Boston Scientific and J&J are providing additional external data analyses to counter CMS' claim that more evidence is required to justify altering the drug-eluting stent diagnosis-related groups (DRGs).

The Taxus manufacturer submitted an original analysis to CMS June 14 based on Premier's Health System hospital data to support its contention that the DES diagnosis-related groups should be reconfigured based on "complex" and "non-complex" cases.

At the same time, Boston Scientific was sensitive to the agency's preference for MedPAR data, conducting a last-minute analysis of the FY 2003 MedPAR file immediately after it became available at the end of June.

Results were submitted to CMS July 12 - the agency's deadline for comments on the FY 2005 inpatient prospective system (IPPS) proposed rule.

"These confirmatory results using actual Medicare drug-eluting experience data provide additional compelling evidence that DRG clinical and resource coherence for coronary stent procedures could be significantly improved" by reclassifying the DRGs, the firm's comments state.

In June 22 comments, J&J likewise used the FY 2003 MedPAR file and the Premier database to support its case for reconfiguration.

Given the extensive analyses by J&J and Boston Scientific, the agency appears to be equipped with enough evidence to justify raising payment rates. Alternatively, CMS could dispute the firms' conclusions or prefer to wait until one full year of MedPAR drug-eluting stent data become available.

The final IPPS rule will be released in early August.

Boston Scientific Cites Three Consistent Analyses

While CMS took the unprecedented step of creating two drug-eluting stent DRGs before FDA approved Johnson & Johnson/Cordis' Cypher in April 2003, both J&J and Boston Scientific maintain the FY 2004 and proposed FY 2005 rates fail to adequately cover the costs of the procedure, particularly when multiple stents are required.

Boston Scientific originally submitted an analysis using FY 2002 MedPAR data before the proposed rule was released in May. The firm urged CMS to reclassify the four coronary stent DRGs based on complex cases and whether drug-eluting or bare-metal stents are used.

Complex cases are defined as patients with a principal diagnosis of acute myocardial infarction or any diagno-sis of congestive heart failure, renal failure or cerebro-vascular disease or a multi-vessel procedure code.

CMS currently classifies the DRGs in two pairs, depending on whether the stents are bare-metal or drug-eluting, and whether acute myocardial infarction is present as a principal diagnosis (see chart: ¹ "DRG Proposals for Drug-Eluting Stents").

While CMS acknowledged that Boston Scientific's proposal to reclassify the four coronary stent DRGs "may have merit," the agency said that the data - compiled before the DES DRGs were created - may not hold up against actual DES experience (² Also see "“Appropriate” Defibrillator, Drug-Eluting Stent Payments Pondered By CMS" - Medtech Insight, 17 May, 2004., p. 5).

In response, Boston Scientific analyzed 48,014 Medicare coronary stenting hospitalizations from CY 2003 using data from Premier's Perspective Comparative Database.

The charges were stratified into complex and non-complex groups to compare the "resource coherence" of the proposed groups against actual DES experience.

The results, confirmed by an analysis of the FY 2003 MedPAR data, demonstrate that AMI-alone cases fail to accurately reflect the most resource-intensive procedures involving coronary stenting, according to Boston Scientific (see chart: ³ "Boston's Mean Charge Comparisons For Stent Cases By Condition").

The mean charge for drug-eluting stent cases when only AMI is considered was $45,277, compared with $51,054 when complex cases were included.

Consequently, "co-morbidity and procedural characteristics other than AMI are the key drivers of resource use for coronary stents," the firm stresses.

Similarly, 4,060 cases, or almost 55%, that would fall under the complex category currently map to the DRG for drug-eluting stents without AMI and had a mean charge of $50,478. The mean charge for all cases in the current DRG is $41,849 - a difference of $8,630, or 20%, according to Boston Scientific.

The firm also found significant gains in "resource coherence" for coronary stents by reclassifying them into complex and non-complex cases compared with the current DRG assignment.

The DRG charge spreads, which Boston Scientific bills as "a good indicator of resource coherence gains," are significantly greater under the new assignments. The DES pair charge spread is $13,287, or 35%, for the complex/non-complex pair compared with $9,897, or 24%, for the current pair.

The firm further maintains that CMS set a precedent in splitting coronary stent DRG procedures in the FY 2002 final rule to reflect procedures with or without a principal diagnosis of AMI after data analysis revealed a 1.32 charge spread ratio.

Both the Premier and FY 2003 MedPAR data show a charge spread ratio of 1.35 for "with complex" or "without complex" cases.

"If a charge spread ratio of 1.32 was sufficient to warrant a 'with AMI' and 'without AMI' DRG split in 2001, we believe even greater charge spread ratios should be adequate to warrant a 'with complex' and 'without complex' DRG split for FY 2005," Boston Scientific asserts.

"CMS must modify the current structure ('with AMI' and 'without AMI') to more accurately capture overall case complexity and resource use of coronary artery stenting procedures," the firm concludes.

J&J Pursues Different Approach To Higher DES Rates

While both drug-eluting stent manufacturers believe the payment rates must be increased to ensure beneficiary access, they disagree over the best tactic to convince CMS.

Boston Scientific and J&J cooperated with AdvaMed on its IPPS comments, but crafted separate proposals to achieve higher payment.

J&J recommends that CMS create two new DRGs for multi-vessel DES procedures, with cases assigned based on the presence or absence of an AMI.

While the agency acknowledged in the proposed rule that the scheme has "some merits," it contended that the "current coding structure for coronary artery stents cannot distinguish cases in which multiple stents are inserted from cases in which a single stent is inserted."

J&J responds that the agency could use existing procedure code 36.05 denoting multi-vessel PCI to assign cases to the new DRGs until codes are created. Approximately 85% of balloon angioplasties involve stent insertion during the procedure.

The firm also conducted an analysis of the FY 2003 MedPAR data to demonstrate a significant difference in resource utilization between single-vessel and multi-vessel procedures.

Overall, the two current drug-eluting stent DRGs (526 and 527) had $8,264 and $10,014 greater standardized charges than the single vessel DES procedures, according to the firm (see chart: ⁴ "J&J's Analysis Of Multi-Vessel Vs. Single Vessel PCI Procedures").

In addition, J&J believes that DES under-reimbursement may be driving clinical practice by encouraging physicians to perform coronary artery bypass procedures rather than DES procedures.

Cordis sponsored the multi-center, 600-patient, European ARTS II registry, which evaluated multi-vessel stenting with the primary endpoints of death, stroke MI and revascularization. On average, patients received 3.6 drug-eluting stents, paid for by the firm.

Conversely, Premier data culled from a survey of 120 U.S. hospitals revealed that while 20% of DES Medicare discharges were multi-vessel procedures, the average number of stents used per procedure was 2.3 and 2.17 for the two drug-eluting stent DRGs. FY 2003 MedPAR data confirmed that 20% of DES discharges involved multi-vessel procedures.

The discrepancy "seems to confirm that the current payment policy creates severe economic constraints that may adversely affect clinical practice and technology utilization," J&J contends.

"This substantial increase in charges and the fact that 20% of all DES cases are multi-vessel procedures warrants the creation of new DRGs that will more closely reflect resource utilization and align the payment system to encourage appropriate clinical practice," the company concludes.

Boston Scientific, J&amp;J Analyses Aim To Convince CMS To Raise DES Payments

More from Archive

More from Medtech Insight

Boston Scientific, J&J Analyses Aim To Convince CMS To Raise DES Payments