Performance-based risk-sharing agreements for units and diagnostics – Health Economist

Performance-based risk-sharing (PBRS) has grown in importance in recent years. While most PBRS are used for expensive pharmaceutical products, PBRS has also been used with manufacturers of medical devices and diagnostics. Unit / diagnostic PBRS can differ from drugs for a number of reasons. First, while health insurance companies bear the burden of paying for most drugs, equipment and diagnostics are relatively more likely to be reimbursed by hospitals or healthcare systems. Second, many devices and diagnostics do not have randomized controlled trial evidence to support their launch, and therefore there may be more uncertainty about the benefits of new devices and diagnostics. Third, devices and diagnostics are typically lower cost than drugs.

How common is PBRS arrangement for medical device and diagnostic manufacturers? To answer this question, a recent paper by Chen and Carlson (2022) uses publicly available PBRS data for these technologies. Specifically, the approach taken by the authors was as follows:

We reviewed publicly available PBRSAs for diagnostics and devices using the University of Washington Performance Based Risk Sharing (PBRS) Database. We expanded the review using PubMed, Google and payer and industry sites, including the top 15 medical devices and diagnostic companies by revenue and the top 10 health insurance companies by market value. We characterized additional events according to our previously published taxonomy [Carlson 2010; Carlson 2014]. Three main categories were used: (1) Coverage with Evidence Development (CED), in research only; (2) CED, with research only; and (3) performance-based reimbursement (PLR).

Based on this approach, the authors found that:

This review identified 52 performance-based events initiated between 2001 and 2019. Among these, 23 (44.2%) were CEDs, in research alone; 17 (32.7%) was PLR; and 12 (23.1%) were CED, only with research …

The use of PBRS has increased over time.

Performance-based risk-sharing agreements for units and diagnostics – Health Economist

PBRS was mostly used for cardiological equipment and oncological diagnostics. Most of the PBRS arrangements in oncology were diagnostics used for precision medicine such as classification analyzes, genomic profile scores, or epigenetic testing. Examples of these precision medical oncology tests include the ConfirmMDx Epigenetic Molecular Assay, Prolaris, Decipher and Oncotype DX Prostate Cancer Assay. Insulin pump devices were a product commonly covered by PBRS arrangements.

How does the use of PBRS differ between public and private entities?

Most of the events were part of the CED events at the Centers for Medicare & Medicaid Services (CMS) or CMS contractors … out of 52 events, 34 (65.4%) CEDs were published on the CMS website and included 20 (58.8%) covered by national coverage regulations (NCDs) at CMS and 14 (41.2%) local coverage regulations (LCDs) by Medicare contractor Palmetto GBA. The remaining schemes (18, 34.6%) were identified from private payers’ websites...

Of all events, 5 (9.6%) were issued by private or commercial insurance companies, with 4 insulin pump devices for diabetes manufactured by Medtronic and another associated with UnitedHealthcare’s event to link reimbursement of Genomic Health’s Oncotype DX analysis to a data collection program in women considering adjuvant breast cancer treatment. Finally, schemes in the use of hospitals (11, 21.2%) and integrated health systems (2, 3.8%) covered a wide range of disease areas for medical devices.

Note that because PBRS uses publicly available sources, the results of this study may be more skewed toward finding increased public use of PBRS, as private entities may be less willing to disclose the use of a specific PBRS scheme. The results could also be skewed towards finding newer PBRSs because more information could be available online for events in recent years.

Despite these limitations, having a snapshot of the evolving landscape of performance-based risk-sharing agreements between entities and diagnostics is an extremely valuable contribution to the literature.

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