Argenta Advisors has contributed a number of articles to the Medical Device Summit (MDS) “Summit News” (www.medicaldevicesummit.com) since mid-2014. The article below appears as first published by MDS

Reimbursement Report: A Major National Health Plan Medical Director Shares Insights on How Coverage Decisions are Made

The following question-and-answer session reveals important information and attitudes toward coverage of new/existing technologies and standards of evidence. This information is provided by an active Regional Medical Director involved in traditional health plan policy and payment development as well as emerging value-based models (e.g., accountable care organizations and pay-for-performance initiatives).

Q: Can you give us some insight into the health plan’s process to review a technology for coverage/non-coverage?

A: Health Technology assessment (HTA) examines a whole host of issues important to the health plan (HP) and its purchasers/customers. This process is deemed of utmost importance and afforded the due diligence deserved. Domains examined in detail include evidence as pertains to safety and efficacy, outcomes from randomized, controlled trials (RCTs) that may include patient-reported outcomes (PRO) as one of a number of appropriate endpoints. Real-world evidence (RWE) is becoming increasingly important to lend further insight into utilization and outcomes outside of the “rarefied air” of the hyper-controlled trial environment designed to isolate the studied “signal” for approval by regulatory bodies. Cost-effectiveness in addition to the “softer” considerations of ethical, legal, political and social remain in the mix to be weighed.

HTA committee members include medical and pharmaceutical professional and support staff as appropriate, additional insight is garnered from actuarial, business line-of-service and the executive functions. Key opinion leaders (KOLs) are utilized as necessary to inform about current market dynamics and frontline practice. Research teams, under the direction of the HTA leadership, conduct the building of the “internal technology dossier” which may consist of any or all of the following materials: published literature review (with preference given to RCTs, especially those with head-to-head comparison against standard-of care (SOC) if available); other HTA body guidance published previously ( examples might include-Blue Cross and Blue Shield Association Technology Evaluation Center, Cochrane Collaboration, ECRI Institute, Hayes, Inc., Institute for Clinical and Economic Review (ICER), Center for Medical Technology Policy (CMTP) and Institute for Clinical Systems Improvement (ICSI) to name a few. Other payers HTA assessments are also collated when available. Manufacturer-produced dossier can also be utilized. Professional society guidelines are reviewed for timeliness and pertinence to the HTA review.

HTA occurs in a dual-track pattern to allow for the development of a clinical efficacy and safety consensus which will then be “married” with economic considerations. This process of activity was formally described by Sullivan et al to include the following domains: 1) horizon scanning; 2) topic determination and queuing; 3) collection and assessment of evidence; 4) appraisal; 5) funding and policy implementation.

Q: What factors determine whether a technology will be reviewed?

A: Factors that are considered to determine the need for technology review may include any or all of the following: existing unmet need; disruptive versus incremental improvement in standard-of care; better safety and patient satisfaction; advocacy by utilizers that may include patients, healthcare professionals, health systems; cost-effectiveness; personalized healthcare; competitive positioning and regulatory issues may pertain as well. In addition, budget constraints at the HP, costs for review and policy implementation and “noise” around utilization and projected demand for the technology will factor in the queuing of the assessment.

Q: What factors determine whether a technology will be written into a formal policy?

A: There are many factors for consideration when weighing the need for issuance of formal policy after HTA. The principal forces that will predominate in this deliberation may include the following: 1) level of disruption projected to current SOC; 2) regulatory (mandate) pressures; 3) degree of advocacy by providers and patients; 4) projected costs driven by rapid uptake and utilization; and/or 4) competitive pressures in the HP’s marketplace that may drive adverse or positive selection in the served populations.

Costs of prior authorization/appeals review and adjudication of these issues may also impact the HP’s perceived need to formalize policy issuance from a regulatory and financial perspective.

Q: In general, what type of data do you prefer (or require) in order to establish positive coverage for a technology?

A: The preponderance of the evidence should demonstrate that in randomized controlled trials (RCTs), the technology preferably performed in regards to excellent efficacy and safety when contrasted against existing SOC. Appropriate approval should have been obtained from regulatory bodies. In addition to the technology providing “clinical utility” (i.e., it has an impact on medical decision-making in terms of testing and/or outcomes), it should be cost-effective, either in its own right or when compared against current SOC. It should demonstrate either a reduction in total cost of care (TCOC)/per defined care episode (or) a cost-offset equal to the innovation’s cost with or without improved safety and customer satisfaction, the “triple aim”. Further evidence around real world evidence (RWE) and patient-reported outcomes (PRO) may be sought. Comparative effectiveness research (CER) is greatly appreciated.

Q: What are your views on the need for health economic information to demonstrate the value of a product/service? Can you give an example?

A: Whether a manufacturer hears that health economics outcomes research (HEOR) is of little or secondary importance in payer decision-making, it has become an imperative going forward. As payers increasingly enter into accountable care organization (ACO) contracting arrangements, these data will be very important if manufacturers want their technologies preferred or utilized at all by the delivery system. As financial risk is transferred to ACO entities, they will require elegant HEOR modeling tailored to their entity and requisite competitive marketplace that meet their “triple aim” goals. Examples: thrombolytic therapy/coronary artery stent for acute myocardial infarction (AMI), mammography for breast cancer screening, implantable cardiac defibrillators (AICD) for cardiac disease/arrest patients.

Q: Does the coverage review process allow for external stakeholder input? If so, how does that typically work?

A: External stakeholder input remains important but is variously perceived (or) utilized. Most payers utilize key opinion leader (KOL) panels by line of service (LOS) or specialty. If they do not recruit and maintain these panels themselves, they will contract to vendors that perform this function (i.e., Hayes, Inc. or others). Manufacturers may approach the HP via clinical directors and/or the ACO entities they are party to if they possess a cogent story around HEOR and the triple aim. While there exists no one true track as regards payers, they should include a simultaneous multi-track plan to speak with financial, clinical and sales broker channels both internal to the plan and as regards their ACO partners engaged in remodeled delivery of healthcare in the marketplace.

In summary, if this glimpse into the decision-making process within a national health plan tells us anything, it is that a well-designed and tailored reimbursement strategy is crucial in preparing for- and engaging in discussions with payers. Companies developing and marketing medical technologies should be prepared to rise to the level of changing clinical and economic evidentiary standards as the U.S. healthcare system continues to evolve toward value-based care and payment models. At the end of the day, life science companies should strive to be as thoughtful and innovative in the approach to reimbursement as in the approach to technology development.

Argenta Knowledge Center
Argenta Advisors, Inc. Copyright © 2015 
LinkedIn Logo