Medicare to Pay for Heart Test That Could Impact Cardiac Device Makers

In a decision that could have long-term implications for Boston Scientific Corp. and its rival heart device makers, Medicare decided yesterday to pay for a test made by a small Bedford company that could limit the number of patients who receive implantable defibrillators. Defibrillators, which prevent the heart from stopping suddenly, are priced at $20,000 or more, plus the cost of the procedure, making them among the most expensive medical implants in wide use. The top three makers — Medtronic Inc., St. Jude Medical Inc., and Guidant Corp. — share a $10 billion worldwide market, and sales are expected to grow significantly in the next several years. That makes the devices a worry for healthcare economists and attractive for manufacturers. Boston Scientific, based in Natick, won a $27 billion bidding war to buy Guidant, the number-two maker of implantable defibrillators in the United States, chiefly as a way to get into the business. It expects to close the deal early next month. The test, made by Cambridge Heart Inc., detects a tiny variation in the regular pattern of a heartbeat. Though too small for doctors to read on a traditional heart chart, the problem can indicate that a patient’s heart is at risk of stopping suddenly — or, if the heartbeat is normal, can suggest that implanting a device is unlikely to help. A defibrillator, about the size of a deck of cards, is implanted near a patient’s collarbone and delivers a shock if the heart stops suddenly. In most recipients, however, a shock is never needed, leading doctors and insurers to look for ways to target patients more precisely. If the Cambridge Heart test becomes a popular screening procedure, doctors and analysts estimate it would exclude a significant fraction of the million-plus patients eligible to receive implantable defibrillators. If the test works, ”They could probably snarf away 30 to 40 percent of the market,” said Jan Wald, a medical device analyst for A.G. Edwards & Co. A spokesman for Boston Scientific declined to comment on the news. Medtronic and St. Jude yesterday downplayed the idea the test would have a major impact on their business. A spokesman for Medtronic, Rob Clark, said that since only a fraction of qualified patients have defibrillators, the test was unlikely to lower the rate of implants. ”Any efforts that serve to further define which patients should receive [defibrillators], we think those efforts are positive,” Clark said. Both Medtronic and St. Jude are sponsoring clinical trials to show how well the test can predict heart problems. Some local Medicare payers already cover the test, said company president David Chazanovitz. Nationally, doctors are reimbursed an average of $322 for administering the test. Chazanovitz called Medicare’s decision a ”huge validation” for the 25-employee company. Its next challenges, he said, would be to push private insurers to start covering the test, and to increase its five-person sales force. Cambridge Heart sells the heart-testing machine to cardiologists for $30,000, along with sets of disposable electrodes that cost $75 per test. The machine has been available for six years, but is not widely used because few insurers will pay for it. Only about 500 are installed in doctors’ offices. In a decision posted to its website late yesterday afternoon, Medicare said the test, known as microvolt T wave alternans, is ”reasonable and necessary for the evaluation of patients at risk of sudden cardiac death” and that it will begin a national policy of reimbursing doctors for administering it. Medicare stopped short of requiring doctors to run the test before implanting a defibrillator. Other insurers are likely to follow Medicare’s lead. Last week Aetna Inc., one of the nation’s largest insurers, said it would begin paying for the test. The decision is a major boost for Cambridge Heart, whose stock price has increased tenfold since Medicare issued a draft of its decision in December. Yesterday, the company’s stock lost 52 cents to close at $2.92 per share. The decision was released after the market closed. The impact on major device makers is less clear. Both Medtronic and St. Jude Medical filed public comments with Medicare urging the agency to delay its payment decision or restrict it to smaller groups of patients. But the test’s inventor, biomedical engineer Richard Cohen at the Massachusetts Institute of Technology, said the firms could ultimately benefit from doctors’ increased certainty their patients need an implantable cardioverter-defibrillator, or ICD. ”I think the ICD manufacturers are concerned about potentially limiting the market,” he said. ”But conversely, in offices that use [the test], they may end up referring a larger number of their patients for ICDs, because they have a call to action.” ”You’re putting in a lot of defibrillators for a very small fraction that ended up making a difference,” said Cohen, who founded Cambridge Heart in the 1990s to help commercialize the test. His work had its roots in experiments funded by NASA, which wanted a reliable way to figure out if astronauts’ hearts would be affected by space travel. Cohen focused on the ”T wave,” the phase of the heart’s beating pattern when its pumping chambers reset for the next beat. Patients with an abnormal T wave are at much higher risk of ventricular fibrillation, a pumping malfunction that triggers cardiac arrest and, often, death. The fluctuation in the T wave, however, is so slight that it requires a special computer algorithm to detect it. Patients are hooked up to the Cambridge Heart machine, put on a treadmill, and their heartbeat is recorded with electrodes. Even with Medicare’s decision, it is unclear if the exam will be widely adopted. Dr. Anne Curtis, a Florida cardiologist and the president of Heart Rhythm Society, said it is difficult for many doctors to use, and there is a risk inherent in any test that tells doctors to restrict treatment. SOURCE: Boston Globe 3/22/06