Wednesday, July 26, 2023

WSJ for CMS Nerds: Why Alzheimer Drugs Bode Well for GE Healthcare; CMS Rulemaking on Tracers


Adoption of Alzheimer drugs could mean a boom in both PET and MRI imaging.  We'll explain why this is, and how CMS payment for radiopharmaceuticals is so different in the Hospital Outpatient vs regular Part B setting.  CMS has also offered to possibly change outpatient pricing rules.


Recent Events

CMS has guaranteed coverage of fully-approved Alzheimer anti-amyloid drugs, as long as patients are enrolled in a basic registry.  CMS has just announced it is dropping its "in research only" coverage of amyloid PET scans, and the drugs will also require patients have regularly monitoring with MRI's to detect adverse brain pathology.   One wild card is how fast the anti-amyloid drugs will be adopted.  Some new biologicals become best-sellers quickly, and others (e.g. Provenge) are launched with high hopes that fizzle.

WSJ and GE Healthcare

See a July 25, 2023, article in WSJ by David Wainer:  "A Surprising Beneficiary of New Alzheimer Drugs: GE Healthcare," here.  Companies as diverse as Lilly - which makes the "Amyvid" tracer - and Philips - which makes imaging equipment.  GE Healthcare (now a standalone stock) makes both the tracer and the PET scanner.

The newspaper can only estimate, but talks about 1.2M extra MRI's, 500K extra PET scans, globally, calling this a "billion dollar market."

CMS Amyloid Imaging Policy

On July 17, 2023, CMS announced it plans to discontinue its roughly ten-year-old NCD, on amyloid PET scans, which covered the scans only under stringent clinical study conditions.  The new policy (to begin in a few months) would leave coverage choices up to the MACs.

I wrote a blog on the initial decision here, and a blog in which I interview AI (GPT3.5) about the new policy, here.   The latter blog also includes an AI-written letter from a stakeholders who urges CMS to make no change, and to keep the current restrictive policy.

Wild World of Payment Policy

In a nutshell, in regular Part B, Medicare pays for the PET scan itself, and separately for the tracer.   This is important because the PET scan may be in the $1500 dollar range while the tracer may be in the $3000 range.

On the other hand, in the hospital outpatient setting (OPPS prospective payment), CMS pays ONE set fee for the scanning and for whatever tracer is chosen for that patient.   That combined payment is in the $1500 range.   The difference is critical, because the least expensive tracers, like FDG, are in the $400 range and the most expensive, for amyloid, may be in the $3000 range. 

This means that amyloid tracer PET will almost always be done in the Part B freestanding centers, not in hospital-based PET centers.   

CMS Proposes Changes in OPPS Radiotracer Policy

In hospital proposed rulemaking released July 13 (here), CMS stated it was happy with its PET tracer bundling policy, but that it receives many complaints.  It listed about five alternatives on which it wants comment (comment til late August).   For example, CMS could make two categories of PET scan coding, one for less-expensive and one for more-expensive tracers.   CMS could bundle tracers, not at any price, but only if they cost less than $500.  (That might lead to a lot of $501 tracers).  CMS could simply pay for the tracer separately (after cutting down the base fee for the scan).  This approach to rulemaking follows instructions in CMS law SSA 1871, which requires that decisions in final rules must be proposed in draft rules, or else, be a natural outgrowth of what was proposed (not a big jump).   

Problems Go Way Back

This HOPPS policy issue also concerns some cancer patients, who get an expensive test tracer prior to certain radioactive anti-cancer therapies.   CMS has bundled the expensive test diagnostic tracer, making it hard for hospitals to buy and offer it.  Scott Gottlieb has complained about this in various Op Eds.   

Another aspect of the story is that it's hard to pay for radiotracers in the same way as regular injectible drugs.  Regular drugs are paid by ASP, average sales price, by surviving the manufacturer (e.g. Pfizer).  But radiotracers have different components at different places - the drug skeleton, the tracer (like F18), the radiobiology center that can combine the two.  The result is there is no simple single price as there is for normal drugs.

I think I recently saw news about 2023 legislation that would REQUIRE CMS to change its OPPS tracer policy, but I haven't got it handy.