Stakeholders push CMS to cover digital health

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Friday, November 20, 2020

WASHINGTON – AdvaMed and CapView Strategies make the case for covering digital health technology under the existing DME benefit in a new 56-page white paper titled “Modernizing Medicare Coverage of Digital Health Technologies.” 

The groups recommend that CMS create a regulatory pathway under the DME benefit for software or an application that is “primarily and customarily” used to serve a medical purpose but can be used on any device that can satisfy the durability requirements, including home computers, smartphones and iPads. This would, effectively, divide the regulatory requirements for DME between the software and the home device used to display the software/application.  

“Our most important finding is that coverage can be modernized through Medicare’s existing benefit structure,” said Lu Zawistowich, president and founder of CapView Strategies, a health policy consulting firm. “No new structures need to be created.” 

The groups recommend that all other non-software components should be covered and coded independently as DME and/or supplies and not bundled into the software supply allowance/payment rate. If software is covered as DME, then major or clinically meaningful updates should be covered as supplies. Currently, routine updates are considered normal/routine servicing of digital health technologies.  

The white paper’s origins go back several years, when a number of digital health companies joined AdvaMed and spoke with the association about exploring possible pathways for Medicare coverage for their technologies. 

“They anticipated challenges in getting Medicare coverage,” said Richard Price, senior vice president of payment and health care delivery policy at AdvaMed. 

And rightly so. The groups point to a broken system that, on the one hand, covers insulin pumps and CGMs, for example, but on the other hand doesn’t cover the algorithm that allows the two devices to speak to each other. 

“(Under the current structure), it’s unclear how the algorithm would be covered, or at all,” Price said. 

The groups point out that digital health has a proven track record. ResMed and their provider partners, for example, have increased the adherence rate for CPAP therapy to 87% and, as a result, reduced costs to the health care system by 50%. 

“Digital health has an incredible return on investment,” said Mick Farrell, CEO of ResMed and AdvaMed board member.