CMS makes 'market-moving proposals' to some medtech Medicare rates, say analysts

Dive Brief:

The Centers for Medicare & Medicaid Services has made “potentially market-moving proposals” to change certain Medicare medical device reimbursement criteria in favor of less costly solutions, according to analysts at BTIG.
Surgical glaucoma and advanced wound care are targeted by CMS’ proposed changes. Alcon, Glaukos, Integra Lifesciences and Organogenesis are among the companies that could be affected by the proposals.
CMS is now seeking feedback on the 2023 proposed Physician Fee Schedule to inform the finalization of the proposals, which typically happens in late November or early December.

Dive Insight:

The proposals cover planned changes to physician fees, as well as to outpatient and inpatient payment rates. Across its more than 2,000 pages of proposals, the CMS has floated changes that could reshape certain medical device markets.

In wound care, the CMS wants to “streamline the coding, billing and payment rules and to establish consistency” for how it codes and pays for skin substitute products. The plan is to change the term skin substitutes to “wound care management products.”

“Essentially the skin substitute would be bundled into a procedure code,” the BTIG analysts wrote. “This might curtail usage of some higher-dollar skin substitute products and likely negatively impact companies such as [Integra], [Organogenesis], and [MiMedx] if enacted. Companies that have effective but less costly treatment options might win out.”

Other changes could disrupt the surgical glaucoma market. An “interested party” nominated a set of cataract surgery codes as misvalued on the grounds that the procedures can be performed safely outside of the well-equipped and fully staffed medical facilities envisaged by the current rates. The CMS has proposed new physician payment rates.

The BTIG analysts calculate that the changes would have the biggest effect on Sight Sciences’ Omni system for minimally invasive glaucoma surgery.

The agency is proposing to reduce the physician payment rate for the code that covers Omni by 19.9%. While the CMS is planning to reduce the rate for the code that covers Alcon’s Hydrus and Glaukos’ iStent by 2.4%, the analysts see the changes as neutral to positive for the companies because of the deeper cuts to the Sight Sciences code.