CMS will not require manufacturers applying for a new technology APC to first submit a CPT code application, according to the FY 2006 hospital outpatient prospective payment system final rule.

The decision, which reverses the agency's previously proposed policy, was praised by AdvaMed and the Medical Device Manufacturers Association. The turnaround was due in large part to blanket opposition from the device industry, which argued that the proposed policy would have slowed beneficiary access to new technologies. Hospitals had supported the proposal.

In the proposed rule, CMS had said that submitting a CPT code with the new tech APC application would encourage more timely review by the wider medical community, as well as establish standardized codes and broader dissemination of new technologies (¹ Also see "New Tech APC Applicants Would Need To File For CPT Code Under OPPS Rule" - Medtech Insight, 25 July, 2005., p. 14).

New tech APCs offer special payments for products for two to three years until enough data are available to assign the product to a clinical APC.

Manufacturers, who usually collaborate with specialty societies on CPT code applications, say that they do not have full control over the submission process.

Furthermore, many firms will wait until they have enough evidence for the CPT Editorial Panel to award them a traditional Category I code, rather than a Category III code designating an emerging technology. Many private payors uniformly reject Category III codes, preventing the product from being reimbursed.

"In light of the numerous and considered comments opposed to this proposal, we are not proceeding with it at this time," CMS states in the rule, set for publication in the Federal Register on Nov. 10.

The agency, however, still maintains that it is "committed to the general goal of promoting review of the coding, clinical use and efficacy of new technology services by the wider medical community" and suggests that it may reintroduce the proposal in the future.

"We continue to believe that timely review of potential new services by the wider medical community is valuable, given our experience that many services that have requested...assignment to a new technology APC have demonstrated limited clinical efficacy," CMS states.

The agency seeks further input on the proposal or alternatives to it. However, CMS says that it will not pursue a recommendation from several commentors, including Boston Scientific and MDMA, to establish a standing advisory committee to provide input on new technology APC applications because it would delay the application process.

Furthermore, CMS says that the "specific medical expertise required to evaluate new technologies would likely vary from application to application" making it "more difficult" to maintain a standing advisory committee with fairly stable membership.

In September 15 comments, Medtronic suggests that CMS issue a new technology APC for one year and allow the payment to continue for an additional one or two years based upon the receipt of the CPT application and acceptance letter. "This approach would allow CMS to realize the benefits of the alignment in the CPT and new technology APC processes without negatively impacting patient access," Medtronic states.

Device stakeholders also helped persuade CMS to hold off on imaging cuts - a move also praised by AdvaMed and MDMA. CMS had proposed that whenever two or more procedures in the same family are performed in the same session, the first procedure would be paid in full and the second one would be discounted by 50% (² Also see "Diagnostic Imaging Scrutinized As CMS Moves Toward Value-Based System" - Medtech Insight, 25 July, 2005., p. 11).

The agency's APC Advisory Panel had also urged CMS to delay the proposal for one year to gather additional data on the implications of any changes.

CMS agrees that additional analyses are needed before moving forward with the proposal. "Depending on the results of our analyses, in a future rule we may propose revisions to the structure of our rates in order to ensure that these rates properly reflect the relative costs of initial and subsequent imaging procedures," CMS says.

In Sept. 14 comments, GE Healthcare contends that the agency failed to consider the high capital costs associated with imaging equipment. "These fixed costs contribute a greater share of total procedure costs and do not vary, regardless of whether a second procedure is performed during the same session," GE writes.

Device OPPS Wins: CMS Scratches CPT Code Requirement And Imaging Cuts

More from Archive

More from Medtech Insight