CMS has created uncertainty by floating draft proposals for payments & procedures. By floating these draft proposals CMS is exploring for ways to rein in costs while observing the effects it might have on the industry/players. These Draft proposals have had a negative effect on the sales/earnings of the wound care companies and with the uncertainty it has created, it has also put pressure on the companies’ stock prices. However, note the excerpt from the just released document by Ann Maxwell, Deputy Inspector General for Evaluation and Inspections. (link:
https://oig.hhs.gov/oei/reports/OEI-BL-23-00010.pdf ). Reading between the lines of the whole document it is clear that they are not interested in harming the “GOOD” companies such as Organogenesis who play by the rules but rather to level the playing field and not reward unethical methods practiced by those companies who take advantage of loopholes in the payment procedures. When this exercise by CMS plays out, it will prove to be a benefit for ethical companies with Best-In-Class products addressing a huge and growing market for many years to come. Organogenesis has a Solid Management team, a Great R&D team and an Excellent Sales Organization. This payments uncertainty created by the CMS exploratory draft proposal has given potential shareholders a great investment opportunity. This is the time to invest!!! (IMHO)
<<“CMS is actively considering other changes to the payment methodology for skin substitutes under Medicare Part B:
In the Calendar Year 2023 Physician Fee Schedule Proposed Rule, CMS proposed to package all skin substitute products as part of the related administration procedure beginning January 1, 2024 (i.e., they would no longer be separately paid for on a claim but instead would be included as part of the physician service payment).7 According to the Final Rule, CMS is not moving forward with the proposed changes at this time. Rather, the agency is continuing to evaluate the comments received through the rulemaking process to determine appropriate next steps for skin substitute products relative to the CAA requirements.8 To that end, CMS conducted a Town Hall in January 2023 to address commenters’ concerns and discuss potential payment approaches.
Conclusion:
OIG appreciates that CMS is carefully considering its options and engaging with stakeholders regarding the potential impacts of different payment approaches for skin substitutes. Further, we also recognize that the number of skin substitutes that are being paid for on the basis of ASPs has increased dramatically over the initial 6-month implementation period, despite the fact that current processes for collecting and validating ASP data are much less effective for these nondrug products.
However, the current system, which uses ASPs as the payment basis for many skin substitutes and WACs/invoices for numerous others, could potentially incentivize providers to prefer products without ASP-based payments to capture the larger spread between reimbursement and their cost. In turn, this dynamic (1) leads to higher payments for Medicare and its enrollees and (2) effectively penalizes manufacturers who comply with the law by making their products less attractive from a payment standpoint.
Every quarter in which the current practices remain in place will likely cost Medicare and its enrollees tens of millions of dollars. Therefore, we encourage CMS to address the issues identified in this report as quickly as possible. This might include establishing interim approaches to enforce manufacturer compliance with reporting requirements while working on a more systemic solution for how best to reimburse for skin substitutes. In the end, it is vital that manufacturers comply with Federal law and that the Medicare program pay appropriately for these high-cost products.” >>
