In Comment Letters, Device Makers Tell CMS to Protect Innovative Technologies

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Patient access to innovative technologies needs to be protected within accountable care organizations, medical device manufacturers told the Centers for Medicare & Medicaid Services in comments on the ACO proposed rule.

The Medical Device Manufacturers Association (MDMA) and the Advanced Medical Technology Association (AdvaMed) in separate comment letters told CMS that the proposed rule needs to be modified to ensure stronger safeguards so that medical progress continues to thrive.

“While MDMA supports the goals of ACOs to improve patient care and delivery and to eliminate waste and inefficiencies, we remain concerned that the proposed regulations could adversely impact access to new and innovative medical technologies,” Mark Leahey, president and chief executive officer of MDMA, said in a statement. “Medical technology entrepreneurs develop products every day that are designed to improve the quality of life, reduce hospital stays and cut costs. We need to ensure that these technologies are not only accessible, but that they are adequately supported so innovators can continue to deliver on the promises of a better tomorrow.”

AdvaMed in its comment letter told CMS that as currently proposed, ACOs would be rewarded for cost savings in the short term and for achieving a limited set of quality measures, most of which are not outcomes-based. AdvaMed said that situation creates disincentives for using innovative treatments that represent improvements in care if they are more costly.

“In fact, it may even discourage adoption of less costly treatments that deliver lower costs outside the ACO annual performance timeframe, such as an implant that lasts longer and requires no, or less frequent replacement,” AdvaMed wrote.

The proposed rule for ACOs under the Medicare Shared Savings Program, released March 31, would help doctors, hospitals, and other health care providers better coordinate care for Medicare beneficiaries. The proposal was published in the April 7 Federal Register (76 Fed. Reg. 19528), and comments were due June 6 (5 MELR 211, 4/6/11).

Carve-Out for Innovative Devices.

Both device groups urged CMS to adopt a carve-out for innovative devices. CMS proposes to assess each ACO's performance by comparing its expenditures to a benchmark based on expenditures for beneficiaries who would have been assigned to the ACO in the three years prior to the agreement period.

Even though the benchmark expenditure data will be adjusted, MDMA said the adjustments would not account for the costs of new technologies that become available during the agreement period. The group told CMS it was concerned that ACOs might be reluctant to use new technologies, even if they help reduce the costs of care over the long term, if the costs of using those technologies during the agreement period appear high compared with the benchmark expenditures.

MDMA and AdvaMed both urged CMS to consider the options available for carving these expenses out of the data used to measure an ACO's performance. Under one possible approach, MDMA said CMS could exclude the costs of any technology that is granted a new technology add-on payment under the hospital inpatient prospective payment system (IPPS) or pass-through status under the hospital outpatient prospective payment system (OPPS) from the benchmark and the ACO's expenditures.

“These mechanisms are intended to provide adequate payment for technologies that would not be reimbursed appropriately under the standard Medicare payment methodologies. Consistent with the efforts to protect access to these technologies under the IPPS and OPPS, CMS should ensure that ACOs are not penalized for using these technologies under the MSSP [Medicare Shared Savings Program] by excluding their costs from the benchmark and the ACO's expenditures used to calculate shared savings,” MDMA said.

AdvaMed recommended that CMS establish a new, annual process for excluding high-cost or high-volume breakthrough technologies from shared losses. “While this special accommodation would vary from case to case, it would typically involve excluding certain Medicare expenditure data from an ACO’s shared savings or shared loss calculations,” AdvaMed wrote.

As part of the consideration process, AdvaMed recommended that CMS ask each developer or manufacturer applying for special designation to estimate the Medicare expenditures that would result from the technology’s use in a given year.

Quality Measures.

CMS proposes to use a set of 65 quality measures to determine if an ACO is eligible to receive shared savings. According to MDMA, the agency should encourage appropriate use of innovative technologies through “consensus-based quality measures” that are updated frequently to reflect improvements in treatment options and promote timely referrals to specialists.

“As innovative devices and other technologies contribute to the evolution of the standard of care for many conditions, Medicare's quality measures also must evolve to promote the best quality care for beneficiaries,” MDMA wrote. “CMS should work with stakeholders and consensus-based organizations to identify outdated measures, revise existing measures to reflect changes in treatment options, and to develop measures for appropriate use of new technologies for which no measures currently exist. The consensus-based organizations are best equipped to consider the relevant literature and expert opinion and develop meaningful measures that effectively promote high-quality care.”

AdvaMed also noted the importance for CMS to update the quality measures to keep pace with changing technology. “These adjustments will avoid freezing medical practice in place and penalizing providers who provide innovative healthcare to their patients,” AdvaMed wrote.

MDMA said that the quality measures used in the ACO program also should promote timely referrals to specialists. CMS intends for primary care physicians to improve the quality and efficiency of care by coordinating with the specialists who treat their patients. “This coordination role must include new referrals to specialists, as well as working with the specialists already treating each beneficiary, but the proposed rule does not address protections to ensure that beneficiaries are referred to specialists in a timely manner,” the group told CMS.

Fraud Law Waivers.

Both AdvaMed and MDMA also wrote to the Office of the Inspector General of HHS expressing concerns about proposed waivers of the anti-kickback, physician self-referral and civil monetary penalty (CMP) statutes. To permit ACOs to function effectively, PPACA allows for HHS to waive those statutes.

CMS and HHS OIG April 7 published a notice in the Federal Register seeking comments on such proposed waivers (76 Fed. Reg. 19655).

AdvaMed wrote that it believes any waivers should be “carefully constructed, clearly stated and carefully monitored to ensure they achieve their purposes without eroding unnecessarily the protections against inappropriate incentives affecting clinical decisions provided by the underlying statutes.”

The group said that it has repeatedly emphasized that gainsharing programs, which would require waivers of the CMP statute, must be carefully designed in order to prevent patients from being put at risk from inappropriate incentives that influence clinical decisions, “leading to stinting on care or otherwise inappropriate choices.”

Gainsharing is an arrangement where a hospital gives a physician a percentage share in any reduction in the hospital's cost for patient care attributable in part to the physician's efforts. AdvaMed said that to the extent any waivers for the CMP, anti-kickback and physician self-referral law are necessary, they should be narrowly tailored to their intended purpose.

MDMA also said it had concerns about waiving the CMP statute. The group cautioned against efforts, like waiving the CMP statute, that could lead to medical device product standardization, which would disproportionately impact small and mid-sized medical device companies and harm patient access.

The group in its letter to HHS Inspector General Daniel Levinson said that standardization “cannot be achieved without limiting access to innovative items, supplies, and devices.” By definition, standardization involves limitations on access to beneficial items, supplies, and devices that are not on the hospital's approved list, MDMA wrote.

This list is likely to include devices from a single manufacturer. No single brand of medical device is best for all patients, because each patient requires different features and sizing. MDMA said physicians must have full access to any medical device that they determine is appropriate for their patient, and their choice of device should not be tainted by financial incentives.


In comments to the Federal Trade Commission regarding antitrust policy, AdvaMed said it is concerned about the overall market power than an ACO may wield, “to the detriment of competitive forces in the health care marketplace. Excess market power often has a negative impact on patient care, resulting in patients having little or no choice in the health care services and items available.”

FTC and the Department of Justice published April 18 a proposed statement of antitrust policy on ACOs (76 Fed. Reg. 21894).

AdvaMed said it is “crucial” for FTC and DOJ to scrutinize hospital employment of physicians and hospital acquisition of physician practices “because they may have serious, long-term, anti-competitive effects that disrupt markets. In particular, we are concerned about the limited choice that consumers/patients will have if there continues to be increasing hospital employment of physicians (or hospital acquisition of physician practices).”

Explicitly expanding the scope of FTC/DOJ's review—both under the Medicare Shared Savings program reviews and under overall enforcement activities for the two agencies—to include a more comprehensive analysis of hospital employment and physician practice acquisitions “would be an important step toward combating the anti-competitive effects of hospitals locking up the market share,” the device industry group wrote.

By Nathaniel Weixel

MDMA’s letter to CMS is at . AdvaMed’s letter on the CMS proposal is at .

MDMA's OIG letter is at .

The AdvaMed antitrust letter to FTC is at , while the group's OIG/CMS letter is at .

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