Medical Devices Approved Using Low-Quality Data Affect Medicare Costs

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By Michael D. Williamson

Sept. 8 — High-risk medical devices are sometimes approved using low-quality clinical data and this increases Medicare costs, a member of a Medicare congressional advisory panel said Sept. 8.

The Medicare Payment Advisory Commission's meeting session reflected its first major examination of the medical device industry. The session may portend a deeper examination of the device industry's practices, which could cause Congress and/or the Department of Health and Human Services to change payment rates for devices and related services, as the commission's recommendations are fairly influential among policy makers.

Commissioner Rita Redberg, a cardiologist at the University of California San Francisco Medical Center, called for further MedPAC examination of how to push the Centers for Medicare & Medicaid Services to more broadly consider quality over an entire episode of care when deciding whether to cover a device.

Commissioners didn’t vote on recommendations. However, they debated how MedPAC staff should further research device company practices and their role in driving Medicare costs. Results of that research could prompt the commission to draft recommendations in the future.

In a separate session, commissioners discussed MedPAC staff progress on developing a uniform set of quality measures that could be used under a unified Medicare payment system for all post-acute care providers.

Tie to Rising Medicare Costs

Devices with a high risk to patients are sometimes approved by the Food and Drug Administration using poor quality data, Redberg said. This can result in low-quality devices being implanted into patients. These low-quality devices then need to be deactivated or removed, which drives up Medicare costs.

Reacting to Redberg's comments, Don May, executive vice president, payment and health-care delivery policy at the Advanced Medical Technology Association, a device trade group, said in a Sept. 8 e-mail that patient safety “is the number one priority of the medical technology industry, and our industry has—on balance—an extraordinary safety record.”

To help ensure safety and effectiveness, “our industry works closely with FDA,” May told Bloomberg BNA. He also said the FDA has extensive premarket authorities to require whatever evidence is necessary, and extensive postmarket authorities to identify and correct issues if they arise.

Moreover, as Medicare and private payers move toward value-based payment systems such as bundles, evaluating quality over the full episode of care is important, May said. And, with some hospitals participating in Medicare bundling programs now responsible for the costs and quality of care over a full 90-day episode, providers already have an incentive to use high-quality products that improve care and lower costs, he told Bloomberg BNA.

Redberg's stance received praise from the leader of a patient safety group. “I completely agree with Dr. Redberg,” Diana Zuckerman, president of National Center for Health Research, told Bloomberg BNA Sept. 8. The National Center for Health Research is a nonprofit that encourages new and more effective programs and medical treatments.

In addition, the CMS should advise the FDA about the lack of data and safety and efficacy analysis specifically on patients over age 65, Zuckerman said. The lack of data “is a major problem for drugs and devices,” she told Bloomberg BNA.

Unique Device Identifiers

A controversial idea to include unique device identifiers (UDIs) in Medicare billing claims forms may be one way the CMS could better track device quality and should be studied further by MedPAC staff, Commissioner Brian DeBusk said. DeBusk, of Powell, Tenn., is the chief executive officer of medical device manufacturer DeRoyal Industries.

Expanded use of UDIs has “tremendous potential,” DeBusk said. It would help the FDA measure device safety and efficacy once products are on the market and help hospitals and the CMS track device quality, he said. Hospitals and the CMS currently have problems tracking what devices are in patients, DeBusk told commissioners, and including UDIs in claim forms would allow the CMS to follow the money.

However, Redberg disagreed somewhat. Having UDIs on claims is important as a safety tracking issue but isn't directly related to payment and shouldn't be pursued by MedPAC, she said.

After opposing UDIs on Medicare claims forms for years, the CMS in July expressed support for it (10 MELR 15, 7/20/16).

Quality Measures

On the topic of developing a uniform set of quality measures, MedPAC Commissioner Pat Wang urged the staff to research how to adjust for patients with low socioeconomic status. Wang is the chief executive officer at the not-for-profit managed care provider Healthfirst in New York.

Provider groups have long advocated that the CMS should account for a patient's socioeconomic status when determining Medicare penalties for low-quality care. They have said that CMS quality measures don't typically adjust for factors that are beyond providers' control, such as patient difficulty understanding discharge instructions because of poor health literacy or limited English proficiency, not having a regular source of primary or specialty care or not having a family member to aid with treatments after hospital discharge.

MedPAC staff said it is possible to develop a set of adjustments to account for patients with low socioeconomic status in the unified quality measures the commission is developing should the CMS move to a single payment system for all post-acute care providers.

Those quality measures should be unveiled during a spring 2017 MedPAC session, staff said.

Currently, the various post-acute care providers, such as skilled nursing facilities, home health agencies and hospice providers, are paid under separate Medicare payment systems. MedPAC previously discussed the implications of recommending a single payment system for post-acute care providers in its last meeting cycle, which started in fall 2015 and ran until spring 2016.

To contact the reporter on this story: Michael D. Williamson in Washington at mwilliamson@bna.com

To contact the editor responsible for this story: Brian Broderick at bbroderick@bna.com

For More Information

Details about MedPAC's device session are at http://src.bna.com/ipk.

Details about MedPAC's session on unified quality measures for post-acute care providers are at http://src.bna.com/ip0.

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