Medical Device Daily Washington Editor

The Centers for Medicare & Medicaid Services (CMS) recently published an update for the prospective payment system for long-term care hospitals (LTCHs), but unlike some other recent reimbursement proposals, this one has met with the approval of the affected industry. It didn't hurt that CMS proposed a rate hike.

The proposed payment rule, according to CMS, is "designed to assure that long-term care hospitals (LTCHs) continue to receive appropriate payment for services provided while giving them incentives to provide more efficient care to Medicare beneficiaries." The new payment rate will take effect July 1.

According to CMS, the rule would affect the nearly 400 LTCHs in the U.S., and the proposed standard rate for 2009 is just more than $39,000. This reflects a 2.6% update, which is based on a 3.5% boost in the market basket rate minus .9% as "an adjustment to offset coding changes" for 2006 that the agency said "do not reflect real changes in the severity of cases treated by these hospitals."

For the 2009 reimbursement year, CMS anticipates paying out roughly $4.4 billion to LTCHs, which would be about $124 million more than the previous year. Because the agency wants to realign the reimbursement year with the fiscal year, the new rates, whatever they may be in their final iteration, will be in force from July 1, 2008 to Sept. 30, 2009.

Acting CMS administrator Kerry Weems said in the statement that the payment proposal, should it go into effect in its current form, "will help make sure Medicare beneficiaries who need longer term inpatient care get high quality services appropriate to their medical conditions," and reflects an interest in "increased incentives for efficient delivery of care."

CMS will accept comments on the proposed payment schedule through March 24 and will finalize the payment schedule by May 1.

Bill Walters, CEO of the Acute Long Term Hospital Association (Alexandria, Virginia), told Medical Device Daily that the payment update is "a positive development and consistent with legislation passed by Congress," a reference to the Medicare, Medicaid and SCHIP Extension Act of 2007. That bill essentially neutralized a proposed 3.75% reduction in payments to LTCHs to maintain budget neutrality for three years.

Walters also said that the proposed regulations "will provide a period of stability during which LTCH hospitals and regulators develop certification criteria" for such establishments.

A Jan. 22 analysis published by Bank of America (BoA; New York) said that the firm's analysts "view this regulation as a positive for the industry inasmuch as CMS could have been more aggressive with a code creep adjustment." This is in reference to changes to diagnostic coding that can increase reimbursement despite not being associated with an increase in the cost of care. BoA also noted that "for the first time in several years, LTCHs would actually receive a positive 2.9% increase in Medicare payments."

CMS averse to covering renal artery stenting

CMS opened a national coverage analysis for stenting of the renal arteries early last year and is looking for final comments on a proposed final decision memo. Should the agency cover renal artery stenting, stent makers would have an expanded market for their products, but CMS indicates it will not budge on its current coverage, which covers angioplasty but not stent use.

The memo notes that in roughly 90% of cases, "renal artery stenosis (RAS) unilateral or bilateral narrowing of the lumen of the renal arteries is the result of generalized atherosclerosis," but that these patients "more often die from cardiovascular causes such as a heart attack or stroke, rather than from kidney failure." The agency pegged the prevalence at "about 30% in patients with coronary artery disease to about 50% in patients who are elderly or have diffuse atherosclerotic disease."

The decision memo says that FDA approved two stents for this application earlier this decade, naming the Palmaz, made by Cordis (Miami Lakes, Florida) and the AVE Bridge made by Medtronic (Minneapolis, Minnesota), but neither of them is still on the market and "there are presently no FDA-approved devices for primary stenting or distal embolic protection in the renal arteries." However, Cordis' web site suggests that the Palmaz is available in the U.S. for renal artery stenting.

Transluminal angioplasty, according to the memo, has been covered since 1994 as an alternative to surgery. CMS noted that the Medicare Coverage and Evidence Development Advisory Committee (MedCAC) met in July 2007 to review the question, and that the committee was lukewarm at best on the question of whether the medical literature supported the use of a bare metal stent. The literature was seen as not supportive at all of the use of a drug-eluting stent.

MedCAC also noted that "[i]n 2007, the American Society of Nephrology (ASN; Washington) advisory group on hypertension published a review and position statement about ongoing controversies" regarding renal artery stenosis, and the conclusion was that it is not known "whether RAS in an individual patient causes hypertension or contributes to declining renal function" in part because "diagnostic tests to delineate this dilemma are not available."

The proposal gained no traction from the whole of ASN membership, either. In a March 28 letter to CMS, the association's president, William Henrich, MD, indicated that the society agreed with an Agency for Healthcare Research & Quality conclusion that "there is no clear evidence that angioplasty and stenting improves outcomes for patients with atherosclerotic renal artery disease." However, ASN did throw its support behind continued funding of the Coral (cardiovascular outcomes in renal atherosclerotic lesions) study, which will evaluate the use of medical therapy and the Genesis stent, made by Cordis, vs. medical therapy alone.

The Society for Vascular Surgery (Chicago) also indicated that because "the primary problem in this arena appears to be a lack of high-quality research rather than lack of efficacy," it recommended "that CMS retain its current coverage policy until more data are published."

CMS said it expects to publish its final decision Feb. 28.