Page 14
Create. Navigate.SM
Characterizing Your Product

Where will the product or service be delivered?
–
–
–
–

Who will deliver or administer the product?
–
–
–
–
–
–

Hospital inpatient
Hospital outpatient/physician office
ASC
Home
Surgeon
Physician
Pharmacist
Nurse or qualified technician
Home Care
Self/family
Who will receive the product or procedure?
–
–
–
–
Diagnoses of patient
Age of patient
Gender of patient
Ability/disability status of patient
Confidential | © 2006 Boston Healthcare Associates, Inc.
|
Page 15
Create. Navigate.SM
MCO Benefit Structure
Benefit
MCO Health Insurance
Benefits
Coding Site of
Care
Medical Benefit
DME
Hospital
Services
Outpatient
MD
Services
Office Based
Injectable
Drugs/
Devices
Home Use
Devices
ICD-9/
HCPCS
CPT
HCPC
S
HCPC
S
Pharmacy Benefit
Home Use
Outpatient
Oral Drugs
Home Use
Injectable
Drugs
NDC
NDC
The site of care generally determines which portion of the benefit structure
bears the cost of the drug or device
Confidential | © 2006 Boston Healthcare Associates, Inc.
|
Page 16
Create. Navigate.SM
Reimbursement Assessment
Primary Market Research with
Payer Decision Makers
FIRST REIMBURSEMENT ASSESSMENT
One-on-One Payer Interviews
(n=~15 to 35)
1. Evaluate Product Profile
Medical Directors
2. Economic Endpoints
Pharmacy Directors
3. Position within Payer
Reimbursement Structure
Health Policy Analysts
4. Coding
5. Coverage
6. Price Ranges
Confidential | © 2006 Boston Healthcare Associates, Inc.
|
Page 17
Create. Navigate.SM
Reimbursement Assessment Issue Analysis
1
Assessment of current standards of care




2
Payer perceptions of current treatments
Prevalence of disease within the health plan
Perceptions of efficacy for current treatment options
Costs of existing therapies
Examination of existing coverage, coding, and payment systems
 Current coverage policies and/or restrictions for treatments
 Implications of point of care
 Copayment/Coinsurance structure and tier placement
3
Reactions to expected clinical outcomes in the target indications
 Value perceptions (an unmet need?) of treatment
 Desired clinical and economic endpoints for further studies or data
4
Examination of potential coverage/reimbursement for new technology





Identify key drivers of coverage policy
Benefit evaluation (medical or pharmacy?)
Potential product restrictions or tier placement
Analysis of health economic evaluations critical for positive coverage
Predicate products with similar issues/profiles
Confidential | © 2006 Boston Healthcare Associates, Inc.
|
Page 18
Create. Navigate.SM
Completing a Payer Mix
Assemble a full set of data on the patient population
1.
Understand the patient demographics of the disease and how these shift as the
disease progresses over time
a)
b)
c)
d)
2.
3.
Age
Gender
Disability
Socioeconomic status
Use peer-reviewed literature, disease-related websites and advocacy group
websites to identify any economic or population-based studies
Other sources: MedPAR data, payer claims data sets, CDC
Apply payer market to the patient population to determine mix
1.
2.
Adjust your mix to account for loss of insurance if chronic disease leads to
disability
Ensure you research not only medical insurance but prescription drug insurance
a)
Stratify population by adequacy of insurance, if applicable
Confidential | © 2006 Boston Healthcare Associates, Inc.
|
Page 19
Create. Navigate.SM
Key Reimbursement Planning Activities
Estimated Timeline
-18 months
-24 months
-12 months
-6 Months
Launch
+6
months
Reimbursement
Strategy
Conduct
payer
MD, payer,
Payer Mix assessment
patient
Analysis
research
Payer Profiling
and Targeting
Payer mix
translated to
targeting
Begin profiling
of accounts
Pricing
Research with
payer, MD,
patient
Profiling
continues and
payer
education
campaign
launched
Testing final
positioning
given data set
Payer
education
campaign
continues
At approval
coverage payer
engagement
begins
Tracking of
policy and
results
Coding
Strategy
Conduct a
coding
assessment
Meet with
specialty societies Align physician
Begin
representatives
group advocacy
coding
with coding
advocacy
strategy
Confidential | © 2006 Boston Healthcare Associates, Inc.
|
Page 20
Prepare
drafts of
the
application
Submit
application
Create. Navigate.SM
Thank You
Erica Bisguier, Director
Boston Healthcare Associates, Inc.
75 Federal Street, 9th Floor
Boston, MA 02110
617.482.4004
[email protected]
www.bostonhealthcare.com
…from mind to market
Confidential | © 2006 Boston Healthcare Associates, Inc.
|
Page 21
Create. Navigate.SM