AdvaMed instrumental in shaping global ophthalmology

In this installment from the OSN IOL Economic Summit, Andy Stapars, discusses the concept behind AdvaMed and its role in IOL compensation.

Issue: September 15, 2006

ByAndy Stapars

Andy Stapars

The Advanced Medical Technology Association (AdvaMed) was founded in 1974. It is headquartered in Washington, D.C., and has now grown to be the largest medical device association in the world. AdvaMed represents over 1,300 medical device manufacturing member companies, ranging from the industry giants to the companies who have just a few employees and are working on emerging technology.

Interestingly, about 70% of the companies that are AdvaMed members have sales of $30 million or less, so the organization represents the full spectrum of companies that are involved in the development of medical technology. In total, the 1,300-plus AdvaMed member companies represent 90% of the estimated $87 billion medical device market in the United States. AdvaMed’s reach extends far beyond just the domestic application, however, in that it also represents approximately 50% of the estimated $195 billion worldwide market.

The mission

AdvaMed’s mission is to advocate a legal, regulatory and economic climate that advances global health care by allowing patients access to new and improved medical technology. This is divided into three main areas, the first of which is improving the speed of the regulatory approvals. The other areas include ensuring that gaining timely coverage and appropriate payment decisions are made for medical technology devices and ensuring fair, competitive access to global markets.

Within AdvaMed, we have established a robust ophthalmic sector, chaired by James V. Mazzo, who is the chairman, CEO and President of Advanced Medical Optics. We benefit from the active participation of a number of other member companies, including Alcon, Bausch & Lomb, Beckton-Dickinson, Johnson & Johnson and Carl Zeiss Meditec. Together, we work to establish the key policy priorities that support the ophthalmic sector. In doing so, I have regular outreach to the American Academy of Ophthalmology and to the American Society of Cataract and Refractive Surgery to ensure that we have alignment on the items on which we are working.

Ophthalmic sector

The mission of the AdvaMed Ophthalmic Sector is to ensure that the ophthalmic sector issues are a priority within the larger AdvaMed agenda. AdvaMed represents the scope of medical technology, so every sector of medical technology, be it cardiology, neurology or GI, has its own issues and priorities. We have to make sure that ophthalmology has an adequately represented voice. I am pleased to say that ophthalmology is arguably one of the most active sectors for the size of the companies that AdvaMed encompasses.

We utilize the AdvaMed organization and the resources to advance understanding of the unique value of ophthalmic technology and how it enables surgeons to achieve increasingly improved patient outcomes. We have a number of vehicles through which to do so. We have staged several congressional briefing events highlighting the role that advanced medical technology plays in delivering greater value and benefit to Medicare beneficiaries. AdvaMed is rolling out a major educational effort called the Value of Technology Educational Campaign, and ophthalmology examples will be prominently featured as part of this campaign. This AdvaMed effort is also chaired by Mr. Mazzo. AdvaMed will be investing approximately $1 million behind this campaign benefiting all technologies, including ophthalmics. This initiative is designed to be a multi-year educational effort.

The ophthalmic sector is also advancing sector-specific regulatory and reimbursement goals within the broader AdvaMed industry agenda. That is important because when it comes time to make key decisions around payment systems, in our case the hospital outpatient system or ambulatory surgery center system, we have to ensure that our industry sector’s goals are represented as part of the AdvaMed policy direction.

Additionally, we are using the work that we are doing in Washington, D.C., to expand that influence and credential these public policies as we take the concepts to international markets.

AdvaMed’s initiatives

What are our current initiatives in the ophthalmic sector within AdvaMed? We have a few big things on our plate. The first and foremost activity right now is to successfully rebase the ASC payment system, which was mandated in the Medicare Modernization Act several years ago. Most people would say that the Medicare Modernization Act was all about implementing the Part D prescription benefit. However, an important provision of that Modernization Act was that it called for the update of the ASC payment system, which has not been materially changed since its introduction almost 20 years ago.

Rebasing the ASC payment system has been a multi-year, collaborative effort led by the Outpatient Ophthalmic Surgery Society, FASA, and other ASC groups, in conjunction with AdvaMed. It has been important for this to be a collective effort because ophthalmic surgery is still the largest and most often performed surgery in ASCs. However, many other disciplines are interested in how they can become participants in ASCs, as well, so we have to ensure that we do not give up anything in terms of establishing the new ASC payment policies. We are seeking to establish a new ASC payment system that is based on, or linked to, the hospital outpatient prospective payment system, which would have many benefits.

The key policy points that we are advocating are that the ASC procedure is linked to the hospital procedure instead of being artificially compressed into the nine payment groups that we have today. This would mean that ASC procedures would be paid for on a procedure-by-procedure basis instead of being grouped into the payment groups that exist today.

It would also mean that we would use the data collection methodology, which is robust in the hospital system, to arrive at a payment that would be indexed from the hospital payment. It would not be the same as the hospital payment because hospitals have certain costs that they incur for indigent care, ICUs, etc. However, there would be a methodology to collect good data upon which to set the rates.

There are some other key benefits to this approach, as well. We are advocating that it would include an annual cost of living increase and new technology payment provisions.

Thus, as new technology is introduced, there should be a methodology to apply for additional payment, which does not exist in ASCs today. It would also eliminate the separate, $150 IOL payment for conventional lenses, which would now just be bundled into the entire procedure.

Providing new options

Additionally, we are closely monitoring any potential changes in cost-charge ratios that may be used in the hospital, as this would have an impact on the rates that are set for the hospital and, ultimately, rates that would be set in the ASC. We are working to ensure that appropriate budget levels that are set for both the hospital and the ambulatory surgery center payment systems.

I previously mentioned expanding the reach of the two-aspect (covered/non-covered benefit) billing decision. We are doing everything that we can to support the application of the CMS Presbyopia IOL Rule to applications in other medical disciplines because we think it is important to see that this becomes a viable option in the U.S. health care system. The more sectors that can adopt this type of a philosophy, the better it is for our future opportunities in ophthalmology.

The AdvaMed Ophthalmic Sector is aggressively supporting this expansion into other medical disciplines, as well as into other applications within ophthalmology.

I am also pleased to report that we have made some breakthroughs in Europe. We have two of the leading districts or regions in Germany that have just approved an approach similar to this two-aspect approach. With this approach, patients are allowed to choose an advanced technology IOL, be it a toric, an accommodative or a multifocal, and pay for that lens themselves.

For more information:

Andy Stapars, vice president of global public policy for Advanced Medical Optics, can be reached at 817-488-3309; fax: 817-488-2679; e-mail: andy.stapars@amo-inc.com.