For medical device companies, gaining Medicare reimbursement for surgical procedures involving their implants can be a sort of financial holy grail. After all, an implant won't be used much if the cost can't be covered. Edwards Lifesciences ($EW) has reached that point now that the Centers for Medicare & Medicaid Services has agreed to pay for surgery involving its Sapien transcatheter heart valve.
Significantly, the CMS decision helps clear up some reimbursement confusion that's been in the market since Sapien's U.S. debut in November. As a result, sales should get a boost, Wells Fargo analyst Larry Biegelsen said, as quoted by Bloomberg in its coverage of the news.
Specifically, CMS approved reimbursement of transcatheter aortic valve replacement therapy when the device is used to treat symptomatic aortic valve stenosis. The coverage determination is flexible and authorizes current and future FDA approved indications, the company notes, as well as coverage for clinical studies.
But there are lots of conditions. Two cardiac surgeons must independently evaluate the patient first, and hospitals offering the procedure must have an on-site heart valve surgery program, plus a cardiac catheterization lab or a lab/operating room hybrid with appropriate imaging systems. And as Bloomberg points out, the guidelines limit who can conduct the procedure to a multidisciplinary team of doctors that must include at least one heart surgeon and interventional cardiologist. And those experts must perform the surgery at least 20 times annually to remain certified.
CMS also requires the heart team and hospital to take part in a post-surgery clinical trial, a national registry that follows patients who have the procedure for at least one year. This study will look at variables including strokes, death, heart attacks, kidney injuries, any repeat procedures and overall quality of life.
Edwards isn't wasting any time with Sapien, which generated $41 million in sales during the first quarter, the first full quarter the device has been on the market. In fact, the company wants to expand its use to patients with severe, symptomatic aortic stenosis who are at high risk for surgery. Edwards will make its pitch before an FDA panel of experts June 13. However, the FDA has delayed its final decision on the matter by at least a quarter.