Medical Device Daily Executive Editor

DANA POINT, California – The road to reimbursement is long and twisting for med-tech companies driving their products to market.

As a panel of top executives of three innovative medical device companies noted during an opening-day session of the Advanced Medical Technology Association's (AdvaMed; Washington) annual meeting at the St. Regis Monarch Beach Resort & Spa on Thursday, this road is filled with obstacles that need to be avoided in order for the journey to be successful.

As part of staying clear of those obstacles, all agreed one key is to start the drive as early as possible.

Nancy Sousa, president of Given Imaging Inc. (Norcross, Georgia), the U.S. unit of Given Imaging Ltd. (Yokneam, Israel), cited the twists and turns negotiated by the maker of the PillCam system for gastrointestinal (GI) tract imaging. And she touched on the variety of decisions that needed to be made along the way.

The original plan was to use an existing CPT code, but that did not prove possible, so the company then had to decide whether to seek a new CPT code or go for Level III coding. It determined that a CPT code was needed, then faced a decision on whether to seek a national coverage decision from the Centers for Medicare & Medicaid Services (CMS; Baltimore) or go after local coverage. Due to an absence of broad-based clinical results initially, Given went the local-coverage route.

Thoratec (Pleasanton, California) President and CEO Keith Grossman cited the numerous reimbursement-related stumbling blocks the maker of ventricular assist devices (VAD) has needed to scale on its road to becoming the leader in that sector, with more than 9,000 such devices implanted to date.

He noted, for instance, the dichotomy of payers for the two indications for its HeartMate XVE device, with the majority of bridge-to-transplant (BTT) patients being covered by private payers and the vast majority of its destination therapy (DT) recipients being covered by Medicare.

"We were covered for BTT under a DRG [diagnosis-related group] for cardiac surgery," he said. But that coverage called for Medicare reimbursement of only about $35,000, far less than the total procedure cost of some $140,000.

And, even as CMS approved the BTT coverage, it specified that a national non-coverage policy was in place for destination therapy.

Then, however, came the strong results from the National Institutes of Health-sponsored REMATCH trial, which showed HeartMate recipients living longer, healthier lives.

Armed with those results, Thoratec submitted for a national coverage decision in the fall of 2002. A new DRG – for VADs – was issued in February 2003, but even there, another twist impacted the company, as CMS determined it would approve reimbursement only in centers it certified.

So far, it has certified 69 of the 130 centers that had been implanting Thoratec VADs. The good news is that the level of payment now averages about $136,000 and ranges up to more than $200,000, depending on the region where the procedure takes place.

Timothy Patrick, president and CEO of Proxima Therapeutics (Alpharetta, Georgia), moderated the panel and related his company's experiences in pursuing reimbursement for its site-specific radiation delivery systems, focusing on its MammoSite RTS system for breast cancer radiation treatment.

While the radiation itself was not being changed, Proxima needed to establish a new reimbursement code because of the delivery method. The company made much of its push via the involvement of the American Society of Breast Surgeons (ABBS; Laurel, Maryland).

With the involvement of ABBS members, including the publication of 22 peer-reviewed articles, a new CPT code covering the MammoSite procedure took effect on Jan. 1 of this year.

In their presentations, and while fielding questions from the audience, all three panelists emphasized common key points:

  • Start the reimbursement process early.
  • Engage outside experts as consultants.
  • Make reimbursement an area of constant focus.
"Start thinking about reimbursement as you design your [clinical] trials," said Grossman. Even after receiving FDA approval for your product, "you're going to be graded a second time when you go to CMS – and graded on a different basis. So, go to CMS early and start talking."

He cautioned companies that they "need to fund it early and get outside help." In addition to using outside consultants, he said, "we also needed more strength internally; we brought in a person [to lead the reimbursement effort] at a very senior level."

Responding to a question about what to look for in a reimbursement consultant, he said, "the needs are a little different for each company – go with someone with demonstrated success" in the area one's company is focused on.

Patrick echoed the "get started early" theme.

He emphasized a three-part focus:

1) Capturing information in trials on a device's cost-effectiveness.
2) Soliciting advisors/consultants input.
3) Getting professional societies involved. "It's very difficult to move forward successfully if they don't believe in the technology."

Grossman added: "Don't wait for the payer to bring up questions of cost benefits – the sooner you jump in [with such information], the better."

Patrick noted, for example, that Proxima was not invited to participate in an early technology assessment that did not go well for the company. "We found later that some of the data used in that tech assessment was dated."

Sousa added: "You need to stay on top of who is doing the tech assessment and make sure they have the most up-to-date data available. Leave your antenna up."

The latter advice seemed to cover, very much in brief, a philosophy companies can subscribe to in order to achieve reimbursement success.