TAVR: A Sound Investment or a Siren Song?

This was supposed to be the month when the Centers for Medicare & Medicaid Services (CMS) released its national coverage determination for transcatheter aortic valve replacement (TAVR) procedures. Instead, CMS unveiled its ruling May 1, almost two full months before its initial deadline.

I doubt anyone was surprised that CMS followed the recommendations of the Society of Thoracic Surgeons (STS) and the American College of Cardiology (ACC), which argued that TAVR procedures should be performed in a specialized heart center by a multidisciplinary team. As our cover story illustrates, the procedure hinges on physician collaboration, with imaging playing a key role in ensuring success. Now programs have guidance on requirements for reimbursement for TAVR candidates, many of whom are elderly and covered under Medicare.

Having a TAVR program takes resources, including staff, training, varied imaging modalities, equipment and capabilities to participate in the required nationwide registry. The centers involved in TAVR trials have built the appropriate infrastructure and protocols, but for hospitals hoping to enter this arena, will reimbursement cover the upfront costs? The STS-ACC Transcatheter Valvular Therapy (TVT) Registry alone will charge an initiation fee of $25,000 and an annual fee of $10,000 for each year following. As the societies argued, these rigorous requirements are designed to ensure competency and quality. But they also impose challenging barriers for hospitals that want in.

TAVR often is examined in a clinical context, but its business implications are equally intriguing. Does it make fiscal sense for a hospital to invest in a TAVR program? In our March issue, two prominent researchers—David J. Cohen, MD, MSc, at Saint Luke's Mid America Heart Institute in Kansas City, Mo., and Joseph E. Bavaria, MD, at Penn Medicine in Philadelphia—discussed the costs of TAVR and how pricing and reimbursement may affect profit margins. Depending on the price of the valve and other factors, even established centers may take a loss with the procedure.

But offering a TAVR program carries benefits as well, including building a reputation and serving as a magnet for patients who ultimately don't qualify for TAVR and then undergo other appropriate (and perhaps profitable) procedures. It potentially could become a loss leader, which is a strategy that has worked well in the retail sector.

This raises interesting questions, including whether TAVR will provide a competitive advantage for those hospitals that meet the Medicare reimbursement mandates or prove to be a financial drain that siphons resources. What's your prediction?