6
Reimbursement and Other Economic Considerations
HIGHLIGHTS
- How medical procedures are reimbursed plays a major role in how scalable they can be. New technologies often face problems in getting reimbursed because they do not fit well with established reimbursement codes. (Brown, Mahoney)
- The Centers for Medicare & Medicaid Services offer a variety of programs for covering and reimbursing innovative technologies. (Miller)
- In thinking about the adoption of new technologies, it is useful to view them not in isolation but as part of a system. (Mahoney, Silburn)
- To avoid as many issues as possible in obtaining coverage and reimbursement for a new technology, the best approach is to meet with regulators early in the development and testing process in order to understand the best path forward. (Miller)
- To get evidence for the cost-effectiveness of new technologies, it would be useful to establish an industry-wide system of collecting, storing, and analyzing patient data. (Mahoney)
NOTE: This list is the rapporteurs’ summary of points made by the individual speakers identified, and the statements have not been endorsed or verified by the National Academies of Sciences, Engineering, and Medicine. They are not intended to reflect a consensus among workshop participants.
Throughout the workshop, participants explored practical barriers to the increased use of implantable brain stimulation, such as deep brain stimulation (DBS), with an examination of how reimbursement policies and other economic considerations affect the uptake of this and other medical technologies. Participants considered the current economic barriers and technological limitations that prevent implantable brain stimulation from becoming scalable, discussed what ongoing or future approaches need to be taken to improve the benefit-cost ratio and allow brain stimulation to be scalable for wider application in central nervous system disorders, reviewed the current status of reimbursement for implantable brain stimulation, and discussed opportunities to increase reimbursement.
BILLING AND REIMBURSEMENT
Julie Brown, senior director for health economics and market access at Spark Biomedical, began by discussing her previous experience at Abbott Neuromodulation, where she was involved with its virtual clinic, which offered telehealth services. It worked well, she said, but several issues arose concerning how clinicians using this remote clinic would bill for it. “We had a couple of questions,” she said. “Do we take the current codes and we make those adaptable to telehealth, or do we go get a completely new set of codes?”
More generally, she said, working with reimbursement even when there are well-defined pathways can be like playing a board game. “If you read the rules, you can end up where you need to go,” she said, “It might take you longer than you would have liked, but there are milestones to be achieved along the way.” This board game–like nature makes it important to educate all the relevant stakeholders so that everyone understands what is necessary.
FUNDING A HEALTH CARE SYSTEM
Kevin Mahoney, chief executive officer of the University of Pennsylvania Health System (UPHS), spoke about that system’s funding. Penn Medicine is the umbrella organization comprising both UPHS and Penn’s Perelman School of Medicine, which together have a tripartite mission of clinical care, education, and research. UPHS includes six acute-care hospitals, multispecialty centers, and outpatient facilities in three states.
Echoing what Brown had said in the previous talk, Mahoney said, “it gets into a game with insurance companies as to how we get reimbursed,” and the focus is on how to get their payments from public and private insurers. What is unusual about the funding model at Penn Medicine, he said, is that 60 percent of the clinical margin is used to support the organization’s
research mission, making up for its operating deficit and adding to its capital investment. Another 15 percent of the clinical margin goes to support its teaching mission, while the remaining 25 percent goes into clinical mission capital. “We made about $512 million last year, and $300 million of that or so went to supporting research,” he said, explaining that much of that goes to supporting good research ideas that do not have enough data supporting them to get outside grants.
This approach has led to significant breakthroughs at Penn Medicine, Mahoney continued. Two dozen drugs developed there have received U.S. Food and Drug Administration (FDA) approval in the past decade. Most recently, two researchers there, Katalin Karikó and Drew Weissman, were awarded the 2023 Nobel Prize in Physiology or Medicine. Initially, they experienced challenges with securing a grant, Mahoney said. “Then we set up a venture fund similar to what many of our colleagues across the country are doing.”
The system’s venture fund is focused on two things, he said: gene therapy and connected health. The goal of connected health is particularly relevant to implantable brain stimulation. “We are talking about patients being able to adjust technology over time,” he said, “You don’t want everyone coming into the hospital or the clinics, so how do we do that remotely?”
COVERAGE DECISIONS AT THE CENTERS FOR MEDICARE & MEDICAID SERVICES
Susan Miller, a board-certified physiatrist who was in practice for more than 20 years, is now a medical officer at the Centers for Medicare & Medicaid Services (CMS). She spoke about the process CMS uses in determining coverage for medical procedures, particularly those involving innovative technology.1
Coverage decisions are made through an evidence-based policy, she began. “When we evaluate any item or service that has a benefit category, meaning that we are allowed to statutorily cover that item, we look for several factors to determine if it is reasonable and necessary for our beneficiaries.” It is important to establish a causal relationship between the item or service and the desired outcome in a trial. Among the factors evaluated is the “the methodology of the study to see if it has done the best that it can to promote bias reduction,” Health outcomes are also evaluated, Miller said. In particular, CMS is looking for health outcomes that are important to the
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1 For additional information on the CMS programs covered by Miller, see https://www.nationalacademies.org/documents/embed/link/LF2255DA3DD1C41C0A42D3BEF0989ACAECE3053A6A9B/file/D5BD8054113521CFB0A96DA50D1CF13B578812D93C52?noSaveAs=1 (accessed February 28, 2024).
patient, such as morbidity and mortality, physical functioning, and quality of life. The agency also looks for data on the durability of outcome, which is a very important piece of the information in making coverage decisions, as well as for information about whether the available item or service is actually generalizable to the Medicare patient population.
Miller also noted that this is a very high bar. CMS has a number of innovative programs or methods by which to promote coverage for new technologies. An example is the Program for Parallel Review of Medical Products done in collaboration with the FDA, in which the two agencies carry out simultaneous reviews of new medical devices to decrease the time to a CMS proposed coverage decision.
Miller also mentioned the coverage with evidence development paradigm, in which a promising item or service with a limited evidence base, specific to the Medicare population, is investigated within an approved study, or with the collection of additional clinical information. CMS also has a Clinical Trials policy and a proposed program for transitional coverage for emerging technology. “That [program] is sort of a combination of our parallel review program and coverage-with-evidence development program,” she explained, “but it also brings in opportunities for the manufacturers [of Breakthrough Devices] to discuss benefit category and coding in addition to coverage.”
Finally, for those situations where a new device does not qualify for any of these other programs, CMS has specialized payment programs. “We have tried very hard to expand these innovative programs at CMS,” Miller concluded. However, it is still important to follow the correct procedures and regulations for each program.
THE ADOPTION OF DEEP BRAIN STIMULATION TECHNIQUES
Peter Silburn, the foundation chair in clinical neurosciences at the University of Queensland and codirector of the Asia-Pacific Centre for Neuromodulation at the Queensland Brain Institute, offered a couple of thoughts about the adoption of DBS technologies.
First, he said the concept of an ecosystem is useful when thinking about adoption of new technologies. In an ecosystem, he said, people get together and evolve in nodes, which can lead to some interesting outcomes because they evolve in parallel as well as sequentially and in an integrated way. “I think if we go to adopt DBS across the world and various geographies and battle with their various systems,” he said, “we have to integrate health economics and also people who know how to get things across the line at the outset.”
The fact that many people, even technologically savvy people, do not realize that DBS is an established technology can be seen as a failure of
marketing, Silburn said. Henry Ford, the founder of Ford Motor Company, said that he was not selling cars, he was selling experiences, and a similar approach can be taken with DBS.
Internationally, he continued, the biggest barrier is that each country has its own way of doing things. “What works in one country does not work in others.” But by focusing on the patient’s outcomes and safety and innovating at a fast pace, it should be possible to get an ecosystem of individuals working together to get the technology adopted around the world.
DISCUSSION
Barriers to Physician and Patient Adoption
Pathak asked the members of the panel to identify a current practice, activity, or economic issue that is a potential barrier to either physician or patient adoption of DBS.
“The biggest barrier we are facing with DBS or any new technology,” Mahoney said, is that “we are held accountable for the unit price of one item as opposed to the ecosystem.” People are “focusing on one sliver of a large pie.” It is important to start seeing payment issues holistically rather than piece by piece. Silburn agreed, saying, “We need to shift the paradigm from one single device to the patient experience.” He suggested partnering with marketing people to urge the public to focus on the overall experience rather than the specifics of any one piece of it.
Brown said that from a reimbursement perspective, DBS has good reimbursement, as there has been a national coverage determination for DBS in the United States for patients with essential tremor or Parkinson’s disease since 2003. That is, Medicare will reimburse for a DBS procedure. “So, from my perspective,” she said, “it is interesting to hear there are challenges.” Yes, she continued, there are certainly challenges getting reimbursement for remote programming or for indications such as treatment-resistant depression or OCD. In those cases, CMS will need to see compelling evidence for efficacy before it provides a national coverage determination. She added, however, that from her perspective, and not in an official CMS position, the reimbursement situation for DBS is “ahead of the game” because the procedure is already covered by Medicare, and other insurers look to Medicare when making their coverage decisions. Because of that, she said, “I think DBS is already in a nice, enviable position to begin with.”
More than just finances play a role in people’s decisions about getting DBS, said Miller. For example, patients often must travel a long distance to get the surgery, and then must worry about who is going to take care of the implant after the surgery. “Is there a local physician able to take care
of that technology, or are you asking the patient to travel extra distances once or twice a year to make certain that their implant works?” In short, it is often not just a case of money, she concluded.
Adoption of Emerging Technologies into Health Care Systems
Reflecting on Mahoney’s earlier comments that technologies such as DBS should be seen as an entire service line versus a single implant, Pathak asked what that implies for scalability. “The more steps you add to something, the less desirable it becomes for adoption, to physicians at least,” she said. How is the tension resolved between how the business model works (and wanting to move beyond single items) versus the desire to do less because simpler things are easier to adopt?
Mahoney answered that this is an issue he wrestles with. One approach is to focus on innovations and improvements in treatments and technologies once they are being used in the clinic, something he described as a “lost art.” Once something is in place, he said, “it’s got a code, got a system, we have a way of doing it,” which means that clinicians end up staying in one place. It is important that the medical system evolve instead. “As the reimbursement pressure continues downward,” he said, “I think we will have to adopt a new tenet: there aren’t unprofitable patients, just unprofitable delivery systems. The only way we will be able to successfully treat every patient without losing our shirts is to make the system more efficient. If we have 10 steps, can we get it to 9, to 8 . . . to 5? The patients, as Peter [Silburn] said, enjoy that experience, and costs will tumble down.”
Examining Meaningful Measurable Outcomes
Pathak asked panelists for their thoughts on which measurable outcomes are of the upmost importance, in their opinion. Miller offered a perspective about how CMS thinks of outcomes. “It is important for people to realize that . . . we are looking for those outcomes that are important to the patient. . . . What we are looking for is [does the patient] feel better, and what can they do today that they weren’t able to do yesterday.” Miller also mentioned patient-centric scales such as pain levels, function, sleep, and the amount of medication the patient needs to take. A similar approach is true for neurological treatments, she said: “If the patient is treated with a device that is supposed to make them better, how is that manifested in the patient’s world? That’s the kind of thing we look for.”
Following Miller, Silburn said that beyond that, it would be useful to find biomarkers that are objective rather than subjective. Even the Unified Parkinson’s Disease Rating Scale, a standard in the field, depends on when the examination is given, he noted.
Brown commented that in the United States it has been difficult to make remote programming reimbursable because there has not been sufficient peer-reviewed, published evidence on it. “We have to be patient-centric,” she said, “but we also have to make sure we are committed to really good science, having these publications, having it peer-reviewed, and being able to present that to CMS.” That can be seen as a hurdle to reimbursement. “You can’t just get coverage,” Brown said. “You have to have evidence that speaks to the outcomes and to the benefits.”
Exploring How to Encourage Innovation
Pathak wondered how innovation can continue to be encouraged, specifically in digital health and telemedicine. Miller offered the perspective of regulatory agencies. The best thing for innovators to do, she said, is to meet with CMS early to discuss plans for trials. CMS will tell you what it is interested in. “I really think that coming in early to the regulatory agencies in our country is a huge step that you can take in order to be able to scale up your innovative technology,” said Miller.
Mahoney responded to a question about how to demonstrate that a particular therapy brings benefits in terms of health economics when the illnesses being addressed are chronic, so that the benefits may stretch out over decades and may involve many people other than the patient, such as caregivers and employers. Without years of patient history and with the patient potentially switching from system to system, it can be very difficult to provide information that proves the benefits of a new therapy. Mahoney agreed that it is a difficult problem to solve. People do switch health systems and insurance companies every 2 or so years, he said. “Unless you are on Medicare, you are switching quite often.” He said that health care should begin collecting long-term, follow-up clinical data across medical centers that is put into a central repository not owned by any one institution. “That is what airlines do and so many industries do,” he said. “They share their back room. I think that would make it much more effective.”
Denison noted that reimbursement codes can be an obstacle to innovation. Suppose, for example, he said, that someone came up with an innovation that made programming more efficient, so that what used to take 30 minutes could now be done in 15. Unfortunately, there is no reimbursement code for a 15-minute programming, which means that people will not adopt the new, more efficient method because they cannot get reimbursed for it. “Now you could say, ‘Let’s go invest and come up with the new reimbursement code,’ but for startups that could actually be a killer,” he said. “Little startups desperately try to match their technology to existing codes, artificial as it may be.” What models, he asked, might make it possible to move
to a more shared incentive “so everyone can economically benefit and truly be patient-outcome focused”?
“There isn’t an easy answer to this question,” Brown said. The coding system does have many advantages, such as the fact that it is brand-agnostic so that all devices, regardless of the manufacturer, use the same codes. But, she said, innovation often does outpace the current mechanisms in place, and there is not an obvious way to address this.
Miller reiterated that innovators should speak to regulators early in the process of development. “You don’t want to be at the end of your pivotal trial and then start asking these sorts of things,” she said. “We try to educate people on this whole process. The thing the innovators have to do is avail themselves of that education.”
