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The CMS Proposal On PET Imaging Payments: A Win For Businesses

Stephen Belcher, Forbes Councils Member

Sep 6, 2024

Stephen Belcher is CEO of RLS Radiopharmacies, America’s only nationwide Joint Commission-accredited radiopharmacy network.



In a landmark move, the Centers for Medicare and Medicaid Services (CMS) have proposed a separate payment for diagnostic radiopharmaceuticals—a significant victory for the imaging industry and patients. This long-anticipated change is set to revolutionize the landscape of nuclear imaging and healthcare delivery, promising enhanced patient care and opening new doors for business growth.

A Long Time Coming

For years, CMS has bundled payments for nuclear imaging agents within the overall diagnostic procedure. While this approach aimed to streamline the payment system, it inadvertently created barriers for patients requiring newer and often more expensive radiopharmaceuticals. Finally, on July 10, industry players and patients alike had cause for celebration when CMS announced its pivotal proposal, which it intends to include as part of its 2025 Hospital Outpatient Prospective Payment System (HOPPS) rules.

This move is poised to significantly enhance the clinical utility of innovative imaging agents and radiopharmaceutical technologies, providing a significant boost to businesses involved in developing and distributing imaging-related radiopharmaceuticals. In fact, holders of certain publicly traded radiopharmaceutical stocks felt the impact almost immediately. Within 48 hours of the CMS announcement, shares of Lantheus surged exponentially.

Why The CMS Proposal Is Good For Business

For radiopharmaceutical developers focused on the PET imaging sector, this decision represents a substantial business opportunity. Following are some of the potential ripple effects of the CMS proposal.

• Increased Access To Cutting-Edge Technology: The separate payment model makes it financially viable for healthcare providers to offer next-generation imaging agents. This translates to increased demand for innovative imaging solutions and fosters an environment ripe for technological advancements.

• Continued Innovation: By ensuring reimbursement for higher-cost radiopharmaceuticals, CMS will incentivize research and development in nuclear medicines. Startups and established companies alike will be able to invest in creating new imaging agents with the confidence that there will be a market for these products supported by adequate reimbursement policies.

• Market Expansion: With improved access and reimbursement mechanisms, the market for diagnostic radiopharmaceuticals is set to expand. I believe companies specializing in developing and manufacturing these agents will likely see a surge in demand, driving revenue growth and encouraging further investment. This expansion also opens up opportunities for new entrants in the market, fostering a competitive and innovative business environment.

• Enhanced Partnerships: Providers can expect better reimbursements, making utilizing the best available diagnostic tools more financially viable. As such, providers will be able to seek out the best imaging agents to improve patient outcomes, while imaging companies and nuclear pharmacists will have the financial backing to supply these advanced tools.

How Patients Will Benefit

While drug developers and care providers stand to gain, the CMS proposal also promises to enhance patient care and outcomes. Advanced imaging agents can enable early detection, more precise diagnoses, timely treatments and, ultimately, higher survival rates. Early detection can lead to less invasive treatments and better prognoses, transforming patient experiences and outcomes.

This is especially important for those needing advanced diagnostics to monitor therapeutic effectiveness. Consider a patient with a suspected disease undergoing quick PET imaging with the latest radiopharmaceuticals, resulting in a prompt and accurate diagnosis.

A Gold Mine For Entrepreneurs

Entrepreneurs, too, stand to gain immensely from this policy change. The healthcare sector is ripe for innovation, and the CMS proposal opens the door for new business opportunities. With enhanced reimbursements, there will be a growing market for developing and supplying advanced imaging agents and related technologies.

Innovators can now focus on creating more effective, safer and affordable diagnostic solutions, knowing that the financial incentives are aligned. This could lead to a surge in startups dedicated to healthcare technologies, driving economic growth and fostering a culture of continuous improvement within the sector.

Looking Ahead

The CMS proposal on PET imaging payments isn't just a regulatory change; it's a potential driver for progress and enhancement across the healthcare landscape. For healthcare providers, improved reimbursements support the use of the most effective imaging agents, boosting the quality of care and patient survival rates. Also, by reducing the cost barrier, patients can have better access to cutting-edge diagnostic tools crucial for early detection and effective disease treatment. For entrepreneurs, this can create a unique opportunity to spearhead innovation and growth within the healthcare sector.

How Radiopharmaceutical Leaders Should Respond

• Expand the market. Radiopharmaceutical leaders should seize this opportunity to expand their market presence. This may involve ramping up production, investing in marketing efforts to educate healthcare providers about the benefits of PET imaging, and exploring new distribution channels.

• Form strategic partnerships. Collaboration is key to maximizing the potential of this CMS proposal. Work to form strategic partnerships with hospitals, research institutions and other stakeholders to drive innovation and improve the quality of care provided to patients.

• Continue innovating. The increased financial viability of PET imaging agents will provide fertile ground for further innovation. Radiopharmaceutical companies and investors should increase investments in research and development to create new and improved diagnostic tools. This will not only benefit patients but also ensure long-term growth and competitiveness in the market.

Conclusion

In summary, the CMS proposal is a triple-win scenario. It marks a collaborative stride toward enhancing healthcare delivery and outcomes, spurring economic growth and supporting the flourishing of technology and innovation in a sector vital to our well-being. For entrepreneurs aiming to make an impact, healthcare providers striving to improve patient care and patients seeking the best diagnostic services, the future is indeed promising.