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May 12, 2000
"Medical Innovation: Is Medicare Keeping Up?"
AIM and the Progressive Policy Institute (PPI)
co-sponsored a May 12 briefing for Congressional staff on medical innovation and the Health Care Financing Administration's (HCFA's) review, approval and reimbursement procedures for Medicare's use of new devices
and technologies. Speakers included Dr. Clifford Goodman, Senior Scientist, The Lewin Group, Ms. Ann Gosier, Vice President, Government Affairs, Guidant Corporation, and Ms. Jan Lane, Vice President,
Government Relations, American Red Cross.
The briefing demonstrated that HCFA is slow to review,
approve and adjust for innovative healthcare technologies and provided insights on how comprehensive Medicare reform could speed HCFA's processes. Specifically, presenters cited H.R. 4395, The Medicare Access
to Technology Act, introduced by Reps. Jim Ramstad (R-MN) and Karen Thurman (D-FL), as an example of a well-conceived proposal which should be incorporated into comprehensive Medicare reform.
Dr. Goodman described his research on HCFA's coverage
policies and process and the impact on the medical technology industry.
He reported that 80 percent of the medical technology industry is comprised of small companies with fewer than 50 employees and little or no sales revenues who are disproportionately responsible for innovation. Further, industry-wide, R&D as a percent of sales for the medical device industry is as high as R&D expenditures for the pharmaceutical industry. However, Dr. Goodman related that time-consuming approval processes, at both FDA and HCFA, and difficulty in gaining payment approval can delay and restrict patient access and affect innovation. Finally, Dr. Goodman opined that HCFA is designed to administer claims, not to provide new technologies quickly.
Ms. Gosier provided an overview of a device manufacturer's
experiences in HCFA's review and approval processes. She advocated comprehensive reform to improve timeliness and patient access.
Ms. Gosier described both the FDA review process and the three separate and distinct HCFA processes of coverage, coding, and payment that a new technology undergoes before Medicare patients have access. Specific examples of delayed coverage or inadequate payments cited by Ms. Gosier included: ventricular assist devices and cochlear implants.
Ms. Lane described problems with HCFA's recently finalized
outpatient PPS system and the recently proposed inpatient DRG coding and payment system. Ms. Lane stated that the safety of the nation's blood supply is an industry priority, spurring development of new technologies
for blood screening. These new technologies are utilized regardless of HCFA-approved coverage and reimbursement.
Ms. Lane stated that the blood industry seeks annual updates and adjustments to DRG payment codes to ensure appropriate reimbursement for new blood screening technologies.
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