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IMPLANTABLE INFUSION PUMP: DRGs MAY INHIBIT ADOPTION

Executive Summary

IMPLANTABLE INFUSION PUMP: DRGs MAY INHIBIT ADOPTION of implantable pumps due to apparent confusion over DRG (diagnostic related group) assignment, according to a recent report from the congressional Office of Technology Assessment. "Since the implantable pump has a variety of current and potential applications, its use may place a patient in any of several DRGs," the report predicts. "To further complicate DRG assignment, there is no single code that adequately represents the surgical implantation of the pump, its greatest cost." As a result, the report observes "there is apparently a great deal of confusion among hospitals about what codes are appropriate at present." The OTA report suggests that given the ambiguities surrounding DRG assignment of the implantable pumps due to their wide range of potential uses, the Medicare prospective payment system's "cost-minimizing incentives will probably act to inhibit rather than encourage widespread adoption of the implantable pump as standard therapy." As an example of how DRG assignment may inhibit adoption of the implantable infusion pump technology, the report notes that if "the primary procedure is coded as 'infusion', the patient is placed into a medical DRG with a low payment rate, rather than a surgical DRG with a higher one." Despite the cost savings interest behind the prospective reimbursement system, the report indicates that long term cost savings from use of the implantable pumps may be lost if the new Medicare system undercuts use of the product. "At present, the pump appears to be cheaper per year than traditional chemotherapy, primarily because users have shorter hospital stays." However, without considering the costs related to potential infection from external pumps, the report notes that due to the "considerable" costs associated with surgical implantation, the implantable pump "appears to be more expensive than externally worn infusion pumps." The report points out that Infusaid's implantable pump is currently approved by FDA for use with three chemotherapy agents as well as for infusion of heparin and morphine. However, the report notes that Medicare "approved coverage for the implantable pump in September 1984, but coverage is limited to use for cancer chemotherapy." The report, entitled "Medicare's Prospective Payment System: Strategies for Evaluating Cost, Quality, and Medical Technology," projects the impact of the Medicare prospective payment system on six emerging medical technologies, including extracorporeal shock wave lithotripsy, percutaneous transluminal coronary angioplasty, intraocular lenses, therapeutic drug monitoring, thrombolytic drug therapy for myocardial infarction, and implantable infusion pumps. Thrombolytic drugs for myocardial infarction could fare well under the Medicare prospective payment system, the report suggests, because use of streptokinase and urokinase in this procedure would fall under a "highly weighted" surgical DRG. The OTA report points out that "the generous payment that could result from use of thrombolytic therapy would encourage the adoption and use of the technology in general." The report also notes that recombinant tissue-type plasminogen activator (tPA) may have significant cost advantages over streptokinase and urokinase due to its potential for intravenous administration. "Intravenous administration has great advantages in that it can be initiated immediately after the onset of acute myocardial infarction, in an ambulance or even at home, and it costs less because it requires fewer laboratory resources and less highly trained personnel." Tissue-type plasminogen activator also has a key advantage of not requiring cardiac catheterization facilities at a hospital, the report says. Regarding therapeutic drug monitoring, the OTA report suggests that DRGs may have a mixed effect. "Cost containment incentives may encourage greater appropriateness of therapeutic drug monitoring testing, since such improvements could reduce laboratory costs associated with misleading or unneccesary testing" while also improving the drug therapy, OTA predicted. However, the prospective reimbursement system may also work to "decrease the intensity of TDM use" due to the extra costs associated with the tests, the report indicates.
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