Which Agency Does the Medical Device Industry Want to Change?


If you believe what medical technology executives are saying at the annual Advanced Medical Technology Association conference in Minneapolis, the device industry wants to change the agency driving reimbursement decisions: the Centers for Medicare & Medicaid Services.

The Food and Drug Administration, which ensures a device’s safety and efficacy before it’s allowed on the U.S. market, traditionally served as the device industry’s boogeyman. Industry executives have long called for shorter FDA review times for products and more transparent and predictable decisions from the agency.

With the industry having some success in getting those changes at the FDA, it seems the CMS is now seen as the major hurdle impeding growth at medical technology companies. At issue is the time lag between a product's approval for the U.S. market and a decision on whether Medicare will cover it. Many in the device industry believe the time between the FDA decision on a new device's safety and efficacy and when the CMS makes a coverage determination for the product is too long. Acquiring CMS coverage for a new medical device is crucial to a product's success, especially as many private payers partially base their own coverage determinations on what the Medicare agency decides.

The Medicare agency needs to improve its policies for covering new medical technologies, the president and CEO of device maker CVRx said at the AdvaMed conference Oct. 17. AdvaMed also views this as a problem and plans to push Congress and the CMS to make it easier for manufacturers to get new devices covered, CVRx's Nadim Yared said. Yared is also on AdvaMed's board.

The industry’s call for change at the CMS comes as the agency is trying to squeeze more value out of devices. However, medical technology companies must demonstrate the value of their devices on aspects other than price as bundled payment models become more common, a Magellan Health executive said at the conference Oct. 18. For example, device manufacturers need to prove their products shorten hospital stays and reduce complications, David Hodges said at the conference. Hodges is the chief medical officer of Magellan Health, a for-profit managed care company based in Columbia, Md.

Bundled payment models are one way the CMS is trying to reduce variations in treatment costs among hospitals while improving outcomes. With bundled payments, hospitals receive one payment for an entire episode of care that spans acute and post-acute care instead of receiving separate pay for individual services under the fee-for-service schedule. Hospitals could face a financial downside for not coordinating follow-up care and some are looking to derive more value from the devices they use, which may prompt medical technology companies to change how they design and sell their products.

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