BUSINESS NEWS

Medtech manufacturers breathed easier in August following the release by the Centers for Medicare and Medicaid Services (CMS; Baltimore) of the agency's payment reforms for inpatient hospital procedures for 2007. When the payment changes were initially proposed in April, some medtech segments—particularly cardiovascular stents and implantable cardioverter-defibrillators—faced anticipated reimbursement reductions of 20 to 30%. However, the final cuts proved to be far more benign, with no decrease greater than 5.4%.

Under the new reimbursement rules, some cardiac products, including pacemakers and heart valves, will see slight increases in their rates. Not targeted for significant cuts in the initial proposal, the orthopedics sector will also see reimbursement gains in certain implant categories.

Medtronic Inc. (Minneapolis), a leading manufacturer of cardiac rhythm management devices, commended CMS for requesting and responding to stakeholder input in establishing the final reimbursement rates. Describing the agency's move as a transition to a "more accurate, cost-based system," Art Collins, Medtronic's chairman and CEO, said the final rule "preserved patient access to some of the newest, most innovative medical technologies by ensuring that adequate reimbursement exists for these procedures."

Industry associations also responded favorably to the new reimbursement rule for inpatient procedures.

"We are pleased that no diagnosis-related group (DRG) was reduced by more than 5.4% and that some payments were increased," said Mark Leahey, executive director of the Medical Device Manufacturers Association (Washington, DC). "This will help ensure that patients are not denied access to critical care."

Stephen J. Ubl, president and CEO of AdvaMed (Washington, DC), said, "We support a more accurate inpatient payment system, and it appears that the rule addresses many of the concerns that were raised by patient, physician, and hospital groups."

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