Reimbursement Programs and Health Technology Assessment for Diabetes Devices and Supplies

Abstract

The reimbursement model for medical devices and supplies used in the management of diabetes in Canada, along with the process for assessing new health technologies, can be complicated. Various provincial programs, including Ontario’s Assistive Devices Program and the Ontario Monitoring for Health Program, reimburse the costs associated with certain devices and supplies for diabetes management. In addition, provincial advisory committees, such as the Ontario Health Technology Advisory Committee, review and make recommendations on the adoption of new health technologies in each province. This article provides an overview of the reimbursement programs available for diabetes devices and supplies and reviews the process for assessing new health technologies using the province of Ontario as an example.

Although Canada’s publicly funded health care system has evolved over time, its foundational core has remained the same for medically necessary health care services—universal coverage to all, provided on the basis of need, rather than the ability to pay. This article provides an overview of the nondrug costs associated with diabetes management in Canada, with a specific focus on reimbursement programs for diabetes devices and supplies using Ontario as an example. In addition, this article reviews the process for assessing new health technologies in Ontario to assist manufacturers with their understanding of the process through which their products must navigate in order to gain acceptance within the province.

Canada’s Health Care System

Pursuant to the Constitution Act, ¹ the roles and responsibilities for Canada’s publicly funded health care system are divided between the federal and provincial/territorial governments. ²

The federal government sets and administers national principles for the health care system, provides financial support to the provinces and territories (known as “cash and tax transfers” and/or “equalization payments” to less prosperous provinces and territories), and funds and delivers services to certain groups of people (eg, First Nations people living on reserves, serving members of the Canadian Forces, eligible veterans, etc). Other important functions of the federal government in the health care system include, among others, the regulation of pharmaceuticals, foods and medical devices to ensure that these products are safe and effective for the intended purpose, as well as disease surveillance and prevention.

The provincial/territorial governments administer and deliver most of Canada’s health care services through various health insurance plans (eg, Ontario’s Health Insurance Plan, more commonly known as OHIP, Alberta’s Health Care Insurance Plan, British Columbia’s Health Insurance BC plan, etc). Each provincial and territorial health insurance plan pays for, on a prepaid basis, the costs associated with medically necessary hospital and physicians’ services. Accordingly, patients are not charged a fee at the point of receiving medically necessary services, for example, at a hospital emergency room or in a doctor’s office. The provincial and territorial health insurance plans, in consultation with their respective physician colleges or groups, determine which services are medically necessary for health reimbursement purposes. Services that are not classified as medically necessary would have to be reimbursed through an individual’s employer group insurance plan, private insurance plan or out-of-pocket. Of note, under most provincial and territorial laws, private insurers are restricted from offering plans that duplicate the publicly funded provincial and territorial plans.

The Increasing Prevalence of Diabetes

Diabetes is a chronic disease where the body either cannot produce insulin or cannot properly use the insulin it produces in order to regulate blood glucose levels. ³ According to the Canadian Diabetes Association, from 2010 to 2020, approximately 1.2 million people are expected to be diagnosed with type 1 or type 2 diabetes, bringing the total number of people in Canada with diabetes to about 3.7 million. ⁴ If improperly managed, diabetes-related complications including kidney disease, circulatory problems, heart disease, retinal disease, and nerve damage can be fatal. ³

The Cost of Living with Diabetes

The economic burden of diabetes in Canada was about $12.2 billion in 2010, and is expected to rise by another $4.7 billion by 2020. ⁴ The direct cost of diabetes now accounts for about 3.5% of public healthcare spending in Canada and is likely to continue to rise given the expected increase in the number of people living with diabetes in Canada. ⁴ These costs include devices and supplies required for diabetes management (eg, syringes, glucose testing meters, test strips, insulin pumps), insulin and/or other medications and therapeutics, medical visits and diagnostic tests, and if necessary, specialized care and rehabilitation services. While there is no comprehensive national strategy in Canada for funding the costs associated with managing diabetes for those living with the disease, the provinces and territories and/or associated partners offer reimbursement plans to help offset the costs for eligible individuals.

Managing the Cost of Living with Diabetes in Ontario

The Assistive Devices Program

The Assistive Devices Program (ADP), administered by Ontario’s Ministry of Health and Long-Term Care (MOHLTC), reimburses the cost of equipment and supplies for eligible Ontarians living with type 1 diabetes. For example, the ADP fully covers the cost of insulin pump therapy, which includes the device and annual funding assistance for the purchase of necessary supplies (eg, reservoir and infusion sets). More specifically, the ADP provides complete reimbursement for the price of the insulin pump, paid directly to the vendor on the recipient’s behalf. Notably, there are presently 4 ADP-approved insulin pump vendors.

In order to qualify for coverage under the ADP, an individual must be assessed by a Diabetes Education Program that is registered with the ADP. Each program consists of a multidisciplinary team of health professionals that determine eligibility. An individual with type 1 diabetes may be eligible for ADP funding if he or she has not had success with multiple daily insulin injections and is willing and able to use an insulin pump. Individuals with type 1 diabetes must demonstrate to the assessment team an ongoing commitment to blood glucose monitoring, the ability to safely and appropriately operate the insulin pump, a willingness to participate in an insulin pump education program, and regular diabetes clinic attendance. ⁵ If the individual is considered to be a suitable candidate for insulin pump therapy, he or she must undergo a 90-day trial period to ensure that pump therapy is appropriate.

An individual must continue to meet eligibility criteria to receive ongoing financial support for insulin pump supplies. A renewal form must be completed annually with a diabetes assessment team and returned to the ADP. If equipment is worn out, no longer under warranty and beyond repair at a reasonable cost, ADP may pay up to 75 percent of the cost for a replacement unit.

At present, insulin pumps for individuals with type 2 diabetes are not covered by a public plan in Ontario due to a lack of clinical evidence supporting this type of therapy in the target group. ⁶

The Ontario Monitoring for Health Program

The Ontario Monitoring for Health Program (OMHP) is funded by the MOHLTC and is administered by the Canadian Diabetes Association. ⁷ The OMHP is designed to help insulin users of any age cover the cost of diabetes testing supplies, including for those with gestational diabetes. To be eligible for reimbursement by the OMHP, an individual’s first claim form must be authorized by a doctor or nurse practitioner to confirm the use of insulin or the presence of gestational diabetes.

Supplies covered by the OMHP include blood glucose test strips, lancets, blood glucose meters, and talking blood glucose meters for the visually impaired. Seniors (ie, 65 years of age or older), social assistance recipients, or Trillium Drug program clients, however, can submit claims to the OMHP only for lancets and/or a blood glucose meter since blood glucose test strips for these patient groups are reimbursed through the province’s public Drug Benefit Program.

While not discussed in detail here, reimbursement programs similar to the ADP and OMHP exist in other provinces including, for example, in British Columbia and Alberta. In British Columbia, the provincially funded PharmaCare Program covers certain medical supplies for eligible British Columbians, including full coverage of insulin pumps every 5 years. ⁸ Alberta’s provincially funded Insulin Pump Therapy Program provides partial funding for the cost of insulin pumps and pump supplies for Alberta residents with type 1 diabetes that meet eligibility and clinical criteria. ⁹

How Are New Health Technologies Adopted in Ontario?

The Ontario Health Technology Advisory Committee (OHTAC), a standing advisory subcommittee of the Health Quality Ontario (HQO) Board, makes recommendations to the Ontario health care system (including the MOHLTC) about the uptake, diffusion, distribution, or removal of new health technologies in Ontario. ¹⁰ OHTAC’s members include representatives from the hospital, community, and long-term care sectors, nursing and medical professions, the Ontario Hospital Association, the Ontario Medical Association, Council of Academic Hospitals of Ontario, Local Health Integration Networks, MOHLTC, human factors engineers, academia, and industry.

As will be described in greater detail below, applicants and/or innovators who wish to have a new health technology adopted by the public health care system in Ontario, must first ensure that the technology has received marketing authorization from Health Canada (if required) and a positive recommendation from OHTAC.

Assessment of New Health Technologies

OHTAC reviews eligible health technology that includes a wide range of clinical procedures, devices and equipment applied to the maintenance, restoration and promotion of health, but does not include drugs. ¹¹ Health technology includes interventions at any stage of health care, including primary prevention, early detection of disease and risk factors, diagnosis, treatment, rehabilitation, and palliative care. Preference will be given to reviews of new health technologies and treatment strategies.

OHTAC requires that applications for review relate only to technologies that have already received marketing authorization from Health Canada (where required). In Canada, Health Canada plays a vital role in licensing drugs and medical devices, among other regulated health products, to ensure patient and provider safety under Canada’s Food and Drugs Act and Regulations thereunder. ¹² Marketing authorization for higher risk medical devices is based on the demonstration that the product is safe and effective for its intended use. Provincial health ministries and providers rely on Health Canada to determine the safety parameters of the new technology. ¹³

OHTAC uses certain criteria to assess whether a new health technology improves health outcomes such as length of life, quality of life and functionality. The new technology must:

• Improve the net health outcome and/or safety for patients and/or providers or improve health systems efficiency

• Be at least as beneficial to any established alternative (if the technology or intervention is not better but equivalent to an existing technology or intervention, it must be shown to be effective and cost-effective)

• Be licensed by Health Canada (where required) and have any other applicable licenses or approvals from applicable government or regulatory bodies (eg, the Canadian Nuclear Safety Commission for medical isotopes)

Applicable opinions and evaluations by national or provincial medical associations, consensus panels, or other technology evaluation bodies are also considered in accordance with the scientific quality and strength of the supporting evidence and rationale. ¹¹

What Does the OHTAC Application Process Entail?

The OHTAC application process requires applications to be sponsored by a potential purchaser of the technology (eg, a hospital, home care program, or long-term care facility). The applicant is responsible for ensuring that the materials submitted comply with applicable privacy and intellectual property legislation. Applicants should also be aware that submitted materials may be shared with experts and are subject to requests for disclosure by the public under freedom of information legislation.

OHTAC applicants must provide the following information when submitting their applications:

• Verification that the new health technology has received applicable federal and provincial authorizations or licenses from relevant regulatory bodies, and the indications for which the technology has been approved

• Description of the new health technology and how it will benefit patients, providers, or health systems or result in efficiencies or cost savings

• Description of the patient population, including the estimated number of patients, who will benefit from the new health technology

• Scientific evidence that would permit OHTAC to draw conclusions concerning the impact of the new health technology on health outcomes and inform decisions concerning the introduction of such technology

• For diagnostic technologies, a demonstration of accuracy (eg, sensitivity and specificity)

• Information as to whether the new health technology can replace or reduce the use of an existing comparable funded health technology

• If available, a description of existing health technologies and the potential utilization interplay between the new and existing technologies

• Available information on safety for patients and providers ¹¹

In addition to the foregoing information, the applicant must also:

• Acknowledge that all confidential, personal, or proprietary information submitted to the HQO is subject to the Ontario Freedom of Information and Privacy Protection Act ¹⁴

• Grant permission to reviewers to discuss their OHTAC application with government entities (eg, Health Canada, provincial government agencies, etc) and advisory bodies

• Provide a list of individuals at the MOHLTC and/or the HQO that the applicant has previously contacted in connection with the proposed technology

• Acknowledge that it is the responsibility of the applicant to obtain approval from the manufacturer to submit information provided to them to the HQO, if submitted

The manufacturer of the new health technology will be informed if their technology is being reviewed by OHTAC and will be invited to offer information regarding the technology. Other manufacturers of similar devices and experts in their use may also be invited to provide appropriate information to better inform the evaluation process. ¹¹

Applicants have the discretion to submit the following information, among others, in support of their application:

• A literature review summarizing studies on the effectiveness and/or cost-effectiveness of the new health technology being presented, especially as they relate to currently funded alternative technologies

• Information about whether the new health technology is insured in the health delivery system of other jurisdictions

• Information regarding guidelines for appropriate utilization of the new health technology and whether the guidelines are consensus or evidence-based

• Implications, if any, on the use of physician resources, and potential changes to the schedule of benefits in relation to the new health technology

• Information regarding consultations with other Ontario experts regarding the new health technology

• Any other information regarding alternative technologies in development

OHTAC’s Review Process

OHTAC is a committee of stakeholder representatives and experts that provides advice to the HQO’s Board of Directors regarding the uptake and diffusion of new health technologies in Ontario. ¹¹ In turn, the HQO makes recommendations to the MOHLTC on these technologies.

When making its recommendations, OHTAC applies a decision determinants framework based on evidence of effectiveness, economic and human resource considerations, societal impact, regulatory and ethical considerations, and medical expertise regarding the introduction of new health technologies into health services in Ontario. ¹¹ As of fall 2014, the framework is currently being reviewed and updated by OHTAC. The updated framework will be posted on the OHTAC website once the committee’s review is complete.

Working from OHTAC’s recommendations and advice, the HQO Board of Directors formulates final recommendations to the provincial health care system and the Minister of Health and Long-Term Care who ultimately decide whether to adopt the proposed new health technology. Manufacturers of new health technologies recommended for adoption should expect to negotiate commercial terms with the provincial government and enter into a contract for reimbursement.

Looking Ahead to the Future of Diabetes Management and Innovation

While the forecasted increase in the number of Canadians who will be diagnosed with diabetes poses a significant challenge to the health care system, ¹⁵ it also presents opportunities to manufacturers of innovative health technologies. Accordingly, it is important for manufacturers to have a comprehensive understanding of the overall regulatory framework for the marketing authorization of new health technologies in Canada, including the process through which technology is adopted and reimbursed within the health care systems administered by the various provinces and territories.