Medical Device Link.

Originally Published MX November/December 2002

BUSINESS NEWS

In September, a coalition of 50 patient advocacy groups, hospitals, healthcare professional organizations, and industry associations joined forces to express concern over the rule proposed by the Centers for Medicare and Medicaid Services (CMS; Baltimore) for calendar year 2003 payments under Medicare's hospital outpatient prospective payment system (OPPS).

Delivered to Representative Bill Thomas (R–CA), chairman of the House Ways and Means Committee, the letter voiced the organizations' "grave concerns over the proposed deep cuts in reimbursement for a broad range of drugs, biologicals, and medical technologies. The implications of such cuts could mean a drastic change in patient access to medicine and treatment."

According to the letter, the proposed rule would cut Medicare's outpatient reimbursement rate by 30–60% for many advanced medical technology tests and treatments as well as for the vast majority of reimbursed drugs and biologicals. "For a small number of new technologies," the letter noted, "the reduction could be as much as 90%."

According to an analysis prepared by Boston Healthcare Associates (Boston), the proposed rule would result in decreased payment rates for 80% of procedures that use high-technology devices or drugs. The analysis notes that the methods used by CMS to calculate 2003 payment rates is "inherently flawed"—and that CMS has acknowledged the shortcomings.

In October, responding to the coalition's call, Representative Thomas led a group of House and Senate leaders in calling on CMS to make further changes in its proposed rule. In a letter to CMS administrator Thomas Scully, the lawmakers encouraged CMS to examine the accuracy of its internal claims data and make use of valid external data—including pricing information provided by manufacturers—as necessary to correct its rates.

"However, given the January 1 [2003] implementation date, CMS does not have the time to check all the rates and make extensive labor-intensive corrections," the lawmakers noted. "If CMS is not able to correct the data, we believe CMS should consider adopting a more fundamental solution that would limit increases or decreases in payment for these items through a corridor approach." Such an approach would limit payment changes for 2003 within a preset range.

The congressmen concluded by requesting that CMS "lay out a research agenda to improve the underlying methodology so that the corridors will no longer be needed in the future," and do so by February 1, 2003.

Copyright ©2002 MX