- Abiomed is facing a cut of about 24% to the CMS reimbursement code that covers some 90% of procedures using its Impella heart pump, as it outlined in the agency's Fiscal Year 2021 Medicare Hospital Inpatient Prospective Payment System (IPPS) proposed rule released Monday.
- It's not the first time Abiomed has faced such a steep reduction to the DRG 215 (Other Heart Assist System Implant) code; the agency floated a 27% cut in last year's IPPS proposed rule before landing on a 3% payment increase in the final version of the rule.
- Also as part of Monday's proposed rule, CMS said it intends to approve three breakthrough-designated devices for reimbursement via its new technology add-on payment pathway. Two are designed to treat heart failure patients and one targets late-stage pancreatic cancer.
If CMS' proposed reduction were to be finalized, payment level for uni-ventricular Impella percutaneous insertion procedures would fall from the current hospital rate of $80,654 to $61,127. However, the agency's actions in recent years would suggest that changes between the proposed rule and the final rule are likely.
CMS is seeking public comments on a number of ways to reconsider the change: maintain this past year's rate, average the FY2021 rate with this past year's, or "adjust and audit reimbursement rate from FY2020 based on hospital charges, length of stay, patient transfer, patient comorbidities and hospital efficiencies over the prior year," according to a regulatory filing from Abiomed outlining the proposed changes.
The agency noted in Monday's proposed rule DRG 215 is the only diagnosis-related group code up for a more than 20% cut, leading it to seek public comments on how best to move forward, according to analysis by investment firm Jefferies.
Analysts at William Blair noted CMS' openness to considering new data during the comment period presents a good opportunity for Abiomed, particularly given that company management has estimated more than one in five cases did not bill for the Impella device last year, which may have incorrectly skewed the agency's cost analysis.
"Patients who require Impella tend to be expensive to manage and are often associated with prolonged stays in the intensive care unit (ICU) that can lead to excess charges. We expect these inputs to be included in the data sets provided to the agency," the analysts wrote in a research note Tuesday.
"Further, because fiscal 2019 was the first year the majority of Impella procedures were switched to coding under DRG 215, we believe incorrect coding may still be negatively affecting CMS' reimbursement formulas (i.e., not properly accounting for the cost of Impella)."
Despite the proposed cut to Abiomed's most-encompassing code, other payment codes affecting Impella procedures including biventricular Impella or open insertion with removal, ECMO plus Impella, as well as ICU care and removal of Impella after transfer from outlying hospital are all slated for payment increases.
Abiomed plans to hold a virtual investor day May 27.
Separately, the IPPS rule also lays out new devices CMS wants to approve for payment under an alternative pathway for new technology add-on payment. The specific pathway applies to technologies that have received both breakthrough device designation and marketing authorization from FDA. Applicants must meet certain cost criteria but, given the new nature of the products, are not required to prove substantial improvement over previously available technologies in order to qualify.
The successful applicants this round are CVRx and its BaroStim neuromodulation implant to treat heart failure, AngioDynamics' NanoKnife ablation system to treat Stage III pancreatic cancer and Impulse Dynamics' device to treat certain patients with moderate to severe heart failure. The last device also received CMS' backing when the agency finalized its Medicare Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System rule for calendar year 2020.
The proposed rule is open to public comment until July 10. The policy changes for FY2021 would take effect Oct. 1.