The development of minimally invasive technologies appears to be a winning scenario for everyone: typically, no hospitalization is required (in fact the procedure may be done in the office setting), reducing costs; patients are more comfortable and can get on with their lives more readily; and employers love the fact that patients can usually return to work more quickly.

So payers must see the value proposition, right? Wrong.

Ever since the advent of laparoscopic surgery some 25 years ago, payers have become wary of minimally invasive surgery. While not stated explicitly, the concern has been referred to as the “woodworking phenomenon,” describing those patients who have deferred elective surgery but are now coming out of the woodwork to seek treatment.

For example, following the conversion from open to laparoscopic surgery, studies reported increasing rates of cholecystectomy, attributed to easier access and falling thresholds for intervention (Legorreta 1993, Escarce 1995).  Total annual expenditures for gallbladder surgery actually rose now that patients could seek treatment for uncomplicated gallstones, whereas this was not offered with open cholecystectomy. Although payers began to provide coverage for laparoscopic procedures, they noted the lessons of cholecystectomy.

Specifically, a minimally invasive alternative for an elective surgery will increase utilization and will ultimately increase the budget impact for the procedure as a whole. Payer response has been twofold: first, prioritizing minimally invasive procedures to an explicit coverage policy; and second, ratcheting up the evidence requirements to support a positive coverage policy. This response has been particularly true for those technologies offering a different approach to the traditional surgical intervention. For example, the positive coverage for laparoscopic cholecystectomy was partially based on the logic that the goal was the same as an open procedure, i.e., the definitive removal of the gall bladder. In contrast, technologies that occupy the middle ground between medical and surgical management or promise to obviate the need for a downstream definitive surgical procedure, have faced more difficult challenges. As an example, a variety of minimally invasive approaches to discogenic back pain (laser discectomy, intradiscal electrothermotherapy [IDET]) have been subjected to very high evidence requirements, including placebo-controlled randomized trials with long-term follow-up to determine the percentage of patients that ultimately convert to an open surgical procedure.

Several minimally invasive alternatives to a laparoscopic Nissen fundoplication have been marketed for patients with persistent heartburn after an adequate trial of proton pump inhibitors. Despite small randomized trials, to date none of these options have achieved widespread coverage. Payers have been inconsistent in their evidentiary requirements, demanding either a comparison to medical management in large placebo-controlled trials and/or demanding a direct comparison to a Nissen fundoplication.

From a purely research point of view, these high-quality trials would provide definitive evidence of the long-term safety and efficacy. However, manufacturers, providers and patients have argued that this evidence requirement is inconsistent with other technologies, unreasonable and questionably ethical, particularly if the evidence requirement calls for randomization between minimally invasive and open surgery.

What recourse does a manufacturer have?

First, the strategy, no matter where the technology lies on the journey to successful commercialization, is to be prepared. Payer resistance is guaranteed if the technology represents a novel minimally invasive alternative to an elective procedure. If the technology is still in the early stages of development, the manufacturer must clearly define positioning and patient selection criteria – this is crucial. Is the technology an alternative to medical management or definitive surgical treatment or somewhere in between? These considerations will help define what type of studies will be necessary to support a positive coverage policy and how best to communicate the study design to the payer. A key strategy point is to maintain control over the positioning and evidence requirement. A bad-to-worst case scenario is the payer who writes a boilerplate initial policy stating something along the lines of, “while initial studies are promising, further large-scale randomized studies with long-term follow-up are required to validate the safety and effectiveness of this technology.” This is a difficult evidence requirement to fulfill once it is established.

There are two basic strategies for technologies with an existing negative coverage policy: either conducting the studies to meet the evidence requirement suggested in the payer policies, or working to get the payer to revise the evidence requirement. Both are challenging tasks, particularly if the stated evidence requirement is neither feasible nor ethical. Changing the payer evidence requirement necessitates significant support from providers and specialty societies, supplemented with an appeals process. Oftentimes, a pattern of initial denials that are consistently overturned on appeal is the tipping point for a positive coverage policy.

Next month: Understanding the payer appeals process.

References:

1. Escarce JJ et al. Falling cholecystectomy thresholds since the introduction of laparoscopic cholecystectomy. JAMA.1995 May 24-31;273(20):1581-5.
2. Legorreta AP et al. Increased cholecystectomy rate after the introduction of laparoscopic cholecystectomy. JAMA. 1993 Sep 22-29;270(12):1429-32.