Performance-based risk-sharing arrangements for devices and diagnostics in the United States: a systematic review.

BACKGROUND: Performance-based risksharing arrangements (PBRSAs) have continued to emerge and evolve over the last 2 decades. To date, most of the attention and available literature have focused on pharmaceuticals. OBJECTIVE: To assess the current status and trends regarding the use of PBRSAs for diagnostics and devices in the United States. METHODS: We reviewed publicly available PBRSAs for diagnostics and devices using the University of Washington Performance Based Risk Sharing Database. We augmented the review using PubMed, Google, and payer and industry websites. Key words and phrases such as outcomes-based, value-based, coverage with evidence development, performance-based, and risk-sharing were used in combination with device or diagnostic. To characterize arrangements in terms of product and market attributes, we extracted data for each product, including arrangement descriptions, arrangement type, year, therapeutic area, product manufacturer, payer, and product type. Arrangements were analyzed using descriptive statistics. RESULTS: Fifty-two arrangements were identified between the years 2001 and 2019, with 30 (57.7%) for devices and 22 (42.3%) for diagnostic tests. Among these, 23 (44.2%) were coverage with evidence development (CED), only in research; 17 (32.7%) were performance-linked reimbursement (PLR); and 12 (23.1%) were CED, only with research. The majority of arrangements for devices were developed in cardiology (12, 40%), endocrinology (4, 13.3%), and radiology (3, 10%). Most of arrangements for identified diagnostic tests were in oncology (17, 77.3%). Over time, there has been a trend towards increasing adoption of PLR and CED, only with research, especially since 2014. CONCLUSIONS: This is the first study to comprehensively review PBRSA arrangements for diagnostics and devices in the United States. Our findings demonstrated that there is substantial PBRSA activity for devices and diagnostics, and the pace of PBRSA adoption appears to be increasing in terms of frequency and variety. These arrangements have implications for managed care into the future as the health care system shifts towards value-based care and value-based pricing to contain cost for payers and ensure value in the patient populations. DISCLOSURES: No funding supported this study. The authors have nothing to disclose.

Analysing actual prices of medical products: a cross-sectional survey of Dutch hospitals.

OBJECTIVES: To assess whether there is a difference between the net prices of medical products used by Dutch hospitals and, if there is, how this difference can be explained. DESIGN: Cross-sectional self-administered electronic survey. SETTING: We surveyed the prices paid for 17 commonly used medical products, such as pacemakers, gloves and stents in 38 Dutch hospitals (including general, specialised and academic hospitals) in 2017. Hospitals voluntarily and anonymously provided these data and received a personalised free benchmark tool in return. This tool provides information about the variance in prices of the medical products they buy. PARTICIPANTS: 38 out of 79 hospitals entered and completed the study. PRIMARY AND SECONDARY OUTCOME MEASURES: Actual price paid excluding Value Added Tax (VAT) per item, the order size per year, total spending for an assortment group and total spending for all products purchased from a specific supplier were measured. RESULTS: We found large price variations for the medical products surveyed (average coefficient of variation of 71%). In general, these differences were hard to explain (average R2 of 26%). Only purchasing volume (for 8 out of 17 products) was significantly associated with the net price paid by a hospital. Total spending for an assortment group (in euros with a specific supplier) and total spending (for all products in euros with a specific supplier) were not related to the net price paid. CONCLUSIONS: We conclude that only purchasing volume is associated with lower prices paid. Total spending for an assortment group and total spending for all products purchased from a specific supplier are not. These results are in stark contrast to expectations based on economic theory. Other sources of differences in bargaining power might explain these findings. Further research might involve comparing prices across countries.

Single-use versus reusable medical devices in spinal fusion surgery: a hospital micro-costing analysis.

PURPOSE: Healthcare facilities could minimize the cost of surgical instrument and implant processing by using single-use devices. The main objective was to prospectively compare the total cost of a single-use and reusable device used in short lumbar spine fusion. METHODS: A 1-year, single-centre, prospective study was performed on patients requiring a one- or two-level lumbar arthrodesis. Patients were randomized in two groups treated with either reusable or single-use device. A cost minimization analysis was performed using a micro-costing approach from a hospital perspective. Every step of the preparation process was timed and costed based on hourly wages of hospital employees, cleaning supplies and hospital waste costs. RESULTS: Forty cases were evaluated. No significant difference in operation time was noted (reusable 176.1 ± 68.4 min; single use 190.4 ± 71.7 min; p = 0.569). Mean processing time for single-use devices was lower than for reusable devices (33 min vs. 176 min) representing a cost of 14€ versus 58€ (p < 0.05). Pre-/post-sterilization and spinal set recomposing steps were the most time-consuming in reusable device group. A total cost saving of 181€ per intervention resulted from the use and processing of the single-use device considering an additional sterilization cost of 137€ with the reusable device. The weight of the reusable device was 42 kg for three containers and 1.2 kg for the single-use device. CONCLUSIONS: Owing to the absence of re-sterilization, single-use devices in one- and two-level lumbar fusion allow significant money and time savings. They may also avoid delaying surgery in case of reusable device unavailability.

Feasibility of Simulation-Based Medical Education in a Low-Income Country: Challenges and Solutions From a 3-year Pilot Program in Uganda.

STATEMENT: Simulation is relatively new in many low-income countries. We describe the challenges encountered, solutions deployed, and the costs incurred while establishing two simulation centers in Uganda. The challenges we experienced included equipment costs, difficulty in procurement, lack of context-appropriate curricula, unreliable power, limited local teaching capacity, and lack of coordination among user groups. Solutions we deployed included improvisation of equipment, customization of low-cost simulation software, creation of context-specific curricula, local administrative support, and creation of a simulation fellowship opportunity for local instructors. Total costs for simulation setups ranged from US $165 to $17,000. For centers in low-income countries trying to establish simulation programs, our experience suggests that careful selection of context-appropriate equipment and curricula, engagement with local and international collaborators, and early emphasis to increase local teaching capacity are essential. Further studies are needed to identify the most cost-effective levels of technological complexity for simulation in similar resource-constrained settings.

Dependence and power in healthcare equipment supply chains.

Most healthcare organizations (HCOs) engage Group Purchasing Organizations (GPOs) as an outsourcing strategy to secure their supplies and materials. When an HCO outsources the procurement function to a GPO, this GPO will directly interact with the HCO's supplier on the HCO's behalf. This study investigates how an HCO's dependence on a GPO affects supply chain relationships and power in the healthcare medical equipment supply chain. Hypotheses are tested through factor analysis and structural equation modeling, using primary survey data from HCO procurement managers. An HCO's dependence on a GPO is found to be positively associated with a GPO's reliance on mediated power, but, surprisingly, negatively associated with a GPO's mediated power. Furthermore, analysis indicates that an HCO's dependence on a GPO is positively associated with an HCO's dependence on a GPO-contracted Original Equipment Manufacturer (OEM). HCO reliance on GPOs may lead to a buyer's dependence trap, where HCOs are increasingly dependent on GPOs and OEMs. Implications for HCO procurement managers and recommended steps for mitigation are offered. Power-dependence relationships in the medical equipment supply chain are not consistent with relationships in other, more traditional, supply chains. While dependence in a supply chain relationship typically leads to an increase in reliance on mediated power, GPO-dependent HCOs instead perceive a decrease in GPO mediated power. Furthermore, HCOs that rely on procurement service from GPOs are increasingly dependent on the OEMs.

Medicare Program; End-Stage Renal Disease Prospective Payment System, Payment for Renal Dialysis Services Furnished to Individuals With Acute Kidney Injury, End-Stage Renal Disease Quality Incentive Program, Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) Competitive Bidding Program (CBP) and Fee Schedule Amounts, and Technical Amendments To Correct Existing Regulations Related to the CBP for Certain DMEPOS. Final rule.

This final rule updates and makes revisions to the End-Stage Renal Disease (ESRD) Prospective Payment System (PPS) for calendar year (CY) 2019. This rule also updates the payment rate for renal dialysis services furnished by an ESRD facility to individuals with acute kidney injury (AKI). In addition, it updates and rebases the ESRD market basket for CY 2019. This rule also updates requirements for the ESRD Quality Incentive Program (QIP), and makes technical amendments to correct existing regulations related to the Competitive Bidding Program (CBP) for certain Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS). Finally, this rule finalizes changes to bidding and pricing methodologies under the DMEPOS competitive bidding program; adjustments to DMEPOS fee schedule amounts using information from competitive bidding for items furnished from January 1, 2019 through December 31, 2020; new payment classes for oxygen and oxygen equipment and a new methodology for ensuring that new payment classes for oxygen and oxygen equipment are budget neutral; payment rules for multi- function ventilators or ventilators that perform functions of other durable medical equipment (DME); and revises the payment methodology for mail order items furnished in the Northern Mariana Islands. This rule also includes a summary of the feedback received for the request for information related to establishing fee schedule amounts for new DMEPOS items and services.

Medicare Program; Durable Medical Equipment Fee Schedule Adjustments To Resume the Transitional 50/50 Blended Rates To Provide Relief in Rural Areas and Non-Contiguous Areas. Interim final rule with comment period.

This interim final rule with comment period makes technical amendments to the regulation to reflect the extension of the transition period from June 30, 2016 to December 31, 2016 that was mandated by the 21st Century Cures Act for phasing in fee schedule adjustments for certain durable medical equipment (DME) and enteral nutrition paid in areas not subject to the Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program (CBP). In addition, this interim final rule with comment period amends the regulation to resume the transition period's blended fee schedule rates for items furnished in rural areas and non-contiguous areas (Alaska, Hawaii, and United States territories) not subject to the CBP from June 1, 2018 through December 31, 2018. This interim final rule with comment period also makes technical amendments to existing regulations for DMEPOS items and services to reflect the exclusion of infusion drugs used with DME from the DMEPOS CBP.

Medicare Program; Update to the Required Prior Authorization List of Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Items That Require Prior Authorization as a Condition of Payment. Update to list.

This document announces the addition of 31 Healthcare Common Procedure Coding System (HCPCS) codes to the Required Prior Authorization List of Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Items that require prior authorization as a condition of payment. Prior authorization for these codes will be implemented nationwide.

Medicare Program; Prior Authorization Process for Certain Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Items; Update to the Master List of Items Frequently Subject to Unnecessary Utilization. Master list deletions.

This document announces the deletion of four Healthcare Common Procedure Coding System (HCPCS) codes from the Master List of Items Frequently Subject to Unnecessary Utilization that could be potentially subject to Prior Authorization as a condition of payment.

Medicare Competitive Bidding Program Realized Price Savings For Durable Medical Equipment Purchases.

From the inception of the Medicare program there have been questions regarding whether and how to pay for durable medical equipment, prosthetics, orthotics, and supplies. In 2011 the Centers for Medicare and Medicaid Services (CMS) implemented a competitive bidding program to reduce spending on durable medical equipment and similar items. Previously, CMS had used prices in an administrative fee schedule to reimburse for these items. We compared prices from Round 1 of the Medicare competitive bidding program, which were established for the periods 2011-13 and 2014-16, to prices paid by national commercial insurers for the same types of items in 2011-14. Our results suggest that the initial years of the program produced prices comparable to those obtained, on average, by large commercial insurers-sophisticated purchasers that presumably were able to negotiate prices with suppliers of durable medical equipment and similar items.

Medicare Program; End-Stage Renal Disease Prospective Payment System, Coverage and Payment for Renal Dialysis Services Furnished to Individuals With Acute Kidney Injury, End-Stage Renal Disease Quality Incentive Program, Durable Medical Equipment, Prosthetics, Orthotics and Supplies Competitive Bidding Program Bid Surety Bonds, State Licensure and Appeals Process for Breach of Contract Actions, Durable Medical Equipment, Prosthetics, Orthotics and Supplies Competitive Bidding Program and Fee Schedule Adjustments, Access to Care Issues for Durable Medical Equipment; and the Comprehensive End-Stage Renal Disease Care Model. Final rule.

This rule updates and makes revisions to the End-Stage Renal Disease (ESRD) Prospective Payment System (PPS) for calendar year 2017. It also finalizes policies for coverage and payment for renal dialysis services furnished by an ESRD facility to individuals with acute kidney injury. This rule also sets forth requirements for the ESRD Quality Incentive Program, including the inclusion of new quality measures beginning with payment year (PY) 2020 and provides updates to programmatic policies for the PY 2018 and PY 2019 ESRD QIP. This rule also implements statutory requirements for bid surety bonds and state licensure for the Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program (CBP). This rule also expands suppliers' appeal rights in the event of a breach of contract action taken by CMS, by revising the appeals regulation to extend the appeals process to all types of actions taken by CMS for a supplier's breach of contract, rather than limit an appeal for the termination of a competitive bidding contract. The rule also finalizes changes to the methodologies for adjusting fee schedule amounts for DMEPOS using information from CBPs and for submitting bids and establishing single payment amounts under the CBPs for certain groupings of similar items with different features to address price inversions. Final changes also are made to the method for establishing bid limits for items under the DMEPOS CBPs. In addition, this rule summarizes comments on the impacts of coordinating Medicare and Medicaid Durable Medical Equipment for dually eligible beneficiaries. Finally, this rule also summarizes comments received in response to a request for information related to the Comprehensive ESRD Care Model and future payment models affecting renal care.

Institutional Cost Comparison Between Heart Transplants and Left Ventricular Assist Device Implantations.

OBJECTIVES: Increased numbers of end-stage heart failure patients and improved technology have led to increased use of left ventricular assist devices as a viable alternative to heart transplants. Given the current economic climate, we compared costs of heart transplant versus device placement. MATERIALS AND METHODS: Medical records of patients who received heart transplants or left ventricular assist devices were cross-referenced with institutional financial data. The device cohort was limited to those receiving durable (not temporary) devices. Index admission, 1-year readmission, and overall 1-year charges were compared using standard statistical methods. RESULTS: Of 184 identified patients with end-stage heart failure surgical therapy, 121 received left ventricular assist devices, 43 had heart transplants, and 20 received left ventricular assist devices as bridge to heart transplant; these latter patients were excluded from our analyses. At index admission, mean charges were $863 433 ± $398 427 for device patients and $725 877 ± $488 685 for transplant patients (P = .05). One-year mean readmission rates were similar (4.65/transplant patient and 4.53/device patient; P = .94), with corresponding 1-year survival rates of 87.8% and 78.0% (P = .04). Total readmission charges during year 1 were $169 732 ± $242 366 for device patients and $201 682 ± $297 565 for transplant patients (P = .08), with corresponding overall charges at 1 year of $1 029 732 ± $450 498 and $927 559 ± $562 404 (P = .49). CONCLUSIONS: During the first year, heart transplant and left ventricular assist device placement have similar costs. Initial index admission costs seem to favor heart transplant, with device pump costs accounting for some of the difference. From a 1-year survival perspective, heart transplant may be more effective; however, with lack of suitable donors, left ventricular assist devices are valuable in the armamentarium of advanced heart failure surgical options.

Rehabilitation Charges Associated With Anterior Cruciate Ligament Reconstruction.

BACKGROUND: Pre- and postoperative rehabilitation are important to the management of patients with anterior cruciate ligament (ACL) reconstruction, but little attention has been given to the costs. This study evaluated the pre- and postoperative rehabilitation charges in patients with ACL reconstruction in the United States. HYPOTHESIS: Patients receive preoperative rehabilitation less commonly than postoperative rehabilitation. STUDY DESIGN: Retrospective database study. LEVEL OF EVIDENCE: Level 4. METHODS: Using the PearlDiver database, we identified patients undergoing ACL reconstruction from 2007 through 2011 using Current Procedural Terminology codes. The associated rehabilitation charges billed to insurance providers for 90 days preoperatively and 6 months postoperatively were categorized as physical therapy or as durable medical equipment (DME). The charges were examined by year and geographic region and represented as per-patient average charges (PPACs). RESULTS: A total of 92,179 patients were identified in the study period. The PPAC for rehabilitation was $241 during the 90-day preoperative period and $1876 for the 6-month postoperative period. Patients averaged 2 preoperative sessions for physical therapy, with 44% of patients receiving preoperative rehabilitation in contrast with an average of 17 postoperative sessions per patient in 93% of patients. Rehabilitation charges were greater postoperatively than preoperatively (P < 0.05). Preoperatively, 24% of patients received a DME, while 35% received a DME postoperatively. Preoperative rehabilitation PPACs were highest in the Northeast, followed by Midwest, South, and West (P < 0.05). There were no significant differences in postoperative rehabilitation PPACs for geographic region (P = 0.43). CONCLUSION: Preoperative rehabilitation charges were lower than postoperative charges. A patient undergoing ACL reconstruction typically received 9 times more sessions of postoperative physical therapy than preoperative. CLINICAL RELEVANCE: This study found that preoperative supervised rehabilitation for patients with ACL reconstruction was infrequent across the United States.

Is safe surgery possible when resources are scarce?

The greatest burden of surgical disease exists in low- and middle-income countries, where the quality and safety of surgical treatment cause major challenges. Securing necessary and appropriate medical supplies and infrastructure remains a significant and under-recognised limitation to providing safe and high-quality surgical care in these settings. The majority of surgical instruments are sold in high-income countries. Limited market pressures lead to superfluous designs and inflated costs for these devices. This context creates an opportunity for frugal innovation-the search for designs that will enable low-cost care without compromising quality. Although progressive examples of frugal surgical innovations exist, policy innovation is required to augment design pathways while fostering appropriate safety controls for prospective devices. Many low-cost, high-quality medical technologies will increase access to safe surgical care in low-income countries and have widespread applicability as all countries look to reduce the cost of providing care, without compromising quality.

Medicare Program; Prior Authorization Process for Certain Durable Medical Equipment, Prosthetics, Orthotics, and Supplies. Final rule.

This final rule establishes a prior authorization program for certain durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) items that are frequently subject to unnecessary utilization. This rule defines unnecessary utilization and creates a new requirement that claims for certain DMEPOS items must have an associated provisional affirmed prior authorization decision as a condition of payment. This rule also adds the review contractor's decision regarding prior authorization of coverage of DMEPOS items to the list of actions that are not initial determinations and therefore not appealable.

Medicare program; End-Stage Renal Disease prospective payment system, quality incentive program, and Durable Medical Equipment, Prosthetics, Orthotics, and Supplies. Final rule.

This final rule will update and make revisions to the End-Stage Renal Disease (ESRD) prospective payment system (PPS) for calendar year (CY) 2015. This rule also finalizes requirements for the ESRD quality incentive program (QIP), including for payment years (PYs) 2017 and 2018. This rule will also make a technical correction to remove outdated terms and definitions. In addition, this final rule sets forth the methodology for adjusting Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) fee schedule payment amounts using information from the Medicare DMEPOS Competitive Bidding Program (CBP); makes alternative payment rules for certain DME under the Medicare DMEPOS CBP; clarifies the statutory Medicare hearing aid coverage exclusion and specifies devices not subject to the hearing aid exclusion; will not update the definition of minimal self-adjustment; clarifies the Change of Ownership (CHOW) and provides for an exception to the current requirements; revises the appeal provisions for termination of a CBP contract, including the beneficiary notification requirement under the Medicare DMEPOS CBP, and makes a technical change to the regulation related to the conditions for awarding contracts for furnishing infusion drugs under the Medicare DMEPOS CBP.