1. The Third Annual Medical Device Regulatory, Reimbursement and Compliance Congress Reimbursement: A Look Inside the Black Box Eric L. Book, MD March 27, 2008

2. The Third Annual Medical Device Regulatory, Reimbursement and Compliance Congress BSC Technology Assessment California Technology Assessment Forum (CTAF) - Public forum sponsored by the Blue Shield of California Foundation to assess new technologies – www.ctaf.org Blue Cross Blue Shield Association (BCBSA) Technology Assessment Center (TEC) Blue Shield of California utilizes information & recommendations and guidelines from CTAF and TEC for incorporation into Medical Policy

3. The Third Annual Medical Device Regulatory, Reimbursement and Compliance Congress Technology Assessment Criteria 1.The technology must have final approval from the appropriate government regulatory bodies. 2.The scientific evidence must permit conclusions concerning the effectiveness of the technology regarding health outcomes. Evidence should consist of well designed and well conducted investigations published in peer- reviewed journals. The quality of the body of studies and the consistency of the results are considered in evaluating the evidence.

4. The Third Annual Medical Device Regulatory, Reimbursement and Compliance Congress Technology Assessment Criteria 3.The technology must improve the net health outcomes. The technology’s beneficial effects on health outcomes should outweigh any harmful effects on health outcomes. For diagnostic tests, there is evidence that use of the test would result in improved medical management in a way that will benefit the patient. 4. The technology must be as beneficial as any established alternatives. The technology should improve the net health outcomes as much as or more than established alternatives.

5. The Third Annual Medical Device Regulatory, Reimbursement and Compliance Congress Technology Assessment Criteria 5.The improvement must be attainable outside the investigational settings. When used under the usual conditions of medical practice, the technology should be reasonably expected to satisfy Criteria No. 3 and No. 4. These criteria determine whether medical devices or treatments are investigational or not. Blue Shield of California then determines coverage based on contract language and medical necessity.

6. The Third Annual Medical Device Regulatory, Reimbursement and Compliance Congress BSC Coverage Determination The medical device must comply with contract language and be considered medically necessary in order to become a covered benefit For Example: Stool gene testing for colon cancer was determined to meet CTAF criteria. It has comparable sensitivity and specificity to fecal occult blood testing and is significantly more expensive. However, BSC contract language requires screening tests to be approved by the United States Preventive Services Task Force and stool gene testing has not been approved by USPSTF Stool gene testing is not a BSC covered benefit

7. The Third Annual Medical Device Regulatory, Reimbursement and Compliance Congress Medical Necessity Example of ‘value’ language. If there are two or more Medically Necessary services that may be provided for the illness, injury or medical condition, Blue Shield will provide benefits based on the most cost-effective service.

8. The Third Annual Medical Device Regulatory, Reimbursement and Compliance Congress CMS Conflicts Periodically and infrequently the Center for Medicare/Medicaid Services approves coverage for a device/procedure that BSC considers investigational. Most of the time BSC maintains it’s position Example: PET Scanning for Alzheimer’s Disease: CTAF has determined that this test is not good at determining causes of dementia…BSC does not provide coverage

9. The Third Annual Medical Device Regulatory, Reimbursement and Compliance Congress