Edward Berger
CEO, Larchmont Strategic Advisors
Last but certainly not least to us here at MassDevice comes Ed Berger, our resident reimbursement guru. What Ed doesn’t know about the ins and outs of reimbursement policy as it pertains to medical devices isn’t worth knowing. Check him out at Larchmont Strategic Advisors. We asked Ed to summarize an eventful year on the reimbursement front and to look ahead as the healthcare reform initiative continues to spool out:
For me, 2010’s major developments in medical technology reimbursement begin and end with the passage and ongoing implementation of the Obama healthcare reform initiative. The insurance market reforms already in place correct serious dysfunctions in the private health insurance marketplace, increase access to preventive services, establish aggressive standards for medical-loss ratios, and eliminate pre-existing condition exclusions and lifetime benefit caps.
The Patient-Centered Outcomes Research Institute created an institutional champion for the comparative effectiveness research required to empower physicians to make better-informed clinical decisions. The reform law’s creation of the Center for Medicare and Medicaid Innovation likewise provides a central focus for a program of payment reform demonstration projects. Pending regulatory guidance for Accountable Care Organizations will be an essential piece of the foundation upon which to build a value-based healthcare purchasing system.
MassDevice New Year’s Special P/review
- P/review: Introduction
- P/review: Paul LaViolette
- P/review: Stephen Ubl
- P/review: David Lucchino
- P/review: Euan Thomson
- P/review: Brian DeChristopher
- P/review: Christopher Delporte
- P/review: Don Hardison
- P/review: Brent Hudson
- P/review: Hamid Tatabaie
- P/review: Patrick Dentinger
- P/review: Nancy Briefs
- P/review: Brian Concannon
- P/review: Ryan Howard
- P/review: Ed Berger
- P/review: Top stories of 2010
Together with the state-administered health insurance exchanges, the individual mandate slated for implementation by 2014, and the already launched electronic health record implementation efforts, these reforms provide the necessities for achieving reform’s twin goals of quality improvement and cost control. And if cost increases remain incorrigible, the Independent Payment Advisory Board will, beginning in 2013, be required to propose Medicare spending reductions.
The success of healthcare reform will depend upon CMS’ ability to make all of the pieces of the complex mosaic created by the 2010 legislation fit together seamlessly and with minimal pain and disruption for key stakeholders. That is why the president’s appointment of Don Berwick as CMS Administrator deserves special attention as one of the most important reimbursement developments of the year. We have heard very little from Berwick since his recess appointment this summer; that will certainly change once the new House Republican majority gins up its healthcare reform oversight hearings and repeal initiatives. But Berwick has been very busy building the institutional framework for the Innovation Center, gearing the agency up for its new program implementation tasks, implementing new interagency cooperative initiatives with FDA and NIH, and otherwise improving operational capabilities. He will be the single most important individual determinant of the success or failure of the reform enterprise.
Most observers believe that Republican efforts to repeal the reform bill will be fruitless. They don’t have the votes to override a Presidential veto, and there is too much in the bill that is popular with even their core constituency. But they will work hard to eliminate or de-fund some critical elements. The Administration and Congressional Democrats will need to be on top of their game politically to fend off those efforts; if their political performance leading up to the November elections is any indicator, therein lies the greatest threat to the reform effort as it exists today.
I’ve given short shrift here to developments that directly affect device companies, such as the reform legislation’s 2.3 percent excise tax on medical devices and to reimbursement adjustments that impact particular specialties, most notably the continued dramatic reductions in Medicare payment for advanced cardiac imaging modalities. There’s that subjectivity I noted up front — painful as these may be at the moment of implementation, any kind of long-term view would conclude they have only modest incremental impacts. I’m more impressed by Medicare’s roll-in of significant bonus payments for primary care providers in 2011, because those payments signal an important long-term policy initiative — but that’s just me.
And finally, kudos to Congress for acting last week, after a year of avoiding the issues, to cancel the impending 24 percent reduction in physician payments mandated by the Sustainable Growth Rate formula, and simultaneous raspberries for doing so by kicking the can downfield for yet another 12 months without actually dealing with the underlying totally dysfunctional provision of the law. Here’s a faint hope that among the highlights of 2011 we’ll be able to find some single act of legislative courage.
