by Craig Lukowski
Director, Physician Preference Contract Services
05/12/16

After years of development, the ABSORB Vascular Bioresorbable Scaffold finally had its day before the U.S. Food and Drug Administration (FDA) Circulatory System Devices Panel on March 15. The news didn’t disappoint. The panel overwhelmingly recommended that the FDA approve the new device. Now we wait for the FDA to complete its work, which generally takes a few months, and then hopefully the device will become available in the U.S.

So why all the excitement?
The device is the first new class of coronary stents since the drug-eluting stent over a decade ago. Like its predecessor, the new scaffold also contains a drug to prevent restenosis by limiting the overgrowth of normal tissue within the stent. The breakthrough feature is that the ABSORB scaffold, once implanted, will completely dissolve leaving nothing behind.

For the patient, this means reduced cost by shortening the time they need to take expensive antiplatelet drugs. For physicians, it provides better long-term options for the patient. Since the coronary vessel will go return to its original condition before the artery disease existed, it will allow the treatment site to be used again, if necessary. Today, a patient cannot have a bypass graft at the site of a coronary stent. With ABSORB, it will now be a possibility.  

But with positives comes negatives.
Like many revolutionary devices, the price will be at a significant premium. A unique reimbursement code is highly unlikely at the time the scaffold becomes available, so hospitals will need to use existing reimbursement codes, which will result in a sharp decrease in the hospital’s procedural margin. This is an approach some vendors use when introducing new technology. They price the new device at an extreme, with the rationale that the price allows them to recoup development costs before competitors enter the market.

What can providers do?
The more progressive hospitals have developed new technology groups. This approach, similar to an FDA panel, combines physicians, clinicians, value analysis and, supply chain leaders, and administration to objectively review the clinical evidence, cost, reimbursement and market data. The group then makes an informed decision on whether to incorporate the new technology into their care pathway and the net impact it will have on the service line and hospital. Hospitals that have implemented such an approach point to increased expense control and decreased cost creep from supplier upselling of new and expensive medical devices and technology. 

What’s next?
Should the new scaffold be approved by July 1, it will become eligible for a potential Medicare New Technology Add-On Payment (NTAP) beginning in October. If it isn’t, hospitals can hope for a unique reimbursement code similar to what happened with drug-coated balloon catheters. In that case, a NTAP was approved by Medicare for inpatient procedures. Soon after, a unique outpatient reimbursement code was issued to cover the cost of the new technology device. If hospitals are unable to secure a unique reimbursement code, then they will have no choice but to absorb the cost. 

In the emerging health care environment, one hopes these vendor pricing tactics for new devices will change. Medicare’s stated intent to reduce costs can be seen in its current push to require hospitals into alternative risk, bundled and population health payment models. But hospitals play a role as well in ensuring new technology drives enhanced patient care and outcomes. Implementing new technology panels might be a good place to start.

For more information on new vascular technology and trends, review our latest issue of Technology Watch.

About the author. As director of strategic initiatives and new technology for physician preference sourcing operations, Lukowski leads the team’s strategic support, innovative program development, new technology assessment and education initiatives. His extensive experience working with both domestic and international medical device suppliers, health care providers and markets gives him the insight to assist hospitals in developing strategies for cost reduction through supplier negotiations, physician relationship development and practice change management.