Issue 236
Digital health research from Brian Dolan
E&O: SaMD
Welcome back to E&O: Software as a Medical Device, a paying subscribers-only weekly newsletter focused on the world of digital pharma products, prescription digital therapeutics and other FDA-regulated digital health.
Here’s what’s new in FDA-regulated Software as a Medical Device….
- Following my report last week about Mahana Therapeutics’ insolvency, the company’s website is offline. Mahana-owned Cara Care, however, still has its site up and running. Cara Care is also still listed in Germany’s nationwide DiGA formulary for reimbursed digital health programs in that country.
- No results yet, but NightWare just finished up a study that was sponsored by The University of Colorado: “A randomized, double-blind, placebo (i.e., sham intervention) controlled parallel pilot study that will provide the first clinical evidence for the efficacy of the NightWare digital therapeutic system to improve cardiovascular health outcomes in adults with PTSD-related nightmares.”
- Big Health, which recently secured FDA clearances for prescription-only versions of its digital therapeutics — Sleepio and Daylight — is currently hiring a Health Systems Sales Director. “As a Sales Director, Health System Sales you will use your knowledge to build relationships, and expand market access into the health system business unit, which will be a critical growth driver for the company. In this role, you will be directly responsible for growing Big Health’s health system partnerships.”
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CMS HCPCS Committee offers a preliminary price for MedRhythms’ InTandem digital therapeutic
Following its May 2024 meeting, and after some apparent hemming and hawing, the CMS HCPCS Committee decided to create a new HCPCS code for MedRhythms InTandem that closely mirrored the language the company requested.
HCPCS Level II code E3200, “Gait modulation system, rhythmic auditory stimulation, including restricted therapy software, all components and accessories, prescription only” Effective October 1, 2024.
If you’re not familiar, MedRhythms uses a combination of wearable sensors, health technology, and music to help people with neurological injuries and diseases to walk. One of the reasons that the company has had a relatively easier time of securing a unique billing code and subsequent reimbursement from CMS is that it is not offering a software-only digital therapeutic.
Following that same meeting back in May, CMS agreed that InTandem fell under the durable medical equipment (DME) benefit category and planned to set pricing for it at a future HCPCS committee meeting.
This week CMS posted its preliminary recommendation on pricing for MedRhythms’ InTandem ahead of its next HCPCS meeting in early November. As you’d expect it’s a bit of a convoluted process that the agency goes through to arrive at a number. Here’s what the committee wrote about pricing the device (which includes a reveal about what the VA paid for the device last year):
“[MedRhythms] provided us with 2023 payment information from the Veterans Administration (VA), which we have verified against the Federal Supply Schedule, and which we have used to establish the payment determination. We divided the VA two-month rental price of $3,467.34 to obtain a monthly rental price of $1,731.67. This would be the basis for establishing the capped rental fee schedule amounts for months one through three, which would then be reduced by 25 percent beginning with rental month four in accordance with the statute and regulations. This results in an estimated purchase price equivalent of $17,336.70.”
“In accordance with regulations at 42 CFR 414.238(c), the $17,336.70 is deflated to the 1986 fee schedule base period using the percentage change in the consumer price index for all urban consumers (CPI-U) from the mid-point of the year the prices are in effect to the midpoint of the fee schedule base period. The price is then updated to the current year using the covered item update factors listed in Chapter 23, Section 60.3 of the Medicare Claims Processing Manual (Pub. 100-04). As the price used in calculating the fee schedule amounts is greater than $150 in the base period, payment would be made on a capped rental basis in accordance with our regulations at 42 CFR 414.229. Therefore, the monthly capped rental fee schedule amount for new HCPCS Level II code E3200 would be approximately $1,099.87 for months 1 through 3, and approximately $824.90 for months 4 through 13, resulting in a total capped payment of $11,548.61 should there be 13 months of continuous use.”
Assuming MedRhythms is happy with that price, it is likely the preliminary recommendation will stand.
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