CMS Acts to Spur Innovation for America’s Seniors

(Originally published on November 11, 2020 at www.salienthealthcare.com.)

One of the tenants of the Triple Aim — improving the experience of patient care (including quality and satisfaction) — looks to expand overall access to care. Over the last decade, technology companies began to focus on developing devices that would increase the access of America’s seniors to healthcare at home. Many forward-thinking industry professionals envisioned what the future of healthcare might be with new technology, not just for seniors, but everyone. In 2011, Microsoft created a promotional video depicting their idea of the future of healthcare, and many other tech companies, with the help of their marketing departments, produced something similar. Each of these common promotional videos depicted some sort of scenario where a person would go about their day, eat, exercise, and run errands all while any concerning changes in their health would be immediately transmitted to their doctor via a wearable device. Today, we are not particularly close to what that Microsoft promo video shows, and we’ve learned that a good idea, in theory, isn’t always so great in practice because success requires widespread adoption by the target market. Senior citizens consume a considerable amount of healthcare considering their population is 52 million, or about 16% of the American population. Some are quite tech savvy, but many are not. The result is that harnessing the power of healthcare technology to help those that need it most has been more difficult than expected.

It’s also important to note that technology companies were previously skeptical of their ROI and were hesitant to put out new technologies without proof that their costs, and efforts, would be rewarded with sales. Yes, better care, better access to care, and lower costs are always the goal, but a low ROI is a huge deterrent. Prior to 2020, it wasn’t uncommon for Medicare beneficiaries to be less likely to use some of the new technologies; Medicare beneficiaries skew less tech savvy and prior policies burdened them with significant out-of-pocket costs. That added risks which also acted as barriers to progress on the side of tech companies. If Medicare beneficiaries weren’t using the available technology, then Remote Patient Management (RPM) was essentially impossible. Thankfully today’s Medicare beneficiaries (specifically baby boomers), primarily through exposure, are beginning to graduate to a more tech savvy position. It’s important to note that previously patients did have to pay their own way for equipment, and there wasn’t much provider reimbursement to add incentive. There’s also the bureaucratic burden involved in putting out a new healthcare product. Technology moves fast…government does not (have you ever been to the DMV?). New products first have to be approved by the government, and then they have to be approved by Medicare so that providers can get reimbursed for distribution. Remote Patient Monitoring (RPM) is a great example of this. Providers want to use RPM, but there are a lot of barriers to entry. Most patients have to pay their own way for the equipment today, and providers don’t receive much fee-for-service revenue to do it. Thus, the incentive is minimal and the effort is significant. That’s not a winning combination. Therefore, some roadblocks are going to be tough to remove, but finally we see some are already starting to be broken down.

Just before NAACOS Fall 2020 the Centers for Medicare & Medicaid Services issued a proposed rule that is designed to allow Medicare beneficiaries to use brand new technologies as they arrive on the market. The rule is titled Medicare Coverage of Innovative Technology (MCIT) (CMS-3372-P), and according to CMS Administrator Seema Verma, “For new technologies, CMS coverage approval has been a chicken and egg issue. Innovators had to prove their technologies were appropriate for seniors, but that was almost impossible since the technology was not yet covered by Medicare and thus not widely used enough to demonstrate their suitability for Medicare beneficiaries.” However, now according to U.S. Department of Health and Human Services (HHS) Secretary Alex Azar, “This new proposal would give Medicare beneficiaries faster access to the latest lifesaving technologies and provide more support for breakthrough innovations by finally delivering Medicare reimbursement at the same time as FDA approval.”

WHAT DOES THAT MEAN?

The short answer is that instead of the lag that occurs from development to market-ready due to the approvals process by both the FDA and Medicare, which eats up money, resources, and delays adoption, now there’s technically a fast track to bypass these bottlenecks. Medicare Coverage of Innovative Technology (MCIT) now allows for the FDA to label a particular product to be considered a “breakthrough” as long as it involves new technology that diagnoses or treats life-threatening or debilitating diseases or conditions. CMS then has four years to re-evaluate this particular product based on real-world evidence. Seniors who were previously prevented from using new technologies while they wait in “limbo,” or to use a movie production term, “development hell,” now can be fast-tracked into using these new devices because they would both be approved and covered by Medicare right away. Covered is the real key because that means technology such as RPM is much easier to implement since incentives are properly aligned, reimbursement would be immediate, and beneficiary out-of-pocket expenses are likely to decrease.

This rule is merely proposed, and at the moment, it could still change. Also, commercial payers aren’t yet allowed to be involved, however, the proposed definition does allow CMS to review coverage policies and analyze them for coverage parameters that would be applicable to the Medicare population. Thus, those with commercial insurance may benefit from this rule later on. The submission of public comments has just passed, so we should know more early next year. That being said, it’s exciting to think what may lie ahead. We may not be where the above Microsoft video predicted we might be, but at least we’re finally free to actually head in that direction.

RESOURCES

• Berwick, Don M., and J. Whittington. “The Triple Aim: Care, Health, and Cost: IHI.” Institute for Healthcare Improvement, The Triple Aim: Care, Health, and Cost. Health Affairs, 27 June 2008, www.ihi.org/resources/Pages/Publications/TripleAimCareHealthandCost.aspx.
• CMS. “Fact Sheet Proposed Medicare Coverage of Innovative Technology (CMS-3372-P).” Proposed Medicare Coverage of Innovative Technology (CMS-3372-P), Centers for Medicare & Medicaid Services, 31 Aug. 2020, www.cms.gov/newsroom/fact-sheets/proposed-medicare-coverage-innovative-technology-cms-3372-p.
• Mather, Mark, et al. “Fact Sheet: Aging in the United States.” Population Reference Bureau, 15 July 2019, www.prb.org/aging-unitedstates-fact-sheet/.