Will Medicare patients be left out of the bionics revolution?

Adrianne Haslet-Davis, who lost her lower left leg in the Boston Marathon bombings, dancing at TED. (Courtesy TED Talks 2014)
Adrianne Haslet-Davis, who lost her lower left leg in the Boston Marathon bombings, dancing at TED. (Courtesy TED Talks 2014)

The dawn of the Bionic Man is upon us.

Bionic eyes help the blind to see and bionic ears allow the deaf to hear. Bionic limbs let the armless man reach and grasp and bionic legs have helped a fallen woman walk, and even dance again.

Millions have watched dancer Adrianne Haslet-Davis, who lost a foot in the Boston Marathon bombing last year, perform for the first time since the terrorist attack as part of the 2014 TED conference last month.

But if Haslet-Davis had relied on Medicare for her health insurance, she would have been denied access to the revolutionary prosthesis made by Bedford’s BiOM. That’s because the government health insurer won’t reimburse patients for the cutting-edge device, which can cost as much as $150,000.

“Bionic integration and how electro-mechanics attach to the body and [are] implanted inside the body are beginning to bridge the gap between disability and ability, between human limitation and human potential,” BiOM founder Hugh Herr, a robotics professor at the Mass. Institute of Technology and a double amputee, said during the presentation at the TED conference.

The most important point in Herr’s presentation may have been a little-noticed reference to Medicare.

“Next week,” Herr said, “I’m going to present to the Centers for Medicare & Medicaid Services, and I’m going to try to convince CMS to grant the appropriate code language and pricing so that this technology can be made available to the patients who need it.”

BiOM (formerly known as iWalk) is a driving force in the bionics revolution. The company is also an example of how cutting-edge medical technology is being constrained by questions of cost more than the capabilities of engineering. It turns out that the bionic man imagined by Hollywood is a lot more expensive than $6 million, and that, for now, Medicare doesn’t cover the costs.

BiOM’s T2 bionic ankles are part of a new generation of “smart” prosthetics that seek to restore the normalized function of human limbs to amputees. The company’s bionic ankle emulates the muscle function of a human ankle using computer processors that are able to “adjust the ankle’s stiffness and propulsive torque 500 times a second,” the company says. The result is a prosthetic that can mimic a person’s natural gait, reducing many of the long-term health problems associated with prosthetic limbs.

Officials at BiOM are bullish on the power of their personalized bionics to dramatically improve lives for the tens of thousands of patients suffering from lower limb loss. But most of those patients, who rely on Medicare for their health coverage, don’t have access to the technology.

The BiOM is one of the costlier prosthetics on the market – until January of this year insurance companies reimbursed physicians anywhere from $50,000 to $150,000 for the devices, according to BiOM. Although the device is covered by the U.S. Defense Dept., the Veterans Affairs Dept., and various private worker’s compensation plans, the device remains in reimbursement limbo at the Centers for Medicare & Medicaid Services (CMS).

BiOM chief executive Tim McCarthy tells MassDevice.com that even though CMS issued a specific reimbursement code and reimbursement rate for BiOM’s prosthetics, it ultimately determined that Medicare would not cover the device.

“Even though they’ve given us the code, given us the fee, it’s a non-Medicare covered item, so any Medicare covered patient who wants the BiOM would either have to get supplemental insurance or pay out of pocket. Medicare is not paying for the BiOM at this stage,” McCarthy told us. “They didn’t do us any favors.”

Medicare patients make up just one-third of the potential patient population for the BiOM, he estimated. Winning reimbursement from the health agency is key to bringing the device to more people because private health insurers look to Medicare to set the baseline for their own coverage decisions.

In that sense, Medicare and Medicaid are the most important bodies in health insurance. “They don’t want to see it this way, but they are market-breakers or market-makers for all these technologies,” McCarthy said. “The BiOM is not available for everybody today, but if we get a runway through payer channels there will be a BiOM for everyone [who needs it].”

BiOM has put more than 1,000 of their systems on the market, about half to military personnel who lost limbs in combat. The company has always had a strong connection to the VA and the Defense Department; BiOM was partially funded by the federal government, part of a $500 million push to create better prosthetics. BiOM is the only commercialized technology to spin out of that investment, McCarthy said.

Roughly 50,000 patients are fitted with a prosthetic leg every year. More than two-thirds of those amputations are due to vascular disease; the rest result from industrial or automobile accidents and military combat injuries, according to McCarthy.

To win coverage under Medicare, BiOM must demonstrate the cost advantage of its prosthetics, something McCarthy says the worker’s compensation industry already recognizes. The BiOM device, for example, allows employees to return to work more quickly and reduces the need for treatment over the long term. Additionally, patients experience less pain and stress on their joints than with normal prosthetic limbs, he explained.

However, Medicare remains skeptical of costly advances in medicine, McCarthy said.

“Their goal is to compress costs. They see a pioneering technology and have a pessimistic view of it,” he said.

BiOM is not the first company to confront Medicare with an expensive technology that radically re-thinks current standards of care for the disabled. The iBOT, a stair-climbing, gyroscope-based wheelchair invented by Dean Kamen’s DEKA Research & Development Corp. in Manchester, N.H., was shelved due to a lack of reimbursement money.

Developed with Johnson & Johnson subsidiary Independence Technology LLC, the iBOT carried a price tag in excess of $25,000, and was shut down after CMS made it eligible for only about $6,000 in reimbursement.

McCarthy views the iBOT story as a cautionary tale for BiOM.

“We know the people who receive the BiOM are healthier, but we don’t know the dollars saved over the course of a lifetime,” McCarthy said. He said that BiOM’s job is to present their data and to prove to Medicare that recipients will be healthier in the long term.

Brian Johnson is the founder of MassDevice.com, an independent Boston-based online publication that provides news and information for the medical device industry and the companies that drive it.
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