Crossing the chasm from innovation to mainstream

When the spark of an idea is fanned into the flame of an invention, there is a long pathway before the blaze of the mainstream therapy can be realized. Chief among the initial tasks is the adequate intellectual protection of the new idea if specific novel devices are required. This task takes the form of a patent and requires specialized legal advice if protection for the inventors, both domestically and internationally, is to be achieved. This intellectual property problem is less important in terms of financial considerations if the new procedure designed does not require novel instrumentation; however, regulatory and reimbursement considerations may still prove formidable. Novel devices require prototype development and preclinical testing, which will require some level of capital investment even if a company is yet to be formed. Visionaries and early adopters will go to work in the laboratory with early device iterations to determine clinical feasibility. There are unique characteristics to these innovators that complicate whether their interest/approval has relevance to mainstream clinical introduction. For instance, the early adopters tend to be tinkerers who will to work through obstacles, whereas the mainstream tends to want solutions nicely packaged for immediate deployment. The potential for mainstream acceptance (ie, does it work, can I afford it, and can the average practitioner perform the procedure?) is a core consideration around the acquisition of the additional financial backing required to fully develop a novel device concept into a therapeutic product.

The Food and Drug Administration (FDA) has created 3 classes of devices defining increasing regulatory oversight: I, II, and III. The requirements for gastroenterology are contained in the Code of Federal Regulations (CFR) Title 21—Part 876. Gastroenterology-Urology Devices . Most class I devices can be marketed without extensive regulatory filing (eg, endoscopic bite block). Class II devices usually are marketed through the 510(k) process in which substantial equivalence to a preexisting (predicate) device is established and are cleared (not approved) by the FDA for marketing (eg, endoscopic ingestible capsule wireless gastrointestinal imaging system). Class III devices require premarket approval (PMA). The Enteryx injectable polymer for treatment of gastroesophageal reflux was approved by the PMA process in 2003. (It was subsequently recalled voluntarily by the manufacturer.)

Most unproven therapeutic interventions or those with insufficient data are classified in this last category. Human subject data are usually required after the review of adequate preclinical testing has been submitted. Performing human subject research to support a PMA with unapproved devices will generally require the issuance of an investigational device exemption (IDE) by the FDA that is applied for usually by a company but occasionally by individual investigators. A successful clinical trial will bring the innovators and the FDA together in what is referred to as a panel meeting. Members of the FDA and panel members selected as experts in the field review the PMA submission and the human subject data obtained under the IDE. They review safety data and determine whether the company’s proposed claim is supported by the data on the PMA. The FDA is required to review data derived from “adequate and well-controlled tests to establish both safety and effectiveness before a new drug (or device) can be approved (marketed) for sale” (CFR Title 21, Sections 355, 360c). FDA approval is only for the proposed claims and results in specific labeling for the use of the device. Their specific strategies are used to obtain optimal labeling language. Attempts to secure very broad labeling may be rejected by the FDA in favor of more conscripted wording. Excessively narrow labeling prevents using the device in reasonable related situations. Once the FDA has either cleared or approved the device, manufacturers are given the green light to market and sell devices with specific labeling indications. Even if a significant cohort of clinicians use a device for off-label indications, the manufacturer may not market that device for such purposes. Contrary to what most people believe, the FDA itself is not funded by the federal government to test drugs or devices and relies on the data submitted by the manufacturers to support claims of safety and efficacy. FDA clearance or approval is necessary but not sufficient for reimbursement.

Once the device is approved or cleared for marketing, there is a clear split in terms of reimbursement. If the device represents a new procedure, then the reimbursement pathway is centered around the procedural reimbursement. If the device is simply a tool that enables the performance of an already approved procedure, then reimbursement is far more straightforward. The manufacturer simply attempts to convince hospitals, operating rooms, or endoscopy suites to purchase their device. This latter scenario has the benefit of avoiding the maze associated with procedural reimbursement. In some countries, the patients purchase these devices directly if the endoscopist or surgeon determines these as essential to the procedure. Procedural reimbursement is far more complex, time consuming, and expensive to achieve. It literally can be conceived of as a maze that device manufacturers must navigate to get reimbursed for their devices.

Endoscopic procedures for the treatment of morbid obesity can be divided into 3 categories. Some procedures will require a specific and unique device that was created to do the procedure. In many ways, the device is the procedure. In this instance, a procedural code will need to be created because of the innovation. This new code could be relatively specific such that no other device could use the same designation or could be more general such that the predicate device is the first in a class of new procedures that could conceivably be covered by the same current procedural terminology (CPT) codes that are developed and maintained by the American Medical Association (AMA). Alternatively, new procedures could be developed as distinct services that require no special equipment to be innovated or even used outside the established labeling. For instance, there are distinct CPT codes for laparoscopic Roux-en-Y gastric bypass (43644 and 43645); yet, it is generally performed with instrumentation devised for other gastrointestinal procedures.

Unless the patient pays for a procedure out of his or her pocket, a CPT code is necessary for reimbursement. It is tempting for innovators (manufacturers, proceduralists, and hospitals) to try to use existing CPT codes as the centerpiece of their reimbursement strategy once any existing FDA requirements have been met. In the case of new operations/endoscopic procedures without novel or off-label use instrumentation, the FDA is not a factor because this body does not regulate procedures per se except through the regulation and controls placed on devices used in procedures. One way to achieve reimbursement for these emerging procedures is to use the catchall 99 unlisted procedure code for the relevant anatomic group, which will result in an individual review by the payer and more often than not a denial of payment, requiring an appeal to achieve reimbursement. As a global strategy for reimbursement of an endoscopic procedure for the treatment of morbid obesity, this is a highly labor intensive approach and is unlikely to result in mainstream adoption of any given procedure. Another approach will be to use an existing code for a distinct service listed in the current volume. The wisdom, risk, or outright danger of this approach will depend on the matchup between the proposed procedure and the description of the existing coded procedure. For example, EndoGastric Solutions (Redwood City, CA, USA) has manufactured a device created for the Esophyx procedure for the endolumenal treatment of gastroesophageal reflux. This device is marketed as a transoral incisionless fundoplication. Could a strategy be used that makes a case that the anatomic result is indistinguishable from a laparoscopic Nissen fundoplication as a rationale for using the 43280 code for Nissen reimbursement, or should the 43499 Unlisted procedure, esophagus code be used? The former is consistently well reimbursed, and casual readers of the procedure note may not notice the discrepancy initially. This issue is the same as that of applying 43243 (Upper gastrointestinal endoscopy; with injection sclerosis of esophageal and/or gastric varices) when injecting Botox for achalasia. The technical aspects of the 2 procedures are identical; however, the descriptor of the code assignment for 43243 refers to the treatment of varices, which is not a component of the treatment of achalasia. Thus, it is not recommended to use this code despite the reasonable similarities. This impact will require careful consideration for surgeons and endoscopists who seek reimbursement for novel procedures even in the absence of dedicated devices. Another pathway to the development of the procedure will be to use an existing device in a fashion not precisely covered in the labeling. In this instance, the roles of the FDA and institutional review board (IRB) are subject to some degree of interpretation. Using a device in an off-label fashion to solve a particular clinical problem of a single patient is an innovation not subject to review of the IRB unless the prospective proposed use is so far afield that the risks and benefits are truly unknown. On the other hand, collecting data on these devices will require human subject research to be performed, subject to the auspices of the IRB, and the classification of such a device must be described accurately noting that the cleared/approved device is being used in an off-label fashion. Creating a restrictive procedure by using an endolumenal suturing device and plicating the stomach may or may not prove to be effective as therapy for weight loss and will create unique challenges for reimbursement that at a minimum it will require some form of data collection (ie, research) to establish a new CPT code.

If a new CPT code is needed for a novel procedure, an application to the CPT editorial panel is required. The AMA Board of Trustees appoints 17 members from clinical experts, the insurance industry, Centers for Medicare and Medicaid Services (CMS), and the American Hospital Association. The CPT editorial panel is supported by the CPT advisory committee. These physicians are nominated by the medical specialty societies that are represented in the AMA House of Delegates and those in the AMA Health Care Professionals Advisory Committee. Requests for new codes or revisions are sent to the CPT staff of the AMA, and if meritorious, they will be sent to the CPT advisory committee where the details and data are reviewed and a determination is made if a recommendation to the CPT editorial panel for a code revision or a new code is needed.

Three categories of codes are available. Category I codes describe a distinct procedure or service with a 5-digit code and a descriptor. This category is generally what is necessary (but not always sufficient) for reimbursement. Once a category I code is assigned, it is sent to the AMA/Specialty RVS Update Committee (RUC) for valuation where relative value units (RVUs) are assigned. Category II codes are 4-digit and fifth–alpha character tracking codes used for performance measurement. Category III codes were developed in 2001, are assigned by the CPT editorial panel to emerging technologies or procedures as temporary or T codes, and are also used for tracking purposes to assess use before considering a category I assignment. The CPT editorial panel will consider limited data such as a specialty society recommendation, a clinical trial, or relevant literature as sufficient documentation to take the issue into consideration. RVUs are not assigned by the RUC and, as is discussed later, present a conundrum of technology diffusion that is directly relevant for the emerging endoscopic treatment of morbid obesity.

Clinician innovators and/or device manufacturers who have successfully scaled the twin peaks of the FDA and the CPT editorial panel may still find themselves on financial life support in need of a cash infusion to sustain the business model or appease hospital administrators who are unwilling to allow clinicians to perform unreimbursed procedures. Thus, despite prototyping, device iteration, preclinical and clinical evaluations, and the mountains of paperwork produced to overcome those hurdles, reimbursement for innovative therapies is considered individually by each payer. In the past, some small companies attempting to bring a new therapy forward have financially bled to death from nonpayment, despite FDA clearance/approval and a category I CPT code. Medicare designates part A payments to hospitals and part B payments to physicians. Although it is improving, separate groups determine if a part A or part B payment is to be made and may come to differing conclusions. Payments by Medicare are considered on a state-by-state basis by private carriers (who often aggregate several states) who are contracted with CMS to administrate payments and benefits but who can function independently unless a national coverage determination is deliberately sought, which means that, for example, a procedure might be reimbursed in Nebraska (Noridian Administrative Services) but not in Massachusetts (National Heritage Insurance Corporation) because different contractors administrate these states. Each commercial insurer reviews a proposed new procedure independently also. Thus, there are no unified approaches to reimbursement by commercial payers particularly in the absence of consistent reimbursement by CMS. Each company will have to be approached individually, although prioritizing whom to contact is usually based on local market share.

The history of devices used in the endoscopic treatment of gastroesophageal reflux highlights potential pitfalls that may beset the endoscopic treatment of morbid obesity. The worst case scenario is the development of specific policies denying coverage for procedures despite category I CPT codes. For instance, Aetna’s Clinical Policy Bulletin #213: Gastroesophageal Reflux Disease (GERD): Treatment Devices relegates most transesophageal treatment of gastroesophageal reflux as investigational and without coverage. Similar policies exist for statewide Blue Cross Blue Shield organizations citing these therapies as investigational regardless of FDA approval/clearance or simply as not medically necessary. The result is financial nonviability if the manufacturer is a small company as seen with Curon Medical or NDO Surgical.