The Centers for Medicare and Medicaid Services put endovascular abdominal aneurysm repair procedures into a new Diagnosis-Related Group (DRG) that will result in increased reimbursement for the treatment, to the delight of W.L. Gore & Associates and other providers of devices used to repair abdominal aortic aneurysms.
According to Gore, the old Medicare reimbursement rate for so-called EVAR procedures was slightly less than $19,000 on average, while the cost to hospitals was about $20,000. Under the procedure's new classification, the reimbursement base rate for noncomplex procedures will increase by about 15%. Complex cases will receive payments that are about 24% larger.
Under the DRG system, hospitals receive fixed payments based on the average cost of providing care to patients with treatments that are grouped in the same bucket. The goal is to incentivize low-cost healthcare because treatments whose costs are above the average receive the same Medicare payment as those whose costs are below the average. The switch of endovascular abdominal aneurysm repair procedures to a new DRG group means the fixed payment will increase.
"As standard of care shifts from open surgery to minimally invasive forms of treatment, different types of resources are used. Hospital payments may not always reflect that change simply due to rate-setting methods," said Don Goffena, Gore's director of reimbursement, in a statement. "It's important for Gore to monitor how reimbursement rates are keeping pace with hospital costs as therapies evolve and gain in popularity. We noticed a disconnect in this case, and in collaboration with others committed to the advancement of EVAR, we were able to work with Medicare to make a change that will improve the alignment of cost and payment for the benefit of the patients, hospitals, and physicians."
Endovascular stent grafts, like Gore's Excluder Conformable AAA Endoprosthesis, offer a catheter-based, minimally invasive option to seal a ruptured abdominal aneurysm in the aorta, the main blood vessel that supplies blood to the body. A burst aneurysm can lead to life-threatening internal bleeding, dizziness, vomiting and low blood pressure, among other complications.
The therapeutic arena has seen a lot of M&A activity recently. Lombard Medical just added a second endovascular stent graft to its portfolio with the acquisition of Silicon Valley's Altura Medical for up to $50.5 million. It aims to offer one device for standard procedures and the other model for more complex cases. Medtronic acquired endovascular repair specialist Aptus Endosystems in June for $110 million and invested in another player, Arsenal AAA, in return for the option to acquire it in the future.
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