A Problem Well-Stated is a Problem Half Solved… (Hopefully)

Research & Regulatory Issues:

• FDA Clearance/approval process that drives non-generalizable trials of superficial ulcers in healthy subjects which are irrelevant to actual patients.
• Private payer coverage decisions based on the same type of flawed studies.
• Manufacturer claims based on non-generalizable trials of efficacy in the absence of data on real-world effectiveness.
• The general lack of real-world comparative effectiveness studies due to the absence of research funding independent from manufacturers.
• Absence of clinical research in the largest group of chronic wounds/ulcers – generic chronic ulcers, pressure ulcers, surgical dehiscences, traumatic wounds.

Clinical Practice Problems:

• Usage of CTPs/skin subs regardless of whether appropriate conservative care and vascular assessment have been performed.
• Lack of adequate wound care training by many individuals with high volume CTP/skin sub utilization.
• Lack of a patient/wound risk stratification to better target CTPs/skin subs toward wounds that will not improve without them.

Product Cost Issues:

• Lack of normal market controls over the WAC (It appears that manufacturers can set virtually any price they wish)
• The method by which the ASP is determined (based at least initially on the “anything goes” WAC).
• Lack of transparency regarding product discounts so that they do not impact the ASP as they are supposed to.
• Indefensible and dramatic variations in the per cm2 pricing of identical products based solely on the site of care in which they are used.
• Lack of pricing pressure from either Medicare or private insurers/MA, the latter preferring to just deny coverage rather than seek cost-effective solutions.

Physician Profit Motivations:

• The potential ability for doctors to make large profits on the product, separately from and in addition to, the procedure (this surely was not the intent of Medicare given that these are our tax dollars).
• The lack of any ceiling or limit on the cost of products used in the doctor’s office.
• Monetary incentives for physicians in the office setting to select certain products and/or over utilize CTPs/skin subs based on the revenue derived from the product.
• Volume based discounts in pricing that encourage clinicians to treat wounds that do not need CTPs/skin subs and/or continue applying them even after maximal clinical benefit has been achieved.

Physician Financial Risk:

• Physicians who decline deeply discounted (and possibly questionable) pricing schemes risk losing money on the purchase of the product.
• Unprecedented Medicare audits using exhaustive and often subjective documentation criteria designed to ensure failure and monetary recoupment.

HOPD Payment Structure Problems:

• The flawed methodology of package pricing in the HODPD which drastically limits the choice of products due to cost and the size of affordable products to small, often clinically inadequate sizes.
• The inability of HOPDs to treat large wounds due to package pricing and flawed coding methodologies.

Payer Coverage Issues:

• MACs using the WAC rather than an invoice to determine physician reimbursement.
• Limited access to CTPs/skin subs by Medicare Advantage plans which routinely ignore Medicare coverage policy.
• Private payer insistence on decision making based on non-generalizable efficacy studies that have almost no bearing on clinical need.

Patient Access and Inequity:

• Inflated pricing designed to enhance physician revenue drives up patient copays which impacts patient access and equity, limiting the use of products to Medicare FFS patients with secondary insurance and those patients wealthy enough to afford copays.

Manufacturer Behavior:

• Marketing “the spread.”
• Concealing discounts a variety of ways to protect the ASP.
• Dramatically different per cm2 pricing based on site of care.
• Not reporting ASPs.