DEVICE COST-EFFECTIVENESS DATA CAN SPEED MEDICARE COVERAGE DECISIONS, HCFA STAFFER ACKNOWLEDGES; PROVIDING LIST OF EXPERTS IN TECHNOLOGY ALSO "VERY HELPFUL"

Medical device cost-effectiveness data can speed up Medicare coverage decisions by the Health Care Financing Administration, Grant Bagley, HCFA director of coverage and analysis for clinical standards and quality, said Oct. 28 at a Health Industry Manufacturers Association meeting in Washington, D.C.

Data showing the savings potential of a device "may not be appropriate for all technologies and" is not "an initial threshold" for making a coverage decision, Bagley said, "but it may be a way to get things paid for and a way to get things paid for sooner." Bagley said that HCFA looks at cost-effectiveness data as part of the evidence-based decision model espoused by the agency ("The Gray Sheet" Oct. 13, I&W-5), which calls for "outcomes research which can show us clinical utility and the actual applications of new technologies."

Bagley's comments reflect the fact that, although not officially codified by HCFA, the agency still takes cost into account in making coverage decisions.

Bagley questioned manufacturers' opposition to HCFA's position on cost-effectiveness. "It's puzzling to me why industry was afraid of it when 90% of the time when we would look at a new technology," the manufacturer would "come in and say, `We've got some clinical data and we've got an FDA approval and'" testimonials and articles, "`but the persuasive thing we want to show you first is the cost-effectiveness'" data. "It's always the argument people bring in."

HCFA had sought to resurrect a Medicare coverage rule in 1996 that would have codified consideration of cost-effectiveness data. Earlier this year, the agency put the effort on hold due to industry opposition. Device manufacturers argued that HCFA lacked the authority to consider cost-effectiveness as part of its determination as to whether a technology is "reasonable and necessary" and should be covered under Medicare ("The Gray Sheet" June 9, I&W-3).

Speaking Oct. 24 at a Food & Drug Law Institute workshop in Washington, D.C., Bagley said that providing a list of medical experts as part of a request for Medicare coverage is helpful. "If you can identify recognized, credible experts, it's very helpful. And I think we rely on that," Bagley said. HCFA tends "not to rely on" testimonials, which are "interesting" but not "persuasive," according to Bagley. If a majority of physicians used a device, "we'd have everybody saying pay for it," he said, but if only a handful of physicians are requesting coverage, "there's some disconnect here."

Commenting on Medicare coverage of positron emission tomography procedures, Bagley noted that HCFA has "recently done technology assessments" and "there seem to be some clinical uses" that "hold the promise of being part of a clinical care model."

HCFA may get involved with studies to determine if PET scans lead to better patient care, lower costs and improved survivability for some patients, Bagley stated. Although such studies will "have to be fairly large" and they will "take a while" to conduct, HCFA is "exploring actively the idea that we can be a partner in that," Bagley said. "Perhaps we ought to find a way to pay" for studies that are "going to accumulate the data" that "will allow us to make final decisions in the future."

In response to a question about HCFA's reimbursement of off-label uses, Bagley called it a "bizarre situation" whereby a manufacturer faces the possibility of losing reimbursement status for an off-label use of a device after the company receives an investigational device exemption for the use. HCFA realizes such a situation is "backwards" and is "trying to fix" it, Bagley said. "We're trying to make it that we'll pay for off-label uses and IDEs the same way....We'll look at them and we'll pay for the ones that are reasonable and not pay for the ones that aren't."

However, because HCFA receives a billion claims per year, many off-label uses get paid and "never get flagged." HCFA has the "ability" to change its policy of not reimbursing off-label uses even if an IDE has been received by the company, but it will take time, Bagley noted. HCFA has to "do it by practice rather than by regulation," he said.