CRT: TAVI reimbursement considerations in U.S. weighed

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WASHINGTON, D.C.--If transcatheter aortic valve implantations (TAVI) become an approved technique in the U.S., the potential reimbursement will depend on the payment model utilized by the U.S. healthcare system, according to a Feb. 28 presentation by David J. Cohen, MD, director of cardiovascular research at Saint-Luke’s Mid America Heart Institute in St. Louis, Mo., during the 2011 annual Cardiovascular Research Technologies (CRT) meeting.

“No one can definitively answer the question: What should the reimbursement for TAVI procedures be?” explained Cohen. “Therefore, we have to hypothetically examine what CMS [Centers for Medicare & Medicaid Services] may assess in weighing coverage.”

Currently, the standard approach of CMS has been to pay what the device, drug or procedure costs.

Typically, the manufacturer sets the price for the device, taking into account production costs, research and development and return on investment. “Right now, we don’t know how transcatheter aortic valves will be priced in the U.S., but we have some insight from Europe, where the devices cost about EUR20,000 each [approximately $27,700 in U.S. currency]” Cohen said. “We can only speculate if that price point will directly translate to the cost in the U.S.”

CMS reimbursement usually covers the device cost plus implantation costs. The coverage policy, which is used to control overall budget, restricts use to well-defined indications where the benefit is well-defined, specifically where “treatment is reasonable and necessary.”

The advantages to this system, according to Cohen, are that hospitals should recover appropriate costs and not lose money with the use of these procedures; and the payors can control budget and off-label use. However, he suggested that a limitation may be a restriction on innovation in delivery, such as “it may prevent individuals from seeking a more cost-effective means of delivery if the cost is covered.” Also, with this payment method, the financial risk shifts to providers, when the physicians treat, for example, patients who are more costly and the hospital has to endure the additional expenses.

Therefore, Cohen presented three alternatives:
1.       It’s a valve… pay for it like a valve!
2.       Fee for benefit
3.       Pay for it like an analogous treatment
For the first alternative, the advantage is that prosthetic valves are established technology and have an established market and reimbursement structure. “This approach would be similar to the approach of the rest of world,” he said.

However, a disadvantage to the approach could be that it discourages innovation since companies cannot charge a premium to recapture research and development costs. “In the current economic environment, is innovation an important goal of our healthcare system? Who needs to pay for innovation in this climate?” Cohen questioned.  He also suggested that costs will come down eventually as competitors enter the marketplace, as has been exemplified with drug-eluting stents.

The second alternative of ‘fee for benefit,’ originally proposed by Diamond and Kaul (J Am Coll Cardiol 1993; 22:343-352), suggests reimbursement should be proportional to the level of expected health benefit.

“In theory, this [fee for benefit] approach could encourage innovation in areas of the greatest unmet need, as well as strong incentives to provide highly beneficial and cost-effective care,” Cohen said. However, as a operational disadvantage, he pointed out that the level of benefit varies considerably with patient population,” such as the variations between those patients with no options, those at high risk and those at low or intermediate risk would require different payments. Therefore, this method would be challenging to administer.

For the third and final method, Cohen compared TAVI devices with left ventricular assist devices (LVADs), in which they both have one year survival rates assessed in large, randomized trials. 

In conclusion, Cohen said the most “rational” approach (fee for benefit) has substantial disadvantages in terms of administration and operations, while the most likely approach (pay what it costs) will likely result in increased healthcare spending due to the high cost of the valve technology.

However, he suggested more will be known when the formal cost-effectiveness analysis of the PARTNER trial is presented at ACC11 during the opening plenary session, Sunday April 3.