A portable walk-in whirlpool tub, a device designed to play “multi-talker babble” in a patient’s ear when they speak, and a personal prosthetic exoskeleton system—these are a few of the items on the agenda for the Centers for Medicare & Medicaid Services’ (CMS) first Biannual 2022 Healthcare Common Procedure Coding System (HCPCS) Public Meeting to be held virtually June 7-9.
CMS makes benefit category and payment determinations for new Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) items under Medicare Part B through its HCPCS process. In this process, CMS considers new technologies either internally or via external application, for Medicare coding and coverage under the DME benefit The scope of items under consideration at this month’s meeting is emblematic of the challenge CMS faces in categorizing and qualifying for reimbursement a rapidly expanding landscape of medical technologies.
Not your grandparents’ DME
The term DME evokes images of wheelchairs, hospital beds, walkers, and portable oxygen— functional, and frequently heavy, equipment, much of which has changed little since DME was originally defined through section 1861(s)(6) of the Social Security Act.
That definition can be limiting. Speaking at a Northern Virginia Health Policy Forum event in March of this year, Jason Bennet, Director of CMS’s Technology, Coding and Pricing Group, noted that the statute continues to list iron lungs among examples of qualifying DME, even though there may only be two iron lungs left in use in the world today.
Many of the items on the agenda for the upcoming meeting offer entirely new visions of the types of equipment that can assist patients in activities of daily living. They represent not only new form, function, and design, but, also, new understandings of health and medicine.
Yet, to qualify for Medicare reimbursement as DME devices must still meet statutory requirements of being appropriate for use in the home, and most importantly, able to withstand repeated use (typically over a period of three years ). In general, CMS will not replace a working DME or pay for a new version of an item for a beneficiary before the current equipment’s reasonable useful lifetime of five years has passed.
Classifying existing technologies
Manufacturers of devices that represent incremental improvement upon existing DME can expect assignment of HCPCS codes relatively quickly, with reimbursement determinations based on existing fee schedules for comparable items. This was the case for the Cala Trio, which treats essential tremors through electrical stimulation of nerves in the wrist; Monarch’s external Trigeminal Nerve Stimulation (eTNS) system, which treats attention deficit hyperactivity disorder (ADHD) by providing electrical stimulation to a patient’s forehead during sleep; and the Alpha-Stim from Electromedical Products International, Inc., which uses low-level electrical signals in the treatment of insomnia, depression, anxiety, and pain. CMS has established a new HCPCS code for each (K1018, K1016, K1002 respectively) and used the preexisting HCPCS code E0720 (electric simulation devices) to determine reimbursement rates.
Classifying new technologies
Classifying and qualifying new technologies can be a bit more challenging. SpeechVive, Inc. has applied for DME qualification of its patented device for patients experiencing motor speech disorders associated with Parkinson’s disease. Similar to a hearing aid in appearance, the SpeechVive plays unintelligible noise described as “multi-speaker babble” in the user’s ear as they speak. Rather than distracting the user, the sound triggers a brain response known as the Lombard Effect, prompting louder and clearer speech, thus enhancing the patient’s ability to communicate.
CMS established a new HCPCS code K1009 (“Speech volume modulation system, any type, including all components and accessories”) for the SpeechVive effective October 1, 2020. Without comparable devices upon which to make a reimbursement decision, CMS has followed its standard procedure of making a preliminary Medicare payment determination for the SpeechVive based upon its commercial pricing.
The ReWalk, developed by Israeli manufacturer ReWalk Robotics, is an example of a device for which existing Medicare benefit categories offer an imprecise fit. Described as a “wearable, motorized, computerized, personal lower body exoskeleton system with adjustable ankle joints” the ReWalk suit provides patients with specific spinal cord injuries (SCI) the possibility of upright and forward motion mimicking a natural gate. In a very real sense, the device offers patients immobilized by SCI the chance to walk again. The ReWalk was approved by the Food and Drug Administration in 2014 and has been available to certain qualifying veterans through the Veterans Administration since 2015.
Recognizing the functionality of the ReWalk, CMS established a new HCPCS Level II code K1007 effective in the fall of 2020 under which the device was characterized as a “bilateral hip, knee, ankle, foot device, powered, includes pelvic component, single or double upright(s), knee joints any type, with or without ankle joints any type, includes all components and accessories, motors, microprocessors, sensors.” This description acknowledges the complexity and multiple components of the ReWalk. Yet, because there is no precisely corresponding Medicare reimbursement category, the manufacturer applied for Medicare reimbursement under the not entirely accurate category “Prosthetic (Artificial Leg).”
CMS has indicated that it will require additional time to consider the scope of benefit for the ReWalk and for now has left it to DME Medicare Administrative Contractor (MACs) to make payment decisions within their regional jurisdictions, a process known as gap-filling.
Statutory exclusion
For some applicants, it is not a matter of the lack of an appropriate category, but the express exclusion under current statute. Such is the current case for Pear Therapeutics. Pear specializes in prescription digital therapeutics (PDT) for the treatment of substance use disorder (SUD), opioid use disorder (OUD), and chronic insomnia. The company characterizes itself as “pioneering software as mainstream medical treatment.”
Designed to deliver cognitive therapy as a complement to outpatient therapy, Pear’s reSET app for SUD and reSET-O app for OUD were approved by the FDA in 2017 and 2018 respectively. CMS responded to Pear’s application with the establishment of a new HCPCS Level II code A9291, “Prescription digital behavioral therapy, FDA cleared, per course of treatment” in April. This represented a significant milestone for the company and was optimistically described during its Q1 2022 earnings call as “clearing a pathway for reimbursement.”
In fact, while Pear has enjoyed some success contracting with individual state Medicaid programs and private insurers, qualifying for Medicare reimbursement may prove elusive in the immediate future. In advance of the meeting, CMS has stated that PDTs and software are not “devices, equipment, or supplies” and therefore do not qualify under any existing DMEPOS benefit category.
This specific exclusion may ultimately be rectified by legislation. In March, Sen. Shelley Moore Capito (R-W.VA) introduced the Access to Prescription Digital Therapeutics Act of 2022. If passed it would amend the Social Security Act to add prescription digital therapeutics to the definition of “medical and other health services” for the purposes of Medicare coverage. Until then, Pear products may remain among those procedures and products which have HCPCS codes, but do not qualify for Medicare reimbursement.
Smartphone technology
The requirement that DME “generally” not be useful to an individual in the absence of illness or injury establishes a reasonable safeguard against its frivolous or fraudulent acquisition. However, the stipulation is becoming anachronistic in a world where the distinction between “medicine” and “wellness” is daily less defined. It is also presenting barriers for qualification of equipment that employs that near ubiquitous device of modern life: the smartphone.
The potential of smartphone technology in healthcare has been recognized in both the popular press and scientific research. Yet, the very fact that so many Americans carry smartphones—regardless of health status—prevents qualification as DME of devices incorporating their use. Many health tech companies are utilizing the smartphone and creating algorithms that help operate a medical device using a patient’s smartphone. Medicare’s biggest concern with smartphones is that phones and algorithms do not fit under the existing decades old definition of DME but also that seniors do not own and operate smartphones like the rest of the population. However, data shows differently. According to Pew Research Center, smartphone use among seniors aged 65 and older has increased 369 percent over the last 10 years. As the U.S. population continues to age at a rapid pace, more and more seniors aging into Medicare will be avid smartphone users.
CMS has ruled that new devices that operate with the help of an algorithm on a smartphone, do not fit the DME benefit. This has thus far been the case in Signifier Medical Technologies’ application for its eXciteOSA, a tongue neuromuscular stimulation device used during the day for the reduction of nighttime snoring and sleep apnea. CMS notes that it rejected eXciteOSA’s application because “the component that performs the medically necessary function of the device is a smartphone which is useful to an individual in the absence of an illness or injury and software application which is nondurable.”
One of the most notable decisions CMS made on smartphones was for therapeutic continuous glucose monitors (CGM). The original components of a CGM are sensor, transmitter, and an app to view the information on a smartphone. In 2017, when Dexcom obtained first-time Medicare coverage for its CGM system, it did so by including a receiver in the system. CMS considered the receiver the durable component of the CGM system and expected all Medicare beneficiaries use the receiver. CMS went so far to state that it would not reimburse CGM supplies for anyone who uses a smart device to access their CGM data, even if that device is used in addition to a dedicated receiver. Following outrage and advocacy efforts from the diabetes community, CMS modified its policy to support use of CGM receiver in conjunction with a smartphone in 2018. The requirement that Medicare beneficiaries must buy and use a receiver with their CGM system remains.
Smartphones will only continue to be leveraged more and more in medical technology and Medicare beneficiaries will be barred from access to these new and life-saving technologies due to CMS’ strict interpretation of the out-of-touch statutory definition of DME. CMS knows that it will only continue to see more HCPCS applications for new technologies operating in conjunction with smartphones. Manufacturers are not asking for the smartphones to be covered or paid by Medicare. Most beneficiaries own one. It would save Medicare money to allow devices that operate with smartphones to be covered under the DME benefit instead of forcing companies to create unnecessary remotes or controllers in place of the smartphone, to meet the DME requirement. If CMS sticks to its strict interpretation of DME, it may be that Congressional action will be the only step to move the needle for these technologies.
Creature comforts
In the case of the portable whirlpool tubs submitted by Portable Hydrotherapy Units LLC, a new HCPCS code K1003–whirlpool tub, walk-in, portable—was previously established effective January 1, 2020. However, CMS’s initial determination was that the units, which were found to be “useful to individuals in the absence of illness or injury for relaxation and soothing sore muscles” were “personal comfort items” that did not meet the threshold of medical necessity and therefore did not qualify as DME.
Public input
That CMS takes information from all interested parties, including the general public, into consideration in making preliminary benefit category and payment determinations may incentivize manufacturers to spark public interest in—or demand for—their products. This can entail print, digital, and television advertising, as well as strategies for earned media. One example is Nanovibronix’s Pain Shield, a “wearable therapeutic ultrasound” for which CMS has established a HCPCS code, but which has thus far failed to meet the criteria as DME. In a Fox Business Network segment which began with Maria Bartiromo quoting federal funding numbers for the nation’s opioid crisis, former major league pitcher Mariano Rivera touted the product as an alternative to opioids. While it is doubtful that piquing consumer or investor interest in products can influence CMS policy, advertising can influence consumer expectations in the long-term.
New technologies are offering new promises in medicine and changing both our understanding and the very definition of healthcare. Applied Policy is closely watching how CMS and product manufacturers negotiate this evolving landscape.