Managed Care Updates: Medicare and CGM, Omada Health Hires, Council for Diabetes Prevention Officers

Evidence-Based Diabetes ManagementMarch 2017
Volume 23
Issue SP4

A landmark reimbursement decision from Medicare, and news in diabetes prevention.

CMS Takes Step Toward Medicare Coverage of CGM for Seniors With Diabetes

CMS has updated its definition of durable medical equipment to include continuous glucose monitors (CGMs) that are approved for dosing, a step that advocacy groups hailed as the first toward getting the devices covered by Medicare.1

The policy change was announced January 12, 2017, by JDRF, formerly known as the Juvenile Diabetes Research Foundation, which has led the drive for CGM coverage in Medicare. In a statement, JDRF said the new definition created a “pathway toward the extension of coverage for the devices that will bring the nation’s largest insurer in line with the vast majority of the country’s private payers.”2

“JDRF is encouraged by this decision, which will bring us one step closer to Medicare coverage for continuous glucose monitors,” said Aaron Kowalski, PhD, chief mission officer. The group thanked leaders in Congress who had pressed for this change, including Senators Susan M. Collins (R-ME) and Jeanne Shaheen (D-NH).2 Collins previously authored a commentary in support of CGM coverage in Evidence-Based Diabetes Management™, stating that Medicare’s blanket denial of CGM reimbursement was at odds with the positions of the FDA and the National Institutes of Health.3

CGMs, which give patients real-time data on their blood glucose levels—and where they are headed—has been shown to help patients reduce glycated hemoglobin and greatly limit glucose variability, the highs and lows in blood glucose levels that have harmful health effects. Because the original FDA approval required patients to take a separate finger-stick test each time they decided how much insulin to use, Medicare had labeled the devices “adjunctive” and thus not eligible for reimbursement.4 Thursday’s decision reclassifies devices with proper FDA labeling as “therapeutic,” which should open the door to payer coverage.1

CMS spelled out 5 specific criteria for a device to meet the definition of DME:1

• It can withstand repeated use • It has an expected life span of at least 3 years • It serves a medical purpose • It is generally not useful in the absence of a disease or injury • It is appropriate for home use

Right now, the Dexcom G5, which gained FDA approval in December 2016 for use in deciding insulin doses,5 is the only device that meets the new CMS standard for reimbursement, but it is expected that other manufacturers will soon seek approval. Dexcom hailed the decision. “This landmark CMS ruling will make available the most important technology in diabetes management to the Medicare population,” said Kevin Sayer, president and CEO.6

Sayer vowed last July to work for Medicare coverage of CGMs, the day after an FDA panel voted to amend approval of Dexcom’s mobile G5 to allow patients to make dosing decisions without a separate finger stick.7

Lack of coverage for CGMs has been a growing concern among patients, especially those with type 1 disease (T1D). As CGM use gained wider acceptance among patients with T1D, frustration mounted that patients over 65 had to pay for CGMs out-of-pocket or go without, even though they might benefit the most from the technology. As individuals with T1D age and live with diabetes for longer periods, they become “hypo-unaware,” which means they stop experiencing symptoms that signal they are heading into hypoglycemia. A CGM warns patients their blood glucose is plummeting and gives them time to take action, thereby avoiding a trip to the emergency department. CMS’ policy change comes after 40 patients with T1D successfully navigated a lengthy, multistep appeals process to gain coverage. Debra M. Parrish, the attorney who handled the first successful appeal, Whitcomb v. Burrell,8 in which a federal judge vacated CMS’ position that CGM use was “precautionary,” explained the significance of the policy change in an e-mail:

“Last summer, when a Medicare beneficiary challenged the Medicare policy that held CGMs are ‘precautionary’ and did not serve a medical purpose, CMS tried to argue that even if a CGM did not require a confirmatory finger-stick before making an insulin adjustment (many Medicare beneficiaries testified they made insulin adjustments based on CGM readings without performing a confirmatory test), because CGM sensors did not last 3 years, a CGM would not meet the durability requirements to be considered durable medical equipment and covered by Medicare. CMS has abandoned that logic and now holds that the receiver performs the medically necessary function of a CGM by informing a user of his or her glucose level,” Parrish wrote.

Allowing CGM coverage for Medicare patients would potentially help more hospitals and health systems avoid 30-day readmissions, which is a key quality indicator as the nation’s health system moves to a value-based payment system. JDRF has frequently cited a 2011 study in The American Journal of Managed Care® that found each inpatient admission from hypoglycemia costs $17,564.9

Omada Health Taps Former Sanofi Executive as Chief Medical Officer

Digital provider Omada Health announced 2 key additions to its leadership team on January 6, 2017, including one that may be a sign of the times: the former global chief medical officer for Sanofi, a leading manufacturer of diabetes and cardiovascular drugs, will now join a company whose mission is to reduce the need for such therapies.1

Paul Chew, MD, formerly of Sanofi, will be Omada’s new chief medical officer, and Omada’s new chief commercial officer will be Tom Schoenherr, who held the same post with Counsyl, Inc, the DNA-testing company. Omada works with both insurers, including Humana and Kaiser Permanente, and employers to deliver digital behavioral health counseling, supplemented by in-person coaching.

“For the last 5 years, we’ve worked to establish Omada Health as a leader in digital health, publishing clinically validated results and operating on an outcomes-based revenue structure since day one,” Omada co-founder and CEO Sean Duffy said. “Bringing on Paul and Tom, experts in their fields with proven track records for clinical development and scaling healthcare businesses, is the next step in Omada’s evolution. Employers, payers, and health systems know digital health is here to stay, and the companies that will succeed are those that deliver outcomes and scale effectively. We’ve built a team to do exactly that.”1

Chew and Schoenherr arrive at Omada as the company makes Medicare reimbursement of the National Diabetes Prevention Program (DPP) a centerpiece of its strategy. Chew’s transition from a major pharmaceutical manufacturer to a company focused on prevention comes as payers are pushing back against the cost of diabetes and cardiovascular therapies; in recent weeks, both Sanofi and rival insulin maker Novo Nordisk have made significant job cuts.2

Omada, by contrast, is poised to scale up its ability to deliver DPPs. Barring a course change from the Trump administration, CMS will spend 2017 working on rules to let digital providers bring DPPs through Medicare starting in January 2018. Schoenherr will play a key role in that process, as the first rule CMS issued on Medicare DPP did not say how digital providers would participate.3

Diabetes is a leading cost driver in healthcare. A recent JAMA study4 found that the annual rate of spending growth from the disease was 6.1% between 1996 and 2013. In its announcement of the appointments of Chew and Schoenherr, Omada said that at that pace, diabetes spending could reach the entire current Medicare budget by 2029.

“Diabetes and cardiovascular diseases drove some of the most widespread, most expensive, and most preventable healthcare costs,” Chew said in the company’s statement. “Omada’s approach to scaling a proven intervention, and personalizing that intervention through data science, while publishing peer-reviewed evidence, has set an example across the digital health industry. I look forward to continuing to help the company build the medical case for covering the Omada program.”

During his tenure at Counsyl, Schoenherr increased revenues from $1 million to $100 million. He has also worked as a regional vice president at Quest Diagnostics and at Siemens Healthcare. “I’ve been in healthcare for more than 2 decades, working with companies ranging from start-ups to industry leaders,” Schoenherr said in the statement. “Sean and his senior team have spent the last 5 years making smart decisions about how to grow this business and have developed a revenue structure that truly puts their money where their mouths are. My expectation is that we can replicate, or even exceed, the success our team delivered at Counsyl.”

Council for Diabetes Prevention Selects Board, Focuses on Medicare Launch of DPP

The Council for Diabetes Prevention, created 4 months ago to promote the success of the National Diabetes Prevention Program (DPP), has elected its first board of directors. The council, a nonprofit group consistently mostly of providers, was formed to promote access, program quality, and sustainability of the DPP, which will be covered by Medicare, for the first time, in January 2018.

“We need all stakeholders to come together to solve the diabetes epidemic in America,” Anne Woodbury, executive director of the Council for Diabetes Prevention, said in a statement. “I’m looking forward to working with the diverse members of our board, who each bring their unique expertise, leadership, and vision to help realize the mission of making the National DPP accessible to all Americans who need it.”1

The council’s agenda shifted with the election of President Donald Trump, whose vow to repeal the Affordable Care Act (ACA) could upend Medicare’s plans to pay for NDPP. Educating members of Congress about this “unintended consequence” is on the council’s immediate agenda, Woodbury said in an interview with Evidence-Based Diabetes Management™ (EBDM™).

Directors, who will serve an initial term of 1 year, are:

• Marlayna Bollinger, founder and executive director of the Skinny Gene Project • Julia Hu, MBA, CEO of Lark Technologies • Neal Kaufman, MD, founder and chief medical officer of Canary Health • Brenda Schmidt, MBA, MS, founder and CEO of Solera Health; acting president of the council; and a contributor to • Lisa Shaffer, senior vice president of industry relations and business development for the Blood Centers of America.1

When it formed in September 2016, council members voiced the need to work together to ensure the long-term viability of the DPP, which has more than 1400 providers with CDC recognition. At the time, Schmidt said it was clear that providers needed an entity through which they could share information and best practices. In the group’s first statement, Schmidt described the council as a “big-tent forum” that would allow members to stay current on government policy.2

At the time, CMS was taking comments on the rules that will govern Medicare’s launch of the DPP. The agency has since set eligibility criteria, but is still working on rules for reimbursement, including how to work with digital providers like Canary Health and Omada Health.3 In the interview, Woodbury explained that, until recently, digital providers were barred from obtaining CDC recognition, which can take several years.

As it stands, Medicare wants to require CDC recognition for reimbursement, but that could exclude digital providers who have not had time to achieve recognition. Without them, she said, “You’re going to have a lot of frustrated seniors—and, more importantly, seniors who should get the benefit.”

Said Woodbury, “It is going to be pivotal to have digital providers in the mix to scale this program.” The importance of scalability was explained by an Omada Health executive last spring in EBDM™.4

A new challenge is ensuring that Medicare can still pay for the DPP, even if the ACA is repealed. HHS secretary Sylvia Mathews Burwell authorized reimbursement through a provision that allowed Medicare to fund programs after a successful pilot within the Center for Medicare & Medicaid Innovation. If that path to reimbursement goes away, Congress must allow a new one, Woodbury said.

The National DPP is based on research funded by the National Institutes of Health; the initial study showed that participants with prediabetes reduced their risk of developing type 2 disease by 58%.5 A 10-year follow-up study published in The American Journal of Managed Care® found that long-term risk reduction among adherence participants was nearly 50%, and these individuals incurred fewer medical costs than those who took metformin to prevent diabetes.6

CGM and Medicare, References

1. Centers for Medicare & Medicaid Services. Regulations and guidance, ruling CMS-1682-R. CMS website. Published January 12, 2017. Accessed January 14, 2017.

2. JDRF encouraged by Medicare decision to take first step toward coverage of continuous glucose monitors for people with type 1 diabetes [press release]. New York, NY: JDRF; January 12, 2017. Accessed January 13, 2017.

3. Collins S. Medicare’s failure to cover CGM at odds with other health, research agencies. Am J Manag Care. 2015;21(SP11): SP378.

4. Caffrey M. Dexcom’s evidence builds case for dosing ahead of key FDA meeting. The American Journal of Managed Care® website. Published June 16, 2016. Accessed January 14, 2017.

5. Caffrey M. FDA approves dosing for Dexcom G5, could pave way for Medicare coverage. The American Journal of Managed Care® website. Published December 20, 2016. Accessed January 14, 2017.

6. Centers for Medicare & Medicaid Services (CMS) classify therapeutic continuous glucose monitors (CGM) as “Durable Medical Equipment” under Medicare Part B [press release]. San Diego, CA: Dexcom; January 13, 2017. Accessed January 14, 2017.

7. Caffrey M. Dexcom committed to bringing CGM to Medicare population. The American Journal of Managed Care® website. Published July 22, 2016. Accessed January 14, 2017.

8. Whitcomb v. Burrell, decided May 26, 2015. Accessed January 14, 2017.

9. Quilliam BJ, Simeone JC, Ozbay AB, Kogut SJ. The incidence and costs of hypoglycemia in type 2 diabetes. Am J Manag Care. 2011;17(10):673-680.

Omada Health, References

1. Omada Health adds Dr. Paul Chew as chief medical officer, Tom Schoenherr as chief commercial officer [press release]. San Francisco, CA: Omada Health; January 6, 2017. dr.-paul-chew-as-chief-medical-officer-tom-schoenherr-as-chief-commercial-officer.

2. Staton T. Sanofi to slash 20% of diabetes sales force as struggling unit faces brand new biosimilar. Fierce Pharma website. new-biosim. Published December 12, 2016. Accessed January 14, 2017.

3. Fact Sheet. Medicare Diabetes Prevention Program (MDPP) expanded model. CMS website. Newsroom/MediaReleaseDatabase/Fact-sheets/2016-Fact-sheets-items/2016-11-02-2.html. Published November 2, 2016. Accessed November 3, 2016.

4. Dieleman JL, Baral R, Birger M, et al. US spending on personal health care and public health, 1996-2013. JAMA. 2016;316(24):2627-2646. doi:10.1001/jama.2016.16885.

Council for Diabetes Prevention, References

1. Council for Diabetes Prevention announces new board of directors [press release]. Washington, DC: Council for Diabetes Prevention website, January 10, 2017. announces-new-board-of-directors/. Accessed January 10, 2017.

2.. Council for Diabetes Prevention launched to support delivery of CDC National Diabetes Prevention Program [press release]. Washington, DC: Marketwired; September 21, 2016. council-diabetes-prevention-launched-support-delivery-cdc-national-diabetes-2160355.htm. Accessed January 10, 2017.

3. Fact sheet. Medicare Diabetes Prevention Program (MDPP) expanded model. CMS website. https://www.cms. gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2016-Fact-sheets-items/2016-11-02-2.html. Published November 2, 2016. Accessed November 3, 2016.

4. Payne M. History lessons in innovation: digital behavioral medicine can address the diabetes “double epidemic” facing Medicare and America’s seniors. Am J Manag Care. 2016;22(SP7):SP275-276.

5. Knowler WC, Barrett-Connor E, Fowler SE, et al; Diabetes Prevention Program Research Group. Reduction in the incidence of type 2 diabetes with lifestyle intervention or metformin. N Engl J Med. 2002;346(6):393-403.

6. Herman WH, Edelstein SL, Ratner RE, et al; Diabetes Prevention Program Research Group. Effectiveness and cost-effectiveness of diabetes prevention among adherent participants. Am J Manag Care. 2013;19(3):194-202.

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