Carryover; Two 2017 Stories for 2018

December 27, 2017 – 9:52 AM | By Mark McCarty | No comments yet

NYE502017 was quite the year in terms of device regulations, but payers had an interesting time of it as well. Following are a couple of developments that promise to carry over into the new year, with unpredictable consequences.

Tapping the NTAP for more jingle

Distracted by tax reform? You might have missed a couple of bills sponsored by Reps. Tom Reed of New York and Dave Reichert of Washington, and the question of Medicare spending on the new technology add-on (NTAP) program is suddenly topical.

H.R. 4679, the Ensuring Equal Access to Treatments Act of 2017, would impose a number of substantial changes to the administration of the NTAP program. At present, Medicare pays half the difference between the cost of the new item and the standard payment under the related diagnostic related group (DRG), but the bill seems to take that up to 75 percent of the difference. Another change would be that CMS would offer an appeals process for applications the agency declines.

Perhaps of greater significance is that the bill would force CMS to come up with a new DRG for NTAP items when they are no longer eligible, while a companion bill, H.R. 4683, would extend the period of eligibility for both the NTAP and new technology pass-through programs from three years to five.

H.R. 4679 does make one budgetary concession by giving CMS a couple of tools for keeping aggregate spending under statutory limits. It was an interesting point, given that Scott Whitaker of the Advanced Medical Technology Association said in a statement that spending on the NTAP program has come to only about one third of the expected amount. Clearly device makers believe they have an argument that the available fiscal headroom ought to be exploited. Given the numbers to date, the cap on additional spending almost seems superfluous, but hawkishness regarding the deficit is never out of style for long.

Another point of interest made by Whitaker is that less than 40 percent of NTAP applications have been approved since the program’s inception, but this has been an ongoing source of friction between CMS and device makers.

The terms of these bills will certainly make a difference in the life of a device’s stay in the NTAP and pass-through programs, but the substantial clinical improvement requirement is still the biggest hurdle in terms of getting through the NTAP door in the first place. Neither bill seems to do anything about that problem, and CMS has no interest in devising a hard-and-fast definition of the term. One wonders why device makers haven’t nudged the medical societies into weighing in more forcefully on how to define the term for a specific device and the related indication for use.

Perhaps the most recent poster child for the deficiencies of these two programs – and the need for a DRG once a device has left the program – is the drug-coated balloon for the lower extremities. The pass-through eligibility period expired for DCBs earlier this year, and CMS will not raise the rates it pays for the procedure and the device to compensate. This was not a popular move by CMS, which was blasted by at least one clinician.

A CMS advisory committee had discussed additional data collection and a new DRG for DCBs, but CMS said in the outpatient final that device makers should talk to the CPT editorial committee if they don’t like the situation. Any new DRG won’t arrive in time for 2018 for obvious reasons, and the net effect is to force physicians to talk to their hospital administrators about covering the shortfall.

As we all know, it’s one thing to get doctors teed off about something of this nature, but now the hospitals are alerted to the problem as well. These two bills just might trigger two very influential legislative constituencies, which certainly does not hurt their chances on Capitol Hill.

FDA’s not-so-risky business
Those who saw the draft guidance for clinical decision support (CDS) software might have been relieved to see at least something from the agency, but Brad Thompson of Epstein Becker Green was not exactly blown away. Thompson, who serves as general counsel for the CDS Coalition, pointed to the absence of any discussion of risk in the CDS draft, an omission he seemed to suggest will leave developers fumbling in the dark with a number of questions.

It appears Thompson is not alone in this view. A commenter named Stephen Ferrell, whose affiliation is not listed, said in a Dec. 19 comment to the docket, “whether a decision support system is defined as a medical device or not, its delivery architecture can either be a risk reducer or a risk contributor.” Ferrell said the scenario in which a CDS “is leaned on by junior doctors” suggests that availability and latency are critical features, and thus risk-based CDS change management, at a minimum, is “an absolute necessity.”

It is interesting that the draft omits any discussion of risk, particularly given how much emphasis “benefit-risk” calculations receive in recent guidances. After all, some of these CDS programs will at least hint at whether a patient needs surgery, not exactly a low-risk proposition.

One way of looking at this is that the agency has taken a consent-of-the-regulated approach to this technological area. That would seem to comport with the perception that the agency has struggled with digital health, but it also seems very much in line with the more collaborative tone employed by the managers at the Center for Devices and Radiological Health over the past couple of years. It’s a far cry from what was going on at CDRH in 2010 and 2011, and a tone one would never have expected from any FDA product center when David Kessler was the commissioner.

For what it’s worth, the agency is taking comment through Feb. 8 (docket number FDA-2017-D-6569), so there’s still plenty of time to weigh in. One suspects this discussion is far from over.


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