Cook Medical’s fenestrated abdominal aortic aneurysm graft is the beneficiary of two positive payment decisions in CMS’ fiscal year 2013 final hospital inpatient rule issued Aug. 1.

The firm’s Zenith fenestratedgraft, approved by FDA in April, was the only device newly awarded a temporary new-technology add-on payment for next year. (See Also see "Cook Medical Makes Its Case For Medicare New-Tech Add-On Payments" - Medtech Insight, 20 February, 2012..) In addition, CMS agreed to move the specialized endovascular AAA graft procedure to a higher-paying underlying payment category from what the agency had proposed in April.

Fenestrated, or branched, stent grafts include reinforced openings that allow attachment to aneurysm-impacted arteries that branch off in a manner than can’t be addressed by standard AAA stent grafts. (See Also see "New Products In Brief" - Medtech Insight, 23 April, 2012..)

“These decisions together appear to reflect Medicare’s appreciation of both the clinical merits of this new technology and new procedure, as well as the hospital resources required to perform these procedures,” said Jim Gardner, director of reimbursement for Cook Medical. “We hope these actions remove any financial barriers to providers and patients accessing this highly beneficial technology.”

Cook’s Zenith fenestrated graft expands the endovascular abdominal aortic aneurysm treatment option to more patients.

Photo: Cook Medical

The Medicare hospital inpatient new-tech add-on payment program was established over a decade ago as a way to identify and ensure adequate payment for promising but costly new medical technologies. The temporary add-on payments are meant to support commercialization of the products until their value can be captured and weighted into the MS-DRG payment system.

In its final hospital inpatients prospective payment system rule, CMS deemed the Zenith fenestrated graft to meet all three criteria for the payment: newness, exceeding certain cost thresholds and substantial clinical improvement.

“We agree that the Zenith F. Graft represents a substantial clinical improvement over existing technologies because it offers a treatment option to a patient population that would otherwise require an open procedure or a treatment option to those patients who are ineligible for an open procedure,” CMS says in its final rule. Procedures using the Zenith fenestrated graft, CMS continues, offer less-invasive treatment resulting in “reduced mortality, reduced morbidity, shorter hospital stays and less operative blood loss.”

CMS set the maximum add-on payment for hospitals using the Zenith fenestrated AAA graft at $8,171.50.

That payment would be on top of the standard MS-DRG reimbursement for the fenestrated AAA graft procedure. In its proposed inpatient rule, released in April, CMS had placed the procedure in the MS-DRG categories designated for “Other Vascular Procedures,” which reimburse in a range of about $9,600 to about $17,500 depending on a patient’s co-morbidities. But Cook and competitor Endologix, which is developing a fenestrated AAA graft device, urged the agency to move the procedure to MS-DRGs for “Major Cardiovascular Procedures,” which will pay between about $18,400 - $29,600 next year.

Both firms had pointed out that the standard AAA graft procedure is included in the higher-paying category, and that the fenestrated technique requires extra steps and more resources. (See Also see "CMS In Brief" - Medtech Insight, 2 July, 2012..) CMS was convinced.

No Add-On For Zilver PTX

But the inpatient rule was not all positive for Cook. CMS denied the firm’s request for a new-tech add-on payment for its Zilver PTX paclitaxel-eluting stent for treating peripheral artery disease because the device has yet to be approved by FDA.

CMS noted in the rule that Cook expects formal FDA approval for Zilver PTX to come before September; the firm had requested that the agency accept an “approvable” letter from FDA as a proxy for final FDA approval.

But CMS regulations require all devices applying for the new-tech add-on payments to have formal FDA clearance or approval by July 1 prior to the payment rule’s fiscal year in order to be considered for the special payment.

Two pharmaceutical products also received the temporary add-on payments for the first time in fiscal 2013. (See Also see "Vascular Device Firms Seek Medicare New-Tech Add-On Payments" - Medtech Insight, 9 January, 2012..)

And CMS extended through next year the established new-tech add-on payment for Monteris Medical’s AutoLITT tumor ablation catheter, a magnetic resonance imaging-guided treatment for the removal of brain tumors. The product was first awarded the special payment in 2011. (See Also see "CMS Awards Monteris Add-On Payment For Tumor Ablation Catheter" - Medtech Insight, 9 August, 2010..)

CMS did not grant new-tech add-on payments to any applicants in its fiscal 2012 inpatient payment rule. (See Also see "Denied! CMS Grants No New Inpatient New-Technology Add-On Payments For 2012" - Medtech Insight, 8 August, 2011..)

The fiscal 2013 IPPS rule impacts Medicare patients discharged on or after Oct. 1, 2012.

Overall, the rule would increase Medicare’s net operating payments to acute care hospitals in fiscal 2013 by 2.3%. Most procedures that depend on implantable devices will see modest, single-digit percentage payment increases as a result of the rule, slightly improved form the increases proposed by CMS in April, according to device industry analysts (See Also see "Medicare Inpatient Proposal: Modest Pay Increases, Longer-Term Reforms" - Medtech Insight, 30 April, 2012..)

Cook’s Zenith Fenestrated AAA Graft Nets Positive Payment Rulings In Medicare Reg

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