Medical device makers to CMS: Make sure ACOs protect innovation

by Brendon Nafziger, DOTmed News Associate Editor | December 06, 2010
Medical device makers hope accountable care organizations (ACOs) have the right incentives so doctors aren't punished for being early adopters of new technologies or are encouraged to skimp on care.

The medical device lobby Advanced Medical Technology Association submitted recommendations to the Centers for Medicare and Medicaid Services on Friday for how ACOs can ensure doctors aren't driven to avoid new equipment. The recommendations come as CMS moves to release its ACO regulations later this month, AdvaMed said.

The group is calling for independent monitors of ACOs, caps on individual physician savings, full consent from beneficiaries when added to a plan, and possibly a pass-through system that could help pay for new devices in the first few years they're available.

"ACOs and other payment modality changes are the right recipe for the health reform system, but you really need to get the ingredients right," David Nexon, senior executive vice president of AdvaMed, told reporters on a call Monday.

ACOs have been offered as a way to improve on the current fee-for-service health system. In general, they treat a network of providers as a virtual organization serving a defined patient population.

While payment schemes haven't been completely hammered out, they would likely aim to cut costs by letting physicians pocket a share of the savings if the group's health care costs fall below a certain amount, and if certain quality requirements are met.

CMS will start funding ACOs by 2012. According to the Congressional Budget Office's predictions, about 40 percent of Medicare beneficiaries eventually could be covered by an ACO.

For the device lobbyists, their main concern is that financial incentives, if not worked out correctly, could "chill" the willingness of doctors to adopt new treatments.

"Any time you change the incentives to encourage providers to reduce cost, there's the danger some of them will reduce cost in the wrong way," Nexon said.

Among the group's recommendations is for ACO spending targets or savings pools to include adjustments or add-on payments for new technology for a certain period of time -- say, five years -- while the value of the new drug or device is being assessed. The technology would have to meet certain criteria, and the whole program would be similar to one already existing in Medicare for hospital care.

AdvaMed also wants the quality metrics used by CMS for the ACOs to measure outcomes and not just processes. Otherwise, it could discourage them from using newer products, the group said.