Tuesday, July 30, 2019

Two Offbeat Policy Quirks in Outpatient Rule: Heartflow and Non-Opioid Management

On July 29, 2019, CMS released annual proposed rulemaking for the hospital outpatient and ASC setting, the physician/lab setting, and the ESRD/DME setting (here).  The overwhelming focus of attention was on new proposals that hospitals must publicly post all of their contracted rates with each payer by name (e.g. here). 

There were two quirky zones in the hospital outpatient rulemaking that I'll highlight briefly.  One involves a proposed 50% cut in payment for the digital cardiac technology HeartFlow.  The other involves a lack of movement on CMS's part on better payment status for Exparel, a delayed release anesthetic for surgical pain.

HeartFlow - APC From $1500 to $750?

I summarized HeartFlow's initial battle for payment recognition, and the pathway of CMS rulemaking, in early 2018 here.  (That blog, nerdy in itself, at the bottom links to an even nerdier level of detail and links.)

In brief, CMS initially classed the service as non-payable.  In November 2017 final rulemaking, CMS reversed this non-payment status and placed Heartflow's main code in a $1500 New Technology payment tier.   This was based on invoices or information provided by the public, including the manufacturer.  A few weeks after the November 2017 CMS publication, HeartFlow snagged a $240M funding round.

Now, CMS shows it did not forget this particular story.  CMS found 840 claims from hospitals for HeartFlow in CY2018 (see p 189 ff).   After charge deflation via the cost-to-charge ratio and other math, CMS found a mean hospital cost of $750, so this week it announces plans to put HeartFlow's code in a lower-priced APC, for $750.

How many Heartflow claims came to CMS in CY2018?  This rulemaking states there were 840 claims in the hospital outpatient billing setting.  Sometime between September and November 2019, CMS will release CY2018 data for freestanding Part B claims - here.

Exparel: CMS Pushes Back on Special Payment Status in Outpatient Surgery

In this last couple years, there was been a huge growth of interest in ways to avoid opioid prescriptions.  One of the means is non-opioid pain relief.  For one example, CMS just released a plan to cover acupuncture for lower back pain at least in clinical registry settings (here).

For a couple years, advocates have been urging CMS to cover Exparel with separate payment status in outpatient surgeries.   Exparel is an extended-release formulation of bupivicaine that may reduce the need for post-op opioids. 

In the proposed rule (p 87 ff), CMS discusses why Exparel has been packaged into surgical costs with no extra payment.  CMS states that data analysis showed declining use in the ASC setting, so CMS has made Exparel separately payable there.  CMS does not see declining use in the OPPS setting, and CMS declines to change Exparel's OPPS payment status, although it will be accepting public comment.

I do not have a dog in this fight, but CMS's logic seems fuzzy.  Even flat utilization of Exparel does not show that the pricing policy isn't negative; for example, separately-priced Exparel might have 5x or 10x utilization while helping of patients - you don't know from looking at the current data as the status quo.  (On the other hand, CMS staff may be tracking the occasionally mixed literature, here).

At any case, in responding to the opioid crisis, CMS seemed to bend pretty readily on improving acupuncture coverage, while erecting a wall with regards to Exparel coverage, within a few weeks of each other.

While it's anecdotal, in a July 8 NPR interview, Johns Hopkins professor Travis Rieder describes being in-hospital for severe trauma and postsurgical pain, and that non-opioid formulations were heavily rationed by the hospital due to cost and lack of separate reimbursement.