Biomedical innovators have mobilized across the world to address COVID-19, from the initiation of clinical trials for potential vaccines to ongoing studies of repurposed medications for potential therapeutic and prophylactic benefit. Most policy commentary for therapeutic development has focused on issues such the availability of master clinical trial protocols and manufacturing capacity following development. Missing from the conversation has been the Centers for Medicare and Medicaid Services (CMS), which plays an important yet often underappreciated role in regulating access to and payment for novel medical products (drugs and devices).
Legislators drew attention to the important role of CMS guidance in the development and financing of COVID-19 therapies during their negotiations on the third iteration of the COVID-19 stimulus bill. An early version of the Coronavirus Aid, Relief, and Economic Security (CARES) Act included provisions to reform CMS policies for coverage (for example, expanding the use of coverage with evidence development), coding (for example, increasing the frequency with which CMS issues Healthcare Common Procedure Coding System billing codes), and payment (for example, directing CMS to develop alternative payment models for novel medical products). Although this language was ultimately stricken from the final legislation passed by Congress, its original intent is increasingly relevant, with patients and payers looking to CMS for regulatory guidance for new COVID-19 therapies.
In this post, I identify how policy makers can address challenges surrounding coverage, coding, and payment for COVID-19 therapies via immediate regulatory guidance from CMS and future legislative action from Congress.
Take Proactive Steps For COVID-19 Coding
Typically, CMS coding guidance follows actions by the Food and Drug Administration (FDA) rather than coming in tandem. This can contribute to delays in product deployment. In the now-stricken Section 4414 of the CARES Act, Congress had proposed moving the coding process further upstream in the life cycle of product development by allowing innovators to file a request with CMS for a billing code upon receiving a “breakthrough” designation from the FDA. This action would not have changed the odds of FDA approval or CMS coverage (which are based on rigorous scientific evidence) but would have enabled CMS to begin developing infrastructure for codes in advance of market clearance.
COVID-19 demonstrates the benefit of this approach. CMS took the unusual step of fast-tracking coding decisions for new polymerase chain reaction (PCR) based diagnostics, which prevented delays in access. It will be imperative for CMS to take similar, proactive steps to develop codes for COVID-19 therapies given that the modality of the medication will affect the type of code CMS will have to issue. For example, if COVID-19 therapies are injectable medications, then CMS will have to develop a CPT code since such a therapy would be considered a physician-administered service. In contrast, COVID-19 therapies that are oral medications would require a different kind of billing code. To minimize barriers to on-label use once a COVID-19 therapy receives FDA approval, CMS should proactively develop general codes for COVID-19 therapies, similar to the new codes for COVID-19 diagnostics.
Employ Coverage With Evidence Development For COVID-19 Therapies
Large-scale randomized studies are the gold standard for therapeutic development and should be the lens through which the effectiveness of COVID-19 therapies is evaluated. However, pandemics are not necessarily conducive to the recruitment of large populations, and trials may not be designed to detect other important real-world effects, such as adverse reactions, interactions with other medications, and different subpopulation responses. Because CMS guidance on coverage is a regulatory bellwether for private payers, it is imperative for policy makers to issue clear guidance for how the Medicare program will adjudicate coverage policies, given the uncertain and evolving nature of evidence for COVID-19 therapies. To do so, CMS should prepare to issue national coverage decisions for any FDA-approved COVID-19 therapy under its Coverage with Evidence Development program.
Coverage with evidence development enables Medicare and private payers to temporarily offer broad coverage of novel medical products for which evidence is still emerging, with the recognition that expanding coverage for (and consequently use of) the new technology would enable rapid data collection at scale for specific outcomes, populations, or settings. These data would then be used to inform final CMS determinations about which populations should be covered and how the therapy should be reimbursed. Importantly, implementing an evidence-based approach to coverage with evidence development would support the creation of infrastructure for the collection and analysis of traditional evidence from trials and registries (for example, CMS’s approach for lung volume reduction surgery) as well as real-world evidence, or evidence collected outside of the trial setting (for example, CMS’s approach for leadless pacemakers). This regulatory strategy would accelerate our understanding of the use cases and limitations of new COVID-19 therapies for which the FDA has certified baseline safety and effectiveness. For example, data could be collected to inform guidelines for COVID-19 treatment in susceptible populations, such as patients who have comorbidities such as cancer or suffer from substance use disorders. Likewise, coverage with evidence development could help clarify potential drug interactions from COVID-19, such as with ibuprofen.
Ensuring that new therapies are safe and effective through rigorous trial design remains the domain of the FDA. But CMS can help supplement FDA decision making by leveraging the massive data sets of the Medicare program through coverage with evidence development, accomplishing the twin goals of both increasing access to new technologies and improving our understanding of their costs and benefits.
Enable Post-Market Surveillance Of Outcomes From COVID-19 Therapies
CMS will need to work with experts, industry groups, and federal partners on what data should be collected as part of coverage with evidence development. To do so, CMS should coordinate with the FDA, which tracks product safety through its Sentinel Initiative and has expertise in real-world evidence, to identify best practices for surveillance. Collaboration with federal partners such as the Agency for Healthcare Research and Quality and the National Institutes of Health will also be important for any coverage with evidence development protocols that involve trials or registries. Furthermore, CMS will need to work with payer and provider networks to create protocols for collecting outcomes data for COVID-19 medications. As outlined in my first recommendation, CMS should prepare for the future FDA approvals by proactively developing codes for COVID-19 therapies. This will enable CMS to monitor claims data for information about use and outcomes.
Existing literature demonstrates that not all innovations are truly “breakthroughs.” Consequently, it is imperative that federal officials develop appropriate infrastructure to track the outcomes of new therapies to ensure the safety of patients and inform future regulatory decisions.
Develop Alternative Payment Models For COVID-19 Therapies
The potential target population for COVID-19 therapies has three components: an initial bolus of patients currently in need of treatment; a “spike” in patients after an initial “flattening” of the curve; and a group of patients (of unknown size) that will require care in the future, in the event that COVID-19 becomes seasonal. To design affordable payment arrangements to meet the needs of these various populations, CMS must be equipped with negotiating powers beyond its existing statutory authority. Congress anticipated this challenge, as earlier drafts of the CARES Act included language that provided a legislative directive to the secretary of Health and Human Services for negotiating alternative payment models for novel medical products. Although the final approved legislation did not ultimately contain this authority, Congress should work to provide statutory guidance on this issue in future COVID-19 legislation to ensure affordable access for needed therapies.
For example, CMS could consider developing a “Netflix” or subscription-style model to secure necessary medicines for highly affected populations (for example, in New York). CMS could consider working with the Biomedical Advanced Research and Development Authority (BARDA) and the Assistant Secretary for Preparedness and Response (ASPR) to begin negotiating advanced market commitments for products currently in the pipeline, with excess purchases returning to the national stockpile. Recognizing that many therapeutics currently being tested for COVID-19 are already approved and priced for other indications, CMS could also consider implementing indication-based pricing to help control costs for already manufactured therapies. To align payment with value, CMS could consider deploying an outcomes-oriented version of the New Technology Add-On Payment, the temporary incentive payment used by Medicare to reimburse novel medical products until sufficient claims data have been generated to modify existing diagnosis-related groups.
Irrespective of the specific strategy CMS takes, the agency will require a legislative mandate from Congress to negotiate outside the box for COVID-19 therapies. Consequently, lawmakers should work to include this policy as a provision in future COVID-19 legislation, and regulators should begin working with providers and payers to begin designing an alternative payment model for COVID-19 therapies.
Conclusion
Increasing access to new technologies in a cost-effective manner has long been a bipartisan imperative for policy makers with important implications for patient outcomes. COVID-19 highlights the importance of interagency coordination and payment flexibilities to achieve the goals of equal access and evidence-based outcomes for public health. Congress and policy makers must take action now on coverage, coding, and payment to pave the way for accessible and affordable COVID-19 therapies.
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Photo courtesy of: Health Affairs
Originally Published On: Health Affairs
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