Experts offer insight into changing payment models for new technologies

BOSTON – Many developers of innovative medical technologies don’t realize that insurers are going to want to see evidence that a new technology improves health outcomes before they will consider paying for it, according to Dr. Louis Jacques, senior vice president and chief clinical officer for ADVI, a health care advisory services firm in Washington.

The Centers for Medicare & Medicaid Services generally seeks “adequate evidence to conclude that the item or service improves clinically meaningful health outcomes for the Medicare population” when determining Medicare coverage, Dr. Jacques said in a presentation at the 2016 AGA Tech Summit, which is sponsored by the AGA Center for GI Innovation and Technology.

Medicare is less likely to pay if there is something controversial about the available evidence, he said in an interview. “The controversy is usually about inadequate evidence or lack of applicability to the affected Medicare beneficiary population,” Dr. Jacques said, noting that the typical Medicare patient, a 74-year-old woman with comorbid conditions taking multiple medications, often is not the type of person included in clinical trials that would generate such evidence.

Medicare is looking for “adequate evidence that a treatment strategy using the new therapeutic technology, compared to alternatives, leads to improved clinically meaningful health outcomes in Medicare beneficiaries,” he said.

Similarly, new diagnostic technologies should provide the physician with additional information that can alter treatment recommendations, resulting in therapeutic changes that improve outcomes.

Dr. Jacques noted that over the next several years, the health care system will move away from fee for service and begin more and more to pay for value, with physicians becoming more accountable for outcomes and cost.

He advised those developing a new device or treatment to think about how they would justify a particular treatment approach to their colleagues. They need to ask themselves: “What is the value proposition that supports what they are recommending? Are they choosing it because it has better outcomes, is less likely to have an adverse event, is more efficiently provided, or is it something that is less expensive?” he said.

Two major health reform laws will change how insurers pay for new medical devices, though the impact of these changes remains to be seen. According to Harry Glorikian, a health care consultant based in Lexington, Mass., the Affordable Care Act and the Medicaid and CHIP Reauthorization Act (MACRA) put many items into play, most notably fundamental changes in Medicare/Medicaid and the shift from fee-for-service to value-based payment.

“It’s a crazy time because of the need for virtually all hospital-based organizations to operate under both fee-for-service and non–fee-for-service payment arrangements right now,” he said in an interview.

Along with those two reform laws, the Health & Human Services department has set a schedule for transitioning to paying for the value – rather than the volume – of care. The initial goal – 30% of Medicare payments based on value by the end of 2016 – was reached in early March.

“HHS also set a goal of tying 85% of all traditional Medicare payments to quality or value by 2016 and 90% by 2018 through programs such as the Hospital Value-Based Purchasing and the Hospital Readmissions Reduction programs. This will be huge, and its impact will be tremendous,” he added.

One tool physicians can leverage to show value in this new payment landscape is the AGA Digestive Health Recognition Program, a quality improvement program and clinical data registry that allows clinicians to demonstrate quality of care for several disease states (colorectal cancer, hepatitis C virus, and irritable bowel disease) (www.gastro.org/DHRP).

Over the next 5-10 years, watch for changes in value-based payment models and a long-term move to a single-payer system, said Mr. Glorikian. In addition, expect changes in the workforce in terms of who delivers care and how.

Finally, physicians will need to use big data to manage patients, prescribe therapy, and integrate all aspects of medical practice, he said.

Dr. Jacques disclosed that he has financial relationships with Exact Sciences and Medtronic.

BOSTON – Many developers of innovative medical technologies don’t realize that insurers are going to want to see evidence that a new technology improves health outcomes before they will consider paying for it, according to Dr. Louis Jacques, senior vice president and chief clinical officer for ADVI, a health care advisory services firm in Washington.

The Centers for Medicare & Medicaid Services generally seeks “adequate evidence to conclude that the item or service improves clinically meaningful health outcomes for the Medicare population” when determining Medicare coverage, Dr. Jacques said in a presentation at the 2016 AGA Tech Summit, which is sponsored by the AGA Center for GI Innovation and Technology.

Medicare is less likely to pay if there is something controversial about the available evidence, he said in an interview. “The controversy is usually about inadequate evidence or lack of applicability to the affected Medicare beneficiary population,” Dr. Jacques said, noting that the typical Medicare patient, a 74-year-old woman with comorbid conditions taking multiple medications, often is not the type of person included in clinical trials that would generate such evidence.

Medicare is looking for “adequate evidence that a treatment strategy using the new therapeutic technology, compared to alternatives, leads to improved clinically meaningful health outcomes in Medicare beneficiaries,” he said.

Similarly, new diagnostic technologies should provide the physician with additional information that can alter treatment recommendations, resulting in therapeutic changes that improve outcomes.

Dr. Jacques noted that over the next several years, the health care system will move away from fee for service and begin more and more to pay for value, with physicians becoming more accountable for outcomes and cost.

He advised those developing a new device or treatment to think about how they would justify a particular treatment approach to their colleagues. They need to ask themselves: “What is the value proposition that supports what they are recommending? Are they choosing it because it has better outcomes, is less likely to have an adverse event, is more efficiently provided, or is it something that is less expensive?” he said.

Two major health reform laws will change how insurers pay for new medical devices, though the impact of these changes remains to be seen. According to Harry Glorikian, a health care consultant based in Lexington, Mass., the Affordable Care Act and the Medicaid and CHIP Reauthorization Act (MACRA) put many items into play, most notably fundamental changes in Medicare/Medicaid and the shift from fee-for-service to value-based payment.

“It’s a crazy time because of the need for virtually all hospital-based organizations to operate under both fee-for-service and non–fee-for-service payment arrangements right now,” he said in an interview.

Along with those two reform laws, the Health & Human Services department has set a schedule for transitioning to paying for the value – rather than the volume – of care. The initial goal – 30% of Medicare payments based on value by the end of 2016 – was reached in early March.

“HHS also set a goal of tying 85% of all traditional Medicare payments to quality or value by 2016 and 90% by 2018 through programs such as the Hospital Value-Based Purchasing and the Hospital Readmissions Reduction programs. This will be huge, and its impact will be tremendous,” he added.

One tool physicians can leverage to show value in this new payment landscape is the AGA Digestive Health Recognition Program, a quality improvement program and clinical data registry that allows clinicians to demonstrate quality of care for several disease states (colorectal cancer, hepatitis C virus, and irritable bowel disease) (www.gastro.org/DHRP).

Over the next 5-10 years, watch for changes in value-based payment models and a long-term move to a single-payer system, said Mr. Glorikian. In addition, expect changes in the workforce in terms of who delivers care and how.

Finally, physicians will need to use big data to manage patients, prescribe therapy, and integrate all aspects of medical practice, he said.

Dr. Jacques disclosed that he has financial relationships with Exact Sciences and Medtronic.

BOSTON – Many developers of innovative medical technologies don’t realize that insurers are going to want to see evidence that a new technology improves health outcomes before they will consider paying for it, according to Dr. Louis Jacques, senior vice president and chief clinical officer for ADVI, a health care advisory services firm in Washington.

The Centers for Medicare & Medicaid Services generally seeks “adequate evidence to conclude that the item or service improves clinically meaningful health outcomes for the Medicare population” when determining Medicare coverage, Dr. Jacques said in a presentation at the 2016 AGA Tech Summit, which is sponsored by the AGA Center for GI Innovation and Technology.

Medicare is less likely to pay if there is something controversial about the available evidence, he said in an interview. “The controversy is usually about inadequate evidence or lack of applicability to the affected Medicare beneficiary population,” Dr. Jacques said, noting that the typical Medicare patient, a 74-year-old woman with comorbid conditions taking multiple medications, often is not the type of person included in clinical trials that would generate such evidence.

Medicare is looking for “adequate evidence that a treatment strategy using the new therapeutic technology, compared to alternatives, leads to improved clinically meaningful health outcomes in Medicare beneficiaries,” he said.

Similarly, new diagnostic technologies should provide the physician with additional information that can alter treatment recommendations, resulting in therapeutic changes that improve outcomes.

Dr. Jacques noted that over the next several years, the health care system will move away from fee for service and begin more and more to pay for value, with physicians becoming more accountable for outcomes and cost.

He advised those developing a new device or treatment to think about how they would justify a particular treatment approach to their colleagues. They need to ask themselves: “What is the value proposition that supports what they are recommending? Are they choosing it because it has better outcomes, is less likely to have an adverse event, is more efficiently provided, or is it something that is less expensive?” he said.

Two major health reform laws will change how insurers pay for new medical devices, though the impact of these changes remains to be seen. According to Harry Glorikian, a health care consultant based in Lexington, Mass., the Affordable Care Act and the Medicaid and CHIP Reauthorization Act (MACRA) put many items into play, most notably fundamental changes in Medicare/Medicaid and the shift from fee-for-service to value-based payment.

“It’s a crazy time because of the need for virtually all hospital-based organizations to operate under both fee-for-service and non–fee-for-service payment arrangements right now,” he said in an interview.

Along with those two reform laws, the Health & Human Services department has set a schedule for transitioning to paying for the value – rather than the volume – of care. The initial goal – 30% of Medicare payments based on value by the end of 2016 – was reached in early March.

“HHS also set a goal of tying 85% of all traditional Medicare payments to quality or value by 2016 and 90% by 2018 through programs such as the Hospital Value-Based Purchasing and the Hospital Readmissions Reduction programs. This will be huge, and its impact will be tremendous,” he added.

One tool physicians can leverage to show value in this new payment landscape is the AGA Digestive Health Recognition Program, a quality improvement program and clinical data registry that allows clinicians to demonstrate quality of care for several disease states (colorectal cancer, hepatitis C virus, and irritable bowel disease) (www.gastro.org/DHRP).

Over the next 5-10 years, watch for changes in value-based payment models and a long-term move to a single-payer system, said Mr. Glorikian. In addition, expect changes in the workforce in terms of who delivers care and how.

Finally, physicians will need to use big data to manage patients, prescribe therapy, and integrate all aspects of medical practice, he said.

Dr. Jacques disclosed that he has financial relationships with Exact Sciences and Medtronic.