Hi Dr. Fife,
Here’s my two cents as someone who has lived this mess for a long time now. The root cause of this issue is the CMS payment structure. CMS has known about this problem this for years. Every year they talked about fixing it and every year they chose not to. The inaction is truly astounding. If they will fix the payment structure, then all of these other issues will fade to the background and clinicians can make clinical decisions again. If they do not fix the payment structure, nothing else will fix the problem long term. We know that when you ignore the root cause, attempted fixes to a problem usually make things worse not better over time. Evidence requirements (such as in the recently postponed LCD) may temporarily change the winners and losers – but won’t change the game. High prices will be there because the current payment structure permits and in fact encourages them. (For example, you posted a blog showing that doctors who do not accept discounts will LOSE money, thanks to the perverse pricing of small size products, and the 3% sequester.
Patients need effective treatments. There are more and more patients every year. Providers need to make a reasonable profit so that someone is willing and able to take care of these patients. We need to encourage investment and innovation for industry without generating excessive costs. We need to start with those basic principles and help CMS come up with a structure that works. Because they have obviously not been able to do it on their own.
[Anonymous]
Here’s a list of the factors that have contributed to the current mess, which I posted in October 2023. I feel like the first step to solving the problem is to state it clearly. What did I miss?
–Caroline
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.
Dr. Fife is a world renowned wound care physician dedicated to improving patient outcomes through quality driven care. Please visit my blog at CarolineFifeMD.com and my Youtube channel at https://www.youtube.com/c/carolinefifemd/videos
The opinions, comments, and content expressed or implied in my statements are solely my own and do not necessarily reflect the position or views of Intellicure or any of the boards on which I serve.
