Cardiac device benefits cut by 40% on Prostheses List, despite pushback from medtech sector and patient group

Cardiac implantable electronic devices (CIEDs) will have their Prostheses List (PL) benefits reduced by 40% of the gap on 1 July 2023. These reductions will only be applied to the proportion of the PL benefit that corresponds to the estimated cost of the medical device.

The Medical Technology Association of Australia (MTAA) put forward the application to Medical Services Advisory Committee (MSAC), which was considered at the March 2023 meeting, to assess and advise on the reasonable cost to industry for Cardiac Implantable Electronic Devices (CIEDs) technical support services provided by Industry Employed Allied Health Professionals (IEAPs) for patients who have their CIED funded through private health insurance.

The medtech industry contends that PL benefit reductions for CIEDs, in the context of the Prostheses List reforms, will reduce their ability to provide technical support services for patients implanted with these medical devices. The MTAA application represented Medtronic, Abbott, Biotronik, MicroPort CRM and Boston Scientific.

In the public sector, patients are required to attend dedicated outpatient ‘pacemaker’ clinics in which the cardiologist on roster supported by hospital technicians performs the CIED check. The costs are largely borne from within the hospital’s funding envelope. Medtech company support for the public sector is very minimal.

By contrast in the private sector, the patients are seen in the treating clinician’s private rooms for their CIED checks post implantation and for the life of the device. Clinicians are supported by device company staff (industry-employed allied professionals, IEAPs) who are highly qualified to provide this technical support. There are between 1 and 4 scheduled follow-up checks that occur each year for each patient, based on guidelines by the Cardiac Society of Australian and New Zealand (CSANZ). CIED manufacturers have been funding the services provided by IEAPs from the Prostheses List benefit for the CIEDs.

The total cost of IEAPs services by FY23 are expected to be in the range of $86 million and $125 million, with a median total cost of $102.98 million, according to a KPMG’s analysis.

The cost of the device has been estimated at ~54% of the current CIED PL benefit. The gap was then calculated between this 54% of the PL benefit and the weighted average price of a CIED in the public hospital system.

This estimate-based reduction allows CIED benefits reductions to progress as per the objectives of the PL reforms, said the Department of Health.

Tanya Hall, CEO of hearts4heart told Health Industry Hub “Cardiac services must be equitable for all patients across Australia. Many Australians with private health insurance are paying top dollar, and still pay out-of-pocket costs. Patients are telling us they can’t afford an increase in out-of-pocket costs for cardiac services. If cardiac services are not adequately funded in the Protheses List reform and out-of-pocket costs increase, patients have indicated they would question the value of having private health insurance.”

hearts4heart has been urging the Government to protect cardiac technical services and ensure there are no additional out-of-pocket costs for patients.

The current PL benefit for CIEDs is made up of two components; the value of the device, and the value of CIED technical services that come with managing the device after implantation. As PL benefits typically relate to the cost of devices and not the services associated with them, further work was required to establish the benefit reductions for CIEDs.

Benefit reductions were deferred by one year (until 1 July 2023), to allow the MSAC to establish the reasonable cost of CIED technical services. While MSAC work is ongoing, an estimate-based reduction to 54% of the current CIED PL benefit will take place on 1 July 2023.

The Department of Health confirmed that MSAC will continue work on establishing the reasonable cost of CIED technical services. Any additional reductions recommended by MSAC as well as adjustments to the estimates applied on 1 July 2023, will be applied to the CIED benefit reductions scheduled for 1 July 2024.

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