Pew Testimony on the Use of Unique Device Identifiers in Health Insurance Claims

PEW TESTIMONY ON THE USE OF UNIQUE DEVICE IDENTIFIERS IN HEALTH INSURANCE CLAIMS

On June 10, the U.S. Department of Health and Human Services’ National Committee on Vital and Health Statistics, Subcommittee on Standards, held a hearing that discussed the incorporation and use of unique device identifiers (UDI) in administrative transactions.

Josh Rising, director of drugs and medical devices, submitted testimony on the importance of including UDIs in health insurance claims forms as a way to improve the nation’s medical device postmarketing surveillance system.

Testimony before the National Committee on Vital and Health Statistics, Subcommittee on Standards

Hearing on HIPAA and ACA Administrative Simplification: Use of UDI in Administrative Transactions

June 10, 2014

Joshua P. Rising, MD, Director of Medical Devices

The Pew Charitable Trusts

Co-Chairmen Suarez and Soonthornsima, and members of the Committee, thank you for the opportunity to provide testimony on the use of the unique device identifier (UDI) in administrative transactions. My name is Josh Rising. I am a physician, and I direct medical device work at The Pew Charitable Trusts. Pew is an independent, non-profit research and public policy organization dedicated to serving the public. Pew seeks to enhance medical device safety and foster device innovation that benefits patients.

The UDI system, developed by the Food and Drug Administration (FDA), will provide each medical device with a code corresponding to its make and model to unambiguously identify devices used in patient care. By this September, the highest-risk implanted devices will have UDIs.

As outlined by FDA in the agency’s vision for postmarketing surveillance, achieving the full benefits of this UDI system requires its adoption in electronic health information—including adverse event reports, materials management systems, device registries, electronic health records (EHR) as well as administrative and claims transactions.^1,2

UDI capture in EHRs and claims provide different and complementary benefits. If the UDI is recorded in EHRs, providers could use this information to identify patients affected by recalls, ensure appropriate care coordination and evaluate product performance in their own facilities. However, the lack of interoperability prevents the aggregation of data across EHRs, which makes it difficult for FDA or payers to use these data to assess whether there are safety problems with a particular device or class of device. Conversely, claims offer large, longitudinal data sets for such analyses—including when patients switch providers or seek care from multiple clinicians. Claims are also standardized and, therefore, easily aggregated. Claims data are already used by payers, FDA and others to evaluate drug performance, but lack information on the specific devices used in care.

There are efforts underway to incorporate UDI into EHRs, which, as stated, is important but insufficient to realize the full benefits of a UDI system.^3,4 Action is now needed to include UDI in administrative and claims transactions.

Benefits of UDI capture in claims

Creating a new field in insurance claims submitted to health plans would greatly enhance the existing medical device postmarket surveillance system to improve patient safety and care quality. Specifically, UDI capture in claims would enable:

• Analyses by health plans: Health plans currently pay for procedures, such as hip replacement surgery, but lack any knowledge on the precise device used. Incorporating UDI in claims will provide payers with that specificity and help them to compare outcomes across device models. Given the current challenges of accessing and integrating data from electronic health records, these data are not available elsewhere.
• Recall assistance from health plans: Currently, more than half of the highest-risk device recalls conclude with not all products identified or removed from the market.⁵ Despite the roles of manufacturers, FDA and hospitals, far too many recalls conclude inadequately, in part because patients’ contact information is not up-to-date. Health plans have expressed an interest in assisting with this deficiency by contacting beneficiaries implanted with recalled products to ensure that they receive appropriate follow-up care. Health plans do not have the necessary information without access to UDI data.
• FDA's Sentinel Initiative: FDA could also use claims data to conduct robust, longitudinal analyses of device safety. For example, FDA could utilize its postmarket surveillance Sentinel Initiative—which relies predominantly on claims data—to assess device safety, as required by Congress in the Food and Drug Administration Safety and Innovation Act of 2012.⁶ FDA has utilized Sentinel to successfully evaluate drug and biologic safety, and the Sentinel primary investigators underscore that using this system to assess device safety is not feasible without adding UDI to claims. Sentinel provides FDA with data unavailable through other postmarket surveillance tools. Adverse event reports, for example, do not provide the agency with information on the total number of products utilized and thus cannot be used to determine the rate of device safety signals. 

These business cases have been recognized from multiple sources. In response to questions from her Senate confirmation hearing, Health and Human Services Secretary Sylvia Mathews Burwell commented that the “Sentinel Initiative will ultimately benefit … by incorporating UDIs into its claims data sources.”⁷ Various stakeholders—including FDA, health plans and health systems—also have expressed their desire to implement these benefits.^8-11 Organizations that have sent letters supporting UDI capture in claims include Mercy health system, Geisinger health system, the Society of Thoracic Surgeons, the American College of Cardiology, Premier, Inc., the Pacific Business Group on Health, AARP, First Databank, Trust for America’s Health and the Leapfrog Group. Public letters of support from some of those stakeholders are attached with this testimony.

There is a school of thought that claims are for billing adjudication purposes only. However, health plans—including Medicare and Medicaid—pay billions annually for health services involving devices. As part of paying for services, health plans should know what products they are purchasing. Including UDI in claims would provide health plans with the information necessary to make better coverage and reimbursement decisions.

The proposal under discussion for incorporating UDI into claims already addresses potential concerns that hospitals and information technology vendors would be forced to upgrade some electronic systems to capture and transmit UDI. We support a limited approach where health plans and hospitals would agree to transmit the UDI of a subset of devices. This proposal would not create a new mandate for hospitals.
It is important to emphasize again—contrary to common misconception—that not all device UDIs will be included in claims. As outlined above, the current proposal would result only in UDI capture for a subset of high risk, implanted devices that hospitals and health plans have agreed to include in claims.

Progress to-date and next steps

The work to achieve these benefits has already begun. As previously mentioned, FDA finalized the UDI regulations in September 2013. High-risk devices, including many implants, will have UDIs starting this fall. All devices will have UDIs by 2018.

The Office of the National Coordinator for Health Information Technology (ONC) has proposed new criteria to document the UDIs of implanted devices in patients’ EHRs. In parallel, the Health Information Technology Policy Committee, a federal advisory committee, recommended that the Centers for Medicare & Medicaid Services (CMS) develop incentives to encourage hospitals and providers to document in patients’ health records the UDIs of implanted devices.¹²

There have also been several recent efforts to incorporate UDI into administrative and claims transactions. Last summer, Pew submitted a change request to the Accredited Standards Committee X12 (ASC X12) to create a new field in claims for UDI. As ASC X12 required additional information to adjudicate this request, Pew commissioned the Workgroup for Electronic Data Interchange (WEDI) Foundation to convene stakeholders and obtain public input to develop a white paper outlining the business case for including UDI in claims. The WEDI Foundation recommended the creation of a new field in claims to support the capture and transmission of the UDI for high-risk, implanted medical devices. This white paper, attached to this testimony, was completed and submitted to ASC X12 in April.

Earlier this month, ASC X12 began considering this topic and voted to continue examining the business case for UDI capture. ASC X12 will now assess how to achieve the stated benefits, and whether UDI capture in claims or another transaction—such as the claims attachment or a different form—is most appropriate. While we are open to considering UDI capture in administrative transactions other than claims, claims are a standardized, proven vehicle for achieving the benefits.

In contrast, claims attachments are not standardized and can include unstructured data, which could prevent electronic systems—such as payers’ internal databases and the Sentinel system—from utilizing the UDI. While CMS is required to finalize claims attachment standards, the agency has not issued a proposed rule. Additionally, hospitals submit claims attachments in only a subset of claims. Including a field for UDI on a claims attachment would require providers to submit an additional form that theymay not otherwise transmit, thus increasing the burden. Considering these issues, the actual claim appears more suited to achieve the UDI system’s benefits.

In its role as an advisor to the Secretary of Health and Human Services, the National Committee on Vital and Health Statistics (NCVHS) should support the adoption of UDI in claims and administrative transactions. This is an essential next step to develop the data necessary to evaluate device performance in large patient populations and achieve other key benefits.

In addition to recommending UDI capture in claims, you should also support UDI adoption and implementation throughout health care delivery, including in materials management, health records, charge capture, billing and claims systems. Given that UDI integration throughout health care delivery is still in its infancy, the Department of Health and Human Services should—working with providers, device manufacturers, distributors, insurance companies and other health care stakeholders—develop a plan to promote the adoption and nationwide exchange of UDI data to improve patient care. In particular, CMS, which has access to large amounts of data, should participate in the development of this plan, especially regarding UDI integration into claims.

Ultimately, capturing the UDI of a small subset of high-risk, non-dental implants in claims can provide the necessary data to greatly improve patient care, postmarket surveillance and recall resolution in a manner that takes into account implementation challenges.

I thank the committee for its leadership. Should you have any questions, do not hesitate to contact me at [email protected] or 202.540.6761.

¹ U.S. Food and Drug Administration. Strengthening our National System for Medical Device Postmarket Surveillance. http://www.fda.gov/downloads/AboutFDA/CentersOffices/OfficeofMedicalProductsandTobacco/CDRH/UCM301924.pdf. Accessed February 6, 2014.
² Gross TP, Crowley J. Unique Device Identification in the Service of Public Health. N Engl J Med. 2012; 367:1583-1585.
³ Wilson NA, Drozda J. Value of Unique Device Identification in the Digital Health Infrastructure. JAMA. 2013;309(20):2107-8.
⁴ Voluntary 2015 Edition Electronic Health Record (EHR) Certification Criteria; Interoperability Updates and Regulatory Improvements; NPRM. 45 Fed Reg 170, 2014.
⁵ U.S. Government Accountability Office. FDA Should Enhance Its Oversight of Recalls. GAO-11-468. June 2011.
⁶ The Food and Drug Administration Safety and Innovation Act, Pub. L. 112-144, 126 Stat. 993. July 9 2012.
⁷ Questions for Ms. Sylvia Mathews Burwell, Secretary of Health and Human Services-Designate, Committee on Health, Education, Labor, and Pensions, U.S. Senate, May 8, 2014.
⁸ America’s Health Insurance Plans. Comments to FDA on the Unique Device Identifier Proposed Rule. November 7, 2012.
⁹ Geisinger Health System. Geisinger Direction and Support of UDI on Claims Form. June 3, 2014.
¹⁰ Kaiser Permanente. Comments to FDA on the Unique Device Identifier Proposed Rule. November 7, 2012.
¹¹ Mercy Health, Inc. Mercy Direction and Support of UDI on Claims Form. April 3, 2014.
¹² Health Information Technology Policy Committee. Transmittal Letter from HIT Policy Committee to the National Coordinator for Health Information Technology. April 1, 2014.