institute for quality resource management 7/7/2016 1 · 11/18/2014 · class ii (special...

Institute for Quality Resource Management 7/7/2016 1

Institute for Quality Resource Management

1994 “…Reimbursement is just the new phrase for Advertising …”

2010 “…National healthcare will cover all new products. Reimbursement is a non issue…”

2011 “…Without reimbursement I cannot sell my product. Without somecodes I cannot sell my product.

2011 to Present “…Create a value added message. We are going to sell the product without reimbursement…”

April 2012 “…“It’s not enough to get a drug approved anymore, you need to get people buying it,” says Randy Schatzman, the co-founder and CEO of Bothell, WA-based Alder Biopharmaceuticals. “We’re moving into a brave new world in the next few years.”

April 2014 “…reclassification of reimbursable products changed their payment…”

7/7/2016 2


CMS Pays

the MD

CMS

Pays the

facility

7/7/2016 3

Need a Reimbursement Strategic Plan Drugs or

Devices


MD Office CPT

5 Pub Studies

FDA Approved

CLIA Waived

Hospital Inpatient

Bundled Payment

DRG- ICD-9-CM

codes to qualify

FDA Approval

required for

Reimbursement

Over the Counter (OTC)

Not Reimbursable

Self Administered poss

product only payment

7/7/2016 4


Understand your target

market.

360oKnee to Aid Praying

Device price along can exceed

the total inpatient payment.

7/7/2016 5


FDA MISSION

Foster device innovation,

Create a more predictable

regulatory environment, and

Enhance device safety.

Measure Safety and

Effectiveness

Class I General Controls

◦ With Exemptions

◦ Without Exemptions

Class II General Controls

and Special Controls

◦ With Exemptions

◦ Without Exemptions

Class III General Controls

and Premarket Approval

7/7/2016

Balance Intention of Use with FDA Labeling Indications

Class I General Controls

◦ With Exemptions – Special Limitations apply

Source 21 CFR Parts 862-892

◦ Without Exemptions -510K Submission

Class II General Controls and Special Controls

◦ With Exemptions

◦ Without Exemptions - 510K Submission

Class III General Controls and Premarket Approval

◦ Verify Preamendment device similar to a product marketed

prior to 1976

http://www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfpcd/classificat

ion.cfm


Device contrast media, ultrasound

Review Panel Radiology

Product Code MJS

Submission Type PMA

Device Class 3

Total Product Life Cycle (TPLC) TPLC Product Code Report

GMP Exempt? No

Third Party Review Not Third Party Eligible


7/7/2016 8

http://www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfTPLC/tplc.cfm?id=4742

Product contrast media, ultrasound

Product Description Ultrasonic Medical Devices

(Miscellaneous)

Product Code MJS

Radiation Type Acoustic

http://www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfP

CD_RH/classification.cfm


Device wound cleaner, ultrasound

Regulation Description Low energy ultrasound wound cleaner.

Definition The ultrasound wound cleaner/mild debridement system is a device that delivers a cleaning fluid to the wound that is pulsed using low power ultrasound radiation. The device is intended to clean and mildly debride wounds. The ultrasound generator must deliver 1.0 mw/cm2 or less energy to the wound.

Regulation Medical Specialty General & Plastic Surgery

Review Panel General & Plastic Surgery

Product Code NRB

Submission Type 510(k)

Regulation Number 878.4410

Device Class 2

Total Product Life Cycle (TPLC) TPLC Product Code Report

GMP Exempt? No

Guidance Document Low Energy Ultrasound Wound Cleaner: Class II Special Controls Guidance Document - Guidance

for Industry and FDA Staff

Third Party Review Eligible for Accredited Persons Program


http://www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfcfr/cfrsearch.cfm?fr=878.4410

http://www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfTPLC/tplc.cfm?id=5079

http://www.fda.gov/medicaldevices/deviceregulationandguidance/howtomarketyourdevice/premarketsubmissions/thirdparyreview/default.htm

TITLE 21--FOOD AND DRUGS

CHAPTER I--FOOD AND DRUG ADMINISTRATION

DEPARTMENT OF HEALTH AND HUMAN SERVICES

SUBCHAPTER H--MEDICAL DEVICES

PART 878 -- GENERAL AND PLASTIC SURGERY DEVICES

Subpart E--Surgical Devices

Sec. 878.4410 Low energy ultrasound wound cleaner. (a)Identification . A

low energy ultrasound wound cleaner is a device that uses ultrasound

energy to vaporize a solution and generate a mist that is used for the

cleaning and maintenance debridement of wounds. Low levels of

ultrasound energy may be carried to the wound by the saline mist.

(b)Classification . Class II (special controls). The special control is FDA's

guidance document entitled "Class II Special Controls Guidance

Document: Low Energy Ultrasound Wound Cleaner." See 878.1(e) for the

availability of this guidance document. [70 FR 67355, Nov. 7, 2005]


http://www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfcfr/CFRSearch.cfm?CFRPart=878

Product wound cleaner, ultrasound

Regulation Description Low energy ultrasound wound cleaner.

Definition The ultrasound wound cleaner/mild debridement system is a device that delivers a cleaning fluid to the wound that is pulsed using low power ultrasound radiation. The device is intended to clean and mildly debride wounds. The ultrasound generator must deliver 1. 0 mw/cm2 or less energy to the wound.

Product Description General & Plastic Surgery Ultrasonic Medical Devices (Miscellaneous)

Product Code NRB

Radiation Type Acoustic

Regulation Number 878.4410

Guidance Document

Low Energy Ultrasound Wound Cleaner: Class II Special Controls

Guidance Document - Guidance for Industry and FDA Staff


http://www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfCFR/CFRSearch.cfm?FR=878.4410

Institute for Quality Resource

Management

Reimbursement

Identify the site of service where the new product or

service will be delivered to the patient.

◦ Does the patient administer the drug?

◦ Understand current coding and payment

What is the current reimbursement

If the item is clearly novel, then there will be no

comparator, rather a process or other treatment that

the new product will replace.

7/7/2016 13

Regulation:

Intraoperative

navigation is not

allowed, by statute, to

have incremental CMS

reimbursement

Outpatient = APC

Inpatient = DRG

Physician = CPT

Institute for Quality Resource Management 7/7/2016

• Pricing of a drug is based

on predecessor drugs

within a category.

• Average sales price

(ASP) is used by CMS.

Medicaid pays less than

CMS.

• Commercial payers

reimburse based on

lowest priced drug in a

category.Institute for Quality Resource Management

7/7/2016


Value-based purchasing is a key mechanism for

transforming Medicare from passive payer to active

purchaser.

◦ Current Medicare Physician Fee Schedule based on quantity and resources consumed, NOT quality or value.

◦ Codes created to track quality

◦ CMS will administer the Affordable Care Act

ACO Model : Fixed Budget to Cover Costs

◦ Value = Quality / Cost for a population of patients

◦ Incentives can encourage higher quality and avoidance of unnecessary costs to enhance the value of care Current Expenditures

7/7/2016 16


Management

Accountable Care Organization Trends

Provider and Payer are becoming closely aligned.

Population/ disease type cost analysis

New Products Must Demonstrate:

1. Scientific publication reporting a significant improvement in patient outcome over and abovethe current treatments.

2. Must demonstrate net cost savings.

3. Instruct providers on billing method.

4. Inform payers of the new product and verify coding and payment will occur as expected.

7/7/2016 17


Management

Early Product Planning: Understand Target Stakeholder Perspective

• Patient, Physician, Support Staff, • Hospital Administration, • Insurance Company /Medicare/ Medicaid• Patients/Their Families – Lifestyle Change??

Commitment to provide the needed data

• Conduct human subject clinical studies • Produce evidence derived from controlled

patient cohorts • Sufficient number to demonstrate effectiveness.

7/7/2016 18


Critical Early Decisions

• Continue with the current

product within pricing

constraints.

• Improve the convenience

of use, reduce

complications.

• Remove costs from the

R&D process

7/7/2016

CARDIONET INC

Stock Price $16.50-2.86

(Hi $35.89)

Date Stock Price

% Chg from

High

6/25/2009 16.5

6/29/2009 16.99 3%

7/1/2009 10.43 -39%

7/9/2009 8.93 -47%

7/21/2009 6.23 -63%

12/7/2009 4.54 -73%

3/12/2010 7.13 -58%

10/24/2011 2.86 -83%

5/7/2012 2.91 -83%

Reimbursement from

$1,123.70 to $754

Now approaching $800

Phy: $25.00 APC $38.29


0

2

4

6

8

10

12

14

16

18

Cardionet, Inc Stock Price

Stock Price

7/7/2016


7/7/2016 21

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Amputation of lower

extremity

Debridement of wound,

infection or burn

Skin graft

1. Participation in parallel review will not affect the review standard for device approval by FDA or for a coverage determination by CMS.

2. The Agencies will adhere to all statutory and regulatory requirements as stipulated in the memorandum of understanding between FDA and CMS, available at http://www.fda.gov/aboutfda/partnershipscollaborations/memorandaofunderstandingmous/domesticmous/ucm217585.htm.

3. A sponsor/requester may withdraw from, and FDA and CMS may terminate, parallel review up until the time of CMS's public posting of an NCD tracking sheet.

4. The Agencies will not publicly disclose participation of a sponsor/requester in parallel review prior to CMS's posting of an NCD tracking sheet, unless the sponsor/requester consents or has already made this information public or disclosure is required by law. If a sponsor/requester does not wish the information that would be revealed by the posting of the NCD tracking sheet to become public, it must withdraw from parallel review prior to this point.

5. Due to Agency resource issues the pilot program expects to accept no more than three to five candidates per year.


Management 7/7/2016 22

1. New technologies for which the sponsor/requester has had sufficient pre-investigational device exemption (IDE) interaction with FDA or approved IDE application.

2. New technologies for which an original or supplemental application for premarket approval (PMA) or petition for de novo review would be required.

3. New technologies that fall within the scope of a Part A or Part B Medicare benefit category and are not subject to an NCD.



Management

1. Medically Necessary

2. Reasonable

3. Appropriate

4. Used within FDA

approved Indications

5. Not Investigational

6. Current payment for

similar patient treatment

7. Hospital Budgeting

7/7/2016 24


Hospital margins are shrinking.Hospitals are making cuts to Reduce Costs.

BMP use is diminishing

Hospitals are seeking solutions:

a) Complex disease, b) Seek lucrative referrals,c) Restructure delivery

options,d) Contribute to Patient

Safety and Quality

Innovation and improved outcomes are needed to reverse falling revenue.

7/7/2016


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institute for quality resource management 7/7/2016 1 · 11/18/2014 · class ii (special...

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