Second bites and second sights: A summer med tech trifecta

August 21, 2017 – 10:53 AM | By Mark McCarty | No comments yet
Another reason to really like the number three!

Prehistoric threefer device

Rock and roll radio stations used to tout their two-for-Tuesday and three-for-Thursday lineups, but we at BioWorld MedTech think every day is good for a threefer. Below are three stories of recent vintage to grace the pages of BWT, at least one of which suggests that the FDA budget may be caught up in the next presidential election.

All-user fee FDA not a reality … yet
The Senate has passed legislation for the latest FDA user fee agreements, and President Trump signed the deal last week despite the President’s expressed preference for an agency that is funded entirely by user fees. Politically, it’s probably a smart move for the White House to dodge this fight given that the final vote in the Senate was a veto-proof tally of 94-1, but this might not be the last of this discussion.

There are plenty who see user fees as a source of potential corruption at the FDA, but device makers are in no rush to pay more than they already are for premarket applications, either. The amounts involved in the device user fee agreements have doubled in both MDUFA III and IV, and its unlikely industry would have gone along with substantially more than the nearly $1 billion called for in MDUFA IV.

Will the Trump administration avail itself of one more bite at this user-fee apple? These user fee deals typically take two years to negotiate, suggesting that the next round of negotiations will commence in 2020 … just in time for the next presidential election. Unless the deficit has eased significantly in the interim, deficit hawks – including the inhabitant of the Oval Office – may once again be salivating at the prospect of a fully user fee-funded FDA.

PAMA still roiling lab fee schedule discussion
Just when you thought it was safe to talk about the Medicare clinical lab fee schedule, the American Medical Association is stirring up talk about insufficient time to collect private payer rates for lab tests to comply with a congressionally mandated fix for the fee schedule.

The Protecting Access to Medicare Act of 2014 requires the Centers for Medicare & Medicaid Services to collect data on private payer rates in an effort to bring the CLFS more in line those rates, but the AMA said recently its members are still having a tough time getting those numbers together. Some of these labs cannot make up for low rates with volume, and you don’t have to spend a lot of time in D.C. to know this association has a lot of clout on Capitol Hill and at CMS.

That’s not the same as saying the docs will win the day, though, is it? The PAMA data collection mandate has already been bumped back a year, and the lab associations know that another delay means another year on a lab fee schedule that many in the business see as miserly. The AMA might just be out of luck this time if the high-volume labs have their way.

A second look for Second Sight
Second Sight Medical had a mixed bag of news in coverage terms recently, announcing in early July that Novitas Solutions, the Medicare administrative contractor for a number of states in the nation’s interior and in the Mid-Atlantic, has removed the category III CPT code from the company’s Argus II retinal prosthetic device.

As an aside, we recall that category III CPT codes are for devices deemed experimental, and device makers have complained that MACs are inordinately fond of denying coverage for devices with category III codes without examining the evidence. This is not an entirely impertinent aside, given that the 21st Century Cures Act presumably addressed some of the elements underlying this problem. Still, both the Medical Device Manufactures Association and the Advanced Medical Technology Association said in comments to the Medicare inpatient prospective payment system (IPPS) final that the MACs continue to play fast and loose with the category III CPT designation.

According to Second Sight, Novitas recently joined Palmetto GBA, National Government Services and First Coast Service Options in covering the device. The Centers for Medicare & Medicaid Services said in the draft outpatient prospective payment schedule for calendar year 2018 that it may pay quite a bit less for the device than it had previously, however. Medicare had paid roughly $150,000 for the device and the procedure needed to implant under the new technology pass-through program. The Argus II has exhausted its pass-through eligibility, however, and may draw only $122,000 for the device and procedure going forward.

So Second Sight may be dinged by lower rates, but CMS said it found only three claims for the device in 2016, so the company may be able to make up in volume what it seems to have lost in per-device reimbursement. Such is the life of an innovator in the medical device business.

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