Reimbursement mapping: ITALY

1. Reimbursement mapping: ITALY 2011

2. Content • Key Economic Indicators • Healthcare Overview • Reimbursement Systems • Market Access • Funding Mechanisms • HTA • Decision makers, Acronyms and Links • Austerity Measures 2011

3. Key Economic Indicators Italy

4. Healthcare system overview (1/2) • Italy has a population of 60.3 million citizens residing in 20 Regions plus 2 Autonomous Provinces. • The National Healthcare System (ServizioSanitarioNazionale - SSN) guarantees healthcare coverage to the population, combining public financing with a mixture of public and private provision. • Legally placed under the central responsibility of the Ministry of Health, the system is largely decentralized resulting in three different levels: • National level: The Ministry of Health formulates every three years a healthcare plan PSN (Piano SanitarioNazionale) which is set to determine general healthcare policies. • Regional level: The Regions have to implement the PSN, adjusting it according to the local needs or policies. • Local level: Local health units ASL (Azienda Sanitaria Locale) are responsible to provide health care services to the citizens – e.g. primary medical services, specialist care and coordination of all non-emergency admissions to public hospitals.

5. Healthcare system overview (2/2) • Inpatient care, accounts for +/- 48% of total public health-care expenditure nationally and in some regions for almost +/- 54%. • Primary care: all Italian residents must be listed with a General Practitioner who acts as a gatekeeper to the system, thus allowing access to specialist care, hospital visit or admission, or other types of medical care. • Hospital care: there is +/- 1271 hospitals in Italy: 52% of hospitals are public hospitals, 43% are private acknowledged by the SSN and the remaining 5% of private ownership. Since 1994 funding through DRGs is implemented and applied to both public and private hospitals, with different tariff levels.

6. Reimbursement system (1/2) Medical Devices in Italy are not subject to P&R negotiation at the central level, thus funding must be queried at the local level. Funding of Medical Devices is largely unregulated and purchase decisions are in practice left to individual providers (hospital Committees and managers). Regional Health Agencies (AgenzieSanitarieRegionali):their role is to plan hospital and ambulatory resources in the region according to population needs, for the part not financed by the DRGs. Part of the contracts are related to appropriate utilization of costly drugs and medicals devices. So, Regional Health Agencies play also a role in defining appropriate funding (extra-payments) for expensive medical devices, whose technical value is supported by adequate clinical and economic evidence.

7. Reimbursement system (2/2) Regional MD Committees (CommissioniRegionaliDispositivi Medici): According to local specificities, the Regions and the ASRs may envisage the need to set up technical committees with the aim to evaluate MDs and issue recommendations on their use. CommissioneProntuarioTerapeuticoOspedaliero(CPTOs): A hospital drug committee is empowered in all hospitals in Italy. Its role is to monitor drug prescription consumption and delivery. Concerning MDs CPTOs monitor the use and decide on enlistment/purchase of medical devices and considering that the cost of MDs falls into the hospital budget, the responsibility of the local committees in the acquisition process, may be considerably larger for MDs, in comparison with drugs; again, this largely depends by the regional legislation and organization.

8. Market Access • CE marking represents the only mandatory step to market access in Italy and it ensures that medical devices are in accordance with the European directives. • Funding of Medical Devices is largely unregulated and purchase decisions are in practice left to individual providers (hospital committees and managers). Considering that public and private healthcare providers are remunerated through a fee-for-service system based on the NTPA (Tariff of outpatient services / Nomenclatore Tariffario delle Prestazioni Ambulatoriali)and NTPO (Tariff of inpatient services / Nomenclatore Tariffario delle Prestazioni Ospedaliere), different pathways may apply for both hospital and ambulatory. • If the new MD is used in the course of a new procedure it becomes necessary to find out an appropriate codification analogue that most closely resembles the characteristics of the new procedure, especially in terms of resources consumption; this may be done by representatives of the scientific society, group of physicians, patient association or manufacturers and should be realized in collaboration with the Regions. Afterwards, the new procedure may be listed in the National Formulary List at the time of the next revision. • If the new MD is used as part of an existing procedure, the willingness of purchasers to fully adopt the new technology will ultimately rest on its price level.

9. Market Access Pathway for Hospital Setting

10. Market Access Pathway for Ambulatory Setting

11. Funding Mechanisms (1/2) DRG funding The DRG-weights are based on both cost and activity in Italy. Most devices are included in the DRG tariffs. Public hospitals receive special funds in order to cope with their public functions; these special funds include capital assets or specific programs related to the National Health Plan. For some devices as orthopedic prosthesis, pace makers, defibrillator and similar, there are specific forms of reimbursement. About rehabilitation, the payment remains on a per diem basis. The DRG system and tariffs are updated every two years and prices have been calculated by using cost of services in a group of hospitals that tested DRGs, with a high variability amongst regions. Tariffs are calculated by the assignment of a DRG per case and at the regional level tariffs are modulated according to case mix complexity, volume treated, availability of services within the regional network, public/private network distribution relationships, dimensions of the provider and level of specialization of it.

12. Funding Mechanisms (2/2) Usual application at the regional level: Usually there is a maximum budget for the whole regional health care system; at the end of the year tariffs get discounted according to the volume of services globally provided within the region. Another system is to fix a maximum budget that providers can fill in by using DRG and fee for service claims. When the budget is reached they continue to provide care with no extra budget or with a discounted budget, according to the availability of funds at the regional level. Extra payments It is very difficult to make changes to the Italian DRG list at the national level while modifications are possible at the regional one. If regions add new procedure codes to reflect the uptake of new technologies in their territories, they can increase the DRG tariff or allow extra DRG reimbursements. These innovative and/or costly devices are not included in the DRG funding and are reimbursed separately through the Regional budget. In that case, prices or extra-tariff-funding has to be negotiated at the Regional level.

13. HTA Due to the extreme fragmentation of the decision process, a common path for the evaluation of MDs is hardly found in Italy. At the regional level, although there is a general consensus towards the application of HTA methodologies (including the need for economic evaluation, whether in the form of cost-minimization; cost-effectiveness/utility; budget impact analysis), the literature is scarce and mainly limited to individual excellence centers. ROLE OF CPTO (CommissioneProntuarioTerapeuticoOspedaliero/ Hospital Therapeutic Committee) IN HTA: The evaluation of a new MD at the local hospital level is usually prompted by the request of one or more physicians who are interested in introducing the new device into their clinical practice. The CPTOs usually require the physicians to submit a formal request which may be supplemented by data which may, in total or in part, be provided to the physicians by the manufacturer: usage forecasts, clinical evidence versus existing alternatives, also supplemented by economic analysis (usually cost-minimization vs. alternatives). Cost/effectiveness analysis or budget impact analysis are not formally required but they can be considered by the CPTOs in their decision process.

14. Decision Makers • Direttorato Generale Farmaci e Dispositivi medici (DGFDM) General Directorate of Medicines and Medical Devices: It performs - vigilance and evaluation of clinical trials, supervision on advertising, on production and trade. • Commissione Unica Dispositivi medici (CUD) Commission Medical Devices: The CUD represents the key consulting body of the Ministry for MDs. The 2007 Financial Act (art. 1, c. 96, lett. V), empowered the CUD to elaborate a list of MDs whose expenditure represents more than 50% of the global expenditure for MDs; based on this list, the Ministry was set in charge of defining reference prices to represent the baseline for tenders. Under this rule, the CUD was empowered to set up studies on the appropriateness of use of specific MD typologies, as well as in terms of cost-comparison vs. adequate alternatives. • Agenzia Nazionale per i Servizi Sanitari Regionali (AGENAS) National Agency for Regional Health Services: It is a national body which plays a role of liaison and decision support for the Ministry of Health and the Regions on the strategies to develop the National Health Service.

15. Links

16. Austerity measures General country measures • Italy has target of a below 3% deficit by 2012, with expenditure reductions making up two-thirds. • Spending cuts at the sub-national level should contribute 33%. A further 30% more should come from: • Public sector employment: replace one in five who leave, freeze pay for three years and implement pay cuts of up to 10% for high earners, including ministers and parliamentarians. • Delay retirement by up to six months for those who reach retirement age in 2011. Increase the retirement age and from 2015 link the retirement age to changes in life expectancy. Revenue raising measures include new taxes for stock options and bonuses, higher corporate tax and fighting tax evasion. Tender / procurement mechanisms: More centralization at regional level. Late payments procedures : Late payment in Italy remains a serious problem. For the 5 worst regions in terms of payment a law forbids to act in the court until the end of 2010, probably this law will enter into force also in 2011. If so Assobiomedica will move at Italian and European level against it.

17. To see more detailed information and other countries overview please open the document ITALY